Dec 17, 2020

Axios Pro Rata

🎧 Axios Re:Cap talks with the CEOs of Aphria and Tilray about cannabis consolidation and pot politics. Listen via Apple, Spotify or Axios.

🎯 Robinhood, the no-fee trading app that's prepping a 2021 IPO, today was charged by the SEC with "material misrepresentations" related to payments from electronic trading firms, and the consequential impact on consumer pricing.

  • It settled for $65 million, without admitting fault.
  • This comes one day after Robinhood was sued by Massachusetts officials for predatory marketing practices.
Top of the Morning

Illustration: Eniola Odetunde/Axios

Initial public offerings are getting the reality TV treatment, with a new show that will track five established companies on their path to the Nasdaq. And viewers will be able to buy-in.

Program guide: It's called "Going Public," and will stream via Entrepreneur.com. The host is Lauren Simmons, who was the youngest full-time equities trader on the NYSE, and the floor's second Black woman trader.

"My partner first suggested this idea three years ago and I cut him off because I'd seen half a dozen decks like it and they all looked dumb," says Darren Marble, executive producer and a veteran crowdfunding executive. "But then we began talking about putting together the domain expertise to really executive, banking, compliance, distribution, a host with financial experience... And it began coming together."

  • Each of the five companies will have at least $20 million in annual revenue, primarily in the direct-to-consumer sector.
  • Marble says the first company cast is a VC-backed Y Combinator alum that went on "Shark Tank" but didn't get a deal.
  • The companies will be followed for 10 weeks, as they work toward a Reg A+ offering underwritten by Roth Capital.
  • Beneath the streaming video box on Entrepreneur.com will be a link that leads viewers to a page whereby they'll be able to invest at the IPO price (assuming that it closes). It's effectively what Reg A+ was designed to do, albeit not necessarily by the imagined mechanism.

"You saw what Massachusetts just did with Robinhood," Lauren Simmons told me last night, before the SEC filed its own suit. "Platforms like that can be great, but they're not really teaching the next generation of investors how to be smart investors. My job is to give viewers the facts and resources to make educated decisions."

Bottom line: This may represent peak IPO. Or the future of small-cap offerings. Or both.

The BFD

Illustration: AΓ―da Amer/Axios

Paxos, a New York-based cryptocurrency infrastructure platform, raised $142 million in Series C funding led by Declaration Partners.

  • Why it's the BFD: This comes within 24 hours of bitcoin topping $20,000 for the first time ever, with Paxos offering much of the back-end plumbing that powers cryptocurrency offerings for companies like PayPal and Revolut. Plus, snaring Declaration, which manages the family money of Carlyle Group co-founder David Rubenstein, reflects the accelerating interest in cryptocurrency by big-name investors outside of Silicon Valley.
  • Other investors include Mithril Capital, PayPal Ventures, RIT Capital Partners, Ken Moelis, Alua Capital, Senator Investment Group and return backers RRE Ventures and Liberty City Ventures.
  • Bottom line: "The infrastructure Paxos is building is potentially transformative for fields beyond cryptocurrency. These include the stock market where Paxos has obtained permission to clear digital versions of shares β€” a process that could dramatically improve the speed and efficiency of how equities are traded. The company has also created digital tokens for gold that are tied to actual bars of bullion held in a London bank." β€” Jeff John Roberts, Fortune
Venture Capital Deals

πŸš‘ Oscar, a New York-based health insurer, raised $140 million in new funding at what Delaware documents suggest is around a $6 billion valuation. Tiger Global led, and was joined by Dragoneer, Baillie Gifford, Coatue, Founders Fund, Khosla Ventures, Lakestar and Reinvent. The company is expected to go public in early 2021.

β€’ GoCardless, a London-based recurring payments platform, raised $95 million led by Bain Capital Ventures. http://axios.link/6jGP

β€’ Lydia, a Paris-based developer of a fintech super-app, raised $86 million in Series B funding led by Accel. http://axios.link/dFHA

β€’ BigID, an Israeli privacy compliance platform, raised $70 million in Series D funding. Salesforce Ventures and return backer Tiger Global co-led, and were joined by Glynn Capital, Bessemer Venture Partners, Scale Venture Partners and Boldstart Ventures. http://axios.link/OhWD

β€’ Brainly, a Polish homework help platform, raised $70 million in Series D funding. Learn Capital led, and was joined by Prosus Ventures, Runa Capital, MantaRay and General Catalyst. http://axios.link/yvyB

β€’ Aceable, an Austin, Texas-based online provider of state-accredited courses, raised $50 million in Series C funding led by HGGC. www.aceable.com

β€’ Cargo.one, a German real-time booking platform for air cargo, raised $42 million in Series B funding. Bessemer Venture Partners led, and was joined by Index Ventures, Creandum, Point Nine and Next47. www.cargo.one

β€’ Openly, a Boston-based homeowners insurance platform, raised $40 million in Series B funding. Advance Venture Partners led, and was joined by return backers Gradient Ventures, Obvious Ventures, PJC, and Greenlight Re. www.openly.com

β€’ Vercel, a San Francisco-based front-end development company, raised $40 million in Series B funding. GV led, and was joined by Greenoaks Capital, Bedrock Capital, Geodesic Capital and return backers Accel and CRV. www.vercel.com

β€’ Lyte, a San Francisco-based live event ticketing startup, raised $33 million in Series B equity and debt funding from Social Capital, Quincy Jones, Rocketship VC and return backers Jackson Square Ventures, Accomplice and Correlation Ventures. www.lyte.com

β€’ Ramp, a corporate card startup, raised $30 million from D1 Capital Partners, Coatue and return backer Founders Fund. www.ramp.com

πŸš‘ Vivace Therapeutics, a San Mateo, Calif.-based developer of therapies targeting the Hippo pathway, raised $30 million in Series C funding from Boxer Capital, RA Capital Management and Canaan Partners. http://axios.link/dSxZ

β€’ Zoomin, a technical documentation development platform, raised $21 million from Bessemer Venture Partners, Salesforce Ventures and Viola Growth. http://axios.link/hciW

πŸš‘ Diameter Health, a Farmington, Conn.-based health data interoperability startup, raised $18 million in Series B funding. Centene Corp. led, and was joined by insiders Optum Ventures, LRVHealth, Connecticut Innovations and Activate Venture Partners. www.diameterhealth.com

β€’ Bambee, a Santa Monica, Calif.-based provider of HR management software, raised $15 million in Series B funding. QED Investors led, and was joined by Alpha Edison and Mucker Capital. www.bambee.com

β€’ Runway, a Brooklyn-based developer of digital creative tools, raised $8.5 million in Series A funding. Amplify Partners led and was joined by Lux Capital and Compound Ventures. www.runwayml.com

πŸš‘ Enveda Biosciences, a medicinal plant database, raised $4.9 million in seed funding. True Ventures led, and was joined by Wireframe Ventures, Village Global and Chris Gibson. http://axios.link/oa1t

β€’ OpenSensors, a London-based air monitoring startup, raised $4 million in seed funding led by Crane Venture Partners. http://axios.link/XwcQ

SnapNurse, an Atlanta-based nurse staffing platform, raised $2 million from Pivotal Group. www.snapnurse.com

β€’ Presso, an Atlanta-based robotic dry cleaning startup, raised $1.6 million from Pathbreaker, AME Cloud Ventures, SOSV, 1517 Fund and YETI Capital. http://axios.link/oNwF

β€’ Now Insurance, a Houston-based small business insurer, raised $1.125 million in seed funding led by The MFO Group. www.nowinsurance.com

β€’ Gr4vy, a cloud payment orchestration platform, raised $1.1 million co-led by Activant Capital and Global Founders Capital. www.gr4vy.com

β€’ Truyo, a Chandler, Ariz.-based data privacy rights management software startup, raised an undisclosed amount of funding from Intel Capital. http://axios.link/pmu2

Private Equity Deals

πŸš‘ Avista Capital Partners agreed to buy Solmetex, a Northborough, Mass.-based provider of amalgam separators to the dental market. www.solmetex.com

πŸš‘ Bain Capital and Clayton Dubilier & Rice are the two remaining bidders for Dutch medical supplier Mediq, which is being sold by Advent International for more than €1 billion, per Bloomberg. http://axios.link/nba5

β€’ Bertram Capital bought Pacific Handy Cutter an Irvine, Calif.-based maker of safety cutting tools and replacement blades, from Levine Leichtman Capital Partners. www.phcsafety.com

β€’ The Blackstone Group made a minority investment in ISN, a Dallas-based provider of third-party contractor and supplier management software, at a valuation north of $2 billion. www.isn.com

β€’ CI Financial said it will vote against Apollo Global Management's $2.5 billion takeover bid for casino group Great Canadian Gaming (TSX: GC), in which it holds a 14% stake. This comes as proxy firms Glass Lewis and ISS also came out against the deal. http://axios.link/blf4

β€’ Cimbria Capital agreed to acquire Madeira Global, a New York-based ESG advisory, analytics and reporting firm. www.madeira-global.com

β€’ EQT agreed to buy a majority stake in Storable, an Austin, Texas-based provider of software to the self-storage industry, from Cove Hill Partners (which retains a minority stake). www.storable.com

β€’ Liberty Hall Capital Partners acquired Comply365, a Beloit, Wis.-based provider of automated compliance management software. Sellers include Drive Capital and Luminate Capital. www.comply365.com

β€’ Penta and Toscafund agreed to buy British broadband provider TalkTalk (LSE: TALK) for Β£1.1 billion. http://axios.link/xSGo

β€’ TA Associates invested in Mid America Pet Food, a Mount Pleasant, Texas-based maker of, from Trinity Hunt Partners. Also participating on the buyside was Rx3 Growth Partners, founded by quarterback Aaron Rodgers. www.midamericapetfood.com

SPAC Stuff

Someone is very happy this morning...

🐢 BarkBox, a New York-based dog supplies subscription service, agreed to go public via a reverse merger with Northern Star Acquisition Corp. (NYSE: STIC), a consumer-focused SPAC led by magazine vet Joanna Coles and New York Islanders co-owner Jonathan Ledecky, at an enterprise value of around $1.6 billion. BarkBox had raised around $86 million, plus a PPP loan, from backers like August Capital, Founders Circle Capital, RRE Ventures and Resolute Ventures. www.barkbox.com

β€’ Corner Growth Acquisition, a SPAC formed by Corner Ventures, raised $350 million in its IPO. http://axios.link/gRWt

πŸš‘ KL Acquisition, a healthcare-focused SPAC formed by Kennedy Lewis, filed for a $250 million IPO. http://axios.link/aSjg

Liquidity Events

πŸš‘ Novartis (NYSE: NVS) agreed to buy Cadent Therapeutics, a Cambridge, Mass.-based biotech focused on psychiatric diseases, for upwards of $770 million, including $210 million upfront. Cadent had raised around $68 million from firms like Atlas Venture, Cowen Healthcare Investments, Access Industries, Clal Biotechnology Industries and Qiming Venture Partners. http://axios.link/zn52

More M&A

β€’ Armstrong World Industries (NYSE: AWI) acquired Arktura, a Los Angeles-based designer and fabricator of acoustic drop ceiling panels. www.arktura.com

β€’ Canada Pension Plan Investment Board is investing $624 million for a 15% stake in the Transurban Chesapeake, a toll-road located in the Washington, D.C. area, from Australia’s Transurban (ASX: TCL). AustralianSuper and UniSuper will acquire another combined 35% stake, while Transurban will retain 50%. http://axios.link/aSWw

β€’ Google won EU antitrust approval for its $2.1 billion takeover of Fitbit (NYSE: FIT), after agreeing to concessions related to how it will use customer health data. http://axios.link/IiVa

β€’ Tribune Publishing (Nasdaq: TPCO) agreed to sell product review site BestReviews to Nexstar Media (Nasdaq: NXST) for $160 million in cash. www.bestreviews.com

Fundraising

β€’ Gridiron Capital of Connecticut raised $1.35 billion for its fourth private equity fund. www.gridironcapital.com

β€’ Imaginary Ventures raised $160 million for its second fund, focused on early-stage startups at the intersection of retail and tech. www.imaginary.co

It's Personnel

β€’ Catherine Armstrong joined British VC and asset management firm Hambro Perks as director of communications. She was previously with The Carlyle Group. www.hambroperks.com

β€’ Akhil Johri, former CFO of United Technologies Corp., joined Clayton Dubilier & Rice as an operating advisor. www.cdr-inc.com

β€’ Behrman Capital promoted Michael Rapport to partner, Calvert Thomas to principal and Kyle Grace to VP. www.behrmancap.com

Final Numbers
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Data: Yahoo Finance; Chart: Axios Visuals

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