December 20, 2019

🥳 Welcome to the last Axios Pro Rata of 2019! We'll return on January 2, rested and ready for the year ahead.

Top of the Morning

Photo by Jackal Pan/Visual China Group via Getty Images

Sen. Tom Cotton (R-Ark.) last week hit CNBC to argue that the WeWork debacle is driving some Americans toward socialism.

  • Cotton's argument is an unintentional critique of American capitalism, at least as codified by legislators like Cotton.

Cotton first raised this argument via Twitter in October: "Adam Neumann ruined WeWork, yet walks away with $1.7 BILLION, while thousands of employees get laid off. Neumann is a fraud & a good example of why some people support a socialist like ⁦@BernieSanders. He ought to be sued & investigated."

What happened: Neumann did get an insane amount of money from SoftBank, as an effective bribe to effect its rescue package and then relinquish his voting shares and board seat. It was just shy of $200 million. Cotton gets to $1.7 billion by also adding in Neumann's share sale via a SoftBank-backed tender that was available to all WeWork holders, plus a restructure of around $500 million in existing loans.

When it happened: Neumann exited in October. That's the same month that Sanders experienced his lowest average polling of the 2020 presidential race, per the RealClearPolitics average. So perhaps Cotton really meant to cite Elizabeth Warren but, either way, it's hard to argue that their messages only began resonating two months ago.

There continues to be zero evidence that Neumann committed financial fraud at WeWork. Arrogant governance and a surfeit of hubris? Absolutely. But I've spoken to numerous sources, both inside the company and outside advisors, and none of them have found fraud.

  • Conventional wisdom among these sources is that WeWork could have successfully gone public had Neumann fixed governance before publicly filing the company's prospectus. Not at a $47 billion valuation — likely at less than half, which Neumann was said at the time to have accepted — but public nonetheless.

The bottom line: Neumann ran afoul of the markets, but not of the law. Suing him would be akin to suing lightly-regulated capitalism. If that's Cotton's true belief, then he might be backing the wrong presidential candidate.

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Source: Giphy appears poised to beat out Dutch conglomerate Prosus for London-based food delivery company Just Eat, after raising its takeover offer to nearly £6.3 billion in stock.

  • Why it's the BFD: Because appearances may be deceiving. Yes, Just Eat's board this morning recommended Takeaway's offer, and lowered the shareholder approval threshold to just 50%. But this has been a fast-changing saga — last month Takeaway said it wouldn't raise its bid — and Takeaway's all-stock proposal lost significant value yesterday due to trading activity. Prosus' headline number is smaller, but is in cash.
  • Calendar: Shareholders have until January 10 to vote.
  • Bottom line: "Prosus has argued that it has the resources to make the significant investments in Just East necessary to stay competitive, while Takeaway believes that it actually knows how to run a food delivery startup, rather than just own one." — Natalia Drozdiak & David Hellier, Bloomberg

Venture Capital Deals

Lenskart, an Indian omnichannel eyewear retailer, raised $275 million in Series G funding led by SoftBank Vision Fund.

Ripple, the blockchain-based payments company, raised $200 million in Series C funding. Tetragon led, and was joined by SBI Holdings and Route 66 Ventures.

Levelset, a New Orleans-based provider of payment and money management software for contractors, raised $30 million. Horizons Ventures led, and was joined by S3 Ventures, Altos Ventures, and Operating VC.

StradVision, a Seoul-based provider of vision processing tech for autonomous vehicles, raised $27 million in Series B funding. Posco Capital led, and was joined by IDG Capital, Industrial Bank of Korea, Lighthouse Combined Investment, LSS Private Equity, Mirae Asset Venture Investment, Neoplux, and Timefolio Asset Management.

Snackpass, a Berkeley, Calif.-based mobile food ordering platform, raised $21 million in Series A funding. Andreessen Horowitz led, and was joined by YC, General Catalyst, First Round Capital, and Inspired Capital.

Summersalt, a St. Louis-based direct-to-consumer swimwear company, raised $17.3 million led by Mercato Partners.

HaptX, a Seattle-based glove for VR and robotics applications, raised $12 million from Mason Avenue Investments, Taylor Frigon Capital Partners, Upheaval Investments, Votiv Capital, Keiretsu Forum, NetEase, and Dawn Patrol Capital.

Osano, an Austin, Texas-based data privacy transparency platform, raised $5.4 million in Series A funding co-led by LiveOak Venture Partners and Next Coast Ventures.

Leapfin, a San Francisco-based finance ops automation platform, raised $4.5 million led by Bowery Capital.

Private Equity Deals

Ardian agreed to buy Cérélia, a Paris-based bakery products company, from IK Investment Partners.

Audax Private Equity acquired Corrona, a Waltham, Mass.-based provider of syndicated registry data and analytics.

Brookfield Infrastructure acquired a 93% stake in British wireless infrastructure firm WIG from 3i Infrastructure at an enterprise value of £387 million.

🚑 Engaged Capital is considering a take-private bid for Medifast (NYSE: MED), a Baltimore-based nutritional supplement company in which it holds a 15% stake, per Bloomberg.

Phoenix Equity Partners invested in Redington, a UK-based institutional investment consultant.

SFW Capital Partners acquired Micromeritics, a Norcross, Ga.-based provider of equipment to material sciences labs.

SIMCO, a Concord, N.C.-based portfolio company of Warren Equity Partners, acquired Maintenance Insulation Co., a Lancaster, S.C. -based provider of corrosion protection services for the chemical, pulp, paper and industrial industries.

Stone Point Capital agreed to buy Safe-Guard Products, an Atlanta-based provider of auto aftermarket finance and insurance products, from Goldman Sachs for more than $1 billion, per Barron’s.

Tikehau Capital of France paid €81 million to acquire assets of Spanish bioenergy company Acek Energias Renovables.

Liquidity Events

Coco Healthcare Products, a Chinese diaper maker whose backers include CLSA Capital Partners, is seeking a buyer, per Bloomberg. The deal could be worth around $200 million.

KKR agreed to sell ELL, a pan-European electric locomotive leasing company, to AXA IM Real Assets and Crédit Agricole Assurances.

More M&A

Apergy (NYSE: APY) agreed to buy Ecolab’s (NYSE: ECL) upstream energy unit for $3.9 billion.

EDP, Portugal’s largest utility, agreed to sell six hydro power plants to a group led by France’s Engie for around $2.4 billion.

Google acquired Typhoon Studios, a Montreal-based gaming studio.

🚑 Intesa (Milan: ISP) agreed to pay €300 million for a control stake in Italian health insurer RBM.

Nestle (Swiss: NESN) agreed to sell its majority stake in French packaged meat company Herta to Casa Tarradellas, creating a joint venture.

OL Groupe acquired Reign FC, the Tacoma, Wash.-based franchise of the National Women’s Soccer League, for $3.5 million.

Toshiba (T: 6502) will not accept a $1.4 billion takeover offer from Hoya (Tokyo: 7741) for Japanese chip-making equipment company NuFlare Technology (T: 6256), in which it holds a 52% stake. Toshiba also doesn’t plan to increase its own tender offer for the rest of NuFlare, which is at a lower price than the Hoya bid.


Expanding Capital, a San Francisco-based VC firm, is raising $150 million for its second fund, per an SEC filing.

Graycliff Partners raised $350 million for its fourth lower mid-market buyout fund.

Lerer Hippeau Ventures is raising $130 million for its seventh flagship fund and $100 million for its third opportunities fund, per an SEC filing.

Morgan Stanley Infrastructure Partners raised $5.5 billion for its
third fund.

Truffle Capital of Paris raised €250 million for a VC fund focused on biotech and med-tech startups.

It's Personnel

Eric Ahlgren is joining BV Investment Partners, per PE Hub. He previously was a vice president with Great Hill Partners, where he served on the board of controversial portfolio company G/O Media.

Final Numbers: IPO filings

Source: Renaissance Capital. 2019 data through December 20.

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