Apr 3, 2019

Axios Pro Rata

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Top of the Morning

Illustration: Rebecca Zisser/Axios

When the Alliance for American Football came out of stealth mode last spring, it made a big deal about having investments from firms like Founders Fund and Chernin Group. But we reported that the total check was less than $10 million, which seemed way to small to successfully launch and scale a new professional sports league.

  • It was.
  • After just two weeks of play in February, the AAF was basically broke and on the verge of being unable to pay its players. Since no one wanted Christian Hackenberg as their Uber driver, there was a $250 million bailout by Carolina Hurricanes owner Tom Dundon.
  • But that investment was even worse than the venture round, even though Dundon only put up $70 million of the $250 million, as the AAF yesterday folded.
  • Axios Sports editor Kendall Baker has the play-by-play.

• Deal scoop: Affirm, the consumer credit startup led by PayPal co-founder Max Levchin, has raised around $300 million in Series F funding led by Thrive Capital, Axios has learned.

  • Word is that the post-money valuation is $2.9 billion.
  • Other new investors include Fidelity, Wellington Management, Baillie Gifford and Sound Ventures. Return backers include Founders Fund, Ribbit Capital, GIC and Spark Capital.

Trumponomics: Axios' Jonathan Swan reports that President Trump late last year discussed the possibility of firing Fed chair Jay Powell and replacing him with Kevin Warsh. Per Swan:

Trump often privately compares Powell to a golfer who has no "feel" for the game, and has told aides Powell poses the greatest threat to the U.S. economy.

Bitcoin is trading at over $5,000 for the first time since last December, after bottoming out at $3,180 on December 14. How come? In the recent words of my daughter, why is a knife called a knife?

🎧 Pro Rata Podcast: Our new episode features an interview with John Delaney, a three-term Maryland congressman and two-time CEO who is running for the Democratic Party's presidential nomination. We talk taxes, healthcare, education and tech monopolies. Listen here.


Source: Giphy

iHeartMedia, the country's largest commercial radio broadcaster, has filed for an initial public offering.

  • Why it's the BFD: Because this is the latest chapter in a complex corporate saga that began when iHeart (then known as Clear Channel) was acquired in 2006 for $18.7 billion. That deal was so contentious that the private equity sponsors, Bain Capital and Thomas H. Lee Partners, had to sue their lenders to get the deal closed, but then the whole thing ended up collapsing under a wall of debt. iHeart last year filed for bankruptcy and agreed to spin off its outdoor advertising business as part of a debt restructuring. This IPO is part of the core company's plan to exit bankruptcy.
  • Details: Not too many yet, as the San Antonio-based company only put a $100 million placeholder figure on its S-1 filing. But we do know it plans to have a dual-class share structure, and reports a pro forma $38 million net loss on $3.8 billion in revenue for 2018.
  • Bottom line: "iHeart now has the flexibility to focus operations more seriously around streaming audio and podcast advertising, some of the fastest-growing ad segments. Its advantage is that is has a massive terrestrial radio footprint to market those efforts, but it had been inhibited by the former debt load." — Sara Fischer, Axios
Venture Capital Deals

Segment, a San Francisco-based customer data infrastructure company, raised $175 million at a $1.5 billion post-money valuation. Return backers Accel and GV co-led, and were joined by return backers Meritech Capital. Thrive Capital, Y Combinator Continuity, eVentures and Sapphire Ventures. http://axios.link/sQM4

ezCater, a Boston-based corporate catering company, raised $150 million in Series D-1 funding co-led by Lightspeed Venture Partners and GIC at a $1.25 billion post-money valuation. http://axios.link/0nao

🚑 Fusion Pharmaceuticals, a developer of alpha-particle radiotherapeutics for treating cancer, raised $105 million in Series B funding co-led by OrbiMed and return backer Varian. Others investors include Johnson & Johnson, Perceptive Advisors, Pivotal BioVenture Partners and Rock Springs Capital. Fusion has offices in Canada and Boston. http://axios.link/7Nqp

Aqua Security, an Israeli provider of security solutions for virtual containers, raised $62 million in Series C funding. Insight Partners led, and was joined by M12, Lightspeed Venture Partners, TLV Partners and Shlomo Kramer. http://axios.link/pcrb

Nutrafol, a New York-based nutraceutical brand for hair growth, raised $35 million in Series B funding led by L Catterton. http://axios.link/wjc0

Vestwell, a New York-based digital retirement advisor, raised $30 million in Series B funding. Goldman Sachs led, and was joined by Point72 Ventures, Nationwide, Allianz Life Ventures, BNY Mellon, Franklin Templeton, F-Prime Capital, FinTech Collective, Primary Venture Partners, and Commerce Ventures. http://axios.link/H7wf

Pagaya, an Israeli asset management platform for institutions, raised $25 million in Series C funding. Oak HC/FT led, and was joined by Viola Ventures, Call Insurance, GF Investments, Siam Commercial Bank and Harvey Golub. www.pagaya.com

Deepwatch, a St. Petersburg, Fla.-based provider of managed security services, raised $23 million in Series A funding led by ABS Capital Partners. www.deepwatch.com

Vertical Cos., a Los Angeles-based cannabis CPG company, raised $23 million in new Series A funding ($58m round total) from backers like Merida Capital Partners. http://axios.link/MMBZ

🚑 AgomAb, a Belgian developer of antibodies for regeneration of damaged tissues, raised €21 million in Series A funding from Advent France Biotechnology, Pontifax, Omnes, V-Bio Ventures and BIVF. http://axios.link/QtpE

Perch, a New York-based marketplace for home buying and selling, raised $20 million in Series B funding. FirstMark Capital led, and was joined by Accomplice and Juxtapose. Perch also secured $200 million in new debt financing. http://axios.link/r3QI

Taxfix, a Berlin-based provider of tax assistance software, raised $13 million in Series B funding. Valar Ventures led, and was joined by Redalpine and Creandum. http://axios.link/Jmkt

Hungry, an Arlington, Va.-based online marketplace that connects chefs with caterers and event-planners, raised $8 million in Series A funding. Sands Capital Ventures and Motley Fools Ventures co-led, and were joined by Marcy Venture Partners and individuals like Usher, Walter Robb and Tom Colicchio. http://axios.link/7dpm

🐶 Good Dog, a New York-based marketplace for getting dogs from breeders or shelters, raised $6.7 million from backers like including BoxGroup, Felicis, Slow Ventures, Fuel Capital, BarkBox and SV Angel. http://axios.link/KVAM

Lucid Sight, a Los Angeles-based developer of blockchain-based games, raised $6 million from Salem Partners, The Galaxy EOS VC Fund, Digital Currency Group, Breakaway Growth, Frontier Venture Capital and Animoca Brands. http://axios.link/2pzE

🚑 Amazentis, a Swiss developer of anti-aging therapies, raised an undisclosed amount of funding from Nestlé Health Science. http://axios.link/IVxS

Private Equity Deals

Berkshire Partners is in talks to buy Fitness and Lifestyle Group, an Australian gym chain owned by Quadrant Private Equity that could fetch upwards of A$1 billion, per The Australian.

Kellermeyer Bergensons Services, an Oceanside, Calif.-based portfolio company of GI Capital Partners, acquired Capital Contractors, an Islandia, N.Y.-based provider of contract cleaning and related facility services, from Palladium Equity Partners. www.kbs-clean.com

Paradigm, a Walnut Creek, Calif.-based provider of medical management solutions to the workers’ comp industry, has acquired Restore Rehabilitation, an Owings Mills, Md.-based case management company. Paradigm is a portfolio company of OMERS. www.restorerehab.biz

Vista Equity Partners is in talks to buy Perform, a provider of data services to sports betting groups, from Len Blavatnik’s DAZN Group, per Bloomberg. http://axios.link/YDWm

Stonepeak Infrastructure Partners agreed to buy Oryx, a provider of crude oil transportation services in the Permian Basin, for $3.6 billion from Quantum Energy Partners, Post Oak Energy Capital, Concho Resources (NYSE:CXO) and WPX Energy (NYSE:WPX). http://axios.link/dLJd

Liquidity Events

Macquarie Infrastructure is considering a sale process for a portfolio of Chinese wastewater treatment assets that could be valued at upwards of $800 million, per Bloomberg. http://axios.link/3DSh

More M&A

Honworld Group (HK: 2226), a Chinese soy sauce maker with a market cap of nearly $300 million, is considering a sale process for at least a 49% ownership stake, per Bloomberg. http://axios.link/2AZi

🚑 TriNetX, a Cambridge, Mass.-based health research network, acquired Custodix, a Belgium-based provider of clinical trial patient recruitment solutions. TriNetX has raised over $90 million in VC funding from firms like MPM Capital, Merck Global Health Innovation Fund, Deerfield Management and Mitsui & Co. www.custodix.com


ByFounders raised €100 million for its debut fund, focused on early-stage startups in Europe’s Nordic and Baltic regions. http://axios.link/zeP7

• Eurazeo is raising between €1 billion and €1.5 billion for a new fund that will focus on European companies that want to expand into China, per PE International. Anchor limited partners include BNP Paribas and China Investment Corp. http://axios.link/1nBC

• Hype Capital has launched as a $75 million Israeli venture capital fund focused on sports technology. http://axios.link/oGbd

• Mars Petcare has launched Companion Fund, a $100 million venture capital pool focused on startups that address the needs of pets, pet owners and pet professionals. It also has launched a pet-focused startup accelerator called Leap Venture Studio.

It's Personnel

Rajan Anandan is stepping down as VP for Google India and Southeast Asia to join Sequoia Capital India. http://axios.link/Q6kX

Peng Chun has been named as chairman of Chinese sovereign wealth fund China Investment Corp. He previously was chair of Chinese lender Bank of Communications. http://axios.link/sDc3

Randy Gelber, former head of TMT Asia Pacific investment banking for UBS, is joining Fortnite maker Epic Games as VP of corporate development, per Bloomberg. http://axios.link/Ll12

Final Numbers: Co-investments
Source: Cambridge Associates co-investment report