Venture capital needs a hero.

• Last week we discussed the expanding disconnect between VC fund disbursements (still flowing) and exits (drought conditions), which at some point will become unsustainable.
• The gap could again narrow, but that requires a venture-backed company to display courage by blazing an IPO trail for others to follow. Sometimes it only takes one.

Zoom out: This hero company should have a few characteristics.

1. It needs to be relatively large, raising at least $100 million. There have been plenty of microcap offerings over the past 12 months, but they don't move the momentum needle.
2. It should remind other companies of themselves, in terms of top-line descriptors. For example, enterprise software or fintech or biotech.
3. Boring is better. A company like Instacart might create some buzz, but a company like Databricks would create more tailwinds. Think back to the ZoomInfo IPO in June 2020, which helped the IPO market kick off its COVID cobwebs.

Pipeline: Two of the strongest candidates right now are Acelyrin, an inflammatory-focused biotech that actually filed its S-1 last week, and Klaviyo, a marketing automation unicorn that just hired IPO bankers.

The bottom line: There are very good reasons for companies to remain private, including a looming debt ceiling fight that could roil markets and send America's economy into recession. But a lot of that will burn off, or look like flabby excuse-making, if there's a leader to follow.

Source: Giphy

Merck (NYSE: MRK) agreed to buy Prometheus Biosciences (Nasdaq: RXDX), a San Diego-based immunology biotech with an ulcerative colitis candidate, for around $10.8 billion in cash.

Why it's the BFD: This is about Merck trying to find a new blockbuster drug for once Keytruda begins facing U.S. competition in 2028, and also sets the pharma giant up to complete against a Pfizer-Roviant partnership on anti-TL1A monoclonal antibodies.

Details: Merck will pay $200 per Prometheus share, a 75% premium to Friday's closing price.

• Prometheus went public in March 2021 after raising around $200 million in VC funding from backers like Cedars Sinai (8.4% remaining stake), RTW Investments (7%), Point72 (6.5%) and Cormorant Asset Management.

The bottom line: "The breadth of Prometheus' list of potential target diseases, which includes rheumatoid arthritis, atopic dermatitis, psoriasis and other blockbuster indications, is underpinned by evidence that TL1A modulates the location and severity of inflammation and fibrosis." — Nick Paul Taylor, Fierce Biotech

• Ynsect, a French insect protein farm startup, raised €160m from undisclosed backers. It previously raised over $360m from firms like Upfront Ventures and FootPrint Coalition. https://axios.link/3L38K6m

• Razor Group, a Berlin-based Amazon merchant acquisition platform, raised €80m in Series C funding from Upper90, L Catterton, Presight Capital, Blackrock, GFC, LatinLeap and Redalpine and 468 Capital. The company also bought rival Stryze Group. https://axios.link/3GMYn41

🚑 Epic Sciences, a San Diego-based diagnostics startup, raised $24m in Series G funding. Deerfield Management and Arsenal Capital Partners co-led, and were joined by insiders Blue Ox Healthcare Partners, Domain Ventures and Labcorp. www.epicsciences.com

• Innovamat, a Barcelona-based math education startup, raised $21m in Series A funding. Reach Capital led, and was joined by Kibo Ventures, Bonsai Partners, Axon Partners, 10x and Dozen Investments. https://axios.link/3UHrv2k

• Capitola, a Mountain View, Calif.-based provider of commercial insurance industry software, raised $15.6m in Series A funding led by Munich Re Ventures, as first reported by Axios Pro. https://axios.link/3MPTCuq

🚑 Scan.com, a diagnostic imaging startup with offices in Atlanta and London, raised $12m in Series A funding from Aviva Ventures, YZR Capital, Oxford Capital, Triple Point Ventures, Simplyhealth Ventures and Forefront Venture Partners. https://axios.link/41Ar5x8

• Equipme, a German “everything-as-a-service” startup, raised $3.8m in seed funding led by La Famiglia. https://axios.link/41BQEOj

• EVEN, a platform for music creators, raised $2.2m in seed funding led by CSA Partners. https://axios.link/403IJbe

• Apollo Global Management made a nonbinding takeover offer for British online retailer The Hut Group (LSE: THG). https://axios.link/43AIU0K

⚽ The Carlyle Group plans to seek a minority stake in Manchester United, per the Telegraph. https://axios.link/3mwqWfi

• Cerberus and Ripplewood around among the suitors for Orange's (Paris: ORA) digital banking unit, per Bloomberg. https://axios.link/3oc7MLT

• Mitratech, an Austin, Texas-based portfolio company of Ontario Teachers, bought Circa, a Milwaukee-based provider of human capital and compliance services for federal contractors, from Gauge Capital. www.circaworks.com

• Network International (LSE: NETW), a UAE-based credit card processor, confirmed receipt of a €2.1b takeover offer from a private equity group that includes CVC Capital Partners and Francisco Partners. https://axios.link/3MJrxEZ

🚑 Temasek is paying around $2b for a majority stake in Indian hospital chain Manipal Health Enterprises. https://axios.link/41fPnwp

• Chia Network, an SF-based public blockchain, filed confidential IPO papers. It's raised over $110m in VC funding from firms like Andreessen Horowitz, Slow Ventures, Richmond Global Ventures and Andromeda Capital. https://axios.link/40c86rg

🚑 NKGen Biotech, an Irvine, Calif.-based developer of natural killer cell therapies, agreed to go public at an implied $145m pre-money valuation via Graf Acquisition Corp. IV (NYSE: GFOR). NKGen backers include Gaingels and ATGen Global. https://axios.link/3UJ9aSH

• Affinity Equity Partners is seeking a buyer for Australian sports and entertainment ticketing firm TEG Group (dba Ticketek), with Blackstone as a likely suitor, per The Australian.

• BHP Group (ASX: BHP) received Australian court approval for its A$9.6b takeover of miner OZ Minerals (ASX: OZL). https://axios.link/3KzMbok

• The Co-Operative Bank, a British commercial bank, hired PJT Partners and Fenchurch Advisory to explore strategic options, including an IPO or sale process, per Reuters. https://axios.link/3ocupA6

• Sega (Tokyo: 6460) will pay €706m in cash buy Angry Bids maker Rovio (Helsinki: ROVIO), which recently was the subject of a failed €689m takeover effort by Playtika (Nasdaq: PLTK). https://axios.link/43FNP0a

• AEA Investors raised $384m for a continuation fund that will acquire a majority stake in Singer Industrial, a Dallas-based distributor of industrial rubber and fluid power products, from AEA Small Business Fund II. www.singerindustrial.com

• Braemont Capital, a Dallas-based PE firm founded by Robert Covington (ex-RedBird Capital Partners), raised $525m for its debut fund. www.braemont.com

• JLC Infrastructure, an infrastructure PE firm focused on underserved communities, is targeting $750m for its second fund. JLC was co-founded by Loop Capital and Magic Johnson Enterprises. https://axios.link/3ohmjGf

🚑 Wellington Management raised $476m for its second biomedical VC fund. https://axios.link/41iRbor

• Joey Krug, former co-CIO of crypto investment firm Pantera Capital, joined Founders Fund as a partner. Going forward, Krug will lead the firm's crypto strategy.

• Scott Silverglate, who joined Silicon Valley Bank in February from Goldman Sachs, is moving to Evercore as a senior managing director, per Bloomberg. https://axios.link/3MM8Hx6

• Annesley Wallace stepped down as global head of infrastructure at OMERS, in order to join TC Energy Corp., per The Globe & Mail. Also at OMERS, growth equity head Mark Shulgan is leaving. https://axios.link/3GOyLUy