Jun 13, 2017

Axios Pro Rata

By Dan Primack
Dan Primack

A reminder that you are invited to join Axios tomorrow morning in Los Angeles for a live event focused on technology and the human brain. For more information and to RSVP, please go here. Okay, here we go...

Top of the Morning

• Double dip? Foxconn CEO Terry Gou said yesterday that Apple and Dell have joined on his company's bid for Toshiba's semiconductors business. Makes sense for China-based Foxconn to bring on American partners, given the political hurdles in Japan. Well, until you remember that Dell is backed by Silver Lake ― the private equity firm that has teamed with Broadcom on its own bid for the Toshiba business.

  • Bottom line: Word is that Dell didn't make any binding financial commitment to Foxconn, so this might be more a case of Gou asking for an optics favor from his major supply chain partners, as Toshiba is just about a week away from naming a winning bidder. Also hear that the Broadcom/Silver Lake bid very much remains on the table.

LP Land: Peter Freire yesterday stepped down as CEO of the Institutional Limited Partner Association, with a source saying the move came at the board's behest. Per a memo sent to members, Jennifer Choi, managing director of industry affairs, "will assume day-to-day management responsibility of ILPA, until an interim CEO is named." Freire joined ILPA in 2015 after stints with World Economic Forum and The Corporate Board.

  • Quasi-related: House lawmakers last Thursday approved a GOP-authored bill that would repeal many of the Wall Street regulations put in place after the financial crisis, including the requirement that most private equity firms register their funds with the SEC. The vote earned kudos from President Trump, and criticism from anyone who has paid attention to what many of the private equity examinations have uncovered. More here

• SV stuff: Alex Moore, the first Palantir Technologies and its former director of operations, has joined 8VC as an operating partner. After leaving Palantir in 2010, he co-founded NodePrime, a cloud automation company acquired last year by Ericsson, and also has been an active angel investor. 8VC is led by Joe Lonsdale, who co-founded Palantir.

• Play ball: There was a Bloomberg report last week that two of the three founding partners of private equity firm Solamere Capital were buying a small piece of the NY Yankees. It's true... sort of. I'm told that the Solamere partners are actually buying the stake on behalf of an investor in Solamere funds, so this is really more about structure than anything else.

• Schedule: Expect details from Uber on the results of Eric Holder's investigation around 1pm ET today (if they don't leak beforehand). The big news from yesterday was that chief business officer Emil Michael did indeed resign (under pressure, natch), with SVP of strategic initiatives David Richter promoted to SVP of business.

• Update: Last week we reported that Marek Hershel had left AlpInvest Partners, where he was a managing director of fund investments and head of North American activities. We're hearing that he's headed to Australia-based MLC Private Equity, as New York-based head of private equity in the Americas. Expect an official announcement later this week.

• Happy trails: Yumi, a Los Angeles-based baby food startup, today announced $4.1 million in seed funding from August Capital, Brand Foundry, NEA and angels like Hugo Barra, Ali Partovi, Philip Krim and Matt Mullenweg. I'm particularly pleased to see this one, since it means company co-founder Evelyn Rusli won't be returning to the world of tech/deal journalism any time soon (she's ex-WSJ, NYT, etc.). A scoop machine who regularly caused me competitive heartburn...

The BFD

Futu Securities, a Chinese online brokerage, has raised $145.5 million in Series C funding. Tencent led the round, and was joined by return backers Matrix Partners China and Sequoia Capital China.

  • Why it's the BFD: This deal comes as Futu continues to work toward obtaining a U.S. brokerage license, and as more and more Chinese retail traders get comfortable using mobile apps to trade local and U.S. securities (the company claims $44 billion of 2016 transaction value).
  • Risk factor: "The China Securities Regulatory Commission said last July that Futu's online platform provided unauthorized overseas stocks trading services and gave no legal protection to investors. [CEO Li Hua] said his company was 'hit by mistake' and the regulator gave positive feedback after understanding its business." ―Bloomberg
Venture Capital Deals

• XG Entertainment, a Shanghai-based entertainment production company, has raised $73 million in Series B funding led by China International Capital Co. http://bit.ly/2rqCGgG

• Clutter, a Culver City, Calif.-based on-demand physical storage startup, has raised $64 million in Series C funding. Atomico led the round, and was joined by Sequoia Capital, GV and Fifth Wall. http://tcrn.ch/2sj1pHC

• Proterra, a Greenville, S.C.-based maker of all-electric buses, has raised $55 million in sixth-round funding from BMW i Ventures and Generation Investment Management. http://bit.ly/2so3pPJ

• Fusion Risk Management, a Chicago-based provider of SaaS software for business continuity risk management, has raised $41 million in new growth equity funding led by Catalyst Investors. www.fusionrm.com

🚑 Alto (f.k.a. ScriptDash), a San Francisco-based digital pharmacy startup, has raised $23 million in Series B funding from backers like Greenoaks Capital and Jackstone Square Ventures. http://tcrn.ch/2tcUb5r

• Ponycar, a Shenzhen-based electric vehicle rental company, has raised around $22 million in new VC funding from OPPO Electronics, Huiyou Capital and China Peakedness. http://bit.ly/2rqRtYQ

🚑 Art Medical, an Israeli developer of a platform of sensor-based smart tubes solutions for patient data collection and reducing medical complications, has raised $20 million in new VC funding led by Advanced Medical Technologies. http://bit.ly/2svp9c7

• CrowdFlower, a San Francisco-based AI platform for data science and machine learning teams, has raised $20 million in new VC funding. Industry Ventures led the round, and was joined by Salesforce Ventures and return backers Canvas Ventures, Microsoft Ventures and Trinity Ventures. http://bit.ly/2rz72xJ

• Shipbob, a Chicago-based provider of fulfillment solutions for e-commerce businesses, has raised $17.5 million in new VC funding. Bain Capital Ventures led the round, and was joined by Hyde Park Venture Partners, FundersClub, Hyde Park Angels and FJ Labs. http://trib.in/2thb27e

• CognitiveScale, an Austin, Texas-based provider of industry-specific machine intelligence software, has raised $15 million in new VC funding Norwest Venture Partners, Intel Capital, Microsoft Ventures, The Westly Group and USAA. www.cognitivescale.com

• PingCap, a Beijing-based provider of enterprise database solutions, has raised $15 million in Series B funding. China Growth Capital led the round, and was joined by Matrix Partners China, Yunqi Partners, Frees Fund and K2VC. http://bit.ly/2th0iFS

• ROKT, an Australian digital referral marketing company, has raised US$11 million in new Series B funding (bringing the round total to US$26m). Backers include Moelis Australia, Time Inc., Square Peg Capital, Lachlan Murdoch, Greg Roebuck and John Ho. http://bit.ly/2sm0Qhp

• Notion, a Denver-based maker of an IoT smart home sensor, has raised $10 million in Series A funding. Draper Nexus and TransLink Capital co-led the round, and were joined by XL Innovate and Mesh VC. www.getnotion.com

• Trusona, a Scottsdale, Ariz.-based provider of identity authentication solutions, has raised $10 million in Series B funding. Microsoft Ventures led the round, and was joined by Kleiner Perkins Caufield & Byers. http://bit.ly/2re0uos

• Oath Craft Pizza, a Boston-based fast-casual pizza chain, has raised $7 million in Series B funding led by Breakaway Ventures. http://bit.ly/2rkmWkf

• Stratumn, a French platform for deploying and monitoring enterprise blockchain applications, has raised €7 million in Series A funding. CNP Ventures led the round, and was joined by Nasdaq, Digital Currency Group and Otium Venture. http://bit.ly/2sHfFrz

• Nomadic, a San Rafael, Calif.-based developer of "tactile VR experiences," has raised $6 million in seed funding. Horizons Ventures led the round, and was joined by Maveron, Presence Capital, Vulcan Capital, and Verus International. http://bit.ly/2sfPavx

• Compliance.ai, a San Francisco-based financial regulatory platform, has raised $4 million from Cota Capital. http://bit.ly/2rqFM47

• Mrs. Wordsmith, a British ed-tech startup focused on vocabulary development, has raised £2 million in seed funding. Kindred Capital led the round, and was joined by Reach Capital, SaatciNvest and Ropart Asset Management. http://tcrn.ch/2sXglt8

🚑 Thriva, a British blood-testing startup, has raised £1.5 million in seed funding from Seedcamp, 500 Startups, the London Co-Investment Fund and individual angels. http://tcrn.ch/2rdfzXI

Private Equity Deals

• Forterro, an Austin, Texas-based portfolio company of Battery Ventures, has acquired Clip Industrie, a French provider of enterprise resource planning software for industrial SMEs, from Ardian. No financial terms were disclosed. http://bit.ly/2s4zLfB

• iAnthus Capital has agreed to acquire Valley Agriceuticals, which just received one of ten cannabis licenses in New York state. The deal is valued at $17.3 million. www.ianthuscapital.com

• The Riverside Company has acquired Information Technologies, a St. Louis-based provider of software and services for the public safety market. No financial terms were disclosed. www.itiusa.com

⛽ Rubicon Oilfield International, a Houston-based portfolio company of Warburg Pincus, has acquired World Oil Tools, a Calgary-based maker of inflatable products and technology consumed in downhole completions operations. No financial terms were disclosed. http://bit.ly/2sVZMxv

Public Offerings

Altice USA, the U.S. unit of Amsterdam-listed broadband giant Altice NV, has set its IPO terms to 46.6 million shares being offered at between $27 and $31 per share. It would have an initial market cap of $21.4 billion, were it to price in the middle of its range. The company plans to trade on the NYSE under ticker symbol ATUS, with J.P. Morgan listed as left-lead underwriter. It reports a $656 million net loss on more than $9 billion in pro forma revenue for 2016. http://bit.ly/2swloTP

Bad Deals

• Hello, a sleep monitor maker that raised over $40 million in venture capital from groups like Temasek, has laid off most of its employees and is seeking a buyer for its remaining assets, as Axios was first to report yesterday. The San Francisco-based company did recently hold what one investor referred to as "fire sale" talks with Fitbit, but no deal was reached. Also worth noting that Hello products remain for sale via its website and some third-party sites, even though frustrated buyers have been unable to receive customer service replies.

• Gymboree, a San Francisco-based children's retailer owned by Bain Capital, yesterday filed for Chapter 11 bankruptcy protection. It also said that it has lined up over $308 million in new financing, and that it will close 375 of its 1,300 stores.

More M&A

⛽ General Electric (NYSE: GE) has received U.S. antitrust approval for its takeover of oilfield services company Baker Hughes (NYSE: BHI). http://reut.rs/2rVMDGs

🚑 Halyard Health (NYSE: HYH) has hired Deutsche Bank to explore a sale of its hospital products unit, which could be valued at more than $600 million, according to Reuters. http://reut.rs/2swGUYI

• KCB Group, Kenya's largest lender by AUM, is seeking an all-stock takeover of National Bank of Kenya, according to Reuters. http://bit.ly/2sw5QPV

⛽ Penn Virginia Corp. (Nasdaq: PVAC), a Houston-based oil and gas company, has hired Jefferies to explore a possible sale, less than one year after emerging from bankruptcy protection, according to Reuters. The company has a current market cap of around $640 million. http://reut.rs/2svKIJD

Fundraising

• Firstminute Capital, a pan-European seed firm, has closed its debut fund with $60 million in capital commitments. http://bit.ly/2stwPLY

It's Personnel

• Myra D'Souza has joined ParkerGale Capital as a principal. She previously was with PwC. www.parkergale.com

• Don Harrison is now president of global partnerships and corporate development at Google, where he previously was VP of corp dev and, before that, deputy general counsel.

• Jang Sae Kim has been named head of alternatives at National Pension Services of Korea, following the February departure of Sang-Hyun Yoo (now with law firm Kim & Chang). Sae Kim previously led alternatives for Meritz Asset Management. http://bit.ly/2swPjeN

• Partners Group, a Switerland-based firm with $57 billion in assets under management, said that private equity co-head Stephan Schäli will become chief investment officer, while fellow private equity co-head David Layton will lead that part of the business solo. http://bit.ly/2tgFpe0

Final Numbers

Dan Primack