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January 04, 2022

Top of the Morning

Photo illustration of Elizabeth Holmes frowning.
Photo illustration: Aïda Amer. Photo: Justin Sullivan/Getty Images

Elizbeth Holmes, who once promised her company could run hundreds of blood tests from a single pinprick, yesterday was found guilty of conspiracy and defrauding certain investors.

Why it matters: Holmes was the poster child of Silicon Valley hubris, taking "fake it till you make it" to criminal extremes.

The verdict: Jurors found Holmes guilty on four of 11 charges brought by prosecutors, all relating to defrauding certain investors who plugged hundreds of millions of dollars into Theranos.

  • She was found not guilty on four counts of defrauding patients, and the jury was deadlocked on three other charges related to investor fraud.
  • On one hand, this feels like an indictment of a legal system that cares more about money than customer health. On the other, the financial case was easier to prove, thanks to pitch-decks and other investor presentations. But, make no mistake, what Theranos did put people's health at risk; which is why Theranos stands apart from other tech startup frauds.
  • Each charge carries a maximum penalty of 20 years in prison, which could be served concurrently, with her sentencing date to be set next week.
  • Holmes is expected to appeal. She left the San Jose, Calif. courtroom holding her mother's hand, which has been a constant throughout the trial.
  • When we watch the dramatized versions of Theranos — such as Hulu's starring Amanda Seyfried or Apple's starring Jennifer Lawrence — expect yesterday's court scene to be the coda.

Court report: Prosecutors keyed in on what they called "knowingly false statements" made by Holmes, particularly over what could and couldn't be done by Theranos' blood analysis technology.

  • Defense attorneys portrayed Holmes as more naïve than duplicitous, and as the victim — both psychologically and sexually — of former Theranos COO Sunny Balwani, whose own trial is slated for later this year. But the jury didn't buy it.

The big picture: There is a legal line between aspiration and artifice, even when it comes to founders who want to change the world.


Illustration of a wallet with a sports trading card in it.
Illustration: Aïda Amer/Axios

Fanatics agreed to buy the trading cards and collectibles business of Topps for around $500 million.

Why it's the BFD: Topps must feel like a baseball card stuck to a bicycle spoke. The industry pioneer last year agreed to go public via SPAC at a $1.3 billion valuation, but the merger was scrapped after Topps lost its exclusive licensing deal with Major League Baseball to Fanatics, which has yet to print a single card.

Cap tables: Fanatics formed its collectibles unit last summer, via a $350 million investment from Silver Lake, Insight Partners and Endeavor. Topps, which will retain its candy and corporate gift cards assets, is backed by Madison Dearborn Partners and Michael Eisner's Tornante Co.

Sigh: My late grandfather founded and ran a printing company that had the Topps contract for much of the 1950s, which means he could have stashed away dozens of the 1952 Mickey Mantle card that now sells for hundreds of thousands of dollars. Sadly, he didn't save any (yes, I checked ... repeatedly).

Bottom line: "Fanatics took Topps' contracts, then gobbled them up. Call the principal, that's bullying." — Kendall Baker, Axios Sports

Venture Capital Deals

🚑 DNA Script, an S.F.-based on-demand DNA printing company, raised $200 million. T. Rowe Price and Baillie Gifford co-led, and were joined by Healthcor Management, eureKARE, Irving Investors, Coatue, Catalio Capital, Fidelity, Columbia Threadneedle Investments and Casdin Capital.

Human Security, a New York-based cybersecurity company focused on sophisticated bot attacks, raised $100 million. WestCap led, and was joined by NightDragon.

☠️ Liquid Death, an L.A.-based canned water company, raised $75 million in Series C funding led by existing backer Science Inc. Other investors include Live Nation, PowerPlant Partners, Access Capital and Nomad Ventures.

Exotel, an Indian customer engagement platform focused on emerging markets, raised $40 million in Series D funding. Steadview Capital led, and was joined by Blume Ventures and IIFL Asset Management.

Ant Money, a Newport Beach, Calif.-based embedded finance platform, raised $20 million in Series A funding. Franklin Templeton led, and was joined by RX3 Ventures, SteelBridge Laboratories, Steelpoint Capital Partners and founder Walter Cruttenden.

Cion Digital, an Austin, Texas-based enterprise SaaS blockchain orchestration platform, raised $12 million in seed funding. Green Visor Capital and 645 Ventures co-led, and were joined by Cota Capital, Epic Ventures, Hourglass Capital Partners, BAT Ventures, Greycroft and Ulu Ventures.

Labrador Systems, a Calabasas, Calif.-based developer of assistive robots, raised $3.1 million in seed funding co-led by Amazon’s Alexa Fund and iRobot Ventures.

Gahez, an Egyptian B2B fashion marketplace, raised $2 million led by Disruptech Ventures.

Top Tier Capital Partners paid around $200 million to buy stakes in five portfolio companies of B Capital Group, per the WSJ. The secondary strip sale included Ninja Logistics, Carro and Evidation Health,

Private Equity Deals

Arcline agreed to buy CoreDux, a Dutch maker of flexible gas and fluid conveyance components and systems, from Silverfleet Capital.

Authentic Brands Group is in talks to buy a 55% stake in DB Ventures, the brand management firm founded by David Beckham, for around £200 million, per Bloomberg. ABG was recently valued at $12.7 billion, in an investment from CVC Capital Partners and HPS Investment Partners.

Barbri Global, a portfolio company of Francisco Partners, bought West Academic, a Saint Paul, Minn.-based publisher of casebooks and other legal educational materials, from Levine Leichtman Capital Partners.

Crestview Partners acquired Emerald EMS, a Salem, N.H.-based electronics manufacturing services provider, from New Water Capital.

Crosslake Technologies, a Charlotte-based portfolio company of Falfurrias Capital Partners, acquired Renna Partners, a Chicago-based boutique advisory focused on IT.

Dessert Holdings, a portfolio company of Bain Capital, acquired Steven Charles, an Aurora, Colo.-based maker of gourmet desserts for the foodservice and retail channels.

E Source, a Boulder Colo.-based portfolio company of Align Capital Partners, acquired AAC Utility Partners, a Columbia, S.C.-based provider of customer information systems and program management solutions to municipalities and utilities.

• Emerald Holdings, a trade show operator owned by Onex Corp., acquired cannabis trade show operator MJBiz for $120 million in cash.

Gemspring Capital acquired Mantis Innovation Group, a Houston-based energy marketing exchange platform, from O2 Investment Partners.

Gryphon Investors acquired Repipe Specialists, a Burbank, Calif.-based provider of services for plumbing companies.

Highview Capital acquired Watterson, a Schaumburg, Ill.-based facility services company.

Littlejohn & Co. acquired Magnate Worldwide, a Portland, Ore.-based supply chain management company, from CIVC Partners.

🚑 MHH Healthcare, an Oklahoma City-based portfolio company of Kinderhook Industries, acquired Medical Card Systems, a Puerto Rico-based health insurer.

MidOcean Partners bought Casper’s Ice Cream, a maker of frozen novelty products under the FatBoy Brand.

Trilantic North America bought Addison Group, a Chicago-based staffing services and consulting firm, from Odyssey Investment Partners.

Public Offerings

Credo, a San Jose, Calif.-based chipmaker, filed for an IPO. It plans to list on the Nasdaq (CRDO) and reports a $17 million net loss on $26 million for the six months ending 10/31/21. The company raised over $200 million from firms like BlackRock, WRV Capital and Walden International.

Justworks, a New York-based provider of HR management software, set IPO terms to 7 million shares at $29-$32. It would have a $1.9 billion market cap, were it to price in the middle, plans to list on the Nasdaq (JW) and reports $11 million of net income on $983 million in revenue for the year ending 5/31/21. Backers include Bain Capital Ventures, Index Ventures, Redpoint Ventures, Spark Capital, Thrive Capital, USV and FirstMark Capital.

TPG set IPO terms to 33.9 million shares at $28-$31. It would have a fully diluted value of $9.3 billion, were it to price in the middle, and ended its most recent quarter with $109 billion in AUM.

SPAC Stuff

Novo Tellus Capital Partners of Singapore received regulatory approval to proceed with an IPO for what would be the Singapore Stock Exchange’s first SPAC, per Bloomberg.

Pico, a New York-based fintech going public via FTAC Athena Acquisition (Nasdaq: FTAA), acquired Redline Trading Solutions, a Woburn, Mass.-based provider of trading and market data software. Redline raised over $17 million from backers like Cue Ball and Goldman Sachs.

Liquidity Events

Blackbaud (Nasdaq: BLKB) acquired EverFi, a Washington, D.C.-based “impact-as-a-service” ed-tech company for around $750 million in cash and stock. Sellers include TPG Rise Fund, Advance Publications, Bezos Expeditions, Eric Schmidt and Ev Williams.

Digital Realty Trust (NYSE: DLR) agreed to buy a majority stake in Nigeria-based Teraco Data Environments, Africa’s largest data center operator, for $3.5 billion from Berkshire Partners and Permira.

🚑 Novo Holdings agreed to buy Ritedose, a Columbia, S.C.-based contract pharma firm focused on inhalation and ophthalmic products, from AGIC Capital and Humanwell Healthcare.

More M&A

David Bowie GIF - Find & Share on GIPHY
Source: Giphy

Warner Music Group (Nasdaq: WMG) agreed to buy David Bowie’s songwriting catalog for a reported $250 million.

CBRE Investment Management agreed to buy a warehouse portfolio in the U.S. and Europe from Hillwood Investment Properties for $4.9 billion.


Ribbit Capital, a fintech VC firm, raised $1.16 billion for its seventh flagship fund, per an SEC filing.

It's Personnel

Bridgewater Associates, the world’s largest hedge fund manager, named Nir Bar Dea and Mark Bertolini as co-CEOs. This follows the resignation of David McCormick, who's expected to run for U.S. Senate in Pennsylvania as a Republican.

Matt Levinson joined B Capital Group as a partner leading fintech, crypto and prop-tech deals. He previously was with FinTech Collective.

Suaad Sait joined Great Hill Partners as a growth partner. He previously was president of SharpSpring (acquired by Constant Contact).

JMI Equity promoted Sureel Sheth to general partner and Stephen Jones to principal.

TCV promoted Matthew Robinson to partner.

Thoma Bravo promoted seven principals to partners: Andrew Almeida, Tara Gadgil, Mike Hoffmann, Brian Jaffee, Carl Press, Adam Solomon and Peter Stefanski.

Final Numbers

Data: CrunchBase; Chart: Connor Rothschild/Axios

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