Axios Pro Rata

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June 22, 2023

Top of the Morning

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Illustration: Aïda Amer/Axios

When Michael Jordan last week agreed to sell the Charlotte Hornets for $3 billion to Gabe Plotkin and Rick Schnall, it was one of the richest deals in NBA history.

  • It also was one of the best by a more important investment metric: IRR, or internal rate of return, which incorporates length of ownership.

By the numbers: Jordan generated a 20.18% IRR over his 13 years owning the NBA franchise, which is second only to the 26.67% IRR that Russian billionaire Mikhail Prokhorov generated from his nine-year stewardship of the New Jersey/Brooklyn Nets.

  • The IRR top five rounds out with the former owners of the Boston Celtics (18.21%), LA Clippers (17.19%) and Utah Jazz (14.96%).
  • The lowest IRRs are for the former owners of the Dallas Mavericks (5.93%), Denver Nuggets (7.08%) and Memphis Grizzlies (7.38%).

Caveat: A handful of clubs were excluded from my calculations, either because the team is still controlled by its original owner, the last sale was more than 25 years ago, or the process was too convoluted to adequately compare to the rest (e.g., 76ers and Knicks).

  • We're also not including any subsequent investments, such as stadium improvements, or dividends that owners may have paid themselves.

The big picture: For context, the two richest pro sports deals ever were recent sales of the NFL's Washington Commanders for $6 billion and the Denver Broncos for $4 billion.

  • IRRs for sellers in those deals were 8.8% and 11.3%, respectively.

The bottom line: Michael Jordan's tenure as an NBA owner was an on-court calamity, with his club winning fewer total playoff games in 13 seasons than Jordan the player did nine times in single seasons. But, off-the-court, it was nearly the GOAT.

The BFD

Animated GIF of a spotlight swinging over the Amazon logo.

Illustration: Sarah Grillo/Axios

Amazon (Nasdaq: AMZN) is weighing a takeover offer for British online grocer Ocado (LSE: OCDO), according to The Times, which added that other U.S. tech "heavyweights" could be in the mix.

Why it's the BFD: This news came on the same day that Amazon was hit with its first lawsuit by Lina Khan's FTC.

  • Khan, who first came to public attention by arguing in an academic paper that Amazon is a monopoly, hasn't yet figured out how to bring an antitrust case. Instead, she went after Amazon's alleged habit of enrolling customers in Prime without consent and then making it onerous to cancel subscriptions.
  • Ocado does have some U.S. operations, while Amazon's Whole Foods has a handful of U.K. locations.

By the numbers: Ocado shares soared more than 30% on the report, closing Thursday trading with around a £4.5 billion market value, although it still hasn't regained all of its 2023 losses.

The bottom line: "Ocado licenses grocery delivery technology, which is used in the company's retail division to bring food, beverages and household goods to more than 800,000 customers across the U.K., according to the company website. Ocado sells own-brand items as well as Marks & Spencer products." — Hannah Ward-Glenton, CNBC

Venture Capital Deals

Warp, a modern terminal app, raised $50m in Series B funding. Sequoia Capital led, and was joined by GV, BoxGroup, Neo and individuals like Dylan Field, Marc Benioff, Jeff Weiner and Sam Altman. https://axios.link/3CHsp6J

System Initiative, an SF-based infrastructure automation platform, raised $15m in Series A funding. Scale Venture Partners led, and was joined by Amplify Partners, Storm Ventures and Battery Ventures. https://axios.link/3plCtPN

🚑 Outbound AI, a Seattle-based health care billing and claims automation startup, raised $16m in seed funding led by Madrona Venture Group and SpringRock Ventures. https://axios.link/3Jqmirr

🚑 Beaconcure, an Israeli provider of clinical trial data software, raised $14m in Series B funding led by NewVale Capital. www.beaconcure.com

GoodBuy Gear, a Denver-based online resale marketplace for baby and children’s gear, raised $14m in funding co-led by Interlock Partners and Revolution Ventures. https://axios.link/3NCxfIQ

🌎 Supercritical, a London-based carbon removal marketplace, raised $13m in Series A funding. Lightspeed Venture Partners led, and was joined by RTP Global, Greencode Ventures and MMC Ventures. https://axios.link/3JtTXjL

GGTech Entertainment, a Spanish esports startup, raised $12.4m. Gilsco Partners led, and was joined by Heart Beat. www.ggtech.global

🚑 Duos, a Minneapolis-based senior benefits navigation startup, raised $10m from Primetime Partners, SJF Ventures and the Aging Innovation Fund. https://axios.link/3NjNo4E

🌎 TreaTech, a Swiss water treatment startup, raised around $10m in Series A funding. Engie New Venture and Montrose Environmental Group co-led, and were joined by EIC Fund, Sipchem, CMA-CGM and Holdigaz. www.trea-tech.com

Maverick Protocol, a DeFi infrastructure startup, raised $9m. Founders Fund led, and was joined by Pantera Capital, Binance Labs, Coinbase Ventures and Apollo Crypto. https://axios.link/43OKewH

Gorgie, a New York City-based energy drink brand, raised $6.5m in pre-seed funding from individuals. https://axios.link/3CIwUxZ

WindBorne Systems, a Palo Alto, Calif.-based maker of long-endurance smart weather balloons, raised $6m in seed funding. Footwork led, and was joined by Khosla Ventures, Pear VC, Ubiquity Ventures, Harvest Ventures, Humba Ventures, Jetstream and Convective Capital. https://axios.link/3qTXvp8

Hypar, a Culver City, Calif.-based building design platform, raised $5.5m in Series A funding. Brick & Mortar Ventures led, and was joined by Building Ventures. www.hypar.io

🚑 Oliva, a British employee mental health platform, raised £5m. Molten Ventures led, and was joined by Stride VC and Alumni Ventures. https://axios.link/3qW1NMN

🚀 ATMOS Space Cargo, a German space capsule developer, raised €4m in seed funding. High-Tech Gründerfonds and the Amadeus APEX Technology Fund co-led, and were joined by Seraphim, E2MC, Ventis and Another VC. https://axios.link/3qO1raQ

🌎 Kubik, a Kenya-based plastics upcycler, raised $3.3m in seed funding from Plug & Play, Bestseller Foundation, GIIG Africa Fund, Satgana, Unruly Capital, Savannah Fund, African Renaissance Partners, Kazana Fund, Princeton Alumni Angels and Andav Capital. https://axios.link/3XkAIPj

🚑 Rosarium Health, a Denver-based home health provider, raised $1.7m in pre-seed funding co-led by Primetime Partners and Rock Health Capital. www.rosariumhealth.com

Chexy, a Toronto-based rewards platform for on-time rent payments, raised US$1.3m in pre-seed funding. Crossbeam Ventures led and was joined by Groundbreak Ventures and Ferst Capital Partners. www.chexy.co

TransBnk, an Indian cross-border payments startup, raised $1m in seed funding led by 8i Ventures. https://axios.link/3CGhN8o

A stealth AI startup led by Bret Taylor (ex-Salesforce co-CEO, Twitter chair) and Clay Bavor (ex-Google), raised at least $20m in first-round funding, per The Information. Benchmark led and was joined by Sequoia Capital. https://axios.link/46jMXA0

Private Equity Deals

Blackstone invested another $1b in Chicago-based renewable energy developer Invenergy Renewables, into which it previously plugged $3b. https://axios.link/3qVYjtJ

GAI Consultants, a Homestead, Pa.-based portfolio company of Comvest Partners, acquired Eland, a Fort Lauderdale, Fla.-based provider of engineering consulting and field maintenance services for traffic signal and transportation systems. www.gaiconsultants.com

Harvest Partners acquired a majority stake in Sparq, an Atlanta-based provider of outsourced digital engineering solutions. www.teamsparq.com

HRSoft, a Denver-based portfolio company of Bow River Capital Partners, acquired CompTrak, a Toronto-based provider of compensation management software. www.hrsoft.com

IFS, a Swedish portfolio company of EQT, Hg and TA Associates, agreed to buy Poka, a Canadian provider of connected worker software for the manufacturing industry. www.ifs.com

🚑 Kelso & Co. acquired Valenz Health, a Phoenix-based medical cost containment firm, from Great Point Partners. www.valenzhealth.com

Richard Hurowitz, former CEO of TPG-backed Octavian Advisors, is partnering with Mubadala Investment Co. on a bid for book publisher Simon & Schuster, per the WSJ. Other suitors reportedly include KKR and News Corp. subsidiary HarperCollins. https://axios.link/3PrIUeO

XDimensional, a Boston-based portfolio company of Serent Capital, acquired I-Engineering, a Shelton, Conn.-based provider of insurance wholesale broker software. www.xdti.com

Zendesk, backed by Permira and Hellman & Friedman, acquired Tymeshift, a Fairfield, Iowa-based workforce management solution in which Zendesk had previously invested. www.tymeshift.com

SPAC Stuff

Nabors Energy Transition II, an energy transition SPAC formed by Nabors Industries (NYSE: NBR), filed for a $300m IPO. https://axios.link/3JmK0Vu

Liquidity Events

🚑 Bio-Techne (Nasdaq: TECH) agreed to buy Lunaphore Technologies, a Swiss spatial biology startup that had raised over $80m from firms like EGS Beteiligungen, PHC Holdings, Swiss Entrepreneurs Foundation, Redalpine Venture Partners and Occident Group. www.lunaphore.com

Robinhood Markets (Nasdaq: HOOD) agreed to acquire SF-based credit card startup X1 for $95m in cash. X1 had raised over $60m from Rogue Capital, Spark Capital, FPV Ventures and Soma Capital. https://axios.link/43UqzeJ

More M&A

Covestro, a listed German plastics firm, rejected a $12b takeover offer from Abu Dhabi National Oil Co. (Adnoc), per Bloomberg. https://axios.link/42OF7eJ

Embracer Group, a Swedish gaming giant that last year acquired the rights to “Lord of the Rings,” disclosed that the purchase price was $396m. https://axios.link/42WpdPk

Rivian (Nasdaq: RIVN) acquired the parent company of EV route-planning app ABetterRouteplanner. https://axios.link/46eyWTX

🚀 SES SA ended talks to merge with rival satellite company Intelsat, per Bloomberg. https://axios.link/3PrWrDg

Fundraising

Aldine Capital Partners of Chicago raised $276m for its fourth fund, which provides junior capital financing to lower midmarket companies. www.aldinecapital.com

Glisco Partners of Mexico held $100m first closes for its fifth PE fund and its first real estate fund. www.gliscopartners.com

Illuminate Financial, a London-based VC firm focused on financial services startups, raised $235m for its third fund. www.illuminatefinancial.com

KCRise Fund, a Kansas City-based VC firm, raised $34m for its third fund. www.kcrisefund.com

Robin Capital, a Europe-focused solo GP venture fund led by Robin Haak (Jobspotting founder, ex-Revaia Growth One), held a €3m first close for a debut fund that’s seeking up to €20m. https://axios.link/44ammTW

Stone-Goff Partners, a PE firm focused on B2B services companies, raised $175m for its fourth fund. www.stonegoff.com

It's Personnel

Larry Colagiovanni (ex-Limeade) and Jay Bartot (Zeitworks) each joined Seattle-based Madrona Venture Labs as tech and AI partners. MVL also announced $11m for its fifth fund. www.madronavl.com

Kevin Phillips, chairman of ManTech International, joined Paladin Capital Group as a strategic advisor. www.paladincapgroup.com

Bessemer Venture Partners promoted Caty Rea to vice president. www.bvp.com

Final Numbers

Data: FRED; Chart: Axios Visuals
Data: FRED; Chart: Axios Visuals

High-yield corporate bond spreads rose shockingly fast in the wake of Silicon Valley Bank's collapse — to levels that typically indicate recession risk, Axios' Kate Marino writes.

  • But spreads have receded to their pre-banking crisis levels, furthering a new conventional wisdom that a soft landing isn't just possible, but likely.

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