Sep 16, 2021

Axios Pro Rata

🚨 Coming attractions: Democrats and Republicans are daring each other to blink on the debt ceiling, with global financial calamity hanging in the balance, Axios' Alayna Treene reports.

  • A reminder that most of those threatening to block an increase voted for spending whose resulting debt needs to be serviced. In other words, they're aspiring deadbeats.
Top of the Morning

Illustration: Aïda Amer/Axios

When Mailchimp recently agreed to be acquired by Intuit for $12 billion, we noted how it was the richest sale ever of a private bootstrapped company. Now we know more about why the Atlanta-based email marketing company never took outside funding.

The big picture: Mailchimp founder and CEO Ben Chestnut tells me that it was all about timing.

  • Mailchimp was founded in 2001, when the country was in recession and the dotcom bust was still fresh. Raising venture capital was hard for most startups, let alone one based in Atlanta.
  • There was, in Chestnut's words, "a whole movement to get real, get pragmatic about things ... a distaste for" venture capital.

Some prospective investors did eventually visit Atlanta, but Chestnut says they missed the opportunity, in large part because they were still stuck in the past:

"There was no prevalence of micropayments. When I told people we charged $5 a month through a credit card, nobody got that, they just wondered about the transaction fees. And remember, when Apple iTunes began, charging 99 cents per song, that was radically different."
"I'd ask investors flat out, 'What would I use it for?' And they'd say to go buy a bunch of Cisco servers.' And I'd say: 'There's managed hosting now. Have you not heard of Rackspace?'"

Chestnut adds that VCs also questioned why Mailchimp was focusing on the small business sector, which some noted was a nut that only Intuit had managed to lucratively crack.

Inside look: A few other notes from our conversation, which also included Intuit small biz boss Alex Chriss...

  • Chestnut began getting informally advised a couple of years ago by Intuit co-founder and board member Scott Cook, first via phone over lunch. Not about an acquisition, but about how to transform Mailchimp from an email-only business into one that also incorporated other communications tools (social media, etc.). Or, as Chestnut puts it, moving from Act 1 to Act 2.
  • "I used to joke that the 'e' in email stands for expendable income."
  • Chestnut and Intuit's Chriss first began talking last year, leading to what became the first time that Mailchimp ever formally hired bankers (Qatalyst Partners) for an auction. Chestnut said there were multiple takeover offers, but declined to say if Intuit's was the largest.

Chestnut is about to become a multibillionaire, but says the only purchase he's planning is a new mountain bike. The 47-year-old adds:

"As our biz started to ramp up, we were already in our 30s and already had kids. I've mentioned to my co-founder Dan that we were so fortunate to have been grounded before our business began to take off. If this had happened in our 20s, God help us."
The BFD

Illustration: Eniola Odetunde/Axios

Rebellion Defense, a developer of AI solutions for the national defense of the U.S. and its allies, raised $150 million in Series B funding at a $1 billion pre-money valuation co-led by Insight Partners and Venrock.

  • Why it's the BFD: This reflects a sea shift for venture capital, which long avoided defense startups because of both philosophical differences and a general resistance to companies that are beholden to government procurement processes.
  • Other investors include Innovation Endeavors, Declaration Partners and Lupa Systems.
  • Bonus: In 2019 I moderated a discussion at Founders Fund's offices about defense investing, and the fissures between D.C. and Silicon Valley. My panelists included Rebellion founder and CEO Chris Lynch, who then was leading the Pentagon's Digital Defense Service (fresh off a plane from Kandahar). Here's the full audio recording.
  • The bottom line: "People talk a lot about the defense industrial base, and we're part of that key middle word. But it's now a different world, where industrial is about software and technology." — Chris Lynch to Axios
Venture Capital Deals

🐉 Discord, a San Francisco-based chat platform popular among gamers, raised $500 million at a $15 billion valuation. Dragoneer led, and was joined by Baillie Gifford, Coatue, Fidelity and Franklin Templeton. The company recently ended talks to be bought by Microsoft. http://axios.link/vU71

Pine Labs, an India-based merchant commerce platform, raised $100 million from Invesco Developing Markets Fund, just weeks after raising $600 million at a $3 billion valuation. http://axios.link/lWUE

Omaze, an organizer of fundraising sweepstakes for nonprofits, raised $85 million in Series C funding. Moore Strategic Ventures led, and was joined by FirstMark Capital, Wndrco, Telstra Ventures, Causeway Media Partners, Mockingbird Ventures, BDMI, Pegasus Ventures, Bono, Kerry Washington, Tom Brady and Alexis Ohanian. http://axios.link/wSvG

🚑 Amolyt Pharma, a developer of therapeutic peptides for rare endocrine diseases, raised $80 million in Series B funding. Sectoral Asset Management and Andera Partners co-led, and were joined by ATEM Capital and insiders LSP, Novo Ventures, Kurma Partners, Mass General Brigham Ventures, Bpifrance, Orbimed, Pontifax, Eurazeo, Sham Innovation Santé/Turenne Capital and Credit Agricole Creation. www.amolytpharma.com

Tradesy, an online marketplace for secondhand high-end fashion goods, raised $67 million in Series D funding led by John Doerr's family office (Foris Ventures). http://axios.link/Fr8N

Rewind, a Canadian cloud backup and recovery company, raised US$65 million in Series B funding. Insight Partners led, and was joined by Bessemer Venture Partners, FundFire, Inovia Capital, Ridge Ventures, ScaleUp Ventures and Union Ventures. http://axios.link/XS3M

🚑 Anjarium, a Swiss developer of nonviral gene therapies, raised $61 million in Series A funding. Abingworth and GIMV co-led, and were joined by Omega Funds, Pfizer Ventures and Surveyor Capital. http://axios.link/1DXv

Abra, a Mountain View, Calif.-based wealth management platform for cryptocurrency investors, raised $55 million in Series C funding. IGNIA and Blockchain Capital co-led, and were joined by Kingsway Capital, Tiga Investments, Stellar Development Foundation and insiders Lerer Hippeau Ventures, Amex Ventures, Arbor Ventures, RRE Ventures, CMT Digital Ventures and Kenetic Advisors. http://axios.link/J5LO

Constructor, an SF-based provider of e-commerce search and product discovery tools, raised $55 million in Series A funding led by Silversmith Capital Partners. http://axios.link/GQ5c

🚑 Francis Medical, a Minneapolis-based developer of thermal water vapor ablation therapies, raised $55 million in Series B funding. Solas BioVentures led, and was joined by Arboretum Ventures, Coloplast A/S, H2Oey Ventures and Tonkawa. http://axios.link/MKD5

StrongDM, a Burlingame, Calif.-based infrastructure access platform, raised $54 million in Series B funding. Tiger Global led, and was joined by GV and insiders Sequoia Capital, True Ventures, HearstLab and Bloomberg Beta. http://axios.link/iovM

Canvas, an SF-based diversity recruitment platform, raised $50 million in Series C funding. Owl Ventures led, and was joined by Sequoia Capital, Lachy Groom, Zoom, HighSage Ventures, BAM Elevate and Fifth Down Capital. http://axios.link/AW8n

CodeSignal, an SF-based tech recruiting assessment platform, raised $50 million in Series C funding. Index Ventures led, and was joined by Menlo Ventures, A Capital and Headline. www.codesignal.com

Outer, a Santa Monica, Calif.-based DTC outdoor furniture retailer, raised $50 million in Series B funding. Capital Today led, and was joined by Tribe Capital, C Ventures, Upfront Ventures and insiders Sequoia Capital China, Mucker Capital, Mantis VC and Reimagined Ventures. http://axios.link/lhdv

Self Financial, an Austin, Texas-based startup that helps consumers establish and build credit history, raised $50 million in Series E funding. Altos Ventures led, and was joined by insiders Meritech Capital and Conductive Ventures. http://axios.link/qlZi

Skello, a French employee scheduling SaaS startup, raised €40 million. Partech led, and was joined by insiders XAnge and Aglaé Ventures. http://axios.link/Go3j

Sleeper, an SF-based fantasy sports startup, raised $40 million at a $400 million valuation. Andreessen Horowitz led, and was joined by fellow insiders General Catalyst and Birchmere Ventures. http://axios.link/zGxi

Open Mineral, a Swiss digital trade platform for base metal commodities, raised $33 million. Mubadala Investment Co. led, and was joined by Statkraft, Lingfeng Capital and insiders Xploration Capital and Emerald Technology Ventures. www.openmineral.com

🚑 54gene, a Nigerian genomics startup, raised $25 million in Series B funding. Cathay AfricInvest Innovation Fund led, and was joined by KdT Ventures, Plexo Capital, Endeavor Catalyst, Ingressive Capital and insider Adjuvant Capital. http://axios.link/99l7

Relyance AI, an SF-based privacy compliance startup, raised $25 million in Series A funding co-led by Menlo Ventures and Unusual Ventures. http://axios.link/hfQX

🚑 Flywheel, a Minneapolis-based biomedical research data management platform, raised $22 million in Series C funding. 8VC led, and was joined by iSelect, Argonautic Ventures, Beringea, DrX/Novartis, HPE Pathfinder, Spike Ventures, Key Investments, Seraph and Great North Labs. It also bought St. Louis-based clinical trial software company Radiologics. http://axios.link/NMKR

🚑 Rune Labs, an SF-based developer of precision medicines for neurodegenerative and psychiatric disorders, raised $22.8 million in Series A funding. Eclipse Ventures led, and was joined by insiders DigiTx and Moment Ventures. www.runelabs.io

The Org, a publicly available database of company org charts, raised $20 million in Series B funding. Tiger Global led, and was joined by Thursday Ventures and insiders Sequoia Capital, Founders Fund, and Balderton Capital http://axios.link/lEtB

Pyxis One, a Burlingame, Calif.-based codeless AI platform for consumer intelligence, raised $17 million in Series B funding. Celesta Capital and Premji Invest co-led, and were joined by Chiratae Ventures, pi Ventures and Exfinity Venture Partners. www.pyxis-one.com

Axelera AI, a Dutch AI semiconductor startup, raised $12 million in seed funding led by Bitfury. www.axelera.ai

Delegate Connect, an Australian virtual/hybrid events platform, raised A$10 million in seed funding led by AirTree Ventures. http://axios.link/RPTJ

Socero, a language intelligence startup, raised $10 million in Series A funding. CityRock Venture Partners led, and was joined by Harmonix Fund, Rackhouse, Mighty Capital, Leawood VC, Castor Ventures and WorldQuant Ventures. http://axios.link/wpXB

Confirm, a London-based reg-tech startup focused on digital currencies, raised $8 million in Series A funding led by SIX Fintech Ventures. www.coinfirm.com

Ascend, an insurance payments platform, raised $5.5 million in seed funding. First Round Capital led, and was joined by Susa Ventures, FirstMark Capital and Box Group. http://axios.link/CQs3

Private AI, a Toronto-based provider of privacy-preserving ML and natural language processing tools, raised C$3.15 million in seed funding co-led by M12 and Forum Ventures. www.private-ai.com

California Cowboy, a “social-technical” apparel brand, raised $2 million in seed funding led by Venn Growth Partners. http://axios.link/dNi2

Private Equity Deals

Lexington Partners, a private equity secondaries and co-investment firm, is seeking a buyer, per the WSJ. KKR is among the bidders. http://axios.link/uzRD

ACA Group, a portfolio company of Ardian and Starr Investment Holdings, acquired Catelas, a Woburn, Mass.-based electronic communications surveillance and investigations platform. www.acaglobal.com

Berkshire Partners agreed to buy Fast Growing Trees, a Charlotte-based DTC e-retailer of trees and plants, with Cove Hill Partners participating as a minority investor. www.fast-growing-trees.com

CVC Capital Partners agreed to buy a “significant interest” in CFGI, a Boston-based non-audit accounting advisory firm backed by The Carlyle Group, at a $1.85 billion valuation. http://axios.link/i2hV

Platinum Equity bought Petmate, an Arlington, Texas-based pet products brand, from Olympus Partners. http://axios.link/StvP

Prudential Financial (NYSE: PRU) agreed to sell part of its in-force legacy variable annuity block to Fortitude Re, a portfolio company of The Carlyle Group and T&D Insurance Group, for $2.2 billion. http://axios.link/S6Z0

Public Offerings

🚑 Cue Health, a San Diego-based developer of portable health testing solutions, set IPO terms to 12.5 million shares at $15-$17. It would have a $2.4 billion fully diluted value if it were to price in the middle, plans to list on the Nasdaq (HLTH) and reports $33 million of net income on $202 million in revenue for the first half of 2021. Cue raised nearly $400 million from firms like ACME Capital (13.2% pre-IPO stake), Cove Investors (11%), Decheng Capital (7.3%), Madrone (6.3%), Perceptive Advisors, MSD Capital, Koch Strategic Platforms, J&J and CAVU Ventures. http://axios.link/3ROZ

🚑 Definitive Healthcare, a Framingham, Mass.-based health care commercial intelligence software provider, raised $420 million in its IPO. It priced at $27 (above upwardly revised range), listed on the Nasdaq (DH) and reports a $26 million net loss on $77 million in revenue for the first half of 2021. Backers include Advent International and Spectrum Equity. http://axios.link/n0vb

🚑 Dice Therapeutics, a South SF-based developer of therapies for chronic immunologic diseases, raised $204 million in its IPO. It priced at $17 (high end of range), listed on the Nasdaq (DICE) and previously raised $234 million from firms like RA Capital (15.1% pre-IPO stake), Northpond Ventures (12.1%) and Sands Capital (9.3%). http://axios.link/0wrL

Enact Holdings, a private mortgage insurer being spun out of Genworth Financial, raised $253 million in its IPO after pricing at the low end of its $19-$20 range. http://axios.link/TBhe

ForgeRock, a San Francisco-based provider of identity management tools for the enterprise, raised $275 million in its IPO. It priced at $25 (above range), for a $1.98 billion market cap, and reports a $20 million net loss on $85 million in revenue for the first half of 2021. The company has raised $273 million from firms like Riverwood Capital, Meritech Capital Partners, KKR, Foundation Capital, Accel and Accenture Ventures. http://axios.link/menr

🚑 Theseus Pharma, a Cambridge, Mass.-based developer of pan-variant kinase inhibitors for solid tumors, filed for an IPO. It plans to list on the Nasdaq (THRY) and raised over $120 million from firms like OrbiMed (58.9% pre-IPO stake) and Foresite Capital (11.1%). http://axios.link/in7k

🚑 Tyra Biosciences, a Carlsbad, Calif.-based developer of therapies targeted at drug-resistant cancer cells, raised $173 million in its IPO. The pre-revenue company priced 10.8 million shares at $16, versus plans to offer 9 million shares at $14-$16, listed on the Nasdaq (TYRA) and previously raised over $150 million from firms like RA Capital (19.9% pre-IPO stake), Boxer Capital (19.9%), Canaan Partners (14.6%), Alta Partners (13%) and Nextech (6.3%). http://axios.link/PZl4

SPAC Stuff

Illustration: Rebecca Zisser/Axios

Gogoro, a Taiwanese developer of e-scooters and swappable battery tech, agreed to go public at an implied $2.35 billion valuation via Poema Global Holdings Corp. (Nasdaq: PPGH). Gogoro had raised around $480 million from backers like Temasek, Engie New Ventures, Generation Investment Management and Sumitomo. http://axios.link/Ej4G

🚑 Prenetics, a Hong Kong-based COVID-19 testing company, agreed to go public at an implied $1.7 billion valuation via Artisan Acquisition (Nasdaq: ARTA), a SPAC led by Ben Cheng (C Ventures). Prenetics had raised around $160 million from firms like 500 Global, Apis Partners, Venturra Capital, Ping An Ventures and Gobi Ventures http://axios.link/hfkh

IX Acquisition, a European TMT and ICT SPAC, filed for a $200 million IPO. http://axios.link/pKwe

Liquidity Events

Byju's, an Indian online learning platform valued by VCs at around $12 billion, paid $2o0 million to buy Tynker, a Los Altos, Calif.-based coding education platform for K-12. Tynker had raised around $15 million from firms like Felicis Ventures, Cervin Ventures, GSV Ventures and NEA. http://axios.link/AeJi

🚑 Kinderhook Industries sold StudyKIK, an Irvine, Calif.-based clinical trial patient recruitment platform, to Syneos Health (NYSE: SYNH). www.studykik.com

Pentair (NYSE: PNR) agreed to buy Pleatco Filtration, a Louisville, Ky.-based maker of clean air and pool/spa water filtration products, from Align Capital Partners for $255 million. www.pleatco.com

More M&A

Siemens is seeking a buyer for its logistics unit, which could fetch around €500 million, per Reuters. http://axios.link/Ck1B

Thyssenkrupp agreed to sell its Italian stainless steel business to Arvedi. http://axios.link/6GDF

Fundraising

500 Startups rebranded to 500 Global, and raised $140 million for its fifth flagship fund. http://axios.link/b8sJ

Aldrich Capital Partners a Vienna, Va.-based growth equity firm, raised $450 million for its second fund. www.aldrichcap.com

Commonfund Capital raised $236 million for its third global private equity fund-of-funds. www.commonfund.org

It's Personnel

Valerie Auffray (ex-Apposite Capital) joined PE advisory Triago as a partner and head of U.K. operations. Triago also named Matt Swain and Victor Quirogo as co-heads of the Americas. www.triago.com

Rodrigo Baer (ex-Redpoint eventures) and Marco Camhaji (ex-Amazon corp dev and CEO of Adianta) joined SoftBank as managing partners focused on Latin America investments. www.softbank.com

Battery Ventures promoted Jordan Welu to partner. www.battery.com

Susan Clark (ex-TCV) joined Sun Capital Partners as a managing director and head of tech value creation on its ops team, while Kelli Turner (SESAC) joined as a managing director and CFO. www.suncappart.com

Ben Harper joined Stonepeak as head of ESG. He previously led corporate sustainability at Zurich Insurance. www.stonepeakpartners.com

Dave Kellogg joined European VC firm Balderton Capital as an executive-in-residence. He’s former CEO of Host Analytics and MarkLogic, plus SVP/GM of Salesforce.com’s service cloud business. www.balderton.com

Final Numbers: Software deal multiples
Source: 451 Research as of 6/30/21, via Duff & Phelps Global Software Sector Update

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