May 8, 2019

Axios Pro Rata

Dan Primack
Top of the Morning

Illustration: Sarah Grillo/Axios

When Uber sold its China business to Didi Chuxing in 2016, the ride-hail giant thought it had taken care of its China problems. It was wrong, although this time the trouble isn't of its own making.

  • Uber plans to price its mega-IPO tomorrow night, and begin trading Friday morning.
  • Not only does that mean it's going public during a week in which the markets have been roiled by increased U.S.-China trade tensions, but it's going public on the exact day that President Trump has threatened to impose new tariffs on $200 billion of Chinese imports.
  • This could help explain why we haven't yet seen an increased IPO price range, despite widespread talk that the offering is already oversubscribed. (I still wouldn't be surprised if it happens, but time is running short).

The biggest headache here is macro, although Uber's IPO registration does list two relevant risk factors:

  1. The imposition of duties, tariffs, and other charges on imports and exports, including with respect to imports and exports of dockless e-bikesand e-scooters from China.
  2. Disruption in the supply of certain hardware and components from our international suppliers, particularly those in China.

It's entirely possible that Trump is bluffing about his Friday deadline, or that his Twitter bluster is prelude to an agreement (as we saw with Canada/USMCA). But Uber won't really know until after it prices and, if Trump keeps his word, it would list into extremely bearish sentiment.

The bottom line: For a company that waited so long to IPO, it might have inadvertently picked one of the worst possible times.

🎧 Pro Rata Podcast digs into what happened in Long Island City after Amazon pulled its HQ2 project. Listen here.

  • This afternoon's episode will focus on the Uber/Lyft driver strikes, which are taking place today around the country. We hope to have it up in a few hours.
  • Not yet a Pro Rata Podcast subscriber? Rectify!
The BFD

Illustration: Sarah Grillo/Axios

Face++, a Chinese developer of facial recognition technology, raised $750 million at a valuation just north of $4 billion. Reuters reports that the company also has hired bankers for a Hong Kong IPO that's expected for later this year.

  • Why it's the BFD: This comes just days after Human Rights Watch reported that Face++ technology is being used by the Chinese government to identify potential terrorists — an extensive and highly-subjective data collection process that has helped result in the detention of over one million Uighur Muslims in China's Xinjiang region.
  • Investors: Bank of China Group Investment led with a $200 million infusion, and was joined by Macquarie Group, ICBC Asset Management, Abu Dhabi Investment Authority and return backer Alibaba.
  • Bottom line: "It's been two years since the internment camps first came to light internationally, and a series of reports from Xinjiang have made vivid the scale of the abuses. Yet foreign governments and corporations are content to pretend it isn't happening." — Dave Lawler, Axios
Venture Capital Deals

• Altiostar, a Tewksbury, Mass.-based developer of open virtualized RAN technology, raised $114 million in Series C funding from Rakuten, Qualcomm Ventures and Tech Mahindra. www.altiostar.com

Sumo Logic, a Redwood City, Calif.-based machine data analytics platform, raised $110 million in Series G funding. Battery Ventures led, and was joined by Tiger Global and Franklin Templeton. http://axios.link/Y2MZ

VTS, a New York-based provider of software for managing commercial real estate leases, raised $90 million in Series D funding at a valuation north of $1 billion. Brookfield Ventures led, and was joined by GLP, Tishman Speyer and return backers like Fifth Wall Ventures. http://axios.link/nJYm

Exabeam, a San Mateo, Calif.-based provider of security intelligence solutions, raised $75 million in Series E funding co-led by Sapphire Ventures and return backer Lightspeed Venture Partners. http://axios.link/Q80R

🚑 Verve Therapeutics, a Cambridge, Mass.-based cardiovascular gene-editing startup, raised $58.5 million in Series A funding. GV led, and was joined by Arch Venture Partners, F-Prime Capital and Biomatics Capital. http://axios.link/S2st

Flexe, a Seattle-based provider of on-demand warehousing and fulfillment solutions, raised $43 million in Series B funding. Activate Capital and Tiger Global co-led, and were joined by Madrona Venture Group, Redpoint Ventures and Prologis Ventures. http://axios.link/zQmc

🚑 DispatchHealth, a Denver-based provider of on-demand home healthcare, raised $33 million. Echo Health Ventures led, and was joined by Alta Partners and Questa Capital. http://axios.link/majE

🚑 Confo Therapeutics, a Belgian drug discovery startup focused on “compounds targeting difficult-to-drug GPCRs,” raised €30 million in Series A funding. BioGeneration Partners and Wellington Partners co-led, and were joined by Fund+, Perceptive Advisors, Capricorn Health-Tech Fund, Qbic, PMV, MINTS, V-Bio Ventures and VIB. http://axios.link/35bD

OSF Commerce, a Canadian provider of e-commerce customer engagement solutions, raised $23 million. Delta-v Capital led, and was joined by Salesforce Ventures. http://axios.link/2ATA

🚑 Elligo Health Research, an Austin, Texas-based integrated research organization, raised $20 million in Series C funding led by Piper Jaffray Merchant Banking. www.elligodirect.com

HeyJobs, a Berlin-based recruiting platform for large employers, raised $12 million in Series A funding. Notion Capital led, and was joined by Creathor Ventures, Global Founders Capital and Heartcore Capital. http://axios.link/NXvH

Aiven, a Finnish cloud data platform, raised €8 million in Series A funding. Earlybird VC led, and was joined by Lifeline Ventures and Nokia chairman Risto Siilasmaa. www.aiven.io

CollegeDekho, an Indian platform that connects students with colleges and keeps track of exams, raised $8 million in Series B funding co-led by parent company Girnarsoft Education and Man Capital. http://axios.link/wN7P

Data Gumbo, a Houston-based provider of smart contract management solutions for industrial customers, raised $6 million co-led by Saudi Aramco Energy Ventures and Equinor Tech Ventures. http://axios.link/J6XA

🚑 MedCrypt, an Encinitas, Calif.-based security startup focused on connected medical devices, raised $5.3 million. Section 32 led, and was joined by return backers YC and Eniac Ventures. http://axios.link/QCPr

Virtuous, a Phoenix-based provider of CRM and fundraising software for nonprofits, raised $3 million in Series A funding from Math Venture Partners. www.virtuouscrm.com

🚑 Journey Meditation, a group meditation app, raised $2.4 million in seed funding led by Canaan Partners. http://axios.link/2zNO

Private Equity Deals

🚑 Audax Private Equity bought Chartis, a Chicago-based provider of advisory and analytics services to healthcare providers, from RLH Equity Partners. www.chartis.com

EQT Partners and Digital Colony agreed to buy Zayo Group Holdings (NYSE: ZAYO), a Boulder, Colo.-based fiber network operator, for approximately $14.3 billion (including $5.9 billion of assumed debt), or $35 per share. http://axios.link/h0uz

Fort Point Capital acquired AMS Fulfillment, a Valencia, Calif.-based outsourced logistics provider. www.amsfulfillment.com

HgCapital is investing in Litera Microsystems, a Chicago-based provider of document lifecycle solutions for the legal and life sciences industries. http://axios.link/mD3n

The Hilb Group, a Richmond, Va.-based portfolio company of Abry Partners, acquired the insurance business of Moorefield, W.V.-based Summit Financial Group. www.hilbgroup.com

KKR completed its $1.6 billion acquisition of Australian accounting firm MYOB. http://axios.link/pQTa

Vector Media, a New York-based portfolio company of Spire Capital, acquired Laurel Outdoor, the exclusive municipal transit advertising partner of New Orleans. www.laureloutdoor.com

Public Offerings

🚑 InnoCare, a Chinese pharma startup focused on cancer and autoimmune diseases, plans to seek around $250 million in a Hong Kong IPO, per Bloomberg. It was most recently valued at $800 million by venture capitalists, which include Vivo Capital, Loyal Valley Capital, 3H Health Investment, Nan Fung Life Sciences and China Construction Bank. http://axios.link/UmNi

Parsons, a Centreville, Va.-based government contractor known for building airports and subways, raised $500 million in its IPO. The company priced 18.5 million shares at $27 (middle of range) and will trade on the NYSE (PSN). Goldman Sachs was lead underwriter.

🚑 Trevi Therapeutics, a New Haven, Conn.-based developer of a treatment for chronic severe itching conditions, raised $55 million in its IPO. It priced 5.5 million shares at $10, compared to original plans to sell 4.67 million shares at $14-$16. The pre-revenue company will trade on the Nasdaq (TRVI) and had raised over $100 million in VC funding from TPG Biotech (53.3% pre-IPO stake), NEA (17.9%), Lundbeckfonden Ventures (7.2%), Omega Funds (5.4%) and Aperture Venture Partners.

Liquidity Events

Square (NYSE: SQ) acquired Eloquent Labs, a Redwood City, Calif.-based conversational AI startup that raised $1.5 million from Khosla Ventures, XSeed Capital and Alchemist Accelerator. http://axios.link/kO75

More M&A

🏧 NCR (NYSE: NCR), an Atlanta-based ATM maker, is exploring a sale process, per Bloomberg. NCR's stock jumped on the news, pushing its market cap up to around $3.7 billion. There was talk last summer that NCR was interested in smaller rival Diebold Nixdorf, which was seeking a buyer, but nothing came of it. http://axios.link/9FJe

Prologis (NYSE: PLD) expressed interest in buying the U.S. operations of Singapore-based warehouse operator GLP, per Bloomberg. The unit, which GLP has been prepping for IPO, could fetch north of $20 billion. http://axios.link/kRrG

Vodafone (LSE: VOD) was blocked by Australian regulators from merging its Australia business with TPG Telecom (ASX: TPM), in what was to be a A$7.7 billion deal. http://axios.link/3c0S

Fundraising

Anthos Capital, a Santa Monica, Calif.-based growth equity firm, is raising up to $550 million for its fourth fund, per an SEC filing.

It's Personnel

Christopher Hayward joined GoldenTree Asset Management as president, succeeding the retiring Robert Matza. Hayward previously was managing partner and co-head of J.P. Morgan Global Alternatives. www.goldentree.com

Dan Primack