Oct 11, 2019

Axios Pro Rata

By Dan Primack
Dan Primack

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Top of the Morning

Illustration: Image: New York Daily News Archive/Getty; Illustration: Aïda Amer/Axios

In Silicon Valley, Paul Martino is known as a serial entrepreneur who later founded Bullpen Capital to invest in such startups as FanDuel, Ipsy, and SpotHero.

  • In Hollywood, he's the guy making a movie about his cousin Tommy, who served time for his key role in the NBA's game-fixing scandal.

"When Tommy got out of jail he got offered a really bad life rights deal and I told him he shouldn't sign it. But he needed money, so as a favor, I bought them," Paul Martino tells me. "Then it became kind of an intellectual challenge of trying to do something I'd never done before. I went on Amazon and filled my cart with three books about how to make a movie."

  • The result is Inside Game, which hits over 150 theaters nationwide in November. Trailer here.
  • Expect a major media blitz to begin late this month, including appearances by the real-life Tommy Martino (played in the film by Scott Wolf) and disgraced referee Tim Donaghy (played by Eric Mabius).

"It's the startup rule about how you need a lucky break no matter how smart or qualified you are," Martino says. "Mine was at my 15th high school reunion, when I met a friend's husband who was a Hollywood screenwriter. He told me his team had beaten Kobe Bryant's team twice in high school, and wanted to write it."

But there was a complication.

  • Martino was on the board of FanDuel. The NBA also was an early investor, with the league's general counsel serving as its original board observer.
  • Martino resigned from the FanDuel board once Inside Game went into production, believing that the dual-roles could bring unwanted scrutiny to the company, which already was under all sorts of media pressure.

"I don't think there's a pure cause and effect between the NBA scandal and sports betting startups, but it's in the same pond... Once [NBA Commissioner] Adam Silver came out publicly in support of legalization, you'll remember he said they'd also want integrity fees. That was so there wouldn't be another Tim Donaghy."

Source: Giphy

Sonnet BioTherapeutics, a Princeton, N.J.-based cancer drug developer, agreed to go public via a reverse merger with Chanticleer Holdings (Nasdaq: BURG), a Charlotte-based owner and operator of Hooters restaurants and various burger chains.

  • Why it's the BFD: Reverse mergers often involve odd bedfellows, but this takes it to a new level.
  • Numbers: Chanticleer peaked at $35 per share in 2015, but was trading below $1 per share before the merger announcement. It plans to spin off its restaurant assets into a separate company owned by current shareholders, with Sonnet paying $6 million for a 96% stake in the public listing that will be re-tickered SONN.
  • Bottom line: "Chanticleer has suffered amid a broader decline in fast-casual dining. Hooters, once known for its scantily-clad female waitstaff, has increasingly seemed out of date." — Drew Armstrong, Bloomberg
Venture Capital Deals

🚑 Healthy.io, a Tel Aviv-based startup that uses smartphone cameras to help diagnose chronic kidney disease, raised $60 million in Series C funding. Corner Ventures led, and was joined by Joy Capital and return backers Ansonia Holdings, Aleph, and Samsung NEXT. www.healthy.io

🐱 Exploding Kittens, a Los Angeles-based maker of card games, raised $30 million from The Chernin Group. http://axios.link/1FGT

🚑 Parsley Health, a New York-based personalized holistic health services startup, raised $26 million in Series B funding. White Star Capital led, and was joined by FirstMark Capital, Amplo, Alpha Edison Partners, Arkitekt Ventures, and Galaxy Digital. http://axios.link/UG21

Einride, a Stockholm-based developer of self-driving delivery trucks, raised $25 million in Series A funding. EQT Ventures and NordicNinja VC co-led, and was joined by Ericsson Ventures, Norrsken Foundation, Plum Alley Investments, and Plug and Play Ventures. http://axios.link/FHHi

Lattice, a San Francisco-based employee management platform, raised $25 million in Series C funding led by Tiger Global. http://axios.link/iqHn

Citrine, a Redwood City, Calif.-based materials data and AI platform, raised $20 million in Series B funding. Prelude Ventures and Innovation Endeavors co-led, and were joined by Moore Strategic Ventures and Next47. http://axios.link/vltE

Descartes Labs, a Sante Fe, N.M.-based satellite imagery analytics startup, raised $20 million. Union Grove Venture Partners led, and was joined by Ajax Strategies, Crosslink Capital, and March Capital Partners. http://axios.link/41GJ

Emplify, an Indianapolis-based employee engagement improvement startup, raised $15 million. Edison Partners led, and was joined by Allos Ventures and Cultivation Capital. http://axios.link/EdnR

XTransfer, a provider of cross-border financial services for China-based foreign trade enterprises, raised $15 million in Series B-1 funding. eWTP Fund led, and was joined China Merchants Venture Capital, 01VC, Yunqi Partners, and Gaorong Capital. www.xtransfer.cn

Future Meat Technologies, a Jerusalem-based producer of GMO-free meat derived from animal cells, raised $14 million in Series A funding co-led by S2G Ventures and Emerald Technology Ventures. www.future-meat.com

🚑 Papa, a Miami, Fla.-based platform that connects seniors with college and nursing students, raised $10 million. Canaan Partners led, and was joined by Pivotal Ventures, Initialized Capital, Sound Ventures, and YC. http://axios.link/6PtP

Florence, an Atlanta-based provider of clinical trials software, raised $7.1 million in Series B funding. Fulcrum Equity Partners led, and was joined by Atrium Health and Bee Partners. www.florencehc.com

Nexkey, a San Mateo, Calif.-based mobile access control startup, raised $6 million in Series A funding. Upfront Ventures led, and was joined by K9 Ventures, Mark IV Capital, and Anand Chandrasekaran. www.nexkey.com

StrongSalt, a Sunnyvale, Calif.-based encryption platform as-a-service, raised $3 million from Valley Capital Partners. www.strongsalt.com

Blue Canoe, a Bellevue, Wash.-based spoken language improvement platform for non-native English speakers, raised $2.5 million in seed funding. Tsingyuan Ventures led, and was joined by Qualcomm Ventures and Fantail Ventures. http://axios.link/NgNt

Private Equity Deals

🚑 Ampersand Capital Partners acquired New England Peptide, a Gardner, Mass.-based provider of custom peptides and antibodies to the life sciences market. http://axios.link/A85u

Bain Capital and The Carlyle Group are among those short-listed to buy Hitachi’s (Tokyo: 6501) majority stake in Hitachi Chemical (Tokyo: 4217), per Reuters. http://axios.link/odI5

Baymark Partners acquired Presidium Network Services, a Lakeland, Fla.-based IT services provider. www.presidiumnetworks.com

Cornell Capital acquired Spectrum Automotive, a Fairfield, N.J.-based agent, marketer and administrator of auto finance and insurance products.

HGGC completed its $825 million take-private acquisition of Woburn, Mass.-based font licensor Monotype Imaging. http://axios.link/41GJ

Kibo, a Dallas-based cloud commerce company backed by Vista Equity Partners, agreed to buy Monetate, a New York-based e-commerce personalization company that had raised over $50 million in VC funding from firms like OpenView Venture Partners, Lead Edge Capital, First Round Capital, FloodGate, Western Technology Investment, and Signia Venture Partners. http://axios.link/2sSi

KKR, Royal Dutch Shell and Mitsubishi Corp. are the remaining bidders for Dutch utility Eneco, which is expected to fetch around €3 billion, per Reuters. http://axios.link/H6jh

National Fire & Safety, a -based portfolio company of Highview Capital, acquired RCI Systems, a Tempe, Ariz.-based fire-sprinkler services contractor. www.rcifire.com

TA Associates and Charlesbank Capital Partners agreed to invest in HelpSystems, a Minneapolis-based IT operations management and security company already backed by HGGC. www.helpsystems.com

🚑 Takeda Pharma (Tokyo: 4502) is in talks to sell its OTC and prescription drug assets in Russia to Stada Arzneimittel, a German portfolio company of Bain Capital and Cinven, per Bloomberg. Takeda also plans to sell its MENA assets to Acino International, a Swiss portfolio company of Nordic Capital and Avista Capital Partners. The combined deals could raise around $1 billion. http://axios.link/gcw0

Public Offerings

EG Group, a British gas station operator, is prepping a 2020 IPO that could value the company north of £10 billion, per Bloomberg. http://axios.link/GMuS

HBT Financial, a family-owned bank with 64 branches in Illinois, raised $133 million in its IPO. The company priced 8.3 million shares at $16 (below $17-$19 range), and will trade on the Nasdaq (HBT). Keefe Bruyette Woods and J.P. Morgan served as lead underwriters. http://axios.link/vkvG

🚑 Vir Biotechnology, a San Francisco-based developer of immunologic therapies for infectious diseases, raised $143 million in its IPO. The company priced 7.1 million shares at $20 (low end of range), for an initial market cap of $2.19 billion. It will trade on the Nasdaq (VIR) with Goldman Sachs as lead underwriter, and had raised over $560 million from firms like Arch Venture Partners (27% pre-IPO stake), SoftBank Vision Fund (21.2%), Baillie Gifford, and Alta Partners. http://axios.link/j28i

More M&A

Metro, a listed German retailer, said it’s in talks to sell its Chinese operations to Wumart. http://axios.link/WRYR


LatinX VC has been formed to help Latino venture capitalists in the U.S. advance their careers, raise new funds, and connect with LPs in Latin America. http://axios.link/l2DY

BoxGroup, a New York-based seed investor, raised outside capital for the first time, securing an $82.5 million flagship vehicle and an $82.5 million opportunities fund. http://axios.link/sEaw

• Trust Ventures of Austin, Texas is raising $100 million for its second fund, per an SEC filing. www.trustventures.com

It's Personnel

Eliot Adelson joined law firm Morrison & Foerster as a San Francisco-based partner focused on corporate antitrust. He’s the former Deputy DA for Alameda County in California. www.mofo.com

Björn Killmer joined Clayton, Dubilier & Rice as a London-based partner. He previously co-led the energy and resources team at Triton Partners. www.cdr-inc.com

Jon McNeill, the former Lyft COO who previously led global sales for Tesla, joined Advent International as an advisory partner. www.adventinternational.com

Welsh, Carson, Anderson & Stowe hired three operating partners: Tim Clifford (ex-CEO of Frontline Education), Manny Conti (ex-CEO of Opus Global), and John Fay (ex-CEO of INTTRA). www.wcas.com

Final Numbers: Fundraising
Source: Preqin Q3 fundraising report
Dan Primack

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