Jul 27, 2021

Axios Pro Rata

🎂 Happy birthday Mom!!!!

💻 You're invited to an Axios virtual event on systemic racism. It takes place tomorrow at 12:30pm ET, and will feature conversations with Rep. James Clyburn (D-S.C.), activist Rosa Clemente and author Michelle Duster. Register here.

Top of the Morning

Illustration: Sarah Grillo/Axios

A growing number of late-stage startups are setting their own valuations and other deal terms, eliminating the concept of "lead investors."

Why it matters: This is a significant reversal of VC power, as financial engineers are giving way to founder engineers.

  • Most of these deals are for pre-IPO companies, offering early allocations to mutual funds and hedge funds.
  • There also are less mature issuers, including Gopuff. The Blackstone Group and Guggenheim are said to be coming in as lead investors on the instant delivery company's new $1 billion fundraise, while existing backer Fidelity is doubling down, but none of them are the lead investors, as Gopuff set all the terms (including the $14 billion pre-money valuation).

Between the lines: For companies, this means more vanilla terms. For investors, it means fewer structural protections, like those ratchets that had become prevalent during the inaugural unicorn boom.

  • Caveat: "Leadless" deals still remain the exception to the rule, but their volume is rising alongside the rise in pre-IPO companies.

Keep quiet: Late-stage startups also are becoming smarter about how they communicate with potential investors.

  • Such companies often are not just fundraising, but also making key hires who will receive large stock options grants — grants that would become less valuable if the 409A valuation gets boosted because of written proposals.
  • The result is a lot more phone calls and encrypted messages via apps like Signal, and far fewer emails. One late-stage VC told me that his firm rarely submits a term sheet until the details have already been hammered out verbally, so as not to hamstring the company.

The bottom line: It's a seller's market, in which capital has become a commodity.

The BFD

Illustration: Eniola Odetunde/Axios

PerkinElmer (NYSE: PKI) agreed to acquire San Diego-based antibodies developer BioLegend for $5.25 billion in cash ($2.2b) and stock.

  • Why it's the BFD: Antibodies have been key research tools for studying COVID-19 and its troublesome variants.
  • The bottom line: "PerkinElmer, which sells an array of laboratory equipment, is eager to expand into selling antibodies to researchers. That’s because these Y-shaped proteins, made by the immune system to latch onto specific molecules, can be adapted for a virtually unlimited range of experiments, from making cells light up under a microscope to isolating and studying specific cell types." — Jonathan Wosen, San Diego Union-Tribune
Also...

Yesterday we noted that Tiger Global led a $235 million round for NotCo, a Chilean developer of plant-based foods whose existing backers include Jeff Bezos.

  • It was curious, given that Tiger describes its investment strategy as backing "Internet companies" (sometimes saying that if it can have an app, Tiger is interested).
  • NotCo is NotInternetCo, despite using some AI on the backend to develop and test formulations.
  • My understanding is that Tiger unofficially allocates between 1–2% of its funds to companies that don't fall within the stated strategy. Past examples have included Chinese smartphone maker Xiaomai and 3D printed rocket developer Relativity Space.
  • Speaking of Tiger, the FT has a new piece about how it's ruffling Silicon Valley feathers. Worthy of your time.

Missed dunk: We also mentioned the collapse of a $1.2 billion merger between mobile game maker Jam City, led by Chris DeWolfe, and a SPAC led by ex-Uber exec Emil Michael. No one is talking on the record, but word from multiple sources is that the SPAC wanted to renegotiate on price and Jam City didn't. Thus the mutual termination:

  • Jam City experienced a usage slowdown in Q2, as people began spending less time with their phones and more time with other people. Everyone knew some softening was inevitable, but one source says it was more than expected.
  • The pandemic delayed all sorts of movie titles which, in turn, delayed some release dates for game publishers like Jam City.
  • The big question going forward is if some of these smaller mobile gamers (i.e., sub-Zyngas) are about to become vulture bait — particularly ones that have already gone public and seen their shares fall hard over the past few months. Maybe from SPACs, maybe from streamers...
Venture Capital Deals

iCapital Network, a New York-based fintech platform for alternative investing, raised $440 million in equity funding at around a $4 billion valuation. Temasek led, and was joined by Owl Rock, MSD Partners, Noah Holdings, Golub Capital, WestCap, Ping An Voyager Partners, Blackstone, UBS, Pivot Investment Partners, BNY Mellon, Wells Fargo, Morgan Stanley and Goldman Sachs. www.icapitalnetwork.com

Nium, a Singapore-based payments processor, raised $200 million in Series D funding at a valuation north of $1 billion. Riverwood Capital led, and was joined by insiders Temasek, Visa, Vertex Ventures, Atinum Capital, Beacon VC and Rocket Capital Investment. http://axios.link/PBm7

Wiliot, a San Diego-based developer of ultra-thin processors, raised $200 million in Series C funding. SoftBank Vision Fund 2 led, and was joined by insiders 83North, AWS, Avery Dennison, Grove Ventures, M Ventures, Merck KGaA, Maersk Growth, Norwest Venture Partners, NTT DOCOMO Ventures, Qualcomm Ventures, Samsung Ventures, Vintage Investment Partners and Verizon Ventures. http://axios.link/oiTp

Onto, a British EV subscription startup, raised $175 million in Series B equity and debt. Alfvén & Didrikson led the equity tranche, while Pollen Street Capital provided the debt facility. http://axios.link/t2EF

ShareChat, an Indian social media platform, raised $145 million in Series F funding at nearly a $3 billion valuation co-led by Temasek and Moore Strategic Ventures. http://axios.link/sjqB

Genomatica, San Diego-based developer of sustainable materials, raised $118 million in Series C funding. Novo Holdings led, and was joined by Viking Global and Casdin Capital. www.genomatics.com

1Password, a Toronto-based provider of password management software, raised US$100 million in Series B funding at a $2 billion valuation led by insider Accel. http://axios.link/MXuW

ActiveFence, an Israeli online integrity startup, raised $100 million in Series A and B funding from Highland Europe, CRV, Norwest Venture Partners, Grove Ventures, Vintage Investment Partners and Resolute Ventures. http://axios.link/al7u

Bubble, a New York-based visual programming platform, raised $100 million in Series A funding. Insight Partners led, and was joined by SignalFire, Neo, BoxGroup, ThirdKind and Betaworks. www.bubble.io

Yoco, a South African provider of payments solutions for offline merchants, raised $83 million in Series C funding. Dragoneer led, and was joined by Breyer Capital, HOF Capital, Raba Partnership, 4DX Ventures, TO Ventures and insiders Partech, Velocity Capital Fintech Ventures, Orange Ventures and Quona Capital. http://axios.link/LSk0

Covariant, a Berkeley, Calif.-based robotic AI startup, raised $80 million in Series C funding. Index Ventures led, and was joined by Amplify Partners, Radical Ventures, CPPIB and Temasek. http://axios.link/yZGS

Blaize, an El Dorado Hills, Calif.-based AI edge computing startup, raised $71 million in Series D funding co-led by Franklin Templeton and insider Temasek. www.blaize.com

HappyFresh, an Indonesian on-demand grocery app, raised $65 million in Series D funding. Naver Financial and Gafina co-led, and were joined by STIC, LB, Mirae and Z Venture Capital. http://axios.link/ag4D

🚑 Elvie, a London-based developer of women’s health devices like breast pumps and kegal exercise trackers, raised £58 million in Series C funding. BGF led, and was joined by BlackRock, Hiro Capital, Westerly Winds and insiders Octopus Ventures and IPGL. http://axios.link/y0x9

MyGlamm, an Indian D2C beauty brand, raised $47.8 million in new Series C funding (round total now $71.3m). Accel led, and was joined by insiders Bessemer Venture Partners, L’Occitane, Ascent, Amazon, Mankekar family, Trifecta and Strides Venture. http://axios.link/GhHt

🚑 Veda, a Madison, Wis.-based AI platform focused on healthcare payers and providers, raised $45 million in Series B funding led by Oak HC/FT. www.vedadata.com

Sedna, a London-based email triage startup, raised $34 million in Series B funding. Insight Partners led, and was joined by Stride.VC, Chalfen Ventures and the SAP.iO fund. http://axios.link/FPvz

Kii Technology, a Paris-based AI training platform, raised $25 million in Series A funding. Balderton Capital led, and was joined by insiders Serena Capital and Headline. www.en.kii.com

Aleph Alpha, a German AI startup, raised €23 million in Series A funding co-led by Earlybird VC, Lakestar and UVC Partners. http://axios.link/3dWP

☕ Spinn, a Los Angeles-based connected coffee marketplace, raised $20 million. Spark Capital led, and was joined by Alexa Fund and Bar 9 Ventures. http://axios.link/7X0Q

🚑 IMIDomics, a Spanish biotech focused on inflammatory diseases, raised $16.5 million from DNS Capital, Bristol Myers Squibb, The Pritzker Organization and Tao Capital. http://axios.link/jyE0

🚑 Peppy, a British B2B health platform for menopause, raised £6.6 million in Series A funding. Felix Capital led, and was joined by insiders Outward VC, Seedcamp and Hambro Perks. http://axios.link/NE7V

🚑 Glyphic Biotech, a San Francisco-based protein sequencing startup, raised $6 million in seed funding. OMX Ventures led, and was joined by Osage University Partners, Wing VC, Artis Ventures, Cantos Ventures, Civilization Ventures and Axial VC. http://axios.link/TUhT

Norby, a New York-based creator marketing platform, raised $3.8 million in seed funding led by Gradient Ventures. http://axios.link/ppt7

Rocketium, a Bangalore-based marketing scale-up startup, raised $3.2 million led by Emergent Ventures. http://axios.link/RTyk

Freightify, a “Shopify for maritime freight,” raised $2.5 million in seed funding. Nordic Eye VC led, and was joined by Tradeworks VC, Venture Catalysts, 9Unicorns and Blume Funders Fund. http://axios.link/4RfS

Private Equity Deals

Datasite, a Minneapolis-based portfolio company of CapVest Partners, acquired Firmex, a Toronto-based virtual data room and file-sharing service provider, from Vertu Capital and BDC Growth Equity Partners. http://axios.link/GjQn

IntelligenceBank, an Australian marketing software provider, raised $37 million from Five Elms Capital. www.intelligencebank.com

🚑 The Jordan Co. agreed to buy Dental365, a New Hyde Park, N.Y.-based dental services group, from Regal Healthcare Capital Partners for a reported $440 million. http://axios.link/sgcx

🚑 Nordic Capital is in talks to buy Inovalon (Nasdaq: INOV), a Bowie, Md.-based provider of healthcare analytics software that has a market cap north of $5 billion, per Bloomberg. http://axios.link/bZAq

O2 Investment Partners invested in Unwired Broadband, a Fresno, Calif.-based fixed wireless ISP. www.getunwired.com

🚑 TA Associates acquired a majority stake in Elos Medtech (Nasdaq: ELOS B), a Swedish contract development and manufacturing organization for medical devices. http://axios.link/qFqt

Warburg Pincus and Tilia Holdings acquired FlexXray, an Arlington, Texas-based X-ray inspection services provider focused on food safety, from Levine Leichtman Capital Partners. www.flexxray.com

Correction: Norwest Venture Partners (not Norwest Equity Partners) is the firm that invested in Supplier.io, a provider of supplier diversity management SaaS.

Public Offerings

🚑 Candel Therapeutics, a Needham, Mass.-based developer of oncolytic viral immunotherapies for cancer, raised $72 million in its IPO. The pre-revenue company priced at $8 per share (below initial $13-$15 range), will list on the Nasdaq (CADL) and had raised $68 million from firms like PBM Capital (26.6% pre-IPO stake), Northpond Ventures (8.8%), Sands Capital Ventures, H7 Holdings and Level One Partners. http://axios.link/8BhY

🚑 WCG Clinical, a Princeton, N.J.-based provider of ethical review services for clinical trials, set IPO terms to 45 million shares at $15-$17. It would have a $6.1 billion fully diluted value, were it to price in the middle, and plans to list on the Nasdaq (WCGC). Shareholders include Leonard Green & Partners, Arsenal Capital, Novo Holdings and GIC. http://axios.link/qJAL

Weber, a Palatine, Ill.-based maker of outdoor grills backed by BDT Capital Partners, set IPO terms to 46.9 million shares at $15-$17. It would have a $4.7 billion fully diluted value, were it to price in the middle. It plans to list on the NYSE (WEBR) and reports $89 million of net income on $1.5 billion in revenue for 2020. http://axios.link/eiy3

SPAC Stuff

AdTheorent, a New York-based provider of predictive solutions for digital advertising whose backers include H.I.G. Growth, agreed to go public at an implied $775 million enterprise value via MCAP Acquisition Corp. (Nasdaq: MACQ), a SPAC sponsored by Monroe Capital. www.adtheorent.com

Oxus Acquisition, an energy transition SPAC, filed for a $150 million IPO. http://axios.link/ASGx

Liquidity Events

Klarna, a Swedish online payment platform and Europe’s most valuable unicorn, bought APPRL, a Stockholm-based provider of influencer marketing software that had raised nearly $10 million from firms like ATM VC and Spintop Ventures. http://axios.link/Nx5n

More M&A

Illustration: Brendan Lynch/Axios

Starbucks (Nasdaq: SBUX) is exiting its South Korean joint venture at a $2.35 billion valuation, selling a 17.5% stake to JV partner E-Mart and the other 32.5% stake to GIC. http://axios.link/dXBF

Carrier Global agreed to sell its Chubb fire safety and security unit to APi Group for $3.1 billion in cash. http://axios.link/3lpk

Fundraising

iAngels of Israel raised $55.5 million for its first institutional fund. http://axios.link/5nHA

King River Capital, a tech VC firm with offices in the U.S. and Australia, held a US$95 million first close on its second fund. www.kingriver.co

🌎 TPG raised held a $5.4 billion first close for its Rise Climate Fund, which is targeting a total of $7 billion. http://axios.link/J09P

It's Personnel

John Ide joined Star Mountain Capital as a Chicago-based managing director. He previously was with JPMorgan Asset Management and Deerpath Capital. www.starmountaincapital.com

Brian Tierney joined The Blackstone Group as a senior managing director and global head of infrastructure portfolio operations and asset management. He previously was CFO of American Electric Power. www.blackstone.com

Final Numbers
Source: SPAC Research

🙏 Thanks for reading Axios Pro Rata! Please ask your friends, colleagues and financial engineers to sign up.