Feb 5, 2018

Axios Pro Rata

Greetings from the home office, where an air of stunned sadness continues to linger. But you can help lift it by sending over some news tips or scoop, via email (dan@axios.com), anonymous tip (http://axios.com/tips) or all sorts of messaging apps like Signal and Telegram (DanPrimack). Okay, here we go...

Top of the Morning

Thomas Lee spent more than two decades on Wall Street, with a final stop as chief equity strategist at J.P. Morgan. He now runs a boutique consultancy called FundStrat, and last week in LA gave an intriguing and bullish presentation on cryptocurrencies. Some highlights:

  • Lee argued that cryptocurrencies are to Millennials what gold was to the Silent Generation and what equities were to Baby Boomers. And it's amplified by Millennial distrust of banks and of government.
  • Millennials are just beginning to enter their prime income years. So if you accept Lee's thesis, then we're just an inning or two into cryptocurrency price appreciation. And, remember, this is the largest-ever U.S. generation with immigration included (yes, even outpacing Boomers).
  • And if you really accept it, then perhaps you'll go along with Lee that Bitcoin could hit $10 million a piece by the middle of the 2030's.
  • He also estimates that Coinbase profits could exceed ICE profits this year.
  • Lee acknowledges that crypto growth runs counter to many textbook economic beliefs, but points out that such textbooks are constantly in need of edits. For example, aggregate U.S. private equity market value is on a path to equilibrium with public markets — something that was unthinkable just a decade or so ago.
  • One for the bears: Since Lee made his presentation just a few days ago, Bitcoin has lost around 24% of its value, which translates into more than $2,300 each.

Off the docket: Venture capitalist Shervin Pishevar has dropped his lawsuit against political oppo research firm Definers Public Affairs, which he had accused of spearheading a “malicious smear campaign." There was no financial settlement.

  • On the docket: Waymo vs Uber is underway, and Kia will be hanging in the gallery. Updates when warranted in the Axios stream.

Money matters: Some LPs in an Abraaj Group healthcare fund — including IFC and the Bill & Melinda Gates Foundation — have hired a forensic accountant "to examine what happened to some of their money," per the WSJ.

Abraaj called the report "misleading," although it acknowledges having hired KPMG “to verify all receipts and payments made by the fund." More from Abraaj:

"The terms of the Limited Partnership Agreement allow the Fund to retain called capital in situations where an investment is delayed but still approved and not canceled. However, following discussions with investors, Abraaj returned the unused capital to all investors in the Fund at the end of December 2017."

Malcolm Butler search party: Congrats to Philly, which I called home during the Ray Rhodes years. And to longtime Eagles fan and venture capitalist Mark Suster, which whom I made a little wager (as you can see from my current Twitter avatar).


Source: Giphy

Broadcom (Nasdaq: AVGO) has increased its takeover bid for rival chip-maker Qualcomm (Nasdaq: QCOM) from $70 per share to $82 per share in cash and stock ($60/$22 split), which would value Qualcomm at nearly $122 billion.

  • Why it's the BFD: Because Broadcom says this is its final offer, and that it's now contingent on Qualcomm either completing or killing its troubled $110 per share takeover of NXP Semiconductors (Nasdaq: NXPI). Broadcom also is promising a "significant" reverse termination fee were regulators to say nay.
  • Bottom line: Private equity firm Silver Lake is running the tech M&A market right now, through its roles in both this deal (backing Broadcom) and the accelerating Dell process.
Venture Capital Deals

Harmless Harvest, a San Francisco-based maker of organic coconut beverages, has raised $30 million in new funding led by Danone Manifesto Ventures. http://axios.link/pEpg

Figma, a Palo Alto, Calif.-based maker of an in-browser interface design and prototyping tool, has raised $25 million in Series B funding from Kleiner Perkins Caufield & Byers, Greylock Partners and Index Ventures. http://axios.link/X89z

Infarm, a Berlin-based vertical farming startup, has raised $25 million in Series A funding. Balderton Capital led, and was joined by TriplePoint Capital, Mons Investments and seed backers Cherry Ventures, QUADIA and LocalGlobe. http://axios.link/yjkD

Lino, a decentralized autonomous video startup, has raised $20 million via a token sale led by ZhenFund.

Owl, a Palo Alto, Calif.-based developer of connected security cameras for cars, has raised $18 million in new VC funding. Defy.vc led, and was joined by Khosla Ventures, Menlo Ventures, Sherpa Capital, Moment Ventures, Maniv Mobility and CSAA Insurance Group. http://axios.link/WTRS

HQ, a mobile trivia game-show app, reportedly has raised $15 million in new VC funding led by Founders Fund. http://axios.link/E7kS

🚑 MDClone, an Israeli provider of medical data access and analytics solutions, has raised $15 million from OrbiMed Israel Partners and return backer Lightspeed Venture Partners. www.mdclone.com

Honeycomb, a San Francisco-based provider of a tech infrastructure monitoring dashboard, has raised $11.5 million in Series A funding. E.ventures led, and was joined by NextWorld Capital, Merian Ventures and return backer Storm Ventures. http://axios.link/YV1X

Lightelligence, a Boston-based startup that aims to accelerate AI workloads via the use of nanophotonics, has raised $10 million in seed funding led by Baidu Ventures. http://axios.link/ImQl

SaaSOptics, an Atlanta-based subscription management platform, has raised $5 million in Series A funding. Fulcrum Equity Partners led, and was joined by Duke Angel Network and return backers TechStars Ventures and Tom Noonan. www.saasoptics.com

Lambda, a computer science school that doesn’t require payment until after graduates are hired, has raised $4 million in seed funding co-led by Y Combinator and Tandem Capital. http://axios.link/xMFY

⛽ Zebra Fuel, a London-based provider of on-demand fuel delivery, has raised $2.5 million in seed funding led by LocalGlobe. http://axios.link/218D

Penta, a German challenger bank that offers digital accounts to SMEs, has raised €2.2 million in seed funding led by Inception Venture Capital. http://axios.link/OGpm

Blueday, a Boston-based provider of retail store revenue management software, has raised an undisclosed amount of funding from Radian Capital. www.blueday.com

Private Equity Deals

Ares Management has acquired Convergint Technologies, a Schaumburg, Ill.-based provider of building systems like electronic security and fire alarms. www.convergint.com

Bain Capital has agreed to acquire Bugaboo, a Dutch maker of high-end strollers. No financial terms were disclosed, but earlier reports suggested an asking price of around €200 million. http://axios.link/vAXp

⛽ Brookfield Asset Management has acquired Center Coast Capital, an energy infrastructure-focused investment advisor with around $4 billion in AUM. It also acquired certain assets of HRC, a third-party marketing and serving agent of CC products. www.brookfield.com

ION Investment Group has agreed to acquire Openlink Financial, a Uniondale, N.Y.-based provider of trading and risk management solutions for the energy, commodities and financial services industries, from Hellman & Friedman. http://axios.link/YoWb

🌮 Orangewood Partners and ABDD Capital have acquired 21 Taco Bell stores in the Louisville, Ky. Market. www.orangewoodpartners.com

⛽ Ridge Runner Resources, a new oil and gas exploration and production company focused on the Delaware Basin, has secured up to a $300 million equity line from Warburg Pincus. www.warburgpincus.com

SKIO Matrix Co., a Chinese developer of electric vehicle technologies, has raised around $159 million from IDG Capital. http://axios.link/idm9

Wellspring Capital Management has acquired SupplyOne, a Newtown Square, Penn.-based distributor and converter of packaging products. Sellers include Stephens Capital Partners www.supplyone.com

Public Offerings

10 companies are expected to price IPOs on U.S. exchanges this week, targeting a combined $1.8 billion: Bioceres, Cactus, Cardlytics, Evolus, Huami, IPSCO Tubulars, Motus GI, Quintana, TFI TAB Food and Victory Capital. http://axios.link/HrgF

More M&A

Bon-Ton Stores, a York, Penn.-based department store operator, has filed for bankruptcy protection and said that it is seeking a possible sale. Last year the company held takeover talks with Sycamore Partners, but no deal was signed. http://axios.link/vI5Q

Mitsui & Co. (Tokyo: 8031) has agreed to acquire Australian natural gas producer AWE (ASX: AWE), beating out a rival bid from Mineral Resources (ASX: MIN). http://axios.link/bHjf

Singtel has agreed to invest $413 million to increase its stake in India’s Bharti Telecom from 47.2% to 48.9%. http://axios.link/G0Vb

Trinity Mirror and Northern & Shell, publisher of the Daily Mirror, reportedly has agreed to acquire rival British publications the Daily Express and Daily Star for £127 million. http://axios.link/Q7Kh


Further Global Capital Management, a new private equity firm led by former Carlyle Group financial services chief Olivier Sarkozy, is targeting $1.25 billion for its debut fund, per an SEC filing. Bloomberg reports it already has secured around $400 million in commitments. http://axios.link/HyAs

It's Personnel

Alison Bush Delgado has joined venture firm SeventySix Capital as a managing director and head of strategic development. She previously was global head of consultant relations for Neuberger Berman. www.seventysixcapital.com

Bucky Moore has joined Kleiner Perkins Caufield & Byers as a principal focused on enterprise tech startups. He previously was with Costanoa Ventures. www.kpcb.com

Final Numbers
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Data: Money.net; Chart: Axios Visuals
  • Correction continuation: The DJIA opened Monday trading down triple-digits.