Mar 24, 2021

Axios Pro Rata

🎧 Axios Re:Cap digs into the southern border crisis, and what comes next, with Axios politics and immigration reporter Stef Kight. Take a listen.

Situational awareness: A hearing just began in the case of Sixth Street vs. Dyal Capital Partners, related to Dyal's proposed SPAC deal. More on this tomorrow.

Top of the Morning

Giphy

Spark Capital's decision to publicly sever ties with retro camera app Dispo has caused other company investors to get cold feet, Axios has learned.

Inside the deal: Spark had agreed to lead what was to be a $20 million round at a $200 million valuation, with Spark's $12 million investment set to close on March 10 (which it did).

  • Also on March 10, a $4 million SAFE note converted into equity.
  • The remaining $8 million was set to close early this week, but a Form D document filed yesterday shows that money still hasn't been wired.
  • It’s tough to imagine that those other investors wouldn’t at least ask for a valuation cut, given what’s transpired since Spark set the $200 million mark.

Yesterday we reported that Dispo’s “core investors” were informed by mid-Sunday that controversial co-founder David Dobrik would be leaving the company, and that Spark’s public split came hours later. This appears to have been incorrect, and we regret the error.

Some investors were indeed led to believe that a separation was likely, no agreement had been reached and a very different message was conveyed during a meeting late Sunday afternoon.

  • Meeting attendees: Spark partners Brian Watson and Nabeel Hyatt, Seven Seven Six founder Alexis Ohanian, Dispo CEO Daniel Liss, Wilson Sonsini partner Becki DeGraw (serving as outside counsel to Dispo) and Dobrik’s attorney Bryan Freedman.
  • Freedman is said to have argued that Spark was rushing to judgment, whereas it hadn’t done so when there had been different sorts of controversies around portfolio companies like Discord and Coinbase. He essentially asked for the startup version of due process, a 48-hour timeout during which cooler heads might prevail.
  • Spark’s partners, who repeatedly stressed the social media blowback, are said to have ended with plans to speak with their colleagues.
  • Everyone agreed to a follow-up meeting later that night.

Spark’s subsequent actions suggest it was unmoved by Freedman’s plea, and likely a bit put off by the lack of a resignation offer (or the lack of a demand for such a letter from Dispo).

  • The follow-up "meeting" was Spark informing Dispo and Freedman that its public tweets were to be forthcoming.

The bottom line: Dispo may still survive and thrive, as it does have Spark's $12 million in the bank and there are success stories that began with horrific stumbles. But this is an extraordinary episode.

  • As Freedman noted, Spark has a history of standing by scandal-singed companies and founders.
  • Its decision not to do so here reflects just how seriously it appears to have taken the situation with Dobrik, and how unsalvageable it viewed its relationship with Dispo.
The BFD

Illustration: Eniola Odetunde/Axios

Robinhood, the San Francisco-based no-fee trading app, filed confidential registration papers for an initial public offering.

  • Why it's the BFD: This comes just one month after CEO Vlad Tenev was grilled on Capitol Hill for Robinhood's actions during the GameStop short squeeze, suggesting the company's investors were right to remain confident.
  • What to watch: Robinhood referred to this as an "IPO," and word is we should take that at face value, but don't be surprised if there are some non-traditional features. Possibly a direct tranche or a mechanism that enables Robinhood users to participate in the listing.
  • Bottom line: "Robinhood gained popularity among younger crowds by making stock purchases as easy as finding an online date on Tinder. Customers quickly link their bank account information, search for a stock, and swipe up to buy." — Lauren Feiner & Kate Rooney, CNBC
Venture Capital Deals

Loft, a Brazilian real estate platform, raised $425 million in Series D funding. D1 Capital Partners led, and was joined by Advent International, Altimeter, CPPIB, DST Global, GIC, Silver Lake Waterman, Soros Fund Management, Tarsadia, Tiger Global and insiders Andreessen Horowitz, Caffeinated Capital, Fifth Wall, Monashees, QED Investors and Vulcan Capital. The round may be expanded by around $100 million. http://axios.link/W7lZ

Blockchain.com, a London-based digital assets platform, raised $300 million at a $5.2 billion valuation co-led by DST Global, Lightspeed Venture Partners and VY Capital. http://axios.link/7pxG

Eat Just (fka Hampton Creek), a San Francisco-based maker of plant-based eggs, raised $200 million. Qatar Investment Authority led, and was joined by Charlesbank Capital Partners and Vulcan Capital. http://axios.link/pbza

Feedazi, a San Mateo, Calif.-based provider of anti-fraud tools to financial services companies, raised $200 million in Series D funding at a valuation north of $1 billion. KKR led, and was joined by insiders Sapphire Ventures and Citi Ventures. http://axios.link/90NW

Hopper, a Montreal-based travel booking app, raised US$170 million in Series F funding. Capital One led, and was joined by Goldman Sachs Growth, Inovia Capital, WestCap Group and Citi Ventures. www.hopper.com

Wiz, an Israeli cloud infrastructure security startup, raised $130 million in Series B funding at a $1.7 billion post-money valuation. Advent Venture Partners led, and was joined by insiders Cyberstarts, Index Ventures, Insight Partners and Sequoia Capital. http://axios.link/nlXF

Airwallex, an Australian cross-border payments business, added US$100 million to its Series D round (total now $260M). Greenoaks led the extension, and was joined by Grok Ventures and returnees Skip Capital and ANZi Ventures. http://axios.link/mRp6

Fourkites, a Chicago-based supply chain visibility platform, raised $100 million in Series D funding. Thomas H. Lee Partners led, and was joined by Qualcomm Ventures, Volvo, Zebra Technologies and insiders August Capital, CEAS Investments, Hyde Park Angels, Hyde Park Venture Partners and Bain Capital Ventures. http://axios.link/1cud

🚑 Ginger, a San Francisco-based provider of online mental health services, raised $100 million in Series E funding led by Blackstone Growth. www.ginger.com

Pacaso, a second home ownership platform, raised $75 million in Series B funding at a $1 billion valuation. Greycroft and Global Founders Fund co-led, and were joined by Acrew Capital, First American Financial, Shea Ventures and Amazon’s Jeff Wilke. www.pacaso.com

🚑 Asher Biotherapeutics, a South SF-based developer of targeted immunotherapies for cancer, raised $55 million in Series A funding. Third Rock Ventures led, and was joined by Boxer Capital, Invus, MBC Biolabs and YC. http://axios.link/WYy5

Neighbor, a Lehi, Utah-based self-storage marketplace, raised $53 million in Series B funding. Fifth Wall led, and was joined by Tony Xu, Scott Cutler and return backer Andreessen Horowitz. http://axios.link/nSHc

Public App, an Indian local social network, raised $41 million led by A91 Partners. http://axios.link/7sdb

🚑 Step Pharma, a French biotech focused on oncology and autoimmune diseases, raised €35 million in Series B funding. Hadean Ventures and Sunstone Life Science Ventures co-led, and were joined by investors Kurma Partners, Pontifax and Bpifrance. www.step-ph.com

Feedback Loop, a New York-based real-time user feedback platform for enterprises, raised $14 million. Crosslink Capital led, and was joined by Spider Capital. http://axios.link/hYcd

KitaBell, an Indonesian social commerce app for group buying, raised $10 million in Series A funding. Go Ventures led, and was joined by insiders AC Ventures and East Ventures. http://axios.link/enhT

AnyRoad, a San Francisco-based experience relationship management startup, raised $10 million in Series A-1 funding. Andreessen Horowitz and Runa Capital co-led, and were joined by insiders Rally Ventures, Precursor Ventures and Day One Ventures. www.anyroad.com

Lev, a New York-based commercial real estate financing transaction platform, raised $10 million in seed funding. NFX led, and was joined by Caanan Partners, JLL Spark, Animo Ventures and Ludlow Ventures. http://axios.link/UXVp

Augmenta, a Dallas-based developer of camera systems for farm equipment, raised $8 million in Series A funding. CNH Industrial led, and was joined by Pymwymic, HCVC and Marathon VC. www.augmenta.ag

Pison Technology, a Boston-based applied nerve sensing and AI insights platform, raised $7 million in Series A funding. Lavrock Ventures led, and was joined by Bose Ventures, In-Q-Tel and Decisive Point. www.pisontechnology.com

Kubecost, a San Francisco-based cloud cost management startup, raised $5.5 million led by First Round Capital. http://axios.link/T6pl

Bankly, a Nigerian fintech for the unbanked, raised $2 million in seed funding from Vault and Flutterwave. http://axios.link/1oIk

Private Equity Deals

Apax Partners agreed to buy German lens and eyewear maker Rodenstock from Compass Partners, with Reuters reporting a price of around €1.5 billion (including debt). http://axios.link/wur7

AsTech, a Plano, Texas-based portfolio company of Kinderhook Industries, acquired Red, a European distributor of aftermarket electronic devices for auto testing. www.astech.com

🚑 Encore Consumer Capital invested in Love Wellness, a New York-based provider of women's health and wellness products like supplements and OTC suppositories. www.lovewellness.com

Full Spectrum Group, a Pleasanton, Calif.-based portfolio company of Pfingsten Partners, acquired Cascade Thermal Solutions, an El Cajon, Calif.-based provider of repair and maintenance services for refrigeration, sterilization, incubation and thermal lab equipment. www.fsaservice.com

MRH Trowe, a German commercial insurance broker owned by AnaCap Financial Partners, made three acquisitions: WIASS Chemnitz, Fivers and KVM. www.mrh-trowe.com

Ontario Teachers' agreed to buy a majority stake in Mitratech, an Austin, Texas-based provider of legal and compliance software, from TA Associates and HgCapital, with Bloomberg putting the price north of $1.5 billion. http://axios.link/oupv

🚑 Nordic Capital agreed to invest €450 million for a minority stake in Danish dermatology firm LEO Pharma. http://axios.link/IjeX

Sunland Asphalt & Construction, a Phoenix-based portfolio company of Huron Capital, acquired Ace Asphalt of Arizona from Prophet Equity. www.sunlandasphalt.com

Public Offerings

ACV Auctions, a Buffalo, N.Y.-based wholesale auto auction site, raised $414 million in its IPO. The company priced at $25 (above upwardly-revised range), for a fully diluted value of $4.1 billion, will list on the Nasdaq (ACVA) and reports a $41 million net loss on $208 million in revenue for 2020. It had raised $350 million in VC funding, most recently at a $1.7 billion valuation, from firms like Bessemer Venture Partners, Tribeca Venture Partners, SoftBank, Armory Square Ventures and Durable Capital Partners. http://axios.link/2oYZ

DigitalOcean, a New York-based cloud hosting and app management platform, raised $776 million in its IPO. The company priced at the high end of its $44-$47 range, for an initial market cap of $4.95 billion. It will list on the NYSE (DOCN) and reports a $44 million net loss on $318 million in revenue for 2020. DigitalOcean had raised over $500 million from such firms as Access Holdings (26.6% pre-IPO stake), Andreessen Horowitz (17.5%) and IA Ventures (16.6%). http://axios.link/7Lyl

TuSimple, a San Diego-based self-driving truck startup, filed for an IPO. It plans to list on the Nasdaq (TSP) and reports a $178 million net loss for 2020. The company raised around $650 million from firms like Nvidia, VectoIQ, Goodyear, Union Pacific, CN Rail, U.S. Xpress, Kroger, Traton Group and Navistar. It also received a PPP loan. http://axios.link/vF4U

🚑 Zymergen, an Emeryville, Calif.-based synthetic biology company, filed for an IPO. It plans to list on the Nasdaq (ZY) and reports a $262 million net loss on $13 million in revenue for 2020. The company raised over $1 billion from firms like SoftBank Vision Fund (32.8% pre-IPO stake), True Ventures (10.4%) and DCVC (9.1%). http://axios.link/neAO

SPAC Stuff

🚑 Altamont Pharma Acquisition, biopharma and med-tech SPAC, filed for a $100 million IPO. http://axios.link/CRFM

🏎️ Andretti Acquisition, an auto SPAC co-led by race car driver Michael Andretti, filed for a $250 million IPO. http://axios.link/iYWd

Avanea Energy Acquisition, an energy tech SPAC led by investors at Presidio Partners Management, filed for a $200 million IPO. http://axios.link/LJ5H

Gateway Strategic Acquisition, a tech SPAC formed by Gaw Capital, filed for a $300 million IPO.

Hony Capital Acquisition, a SPAC formed by Hony Capital to target a tech-enabled consumer or healthcare company in China, filed for a $300 million IPO. http://axios.link/3Zq0

Horizon Acquisition III, a SPAC led by Todd Boehly (Eldridge Industries), filed for a $500 million IPO. http://axios.link/MwwM

Modiv Acquisition, a real estate SPAC, filed for a $100 million IPO. http://axios.link/4qB9

Siddhi Acquisition, a food and beverage SPAC, filed for a $200 million IPO. http://axios.link/rbbQ

Swiftmerge Acquisition, a consumer SPAC formed by IVEST Consumer Partners, filed for a $250 million IPO. http://axios.link/y9hN

Liquidity Events

Carrefour (Paris: CA) agreed to buy Brazilian hypermarket chain Grupo BIG from Advent International and Walmart for around $1.3 billion. http://axios.link/wwum

Greenbriar Equity Group agreed to sell Nordco, an Oak Creek, Wis.-based maker of rail track maintenance equipment, to Wabtec (NYSE: WAB) for $400 million. www.nordco.com

Turnspire Capital Partners sold Crane Carrier Co., a New Philadelphia, Ohio-based maker of construction and garbage trucks, to Battle Motors. www.cranecarrier.com

UiPath, a New York-based robotic process automation software company recently valued by VCs at $35 billion, acquired Cloud Elements, a Denver-based API integration platform. Cloud Element had received a PPP loan and nearly $60 million in VC from firms like Grotech Ventures, Mercato Partners, Harbert Growth Partners, American Express, Rally Ventures, ServiceNow and Access Venture Partners. http://axios.link/Xh8v

More M&A

AIA Group (HK: 01299) agreed to pay around $653 million to buy the life insurance unit of Bank of East Asia (HK: 00023). http://axios.link/jfZh

Fundraising

Kelso & Co. is targeting $3 billion for its 11th flagship buyout fund, per the WSJ. http://axios.link/GTBq

KLAR Partners, a European private equity firm focused on asset-light industrial and mission-critical services companies, raised €600 million for its debut fund. http://axios.link/jfdO

Orangewood Partners, a growth equity and special situations firm, raised $200 million for its second flagship fund, plus another $100 million for other vehicles. www.orangewoodpartners.com

It's Personnel

Mark Malo, a former Clorox executive, joined Yellow Wood Partners as an operating partner. www.yellowwoodpartners.com

Final Numbers
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Congress is working to extend the deadline for PPP loan applications from March 31 to May 31.

  • The House voted for the extension on March 13 by a 415-3 vote, and it now looks like there might be enough Senate GOP support to cross the 60-vote threshold.
  • The renewed PPP program included $284 billion in available loans.
  • Through March 21, over 3.1 million small businesses had secured $195.8 billion of the new pot.
  • Overall, including the initial PPP programs, over $718 billion has been disbursed.

Go deeper: Small business fears persist

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