Jun 3, 2020

Axios Pro Rata

By Dan Primack
Dan Primack
Top of the Morning

Illustration: Eniola Odetunde/Axios

Venture capital is not the primary cause of, nor primary solution to, America's racial inequities. But as a major driver of wealth and opportunity, it does exacerbate them.

  • Black men are woefully underrepresented within VC firms at just 2%, based on the most recent data. Black women don't even rank a percentage point.
  • Only 1% of VC-backed founders between 2013 and 2018 were black.
  • Historically black college and university endowments are rarely limited partners in VC funds.

The big question: How can this change?

The past week does seem to have shaken many in the VC community. Or maybe slapped them in the face.

  • There have been the obligatory tweets of solidarity.
  • There have been large, personal donations made to organizations focused on racial justice. This includes more than $200,000 now pledged to the NAACP Legal Defense & Education Fund for our Peloton ride this Saturday (full details on that tomorrow).
  • SoftBank today announced a $100 million fund, backed by its balance sheet, "to invest in companies led by founders and entrepreneurs of color."

It's all important. Laudable. Could help begin to reduce economic inequality in the short and long terms. But, moving forward, there's another thing to do that doesn't cost anything but time.

Listen. Tomorrow at 3pm ET/12pm PT, a group called BLCK VC is hosting a virtual event called "We Won't Wait." It will begin with a moment of silence, and then feature a group of black investors and founders sharing personal stories of their challenges within tech, stories of racism within the industry, and what they're feeling at the current moment.

  • The goal, in the words of Storm Ventures' Frederik Groce, is to "jump-start internal conversations."
  • Every good investor, and journalist, knows that their job is more about listening than talking. And that understanding can lead to action, such as expanding employment and investment opportunities in a structural way that persists once this moment has passed.
  • I hope you join me tomorrow in hearing what BLCK VC has to say.

RSVP here.

The BFD

Illustration: Aïda Amer/Axios

Global Infrastructure Partners and Brookfield Asset Management are in advanced talks to acquire a 49% stake in Abu Dhabi National Oil Co.’s natural gas pipelines for $15 billion (including debt), per multiple reports.

  • Why it's the BFD: Neither the pandemic nor energy price volatility has slowed global infrastructure investing.
  • Other investors would include Ontario Teachers’ Pension Plan, GIC, Snam,
    and NH Investment & Securities.
  • The bottom line: "Abu Dhabi has been opening up the operations of its state-owned oil producer to foreign partners as part of a push to diversify its economy and generate additional sources of funding. Adnoc has already sold shares in its distribution unit and brought in international investors to its refining and oil field services business. KKR and BlackRock agreed last year to invest $4 billion in Adnoc’s oil pipeline network. GIC bought a stake in the business later." — Bloomberg
Venture Capital Deals

Varo Money, a San Francisco-based mobile banking app, raised $240 million in Series D funding. Gallatin Point Capital and return backer The Rise Fund co-led, and were joined by TPG, Bono, Jeff Skoll, HarbourVest Partners, and Progressive Insurance. http://axios.link/7Nkg

🚑 Genor Biopharma, a Chinese biotech focused on autoimmune diseases and cancer, raised $160 million. Hillhouse Capital led, and was joined by Temasek, Haitong Capital, Cavenham PE, and CR-CP Life Science Fund. http://axios.link/1nwI

🚑 Bigfoot Biomedical, a Milpitas, Calif.-based developer of digital therapies for diabetes, raised $55 million in Series C funding. Abbot Labs led, and was joined by Smile Group and return backers Quadrant Capital Advisors, Senvest Capital, Janus Henderson, and Cormorant Asset Management. http://axios.link/rapL

🚑 Nodthera, a U.K.-based biotech focused on chronic inflammation, raised $55 million from Novo Holdings, Cowen Healthcare, and Sanofi Ventures. http://axios.link/tP60

Tembici, a Brazilian micromobility startup, raised $47 million in Series B funding. Valor Capital and Redpoint eventures co-led, and were joined by IFC, and Joá Investimentos. http://axios.link/LEX0

Locus Robotics, a Wilmington, Mass.-based developer of autonomous mobile robots for e-commerce fulfillment warehouses, raised $40 million in Series B funding led by Zebra Technologies. http://axios.link/zSLV

🚑 Tae Life Sciences, a Foothill Ranch, Calif.-based radiation therapy startup, raised $30 million in Series B funding from firms like Artis Ventures. http://axios.link/Pwg4

Verne Global, an Icelandic provider of data centers for high-performance computing, raised $27 million from return backers General Catalyst, Wellcome Trust, Novator Partners, and Stefnir. http://axios.link/3Px8

Cutover, a London-based work orchestration and observability platform, raised $17 million in Series A funding from Barclays and Index Ventures. http://axios.link/ZWel

MessageGears, an Atlanta-based provider of customer marketing solutions for large brands, raised $12 million co-led by Argentum and BridgeBank. http://axios.link/9Z1X

🚑 Shorla Pharma, an Ireland-based biotech focused on pediatric and women’s cancers, raised $8.3 million in Series A funding. Seroba led, and was joined by Enterprise Ireland. http://axios.link/O76m

🚑 Overjet, a dental scan analytics startup, raised $7.85 million in seed funding from Crosslink Capital and E14 Fund. http://axios.link/6jga

🚑 Vara, a Berlin-based developer of breast cancer screening tech, raised $7 million in Series A funding. OMERS Ventures led, and was joined by Merantix, Think.Health, Soleria Capital, and Plug and Play. www.varahealthcare.com

🚑 Re-Vana Therapeutics, a Belfast-based developer of sustained-release drugs for sight-threatening ocular diseases, raised $3.25 million in seed funding. ExSight Ventures led, and was joined by InFocus Capital Partners, TechStart Ventures, Clarendon Fund Managers, Visionary Ventures, and Qubis. www.revanatx.com

Good Monday, a Denmark-based workspace management startup, raised $4 million. Firstminute Capital led, and was joined by return backers Creandum, Seed Capital, and Preseed Ventures. http://axios.link/b09K

Vetty, a New York-based provider of employee verification software, raised $4 million in seed funding led by 3Lines VC. http://axios.link/NUAW

Private Equity Deals

The Carlyle Group and T&D Holdings (Tokyo: 8795) acquired a 76.6% stake in reinsurer Fortitude Group Holdings from AIG (NYSE: AIG) for $2.2 billion. www.fortitude-re.com

GTCR acquired a 25% stake in Captrust Financial Advisors, a Raleigh, N.C.-based RIA with $390 billion in assets under advisement. The deal values Captrust at $1.25 billion. http://axios.link/jRw2

Sovereign Capital Partners sponsored a management buyout of Acolin Fund Services, a Swiss provider of regulatory and cross-border fund distribution services.

Thoma Bravo agreed to acquire Exostar, a Herndon, Va.-based information-sharing platform for highly-regulated industries. Sellers include Merck Global Health Innovation Fund. http://axios.link/z4l1

Public Offerings

DoubleDown Interactive, a South Korean publisher of mobile and web-based games, filed for a $100 million IPO. It plans to trade on the Nasdaq (DDI) with J.P. Morgan as lead underwriter, and reports $36 million of net income on $274 million in revenue for 2019. http://axios.link/CFNt

Playtika, an Israeli mobile gaming company, hired Morgan Stanley to lead a U.S. IPO that could raise around $1 billion, per Reuters. The company was acquired in 2016 for $4.4 billion by a Chinese investor group that included Shanghai Giant Network Technology, Jack Ma, Yunfeng Capital, China Oceanwide Holdings Group, China Minsheng Trust, CDH China HF Holdings, Netmarble Games, and Hony Capital. http://axios.link/GZkc

🚑 Pliant Therapeutics, a South San Francisco-based developer of fibrosis treatments, raised $144 million in its IPO. It priced 9 million shares at $16, versus plans to offer 6 million at $14-$16. The company will trade on the Nasdaq (PLRX), used Citigroup as lead underwriter, and had raised over $280 million in VC funding from Third Rock Ventures (32.3% pre-IPO stake), Eventide Asset Management (9.3%), Redmile Group (7.8%), Cowen Healthcare (7.7%), and Novartis (6.2%). http://axios.link/c1iO

UTime, a Chinese mobile phone and electronics manufacturer, set IPO terms to 3.8 million shares at $4-$5. It would have an initial market cap of $37 million, were it to price in the middle, and plans to trade on the Nasdaq (UTME) with ViewTrade Securities as sole underwriter. http://axios.link/KJtG

Liquidity Events

Puig, a Spanish perfume-maker, is in advanced talks to buy London-based makeup brand Charlotte Tilbury for more than $1 billion, per Bloomberg. Sellers would include Sequoia Capital. Other early bidders included Unilever, Estée Lauder, L’Oreal, and Shiseido. http://axios.link/nXHc

More M&A

GIC is in talks to acquire “a large stake” in StorageMart, a Columbia, Mo.-based storage company that could be valued at around $2.5 billion, per Bloomberg. http://axios.link/63sr

HKT, the Hong Kong telecom giant controlled by Richard Li, is weighing a sale of international enterprise unit PCCW Global, which could fetch upwards of $1 billion, per Bloomberg. http://axios.link/bZfb

Fundraising

Francisco Partners raised $7.45 billion for its sixth flagship buyout fund, $1.5 billion for its second mid-market fund, and $750 million for an opportunistic credit fund. www.franciscopartners.com

MassMutual Ventures raised $100 million for its third fund. www.massmutualventures.com

It's Personnel

Creighton Hicks joined LiveOak Venture Partners as a principal. He previously was with Dell Technologies Capital. www.liveoakvp.com

🚑 Deutsche Bank promoted Nick Richitt to head of health care investment banking, per his LinkedIn page.

Final Numbers
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Data: COVID Tracking ProjectHarvard Global Health Institute; Note: Alabama, Florida, Hawaii, Idaho, Kansas, Nebraska, Tennessee and Puerto Rico have not reported hospitalizations consistently; Chart: Andrew Witherspoon/Axios

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