Jan 18, 2019

Axios Pro Rata

Top of the Morning

This morning's planned column fell apart at the very last minute, so just some quick notes to kick off your Friday...

Survey says: 40% of endowment and foundation managers say that private equity fund fees are a greater concern than ever before, due to muted return expectations, per a recent NEPC survey.

  • That said, 51% of respondents also expect PE to outperform other asset classes over the next 12-24 months, with 45% neutral and just 4% bearish.
  • 58% of respondents predict public equities will be flat or down in 2019, with rising interest rates and geopolitical tensions as the top risk factors.

Moving on: Slack chief product officer April Underwood resigned yesterday ahead of the company's planned IPO, and wrote in a Medium post that she wants "to focus on investing."

  • Underwood already has been a part-time investor via the #Angels group, and her Medium post shares some DNA with one that came earlier this week from fellow #Angels founder Katie Jacobs Stanton, the former Twitter exec who is now stepping down as chief marketing officer of Color Genomics.
  • No word yet on if Underwood and Stanton have plans to invest together beyond their #Angels activities. I know at least one of them has had at least preliminary VC firm conversations.
  • In seemingly unrelated news, John Lilly used Medium to announce he's stepping down as a general partner at Greylock (he'll become a venture partner). This adds to what has been a ton of Sand Hill Road turnover of late — perhaps not surprising given all the VC successes of recent years, but still something that presents challenges to LPs as they consider new funds.

Different angels: Less than two years after launching its VC fund management service, AngelList says that such funds have raised $123 million and participated in over half the deals on its site in 2018. Kia has more.

Coming attractions: Desktop Metal, a Burlington, Mass.-based maker of 3D metal printing systems, is raising up to $150 million in Series E funding that would value the company at nearly $1.5 billion, per a Delaware stock authorization certificate uncovered by Lagniappe Labs. That's about a 17% bump (on the share price) from Desktop Metal's Series D round.

  • I've not yet been able to connect with CEO Ric Fulop, but one source says the round is being led by a "big industrial company."
  • That's not too surprising, because Desktop Metal already has a large group of strategic shareholders that include Ford Motor Co., Panasonic, GE, Dirt Devil and Milwaukee Tool.

🎧 Podcast: Our new episode focuses on the escalating D.C. backlash to big tech, including a conversation with Dean Garfield, CEO of the IT Industry Council who is leaving to lead global policy for Netflix. Listen here.

🎂 Today is the two-year anniversary of Axios. Thanks to everyone for reading!


Source: Giphy

Alstom (Paris: ALSO) warned yesterday that the planned merger of its rail operations with those of Germany's Siemens may be blocked by European antitrust regulators. Siemens, which already carved out its rail merger in preparation for the deal, added that it is not willing to make additional concessions.

  • Why it's the BFD: Because this mega-merger was designed to help the European rail giants fend off Chinese competition. It also reflects a philosophical rift between those in the EU who believe in building local industrial monoliths as a bulwark against China, and those who believe the best way to protect European business is by maintaining vigorous local competition.
  • Bottom line: “It’s a very frustrating moment for us. We’ll fight until the end,” Alstom CEO Henri Poupart-Lafarge to bank analysts
Venture Capital Deals

Flash, a Berlin-based e-scooter startup, raised €55 million in Series A funding. Target Global led, and was joined by Idinvest Partners and Signals VC. http://axios.link/V6sI

Bukalapak, an Indian e-commerce company, raised $50 million in Series D funding at around a $1 billion valuation from the Mirae Asset-Naver Asia Growth Fund. http://axios.link/cRRw

🚑 Limelight Health, a San Francisco-based insure-tech startup, raised $33.5 million in Series C funding. Principal Life led, and was joined by AXA Venture Partners, MassMutual Ventures, Aflac Ventures, Transamerica Ventures, Wells Fargo Strategic Capital, LaunchPadDigital Health and Wanxiang America Healthcare Investments. http://axios.link/dTv7

Birdies, a San Francisco-based maker of slipper shoes, raised $8 million in Series A funding. Norwest Venture Partners led, and was joined by Forerunner Ventures and Slow Ventures. http://axios.link/aAci

🚑 HighLife, a Paris-based developer of a system for treating mitral regurgitation, raised €32 million in Series B funding. USVP and Andera Partners co-led, and were joined by Sofinnova Partners and Sectoral Asset Management. http://axios.link/qPUW

HyperScience, a New York-based office work automation startup, raised $30 million in Series B funding. Stripes Group led, and was joined by Battery Ventures, Global Founders Fund, TD Ameritrade, QBE and return backers FirstMark Capital and Felicis Ventures. http://axios.link/XgkE

ScaleFactor, an Austin-based provider of accounting and payroll management SaaS, raised $30 million in Series B funding. Bessemer Venture Partners led, and was joined by return backers Canaan Partners, Broadhaven Ventures and Firebrand Ventures. http://axios.link/d33d

Alto, a Dallas-based ride-hail startup, raised $14.5 million over two funding rounds from Road Ventures and Frog Ventures. http://axios.link/HrT4

Alluxio, a San Mateo, Calif.-based data unification startup, raised $8.5 million in Series B funding. Seven Seas Partners led, and was joined by return backer Andreessen Horowitz. http://axios.link/gVt6

SimplyCook, a UK-based recipe kit startup that only provides “flavor ingredients,” raised £4.5 million in Series A funding led by Octopus Investments. http://axios.link/cTaa

Private Equity Deals

The Carlyle Group and Nomura are prepping a joint takeover bid for Orion Breweries, Japan’s fifth-largest beer-maker, per the Nikkei daily. http://axios.link/FmH0

🚑 Definitive Healthcare, a Framingham, Mass.-based backed by Spectrum Equity, acquired HIMSS Analytics, a Chicago-based healthcare data provider. www.himssanalytics.org

Ferrero, the Italian maker of Nutella, has been added to the short-list of remaining bidders for the international business of Campbell Soup Co. (NYSE: CPB), per Reuters. Other second-round bidders in the $3 billion auction include Bain Capital, KKR, FinTrek Capital, Kraft Heinz and Mondelez. http://axios.link/Z6QW

Lightview Capital invested in Educational Measures, a Denver-based provider of audience engagement analytics for live events. http://axios.link/G6US

Yildiz Holding has short-listed prospective buyers for its Godiva assets in the Asia-Pacific region, which could garner upwards of $1.5 billion, per Bloomberg. Remaining bidders include Baring PE Asia, CVC Capital Partners, MBK Partners and Marunouchi Capital. http://axios.link/iexA

Public Offerings

Source: Giphy

More M&A

BYJU’S, an India-based K-12 learning app developer, acquired Osmo, a Palo Alto-based maker of digital games for kids. BYJU’S recently raised $540 million in a round led by Naspers Ventures. http://axios.link/l4gc

Central European Media Enterprises scrapped plans to sell its Slovenian television networks. http://axios.link/2yQs

Tencent is considering a takeover offer for South Korean gaming company Nexon, per Reuters. http://axios.link/sVDd


Redpoint Ventures is raising $300 million for its second China-focused early-stage fund and $100 million for a new China-focused opportunities fund, per SEC filings. http://axios.link/iQxa

It's Personnel

Evan Hershberg joined Leonard Green & Partners as a partner, per his LinkedIn profile. He previously was a managing director with ONCAP.

Final Thought

Index fund pioneer Jack Bogle, who died Wednesday at the age of 89:

“It’s about being a good husband, a good father, a good colleague, a good member of the community. Everything else pales by comparison. The accumulation of material goods is a waste — you can’t take them with you, anyway — and the waste is typified by our financial system. The essential message is, stop focusing on self and start thinking about service to others.”

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