Axios Pro Rata

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November 12, 2021

Top of the Morning

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Illustration: Annelise Capossela/Axios

Electric vehicle maker Rivian closed trading Thursday valued at nearly $105 billion, two days after completing the largest U.S. IPO since Alibaba in 2014. In short, investors are betting that Rivian can become the next Tesla, whose own market cap stands above $1 trillion.

It's a bad bet.

  • This isn't a commentary on Rivian's products, management or ability to deliver on its long list of preorders. Nor is this stock advice; as I once upbraided Google's venture investors for not taking money off the table at IPO.
  • Instead, this is about ROI.

Tesla went public seven years after being founded, having raised less than $500 million in VC funding. It never hit unicorn status, and its current market cap is 658x its at-IPO value.

Rivian went public 12 years after being founded, having raised over $10 billion in VC funding. For Rivian to match Tesla's aftermarket performance, its market cap would need to hit around $69 trillion. I know inflation is all the rage these days, but... no.

  • Tesla, despite being younger than Rivian, had delivered more vehicles at the time of IPO. It also was operating in a much less mature market, whereas both companies now compete with legacy OEMs and a raft of EV startups.

Between the lines: Staying private longer has always resulted in a small number of private market investors getting to capture more potential upside; the antithesis of securities democratization. And that opportunity gap is being widened by the exploding sizes of growth equity rounds at nosebleed prices.

  • Rivian isn't a perfect example, given that some of its biggest VC backers were Amazon and Ford, although Tesla also had large public company investors in its pre-IPO cap table.

The bottom line: Rivian already has generated big returns, at least on paper, for those who bought at the IPO price. This includes pre-order customers who took advantage of a directed share program. It will not, however, generate Tesla-like returns, because it hit Wall Street too old and too rich.


Illustration of a pill with the dividing line in the shape of a dollar bill sign.

Illustration: Aïda Amer/Axios

Johnson & Johnson (NYSE: JNJ) said it will spin off its consumer health business into an independent public company.

Why it's the BFD: This is the second iconic U.S. company to announce a breakup in four days, following General Electric.

Details: J&J's consumer health unit generated $14 billion in 2020 sales and includes such brands as Band-Aids, Listerine and Tylenol. The split is expected occur within the next 18–24 months, with an executive team to be named later. J&J would continue to operate its pharma and medical device businesses, which include the company's COVID-19 vaccine.

Market reax: J&J shares jumped more than 4% in premarket trading.

The bottom line: "J&J is following many other large pharmaceutical companies that have shed their consumer divisions, including GSK and Pfizer, which formed a joint venture from their consumer health units that they plan to spin off in the middle of next year. The pharmaceuticals industry is moving towards more slimmed down companies focusing on innovation, including high-priced specialist drugs." Hannah Kuchler, FT

Venture Capital Deals

GoTo Group, an Indonesian tech giant formed via the merger of ride-hail firm Gojek and e-commerce platform Tokopedia, raised more than $1.3 billion in pre-IPO funding. ADIA led, and was joined by Avanda Investment Management, Fidelity International, Google, Permodalan Nasional Berhad, Primavera Capital, SeaTown Master Fund, Temasek, Tencent and Ward Ferry.

Cerebras Systems, a Sunnyvale, Calif.-based AI chipmaker, raised $250 million in Series F funding at a valuation north of $4 billion. Abu Dhabi Growth Fund and Falcon Edge Capital co-led, and were joined by Altimeter, Benchmark, Coatue, Eclipse Ventures, Moore Strategic Ventures and Vy Capital.

Workato, a Mountain View, Calif.-based business automation integration platform, raised $200 million in Series E funding at a $5.7 billion valuation. Battery Ventures led and was joined by Insight Partners, Altimeter Capital and Tiger Global.

Applied Intuition, a Sunnyvale, Calif.-based simulation platform for autonomous systems development, raised $175 million in Series D funding at a $3.6 billion valuation. Elad Gil, Addition and Coatue co-led, and were joined by insiders Semil Shah, Andreessen Horowitz, General Catalyst and Lux Capital.

Contrast Security, a Los Altos, Calif.-based developer of code security tools, raised $150 million in Series E funding. Liberty Strategic Capital led, and was joined by insiders Warburg Pincus, Battery Ventures, General CatalystM12, AXA Venture Partners and Acero Capital.

Kodiak Robotics, a Mountain View, Calif.-based self-driving trucking startup, raised $125 million in Series B funding from SIP Global Partners, Lightspeed Venture Partners, Battery Ventures, CRV, Muirwoods Ventures, Harpoon Ventures, StepStone Group, Gopher Asset Management, Walleye Capital and Aliya Capital Partners.

Pendo, a Raleigh, N.C.-based customer analytics platform, secured $110 million in secondary funding led by Thoma Bravo at a $2.6 billion valuation.

ControlUp, a San Jose, Calif.-based desktop computing performance monitoring company, raised $100 million co-led by insiders K1 Investment Management and JVP.

Alt, a P2P marketplace for sports cards, raised $75 million in Series B funding. Naval Ravikant and Spearhead co-led, and were joined by Seven Seven Six, Vibe Capital, Breyer Capital, Shrug Capital, Apollo Projects and pro athletes like Tom Brady, Giannis Antetokounmpo and Alex Morgan.

CoreWeave, a New York-based cloud infrastructure services provider, raised $50 million from Magnetar Capital.

🚑 Shasqi, an S.F.-based developer of chemotherapy-boosting treatments, raised $50 million in Series B funding from backers like Arcus Biosciences and Bill Rieflin (NGM Biopharma chairman).

🚑 Nuritas, an Irish developer of plant-based bioactive peptides, raised $45 million in Series B funding. Cleveland Avenue led, and was joined by Grosvenor, ECBF, Vertex Holdings, Nutresa Ventures, Cultivian SandBox Ventures and VisVires New Protein.

Ometria, a London-based personalized customer marketing platform, raised $40 million in Series C funding. InfraVia Growth led, and was joined by Octopus Ventures, Sonae IM, Summit Action, Adjuvo and Columbia Lake Partners.

🚑 AppliedVR, an L.A.-based immersive therapeutics startup, raised $36 million in Series B funding from F-Prime Capital, JAZZ Venture Partners, Sway Ventures and SVB Ventures.

Houm, a Chilean home rental and sales platform, raised $35 million in Series A funding. Goodwater Capital led, and was joined by such backers as Elad Gil, Fifth Wall and OneVC.

Hive, a Berlin-based ecommerce logistics startup, raised $34 million from Tiger Global and insiders Earlybird and Picus.

Ample, an S.F.-based developer of EV battery swapping tech, raised $30 million from The Blackstone Group and Banco Santander.

Knak, a Canadian marketing campaign creation platform, raised US$25 million in Series A funding led by Insight Partners., an Austrian "digital twin" mapping startup, raised $20 million in Series A funding co-led by M12 and Point72 Ventures.

Puls Technologies, a Livermore, Calif.-based on-demand home appliance repair and insurance service, raised $15 million led by Hanaco VC.

TreeDots, a Singapore-based B2B marketplace for reducing food waste, raised $11 million in Series A funding co-led by Amasia and East Ventures.

Evergrow, an S.F.-based carbon offtake startup, raised $7 million in seed funding. XYZ VC and Congruent Ventures co-led, and were joined by First Round Capital, Garuda Ventures, MCJ Collective and Skyview Ventures.

CacheFlow, a Sunnyvale, Calif.-based provider of embedded financing solutions for enterprise SaaS, raised $6 million in seed funding. GGV Capital led, and was joined by Pelion Ventures.

Momentum, a Slack-based sales task automation startup, raised $5 million in seed funding. Basis Set Ventures led, and was joined by Inovia Capital, Leadout Capital and South Park Commons.

CloudQuery, a Beaverton, Ore.-based cloud infrastructure visibility tool, raised $3.5 million in seed funding. Boldstart Ventures led, and was joined by Work-Bench, Mango Capital and Haystack.

Root, a South African low-code insurance platform, raised $3 million in seed funding from Infenfin, Base Capital, Savannah Fund, P1 Ventures, Luno and FireID.

🚑 Videra Health, an Orem, Utah-based remote patient monitoring video platform for behavioral health, raised $3 million in seed funding. Peterson Ventures led, and was joined by Rose Park Advisors and OATV.

Framework, an on-demand business school focused on startups, raised $2 million in seed funding from LearnStart, Atomico and Ada Ventures.

Private Equity Deals

Blackstone Infrastructure Partners bought out the controlling shareholders of Seattle-based marine terminational operator Carrix.

CVC Capital Partners is in exclusive talks to buy listed Dutch financial services company Intertrust for €1.63 billion, or €18 per share (43% premium to yesterday’s closing price).

IG4 Capital of Brazil agreed to buy a 50% stake in Chilean consumer products distributor Adelco for $57 million.

J.C. Flowers invested in Tricor Insurance, an Arcadia, Wis.-based business and personal insurer.

Midland Industries, a Kansas City-based portfolio company of Wynnchurch, acquired Century Brass, a Long Island-based distributor of brass fittings and valves to the plumbing market.

New State Capital Partners acquired a majority stake in Wilmington Paper, a Pine Brook, N.J.-based paper recycling company.

🌮 Orangewood Partners acquired Pacific Bells, a Taco Bell franchisee with over 250 stores in the U.S.

Rhône agreed to buy Paragon Films, a Broken Arrow, Okla.-based manufacturer of cast stretch films for packaging, from Wellspring Capital Management.

SportPet, a Waukesha, Wis.-based portfolio company of Topspin Consumer Partners, acquired Mission Pets, an S.F.-based pet products maker.

TZP Group acquired Re-Bath, a Phoenix-based bathroom remodeling franchise, from Webster Equity Partners, Sorenson Capital and Yukon Partners.

Public Offerings

Backblaze, a San Mateo, Calif.-based provider of cloud storage and backup software, raised $100 million in its IPO. It priced in the middle of its $15-$17 range, for a $644 million fully diluted value, listed on the Nasdaq (BLZE) and reports a $6 million net loss on $31 million in revenue for the first nine months of 2021.

Lulu's Fashion Lounge, a Chico, Calif.-based women's apparel retailer, raised $92 million in its IPO. It priced at the low end of its $16-$19 range, for a $597 million fully diluted value, listed on the Nasdaq (LVLU) and reported $7 million of net income on $173 million in revenue for the first half of 2021. Backers include CPPIB and IVP.

🚑 Vaxxinity, a Dallas-based vaccine developer that uses synthetic peptides, raised $78 million in its IPO. It priced at $13 (below $14–$16 range), listed on the Nasdaq (VAXX) and was backed by shareholders like Prime Movers Lab.

Weave Communications, a Lehi, Utah-based unified patient communication technology platform, raised $120 million in its IPO. It priced at $24 (below $25–$28 range), for a $1.51 billion market value, listed on the NYSE (WEAV) and was backed by firms like Tiger Global, Catalyst Investors, Pelion Ventures, Bessemer Venture Partners and Crosslink Capital.

SPAC Stuff

Brivo, a Bethesda, Md.-based provider of building access control tech, agreed to go public at an implied $808 million valuation via Crown PropTech Acquisitions (NYSE: CPTK).

Liquidity Events

🚑 Ani Pharma (Nasdaq: ANIP) received FTC approval to buy East Windsor, N.J.-based generic drugmaker Novitium Pharma from firms like Bourne Partners, so long as it divest rights or assets related to two products.

BAE Systems (LSE: BA) agreed to buy Bohemia, a Czech provider of military simulation solutions, from The Riverside Company.

The Carlyle Group and TA Associates are seeking a buyer for PurposeBuilt Brands, a Gurnee, Ill.-based maker of cleaning and disinfection that could fetch $1.5 billion, per Bloomberg.

Lacework, a San Jose, Calif.-based cloud security unicorn, acquired Soluble, an Alamo, Calif.-based cloud infrastructure firm backed by Dell Technologies Capital.

Nu Skin Enterprises (NYSE: NUS) agreed to buy Mavely, a Chicago-based social commerce startup seeded by PivotNorth, Trail Mix Ventures and Starting Line.

🚑 Ro, a DTC men's health company valued by VCs at $5 billion, is in talks to buy Dadi, an at-home sperm storage startup, per TechCrunch. Dadi could fetch around $100 million, and raised $10 million from firstminute Capital, Third Kind VC and The Chernin Group.

Sika (SWX: SIKA), a Swiss chemicals company, agreed to buy German construction chemicals firm MBCC Group for around $6 billion from Lone Star Funds.

Storytel, a listed Swedish audiobook streaming firm, agreed to buy from KKR.

🍷 Sycamore Partners is considering a sale of Stag's Leap Wine Cellars for around $1 billion, just one month after buying the label via its $1.2 billion purchase of Ste. Michelle Wine Estates, per Bloomberg.

TorQuest Partners is seeking to fetch around C$1 billion via a sale of Canadian railway services provider Cando Rail & Terminals, per Bloomberg.

More M&A

Eneos (Tokyo: 5020) is proceeding with a tender offer for the 43% it doesn’t already hold in Japanese roadbuilder Nippo (T: 1881) at a $4.2 billion valuation, over opposition from activist investor Oasis Management.

🧀 Groupe Lactalis, the French dairy giant, received DOJ approval to buy Kraft Heinz's (Nasdaq: KHC) natural cheese business on the condition that it divest the feta and ricotta units.

🚑 Organon (NYSE: OGN), a Merck spinout, acquired Forendo Pharma, a Finnish drugmaker focused on women's health, for at least $75 million.

Ping An Insurance is seeking to sell its 44% stake in Autohome (HK: 2518), which currently would be worth $2.15 billion, per Reuters.


DWS, an asset management arm of Deutsche Bank, raised $550 million for its first private equity fund, including co-investment vehicles.

IgniteXL Ventures, a Silicon Valley-based beauty and wellness VC firm led by Claire Chang, raised $10 million for its debut fund.

True Wind Capital, an S.F.-based tech private equity firm, raised $817 million for its second fund.

It's Personnel

Allison Cole (ex-Lightyear Capital) joined The Riverside Company as a managing director and head of fundraising and IR.

Steve Goldberg (ex-Venrock) joined Finistere Ventures, a VC firm focused on the "food value chain," as a partner.

🚑 Rich Goode, ex-CFO of Dallas-based Children's Health, joined Gauge Capital as an operating partner.

Amir Kabir (ex-Munich RE Ventures) joined AV8 Ventures as a partner.

Emergence Capital promoted Lotti Siniscalo to partner and Yaz El-Baba to senior associate.

Final Numbers

Consumer M&A chart
Source: Refinitiv Deals Intelligence. Data through Nov. 11, 2021.

The next big consumer products deal may involve Progresso soup and Hamburger Helper, as Bloomberg reports that General Mills has hired Goldman Sachs to help divest a brand portfolio that could fetch around $3 billion.

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