Oct 21, 2020

Axios Pro Rata

🎧 Axios Re:Cap digs into China's economy recovery, after COVID-19, with CNBC's Eunice Yoon. Listen via Apple, Spotify, or Axios.

⚖️ USA vs. Google: The siege begins. Read the lawsuit. How the states fit in. Google's reply. The path to "monopoly." Lessons from Microsoft.

  • This afternoon's Axios Re:Cap podcast will go deeper with Rep. David Cicilline (D-R.I.), chair of the House subcommittee on antitrust.
Top of the Morning

Illustration: Eniola Odetunde/Axios

Vista Equity continues to work toward getting its house in order, following last Thursday's stunning admissions of personal tax fraud by founder and CEO Robert Smith.

Three updates:

  1. There has not yet been any resolution to the conflict between Smith and firm president Brian Sheth.
  2. Vista recently removed Sheth from the board of Datto, a data protection software company that last night raised nearly $600 million in its IPO (at an initial market cap of $4.25 billion). Multiple sources say Sheth is credited with selling the original buyout to Datto founder and former CEO Austin McChord, after the pair connected at a Morgan Stanley tech event. He had been listed on Datto's original IPO paperwork, filed on Sept. 29.
  3. Vista isn't sitting on its hands while all of this plays out. Axios has learned that the firm quietly agreed to buy a 50% stake in SmartBear, a Somerville, Mass.-based software development and testing company, for around $1.7 billion from Francisco Partners (which retains the other half).

The bottom line: The tension isn't just between two top execs at one of private equity's largest firms. It's also between the appearance of stability and the reality of volatility.

The BFD

Source: Giphy

RVshare, an Akron, Ohio-based peer-to-peer RV rental marketplace, raised over $100 million led by KKR. Existing backer Tritium Partners also participated.

  • Why it's the BFD: The RV market was cruising even before the pandemic, with Winnebago reporting its sales were at a 50-year high, and has only accelerated as people opt for socially distanced travel.
  • Yes, RVshare has competition. Outdoorsy, an Austin, Texas-based rival, has raised over $90 million in venture capital.
  • The bottom line: "There is going to be a huge number of RV owners with a really compelling asset that sits in their driveway for 47 weeks per year, and they can now get matched up to the 40 million American households that camp each year. ... It's analogous to what companies like VRBO, HomeAway, and Airbnb did for vacation homes." — KKR's Jake Heller tells Axios
Venture Capital Deals

Tekion, a San Ramon, Calif.-based auto retail SaaS platform, raised $150 million in Series C funding at a valuation north of $1 billion. Advent International led, and was joined by Index Ventures, Exor, Airbus Ventures, and FM Capital. www.tekion.com

BrightFarms, an Irvington, N.Y.-based indoor farming company, raised $100 million in Series E equity and debt funding. Cox Enterprises led and received a majority stake, and was joined by return backer Catalyst Investors. http://axios.link/r0t0

🚑 SparingVision, a Paris-based developer of gene therapy treatment for retinitis pigmentosa, raised €44.5 million in Series A funding. 4BIO Capital led, and was joined by UPMC Enterprises, Jeito Capital, Ysios Capital, Bpifrance, and Foundation Fighting Blindness. http://axios.link/lFjt

• Output, a Los Angeles-based provider of digital music creation SaaS, raised $45 million in Series A funding from Summit Partners. www.output.com

• Anyscale, a Berkeley, Calif.-based app development platform, raised $40 million in Series B funding. NEA led, and was joined by Andreessen Horowitz, Intel Capital, and Foundation Capital. http://axios.link/NRqo

• 4iQ, a Los Angeles-based cyber intelligence startup, raised $30 million in Series C funding. ForgePoint Capital and Benhamou Global Ventures co-led, and were joined by TheVentureCity, C5 Capital, and Adara Ventures. http://axios.link/3Sfp

🚑 InCarda Therapeutics, a San Francisco-based developer of inhaled therapies for cardiovascular diseases, raised $30 million in Series C funding. Innoviva led, and was joined by return backers Deerfield Management, HealthCap and Morningside Ventures. http://axios.link/LmX6

• Syte, an Israeli product discovery platform, raised $30 million in Series C funding. Viola Ventures led, and was joined by LG Tech Ventures, La Maison, MizMaa Ventures, Kreos Capital, and return backers Magma, Naver Corp., Commerce Ventures, Storm Ventures, Axess Ventures, Remagine Media Ventures, and KDS Media Fund. Syte also secured $10 million in debt financing. http://axios.link/5zbM

• Tarana Wireless, a Milpitas, Calif.-based provider of fixed wireless access network solutions, raised $30 million. Prime Movers Lab led, and was joined by Liberty Global Ventures and Liberty LatAm Ventures. www.taranawireless.com

• VENN, a Los Angeles-based e-sports content network, raised $26 million in Series A funding co-led by Bitkraft Ventures and Nexstar Media Group. http://axios.link/e0q9

• Klar, a Mexico City-based online challenger bank, raised $15 million led by Prosus Ventures. http://axios.link/Wvu8

• CasperLabs, a Swiss smart contracts platform, raised $14 million via a private token sale led by Digital Strategies. www.casperlabs.io

• Robust Intelligence, an AI security and reliability platform, raised $14 million in Series A funding. Sequoia Capital led, and was joined by Engineering Capital and Harpoon Ventures. http://axios.link/jwrf

• Intellimize, a San Mateo, Calif.-based website optimization startup, raised $12 million in Series A-1 funding. Addition led, and was joined by return backers Amplify Partners, Homebrew, and Precursor Ventures. www.intellimize.com

• Possible, a Seattle-based fintech focused on small personal loans, raised $11 million. Union Square Ventures led, and was joined by Canvas Ventures, Unlock Venture Partners, Columbia Pacific Advisors, Union Bay Partners, and FJ Labs. http://axios.link/doaA

• Sym, a security workflow platform, raised $9 million in Series A funding led by Amplify Ventures. http://axios.link/1fdp

• Kettle, a San Francisco-based reinsurance startup focused on climate change risk, raised $4.7 million in seed funding. True Ventures led, and was joined by Acrew Capital, Homebrew Ventures, Anthemis, and Inspired Capital. http://axios.link/uDxX

• Vowel, a New York-based collaborative video meeting platform, raised $4.3 million from Twitch co-founder Kevin Lin, Amity Ventures, BoxGroup, and Company Ventures. http://axios.link/ziXb

• Textel, a St. Louis-based texting platform for contact centers, raised $4 million in Series A funding. Cultivation Capital led, and was joined by Stout Street Capital and Capital Midwest Fund. www.textel.net

• Conducto, a New York-based developer of tools for developer workflow automation solutions, raised $3 million in seed funding led by Jump Capital. www.conducto.com

• Index, a platform for building no-code business intelligence dashboards, raised $2.6 million in seed funding from Slack, Gradient Ventures, YC, and David Sacks. http://axios.link/5eox

• Ways2H, a Long Beach, Calif.-based developer of renewable hydrogen production projects, raised $2.5 million from Pacific6 Enterprises. www.ways2h.com

• Faire, a San Francisco-based curated wholesale marketplace, is in talks to raise more than $100 million in Series E funding at a valuation north of $2 billion, per Bloomberg. To date, it’s raised over $260 million from firms like Lightspeed, Founders Fund, Forerunner Ventures, YC Continuity, and Khosla Ventures. http://axios.link/mJVJ

Private Equity Deals

🚑 Abry Partners invested in Benefit Recovery Group, a Memphis-based provider of health care subrogation services. www.brgsubro.com

Atairos invested in Arcis Golf, a Dallas-based operator of public and private golf clubs. Existing backer Fortress Investment Group will retain an ownership stake. www.arcisgolf.com

• Clayton Dubilier & Rice has expressed interest in buying listed German industrial services provider Bilfinger, which has a market cap of around €1 billion, per Bloomberg. http://axios.link/qEhs

Goldman Sachs Merchant Banking will invest up to $500 million to form Global Compute, a data center infrastructure platform led by Scott Peterson (ex-Digital Realty). http://axios.link/zrKA

• H.I.G. Capital agreed to buy Capstone Logistics, an Atlanta-based provider of outsourced supply chain solutions to distribution centers, from The Jordan Co. www.capstonelogistics.com

• ICP Group, an Andover, Mass.-based portfolio company of Audax Private Equity, acquired Leeson Polyurethanes, a British maker of polyurethane adhesives and coatings. www.icpgroup.com

Lightyear Capital and Ontario Teachers’ agreed to buy Allworth Financial, a Sacramento-based provider of retirement and wealth management solutions, from Parthenon Capital. Barron’s reports a price-tag of up to $800 million. http://axios.link/M8IA

🚑 RLDatix, a patient safety software firm backed by investors like Five Arrows and TA Associates, acquired Verge Health, a Mount Pleasant, S.C.-based provider of credentialing software. www.rldatix.com

Trilantic North America secured a minority stake in SemaConnect, a Bowie, Md.-based provider of electric vehicle charging infrastructure. www.semaconnect.com

TZP Group invested in SA Co., a Boca Raton, Fla.-based outdoor lifestyle apparel business. www.safishing.com

Vector Capital completed its buyout of MarkLogic, a San Carlos, Calif.-based provider of enterprise data integration and data management solutions. MarkLogic had raised around $175 million from firms like Sequoia Capital, Tenaya Capital, Wellington Management, Arrowpoint Partners, and Northgate Capital. www.marklogic.com

Public Offerings

• AmeriHome, a Thousand Oaks, Calif.-based residential mortgage lender and servicer, set IPO terms to 14.7 million shares at $16-$18. It would have a fully-diluted market value of $1.3 billion, were it to price in the middle, and plans to raise another $100 million via a concurrent placement with Starwood Capital. http://axios.link/nXyP

• Caliber Home Loans, a Coppell, Texas-based residential mortgage company backed by Lone Star Funds, set IPO terms to 23 million shares at $14-$16. It would have a fully diluted market value of $1.8 billion, were it to price in the middle, and plans to list on the NYSE (HOMS). http://axios.link/VGug

• Mavenir, a Richardson, Texas provider of cloud-native software apps for mobile networks, set IPO terms to 13.6 million shares at $20-$24. It would have a fully diluted market value of $1.9 billion, were it to price in the middle, and plans to list on the Nasdaq (MVNR) with Morgan Stanley as lead underwriter. The company reports a $5.6 million net loss on $235 million in revenue for the first half of 2020, and was taken private in 2016 by Siris Capital. http://axios.link/wux6

• MediaAlpha, a Los Angeles-based provider of customer acquisition services for insurers, set IPO terms to 9.3 million shares at $18-$20. It would have a fully diluted market value of $1.1 billion, were it to price in the middle, and is backed by White Mountains Insurance Group. http://axios.link/UspU

SPAC Stuff

🚑 Nuvation Bio, a New York-based oncology company, agreed to go public via a reverse merger with Panacea Acquisition Corp. (NYSE: PANA), a SPAC sponsored by EcoR1 Capital. The deal also includes a $500 million PIPE. Nuvation in 2019 raised a $275 million Series A round led by Omega Fund. www.nuvationbio.com

• Acies Acquisition, an entertainment-focused SPAC led by ex-Morgan Stanley bankers Daniel Fetters and Edward King, raised $200 million in a downsized IPO. http://axios.link/7vv3

• DPCM Capital, a SPAC led by former Uber chief business officer Emil Michael, raised $300 million in an upsized IPO. http://axios.link/lEUP

• Good Works Acquisition, a SPAC focused on distressed businesses, raised $150 million in its IPO. It’s led by Fred Zeidman, chairman of Gordian Group, and Douglas Wurth, former CEO of alt investments for JPMorgan Asset Management. http://axios.link/CsNC

• H.I.G. Acquisition, a SPAC formed by H.I.G. Capital, raised $325 million in a downsized IPO. http://axios.link/3fY2

• Lefteris Acquisition, a fintech-focused SPAC led by Mark Casady (co-founder of Vestigo Ventures) and Karl Roessner (ex-CEO of E*Trade), raised $200 million in a downsized IPO. http://axios.link/zawu

• Supernova Partners Acquisition, a SPAC whose leaders include ex-Zillow CEO Spencer Rascoff, raised $350 million in an upsized IPO. http://axios.link/MDpf

🚑 Sarissa Capital Acquisition, a health care-focused SPAC formed by Sarissa Capital, raised $175 million in its IPO. http://axios.link/gmSl

Liquidity Events

• Omers is seeking a buyer for Kenan Advantage Group, a North Canton, Ohio-based bulk transportation company that could fetch at least $2.5 billion (including debt), per Bloomberg. http://axios.link/LVkm

• Spectrum Equity sold ExamSoft, a Dallas-based exam administration platform, to Turnitin, a subsidiary of Advance Pubications. www.examsoft.com

More M&A

Illustration: Sarah Grillo/Axios

Pioneer National Resources (NYSE: PXD) agreed to buy Austin, Texas-based shale oil producer Parsley Energy (NYSE: PE) for $4.5 billion in stock. http://axios.link/F0Nz

Iberdrola (Madrid: IBE) agreed to buy PNM Resources (NYSE: PNM) for $8.3 billion (including debt), and will merge it with Avangrid (NYSE: AGR) to create the third-largest U.S. renewable energy company. http://axios.link/dARD

Quest Resource (Nasdaq: QRHC) acquired Green Remedies, an Elon, N.C.-based waste management and recycling company. www.greenremedieswaste.com

Fundraising

Amplify Partners raised $275 million for its fourth early stage fund and $100 million for its first growth fund. http://axios.link/N6Mo

Invictus Growth Partners, a San Francisco-based firm led by Pilot Growth Equity vets John DeLoche and William Nettles, is raising $200 million for its debut fund, per an SEC filing. www.invictusgrowth.com

Neo, a VC firm led by Ali Parvoti, is raising $120 million for a new fund, per an SEC filing. www.neo.com

SVB Capital Partners is raising $250 million for its fifth fund, per an SEC filing.

Valia Ventures, a bi-coastal early stage firm, is raising a $30 million fund, per an SEC filing. www.valia.vc

It's Personnel

Marina Jovanovic (ex-Rede) joined L Catterton to lead European investor relations, per PE International. The firm currently is raising its fourth Europe-focused fund with a €500 million target. http://axios.link/IpVb

Final Numbers
Source: SPAC Research

Yesterday I moderated two sessions at the Milken Global Conference, and one takeaway is that SPACs are on everyone's mind.

  • Revolution's Steve Case said his VC/growth equity firm has considered trying to raise one.
  • Ibrahim Ajami, head of ventures for sovereign wealth fund Mubadala, said the same.
  • Nick Green, CEO of Thrive Market, said his company is likely to go public within a year and that it would consider the SPAC route.

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