Jan 21, 2020

Axios Pro Rata

Top of the Morning

Source: Giphy

Sequoia Capital two years ago made a decision that stunned many of its VC peers and limited partners: It would raise a whopping $8 billion for its third global growth fund, in an effort to defend both itself and its portfolio companies from SoftBank Vision Fund.

  • The plan: Sequoia still wouldn’t have SoftBank’s aggregate firepower, but it would have enough to compete for follow-on deals within its own portfolio, and to fund pro rata checks in SoftBank-led deals.
  • The reality: SoftBank so far hasn't managed to raise a second Vision fund.

A source close to the situation says that Sequoia Global Growth III is only a month or two behind its expected investment pace, with the bigger change being that it's written a larger number of (relatively) smaller-sized checks.

  • Sequoia also is said to believe that the iPhone-born "online-to-online" revolution is mostly tapped out, save for some remaining opportunities in China, meaning the unicorn funding race would look different even if SoftBank pulls a rabbit out of the Saudis' hat.
  • Sequoia also happens to be in market with its regular series of funds (i.e., early-stage venture, etc.).

The bottom line: Sequoia in 2018 looked like it was bringing a knife to a gun-fight. In 2020, bullets are overrated.


• Food fund: Tom Mastrobuoni, who co-founded Tyson Food’s corporate venture group before leaving late last year, has joined Big Idea Ventures to raise a $250 million-targeted fund focused on food startups, Axios has learned.

  • Tyson had invested in Big Idea’s debut fund, which focuses exclusively on early-stage deals for alternative protein startups – with an aim toward reducing factory farming and improving the climate.
  • Mastrobuoni's effort will have a broader, more stage-agnostic mandate: Everything from CPG-branded foods to industrial manufacturing, to ag-tech.

Elevator pitch: The €15 billion auction for Thyssenkrupp's elevators unit has gotten a bit smaller, with China's Hillhouse Capital and Brazil's 3G Capital reportedly opting against bids.

  • That leaves three private equity consortia, plus the pairing of strategic Kone with buyout firm CVC Capital Partners.

🎧 Pro Rata Podcast digs into Microsoft's "carbon-negative" climate pledge, and how it's already hedging its political bets. Listen here.


Illustration: Sarah Grillo/Axios

The Athletic, a subscription-based digital sports media company, raised $50 million in Series D funding led by Bedrock Capital at a $500 million post-money valuation.

  • Why it's the BFD: This reflects the recuperation of digital media, not too long after many venture capitalists (and pundits) left the category for dead. Several upstarts turned profits in 2019 — including Business Insider, Vox, The Information, and us here at Axios — with The Athletic expecting to do the same in 2020.
  • Other investors included Founders Fund, Evolution Media, Plus Capital, and Y Combinator.
  • Bottom line: "The Athletic's strategy for the past three years has been to hire top-talent sports journalists in local markets and to get people to pay for high-quality journalism content. The company isn't looking to increase prices on consumers to hit profitability, but rather is focusing on growing and retaining its user base." — Sara Fischer, Axios
Venture Capital Deals

AppsFlyer, an Israeli provider of mobile attribution and marketing analytics SaaS, raised $210 million in Series D funding at a $1.6 billion valuation. General Atlantic led, and was joined by Qumra Capital, Goldman Sachs, DTCP, Pitango VC, and Magma Venture Partners. www.appsflyer.com

Snyk, a London-based developer of security analysis tools, raised $150 million led by Stripes Group. www.snyk.io

Skylo, a San Mateo, Calif.-based network that connects any machine or sensor via satellites, raised $103 million in Series B funding. SoftBank Group led, and was joined by return backers DCM, Innovation Endeavors, and Moore Strategic Ventures. http://axios.link/pxrO

Tink, a Swedish open-banking platform, raised €90 million at a €415 million post-money valuation. Dawn Capital, HMI Capital and Insight Partners co-led, and were joined by Poste Italiane, Heartcore Capital, ABN Amro, and BNP Paribas. http://axios.link/WORp

FloQast, a Los Angeles-based provider of software for accountants, raised $40 million in Series C funding. Norwest Venture Partners led, and was joined by return backers Insight Partners and Norwest Partners. www.floqast.com

Soft Robotics, a Bedford, Mass.-based robotics startup, raised $23 million in Series B funding. Calibrate Ventures and Material Impact co-led, and were joined by Fanuc Corp. and return backers Honeywell, Hyperplane, Scale, Tekfen Ventures, and Yamaha. http://axios.link/qDxG

Home, a Berlin-based marketplace for apartment landlords and tenants, raised €11 million in Series A funding from Capnamic, EQT Ventures, FJ Labs, and Redalpine. http://axios.link/PCpt

🚑 Elder, a British in-home elder care marketplace, raised £8.2 million. MMC Ventures led, and was joined by Acton Capital. http://axios.link/hZUD

Loliware, a developer of seaweed-based materials to replace plastics, raised $6 million led by Hatzimemos/Libby. www.loliware.com

Samya.ai, a Chicago-based provider of revenue growth software, raised $6 million in seed funding led by Sequoia India. http://axios.link/lvTg

🚑 Vivante Health, a Houston-based digital medicine startup focused on gut health, raised $5.8 million in Series A1 funding from Lifeforce Capital, Big Pi Ventures, NFP Ventures, FCA Venture Partners, and Longmont Capital. www.vivantehealth.com

Mine, a London-based startup that helps users enforce their “right to be forgotten,” raised $3 million in seed funding from Battery Ventures and Saban Ventures. www.saymine.com

Stasher, a London-based luggage storage startup, raised $2.5 million led by Venture Friends. http://axios.link/GJr2

Pawlicy, a pet insurance marketplace, raised $1 million in seed funding led by Defy Ventures. www.pawlicy.com

Private Equity Deals

Adrian and Macquarie Group are among the bidders for Portuguese toll road operator Brisa, which could fetch around €3 billion, per Bloomberg. http://axios.link/6vbk

Asterion Industrial Partners, a Europe-focused private equity infrastructure firm, raised €1.1 billion for its debut fund. www.asterionindustrial.com

Brand Velocity Partners acquired Original Footwear, a Stockton, Calif.-based maker of footwear for military and law enforcement personnel. www.originalswat.com

CityFibre, a London-based fiberoptic infrastructure company owned by Goldman Sachs and Antin Infrastructure Partners, paid £200 million for the fiber unit of TalkTalk (LSE: TALK). http://axios.link/UHVe

Davies, a London-based insurance claims company, raised new equity funding from existing backers HGGC and Alberta Investment Management Corp. Some proceeds were used to buy Keoghs, an insurance-focused law firm. www.davies-group.com

MML Capital Partners acquired Arrow Business Communications, a UK-based provider of business telecom services. www.arrowcommunications.co.uk

Rhone Group and Chatterjee Group agreed to buy Lummus Technology, a Bloomfield, N.J.-based provider of chemical processing technologies for hydrocarbon industry, for $2.725 billion from oilfield services company McDermott International (NYSE: MDR), which will file for bankruptcy protection.

Skyview Capital acquired Fidelis Cybersecurity, a Bethesda, Md.-based enterprise network security company, from Marlin Equity Partners. www.fidelissecurity.com

Public Offerings

No companies plan to go public on U.S. exchanges this week.

🚑 Black Diamond Therapeutics, a Cambridge, Mass.-based cancer precision medicine company, set IPO terms to 8.9 million shares at $16-$18. It would have an initial market cap of $555 million, were it to price in the middle, and plans to trade on the Nasdaq (BDTX) with J.P. Morgan as lead underwriter. The pre-revenue company raised $190 million in VC funding from firms like Versant Ventures (42.09% pre-IPO stake), NEA (11.16%), RA Capital (6.7%), and Boxer Capital (5.59%). http://axios.link/1uOj

🚑 One Medical, a chain of primary care clinics, set IPO terms to 17.5 million shares at $16-$18. It would have an initial market cap of $2.08 billion, were it to price in the middle, and plans to trade on the Nasdaq (ONEM) with J.P. Morgan as lead underwriter. The company reports a $34 million net loss on $199 million of revenue for the first nine months of 2019, and raised over $530 million in VC funding from firms like The Carlyle Group (26.8% pre-IPO stake), Benchmark (13%), Oak Investment Partners (11.4%), DAG Ventures (7.6%), GV (5.9%), J.P. Morgan (5.4%), and Maverick (5.2%). http://axios.link/o0mQ

Reynolds Consumer Products, the maker of aluminum foil and Hefty trash bags, and other household and kitchen products, set IPO terms to 47.17 million shares at $25-$28. It would have an initial market cap of $5.37 billion, and plans to trade on the Nasdaq (REYN) with Credit Suisse as lead underwriter. http://axios.link/FWJf

Liquidity Events

🚑 Affinity Equity Partners is seeking a buyer for a Malaysian hospital that could fetch more than $500 million, per Bloomberg. http://axios.link/YKil

Tinicum is in talks to sell Consolidated Aerospace Manufacturing, a Fullerton, Calif.-based aerospace components maker, to Stanley Black & Decker (NYSE: SWK) for more than $1 billion, per Reuters. http://axios.link/u5Zu

More M&A

Air-France KLM (Paris: AIRF) offered to buy up to a 49% stake in troubled Malaysia Airlines, while Japan Airlines (Tokyo: 9201) is seeking a 25% stake, per Reuters. http://axios.link/I3aC

BAE Systems (LSE: BAES) agreed to pay $2.2 billion for a pair of businesses — a GPS unit and an airborne tactical radios unit — being divested by United Technologies (NYSE: UTC) and Raytheon (NYSE: RTN), as a result of their merger. http://axios.link/E6YT

Uber (NYSE: UBER) sold its food-delivery business in India to Zomato in exchange for a 9.99% stake in the startup. http://axios.link/tnuh

UBS agreed to sell a majority stake in fund distribution group Fondcenter for $400 million to Deutsche Boerse-owned Clearstream. http://axios.link/cZ0m


Citigroup formed a $150 million "impact" fund that will back companies focused on sustainability, workforce development, financial capability, and pysical and societal infrastructure. www.citi.com

EQT Partners of Sweden is targeting €14.75 billion for its fourteenth flagship private equity fund, per Financial News. http://axios.link/Oaad

Fifth Wall is raising $200 million for a VC fund aimed at helping real estate companies reduce carbon emissions. http://axios.link/cdUM

Stone Point Capital of Connecticut raised $7 billion for its eighth private equity fund. www.stonepoint.com

It's Personnel

Amplify Partners promoted Lenny Pruss to general partner and Sarah Catanzaro to partner. www.amplifypartners.com

Digital Currency Group named Mark Murphy as COO. He joined the firm in 2018 as head of communications and public policy. www.dcg.co

Monomoy Capital Partners promoted Lee Mlotek to managing director.

Sandesh Patnam (ex-Premji Invest) and Jess Segal (ex-Vista Equity) joined DFJ Growth as partners. Patnam will focus on tech investments, while Segal will lead IR. www.dfjgrowth.com

Pantheon promoted Toni Vainio and Erik Wong to partner. It also named partner Andrea Echberg as co-head of its global infrastructure and real assets group. www.pantheon.com

Perella Weinberg Partners promoted Doug McGovern (New York) and Cyrille Perard (Paris) to partner. www.pwpartners.com

🏈 Richard Sherman, who will appear in Super Bowl LIV as a starting cornerback for the San Francisco 49ers, has joined Cisco-backed venture capital group Decibel as an advisor. http://axios.link/8IKS

Final Numbers
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Reproduced from PwC’s Annual Global CEO Survey; Chart: Axios Visuals

President Trump didn't appear to share CEO pessimism during his Davos speech earlier this morning, touting economic growth while ignoring impeachment and slamming the "perennial prophets of doom."

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