• Coming attractions: MuleSoft, a SaaS integration company that has raised over $250 million in VC funding, is quietly prepping for an IPO. Word is that the San Francisco-based company hired banks like Morgan Stanley to manage the offering. MuleSoft could become the year's second enterprise software "unicorn" to go public, with AppDynamics having already filed its S-1. A company spokeswoman declined comment.
• 2018 vintage watch: This is going to be a "put up or shut up" year for tech-focused venture capital. Most of the big domestic firms raised new funds in 2016, often via the siren song of unrealized valuations. For some, this was the second straight cycle of whispering sweet distributions into LP ears. But it's hard to imagine that institutional investors will accept paper promises for a third time, which is why VCs need some of their bigger bets to exit in 2017. Or else there will be a culling of the herd.
No worries, say many VCs, who are predicting a bumper crop of tech IPOs beyond just Snap (see Wilson, Fred). Then again, we heard the same thing about 2016. Before China's economic data. And Brexit. And our Kafkaesque presidential election. Optimism is good. Tempered optimism is better.
• Creative destruction: Sun Capital Partners on Friday disclosed that it will shutter all retail locations of portfolio company The Limited, which will put around 4,000 people out of work (including approx. 800 full-timers). But the private equity firm reportedly told its investors not to worry about the remaining value being written down to zero, because it already generated 1.8x cash-on-cash via earlier dividends.
This was always a bit of an odd deal, because Sun basically backed the company twice: First via a 75% purchase in 2007, and then again in 2010 when it bought the remaining 25% (shortly after which it did the dividend recap). When it first got in, Sun was involved with a clothier that hadn't generated profits since 1993. The financials flipped by 2009, so Sun viewed its subsequent buy-in as providing liquidity on a normal timetable to LPs ― following a successful turnaround ― while effectively doubling down on the future (which didn't work out so well).
That said, it seems to me that The Limited could still be in business, and its workers still employed, if it hadn't used a dividend recap to drain company coffers for the sake of what amounted to an LBO hedge...
• Something familiar: Former TechCrunch co-editor Alexia Tsotsis is on the TC-to-VC highway, per multiple sources who say she is in the early planning stages for a first-time venture capital fund. Target would be $20 million, with Tsotsis working alone (at least initially). She left TechCrunch in early 2015 to enter the MSx program at Stanford's biz school, which she completed last summer. No comment from Tsotsis, natch.
• Moving In: Bain Capital Ventures today will announce the addition of Yumin Choi as a managing director focused on healthcare. He previously was with HLM Venture Partners, and basically fills a BCV role that has been vacant since Jeff Crisan left in 2015 to launch Silversmith Capital Partners.
Choi's thoughts on the future of America's healthcare system, vis-a-vis ACA repeal: "Anyone who tells you they know what it's going to look like is lying to you, but I think we'll all be surprised in the end by how similar it becomes to what it is now. Value-based care, for example, is here to stay in some form."
• Healthcare VC/PE consensus: So long as the product (drug, device or service) works and is cheaper than the alternative, then someone will pay for it.
• What is Axios? At some point soon I'll write the "why I joined a VC-backed startup" post, particularly given that I've covered startups long enough to know the odds. For now, however, three things: (1) Our manifesto; (2) More on the biz model, per today's WSJ; (3) You have my assurance that I was not involved in fundraising for Axios, nor will its investors have any influence on this publication. But, for full disclosure, our outside backers are: Lerer Hippeau Ventures, NBC, Greycroft, Laurene Powell Jobs/Emerson Collective, Steve Rattner, Greg Penner, David Bradley, Eric Ruttenberg and Terry O'Toole.
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