Nov 27, 2019

Axios Pro Rata

By Dan Primack
Dan Primack

🦃 Publishing note: No issues tomorrow or Friday. Have a delicious Thanksgiving break, and we'll chat again on Monday morning.

Top of the Morning

Illustration: Lazaro Gamio/Axios

The New York Stock Exchange yesterday laid the formal groundwork for letting companies raise capital as part of direct listings.

  • This could upend the traditional IPO market, which has relied on Wall Street banks to set pricing terms.

Background: We first discussed the possibility of hybrid listings back in June, in preparation of Slack's direct listing (through which the company itself raised no money). Three months later we broke news on how a group of Silicon Valley investors and attorneys were hosting an invite-only meeting to gain further support for hybrid listings, arguing that the normal IPO process too often benefits bank clients at the expense of issuers.

What's new: NYSE's proposal would let both the company and company insiders sell stock at listing, so long as the company sells at least $250 million worth of shares. There are no new lockup requirements.

  • An exchange spokesperson writes: "This represents the next step in the development of the Direct Listing, which the NYSE pioneered with Spotify in 2018 and Slack earlier this year."

What's next: The filing kicks off a public comment period, after which NYSE's plan will be approved or rejected. The Nasdaq also has said that it's working with the SEC on a direct listing plan.

Also...

VC-land: Zume Pizza co-founder Julia Collins has become an entrepreneur-in-residence at Cleo Capital, an early-stage VC scout fund that relies exclusively on female entrepreneurs, Axios' Kia Kokalitcheva scoops. She's also launched a Cleo-backed startup called Planet FWD, which is designed to "help reverse climate change by making it easier to bring carbon neutral products to market."

  • "As a new mom, I became obsessed with being able to tell my kid 'I did everything I could to fix this,'" she tells Axios.
  • On last year's departure from Zume, just after it raised $375 million from SoftBank: "It was bittersweet... But I think the fairest and most honest thing to say is that we don’t have 100 years to reverse climate change." (She declined to comment further on Zume, which is one of several SoftBank-backed companies in the midst of both fundraising and senior executive turnover).

Bloomberg 2020: A campaign spokesman tells me that there "are no immediate changes" to how Mike Bloomberg's philanthropic assets will be managed and invested.

  • That work is done by Willett Advisors, whose CEO Steve Rattner has no formal role on the campaign. (note: Rattner is a personal investor in Axios.)

Corporate hit list: Axios' Alexi McCammond writes that presidential candidates have called out more than 80 companies across 30 industries on Twitter over the past six months, mostly in a negative context. Go deeper.

🎧 Pro Rata Podcast digs into how and why the Iranian government shut off the country's Internet last week. Listen here.

The BFD

Illustration: Rebecca Zisser/Axios

Silver Lake agreed to invest $500 million for just over a 10% stake in City Football Group, owner of reigning English Premier League champs Manchester City and other soccer clubs, from Abu Dhabi United Group.

  • Why it's the BFD: It makes CFG, now valued at $4.8 billion, the world's most valuable soccer group.
  • Bottom line: "Silver Lake made its name investing in technology companies but has pivoted in recent years to entertainment... It had approached other leading English and European clubs, including Chelsea... attracted by the multi-billion-dollar prices paid for football media rights by broadcasters and Internet groups." — Murad Ahmed, The Financial Times
Venture Capital Deals

🛴 Bounce, an Indian electric and gas-powered scooter rental startup, raised around $150 million in Series D funding from B Capital and Accel Partners India, per TechCrunch. http://axios.link/E6JG

Tray.io, a San Francisco-based workflow automation platform, raised $50 million in Series C funding at what TechCrunch reports is a $600 million post-money valuation. Meritech Capital led, and was joined by return backers Spark Capital, GGV Capital, and True Ventures. http://axios.link/JOLj

Loom, a video-based enterprise collaboration platform, raised $30 million in Series B funding. Sequoia Capital led, and was joined by Kleiner Perkins and individuals like Instagram co-founders Kevin Systrom and Mike Krieger. http://axios.link/ygU1

Genvid Technologies, a New York-based interactive video streaming engine, raised $27 million. Galaxy Interactive led, and was joined by Valor Equity, K5 Global, and return backers March Capital Partners, OCA Ventures, Makers Fund, and Horizons Ventures. http://axios.link/o7G0

Arteza, a Miami-based direct-to-consumer arts and crafts supplier, raised $24 million in Series A funding led by Volition Capital. http://axios.link/LA2r

Pricefx, a Munich-based pricing software startup, raised €23 million in new Series B funding (round total now €48m). Digital+ Partners led, and was joined by return backer Talis Capital. http://axios.link/GGTV

Trouva, a London-based online marketplace for brick-and-mortar boutique stores, raised £17 million from Octopus Ventures, C4 Ventures, Downing Ventures, BGF, and LocalGlobe. http://axios.link/ue3A

Gorgias, a San Francisco-based provider of customer service tools, raised $14 million in Series A funding. Flex Capital led, and was joined by SaaStr, Alven, CRV, and Amplify Partners. http://axios.link/Oe7D

Coralogix, an Israeli data log automation startup, raised $10 million in Series A funding. Aleph led, and was joined by StageOne Ventures, Janvest Capital Partners, and 2B Angels. http://axios.link/vfRe

Forest Admin, a San Francisco-based SaaS startup focused on building admin panels for web apps, raised $7 million in Series A funding from Notion Capital and Runa Capital. www.forestadmin.com

Kasada, an anti-bot cybersecurity startup with offices in Chicago and Sydney, raised $7 million in Series A funding led by In-Q-Tel. http://axios.link/OkfQ

Vivun, an Oakland-based provider of pre-sale software, raised $3 million in seed funding led by Unusual Ventures. http://axios.link/KheH

Private Equity Deals

Foreside Financial Group, a Portland, Maine-based portfolio company of Lovell Minnick Partners, agreed to buy Quasar Distributors, the Milwaukee--based mutual fund and ETF distribution unit of U.S. Bancorp (NYSE: USB). www.foreside.com

The Jordan Co. acquired the polymer additives unit of Polymer Solutions Group, a Cleveland-based portfolio company of Arsenal Capital Partners. www.polymersolutionsgroup.com

King Tester, a portfolio company of Salt Creek Capital, acquired Cianflone, a Pittsburgh-based maker of testing and measurement equipment. www.kingtester.com

Pfingsten acquired Environmental Lights, a San Diego-based maker of commercial LED lighting. www.environmentallights.com

Public Offerings

Muscle Maker, a Burleson, Texas-based fast-casual restaurant chain with 53 locations, filed for a $59 million IPO. It plans to trade on the Nasdaq, with Alexander Capital as sole underwriter. http://axios.link/ToCY

Nongfu Spring, a Chinese bottled water company, is prepping a Hong Kong IPO that could raise at least $1 billion, per Bloomberg. http://axios.link/wRb8

Liquidity Events

Bridgepoint hired HSBC to find a buyer for Portuguese agrochemical company Rovensa, which could fetch around €800 million, per Reuters. http://axios.link/xXMc

• Deutsche Bank sold around $50 billion in emerging market debt assets to Goldman Sachs, as part of a restructuring effort, per Bloomberg. http://axios.link/1Gfw

London Stock Exchange (LSE: LSE) shareholders approved the exchange’s $27 billion purchase of financial data firm Refinitiv from The Blackstone Group and Thomson Reuters (NYSE: TRI). http://axios.link/3zYy

Palo Alto Networks (NYSE: PANW) agreed to buy Aporeto, a machine identity-based microsegmentation startup, for $150 million in cash. Aporeto had raised nearly $40 million in VC funding from firms like Comcast Ventures, Norwest Venture Partners, and Wing VC. http://axios.link/vN6S

Partners Group is seeking to sell British public sector software company Civica, which it bought in 2017 for around £1 billion, per Bloomberg. http://axios.link/hyHH

🚑 New Mountain Capital is seeking a buyer for Western Dental, an Orange, Calif.-based dental and orthodontic services group, per PE Hub. http://axios.link/uHj1

Riverstone sold a 50% stake in the Utopia Pipeline, which runs from Ohio to Canada, to a consortium of South Korean investors. http://axios.link/Dm2W

More M&A

Facebook (Nasdaq: FB) agreed to buy Beat Games, developer of VR rhythm game Beat Saber. http://axios.link/fJBG

Gategroup, a Swiss portfolio company of RRJ Capital and Temasek, is in talks to buy the European catering unit of German airline Lufthansa, per Reuters. http://axios.link/5c3S

Intel (Nasdaq: INTC) is seeking to sell its connected home unit, which it expects could fetch around $450 million, per Bloomberg. http://axios.link/1roZ

Siemens acquired MultiMechanics, an Omaha-based provider of material modeling and simulation software. http://axios.link/XmTQ

It's Personnel

Chu Kong joined Brazil’s XP Investimentos to launch a $300 million private equity fund. He previously was with Actis, where he led the purchase of a stake in XP. http://axios.link/65fQ

Final Numbers
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Reproduced from IHS Markit.; Chart: Axios Visuals
Dan Primack

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