May 10, 2017

Axios Pro Rata

By Dan Primack
Dan Primack

Greetings from the home office. Just a reminder that you can send feedback or share scoop via email at dan@axios.com or by using our anonymous tip box at www.axios.com/tips. Plus all sorts of messaging apps, like Signal, Confide, Messenger, Twitter DM, Telegram, etc. (Dan Primack / 857-472-3072). Here we go...

Top of the Morning

• The long wait: Wonder no longer if star M&A banker Frank Quattrone still holds a grudge against James Comey, who prosecuted Quattrone in the aftermath of the dotcom bubble (good backgrounder from Fortune). Following Comey's dismissal as FBI Director, Quattrone tweeted:

"The man who once lied about me on national TV and wrongfully indicted me just got fired. Karma's a powerful force."

But Quattrone, a lifelong Republican, didn't exactly applaud President Trump:

"The right person was fired with good reason, with questionable timing, and definitely in the wrong manner."

• New boss: Last month we reported on turmoil at Grovo, a digital skills training platform that had raised $40 million in early 2016 from firms like Accel Partners. Specifically, CEO Jeff Fernandez and two fellow co-founders were out, due largely to a lack of financial management discipline.

Yesterday the company held an all-hands to announce that its new CEO is Steven Carpenter, an executive-in-residence at Accel who previously served as founding CEO of both Endorse.com (acquired by Dropbox) and Cake Financial (acquired by E*Trade). The plan now is to proceed with the summer roll-out of a major product upgrade ― including Grovo Create, an authoring tool for internal corporate educational and training content. Also expect the company's nexus to continue moving west from NYC to SF, as Carpenter and the company's recently-hired vice presidents of engineering and product are based in the Bay Area.

I asked Carpenter repeatedly if Grovo would be raising new VC in 2018, in part to help with the new product roll-out, and he repeatedly found creative ways to avoid answering.

• Empty handbag: Kate Spade's namesake company this week agreed to be acquired for $2.4 billion by Coach, but the famed fashion designer won't see a dime of it. As Forbes points out, Kate and her husband Andy Spade sold out years ago for just $46.5 million (and that's before taxes).

• Big hire: Sarah Tavel yesterday announced that she has joined venture capital firm Benchmark Capital as its sixth general partner, after having been with rival Greylock since 2015. Before that Tavel was a product manager with Pinterest, for which she had co-lead a Series A investment in her prior role as a VP with Bessemer Venture Partners.

  • Bigger picture: Tavel is the first-ever female general partner at Benchmark, a San Francisco-based firm known for being the early money in such companies as eBay, Twitter and Uber. She also will have more influence than do new partners at many other VC firms, as Benchmark is a "flat" organization that splits its investment profits evenly among its partners, without employing junior investment staffers. As Axios previously reported, women comprise only 7% of decision-makers at U.S. venture firms.
The BFD

Snap Inc. will report Q1 earnings at market close today, just over two months after it went public. Quiet period begone!

  • Why it's the BFD: Not everything has to be transactional. A lot of people have a lot invested in Snap, even if they don't own actual shares, as it has become a proxy for a certain vintage of consumer tech unicorns.
  • What the analysts are saying: "Wall Street expects Snap to post a quarterly loss of 19 cents per share, according to Thomson Reuters I/B/E/S. Analysts expect revenue of close to $158 million, roughly four times the $38.8 million figure from a year earlier, but down about 5 percent from $165.7 million for the fourth quarter of last year." ― Reuters
  • Axios preview: "Snap's earnings will be under heavy scrutiny. It commanded a massive valuation at IPO despite being unprofitable and having far fewer users than Facebook, so it will have to show improved financials and continued growth. It also must fight growing perceptions that Instagram's cloning of its most popular features is a serious threat." -- Kia Kokalitcheva & Sara Fischer
  • What I'll be watching for: Whether Evan Spiegel or Imran Khan take the lead in answering earnings call questions.
  • Reminder: Both Facebook and Twitter beat analyst estimates in their first post-IPO earnings reports, but both still saw their shares trade lower.
Venture Capital Deals

• Kreditech, a German developer of credit and banking products for people with little to no credit history, has raised €110 million in new equity funding from PayU, a Czech online payments company owned by Naspers. http://tcrn.ch/2pyBoAa

• Royale, a Chinese developer of rollable displays, has raised $58 million in Series D funding led by Beijing Zhongtai Chuanghui Equity Investment Fund. http://bit.ly/2qSzqOP

• Intrinsic Therapeutics, a Woburn, Mass.-based developer of a medical device to improve outcomes in lumbar discectomy patients, has raised $28 million in new VC funding. NEA and Delos Capital co-led the round, and were joined by Greenspring Associates, Quadrille Capital and an undisclosed corporate investor. The company also secured a new $21 million debt facility with CRG. www.in-thera.com

• Hesai, a Shanghai-based developer of LiDAR sensors, has raised $16 million in Series A funding. Pagoda Investment led the round, and was joined by Grains Valley Venture Capital, Jiangmen Venture Capital and LightHouse Capital Management. http://bit.ly/2qSj1tC

• TubiTV, a San Francisco-based developer of an ad-supported streaming video service, has raised $20 million in new VC funding. Jump Capital led the round, and was joined by Danhua Capital, Cota Capital and Foundation Capital. http://bit.ly/2pjEDz8

• Attivo Networks, a Fremont, Calif.-based provider of "deception for cybersecurity defense," has raised $15 million in Series B funding from Omidyar Technology Ventures, Bain Capital Ventures, Trident Capital Cybersecurity and Macnica Ventures. www.attivonetworks.com

• Vera, a Palo Alto, Calif.-based enterprise data security company, has raised $15 million. Hasso-Plattner Ventures led the round, and was joined by return backers Battery Ventures, Sutter Hill Ventures, Clear Venture Partners, Amplify Partners, Capital One Ventures and Leslie Ventures. www.vera.com

• Finxact, a Jacksonville, Fla.-based "core-as-a-service" banking technology provider, has raised $12 million in seed funding led by Live Oak Capital. http://bit.ly/2q5D84Y

• RedLock, a Menlo Park, Calif.-based startup that automates public-private cloud protection, has raised $12 million in new VC funding from Sierra Ventures, Storm Ventures and Dell Technologies Capital. http://bit.ly/2q5kcmS

• BC Platforms, a Switzerland-based provider of genomic data management solutions, has raised $10 million in new VC funding led by Debiopharm Innovation Fund. www.bcplatforms.com

• Remix, a San Francisco-based startup focused on helping local governments plan better public transit, has raised $10 million in Series A funding led by Sequoia Capital. www.remix.com

• Solovis, a Dallas-based portfolio management and reporting platform for limited partners and asset allocators, has raised $8 million in Series A funding. Edison Partners led the round, and was joined by return backers MissionOG, OCA Ventures, Timberline Ventures and Northwestern University. www.solovis.com

• Simple Habit, a San Francisco-based online meditation platform, has raised $2.5 million in seed funding. Backers include NEA, FJ Labs, Foundation Capital and Y Combinator. http://tcrn.ch/2qYYwYG

• Freska, a Finland-based home-cleaning startup, has raised €2 million in new VC funding. Spintop Ventures led the round, and was joined by Momentum Partners. http://tcrn.ch/2pw3Ykx

• Empower, a San Francisco-based financial management app for millennials, has raised an undisclosed amount of VC funding from Sequoia Capital. http://tcrn.ch/2q1ZWUD

Private Equity Deals

• Bain Capital has acquired a majority equity stake in Surgery Partners (Nasdaq: SGRY), via a transaction whereby Bain helped finance the company's $750 million acquisition of surgical facilities operator National Surgical Healthcare from Irving Place Capital. As part of the transactions, existing Surgery Partners owner H.I.G. Capital exited. www.surgerypartners.com

• Broadway Technology, a New York-based provider of trading solutions to electronic fixed income markets, has raised $42 million in minority equity funding led by Long Ridge Equity Partners. Signal Hill managed the process. www.broadwaytechnology.com

• Cimarron Healthcare Capital has led a recapitalization of Medical Pricing Solutions, a Norcross, Ga.-based provider of cost containment solutions. Other equity participants included RAF Industries and Leavitt Equity Partners. www.advancedpricing.com

• Crestview Partners has helped form Congruex, a new provider of design, engineering, construction and maintenance services to broadband network and utility operators. Crestview's investment is upwards of $200 million, with the company planning to raise a total of $500 million. www.congruex.com

• Genstar Capital has agreed acquire and merge Bermuda-based fund administrators Apex Fund Services and Equinoxe Alternative Investment Services for an undisclosed amount. http://bit.ly/2q5lLks

• INC Research (Nasdaq: INCR) has agreed to an all-stock merger with Burlington, Mass.-based inVentiv Health, in order to form a contract research and commercialization organization valued at approximately $7.4 billion. The deal values inVentiv at around $4.6 billion, with shareholders Advent International and Thomas H. Lee Partners to own approximately 47% of the combined company. http://reut.rs/2q5zDvr

• Kohlberg & Co. has completed its previously-announced purchase of Georgia-based specialty plastics manufacturer Pexco from Odyssey Investment Partners, and merged it with existing portfolio company PPC Industries. No financial terms were dislosed. http://bit.ly/2r16yRw

• MacStadium, an Atlanta-based provider of Mac Pro private cloud infrastructure-as-a-service, has raised an undisclosed amount of growth equity funding. Summit Partners led the round, and was joined by Noro-Moseley Partners. www.macstadum.com

• Warburg Pincus has invested $231 million for a minority equity stake in Modernizing Medicine, a Boca Raton, Fla.-based provider of EMR and other health technology solutions. www.modmed.com

Public Offerings

• AXA (Paris: AXAF) said that it plans to list its U.S. life insurance and asset management business in 2018. http://reut.rs/2pvUPZp

• Five Point Holdings, an Aliso Viejo, Calif.-based homebuilder, raised $294 million in its IPO. The company priced 21 million shares at $14 per share (below $18-$20 price range), and will trade on the NYSE under ticker symbol FPH. Citigroup and J.P. Morgan served as lead underwriters. Shareholders include Marathon Asset Management, Och-Ziff, Third Avenue Management, Anchorage Capital and Castlelake. http://bit.ly/2qZa7a4

• Guaranty Bancshares, raised $54 million in its IPO. The company priced 2 million shares at $27 per share ($26-$28 range), and will trade on the Nasdaq under ticker symbol GNTY. Sandler O'Neill served as lead underwriter.

• Pret A Manger, a UK-based sandwich shop chain owned by Bridgepoint, is considering a New York IPO this year, according to Bloomberg. https://bloom.bg/2pyONYX

Liquidity Events

• Apple (Nasdaq: AAPL) has acquired Beddit, a Finland-based sleep tracking hardware and software company that had raised over $3 million in VC funding from firms like Inventure, VeraVenture and Open Ocean Capital. No financial terms were disclosed. http://cnb.cx/2q2JNyO

• Levine Leichtman Capital Partners has sold Champion Manufacturing, an Elkhart, Ind.-based maker of medical seating products, to an undisclosed buyer. www.championchair.com

• Vivarte, a French clothing retailer owned by and investor group that includes Oaktree Capital, has agreed to sell its Pataugas footwear brand to Hopps Group. http://reut.rs/2q5q7YT

More M&A

• Abercrombie & Fitch (NYSE: ANF) has hired Perella Weinberg Partners to explore a possible sale of the company, per Reuters. The Ohio-based teen apparel retailer's shares have been trading at a 17-year low, with a current market cap of around $860 million. http://reut.rs/2qYBwcr

• HNA Group of China has opted against bidding for German shopping finance company HSH Nordbank, per a German media report. http://reut.rs/2r15ltP

• Iconix Brand Management (Nasdaq: ICON) has agreed to sell its entertainment unit, which includes Peanuts Worldwide and Strawberry Shortcake, to DHX Media (TSX: DHX) for $345 million. http://reut.rs/2qZrCXU

Fundraising

• Dreamit is launching a new "urban tech" startup accelerator in Tampa ― focused on areas like real estate, city infrastructure and urban living ― in partnership with Tampa Bay Lightning owner Jeff Vinik. http://bit.ly/2psEIMa

• Fred Destin (ex-Accel) and Harry Stebbings (ex-Atomico) are prepping a London-based seed fund, per TechCrunch. http://tcrn.ch/2q2ACxP

• Obvious Ventures has closed its second fund with $191 million in capital commitments, per Dow Jones. www.obvious.com

• SoftBank may be just a week away from announcing a final close of its Vision Fund at $95 billion, per Bloomberg. http://bit.ly/2q2mB3q

• SVB Capital has closed its fourth VC and private equity fund with $225 million in capital commitments, according to a regulatory filing. www.svb.com

It's Personnel

• Rohit Bassi has joined Corridor Capital as a managing director on the firm's operations team. He previously led ops at Ampersand Biopharmaceuticals. www.corridorcapital.com

Final Numbers
Dan Primack