Jun 1, 2018

Axios Pro Rata

By Dan Primack
Dan Primack

Hello, readers! I'm back this morning in your inboxes while Dan eats a much deserved breakfast after driving from NYC to Boston bright and early. Reminder: You can send me tips and scoops at kia@axios or on Twitter at @imkialikethecar—even when I'm not writing this newsletter myself!

Top of the Morning

Conway speaks during TechCrunch Disrupt SF 2017. Photo: Steve Jennings/Getty Images for TechCrunch

SV Angel as we know it is no more, the Silicon Valley firm said yesterday.

In short, Ron Conway and his son Topher will return to making angel investments with their own money under the SV Angel brand, and will no longer raise funds with outside investors. This also means that the rest of the partners will depart, though they’ll continue to be advisers to the existing portfolio.

  • In a blog post, the firm attributed its decision to the changing seed investing climate, namely the ballooning size of seed rounds.
  • And that’s true: The median U.S. seed deal in 2017 was $1.7 million, up from $1.47 million in 2016 and $1 million in 2015, according to Pitchbook. In 2018’s Q1, it reached $2.2 million.
  • Of course, it’s very possible that this isn’t the whole story, as is often the case in the Valley…

• Breaking sports betting news: Following a recent Supreme Court decision, DraftKings and Resorts Casino will sign a deal today to offer sports betting in New Jersey, the companies told the AP.

• Chip chat: China’s markets regulator said on Friday that it’s still reviewing Qualcomm’s proposed $44 billion acquisition of NXP Semiconductors, according to Reuters.

• Fund scoop: Meritech Capital Partners tells Axios that it has closed its sixth fund with $630 million, and that co-founding partner Mike Gordon is retiring.

  • This is a slight increase from the $565 million Meritech raised for its last fund, but the firm isn't looking to compete with the SoftBank or crossover crowd.
  • "We're still late-stage investors, but that's now different from pre-IPO. For Meritech that means Series C or D rounds, $50 million or so and probably around three years away from an IPO."

• Un-social network: Facebook held its annual shareholder meeting yesterday, and aside from the totally predictable outcomes (all board members elected, all shareholder proposals rejected), it was an unusual event.

  • Shareholders voice their frustrations with the company’s leadership, including a tense back-and-forth at one point, pointed questions about the company’s plans to house its employees, and one even comparing its handling of user privacy as a human rights violation. Bloomberg and USA Today have good overviews of the affair.
The BFD

Billy Horschel speaks with Cheddar hosts Kristen Scholer and Jon Steinberg at the New York Stock Exchange. Photo: Ryan Young/PGA TOUR via Getty

Cheddar, the upstart financial news network for millennials, has acquired MTV Networks on Campus from Viacom. Terms of the deal were not disclosed, but Cheddar said it will stream content from its flagship business news channels, as well as as original content for college students sponsored by Pandora and Chegg.

  • Why it’s the BFD: The media company, led by former BuzzFeed exec Jon Steinberg, has been making daring bets on millennials' content consumption trends.
  • Bottom line: "Acquiring a legacy network shows that Cheddar’s thesis rests more on the content being aimed at those young viewers, not the delivery mechanism." — Benjamin Mullin, WSJ
Venture Capital Deals

• Chime, a San Francisco-based provider of retail banking, has raised $70 million in Series C funding led by Menlo Ventures, with Forerunner Ventures, Aspect Ventures, Cathay Innovation, Northwestern Mutual, Crosslink Capital, and Omidyar Network also participating. It's now valued at about $500 million. http://axios.link/utqC

• Xiaohongshu, a Chinese social recommendation app for cross-border shopping, has raised $300 million in Series D funding led by Alibaba, with Tencent, GSR Ventures, GGV Capital, Zhen Fund, Genesis Capital, Adrian Cheng, and Tiantu Capital also participating. The deal values the company at more than $3 billion. http://axios.link/ojrQ

• Pine Labs, an Indian provider of point-of-sale technology, has raised $125 million from PayPal and Temasek. http://axios.link/gqvk

• Paxos, a New York City-based blockchain company, has raised $65 million from investors including venture capital firms RRE Ventures and Liberty City Ventures. http://axios.link/qAmh

🚙 Protean Electric, an automotive technology company, has raised $40 million in new funding led by Weifu High-Technology Group and Oak Investment Partners. www.proteanelectric.com

• Virtru, a Washington, D.C.-based startup that provides encryption tools, has raised $37 million in Series B funding led by Iconiq Capital, with Bessemer Venture Partners, New Enterprise Associates, Samsung, Blue Delta Capital, and Soros Capital also participating. http://axios.link/20gb

• CyberInt, an Israel-based cybersecurity company, has raised $18 million in new funding led by Viola Growth, with existing investors also participating.

• Kneron, a San Diego-based provider of edge artificial intelligence solutions, has raised $18 million in funding led by Horizons Ventures. www.kneron.com

• Stellapps, an Indian company providing connected tech for dairy farming, raised $14 million in Series B funding led by The Bill & Melinda Gates Foundation and IndusAge, with Qualcomm Ventures, ABB Technology Ventures, Omnivore, Blume Ventures, BEENEXT, and Venture Highway also participating. http://axios.link/RWPe

• imToken, a provider of Ethereum digital wallets, has raised $10 million in Series A funding from IDG Capital. http://axios.link/4LbZ

Modern Fertility, a San Francisco-based startup that helps women evaluate their fertility, has raised $6 million led by Maveron and Union Square Ventures, with Sound Ventures, #Angels, SV Angel and additional individual investors also participating. http://axios.link/G9O0

• Weights & Biases, a San Francisco-based startup building tools for machine learning, has raised $5 million in Series A funding from Trinity Ventures and Bloomberg Beta. http://axios.link/tLG0

Private Equity Deals

🍷 The Carlyle Group has completed the acquisition of Accolade Wines, an Australian wine company. www.accolade-wines.com

• Bain Capital Private Equity has agreed to recapitalize TriTech Software Systems, a San Diego-based provider of public safety software. The deal is expected to close during the second quarter of 2018. www.tritech.com

• Thoma Bravo has agreed to acquire a majority stake in LogRhythm, a Boulder, Colo.-based provider of security information and event management solutions. www.logrhythm.com

• Corsair Capital has acquired Jackson Hewitt Tax Service Inc, a Jersey City-based tax preparation service, from H.I.G. Bayside Capital. www.JacksonHewitt.com

• Cache Creek Industries and Rockmont Capital will acquire Mountain Secure Systems, a provider of proprietary, ruggedized and highly engineered electronic solutions to leading defense contractors in the United States, from Phillips Service Industries. www.mountainsecuresystems.com

Public Offerings

🚑 Hancock Jaffe Laboratories, an Irvine, Calif.-based developer of bioprosthetic devices for cardiovascular surgeries, raised $8 million by offering an upsized 1.5 million units at $5, below $6 to $8 range. The company initially filed to raise $8 million by offering 1.2 million units at the same range. It will trade on the Nasdaq (HJLI) and have a market value of $53 million and an enterprise value of $46 million. http://axios.link/vHIF

🚑 Neuronetics, a Malvern, Penn.-based seller of a medical system that uses magnetic stimulation to relieve depression, filed for $86 million. It booked $43 million in sales for the 12 months ended March 31, 2018. It plans to list on the Nasdaq (STIM), with Piper Jaffray and William Blair as joint bookrunners on the deal. No pricing terms were disclosed. http://axios.link/zQwd

More M&A

• Toshiba has completed the $18 billion sale of its chip unit to a consortium led by U.S. private equity firm Bain Capital. http://axios.link/fhjJ

• Sunshine Fitness, an owner and operator of Planet Fitness clubs in the Southeast and backed by TSG Consumer Partners, has acquired 31 additional clubs in Florida, North Carolina, and South Carolina. www.planetfitness.com

• Fitch Group has agreed to buy Fulcrum Financial Data, a New York and London-based provider of leveraged finance and distressed debt analysis and news data, from Leeds Equity Partners.

Fundraising

• Binance, a cryptocurrency exchange, is establishing a $1 billion fund to invest in blockchain projects. http://axios.link/GqIa

• Mill Point Capital closed its $450 million debut fund for investments in middle market companies in business services and industrial sectors. www.millpoint.com

It's Personnel


• Steve Shlafman, who left RRE Ventures last year, has joined New York-based firm Primary Venture Partners. http://axios.link/ibh6

Final Numbers
Expand chart
Data: Bureau of Labor Statistics; Chart: Axios Visuals

Here are the U.S. monthly jobs numbers for May, with unemployment being down to 3.8% and beating expectations. More here.

Dan Primack