Jun 23, 2020

Axios Pro Rata

By Dan Primack
Dan Primack

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Top of the Morning

Illustration: Eniola Odetunde/Axios

White House economic adviser Larry Kudlow likes to compare the coronavirus pandemic to a hurricane, arguing it's a devastating but finite event that doesn't leave a lasting economic mark.

Why it matters: It's a flawed analogy being used to inform America's economic policy.

Here's what Kudlow told Axios' Jonathan Swan, for an "Axios on HBO" interview that aired last night:

"It's like a big bad hurricane or a bad snowstorm. It's a natural disaster. And we've seen in the past with natural disasters, they come and they inflict enormous pain. And this virus has inflicted horrible pain. But the disaster passes and therefore has very little damage to what I call the structural aspects of the economy."

Yes, the disaster will eventually pass.

  • But, unlike with a hurricane, we have no reliable forecast for when the skies will clear. Maybe we get a working therapeutic or vaccine by year-end. Maybe by the middle of 2021. Maybe later.
  • Businesses physically destroyed by natural disasters can usually rely on insurance to rebuild. That's not generally true during this pandemic, with interruption-of-business claims being denied.
  • Businesses don't reopen while the winds are still whipping, unlike what we're doing right now. Imagine a New Orleans restaurant during Hurricane Katrina saying: "Yeah, the roads are flooded and our ceiling might collapse, but come get dinner anyway."

Natural disasters also don't play geographical whack-a-mole like we're seeing now with the coronavirus pandemic. Kudlow says we won't shut down the economy again. That's akin to saying Houston wouldn't shut again were it to get hit with another hurricane like Harvey.

  • Nor is there ever politicization of public safety measures like wearing masks ("Board up my windows? No, I voted for the other guy.").

The bottom line: We're facing something novel to our lifetimes. Comparing it to natural disasters, even horrific ones, doesn't do it justice. It also doesn't help us set adequate, sober-minded policy.


Amazon this morning announced the creation of a $2 billion venture capital fund that will focus on "sustainable and decarbonizing technologies and services."

German authorities arrested Markus Braun, the former CEO of German fin-tech company Wirecard. In short, he's accused of cooking the books to the tune of $2.1 billion.

  • This is yet another black eye for SoftBank, which last year organized a €900 million investment into publicly-traded Wirecard. The money reportedly came from SoftBank employees and one, undisclosed outside investor — not from Vision Fund or SoftBank's balance sheet.

In discussing the PPP loan disclosures yesterday, one thing we forgot: If any venture capital or private equity firms themselves received loans, we're likely to learn about it.

🎧 Axios Re:Cap talks with Andrew Yang about if he feels the federal stimulus was a test run for universal basic income, following new reports that The CARES Act reversed expected increases in U.S. poverty rates.


Photo illustration: Sarah Grillo/Axios. Photo: Sylvain Gaboury/Patrick McMullan via Getty Images

Pershing Square Tontine Holdings, a special purpose acquisition company formed by Bill Ackman to acquire "mature unicorns," filed for a $3 billion IPO.

  • Why it's the BFD: $3 billion would be the most money ever raised by a SPAC. And it may ultimately raise nearly $6.5 billion, based on concurrent plans to raise between $1 billion and $3 billion from funds associated with Ackman's hedge funds, plus up to another $450 million if banks exercise their overallotment options.
  • Mature unicorns? Yeah, we need a better term for this. Twitter is helping out.
  • History: Pershing Square did a SPAC back in 2011, which ultimately took Burger King public.
  • The bottom line: "The deal will give Ackman firepower to compete for a big acquisition against some of the largest private equity firms, such as Apollo Global Management and The Blackstone Group." — Reuters
Venture Capital Deals

🚑 Cedar, a New York-based health care financial engagement platform, raised $102 million in Series C funding. Andreessen Horowitz led, and was joined by Kaiser Permanente, and return backers Kinnevik, Thrive Capital, Lakestar and Founders Fund. http://axios.link/wfBr

Swile (fka Lunchr), a French provider of corporate benefits management software, raised €70 million in Series C funding. Index Ventures led, and was joined by Bpifrance and Idinvest. http://axios.link/q9fp

Canva, an Australian design software company, raised $60 million in new funding at a $6 billion valuation. Backers include Bond, General Catalyst, Sequoia Capital China, Felicis Ventures, and Blackbird Ventures. http://axios.link/AOy4

🚑 BrightInsight, a San Jose, Calif.-based regulated digital health platform for biopharma and medtech, raised $40 million in Series B funding. Insight Partners led, and was joined by return backers New Leaf Venture Partners and Eclipse Ventures. www.brightinsight.com

Rasa, a San Francisco-based chatbots platform, raised $26 million in Series A funding. Andreessen Horowitz led, and was joined by Accel, 468 Capital, Basis Set Ventures, and Mango Capital. http://axios.link/3PFj

Cazoo, a British online used car marketplace, raised £25 million at a valuation north of $1 billion. Draper Esprit led, and was joined by return backers DMG Ventures and General Catalyst. http://axios.link/aGjO

🚑 Foldax, a Salt Lake City-based artificial heart valve developer, raised $20 million in Series D funding. MCIF led, and was joined by APF, Sayan Bioventures, and return backers BioStar Capital, Kairos Ventures, and Caltech. http://axios.link/mnAT

Roamler, a Dutch on-demand workforce platform, raised €20 million from Endeit Capital, SmartFin and Achmea Innovation Fund. http://axios.link/4EOm

GoStudent, an Austrian online tutoring platform, raised €8.3 million in Series A funding. Left Lane Capital led, and was joined by DN Capital. http://axios.link/fiDo

Urjanet, an Atlanta-based utility account aggregator, raised $14.7 million in Series D funding. Equifax was joined by return backers Oak HC/FT, Pete Kight, Grotech Ventures, and Correlation Ventures. www.urjanet.com

Quidnet Energy, a Houston-based long-duration energy storage startup, raised $10 million in Series B funding from Trafigura, The Jeremy and Hannelore Grantham Environmental Trust, and return backers Breakthrough Energy Ventures and Evok Innovations. www.quidnetenergy.com

Armored Things, a Boston-based provider of crowd intelligence software, raised $7 million in new seed funding. Will Ventures led, and was joined by Splunk and return backers Glasswing Ventures, iNovia and MassVentures. www.armoredthings.com

Satelytics, a Toledo, Ohio-based geospatial analytics startup, raised $5 million from BP. http://axios.link/upUu

🚑 Optimize.health, a Seattle-based provider of reimbursement software for remote patient care, raised $3.5 million in seed funding from Bonfire Ventures. www.optimize.health

Sparrow Exchange, a Singapore-based cryptocurrency options trading platform, raised $3.5 million in Series A funding. HDR Group led, and was joined by Signum Capital, Du Capital, and FinLab EOS VC. http://axios.link/zyjT

Horizon Quantum, a Singapore-based developer of software for quantum computers, raised $3.2 million led by Sequoia Capital India. http://axios.link/4zLX

Treehouse Games, a Los Angeles-based developer of cooperative games, raised $2.6 million in seed funding. LVP led, and was joined by Transcend Fund and Kristian Segestrale. www.treehousegames.com

Quortex, a French video streaming startup, raised €2.5 million in seed funding co-led by Elaia and Go Capital. http://axios.link/O46P

Workhuman, an Ireland-based performance management platform, is now valued at $1.2 billion after Intermediate Capital Group bought an undisclosed amount of shares from existing backers, per The Irish Times. http://axios.link/bhC0

Private Equity Deals

Advent International has offered to buy around a minority stake in Italian soccer league Serie A, at a valuation of around €13 billion, per Bloomberg. This follows earlier offers from CVC Capital Partners and Bain Capital. http://axios.link/MY1B

PDFTron Systems, a Vancouver-based portfolio company of Silversmith Capital Partners, acquired ActivePDF, a Laguna Niguel, Calif.-based provider of server-side PDF automation components. www.pdftron.com

Ridgemont Equity Partners acquired American Safety Council, an Orlando, Fla.-based provider of mandatory training, education, and certification solutions to regulated end markets. Sellers were Bratenahl Capital Partners and Falfurrias Capital Partners. www.americansafetycouncil.com

Public Offerings

Allegro, a Polish online auction site, picked Goldman Sachs and Morgan Stanley to lead an IPO that could value the company north of $11 billion, per Bloomberg. Backers include Cinven, Permira, and Mid Europa Partners. http://axios.link/y9gp

MessageBird, a Dutch communication APIs company, told Bloomberg that it plans to go public within the next 12 months. The company has raised over $60 million from Accel, Atomico, and YC, and expects to generate around €300 million in 2020 revenue. http://axios.link/FJvh

Liquidity Events

🚑 Gilead Sciences (Nasdaq: GILD) agreed to buy a 49.9% stake in Pionyr Immunotherapeutics, a San Francisco-based developer of immunotherapies targeting the tumor microenvironment, for $275 million. The deal also gives Gilead an option to pay $315 million for the rest of Pionyr, which has raised $78 million in VC funding from firms like NEA, Sofinnova Ventures, Vida Ventures and return backers OrbiMed, SV Health Investors, Osage University Partners, and Mission Bay Ventures. http://axios.link/is5S

Mastercard (NYSE: MA) agreed to buy Finicity, a Murray, Utah-based financial data aggregation platform, for $825 million (plus an earnout of up to another $160m). Finicity had raised over $25 million in VC funding from firms like Experian Ventures. http://axios.link/8tJ6

Microsoft (Nasdaq: MSFT) acquired CyberX, a Waltham, Mass.-based industrial network security platform. CyberX had raised $48 million from firms like Qualcomm Ventures, Inven Capital, NVP, Glilot Capital Partners, Flint Capital, and OurCrowd. http://axios.link/RoUv

More M&A

21Vianet (Nasdaq: VNET), a Chinese data center operator, secured a $150 million equity commitment from The Blackstone Group.

Abu Dhabi National Oil Co. agreed to sell a $10.1 billion stake in its natural gas pipelines to a consortium that includes Global Infrastructure Partners, Brookfield Asset Management, GIC, Ontario Teachers’ Pension Plan Board, NH Investment & Securities, and Snam. http://axios.link/R09l

Credit Suisse agreed to buy up to a 35% stake in Brazilian digital broker Modalmais. http://axios.link/9ygV

ED&F Man Holdings, a London-based commodities trader, is seeking a buyer for its brokerage unit, which could fetch more than $500 million, per Bloomberg. http://axios.link/11l8

Facebook (Nasdaq: FB) acquired Ready At Dawn Studios, a maker of VR and console games. http://axios.link/OfOh

Quebec’s government is in talks to invest in Montreal-based footwear retailer Aldo Group, as part of a court-overseen restructuring. http://axios.link/Ob7s

🚑 Sanofi (Paris: SASY) agreed to acquire a 7.2% stake in Translate Bio (Nasdaq: TBIO), as part of a potential $2 billion vaccine development deal. http://axios.link/9HH9

SoftBank Group formally announced plans to sell up to $21 billion of its $30 billion stake in T-Mobile US (Nasdaq: TMUS), which it acquired via T-Mobile's recent purchase of Sprint. Around 134 million of the 198 million shares will be sold to the public. http://axios.link/ThaA


Omega Venture Partners, a Menlo Park-based VC firm led by Guarav Tewari (ex-Citi Ventures, SAP Ventures), is raising $100 million for its debut fund, per an SEC filing.

Sherpa Capital, a Madrid-based private equity firm, raised €120 million for its third special situations fund.

Tenzing Private Equity of London is raising £400 million for its second fund, per an SEC filing. www.tenzing.pe

Final Numbers
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Data: The Center for Systems Science and Engineering at Johns Hopkins; Map: Andrew Witherspoon/Axios. This graphic includes "probable deaths" that New York City began reporting on April 14.
Dan Primack

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