Jan 25, 2021

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Top of the Morning

Illustration: Aïda Amer/Axios

Merger Monday has been overrun by SPACs.

Driving the news: Five companies this morning announced plans to go public via reverse mergers with SPACs, at an aggregate market value of more than $15 billion. And there might be even more by the time you read this.

  • Alight, a Blackstone Group-backed benefits services provider, for $7.3 billion by a Bill Foley-led SPAC.
  • The Hillman Group, a home improvement hardware maker owned by CCMP Capital, for $2.6 billion to a SPAC led by Tilman Fertitta and Rich Handler.
  • Taboola, a VC-backed content recommendation company, for $2.6 billion by a Gilad Shany-led SPAC.
  • Latch, a VC-backed smart lock startup, for $1.56 billion by a SPAC formed by Tishman Speyer Properties.
  • Sunlight Financial, a private equity-backed residential solar financing platform, for $1.3 billion by a SPAC formed by Apollo Global Management.

Coming attractions: More SPAC merger announcements are anticipated shortly, including deals in the EV, ed-tech and aerospace sectors.

What's happening: A lot of this can just be chalked up to supply and demand, the predictable consequence of surging private funding flows and a record amount of new SPAC issuance.

  • I'm also hearing an argument that private market investors, and their portfolio companies, are increasingly worried about a valuation bubble. SPACs provide a quicker route to listing than do traditional IPOs, thus lowering the risk of finding themselves on the wrong side of a pop or deflation.
  • The counterargument is that SPACs aren't quite as fast as they're sometimes made out to be. In the case of Alight, for example, a source tells me that Blackstone began talking to Bill Foley last August, with serious negotiations beginning a couple of months ago. Today's announced deal does have committed PIPE financing, but still requires a SPAC shareholder vote and isn't slated to close until sometime in Q2.

The bottom line: SPAC merger activity hasn't peaked. If anything, it's just getting started.

The BFD

Illustration: Aïda Amer/Axios

Clubhouse, a San Francisco-based audio social network, raised around $100 million led by existing investor Andreessen Horowitz at a $1 billion post-money valuation, Axios has learned. The deal was publicly announced, but the dollar details were not.

  • Why it's the BFD: The startup says it had two million users last week, despite having launched less than a year ago and keeping a very tight handle on new invites until quite recently. It also now plans to launch a program to monetize creators, which could both increase usage and open up Clubhouse's own revenue spigot.
  • Details: Clubhouse says it now has "over 180 investors.” That sounds like startup cap table hell, but word is that most of those backers fit on a single line via a zero-fee SPV.
  • Bottom line: This is a very high-risk/high-reward bet. The risk is that the audio boom is being artificially inflated by the stay-at-home pandemic, and that Andreessen Horowitz's confidence is colored by some of its partners' own addictions to using Clubhouse. The reward is that this is the next evolution of social networking, and that Andreessen Horowitz just preempted other investors like Sequoia Capital once did with WhatsApp.
Venture Capital Deals

• Wolt, a Helsinki-based online ordering and delivery company, raised $530 million in Series D funding. Iconiq Growth led, and was joined by Tiger Global, DST, KKR, Prosus, EQT Growth, Coatue and insiders 83North, Highland Europe, Goldman Sachs Growth Equity, EQT Ventures and Vintage Investment Partners. http://axios.link/QlwN

• Uisee, a Chinese provider of autonomous driving tech, raised $150 million from state-owned investors like the National Manufacturing Transformation and Upgrade Fund. http://axios.link/YaYH

🚑 TScan Therapeutics, a Waltham, Mass.-based developer of T-cell therapies for cancer, raised $100 million in Series C funding from BlackRock, RA Capital and return backers Longwood Fund, 6 Dimensions Capital, Bessemer Venture Partners, GV, Novartis and Pitango HealthTech. www.tscan.com

• Alma, a French installment payments platform, raised €49 million in Series B funding from Cathay Innovation, Bpifrance, Seaya Ventures and Picus Capital. http://axios.link/B5Mg

• IMVU, an avatar-based social network, raised $35 million from firms like Structural Capital. http://axios.link/rQgO

• Wingcopter, a German maker of cargo delivery drones, raised $22 million in Series A funding co-led by Xplorer Capital and Futury Regio Growth. http://axios.link/Ct50

• Riverlane, a British quantum computing startup, raised $20 million in Series A funding. Draper Esprit led, and was joined by insiders Cambridge Innovation Capital, Amadeus Capital Partners and the University of Cambridge. http://axios.link/5HWG

• MotoRefi, an Arlington, Va.-based auto refinancing startup, raised $10 million led by Moderne Ventures. http://axios.link/B1Gg

• Yac, an Orlando-based voice message digitization startup, raised $7.5 million. GGV Capital led, and was joined by Slack Fund. http://axios.link/7r3m

• Sproud, a Swedish maker of pea-made milks, raised $6.5 million from VGC Partners. www.besproud.com

• Pula, a Kenyan provider of insurance to smallholder farmers, raised $6 million in Series A funding led by TLcom Capital. http://axios.link/Hapj

🚑 Sano Genetics, a British startup focused on increasing clinical trial participation, raised £2.5 million in seed funding. Episode1 Ventures led, and was joined by Seedcamp, Cambridge Enterprise and January Ventures. http://axios.link/Lfda

• SpiderSilk, a Dubai-based cybersecurity startup focused on preventing data breaches, raised $2.25 million in seed funding co-led by Global Ventures and STV. http://axios.link/YIFd

Private Equity Deals

• Apollo Global Management is no longer in talks to buy the vinyl business of Orbia Advance (f.k.a. Mexichem) for around $2 billion, after negotiations collapsed, per Bloomberg. http://axios.link/205f

🚑 Bain Capital Double Impact invested in Multi-Specialty HealthCare, a Baltimore-based provider of outpatient post-traumatic injury care and physical rehabilitation. www.multi-specialty.com

• Blue Point Capital Partners bought Transtar Holding, a Cleveland-based distributor of original equipment and aftermarket automotive products for the transmission and driveline repair market. www.transtar1.com

🎮 The Carlyle Group acquired Jagex, a British video game publisher whose titles include RuneScape, from Platinum Fortune. http://axios.link/s7gM

• Charger Investment Partners invested in B&B Coffeehouse, a Sandy, Utah-based coffeehouse operator. www.beansandbrews.com

• Envest Capital Partners acquired Bell & Williams Associates, a Windham, N.H.-based collection agency. www.bellandwilliams.com

• Imaweb, a Madrid-based portfolio company of Providence Strategic Growth, acquired Procar, a German provider of software solutions to auto dealers. www.imaweb.com

• Orange (Paris: ORA) sold €1.3 billion worth of French fixed fiber assets to an investor group comprised of La Banque des Territoires, CNP Assurances and EDF Invest. http://axios.link/i138

• Praesidian Capital acquired a control stake in Round 2, a South Bend, Ind.-based maker of collectibles like model car kits. www.autoworldstore.com

• San Francisco Equity Partners acquired SV Labs, a Santa Cruz, Calif.-based maker of natural beauty and personal care products. www.svlabs.com

🚑 Symplr, a Houston-based portfolio company of Clearlake Capital Group and SkyKnight Capital, agreed to buy Phynd, a Dallas-based provider of data management software for healthcare systems. Phynd had raised around $12 million from firms like Rex Health Ventures, and also received a PPP loan. www.symplr.com

• TPG is in exclusive talks to buy a minority stake in DirecTV from AT&T (NYSE: T) at a valuation north of $15 billion, per Reuters. http://axios.link/a4ue

Public Offerings

• Eight companies plan to price IPOs on U.S. exchanges this week, including possible $1 billion-plus raises from Ortho Clinical Diagnostics, Qualtrics and Shoals Technologies Group. http://axios.link/xs9z

• AUTO1, a German used-car marketplace, set IPO terms to 31.25 million shares at €32-38. It plans to list in Frankfurt, while backers include SoftBank, Princeville Capital and DN Capital. http://axios.link/kQAS

• The Bountiful Co. (f.k.a. Nature’s Bounty), a Ronkonkoma, N.Y.-based nutritional supplements maker owned by KKR, is in talks with banks about an upcoming IPO that would value the company at north of $6 billion, per Bloomberg. http://axios.link/9ECG

• Cole Haan, a Greenland, N.H.-based shoemaker owned by Apax Partners, withdrew its IPO registration. It originally filed for a $200 million listing in February 2020, but soon postponed because of the pandemic. http://axios.link/YlDh

🚑 Decibel Therapeutics, a Boston-based biotech focused on hearing loss and balance disorders, filed for a $75 million IPO. The pre-revenue company plans to list on the Nasdaq (DBTX) and raised $215 million from Third Rock Ventures (22% pre-IPO stake), OrbiMed (21.4%), Regeneron (14.7%), GV (11.3%), Surveyor Capital (7.5%), GlaxoSmithKline (7.2%), BlackRock, Casdin Capital, Janus Henderson, Samsara BioCapital and Foresite Capital. http://axios.link/kQD6

• Flywire, a Boston-based vertical payments company, hired Goldman Sachs and JPMorgan for an IPO that could value the company at around $3 billion, per Reuters. It raised $263 million from firms like GS, Spark Capital, Bain Capital Ventures, F-Prime Capital, Tiger Global and Adage Capital Management. http://axios.link/OHrE

• Grab, the Southeast Asia ride-hail giant, picked Morgan Stanley and J.P. Morgan for a U.S. IPO that could raise at least $2 billion, as its merger talks with rival Gojek have stalled, per Bloomberg. http://axios.link/3kGd

• Qualtrics, the Utah-based experience management company being spun out of SAP (NYSE: SAP), upped its IPO terms to 50.4 million shares at $27-$29. It previously planned to offer 49.2 million shares at $22-$26. http://axios.link/gs8N

🚑 Talis Biomedical, a Menlo Park-based provider of point-of-care molecular diagnostics, filed for a $150 million IPO. It plans to list on the Nasdaq (TLIS) and raised over $300 million from firms like Baker Brothers and ArrowMark. http://axios.link/Mvlm

SPAC Stuff

⚡ Power & Digital Infrastructure Acquisition, a SPAC focused on the U.S. electrical power grid transition, filed for a $250 million IPO. http://axios.link/srtN

• Twin Ridge Capital Acquisition, a consumer and distribution SPAC formed by Twin Ridge Capital, filed for a $200 million IPO. http://axios.link/yDEL

Liquidity Events

🚑 Affinity Equity Partners hired Jefferies Australia to find a buyer for MedicalDirector, an Australian medical software business that could fetch upwards of A$600 million, per The Australian. www.medicaldirector.com

More M&A

• ASOS (LSE: ASC) is in exclusive talks to buy Topshop and other British fashion retail brands from bankrupt Arcadia Group. http://axios.link/U6sR

• Bally's (NYSE: BALY) agreed to buy Monkey Knife Fight, a daily fantasy sports operator, for up to $90 million in stock ($50m upfront). www.monkeyknifefight.com

• GlobalWafers, a Taiwanese chipmaker, is trying to save its 4.35 billion takeover offer for Germany's Siltronic by extending its deadline and lowering the minimum shareholder acceptance threshold. http://axios.link/IDbo

• NCR (NYSE: NCR) is nearing an agreement to buy Houston-based ATM operator Cardtronics (Nasdaq: CATM) for around $1.7 billion in cash, or $39 per share, after Apollo Global Management and Hudson Executive Capital declined to raise their $35 per share bid, per WSJ. http://axios.link/Laf9

⚡ Royal Dutch Shell agreed to buy Ubitricity, owner of the U.K.’s largest public electric vehicle charging network. Ubitricity had raised nearly $30 million from firms like Earlybird VC and Honda. http://axios.link/YFq4

Fundraising

• Elbrus Capital, a Russia and CIS-focused private equity firm, held a $165 million first close on its $260 million-targeted third fund, per PE International. http://axios.link/WFdT

• Hellman & Friedman is targeting $20 billion for its tenth flagship buyout fund, per Buyouts. www.hf.com

It's Personnel

• Chris An joined TA Associates as a Hong Kong-based senior vice president. He previously was with CVC Capital Partners. www.ta.com

🚀 Jim Bridenstine, former administrator of NASA, joined Acorn Growth Cos as a fulltime senior advisor. www.acorngrowthcompanies.com

• Perella Weinberg Partners promoted three to partner: John Cesarz (NYC, restructuring), Jackie Chan (SF, tech) and Guy Morgan (London, restructuring). www.pwpartners.com

• Summit Partners promoted six to managing directors: Antony Clavel, Johannes Grefe, Adam Hennessey, Colin Mistele, Steffan Peyer and Ross Stern. It also promoted Gabriel Carreiro, Paul Furer, Patrick Murphy and Sophia Popova to principals. www.summitpartners.com

Final Numbers
Data: National Association for Business Economics quarterly survey; Chart: Axios Visuals

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