May 24, 2017

Axios Pro Rata

By Dan Primack
Dan Primack

Greetings from the home office. Please remember that you can always get in touch with me via email (dan@axios.com), anonymous tip (http://axios.com/tips) or confidential apps like Signal, Telegram and Confide or texts (Dan Primack / 857-472-3072). Here we go...

Top of the Morning

• Into the woods: The Institutional Limited Partners Association, which represents institutional investors with over $1 trillion in private assets, has added its name to those opposing legislation that would effectively eliminate SEC oversight of private equity funds. Probably because such oversight ― which came into effect via Dodd-Frank ― is the only reason that big buyout shops have cleaned up some of their more duplicitous fee schemes (and been forced, in many cases, to provide reimbursement).

This is all part of the so-called Financial Choice Act of 2017, which recently passed through the House Financial Services Committee and is expected to go for a full vote in early June (whether the Senate will even take it up remains unclear).

From ILPA CEO Peter Freire:

"The ILPA's members are sophisticated investors and supporters of free market principles. However, there are proven limits to what even the most powerful investor can achieve through negotiation, particularly without strong oversight to ensure the rules of the market are followed and the contractual obligations are being met."

• Personnel scoop: Harel Kodesh, the former CTO of GE Digital, has joined Silver Lake as a Silicon Valley-based operating partner. Prior to joining GE in 2014, he co-founded and led EMC spinoff Nurego.

• Occupy Silicon Valley: Michael Hartnett, chief investment strategist for BAML Global Research, sounds the following warning in a recent report:

"Creative Disruption" vs "Economic Nationalism" is ultimately unsustainable. It will engender a more forceful inflationary policy response for the political establishment: monetary & fiscal policy moving left, trade & immigration policy moving right. In addition, it could ultimately lead to populist calls for redistribution of the increasingly concentrated wealth of Silicon Valley as the gap between tech capital & human capital grows ever-wider.

• That's helpful: There is now a transcript on my recent interview with Marc Andreessen. Thanks Zach!

• Infrastructure on hold: My colleague Mike Allen interviewed Paul Ryan this morning at an Axios event in D.C., at which the Speaker said that he expects tax reform to get done in 2017 but was much less certain about an infrastructure package. This is a different line than we've been hearing from the White House, which has suggested that infrastructure could be done simultaneous to, or even ahead of, tax reform. Other takeaways here.

• More Trumpland: The White House's proposed budget only balances over 10 years if you ignore a $2 trillion math mistake.

• Quotable: Fidelity Investments CEO Abigail Johnson made a rare conference appearance yesterday, speaking at the Consensus 2017 blockchain tech summit. She acknowledged that blockchain's decentralized control poses a major challenge for financial market adoption, but remains bullish about its transformative potential: "Blockchain technology isn't just a more efficient way to settle securities – it will fundamentally change market structures – and maybe even the architecture of the internet itself."

The BFD

Unity, a San Francisco-based VR/AR gaming engine founded in 2004, has raised $400 million in new equity funding led by Silver Lake. Around half of the deal is a secondary, providing liquidity for early shareholders. The company is now valued at around $2.6 billion, and previously raised over $170 million from firms like DFJ Growth, Sequoia Capital, Thrive Capital and WestSummit Capital.

  • Why it's the BFD: Beyond the fact that Unity powers Pokemon Go, which was the hottest thing on the planet (and in my house) at this time last year? Okay, how about because Unity claims that half of all new mobile games and two-thirds of all AR/VR content is now made in its environment? That basically means that Unity can sidestep the "hits problem" of gaming, and instead is able to ride the industry's more secular trends.
  • Bottom line: "Unity's plan is to democratize game development. It has done so by creating an engine that enables games to run on just about any platform, without huge costs related to porting the games to each new platform. That allows game developers to cut their costs and generate more revenues from more platforms. In that sense, Unity frees the developers from being beholden to platform owners, who often front the cash for big game development in exchange for exclusivity." -- Dean Takahashi, VentureBeat
Venture Capital Deals

• Smartsheet, a Bellevue, Wash.-based SaaS platform for managing and automating collaborative work, has raised $52.1 million in Series F funding. Insight Venture Partners led the round, and was joined by fellow return backers Madrona Venture Group, Sutter Hill Ventures and new investor Summit Partners. www.smartsheet.com

🚑 OrphoMed, a San Francisco-based developer of dimer therapies, has raised $39 million in Series A funding. NEA led the round, and was joined by return backers Takeda Ventures, Pappas Capital, Relativity Healthcare Partners and the Mario Family Fund. www.orphomed.com

• Outreach.io, a Seattle-based sales automation platform, has raised $30 million in Series C funding. DFJ led the round, and was joined by Four Rivers Group and return backers Mayfield, MHS Capital, Microsoft Ventures and Trinity Ventures. http://bit.ly/2qMwUsD

🚑 Medrio, a San Francisco-based provider of e-clinical and electronic data capture solutions for clinical trials, has raised $30 million in new equity funding from Questa Capital Management. www.medrio.com

• PolicyGenius, a New York-based marketplace for finding insurance policies, has raised $30 million in Series C funding led by Norwest Venture Partners. http://tcrn.ch/2rzGSP8

🚑 Organogensis, a Canton, Mass.-based regenerative medicine company focused on wound care and surgical biologics, has secured a $20 million financing facility from venture debt and equity investor Eastward Capital Partners. www.organogenis.com

• Quiqup, a London-based provider of on-demand logistics services to consumers and retailers, has raised £20 million Series B funding. JOBI Capital led the round, and was joined by Transmed. http://read.bi/2qUOPOb

• Bulletproof 360, a Seattle-based coffee maker, has raised $19 million in Series B funding. CAVU Venture Partners led the round, and was joined by return backer Trinity Ventures. http://tcrn.ch/2qWjtF2

🚑 Anaconda Biomed, a Barcelona-based developer of neuro-thrombectomy systems for the treatment of acute ischemic stroke, has raised €15 million in Series A funding from Ysios Capital, Omega Funds, Banco Sabadell and Innogest Capital. http://bit.ly/2rxJ2z2

• PandaDoc, a San Francisco-based provider of sales process management software, has raised $15 million in Series B funding. Rembrandt Venture Partners led the round, and was joined by Microsoft Ventures, HubSpot, EBRD and Altos Ventures. http://tcrn.ch/2rf9KML

• Blispay, a Baltimore-based provider of customer financing programs for small and mid-sized retailers, has raised $12 million in Series A funding from FirstMark Capital, Accomplice, NEA, Camden Partners and F-Prime Capital. http://bsun.md/2qcVW1b

• Circle Media, a Portland, Ore.-based provider of products to help families manage their connected devices, has raised $10 million in Series A funding led by Relay Ventures. www.meetcircle.com

• Trove, a San Francisco-based provider of self-storage solutions, has raised $8 million in Series A funding led by Greylock Partners. http://bit.ly/2q9h0Kk

• Carpe Data, a Santa Barbara, Calif.-based provider of data products for the insurance industry, has raised $6.6 million in Series A funding led by Aquiline Technology Growth. http://bit.ly/2qhVXjV

• Long Game, a San Francisco-based personal finance app that includes lottery-style cash prizes, has raised $6.6 million in VC funding from Thrive Capital and Collaborative Fund. http://tcrn.ch/2qTuU20

• Inflowz, an Israeli AI process optimization startup, has raised $3.5 million in VC funding from Gilot Capital Partners. www.inflowz.com

• Mavin Motion, a Mountain View, Calif.-based provider of app engagement solutions, has raised $3 million in seed funding from Mousse Partners and Montane Ventures. http://tcrn.ch/2qRxTpW

• Embrace.io, a Culver City, Calif.-based provider of app performance analytics, has raised $2.5 million in seed funding. Eniac Ventures led the round, and was joined by Chernin Group, Techstars Ventures and BoxGroup. http://tcrn.ch/2qTrBrK

• Meta SaaS, an Austin, Texas-based provider of enterprise SaaS subscription management technology, has raised $1.5 million in seed funding. Mark Cuban led the round, and was joined by Barracuda Networks and Brett Hu (Bazaarvoice founder). www.metasaas.com

• American Robotics, a Boston-based developer of agricultural drones, has raised $1.1 million in seed funding from backers like Brain Robotics Capital. http://bit.ly/2ryrqmv

Private Equity Deals

• Apollo Global Management is in advanced talks to acquire online jobs site CareerBuilder, according to Reuters (which previously reported that GTCR was in talks to buy the company for $1 billion). Sellers would include Tegna, Tribune Media and The McClatchy Co. http://reut.rs/2qVbVEf

• CF Corp. (Nasdaq: CFCO) has agreed to acquire Fidelity & Guaranty Life (NYSE: FGL) for $1.835 billion in cash (not including $405m of assumed debt), or $31.10 per share (8.4% premium to yesterday's closing price). CF is a blank-check company formed by former Blackstone Group dealmaker Chinh Chu, while Blackstone itself is also participating on the buyside. FGL is an Iowa-based provider of fixed indexed annuities and life insurance. http://dailym.ai/2rzBKdP

🚑 Great Hill Partners has acquired PartsSource, an Aurora, Ohio-based provider of medical parts and supplies procurement solutions. Sellers include Polaris Partners and Primus Capital. No financial terms were disclosed. http://bit.ly/2qTzhdp

🚑 HGGC has acquired AIMC, an Atlanta-based developer and distributor of Medicare Supplement products, for an undisclosed amount. AIMC will be merged with existing HGGC portfolio company Integrity Marketing Group. www.AIMC.net

• Insight Venture Partners has acquired Resolve Systems, an Irvine, Calif.-based incident response and automation platform for IT and network operations, from Solis Capital Partners. No financial terms were disclosed. http://bit.ly/2rzs3vZ

• Insignia Capital Group has acquired Tillamook Country Smoker, a Bay City, Ore.-based maker of branded meat snacks. No financial terms were disclosed. www.tcsjerky.com

🚑 Sheridan Capital Partners has invested in Dermatologists of Central States, a Dayton, Ohio-based dermatology practice management company. No financial terms were disclosed. www.sheridancp.com

• TA Associates has agreed to acquire an equity stake in MRI Software, a Solon, Ohio-based provider of real estate software, from GI Partners (which will retain a minority stake). No financial terms were disclosed. http://bit.ly/2rOiTcp

Public Offerings

• Delivery Hero, a European food delivery startup that has raised over $1.5 billion in VC funding, is planning a Frankfurt IPO for this summer, according to Reuters. http://reut.rs/2qjpDwM

Liquidity Events

Merit Capital Partners has sold Ferrara Fire Apparatus, a Holden, La.-based maker of custom fire apparatus and rescue vehicles, to REV Group (NYSE: REVG) for an undisclosed amount. http://bit.ly/2qTrlsR

More M&A

• Glencore's agricultural arm has made an informal takeover approach for Bunge (NYSE: BG), a White Plains, N.Y.-based gains company valued at over $11 billion. Bunge said this morning, however, that it is not in current talks with Glencore. http://on.ft.com/2qV1Bw2

• Greely, the owner of Volvo, has agreed to acquire a 49.9% stake in Malaysian automaker Proton from DRB-HICOM, and a majority of Proton's 51% stake in UK-based Lotus. No financial terms were disclosed. http://reut.rs/2qjyC14

• SoftBank has amassed a 4.9% stake in Santa Clara, Calif.-based graphics chipmaker Nvidia (Nasdaq: NVDA), making it the company's fourth-largest shareholder, according to Bloomberg. The position is worth approximately $4 billion. https://bloom.bg/2qNPVLr

• UBS has agreed to acquire a majority stake in Consenso, a Brazilian wealth management firm with more than $6 billion in AUM. No financial terms were disclosed. http://reut.rs/2qjGobm

Fundraising

🚑 Bain Capital has closed its debut fund focused on life sciences with $720 million in capital commitments. http://bit.ly/2qS3kjT

• Gree Ventures of Japan has closed its second fund with $67 million in capital commitments. http://bit.ly/2rOfvhI

• Morgan Stanley has closed its first private equity "impact" fund-of-funds with more than $125 million in capital commitments. http://bit.ly/2rPQrGT

• Osage Venture Partners, a Bala Cynwyd, Penn.-based VC firm focused on early-stage B2B software companies, has closed its fourth fund with $90 million in capital commitments. www.osagepartners.com

• River Cities Capital Funds of Cincinnati is raising up to $200 million for its sixth VC fund, according to an SEC filing. www.rccf.com

• Seyen Captial, a Chicago-based VC firm founded by George Spencer (ex-JK&B Capital), is raising up to $30 million for its debut fund, per an SEC filing.

It's Personnel

• Todd Forman, former CEO of business information company UCG, has joined SWaN & Legend Venture Partners as a managing director. www.swanandlegend.com

• Rothschild Global Advisory has made four senior hire to its North American business: Reza Vahabzadeh (ex- Perella Weinberg Partners) and Siddharth Hariharan (J.P. Morgan) as managing directors on the consumer team, and Aashis Mehta (Lazard) and Timothy Hotchandani (Deutsche Bank) as managing directors on the healthcare team. www.rothschild.com

Final Numbers
Dan Primack