May 6, 2020

Axios Pro Rata

By Dan Primack
Dan Primack

Situational awareness: ADP this morning reported a 20.2 million drop in private payrolls during April, the largest monthly job losses in the report's history.

Top of the Morning

Illustration: Aïda Amer/Axios

The coronavirus pandemic is lasting longer than Congress and the White House anticipated when it committed hundreds of billions of dollars to small businesses, Axios' Alayna Treene and I report.

Why it matters: The loans were designed as bridges to reopening, but if they only delayed layoffs and economic pain by a couple of months, then they may end up being remembered as bridges to nowhere.

Treasury Secretary Steve Mnuchin told CBS that "the entire [Cares Act] package provides economic relief overall for about 10 weeks."

  • The CARES Act was signed by President Trump on March 27.
  • Mnuchin's 10-week window expires on June 5.
  • No one expects to see a "phase 4" stimulus by that date, as the two parties remain far apart on what that should include, nor a full-scale economic reopening.

Paycheck Protection Program (PPP) loans require that small businesses effectively maintain staffing levels for eight weeks. For early recipients, that means their payroll obligations could run out by month's end.

  • Axios asked several congressional leaders to explain why eight weeks was picked as the expiration date, but was unable to get a direct answer.
  • House aides from both parties directed our questions to the Senate, and Senate staffers directed Axios to the Treasury. Treasury directed us to prior public comments by Mnuchin, such as that "there's no great models for [this] because so much of what is driving the economy is the health issue."

SBA reports that around $181 billion of the refreshed PPP (an additional $311 billion) was spoken for as of yesterday afternoon, nine days after SBA reopened the application portal. The original $349 billion pool was exhausted after 14 days, so it feels like this one will last longer.

  • SBA missed the statutory deadline for providing additional guidance around forgiveness for PPP loans. Six days ago, an agency spokesperson told Axios that "guidance will be forthcoming shortly."
  • Millions of small businesses are waiting on this vital information, which is now 10 days late and counting.

Go deeper.

The BFD

Illustration: Eniola Odetunde/Axios

LetsGetChecked, an at-home health testing startup, raised $71 million co-led by Illumina Ventures and HLM Venture Partners.

  • Why it's the BFD: This reflects increased demand for at-home medical services, from consultations to testing, which many investors believe will become a permanent change to consumer and industry behaviors.
  • Other investors include Deerfield Management, CommonFund Capital, Angeles Investment Advisors, and return backers Transformation Capital, Optum Ventures, and Qiming Venture Partners USA.
  • The bottom line: " Founded in 2015, LetsGetChecked — which has offices in Dublin and New York City — already provided an array of home-based testing kits, covering sexual health, diabetes, cancer screening, vitamin deficiencies, and more. But back in March, the company announced a new two-part coronavirus test aimed initially at frontline workers." — Paul Sawers, VentureBeat

Pro Rata for Kids

Today's project is for your kids to come up with a brand new flavor of ice cream, and then draw a picture of it. What's it called, what's in it, etc.

  • Per usual, please send me photos of what they create.

Yesterday's project was for kids to "make" themselves. Here's Elliot, age 11, who used an iPad:

Venture Capital Deals

• RWDC Industries, a bioplastics manufacturing startup with offices in Singapore and Georgia, raised $133 million in Series B funding from Vickers Venture Partners, Flint Hills Resources, CPV/CAP Pensionskasse Coop & International, Eversource Retirement Plan Master Trust, and WI Harper Group. http://axios.link/k1bX

• Bought By Many, a London-based pet insurer, raised around $98 million in growth equity funding led by FTV Capital. http://axios.link/wThB

🚑 Pulmonx, a Redwood City, Calif.-based developer of minimally invasive treatments for severe emphysema, raised $66 million. Ally Bridge Group led, and was joined by Adage Capital Management, HealthQuest Capital, Partner Fund Management, and Rock Springs Capital. http://axios.link/jZH0

Covariant, a Berkeley, Calif.-based developer of autonomy solutions for industrial robotics, raised $40 million in Series B funding. Index Ventures led, and was joined by Radical Investments and return backer Amplify Partners. http://axios.link/qJmq

GigaSpaces, a New York-based in-memory computing platform, raised $12 million. Fortissimo Capital led, and was joined by return backers Claridge Israel and BRM Group. http://axios.link/rX0f

• Jellyfish, a Boston-based engineering management platform, raised $12 million from Accel and Wing VC. http://axios.link/PvXj

• Peanut, a social network for women, raised $12 million in Series A funding. EQT Ventures led, and was joined by Index Ventures and Female Founders Fund. http://axios.link/wpkH

Limbix, a Palo Alto-based developer of digital treatments for adolescent mental health disorders, raised $9 million in Series A funding. GSR Ventures led, and was joined by return backers Sequoia Capital, Storm Ventures, NextGen Venture Partners, and Bixink Therapeutics. http://axios.link/4m2G

Postal.io, a San Luis Obispo, Calif.-based sales and marketing engagement platform, raised $9 million in Series A funding led by Mayfield. http://axios.link/YL7l

🚑 Embody, a Norfolk, Va.-based developer of medical devices for soft tissue repair, raised $9.3 million in Series A funding. Litigit led, and was joined by Cultivate(MD) and 757 Angels. http://axios.link/UaGJ

Treasury Prime, a routine task automation platform for banks, raised $9 million in Series A funding from QED Investors, SaaStr, and NYCA Partners. http://axios.link/Mr34

Vndly, a Cincinnati-based provider of vendor management software, raised $8.5 million in Series B-1 funding led by Madrona Venture Group. http://axios.link/pGb7

🚑 TimeDoc, a Chicago-based virtual care management platform, raised $5.7 million in Series A funding. Vocap Investment Partners led, and was joined by Grand Ventures, Serra Ventures, Waterline Ventures, Impact Engine, Break Trail Ventures, and Chaifetz Group. http://axios.link/9l6Y

🚑 First Dollar, an Austin, Texas-based health care savings platform, raised $5 million in seed funding. Next Coast Ventures led, and was joined by Meridian Street Capital. www.firstdollar.com

Sleuth, a continuous delivery startup, raised $3 million in seed funding led by CRV. http://axios.link/miKB

• Banked, a London-based open banking startup focused on account-to-account payments at checkout, raised £2.35 million in seed funding. Force Over Mass led, and was joined by Backed and Acrew Capital. http://axios.link/iTI8

• AskRobin, a financial marketplace for underbanked consumers in Latin America, raised $1.7 million from Change Ventures, Vereeni Early Stage Fund, BENE Asia Capital, and Lemonade Stand. http://axios.link/JscS

🚑 Every Mother, a streaming fitness app for pregnant and post-natal women, raised $1.5 million in seed funding. Courtside Ventures led, and was joined by Serena Ventures, Techstars Ventures, and The Fund. www.every-mother.com

Private Equity Deals

🚑 Aspen Surgical Products, a Caledonia, Mich.-based portfolio company of Audax Private Equity, acquired Precept Medical Products, an Arden, N.C.-based maker of single-use protective medical apparel. http://axios.link/BOqx

The Blackstone Group and CVC Capital Partners each are in talks to buy a minority stake in Italy’s Serie A soccer league, which could value the overall group at around €10 billion, per the FT. http://axios.link/psMz

BluSky Restoration Contractors, a Centennial, Colo.-based portfolio company of Dominus Capital and HarbourVest Partners, acquired Harbro, a Signal Hill, Calif.-based provider of mitigation, restoration and reconstruction services. www.goblusky.com

L Catterton invested $400 million into Norwegian Cruise Line Holdings (NYSE: NCLH), via a private placement of 6-year exchangeable senior notes. http://axios.link/5Mgz

🚑 Permira bowed out of the takeover process for Australian medical center operator Healius (ASX: HLS), per The Australian.

Sole Source Capital acquired Supply Chain Services, an Oakdale, Minn.-based provider of automatic identification and data capture and factory automation solutions. www.supplychainservices.com

Public Offerings

GAN Ltd., a London-based provider of online gambling software, raised $54 million in its U.S. IPO. The company priced 6.4 million shares at $8.50 (high end of range), for an initial market value of $254 million. It will continue to be listed on London’s AIM, but also now trades on the Nasdaq (GAN), while B. Riley FBR served as lead underwriter. http://axios.link/nIC7

Live Oak Acquisition, a blank-check acquisition company formed by merchant bank Live Oak, raised $200 million in its IPO. http://axios.link/o3v5

Sustainable Opportunities Acquisition, a blank-check company targeting an environmentally sustainable industrial business, raised $300 million in its IPO. http://axios.link/5NN2

Liquidity Events

Franklin Templeton (NYSE: BEN) acquired AdvisorEngine, a New York-based digital wealth platform that had raised over $60 million from firms like WisdomTree Investments. www.advisorengine.com

More M&A

🚑 AbbVie (NYSE: ABBV) received U.S. antitrust approval for its $63 billion acquisition of Allergan (NYSE: AGN). They previously secured FTC approval by agreeing to divest an autoimmune disease drug candidate to AstraZeneca. http://axios.link/mZjf

JD Sports (LSE: JD), a British youth footwear and clothing retailer, was blocked by U.S. antitrust regulators from buying smaller rival Footasylum (AIM: FOOT) for upwards of £90 million. http://axios.link/BM7Z

Fundraising

Apollo Global Management is seeking to raise upwards of $3 billion for its second infrastructure fund, per Bloomberg. http://axios.link/Chf5

Bracket Capital is raising its second fund, per an SEC filing. The Beverly Hills, Calif.-based VC firm's debut fund netted $150 million. www.bracketcapital.com

🚑 DaVita (BYSE: DVA) launched a corporate venture capital group focused on kidney health startups. www.davita.com

Melitas Ventures, a New York-based VC firm focused on early stage food and beverage startups, is raising $60 million for its second fund, per an SEC filing. www.melitasventures.com

It's Personnel

Aron Beach joined Wynnchurch Capital as a managing director focused on operations, strategy, and portfolio management. He previously was CFO of Advanced Lighting Technologies. www.wynnchurch.com

Final Numbers: IPO filings
Source: Renaissance Capital. Data through May 5, 2020.
  • Renaissance Capital reports that IPO filing volume is down 30.8% from this time last year.
  • Pricing activity is off 25%, while proceeds raised are 31.1% lower.
  • Of the 45 priced IPOs in 2020, 22 of them have been SPACs.
Dan Primack

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