June 29, 2023

Top of the Morning

Illustration: Sarah Grillo/Axios

If you've come for growth, you've come to the wrong place.

  • Almost every major deal market metric was down sharply in the first half of 2023, according to preliminary data from Refinitiv.

By the numbers: Global M&A hit $1.3 trillion year-to-date, which is down 38% over the same period in 2022 and not too much higher than the COVID shock era of H1 2020.

  • Remove 2020 and it's the lightest first half figure in a decade.
  • U.S. M&A was down 41% in terms of dollars and 5% in terms of deal number, reflecting a relative dearth of large transactions. Europe's dollar volume shrunk even more (50%), while Asia-Pacific was off 34%.
  • Private equity-backed deal volume was off 51% globally, returning to 2018/19 levels, while U.S. activity was down 49%. Europe again led the losers with a 70% decline.

OK, there was a tiny ray of sunshine: Second quarter deal volume climbed 22.6% over Q1 2023.

Uh oh, here come the clouds again: Q2 is almost always more active than Q1, when dealmakers are still working off the holiday ham. And Q2 2023 was the slowest quarter since the one when most people wouldn't (or couldn't) leave their homes.

Finger pointing: The easiest culprit is the Fed, which raised in May rates to 5.2% and then last week shaded its status quo decision with hints that more hikes could be coming soon.

  • Plus stubborn inflation, rising antitrust concerns and the realization that soft landings are still ... well, falls.

The bottom line: The past three months felt busier than they were.

Go deeper: Axios Pro newsletters this morning will have more detailed industry sector breakdowns, for media, retail, climate tech and health tech.

The BFD

Illustration: Eniola Odetunde/Axios

TuSimple (Nasdaq: TSP), a San Diego-based maker of self-driving commercial trucks, said that it may seek to sell its U.S. business.

Why it's the BFD: The company feels like it's careening into the guardrails, just two years after raising $1.4 billion in its IPO at an $8.5 billion market cap.

  • TuSimple's stock has been stuck below $3 per share since last November, compared to its $40 per share IPO price, and is is under a delisting threat for not filing quarterly financials.

Details: Perella Weinberg Partners is leading the strategic review. Major TuSimple shareholders include Porsche (7% stake) and BlackRock (5.2%).

The bottom line: "TuSimple has staunchly identified itself as an American company with operations abroad, despite its founding team and earliest backers coming from China. The company was even mulling the sale of its Asia-Pacific business after facing regulatory scrutiny over its ties to the country, and ended up firing then-CEO Xiaodi Hou over TuSimple’s relationship with Hydron Motors." — Rebecca Bellan, TechCrunch

Venture Capital Deals

🚑 Author Health, a Boston-based provider of services for Medicare Advantage members with serious mental illness and substance use disorders, raised $115m. General Atlantic led, and was joined by Flare Capital Partners. https://axios.link/3qYExO4

Celestial AI, a Santa Clara, Calif.-based photonic fabric startup, raised $100m in Series B funding from IAG Capital Partners, Koch Disruptive Technologies and Temasek. https://axios.link/3r1ELUB

Typeface, an SF-based provider of generative AI for the enterprise, raised $100m in Series B funding at a $1b valuation. Salesforce Ventures led, and was joined by Lightspeed Venture Partners, Madrona, GV, Menlo Ventures and M12. https://axios.link/44s7TDb

Fly.io, a Chicago-based app delivery network, raised $70m in Series C funding. EQT Ventures led, and was joined by insiders Andreessen Horowitz, Dell Capital and Intel Capital. https://axios.link/3XttYyI

Reka, a Sunnyvale, Calif.-based developer of custom enterprise AI models, raised $58m. DST Global Partners and Radical Venturesco-led, and were joined by Snowflake Ventures. https://axios.link/3prDVjD

Cyware, a Jersey City, N.J.-based threat intelligence platform, raised $30m in Series C funding. Ten Eleven Ventures led, and was joined by Advent International, Zscaler, Emerald Development Managers, Prelude and Great Road Holdings. https://axios.link/3pp37aD

One Trading, a digital asset exchange, spun out from Bitpanda and raised €30m in Series A funding led by Valar Ventures. https://axios.link/44q4kgL

Venn Software, a New York-based provider of employee cybersecurity and compliance SaaS raised $29m in Series A funding led by New Spring Capital. https://axios.link/3pj5sE4

Federato, a Palo Alto, Calif.-based underwriting platform for the insurance industry, raised $25m in Series B funding. Caffeinated Capital led and was joined by Emergence Capital and Pear VC. https://axios.link/4311PAf

IP Fabric, a New York-based automated network assurance startup, raised $25m in Series B funding. One Peak led, and was joined by Senovo and Presto Ventures. https://axios.link/3Xx1Af1

Parabola, an SF-based workflow automation startup, raised $24m in Series B funding. OpenView led, and was joined by Flexport, Webflow and insiders Matrix Partners and Thrive Capital. https://axios.link/3pshydY

B Garage, a San Jose, Calif.-based developer of autonomous warehouse drones, raised $20m in Series A funding. LB Investment led, and was joined by Ignite Innovation Fund, Krossroad Partners and insider SoftBank Ventures Asia. https://axios.link/3JD8YQj

🌎 Material Evolution, a British cement decarbonization startup, raised £15m in Series A funding. Kompas VC led, and was joined by Norrsken VC, Circle Rock and SigmaRoc. https://axios.link/3CYpoyV

Quandri, a Canadian digital worker automation platform for the insurance industry, raised US$8.5 million in Series A funding. FUSE led, and was joined by Defined. https://axios.link/448PQlx

Maza, a provider of tax identity solutions to immigrants, raised $8m in seed funding. Andreessen Horowitz led, and was joined by SV Angel, Box Group, Restive Ventures and Global Founders Capital. https://axios.link/3r7iTYh

Scriptic, a platform for user-generated games, raised $5.7m led by Bitkraft Ventures led, and was joined by Tower 26 and the Amazon Alexa Fund. https://axios.link/3Nu4MDD

Memphis.dev, an Israeli event streaming startup, raised $5.5m in seed funding co-led by Angular Ventures and Boldstart Ventures. https://axios.link/3Xx3FrG

Embat, a Spanish financial planning and treasury management company, raised €5m. Samaipata led, and was joined by 4Founders and Venture Friends. https://axios.link/3CSnS1A

🚑 Dalan Animal Health, an Athens, Ga.-based honeybee vaccine developer, raised $4.5m in in new seed funding. Prime Movers Lab led, and was joined by At One Ventures. www.dalan.com

Vok Bikes, an Estonian maker of e-bikes for last mile deliveries, raised €3.8m from SmartCap, Metaplanet and Sunly. www.vokbikes.com

Intelecy, a Norwegian no-code software developer, raised $3.5m. Yara led, and was joined by GC Rieber, Aidiom and Investinor. https://axios.link/46sYRY2

Sixty AI, a Portland, Ore.-based personal relationship management startup, raised $3.5m from 468 Capital. www.sixty.app

32Co, a London-based platform for connecting general and specialist clinicians, raised $3m in seed funding led by Balderton Capital. www.32co.com

🚑 Alfie Health, an obesity management tech startup, raised $2.1m in pre-seed funding, per Axios Pro. Nina Capital and YC co-led, and were joined by Goodwater Capital and Phoenix Investment Club. https://axios.link/3JAiuDX

🚑 Berry Health, a Ghanian sexual and mental health startup, raised $1.6m in pre-seed funding co-led by Lightspeed Venture Partners and General Catalyst. https://axios.link/3CTUKqK

🌎 Renewabl, a London-based developer of hourly-matched renewable energy certificates, raised £1.1m in pre-seed funding from South Pole, QVentures, Portfolion and Syndicate Room.

Innoviti Technologies, an Indian payments company, is raising $25m at around a $350m valuation, per Bloomberg. https://axios.link/3CNCf78

Private Equity Deals

Accel-KKR agreed to buy Symfonia, a Polish business management software firm owned by MidEuropa (which will retain a stake). www.symfonia.pl

Authentic Brands Group, the brand and rights platform led by Jamie Salter, raised $500m from insider General Atlantic at a $20b valuation, per Bloomberg. Other existing ABG backers include BlackRock, Lion Capital and CVC Capital Partners. https://axios.link/3NQbgyc

Congruent Investment Partners invested in AAA Fabrication, a Kemp, Texas-based provider of custom metal fabricated products. www.aaametalfabrication.com

H.I.G. Capital acquired CLC Group, a British provider of property and asset refurbishment solutions, from the Armitage Family Trust. www.clcgroup.com

Lone Star Funds completed its purchase of Titan Acquisition Holdings, a Portland, Ore.-based provider of ship repair services and marine fabrication, from Carlyle and Stellex Capital Management. www.vigor.net

🚑 Parkview Health Services, an Amherst, N.Y.-based provider of specialized pharmacy services, raised an undisclosed amount of funding from Flexpoint Ford affiliate ArtesRx. ww.parkviewhs.com

Right Time, a Canadian home services provider owned by Gryphon Investors, acquired Shines, a provider of residential HVAC and air quality services in Halifax and Nova Scotia. www.right-time.ca

Smart Care, a St. Paul, Minn.-based portfolio company of Wind Point Partners, acquired Richard Meek, a Wichita Falls, Texas-based commercial refrigeration and HVAC equipment repair and installation company. www.smartcaresolutions.com

🚑 UnisLink, a Phoenix-based portfolio company of Riverside Partners, acquired Healthcare Support Technologies, a New Brighton, Pa.-based revenue cycle software provider. www.hstbilling.com

Weaver Leather, a Mount Hope, Ohio-based portfolio company of Blue Point Capital Partners, acquired Rex Spaces, a Jackson, Wyo.-based brand of outdoor products for dogs. www.weaverleather.com

Public Offerings

Fidelis Insurance, a Bermuda-based specialty insurer and property reinsurer, raised $241.5m in its IPO. It priced 15m shares at $14, compared to plans to offer 17m shares at $16-$19, and will list on the NYSE (FIHL). Shareholders include Crestview, Goldman Sachs, CVC Capital Partners and Pine Brook Partners. https://axios.link/44rP0QP

Kodiak Gas Services, a Montgomery, Texas-based natural gas compression services firm owned by EQT, raised $256m in its IPO. The company priced at $16 per share (below $19-$22 range), and will list on the NYSE (KGS). https://axios.link/447v8C3

Savers Value Village, a Bellevue, Wash.-based for-profit thrift store operator owned by Ares Management, raised $401m in its IPO. The company priced 22.3m shares at $18, compared to plans to sell 18.8m shares at $15-$17, and will list on the NYSE (SVV). https://axios.link/3JoJK8p

Liquidity Events

Arkema (Paris: AKE) agreed to buy a 54% stake in PI Advanced Materials, a South Korean polyimide film manufacturer, for $765m from Glenwood Private Equity. https://axios.link/3CT1jK4

Macquarie Group said it plans to sell Brentwood, Tenn.-based port terminal operator Ceres Terminals, with Reuters reporting it could fetch more than $900m. https://axios.link/3NQb2ak

TRP Energy, controlled by Greenbelt Capital Partners, is seeking a buyer for its Permian Basin oil and gas operations, which could fetch more than $1.5b, per Reuters. https://axios.link/44oLGFT

TSG Consumer Partners is seeking a buyer for Backcountry, a Park City, Utah-based outdoor and ski gear retailer that generates around $1b in annual revenue, per Bloomberg. https://axios.link/3NU1rPU

Visa (NYSE: V) agreed to buy Brazilian banking and payments startup Pismo for $1b in cash. Pismo had raised over $100m from backers like Accel, Amazon and SoftBank. https://axios.link/3r8KKHz

More M&A

Bed Bath & Beyond is splitting the bankruptcy auction for its Buy Buy Baby chain into two parts, per CNBC. The first one would be for IP, while a future one would be for the actual stores. https://axios.link/438JIZ8

🚑 Eli Lilly (NYSE: LLY) agreed to buy Sigilon Therapeutics (Nasdaq: SGTX), a Cambridge, Mass.-based diabetes drugmaker in which it already held an 8.4% stake, for $34.6m. https://axios.link/3CSrnot

Fundraising

Arboretum Ventures, an Ann Arbor, Mich.-based VC firm focused on health care, raised $268m for its sixth fund. https://axios.link/3Puh1CU

KLH Capital Partners, a Tampa, Fla.-based midmarket PE firm, raised $400m for its fifth fund. www.klhcapital.com

🌎 Omnivore, an Indian VC firm focused on ag-tech and climate tech, raised $150m for its third fund. https://axios.link/440gBIT

New York State Teachers’ Retirement System is seeking to sell around $6b of private fund stakes, per Bloomberg. https://axios.link/3Xzc6Tk

Pronghorn, an Atlanta-based investment firm focused on Black-owned spirits makers, raised $200m. www.pronghorn.co

Final Numbers

Source: Refinitiv. Data through June 27, 2023.

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