Oct 26, 2018

Axios Pro Rata

Hello, readers! I'm steering the ship this morning while Dan recovers from a week of travels. It's almost the weekend, so let's do this...

Top of the Morning

Illustration: Lazaro Gamio/Axios

Venture-backed tech IPOs are picking up, but it’s less and less because they need cash.

  • The influx of late-stage capital in recent years has made it possible for companies to delay going public. “It used to be that IPOs really were about generating growth capital,” says Class V Group's Lise Buyer.
  • Scenic Advisement's Barrett Cohn points to the small floats of recent IPOs like Anaplan (12.7%), Elastic (10.1%) and Upwork (11.8%) as examples of firms that seem to want to be public companies without necessarily needing money from the market’s investors.
  • Spotify’s unusual path to the public market this year — a direct listing, through which it raised no funds at all — is another example where a company made the jump because it saw benefits in being public, rather than in the IPO process.

Yes, but: This is still a luxury reserved for the best and brightest stars. For a number of tech companies without exorbitant valuations and private investor appeal, the IPO remains a significant fundraising event. "It's a barbell," says Buyer.

The bottom line: For tech companies with access to seemingly unlimited private capital, other priorities — like founders' liquidity and market validation — eventually lead them to make the jump. Read the full story.

Speaking of: A number of tech companies posted quarterly earnings yesterday, with mixed results. Snap and Twitter beat revenue expectations but lost users, Amazon and Alphabet missed on revenue, and Microsoft did well but disappointed on Azure sales.

Econ: U.S. gross domestic product grew at a 3.5% annual rate in the third quarter, beating economists' expectations but slower Q2's 4.2% pace, the Commerce Department said Friday.

Must-read: Yesterday, the NY Times published a lengthy report on Google's longstanding culture of covering up sexual harassment and other terrible workplace decision making. Most unfortunate is that none of this is news to us folks living and working in the Silicon Valley...

🎧 Pro Rata Podcast: Our latest episode explores the rising cost of child care and what it means for employers and women's careers. Listen here.


Photo: Giuseppe Cacace/AFP/Getty Images

The Public Investment Fund, a sovereign wealth fund directly representing Saudi Arabia's government, will invest $500 million into the Russia-China Investment Fund, initially established by the Russian Direct Investment Fund and China Investment Corporation. This brings the fund's total to $2.5 billion.

  • Why it's the BFD: A string of prominent business names bailed on the Crown Prince's Future Investment Initiative conference this week in Riyadh following the disappearance and death of journalist Jamal Khashoggi. (Though many simply skipped the main event stage while still attending the conference or even meeting with the Crown Prince one-on-one.)
  • The bottom line: Saudi Arabia's Public Investment Fund may be on thin ice with much of the investment world, but some are still happy to take its cash.
Venture Capital Deals

• Ribbon, a NYC and Charlotte, N.C.-based real estate company, has raised $225 million in new funding from Bain Capital Ventures, Greylock, NFX, and NYCA.

🚗Huasheng Haoche, a Beijing-based car trading company, has raised $210 million in Series D funding led by Grescent Group, with Goldman Sachs, JD Financial and Frees Fund also participating. http://axios.link/mr0d

• Terminus Technologies, a Chinese internet-of-things company, has raised $172.7 million in Series B-1 funding led by China Everbright Limited and IDG Capital, with SenseTime also participating. http://axios.link/dzcX

• DataRobot, a Boston-based automated machine learning company, has raised $100 million in Series D funding led by Meritech and Sapphire Ventures, with DFJ Growth, NEA, IA Ventures, Intel Capital, and others also participating. www.datarobot.com

• Metrc, a Lakeland, Fla.-based maker of software that helps regulators track cannabis, has raised $50 million in funding from Tiger Global Management and Casa Verde Capital. http://axios.link/xaBt

• Arctic Wolf Networks, a Sunnyvale, Calif.-based security operations company, has raised $45 million in Series C funding led by Future Fund, with Adams Street, Unusual Ventures, Lightspeed Venture Partners, Redpoint Ventures, Sonae Investment Management and Knollwood Investment Advisory also participating. www.arcticwolf.com

• Area 1 Security, a Redwood City, Calif-based provider of anti-phishing software, has raised $32 million in Series C funding led by Kleiner Perkins, with Icon Ventures, DCVC, Top Tier Capital, Allegis Cyber and Epic Ventures also participating. www.area1security.com

• AXiomatic Gaming, a Los Angeles-based company that owns an e-sports franchise, has raised $26 million in funding, including from Basketball Hall of Fame member Michael Jordan. http://axios.link/6CcL

• Teikametrics, a Boston-based maker of advertising software for Amazon sellers, has raised $10 million in Series A funding from Granite Point Capital, Jump Capital and FJ Lab. http://axios.link/2ONO

• Pathmatics, a Santa Monica, Calif.-based marketing intelligence software company, has raised $3 million in new funding from Mintel and SPH Ventures. www.pathmatics.com

• VergeSense, a San Francisco-based provider of an automated sensor services for commercial real estate, has raised $1.5 million in new funding led by JLL Spark, with Bolt and Pathbreaker Ventures also participating. www.vergesense.com

• CSPA, a San Francisco-based company that makes standardized exams for software engineers, has raised $1.5 million in seed funding from investors, including Y Combinator, Amino Capital, Sinai Ventures, Ocean IQ Partners, Mehta Ventures, VentureSouq, and Dylan Field. www.cspa.io

Private Equity Deals

• Falfurrias Capital Partners has made an investment in Best Impressions Caterers, a Charlotte, N.C.-based catering company, which has acquired Charleston, South Carolina-based Duvall Catering & Events. www.bestimpressionscaterers.com

🚑NexPhase Capital has recapitalized Action Behavior Centers, an Austin-based provider of early intensive behavioral intervention therapy for children on the autism spectrum. www.nexphase.com

🚑GenesisCare, a Sydney-based private provider of cancer and cardiac healthcare in Australia and Europe, has raised an undisclosed amount of funding from KKR and China Resources. Macquarie Bank will sell its stake as part of the transaction. www.genesiscare.com/au/

• DPI has invested about $30 million in Dolidol, a Morocco-based provider of foam, mattress and bedding products. www.dolidol.ma

• Charter Oak Equity and Fonds de solidarité FTQ have recapitalized Licaplast, a Montreal-based producer of flexible plastic packaging. www.licaplast.com

🚗EQT Partners is weighing the sale of Direct ChassisLink Inc, a provider of chassis leasing and other services to shipping companies, railroads, terminal operators, for possibly $2.5 billion, per Bloomberg. http://axios.link/eitM

Liquidity Events

• Wireless Innovation, a portfolio company of Horizon Capital, has acquired Rock Seven Mobile Services Ltd and YB Tracking Ltd., both providers of connectivity and hardware using the Iridium satellite networks. www.wireless-innovation.co.uk

• Mediafly, backed by Boathouse Capital, has acquired Alinean Inc, a Winter Park, Fla.-based software and consulting company for sales and marketing teams. www.mediafly.com

🚑Geritrex, a portfolio company of BelHealth Investment Partners, has acquired Pittsburgh-based Unipack, a manufacturer and distributor of over-the-counter pharmaceuticals. www.geritrex.com

More M&A

• Expedia has acquired San Francisco-based Pillow, a short-term rental management software company for landlords, and ApartmentJet, a Chicago-based software company and short-term rental platform that allows multifamily owners and operators to rent vacant units. http://axios.link/uYMU

• HZO Inc. has acquired Semblant, a U.K.-based waterproofing and nano-shield technology company. www.hzo.com

⛽️Chevron Corp has held talks to acquire Pasadena Refining System, a Texas oil refining unit of Brazilian state-run oil firm Petroleo Brasileiro SA (PETR4.SA), per Reuters sources. http://axios.link/d7aW

🚗Faurecia has agreed to acquire Clarion, a Japanese car navigation system maker, from Hitachi for $1.3 billion. http://axios.link/RQag

• Deutsche Post DHL is selling its supply chain and logistics business in Greater China to S.F. Holding as part of a 10-year strategic partnership. http://axios.link/Tw3i


• Bessemer Venture Partners has raised $1.85 billion for its tenth flagship fund. www.bvp.com

It's Personnel

• Joy Marcus has joined Jerusalem Venture Partners as a venture partner. Marcus was previously an executive at Conde Nast. www.jvpvc.com

• Atlantic Street Capital has promoted Phil Druce and George Parry to partner. They were previously principals. www.atlanticstreetcapital.com

• Accel has added Cherry Miao as a VP in its Growth fund, Eli Collins as technologist-in-residence, and Paula Judge as VP of talent. www.accel.com

• Angeles Equity Partner has named Frank Spelman as a managing director. Previously, he was a principal at Apollo Global Management. www.angelesequity.com

• Boston Consulting Group has hired Tom Taylor as a partner and managing director in its principal investors and private equity practice, per PEHub. Previously, he ran Ernst & Young’s value creation practice for private equity firms. http://axios.link/0y15

Final Numbers
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Reproduced from International Federation of Robotics; Chart: Axios Visuals