Mar 16, 2020

Axios Pro Rata

By Dan Primack
Dan Primack

😷 Axios has a new, regularly updated Coronavirus Dashboard, with the latest data and headlines from around the U.S. and the world. Check it out.

🎧 On Saturday we posted a series of 5-minute Pro Rata Podcasts on how the coronavirus is impacting our economy, politics, cities, global relations, and health care system. Find them on Apple, Spotify or Google Play.

Top of the Morning

Illustration: Eniola Odetunde/Axios

Last year, we discussed the emergence of CEOs becoming America's new politicians, stepping into the national leadership void on issues like climate change and immigration. Or, in some cases, being shoved into that void.

  • This role reversal has manifested itself over the past week, as so many of our elected officials dithered.

Companies large and small closed their offices, instituting work from home policies or (in cases like pro sports leagues) temporary shutdowns. Most of this came well ahead of government directives.

Some large retailers like Apple closed their stores, or altered their in-store services, like Starbucks. Again, usually ahead of government directives.

Many companies, including "non-employers" like Uber and Lyft, initiated new sick leave policies, well ahead of the proposed federal sick pay package that the Senate didn't care about enough to return over the weekend to vote on.

  • To be sure, not every company was proactive. Just like not all elected officials were behind the ball (Ohio Gov. Mike DeWine and Illinois Gov. J.B. Pritzker may go down in history as national heroes).
  • But each new office or store closure helped give cover to other companies to follow suit. And, arguably, lent courage to state and municipal politicians.

The big question last year was if CEOs were sincere when talking about their responsibility to all stakeholders, not just stockholders. Many have met that test, when the rubber hit the revenue.

But, but, but: This is only a first step. It is encouraging that so many companies took early leadership, but those with resources must also become even more accommodating to their employees (particularly those whose kids are now home from school) and make sure not to leave non-salaried employees behind.

  • For example, connected fitness company Peloton was one of those companies that shut its retail stores (initially for two weeks).
  • CEO John Foley tells me that it will pay retail employees for their scheduled hours over that break, will use its tech to help many of them work from home (i.e., interact with customers so they can earn commissions), and will offer all employees up to $100 per day in a new "crisis" childcare credit.

The bottom line: The coronavirus chaos has laid bare the countless holes in our economic safety nets. No amount of newfound corporate responsibility changes that, nor forgives past sins.

  • But, we don't always get to choose our leaders. And at least we have some, when all of us must be united in flattening the curve.

Illustration: Aïda Amer/Axios

Impossible Foods, a Redwood City, Calif.-based maker of plant-based protein products, raised $500 million in Series F funding led by Mirae Asset Global Investments.

  • Why it's the BFD: Because this massive round closed last week. Not only is that notable in our new abnormal, confirming what we heard last week about VC willingness to cut checks, but it also should help Impossible handle short-term business disruptions.
  • Investors in the round included celebrities like Mindy Kaling and Peter Jackson, and existing shareholders like Horizons Ventures, Khosla Ventures, and Temasek.
  • The bottom line: "Plant-based meat and lab-grown meat companies have been gaining traction with many consumers becoming more aware of the environmental impact of industrial husbandry. Rival Beyond Meat is trading at three times its initial public offering price in May and worth around $4.5 billion even after the recent market rout." — Jane Lanhee Lee, Reuters
Coronavirus Coverage

Illustration: Aïda Amer/Axios

Air Liquide (Paris: AI) is expecting to fetch a significant premium for its Schülke unit, whose products include hand sanitizing liquids and hospital disinfectants. The business was put up for sale prior to the coronavirus outbreak, with expectations of a €1 billion price, per the FT:

"The coronavirus premium is less linked to the sudden uptick in demand for Schülke’s products during the coronavirus outbreak than to a long-term forecast of a rise in sales as consumers and companies become more hygiene-conscious even after the pandemic subsides."

Rubix, a London-based industrial supplies firm, is putting its IPO plans on ice.

Warburg Pincus is putting on hold its sale process for luxury fashion retailer Reiss, per The Telegraph.


Bonus: Like many of you, I’m now balancing work with childcare/makeshift school. So each day we’re gonna crowdsource a bit.

This morning, let’s build a jokebook. My daughter E is 9 years-old and offers up:

What kind of bagel can fly?
A plain bagel

What’s your kid’s favorite joke? Email it to me me (hit reply, or I’ll reprint the best ones tomorrow, and you can share them with your “students.”

Venture Capital Deals

Rancher Labs, a Cupertino, Calif.-based Kubernetes management platform, raised $40 million in Series D funding. Telstra Ventures led, and was joined by return backers Mayfield, Nexus Venture Partners, GRC SinoGreen, and F&G Ventures.

Fenbeitong, a Chinese provider of corporate expense management software, raised $36 million in new Series B funding from CreditEase Fintech Investment Fund, Eight Roads, Glade Brook Capital, Ribbit Capital, IDG Capital, and China Growth Capital.

Neolix, a Chinese autonomous vehicle startup, raised around $28.5 million from Lixiang Automotive, Addor Capital, and return backers Yunqi Partners and Glory Ventures.

Fiscozen, an Italian digital platform for managing small businesses and freelancers, raised €3 million in Series A funding led by United Ventures.

Correction: Friday's edition botched the business description of Confluent, which is raising new funding at a $5 billion valuation. The company's event-streaming technology helps users process huge amounts of data in real-time, enabling decision-making.

Private Equity Deals

Advent International invested in Conservice, a Logan, Utah-based provider of utility management software and billing solutions to property owners and managers.

AE Industrial Partners agreed to buy G.S. Precision, a Brattleboro, Vt.-based maker of high-precision machined components and complex assemblies.

Hellman & Friedman agreed to buy Checkmarx, a Paramus, N.J.-based provider of software security solutions for DevOps, from Insight Partners for $1.15 billion.

🚑 TSG Consumer Partners agreed to buy veterinary clinic chain Pathway Vet Alliance from Morgan Stanley Capital Partners for $2.65 billion.

Public Offerings

The only IPO expected to price on U.S. public markets this week is from Collective Growth Corp., a cannabis SPAC led by former Canopy Growth execs. The second Social Capital Hedosophia SPAC also is eligible to price this week.

More M&A

China Resources Group and Yonghui Superstores have expressed interest in buying City’super, a Hong Kong-based high-end grocery chain that’s being sold by The Fenix Group for upwards of $400 million, per Bloomberg.

United Technologies (NYSE: UTX) received EU approval for its purchase of Raytheon (NYSE: RTN), subject to the divestiture of YTC’s military GPS receiver and anti-jamming unit and Raytheon’s military airborne radios business.


Commonfund Capital is raising up to $300 million for its third emerging markets fund-of-funds, per an SEC filing.

Final Numbers
Data: Federal Reserve Bank of St. Louis; Chart: Axios Visuals

Go deeper: Why the Fed action matters

Dan Primack

🙏 Thanks for reading Axios Pro Rata! Please ask your friends, colleagues, and videoconferencing addicts to sign up.