May 3, 2017

Axios Pro Rata

By Dan Primack
Dan Primack

Early flight this morning from Los Angeles to D.C., where tomorrow I'll be interviewing Marc Andreessen at his venture firm's Tech Policy Summit. Here we go...

Top of the Morning

• Two days in short: Big takeaway from the Milken Global Conference is that America's elites are concerned about coming labor displacement, whether it be from AI, robotics or some other buzzy tech advance. But there is very little interest in trying to figure out solutions, because it's hard and is not viewed as an existential threat to those in the room.

• Smaller takeaway: There is widespread consensus from the investing class that there are about to be huge opportunities in U.S. infrastructure, even though the exact timing remains quite uncertain. The caveat is that many of these same folks are now souring on the prospects of comprehensive tax reform, because they fear the very same buzz-saw that an infrastructure package will eventually have to leapfrog.

• Smallest takeaway: Even billionaires gripe about paying $7 for a Diet Coke.

• Recommended reading: The FT's Martin Arnold reports that KKR has stopped all new business with Barclays, "in protest at how the British bank's chief executive took the side of his brother-in-law in a dispute over a failed Brazilian deal." It's a pretty remarkable story, which tangentially involves other private equity firms like General Atlantic and Ripplewood. Read it here.

• Defensive pose: For all of my varying thoughts on Uber's triumphs and travails, I've never wavered in believing that Travis Kalanick should remain CEO. But his decision to bail on an interview at the Code Conference later this month, which would have been his first interview since Susan Fowler's sexual discrimination claims (let alone the Waymo lawsuit, exec departures, data privacy questions, etc.), has caused me for the first time to feel that he may not be up for the task.

This isn't about meeting your commitment to the conference organizers or appeasing the media. The reason you do these interviews is to better control the narrative about your company, for an audience that includes potential employees, partners, users and regulators. It's to answer the tough questions everyone is already thinking, or else you just leave them there, hanging in an accusatory haze. And it is the CEO's job to be on that stage, not to instead send out some female flack jackets (including Arianna Huffington, whose own nascent startup should be mortified by this image-sullying distraction).

In the immortal words of Bill Belichick, do your job Travis.

The BFD

Orbital Insight, a Mountain View, Calif.-based provider of geospatial analytics solutions, has raised $50 million in Series C funding at what one source says is a pre-money valuation north of $300 million. Sequoia Capital led the round, and was joined by Envision Ventures, Balyasny Asset Management, Geodesic Capital, ITOCHU Corporation, Intellectus Partners and return backers GV, Lux Capital and CME Ventures.

  • Why it's the BFD: As more and more drones and satellites get sent up, more and more data is being beamed down. A company like Orbital Insight is charged with making sense of it all ― kind of a Google for all of that stuff flowing into Google Earth, but with application to a whole host of industries.
  • Bottom line: "With images of retailer parking lots, companies like Orbital Insight have proven their ability to extrapolate accurate revenue predictions for businesses by counting cars as a proxy in advance of official earnings reports. But as data and technology commoditize, startups have been racing to service new markets and simplify their offerings to avoid becoming clunky consultancies." ― John Mannes
Venture Capital Deals

• AltSchool, a San Francisco-based experimental school operator and developer of educational tools, has raised around $40 million in a new funding round that could total up to $80 million, according to an SEC filing. The company previously raised just over $137 million from backers like Andreessen Horowitz, First Round Capital and Facebook CEO Mark Zuckerberg. http://bit.ly/2puITdT

• Dinova, a Johns Creek, Ga.-based marketplace for connecting expense-account diners to restaurants, has raised $40 million in growth equity funding from Frontier Capital. www.dinova.com

• One, a Folsom, Calif.-based provider of cloud software and payments solutions for the insurance industry, has raised $15.5 million in new VC funding. American Family Ventures and Centana Growth Partners co-led the round, and were joined by return backers AXA Strategic Ventures and MassMutual Ventures. http://bit.ly/2qqOvHf

• Axonics Modulation Technologies, an Irvine, Calif.-based developer of a rechargeable sacral neuromodulation system for treating urinary and fecal dysfunction, has raised $14.5 million in a first close of its Series C round. Return backers include Edmond de Rothschild Investment Partners, Advent Life Sciences, Cormorant Asset Management, Legend Capital and NeoMed Management. www.axonicsmodulation.com

• ExoCoBio, a South Korean developer of exosome-based cosmeceuticals and biopharmaceuticals for skin and tissue regeneration, has raised $11 million in Series A funding from firms like SBI Investment, Atinum Investment, ID Ventures and Dt&Investment. www.exocobio.com

• Spindrift, a Waltham, Mass.-based maker of fruit-flavored sparking waters, has raised $10 million in growth equity funding. VMG Partners led the round, and was joined by Prolog Ventures and Karp Reilly. www.spindriftfresh.com

• Wavedash Games, an Oakland-based social gaming startup, has raised $6 million in Series A funding. March Capital led the round, and was joined by Lowercase Capital, Advancit Capital, CourtsideVC, Machine Shop Ventures, Luma Labs and Cherrytree VC. http://tcrn.ch/2p3QtZd

• Yieldify, a London-based digital marketing conversion company, has raised $6 million in new VC funding from backers like Binomial Ventures, Hoxton Ventures and Data Point Capital. http://tcrn.ch/2pXu8S7

• Iconixx Software, an Austin, Texas-based, has raised $4.2 million in new VC funding. Return backers include Ballast Point Ventures, Harbert Growth Partners and S3 Ventures. www.iconixx.com

• Morty, a New York-based automated mortgage marketplace, has raised $3 million in VC funding. Thrive Capital led the round, and was joined by SV Angel, FJ Labs, Corigin Ventures, MetaProp and TechStars. http://tcrn.ch/2p4ZBhd

Private Equity Deals

• ACG Materials, a Norman, Okla.-based portfolio company of H.I.G. Capital, has acquired North Florida Rock, a miner and processor of limestone products sold into infrastructure, agriculture and building products applications. No financial terms were disclosed. www.acgmaterials.com

• Amendia, a Marietta, Ga.-based portfolio company of Kohlberg & Co., has acquired Spinal Elements, a Carlsbad, Calif.-based developer of tech solutions for spinal surgery. No financial terms were disclosed. http://bit.ly/2oXgflc

• Bain Capital, The Carlyle Group and Thoma Bravo are among the bidders for Citrix Systems (Nasdaq: CTSX), which has a current market cap of around $12.3 billion, according to Reuters. https://bloom.bg/2pw1whz

• Cerberus Capital Management and Sycamore Partners are continuing to consider a buyout of Staples Inc. (Nasdaq: SPLS), whereas earlier suitors like Bain Capital, Advent and CD&R have cooled, per Reuters. http://reut.rs/2qAqWbq

• Education Growth Partners has acquired Apex Learning, a Seattle-based provider of personalized e-learning solutions for K-12. No financial terms were disclosed. Sellers include MK Capital and Warburg Pincus. www.apexlearning.com

• Francisco Partners has acquired SmartBear Software, a Somerville, Mass.-based maker of software quality tools for teams, from shareholders like Insight Venture Partners. No financial terms were disclosed. www.smartbear.com

• The Hilb Group, a Richmond, Va.-based portfolio company of ABRY Partners, has Woonsocket, R.I.-based insurance company Keough Kirby Associates. No financial terms were disclosed. http://bit.ly/2pDtYME

• Home Capital Group (TSX: HCG), a Canadian mortgage lender valued at nearly C$450 million, is receiving takeover interest from such firms as Brookfield Asset Management, Blackstone Group and Centerbridge Partners, according to Reuters. http://reut.rs/2p2Vqlg

• Lucid Energy Group, a Dallas-based provider of midstream services to producers working in the Midland and Delaware Basins, has secured up to $250 million in preferred equity funding from Magnetar Capital. http://bit.ly/2oVvFrX

• Pinewell Capital has acquired Fogco Systems, a Chandler, Ariz.-based maker of high-pressure misting systems. No financial terms were disclosed. www.fogco.com

• Thoma Bravo has agreed to acquire Lexmark's enterprise software business for an undisclosed amount. Lexmark is owned by Apex Technology Co., PAG Asia Capital and Legend Capital Management. www.lexmark.com

• Trescal, a French calibration services provider backed by Ardian, has acquired Manassas, Va.-based calibration services company Acucal for an undisclosed amount. www.trescal.com

Public Offerings

• Liberty Oilfield Services, a Denver-based provider of hydraulic fracturing services, has cut its IPO terms from 23 million shares being offered at $16-$19 per share to 20 million shares being offered at $12-$13 per share. It plans to trade on the NYSE under ticker symbol BDFC, with Morgan Stanley and Goldman Sachs serving as lead underwriters. Shareholders include Riverstone Holdings.

• Nine Energy Service, a Houston-based onshore completion and production services provider owned by SCF Partners, has filed for a $100 million IPO (Renaissance Capital estimates it could ultimately garner around $300 million). It plans to trade on the NYSE under ticker symbol NINE, with J.P. Morgan serving as left lead underwriter. http://bit.ly/2pHiQ3r

• Saudi Aramco's highly-anticipated IPO will not come until 2018, according to comments made by Saudi Deputy Crown Prince Mohammed bin Salman. The government also is expected to sell around 5% of its stake in the offering. http://reut.rs/2pXn1sJ

• ShotSpotter Inc., a Newark, Calif.-based provider of gunshot location systems for the public safety and military markets, has filed for a $34.5 million IPO. It plans to trade on the Nasdaq under ticker symbol SSTI, with Roth Capital Partners serving as lead underwriter. The company reports a $7 million net loss on $15.5 million in revenue for 2016. Shareholders include Lauder Partners (37.4% pre-IPO stake), Motorola Solutions (15.6%), Claremont Creek Ventures (11.3%) and Labrador Ventures (6.1%). www.shotspotter.com

• Solaris Oilfield Infrastructure, a Houston-based provider of mobile proppant management systems, has set its IPO terms to 10.6 million shares being offered at between $15 and $18 per share. It would have a fully diluted market cap of around $715 million, were it to have priced in the middle of its range. The company plans to trade on the NYSE under ticker symbol SOI, with Credit Suisse and Goldman Sachs serving as underwriters. Shareholders include Yorktown Energy Partners. http://bit.ly/2p7PQib

Liquidity Events

• Quotient Technology (NYSE: QUOT) has agreed to acquire Crisp Media, a New York-based mobile marketing and advertising company, for $53 million. Crisp had raised around $17 million in VC funding from firms like Meritage Funds, Intel Capital and EDB Investments. http://bit.ly/2qxDHV1

More M&A

• Airbnb has acquired Deco Software, a San Francisco-based integrated development environment for building React Native apps. No financial terms were disclosed. http://tcrn.ch/2pVXxMt

• Intact Financial Corp. (TSX: IFC) has agreed to acquire Minnesota-based specialty insurer OneBeacon (NYSE: OB) for $1.7 billion in cash, or $18.10 per share (15.3% premium over yesterday's closing price). http://reut.rs/2qwjGhi

• MiNA Therapeutics, a British biotech focused on liver disease, has raised £35 million in equity funding for a 25.6% equity stake from Sosei Group (Tokyo: 4565), in a deal that also gives Sosei an exclusive option to acquire MiNA Therapeutics. http://bit.ly/2oWPf73

It's Personnel

• Jay Clayton yesterday received U.S. Senate approval to become the next SEC chair. He previously was a corporate attorney with Sullivan & Cromwell. http://wapo.st/2qrm7Vc

• Reed Sturtevant has joined The Engine, a "hard science" venture group affiliated with MIT. He previously was a managing director with Project 11 (where his partners included Engine CEO Katie Rae) and, before that, was a managing director with Techstars Boston.

Final Numbers: Carlyle Group holdings
Dan Primack