May 17, 2024

Top of the Morning

Illustration: Brendan Lynch/Axios

Dealmakers aren't sweating this year's presidential election, even if it's the most important of our lifetimes.

Why it matters: The 2024 rebound should survive November, including for corporate mergers, private equity, and IPOs.

The big picture: The "election season slowdown" narrative is driven by uncertainty.

  • Will there be a new president? If so, what will that new president do?
  • This time around, however, both major party candidates are known quantities in the Oval Office. You may not like one of them, but you shouldn't be uncertain about either their policies or styles.

Zoom in: Stock markets reacted favorably to the past elections of both Trump and Biden.

  • The S&P 500 rose nearly 6% between the beginning of November 2016 and year-end.
  • It climbed over 12.7% between the beginning of November 2020 and year-end.
  • Moreover, stocks performed very well during Trump's term until getting derailed by COVID, and have soared thus far under Biden.

By the numbers: A midyear EY-Parthenon Deal Barometer is coming out this morning, and exclusive data shared with Axios shows increased optimism (see more in Final Numbers section).

  • "What surprised me most is that we're being more bullish, says Mitch Berlin, EY's vice chair of Americas strategy and transactions. "Last time we thought corporate deal activity for transactions over $100 million would be up 12%, but now it's 20%, and private equity has risen from 13% to 16%."
  • Both would bring the U.S. deal market nearly in line with pre-pandemic activity.

The bottom line: Bankers and investors both acknowledge that some deals could be getting pulled forward, and that November/December activity is always challenged by the holiday calendar.

  • But the consensus seems to be "full steam ahead," even if that means announcing new mergers or pricing IPOs in the midst of a political maelstrom.

The BFD

Illustration: Natalie Peeples/Axios

Vercel, a front-end cloud development platform, raised $250 million in Series E funding at a $3.25 billion valuation led by insider Accel.

Why it's the BFD: VCs keep cutting giant checks for most any company in the AI game, and Vercel plays both sides by offering its own text-to-code solution and also counting OpenAI and Perplexity as customers.

Other investors include CRV, GV, Notable Capital, Bedrock, Geodesic Capital, Tiger Global, 8VC, and SV Angel.

  • Vercel has now raised a total of $560 million, including a Series D round in 2021 at a $2.5 billion valuation.

The bottom line: "The San Francisco-based firm allows developers to use an open-source framework to create web applications, and tries to simplify the process to migrate websites to cloud infrastructure to help with accessibility." — Chris Metinko, CrunchBase

Venture Capital Deals

Steno, an LA provider of legal support and court reporting service, raised $46m led by Left Lane Capital. steno.com

AssetWatch, a Westerville, Ohio-based asset monitoring and predictive maintenance firm, raised $38m in Series B funding. Wellington Management led, and was joined by insiders G2 Venture Partners, Triangle Peak Partners, Standard Investments, Osage University Partners, and JobsOhio Growth Capital Fund. assetwatch.com

Agora, an Israeli real estate investment management platform, raised $34m in Series B funding. Qumra Capital led, and was joined by Aleph and Insight Partners. agorareal.com

Humanity Protocol, a blockchain-based identity verification startup, raised $30m in seed funding at a $1b valuation. Kingsway Capital led, and was joined by Animoca Brands, Blockchain.com, and Shima Capital. axios.link/3WKZY30

Voxel51, an Ann Arbor, Mich., visual AI startup , raised $30m in Series B funding. Bessemer Venture Partners led, and was joined by Tru Arrow Partners and insiders Drive Capital, Top Harvest Capital, Shasta Ventures, and ID Ventures. axios.link/4asWtBs

XGS Energy, a Palo Alto, Calif., geothermal energy tech developer, raised $20m in Series A extension funding. Valo Ventures and VoLo Earth Ventures co-led, and were joined by B Current Impact Investment, MIH Capital, and insider Thin Line Capital. xgsenergy.com

Veda, a German payroll-as-a-service provider, raised €17m from CIBC Innovation Banking. axios.link/4ai0CZ2

Yendo, a Dallas provider of vehicle-secured credit cards, raised $15m in equity funding led by FPV Ventures, plus $150m in debt led by i80 Group. axios.link/3V1HSbF

Caeli Wind, German wind energy marketplace, raised €11m. Notion Capital led, and was joined by Santander Alternative Investments and HTGF. axios.link/3X1TxJh

Honey Homes, a Lafayette, Calif., membership service for home upkeep and maintenance, raised $9.3m in Series A-1 funding. Era Ventures led, and was joined by insiders Khosla Ventures and Pear VC. honeyhomes.com

GoodShip, a Nashville platform for freight network orchestration and procurement, raised $8m in Series A funding. Bessemer Venture Partners led, and was joined by 53 Stations, Ironspring Ventures, Chicago Ventures, FUSE VC, and Cercano Management. goodship.io

Orange Charger, a Redwood City, Calif., maker of outlets for EV charging in multi-unit buildings, raised $6.5m in seed funding. Munich Re Ventures and Climactic co-led, and were joined by Baukunst, Crow Holdings, Lincoln Property Ventures and Space Cadet Ventures. axios.link/3wAZOAI

🚑 Daffodil Health, a health care pricing automation startup, raised $5m in seed funding, per Axios Pro. Maverick Ventures led, and was joined by Epic Ventures. axios.link/4biIv6s

🌎 Ulemco, a British startup converting commercial vehicles to run on hydrogen, raised over £5m. Mercia Ventures and Northern Powerhouse Investment Fund co-led, and were joined by insiders Equity Gap, North West Fund, and Scottish Enterprise. axios.link/3WJU0iX

🚑 Hephaistos-Pharma, a French developer of cancer immunotherapies, raised €4.3m in seed funding led by Elaia. axios.link/44Oceld

🌎 Ekko, a London provider of environmental impact-tracking software, raised $2.5m led by Fuel Ventures. axios.link/4anykw0

South 8 Technologies, a San Diego developer of lithium-ion batteries, raised funding from Porsche Ventures. south8.com

Private Equity Deals

Battery Ventures completed its C$150m take-private buyout of TrueContext, a Canadian field intelligence firm, for around C$150m. axios.link/43ClJ6N

Brookfield Asset Management will invest around $500m for a majority stake in Indian renewable power developer Leap Green, with The Rohatyn Group retaining a minority position, per Bloomberg. axios.link/3wFvNQc

Commercial Bakeries, a Canadian portfolio company of Graham Partners, acquired Imagine Baking, a Sandusky, Ohio, maker of better-for-you products. commercialbakeries.com

General Atlantic and CPPIB are prepping a €3b bid to buy Spanish online real estate company Idealista from EQT, per Expansion. axios.link/3wv1uMb

RedBird IMI closed its £1.15b acquisition of British TV and film production giant All3Media.

Rubicon Technology Partners acquired Nulogy, a Toronto provider of packaging software, from backers like Export Development Canada. nulogy.com

Public Offerings

🚑 GSK (LSE: GSK) will sell its remaining stake in Haleon (LSE: HLN), the consumer health unit it spun off in 2022, for £1.25b. axios.link/4bjlK2n

OneStream, a Birmingham, Mich., provider of corporate performance management software , filed confidentially for an IPO that could value the KKR-backed company at up to $6b, per Bloomberg. axios.link/3yoKPdI

Super Hi International (HK: 9658), a Hong Kong-based operator of hot pot restaurants under the Haidilao brand, raised $53m in its IPO. It will list on the Nasdaq (HDL). axios.link/3yoOs3e

Liquidity Events

Cloud Software Group, the Citrix parent company owned by Vista Equity Partners and Elliott Investment Management, is seeking a buyer for content-collaboration platform ShareFile, per Bloomberg. axios.link/4bGztQr

Figma, a collaborative online design software maker, is doing a tender offer for investors and employees at a $12.5b valuation, one year after the collapse of its proposed sale to Adobe for $20b. axios.link/3UMYkex

GrubMarket, a food B2B marketplace valued by VCs at over $2b, acquired Butter, a food distribution SaaS that had raised around $12m from Gradient Ventures, Outbound Ventures, Uncommon Capital, CoFound Partners, Notation Capital, Collide Capital, Quint Capital, RSLP Ventures, Amino Capital, and Jack Altman. axios.link/44N7Oez

MBK Partners is seeking to sell Shanghai Siyanli Industrial, a Chinese spa and beauty clinic chain, per Bloomberg. axios.link/4aqDYhd

Roark Capital is seeking to sell Primrose Schools, an Atlanta early childhood education firm that could fetch nearly $2b (including debt), per Reuters. axios.link/4bjlK2n

Snowflake (NYSE: SNOW) is in talks to buy Reka AI for more than $1b, per Bloomberg. The Sunnyvale, Calif.-based generative AI startup has raised over $50m from DST Global, Radical Ventures, Snowflake Ventures, New York Life Ventures, and Nat Friedman. axios.link/3V5F2l5

More M&A

Chevron is seeking to sell its 19.4% stake in the BP-operated Clair oilfield in the U.K. North Sea. axios.link/3V4ityc

Glass Lewis recommended that Hess (NYSE: HES) shareholders support a $53b takeover by Chevron (NYSE: CVX), shortly after rival proxy advisor ISS said that Hess shareholders should abstain from voting. axios.link/4bkHCKx

WM (NYSE: WM) hired JPMorgan to find a buyer for its renewable natural gas unit, which could fetch around $3b, per Reuters. axios.link/4bGIGIB

TenneT, a listed Dutch electric grid operator, said it's considering a listing or sale of its German assets, which could be valued at around €25b. axios.link/3UJiRkj

Fundraising

Leonard Green & Partners is targeting $1.5b for its first continuation fund-of-funds, per Bloomberg. axios.link/3K4ChLG

It's Personnel

Garnett Station Partners promoted Jordan Garay to partner. axios.link/3K34mms

Final Numbers

EY-Parthenon data

The midyear EY-Parthenon Deal Barometer has gotten more bullish, as we noted at the top.

  • Its most optimistic scenario for large corporate M&A in 2024 is 31% year-over-year growth, while its pessimistic scenario remains 13% higher.
  • For private equity, the optimistic number is 23% year-over-year, while the pessimistic number is 8%.

EY's Mitch Berlin notes that while anticipated rate cuts haven't yet materialized, it hasn't hurt deal activity too much because so many large transactions are being funded by corporate cash.

  • He adds that if a rate cut doesn't occur by late summer, then it could begin to bite.

Look ahead: Berlin also says he's seeing a lot of companies creating new business segments for the sake of eventual sales of spinoffs, complete with separate legal entities and independent P&Ls.

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