Axios Pro Rata
October 19, 2017
Top of the Morning
We've not discussed the Uber-SoftBank transaction lately, so let's do it now. And, in honor of Gordon Hayward's surgery apparently going well, let's treat it like the game it has become:
Possession arrow: SoftBank
- Everyone currently is waiting on the Japanese giant, which has not yet set a price, nor even communicated how it plans to run the auction process (i.e., fixed tenders, Dutch auction, etc.). It has, however, tried to do price discovery via some one-on-one conversations, and most sources expect formal details within a week.
- That's Uber's most recent 409a valuation, which works out to around a $60 billion valuation based on the current share count. It also seems to be the number below which many shareholders won't even consider a deal (and below which those with pro rata rights — like Benchmark and TPG — could become buyers). That's got to be causing SoftBank some heartburn, given that it originally proposed pricing the deal near a $50 billion valuation. For greater context, the primary buy still sounds like it would be at the Series G price of $48.77 per share.
- "Everyone wants to provide as little transparency as possible." — Uber investor
- "I know a lot of people don't think it gets done in the end, but they also thought Dara wouldn't get over the governance hurdles. He wants this, and I wouldn't bet against him." — (different) Uber investor
- There was a recent FT report about how Benchmark wouldn't raise its ROFR rights in regards to the tender, but sources say the ROFR only relates to shares being (possibly) offered by Travis Kalanick, Ryan Graves and Garrett Camp.
Different sort of court
- Uber's former chief business officer, Emil Michael, yesterday was dropped as a defendant in a privacy invasion lawsuit filed by a woman who was raped by an Uber driver in India. The company itself remains party to the suit, as do Travis Kalanick and former executive Eric Alexander.
MongoDB, a New York-based open source database company, raised $192 million in its IPO. The company priced 8 million shares at $24, above its upwardly-revised $20-$22 range, for a fully-diluted market cap of around $1.39 billion. The company reports a $46 million net loss on $68 million in revenue for the first half of 2017, compared to a $45 million net loss on $45 million in revenue for the year-earlier period. Morgan Stanley served as lead underwriter.
- Why it's the BFD: Because MongoDB will be another critical data point for traders trying to decide if "unicorn" SaaS companies can ever really ride their recurring revenue models to profitability — or at least how to separate the future successes from the undercorns. To date, the trend too often has been: Strong IPO pricing, first day pop and then a steady slide.
- Regional: NYC tech could really use a win, following yesterday's Blue Apron layoffs.
- $ history: MongoDB had raised $300 million in VC funding, most recently at a post-money valuation of around $1.7 billion, from firms like Sequoia Capital (16.9% pre-IPO stake), Flybridge Capital (11.6%), Union Square Ventures (9.7%), NEA (7.2%), Future Fund (6.2%), Fidelity, Altimeter Capital Management and T. Rowe Price.
Venture Capital Deals
• Meituan-Dianping, a Chinese provider of on-demand services, has raised $4 billion in new funding at a $30 billion valuation. Existing backer Tencent led the round, and was joined by Sequoia Capital, GIC and Tiger Global. http://axios.link/DQUo
🚑 Forty Seven, a Palo Alto, Calif.-based immuno-oncology startup, has raised $75 million in new VC funding. Wellington Management led the round, and was joined by return backers Clarus, Lightspeed Venture Partners, Sutter Hill Ventures and GV. http://axios.link/6QfL
🚑 CureVac, a VC-backed German drug developer, has signed a $1.8 billion deal with Eli Lilly (NYSE: LLY) to work on five mRNA cancer vaccines. The deal includes a $50 million upfront payment from Eli Lilly and a €45 million equity investment. Existing CureVac shareholders include Hopp BioTech. http://axios.link/f2B6
• Feedzai, a Portugal-based provider of machine-learning tools for banks and merchants to identify fraud, has raised $50 million in new VC funding from an undisclosed investor and Sapphire Ventures. http://axios.link/NbRj
🚑 Gemini Therapeutics, a Cambridge, Mass.-based startup focused on age-related macular degeneration, has raised $42.5 million in Series A funding from Atlas Venture, Lightstone Ventures and OrbiMed. http://axios.link/kyNt
• Movinga, a German online platform for relocation services, has raised up to €22 million in tranched-out venture funding. Santo Venture Capital led the round, and was joined by Earlybird Venture Capital and Rocket Internet. http://axios.link/nejy
• Hiya, a Seattle-based Whitepages.com spinout that focuses on smart caller ID services, has raised $18 million in Series A funding. Balderton Capital led the round, and was joined by Nautilus Venture Partners and Lumia Capital. http://axios.link/PMc1
• Mya Systems, a San Francisco-based provider of AI-powered recruiting solutions, has raised $18 million in Series B funding. Foundation Capital led the round, and was joined by Emergence Capital. www.hiremya.com
• XMos, a Bristol, U.K.-based provider of voice capture solutions for consumer electronics, has raised $15 million in Series E funding. Infineon Technologies led the round, and was joined by Amadeus Capital Partners, Draper Esprit, Foundation Capital and Robert Bosch Venture Capital. www.xmos.com
• Veo Robotics, a Cambridge, Mass.-based provider of robotic awareness systems, has raised $12 million in new VC funding from GV and Lux Capital. http://axios.link/mXTP
• DirectScale, a Linden, Utah-based provider of direct sales software, has raised $8.5 million in Series B funding. Grotech Ventures led the round, and was joined by Origin Ventures and return backer Kickstar Seed Fund. http://axios.link/W8lv
• Fingerlix, an Indian maker of ready-to-cook foods like batter, has raised $7 million in third-round funding from Accel and Zephyr Peacock. http://axios.link/H0kR
• Bespoke Post, a New York-based lifestyle subscription service for men, has raised $6 million in Series A funding from Walden Venture Capital, Scout Ventures and Kiwi Venture Partners. http://axios.link/ZUAt
• Zype, a New York-based cloud platform for video publishing and distribution, has raised $4.9 million in Series A funding. Runa Capital led the round, and was joined by Revel Partners, Point Nine Capital, Alpine Meridian and Entrepreneurs Fund. http://axios.link/wh8b
🚑 Blade Therapeutics, a South San Francisco-based developer of anti-fibrotic therapies, has triggered the final tranche of a $45 million Series B round announced last summer. Backers include Deerfield Management, MPM Capital, Pfizer, Novartis, Bristol-Myers Squibb and Osage University Partners. http://axios.link/vpTV
Private Equity Deals
• AEA Investors has agreed to acquire Excelitas Technologies, a Waltham, Mass.-based provider of photonics technology solutions, from Veritas Capital. www.excelitas.com
• Heidelpay Payment, a German e-commerce payment services provider backed by AnaCap Financial Partners, has acquired StarTec Payment and Service, a German provider of cashless payment transaction services at the point-of-sale. www.startec-payment.de
• Investcorp has acquired Kee Safety, a British provider of safety solutions for people working at heights, for $370 million. Sellers include LDC. http://axios.link/QPz2
• Linden Capital has acquired a stake in Smile Doctors, a Georgetown, Texas-based orthodontic dental support organization. Existing backer Sheridan Capital Partners will retain a position. www.smiledoctors.com
• Thompson Street Capital Partners has acquired BCC Software, a Rochester, N.Y.-based provider of USPS-certified mail preparation software, from Versa Capital Management. www.bccsoftware.com
• ACM Research, a Fremont, Calif.-based provider of single-wafer wet cleaning equipment, has set its IPO terms to 2 million shares being offered at $7.50-$9.50. It plans to trade on the Nasdaq under ticker symbol ACMR, while Roth Capital Partners served as lead underwriter. The company reports a $3 million net loss on $14.4 million in revenue for the first half of 2017. Shareholders include Shanghai Science and Technology Venture Capital (18.2% pre-IPO stake). www.acrmrsch.com
• Evoqua Water Technologies, a Pittsburgh-based water treatment and services company owned by AEA Investors, has set its IPO terms to 27.8 million shares being offered at $17-$19. It would have a fully-diluted market cap of around $2.2 billion, were it to price in the middle. The company plans to trade under ticker symbol AQUA, with Credit Suisse and J.P. Morgan serving as lead underwriters. Evoqua reports nearly a $7 million net loss on $891 million in revenue for the nine months ending June 30, 2017. www.evoqua.com
• SendGrid, a Denver-based email marketing platform, has filed for a $100 million IPO. It plans to trade on the NYSE under ticker symbol SEND, with Morgan Stanley and J.P. Morgan serving as lead underwriters. The company reports a $3 million net loss on $38 million in revenue for the first half of 2017. It has raised over $80 million in VC funding from firms like Foundry Group (29.64% pre-IPO stake), Bessemer Venture Partners (22.51%), Highway 12 Ventures (13.9%) and Bain Capital Ventures (7.03%). www.sendgrid.com
• Advent International has hired Morgan Stanley to find a buyer for its 45% stake in Spanish explosives maker Maxam at an enterprise value of up to €1.5 billion, per Reuters. http://axios.link/8Uae
• ASSA ABLOY (Oslo: ASSA) has agreed to acquire acquire August Home, a San Francisco-based smart lock company that has raised around $75 million in VC funding from firms like Bessemer Venture Partners, Comcast Ventures, Maveron, SoftTech VC, Qualcomm Ventures and Liberty Mutual. http://axios.link/Bo0R
• Cisco Systems (Nasdaq: CSCO) has agreed to acquire Perspica, a San Jose, Calif.-based provider of SaaS analytics and observability products that had raised around $8 million in VC funding from firms like March Capital Partners.The Perspica team will join Cisco's AppDynamics unit. www.perspica.io
🍭 L Catterton has agreed to sell Ferrara Candy Co., the third-largest U.S. non-chocolate confectioner, to Italy's Ferrero Group, the maker of Nutella. This comes just days after a CNBC report that Ferrara was expected to submit an initial bid to buy Nestle's U.S. confectionary business, which could fetch upwards of $2.5 billion. http://axios.link/KZXN
Bonus: Yesterday we noted that J.P. Morgan agreed to acquire Silicon Valley online payments company WePay for an undisclosed amount. A source tells us that J.P. Morgan initiated the deal (i.e., not auction process) and that the price-tag was just south of $300 million in cash. PitchBook reports that the company raised around $75 million in VC funding, most recently at a $220 million post-money.
• Adobe (Nasdaq: ADBE) has acquired KyleBrush.com, a service offering digital brushes for Adobe programs. http://axios.link/qNrX
• The FCC yesterday paused the "shot clock" on Sinclair Broadcast Group's (Nasdaq: SBGI) proposed purchase of Tribune Media Co. (NYSE: TRCO), in order to solicit more public comment. Per Axios' David McCabe: "This isn't uncommon, but does give the deal's many critics extra time to respond to information filed by Sinclair earlier this month. For now, the clock is paused through Nov. 2."
• Hearst has agreed to acquire magazine publisher Rodale, including its subsidiary health and wellness properties, like Men's Health. Terms were not disclosed, but the WSJ places it below $225 million. http://axios.link/lkxF
• Hochtief, a listed German construction company controlled by Spain's ACS, yesterday did top Atlantia's takeover offer for Spanish toll road operator Abertis. This is the deal we discussed yesterday in the BFD.
• Anil Agarwal, the Indian billionaire owner of Vedanta Group, is planning to launch a $1 billion venture fund focused on the natural resources space, according to the Times of India. http://axios.link/M79t
• DGF Ventures of Brazil is raising up to $60 million for its second fund, per an SEC filing.
• Owl Ventures, a VC firm focused on ed-tech, has closed its second fund with $185 million in capital commitments. www.owlvc.com
• Roark Capital is raising up to $5 billion for its fifth buyout fund, per an SEC filing. www.roarkcapital.com
• SparkLabs Group has launched a $100 million early-stage VC fund focused on blockchain and crytpocurrencies. It will be led by Joyce Kim, formerly of Freestyle Capital and Stellar.org. http://axios.link/AhQr
Bonus: Blackstone Group president Tony James said in a media call this morning that the firm's new infrastructure mega-fund strategy will not be impacted by the absence of federal infrastructure legislation. He adds that a first close is planned for Q1 2018. "We think that based on today's market conditions, today's regulations and today's market that there's a huge opportunity for the fund we're raising. There has been around $9 billion of opportunity we've been unable to action in just the past year, that would have gone into this fund."
•Brett Redfearn, former head of market structure at J.P. Morgan, has joined the SEC as director of trading and markets. www.sec.gov
• Tim Wright has joined Guggenheim Investments as senior managing director and head of strategy. He previously was global head of strategy and biz dev at Deutsche Bank.