Jul 14, 2020

Axios Pro Rata

By Dan Primack
Dan Primack

🎧 Axios Re:Cap focuses on if and how schools will reopen, with American Federation of Teachers president Randi Weingarten. Plus, Henrik Fisker on why electric vehicle-makers are having a stock market moment. Listen via Apple or via Axios.

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Top of the Morning

Illustration: Aïda Amer/Axios

TikTok has helped China's ByteDance become the world's most valuable "unicorn" company, but its shiny horn is beginning to get some serious scuff marks.

Driving the news: Wells Fargo yesterday told employees to delete TikTok from company devices. This is similar to what Amazon did last Friday, except Wells Fargo didn't then backtrack and claim to have made "a mistake."

  • This comes shortly after TikTok was banned in India, by far its largest market.
  • TikTok also is at increased risk of being banned in the U.S., its third-largest market, with multiple social media execs telling me they believe President Trump's bark will lead to bite.

What's next: If TikTok is indeed banned in the U.S., lots of apps are preparing to take its place. Pay special attention to one: Los Angeles-based Triller.

  • The app was originally created by a pair of musical techies who wanted to edit music videos without complex software, but now is a more robust version of TikTok (albeit a bit slower with barely a fraction of the downloads).
  • It claims to have jumped from a few hundred thousand users in India to tens of millions after the TikTok ban, thanks in part to some well-known influencers joining its platform.
  • Triller, which last year raised $28 million in a round led by a holding company affiliated with Ryan Kavanaugh (founder of hot-then-bankrupt film studio Relativity Media), is said to be in the midst of a large new fundraise being managed by UBS.
  • It also just quietly acquired a livestreamed events app called Halogen, Axios has learned.

The bottom line: Unicorns have failed before, but none have been abruptly regulated out of existence. If Triller can convince investors that it's a viable fallback plan, it could soon become a unicorn itself.

On the docket

Bill Dawson, CEO of buyout firm Wellspring Capital Management, has taken a leave of absence while Wellspring investigates allegations that he threatened an employee after she told him about being drugged and raped by Dawson's son Christopher.

  • Taylor Lawrence made her explosive claims in a lawsuit against Christopher Dawson filed last Thursday. She was Wellspring's head of marketing and investor relations from 2010 through January 2018, and now is at a different private equity firm.
  • Lawrence alleges that the rape occurred in 2014, but that she didn't report it at the time because Bill Dawson told her: "I will destroy you. I will ruin you."
  • Christopher Dawson has not yet filed a legal response, but the Dawson family issued a statement calling Lawrence's claims as "pure fiction intended as a shakedown."
  • The Dawsons claim there was no rape, and that the first Bill Dawson heard of Lawrence's allegations was last month.
  • Christopher Dawson has been fired from his job at a commercial real estate tech startup.

New York-based Wellspring is currently investing out of a $1.4 billion fund raised in 2018, and is not actively fundraising.

The BFD

Source: The Blackstone Group holiday video. And, yes, the firm has an unofficial mascot it calls "Mr. Stone."

Oatly, a Swedish oat milk company, raised $200 million in growth equity funding led by The Blackstone Group at around a $2 billion valuation.

  • Why it's the BFD: Alt-milk predated alt-meat, and now seems poised to follow it into the public markets.
  • Other investors include Howard Schultz, Oprah Winfrey, Roc Nation, Natalie Portman, Orkila Capital, and Rabo Corporate Investments.
  • Flashback: Califia Farms, a Los Angeles-based almond and oat milk producer, raised $225 million earlier this year led by Qatar Investment Authority.
  • The bottom line: "Founded in the 1990s, Oatly entered the U.S. four years ago. The company’s 2019 sales of about $200 million were roughly double the previous year. It expects to have similar growth this year, according to people familiar with the matter. Oatly has been profitable in the past but lost money in recent years as it invested in its business." — The Wall Street Journal
Venture Capital Deals

🚑 Medly Pharmacy, a New York-based digital pharmacy, raised $100 million in Series B funding. Volition Capital led, and was joined by Greycroft, Horsley Bridge, and Lerer Hippeau. www.medlypharmacy.com

Skydio, a Redwood City, Calif.-based autonomous drone developer, raised $100 million in Series C funding. Next47 led, and was joined by Levitate Capital, NTT Docomo Ventures, and return backers Andreessen Horowitz, IVP, and Playground VC. http://axios.link/nunG

Komaza, a Kenyan developer of sustainable forestry tech, raised $28 million in Series B funding from AXA Impact Fund, Novastar Ventures, FMO, and Mirova. http://axios.link/JekF

Warren, a Brazilian digital brokerage, raised $22.2 million in Series B funding led by QED Investors. www.warren.com.br

🚑 Genome Medical, a South San Francisco-based genomic care platform, raised $14 million in Series B funding led by Samsung Catalyst Fund. http://axios.link/BAwm

Beekeeper, a Zurich-based chat platform for frontline hospitality workers, raised $10 million in new Series B funding (round total $60m). Energize Ventures led, and was joined by HighSage Ventures, SwissCanto, Thayer, Swisscom, Investiere, Alpana Ventures, and Swiss Post. http://axios.link/ZvoN

TradeDepot, a Nigerian SaaS platform that connects distributors, wholesalers, and retailers, raised $10 million from Partech, IFC, Women Entrepreneurs Finance Initiative, and MSA Capital. http://axios.link/e9eK

🚑 NovaSight, an Israeli developer of lazy eye treatments, raised $8 million in Series A funding led by Rimonci Capital. http://axios.link/Vfj4

🚑 MIP Diagnostics, a British nanotech startup focused on synthetic polymer alternatives to antibodies, raised £5.1 million. Downing Ventures led, and was joined by BGF, Mercia and Calculus VCT. http://axios.link/ejrV

Orbital Witness, a British provider of property due diligence software, raised £3.3 million in seed funding. LocalGlobe and Outward VC co-led, and were joined by Seedcamp and JLL Spark. http://axios.link/TftA

Private Equity Deals

Align Capital Partners invested in WilliamsMarston, an accounting advisory and management consulting firm with offices in Boston and New York. www.williamsmarston.com

Madison Dearborn Partners agreed to buy Benefytt Technologies (Nasdaq: BFYT), a Tampa, Fla.-based health insurance tech provider, for around $410 million or $31 per share (39% premium to Friday’s closing price). http://axios.link/Ah5f

Service Champions, a portfolio company of CenterOak Partners, acquired ABC Cooling Heating & Plumbing, a Hayward, Calif.-based provider of residential air conditioning and plumbing repair services. www.servicechampions.com

🚑 Vernacare, a British portfolio company of H.I.G. Capital, acquired the infection prevention unit of Frontier Medical Group, a portfolio company of Kester Capital. www.vernacare.com

Public Offerings

🚑 ALX Oncology, a Burlingame, Calif.-based immuno-oncology biotech, filed for set IPO terms to 8 million shares at $15-$17. It would have a fully diluted market value of $605 million, were it to price in the middle, and plans to list on the Nasdaq (ALXO). The company raised $128 million from firms like VenBio Partners (30.6% pre-IPO stake), Lightstone Ventures (15%), Vivo Capital (12.9%), and Logos Opportunities Fund (8.6%). http://axios.link/5Pap

Artius Acquisition, a SPAC co-founded by former WorldPay CEO Charles Drucker, raised $630 million in its IPO. http://axios.link/0JH4

BigCommerce, an Austin, Texas-based outsourced builder of e-commerce sites, filed for a $100 million IPO. It plans to trade on the Nasdaq (BIGC) with Morgan Stanley as lead underwriter, and reports a $4 million net loss on $33 million in revenue for Q1 2020. The company raised $228 million in VC funding from firms like Goldman Sachs, General Catalyst, GGV Capital and Tenaya Capital. http://axios.link/XHp6

E.Merge Technology Acquisition, a SPAC formed to acquire a tech company, filed for a $500 million IPO. Its CEO is former Eastman Kodak co-CEO Jeff Clark and its chairman is Madrona Venture Group’s Steven Singh. http://axios.link/q31d

Jamf, a Minneapolis-based Apple device management company owned by Vista Equity, set IPO terms to 16 million shares at $17-$19. It would have a market cap of $2.1 billion, were it to price in the middle, and plans to list on the Nasdaq (JAMF) with Goldman Sachs as lead underwriter. http://axios.link/OzPr

nCino, a Wilmington, N.C.-based digital banking startup, raised $250 million in its IPO. The company priced 8.1 million shares at $31 (above upwardly revised range), for a fully diluted market cap of $3 billion. It will list on the Nasdaq (NCNO), and had raised just over $200 million in VC funding from Insight Partners (46.6% pre-IPO stake), Salesforce (13.2%), Wellington Management (9.5%), T. Rowe Price, and Bessemer Venture Partners. http://axios.link/i0no

🚑 Pandion Therapeutics, a Phase 1 biotech developing engineered T cells for autoimmune diseases, set IPO terms to 5.5 million shares at $16-$18. It would have a fully diluted market value of $451 million, were it to price in the middle, plans to list on the Nasdaq (PAND), and raised $138 million in VC funding from firms like Versant Ventures (15.9% pre-IPO stake), Polaris Partners (14.7%), Roche (14.2%), S.R. One (8.8%), and Boxer Capital (6.5%). http://axios.link/DiuS

• Pershing Square Tontine Holdings, a SPAC formed by Bill Ackman to acquire "mature unicorns," increased its proposed IPO size from $3 billion to $4 billion. http://axios.link/sVSz

Liquidity Events

I Squared Capital is exploring options for Hong Kong fixed-line operator HGC Global Communications, including a possible sale, merger, or IPO, per Bloomberg. http://axios.link/UImQ

• SoftBank is considering a sale or listing for all of party of its stake in chip design company Arm Holdings, per Bloomberg. http://axios.link/wblB

More M&A

Illustration: Lazaro Gamio/Axios

Google is in “advanced talks” to invest $4 billion in Indian telco Reliance Jio Platforms, per Bloomberg. http://axios.link/5W3j

Alfa Laval (Stockholm: ALFA) offered to buy listed Finnish valve-maker Neles for €1.73 billion, although Neles’ largest shareholder said the bid was insufficient. http://axios.link/ovuX

Haymaker Acquisition Corp. II (Nasdaq: HYAC) agreed to acquire Arko Holdings (Tel Aviv: ARKO) and its majority-owned U.S. convenience store chain GPM. The combined entity would be valued at $1.5 billion. http://axios.link/rHnh

🚑 Roche (Swiss: ROG) struck a $1.7 billion cancer drug deal with Blueprint Medicines (Nasdaq: BPMC), which includes a $675 million upfront payment and a $100 million equity investment. http://axios.link/Veme

🚀 Voyager Space Holdings acquired Pioneer Astronautics, a Lakewood, Colo.-based space research lab. http://axios.link/XWjt

Fundraising

H.I.G. Capital is raising $1.25 billion for its sixth flagship buyout fund, per an SEC filing. www.higcaptial.com

TrueBridge Capital Partners raised $600 million for its sixth VC fund-of-funds. http://axios.link/19hP

It's Personnel

Justin Kulla joined TZP Group as a partner and head of impact investing and ESG, per his LinkedIn page. Kulla previously was an SVP of global investments and M&A at AmTrust Financial Services. www.tzpgroup.com

Final Numbers
Reproduced from BloombergNEF; Chart: Axios Visuals

Go deeper: Biden to push for $2 trillion clean energy spending package

Dan Primack

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