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Oct 6, 2021

Axios Pro Rata

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Top of the Morning

Illustration: Sarah Grillo/Axios

It's not too often that a multi-billion dollar merger gets signed despite the best efforts of both Warren Buffett and Carl Icahn.

Driving the news: Southwest Gas (NYSE: SWX) agreed to acquire Questar Pipeline Co. for nearly $2 billion in cash from Dominion Energy (NYSE: D). The purchase price includes around $430 million in assumed debt.

If Questar sounds familiar, it's because Buffett's Berkshire Hathaway Energy last year agreed to buy it, as part of a larger purchase from Dominion, but bailed in July due to worries about antitrust objections. The rest of its Dominion deal closed, with Questar carved out.

  • Dominion then launched a new sale process for Questar, which operates over 2,000 miles of natural gas pipelines (plus underground storage) in Utah, Wyoming and Colorado.
  • On Sunday night, Reuters reported that Southwest Gas was in advanced talks to buy Questar.

Hours before the official merger announcement between Southwest and Dominion, activist investor Carl Icahn made two announcements. First, that he holds nearly a 5% stake in Southwest Gas. Second, that he objects to Southwest buying Questar (an objection that didn't stop Southwest or Dominion from issuing their press release).

  • Like most Icahn letters, this one took direct aim at what he views as managerial mistakes: "During the past few years, management of SWX has made a number of egregious errors at the expense of shareholders. However, the purchase of Questar you are currently being rumored to make at the price you are willing to pay will make all past errors pale in comparison."
  • Icahn added: "It also appears that other shareholders agree with our assessment, given the 7.5% price decline this morning – an amazing and unusual decline for a regulated utility." It should be noted, however, that the shares later recovered (and then some).

The bottom line: Buffett and Icahn have very little in common, in terms of personality or investment philosophy. But they may get to share a sense of disappointment related to Questar, as Icahn came up empty the last time he bought into an energy company and tried to stop it from making a major purchase.

The BFD

Illustration: Aïda Amer/Axios

CoinSwitch Kuber, an Indian crypto exchange, raised $260 million at a $1.9 billion valuation co-led by Andreessen Horowitz and Coinbase Ventures.

  • Why it's the BFD: All crypto investments are done against the backdrop of regulatory uncertainty, but the situation is even more fraught in India, where there's been government talk of a total ban on both trading and holding. But the lure of India's giant population was apparently too much for Andreessen Horowitz, which had never before done a deal in the country, with CoinSwitch Kuber saying it will use proceeds to onboard 50 million new customers.
  • Other investors include Sequoia Capital India, Paradigm, Tiger Global and Ribbit Capital.
  • The bottom line: "The exchange's unicorn status follows the $1 billion valuation attained by rival crypto exchange CoinDCX in August in a $90 million funding round that also included contribution from Coinbase." — Jamie Crawley, CoinDesk
Venture Capital Deals

Pattern, a Lehi, Utah-based ecommerce accelerator, raised $225 million. Knox Lane led, and was joined by insiders like Ainge Advisory and KSV Global. http://axios.link/7eRr

Tekion, a Pleasanton, Calif.-based auto retail platform, raised $250 million at a $3.5 billion valuation. Durable Capital Partners and Alkeon Capital Management co-led, and were joined by Hyundai Motor Co. and insiders Advent International and Index Ventures. http://axios.link/jaxY

mParticle, a New York-based customer data infrastructure company, raised $150 million in Series E funding led by Permira. www.mparticle.com

🚑 Twin Health, a Mountain View, Calif.-based precision medicine company focused on chronic metabolic diseases, raised $140 million in Series C funding from Iconiq, Sequoia Capital India, Perceptive Advisors, Corner Ventures, LTS Investments, Helena and Sofina. www.twinhealth.com

Sure, a Santa Monica, Calif.-based insurance infrastructure startup, raised $100 million in Series C funding at a $550 million valuation. Declaration Partners and Kinnevik co-led, and were joined by WndrCo and insiders W. R. Berkley and Menlo Ventures. http://axios.link/rt7w

NeuroBlade, an Israeli developer of in-memory inference chip for datacenters and edge devices, raised $83 million. Corner Ventures and Intel Capital co-led, and were joined by StageOne Ventures, Grove Ventures, Marius Nacht, MediaTek, Pegatron, PSMC, UMC and Marubeni Ventures. http://axios.link/bwpz

Huboo, a British warehouse services startup, raised £60 million in Series B funding. Mubadala Capital led, and was joined by Stride, Ada Ventures, Hearst, Episode 1 and Maersk Growth. http://axios.link/JI8x

Buk, a Chilean HR management platform, raised $50 million in Series A funding. Greenoaks led and was joined by SoftBank. http://axios.link/8eXh

CRM Bônus, a Brazilian gift-back platform, raised around $50 million from SoftBank, Riverwood Capital, Igah Ventures and Volpe Capital. www.crmbonus.com

Olea Edge Analytics, a Austin, Texas-based edge computing platform for water utilities, raised $35 million in Series C funding led by Insight Partners. www.oleaedge.com

Neural Magic, a Somerville, Mass.-based developer of deep learning inference software, raised $30 million in Series A funding. NEA led, and was joined by Andreessen Horowitz, Amdocs, Comcast Ventures, Pillar VC and Ridgeline Ventures. www.neuralmagic.com

Trybe, a Brazilian online tech-ed school, raised $27 million. Base Partners and Untitled co-led, and were joined by Global Founders Capital and Endeavor Scale Up Ventures. www.betrybe.com

Favo, a Brazilian social commerce platform, raised $26.5 million in Series A funding. Tiger Global led, and was joined by GFC, Elevar Equity, Kevin Efrusy, David Velez, FJ Labs and H2O. http://axios.link/U3p6

ReleaseHub, an S.F.-based environments-as-a-service startup, raised $20 million in Series A funding. CRV led, and was joined by Sequoia Capital, Bow Capital, YC, Artisanal Ventures and Hack VC. http://axios.link/pyab

Voom, a Palo Alto-based pay-per-mile motorcycle insurer, raised $15 million. JAL Ventures and UP.Partners co-led, and were joined by F2 Capital, Arbor Ventures, Verizon Ventures and ICON Continuity Fund. www.voominsurance.com

Autify, a Tokyo-based automated software testing platform, raised $10 million in Series A funding. World Innovation Lab led, and was joined by Uncorrelated Ventures, Archetype Ventures, Salesforce Ventures and Tably. http://axios.link/jHWp

CarbonBuilt, an L.A.-based developer of tech that can embed CO2 in concrete, raised $10 million in Series A funding. Grantham Environmental Trust led, and was joined by Pritzker Group, Lime Street Ventures, Climate Capital and YouWeb Impact. www.carbonbuilt.com

🚀 Muon Space, a climate-focused satellite constellation company, raised $10 million in seed funding. Costanoa Ventures led, and was joined by Space Capital, Congruent VC, Ubiquity Ventures, South Park Commons and Climactic VC. http://axios.link/ZnDZ

Appsmith, an Indian provider of open source tools for building internal corporate apps, raised $8 million in Series A funding. Canaan Partners led, and was joined by Accel and Bessemer Venture Partners. http://axios.link/BAB4

Podcastle, an all-in-one podcasting platform, raised $7 million co-led by RTP Global and Point Nine Capital. http://axios.link/j1Tn

Chari, a Moroccan merchant digitization startup, raised $5 million in seed funding led by YC. http://axios.link/Drk4

Plum, a French interior design services platform, raised €5 million in seed funding. Firstminute Capital led, and was joined by Partech. www.plum-kitchen.com/fr

ModernLoop, an S.F.-based recruiting operations platform, raised $3.3 million in seed funding. Accel led, and was joined by Webb Investment Network. www.modernloop.io

SmartRyde, a Japanese airport transfer service, raised $1.6 million in Series A funding led by Angel Bridge. http://axios.link/VecW

Hotglue, a startup that helps developers connect to business apps, raised US$1.5 million in seed funding led by Uncommon Capital. http://axios.link/r2E9

Private Equity Deals

Ares Management agreed to buy a majority stake in Apex Clean Energy, a Charlottesville, Va.-based clean energy generation company. www.apexcleanenergy.com

Industrial Growth Partners bought APCT, a Santa Clara, Calif.-based maker of quick-turn printed circuit board prototypes, from Angeles Equity Partners. www.apct.com

PDQ.com, a Salt Lake City-based portfolio company of TA Associates, acquired SimpleMDM, a Portland, Ore.-based Apple device management platform. www.pdq.com

Revalize, a Jacksonville, Fla.-based portfolio company of TA Associates, acquired Sofon, a Dutch provider of guided selling and CPQ software. www.revalizesoftware.com

Saudi Aramco received nonbinding offers for a stake in its gas pipelines from Apollo Global Management, Brookfield Asset Management, BlackRock, EIG Global Energy Partners and Global Infrastructure Partners, per Bloomberg. A deal could be worth more than $15 billion. http://axios.link/4mfb

TPG agreed to buy a majority stake in Nintex, a Bellevue, Wash.-based automation and workflow management platform, from Thoma Bravo (which will reinvest). http://axios.link/HkAC

Public Offerings

🚑 Elite Body Sculpture, a Miami Beach, Calif.-based provider of body contouring procedures, filed for an IPO. It plans to list on the Nasdaq (AIRS) and reports $17 million of net income on $61 million in revenue for the first half of 2021. Backers include Vesey Street Capital Partners. http://axios.link/v7ZA

HireRight, a Nashville-based provider of background screening and identity verification services, filed for an IPO. It plans to list on the NYSE (HRT), and reports a $16 million net loss on $327 million in revenue for the first half of 2021. Backers include General Atlantic and Stone Point Capital. http://axios.link/Jsqn

Tricon Residential, a Canadian rental housing owner and operator listed in Toronto (TCN), filed for a $350 million IPO on the NYSE. http://axios.link/Dby0

SPAC Stuff

Rigetti Computing, a Berkeley, Calif.-based developer of quantum computing for AI and computational chemistry, agreed to go public at an implied $1.5 billion valuation via Supernova Partners Acquisition Co II (NYSE: SNII), a SPAC whose leaders include ex-Zillow CEO Spencer Rascoff.

  • Rigetti raised nearly $200 million in VC funding from firms like Bessemer Venture Partners, Battery Ventures, Andreessen Horowitz, Alumni Ventures, Vy Capital, Calterra Capital, Northgate Capital and Castor Ventures. http://axios.link/sTP8

ExcelFin Acquisition, a fintech SPAC formed by Fin VC and Grand Fortune Capital, filed for a $200 million IPO. http://axios.link/fEuP

Pyrophyte Acquisition, an energy transition SPAC, filed for a $175 million IPO. http://axios.link/sJa9

Liquidity Events

Axcel agreed to sell Danish gaming gear maker Steelseries for $1.25 billion to GN Store Nord (CSE: GN). http://axios.link/HqZ7

Baring Private Equity Asia and PAI Partners are seeking a buyer for World Freight Company International, a French cargo freight services company that could fetch more than €1.5 billion, per Reuters. http://axios.link/eFOQ

🚑 The Carlyle Group is seeking a buyer for Sunsho Pharma, a Japanese contract manufacturer of health and nutrition products that could fetch more than $500 million, per Bloomberg. http://axios.link/kTVs

More M&A

🚑 Boston Scientific (NYSE: BSX) agreed to buy Baylis Medical, a Montreal-based developer of cardio medical devices, for $1.75 billion. http://axios.link/6CNd

🐉 Databricks, a San Francisco-based unified data analytics platform recently valued at $38 billion, acquired 8080 Labs, a German low-code/no-code startup. http://axios.link/Jpkw

LVMH (Paris: MC) offered to buy French perfume and cosmetics company Officine Universelle Buly 1803. http://axios.link/JJwF

🎬 Magnolia Pictures, a film distributor owned by Mark Cuban and Todd Wagner, is seeking a buyer, per the NY Times.

Nice, a smart home products maker, acquired Nortek Security & Control, a Carlsbad, Calif.-based maker of security and control systems, from Melrose Industries (LSE: MRO) for $285 million. www.niceforyou.com

Telefónica (Madrid: TEF) is seeking a buyer for a minority stake in its Spanish fiber network, the overall value of which is estimated at €15 billion, per Reuters. http://axios.link/FWIJ

Fundraising

Contrary Capital, an SF-based VC firm, raised $20 million for its second fund. http://axios.link/NKEE

🚑 MPM Capital of Boston raised $850 million for its second fund focused on cancer drug developers. http://axios.link/xr2X

It's Personnel

JMI Equity promoted Randy Guttman to COO. www.jmi.com

Lincoln International promoted Rob Brown to global CEO and Eric Malchow to CEO of North America. www.lincolninternational.com

Final Numbers: Gaming VC deals
Source: Drake Star Partners report. Data via DSP research, Cap IQ and PitchBook

Gaming deal activity in 2021, including private funding rounds and M&A, has already doubled 2020 totals, according to a new report from Drake Star Partners.

  • Axios Gaming's Stephen Totilo writes: "Investment isn’t settling on any one thing, as outsiders buy in (Netflix purchasing its first studio), midsize publishers try to grow (see studio purchases by Team17 and Focus) and larger players (Zynga, Roblox, ByteDance) expand."

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