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Illustration: Aïda Amer/Axios
Staples recently informed landlords that it will not pay April rents for its U.S. stores, even though the locations remain open, Axios has learned.
Why it matters: Commercial landlords are stuck in a tightening vise, forgiving or deferring payments from shuttered tenants while still needing to meet their own mortgage obligations.
What they're saying: Multiple landlords tell Axios that Staples reached out within the past 72 hours to inform them of its decision. It didn't propose any sort of deferred payments, nor would it pledge to pay May rents. At the same time, the landlords remain expected to maintain such services as utilities and sanitation.
Standard commercial property leases do not allow for tenants to stop paying their rent due to the current situation, nor are the tenants typically covered via interruption-of-business insurance. Likewise, commercial landlords remain on the hook for their own debt obligations.
Background: Private equity firm Sycamore Partners took Staples private in 2017 for $6.9 billion. It also split the company into three independent operating entities — U.S. retail, Canada, and corporate supply.
For the record: I spoke briefly on Monday with a Staples spokeswoman, who said she'd respond soon to Axios' inquiries. She never did, nor replied to follow-up emails and calls. Sycamore Partners declined comment, as it always does.
The bottom line: Most American businesses are struggling, and the pain is particularly acute in physical retail. No one ever made a model for this. At the same time, so many are pulling together to alleviate pain when possible. Staples and Sycamore are an exception, choosing instead to make it worse.
SoFi, a personal finance company most recently valued at $4.8 billion, agreed to buy Galileo, a Salt Lake City-based financial services API and payments platform, for $1.2 billion in stock and cash.
Today's project is for your kid(s) to make a stained glass window. You'll need painter's/masking tape, some sort of washable paint (including watercolors), a paint brush, and a bit of dish soap. Oh, and a window. Here's a quick explainer.
Yesterday I asked your kid(s) to create a movie theater. And a bunch of them did:
• Cato Networks, an Israeli cloud security platform for remote workforces, raised $77 million. Lightspeed Venture Partners led, and was joined by Aspect Ventures, Greylock, Singtel Innov8, USVP, and Shlomo Kramer. http://axios.link/nC2E
🚑 Tyto Care, a New York-based telehealth platform, raised $50 million. Insight Partners, Olive Tree Ventures, and Qualcomm Ventures were joined by return backers Orbimed, Echo Health, Qure, and Teuza. http://axios.link/xtcg
• SafetyCulture, an Australian provider of corporate security and compliance checks, raised $35.5 million at an $800 million valuation. TDM Growth Partners led, and was joined by Blackbird Ventures, Skip Capital, and Malcolm Turnbull. http://axios.link/af54
• Shippo, a San Francisco-based provider of shipping software, raised $30 million in Series C funding. D1 Capital Partners led, and was joined by return backers Uncork Capital, Union Square Ventures, and Bessemer Venture Partners. http://axios.link/mupB
• Neat, a Hong Kong-based provider of cross-border trade software, raised $11 million in Series A funding. Pacific Century Group led, and was joined by return backers Dymon Asia Ventures, Linear Capital, and Sagamore Investments. http://axios.link/c78e
• Universe, a Brooklyn-based mobile website builder for commerce, raised $10 million in Series A funding from GV. http://axios.link/kcqE
• Arturo, a provider of real estate characteristic data and predictive analytics, raised $8 million in Series A funding. Crosslink Capital led, and was joined by IAG Firemark Ventures. www.arturo.ai
• Sila, a Portland, Ore.-based payments and banking API infrastructure startup, raised $7.7 million in seed funding from Madrona Venture Capital and Oregon Venture Fund. http://axios.link/xIek
🚑 Lionrock Recovery, a Redwood City, Calif.-based provider of telehealth services for substance abuse, raised $7 million from the Wasserstein Family Trust and Big Spruce Holdings. http://axios.link/DrR4
• Spot & Tango, a direct-to-consumer pet food brand, raised $4.2 million in seed funding led by Guild Capital. http://axios.link/Mt3c
• WorkClout, a Walnut, Calif.-based provider of manufacturing performance support software raised $2.3 million in seed funding. Spider Capital led, and was joined by YC, Liquid 2 Ventures, Soma Capital, Pioneer Fund, and Mehta Ventures. http://axios.link/MC8I
• AEgis Technologies, a Huntsville, Ala.-based portfolio company of Arlington Capital Partners, acquired Excivity, a Chantilly, Va.-based developer of security apps and situational awareness tools.
🚑 EQT Partners agreed to pay €900 million to buy Germany-based Schülke, whose products include hand sanitizing liquids and hospital disinfectants, from Air Liquide (Paris: AI), per the FT. http://axios.link/Y8FD
☕ Gateway Partners of Dubai paid around $50 million for a 40% stake in the Gulf region’s franchise of Tim Hortons restaurants, per Reuters. http://axios.link/Adru
• KKSP Precision Machining, a Glendale Heights, Ill.-based portfolio company of Mill Point Capital, acquired PRO Manufactured Products, Inc. (“PRO”), a manufacturer of stainless steel, aluminum, and other metal alloy custom components. www.kksp.com
• Macquarie Infrastructure agreed to buy an 88% stake in Australian data center operator AirTrunk for more than A$3 billion from Goldman Sachs and Sixth Street Partners. http://axios.link/vXub
🚑 Therapeutic Research Center, a Stockton, Calif.-based portfolio company of Levine Leichtman Capital Partners, acquired drug compounding training and consulting groups CriticalPoint and Clinical IQ. www.trchealthcare.com
⛽ China Three Gorges, a state-owned renewable energy producer, filed to raise upwards of $3.5 billion in a Shanghai IPO. http://axios.link/ZpZF
🚑 Keros Therapeutics, a Lexington, Mass.-based drug startup focused on neuromuscular diseases, raised $96 million in its IPO. The company priced 6 million shares at $16, versus plans to sell 5 million at $14-$16, for an initial market cap of $291 million. It will trade on the Nasdaq (KROS), used Jefferies as lead underwriter, and had raised over $90 million in VC funding from Pontifax (32.6% pre-IPO stake), Arkin Bio Ventures (14.4%), Foresite Capital (9.9%), Partners Innovation Fund (8.7%), and OrbiMed (8.5%), Global Health Sciences Fund, and Medison Pharma. http://axios.link/dMDm
• American Pacific Group raised $450 million for its debut fund. The San Francisco-based firm focuses on complex situations, and is led by Fraser Preston (ex-H.I.G. Capital). www.americanpacificgroup.com.
• Crescent Capital Group of Los Angeles raised €1.6 billion for its second European specialty lending fund. www.crescentcap.com
• Golding Capital Partners of Germany raised €710 million for its latest private equity infrastructure fund, which focuses on both Europe and North America. http://axios.link/abRT
• StepStone Group raised $2.1 billion for its fourth private equity secondaries opportunity fund. www.stepstoneglobal.com
• Cambridge Innovation Capital promoted Carol Cheung to principal. She joined in 2016 after serving as commercial director of speech recognition startup Speechmatics. www.cic.vc
• Aaron Epstein (CEO of Creative Market) and Harj Taggar (ex-CEO of Triplebyte) are joining Y Combinator as a visiting partner and partner, respectively. www.ycombinator.com
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