Jul 29, 2020

Axios Pro Rata

By Dan Primack
Dan Primack

🎧 Axios Re:Cap focuses on the future of live music venues with Sen. Amy Klobuchar (D-Minn.), who recently introduced a bipartisan bailout bill focused on independent operators. Listen via Apple, Spotify, or Axios.

Top of the Morning

Illustration: Annelise Capossela/Axios

C-SPAN should net record ratings in Silicon Valley today, as tech executives, investors, and media will be glued to the congressional testimony of Jeff Bezos, Tim Cook, Sundar Pichai, and Mark Zuckerberg.

  • Forget the fireworks: Some members of the House Judiciary Committee will seek to create viral clips, even if the optics are more difficult via remote questioning. And it's certainly possible that one or more of the CEOs will make an unforced error, or take tacit shots at a rival. But none of that is likely to survive more than one or two news cycles.
  • Pay attention to any of the more serious questions about antitrust. That's where this testimony could eventually be incorporated into legislative proposals, particularly if Democrats keep the House and Joe Biden wins the presidency in November.

Flashback: It's been three years since congressional Democrats introduced a vague framework to "crack down on monopolies," under a belief that existing antitrust laws were antiquated to the point of irrelevance. Particularly when it comes to Big Tech.

  • Republicans are more divided on the subject, Axios' Ashley Gold reports.

Fast forward: All four of the companies testifying today are under antitrust review by either the DOJ or the FTC. But those investigations rely on existing law.

  • I've spoken to corp dev folks inside of Big Tech companies, and they tell me that heightened antitrust scrutiny rarely preempts merger considerations.
  • That could change if Google is ultimately blocked from buying Fitbit — yeah, that's still not approved — but they seem pretty confident under the current rubric.

The bottom line: If today's hearing has consequences, we won't know it until next year.

  • Bonus: I'll have Rep. David Cicilline (D-R.I.), chairman of the House Judiciary's antitrust subcommittee, on today's "Axios Re:Cap" podcast. We'll tape after the hearing, and expect it to post around 7pm ET.
Also...

On Monday we reported on a gender discrimination and retaliation lawsuit brought against Carta by the company's former VP of marketing. Yesterday, the company sent us a statement:

"Gender inequality in the workplace is a real and systemic problem, particularly in Silicon Valley, however, the allegations in this case are unfounded. We will allow the court to determine the merits of the claims."

  • Bonus: A source tells Axios that, as of late yesterday, Carta still hadn’t been served with the suit. Unclear why, although likely because it’s hard to serve lawsuits against companies that are operating remotely.

SPAC stuff: No dedicated section today, but Kia reports that Eventbrite co-founder Kevin Hartz is talking to folks about raising a SPAC of his own.

Follow-up: We recently reported that Chelsea Clinton is in the early stages of forming a venture capital firm. Now comes word that Union Square Ventures is advising her.

TikTok CEO Kevin Mayer today made his first public statement since joining the controversial company, trying to position TikTok as more transparent and patriotic than some of its U.S.-born rivals.

The BFD

Illustration: Aïda Amer/Axios

Eastman Kodak (NYSE: KODK) secured a $765 million loan from the U.S. government, to create a business that will manufacture ingredients for use in key generic drugs (including hydroxychloroquine).

  • Why it's the BFD: This is a lifeline for Kodak, which realized way too late that photography was going digital. It also seeks to remedy a situation in which the U.S. is reliant on foreign manufacturers (particularly in China and India) for drugs that are critical to national security.
  • Why Kodak? As one administration source explains to me, it was an "easy shell to transform."
  • Details: The money appears to come from the U.S. International Development Finance Corp. (DFC), which was created in 2018 via the consolidation of OPIC and USAID, operating in collaboration with the U.S. Defense Department.
  • The bottom line: "The loan is the first of its kind under the Defense Production Act, which the Trump administration has previously invoked to speed the production of Covid-19 related supplies such as ventilators. ... Trump in May issued an order allowing the DFC to financially support the domestic production of strategic resources for the coronavirus pandemic and 'to strengthen any relevant domestic supply chains.'" — Rachael Levy, WSJ
Venture Capital Deals

🚑 Thrive Earlier Detection, a Cambridge, Mass.-based early cancer detection startup, raised $257 million in Series B funding. Casdin Capital and Section 32 co-led, and were joined by Bain Capital Life Sciences, Brown Advisory, Driehaus Capital, Intermountain Ventures, Janus Henderson Investors, Lux Capital, Moore Strategic Ventures, Perceptive Advisors, Rock Springs Capital, Sands Capital, and T. Rowe Price. http://axios.link/FrVw

Traveloka, an Indonesian online travel portal, raised $250 million in fifth-round funding. Return backers include EV Growth. http://axios.link/yLYX

🚑 Praxis Precision Medicines, a Cambridge, Mass.-based biotech focused on CNS disorders, raised $110 million in Series C-1 funding. Eventide Asset Management led, and was joined by Avoro Capital, Surveyor Capital, Point72, Cormorant, Qatar Investment Authority, Irving Investors, Adage Capital Management, Verition Fund Management, Ample Plus Fund, and return backers Vida Ventures, Novo Holdings, Blackstone Life Sciences, and OCV Partners. http://axios.link/W9ca

🚑 Heal, a physician house call and telemedicine platform, raised $100 million at a $300 million valuation from Humana. http://axios.link/ZYXY

Remitly, a Seattle-based digital remittance company, raised $85 million at a $1.5 billion valuation led by insider PayU, the fintech investment arm of Naspers. Other return backers include DN Capital, Generation Investment Management, Owl Rock Capital, Princeville, Stripes, Threshold Ventures, and Top Tier Capital. http://axios.link/3JeK

Stack Overflow, a New York-based coding Q&A site, raised $85 million in Series E funding. GIC led, and was joined by Silver Lake Waterman and return backers Andreessen Horowitz, Index Ventures, Spark Capital, and USV. http://axios.link/Ct5d

🚑 Nura Bio, a San Francisco-based developer of neuroprotective drugs, raised $73 million in Series A funding. The Column Group led, and was joined by Samsara BioCapital and Euclidean Capital. http://axios.link/54iE

Tempo, a connected home gym startup, raised $60 million at a $250 million valuation co-led by Norwest Venture Partners and General Catalyst, per Bloomberg. http://axios.link/lMuX

Density, a San Francisco-based startup that measures indoor headcount, raised $51 million in Series C funding. Kleiner Perkins led, and was joined by 01 Advisors, Upfront Ventures, Founders Fund, Ludlow Ventures, Launch, DTA, Alex Rodriguez, LBC Ventures, Julia and Kevin Hartz, and Cyan and Scott Banister. http://axios.link/LL1u

Toppr, an Indian online learning startup, raised $46 million. Dubai’s Foundation Holdings led, and was joined by return backer Kaizen Private Equity. http://axios.link/YjWZ

🚑 BioTheryX, a San Diego-based biotech focused on restoring protein homeostasis, raised $35 million in Series D funding led by MSD Partners. http://axios.link/9yMg

🚑 Bright Peak Therapeutics, a biotech focused on chemically synthesizing and optimizing proteins, raised $35 million in Series A funding from Versant Ventures. http://axios.link/fKi8

🚑 Vico Therapeutics, a Dutch biotech focused on rare neurological disorders, raised €27 million in Series A funding. Life Science Partners and Kurma Partners co-led, and were joined by Pontifax, Droia Genetic Disease, Polaris Partners and Pureos Bioventures, and Idinvest Partners. http://axios.link/Of04

Ermetic, a cloud access risk security startup, raised $17.3 million in Series A funding. Accel led, and was joined by Glilot Capital Partners, Norwest Venture Partners, and Target Global. www.ermetic.com

Rangeforce, a Manassas, Va.-based cybersecurity training startup, raised $16 million in Series A funding. Energy Impact Partners led, and was joined by Paladin Capital Group and Cisco Investments. http://axios.link/JyNy

Aquicore, a Washington, D.C.-based platform for digitizing real estate operations, raised $14 million. Keyframe Capital led, and was joined by A/O Proptech and The Westly Group. www.aquicore.com

Cybellum, an Israeli automotive cybersecurity risk assessment startup, raised $12 million in Series A funding. RSBG Ventures led, and was joined by return backers Blumberg Capital and Target Global. www.cybellum.com

Whistic, a Salt Lake City-based vendor security platform, raised $12 million in Series A funding. Emergence Capital led, and was joined by Album VC. www.whistic.com

Polyarc, a Seattle-based AR game developer, raised $9 million in Series B funding. Hiro Capital led, and was joined by Vulcan Capital and Galaxy Interactive. www.polyarcgames.com

Paragon, a low-code app integration platform, raised $2.5 million in seed funding from YC, Village Global, Global Founders Capital, Soma Capital, and FundersClub. http://axios.link/Be6E

Private Equity Deals

BC Partners is sponsoring a take-private buyout of Italian machinery maker IMA, at around a $3.4 billion enterprise value, in partnership with IMA’s largest shareholder. http://axios.link/jbB4

Core Industrial Partners acquired and merged Incodema, an Ithaca, N.Y.-based precision sheet metal engineering firm, and Newchem, a Newark, N.Y.-based photo chemical etching manufacturer. www.incodema.com

Industry Dive, a Washington, D.C.-based business media company owned by Falfurrias Capital Partners, acquired the content-marketing studio of NewsCred, which has raised over $100 million from InterWest Partners, Dentsu, FTV Capital, Escalate Capital Partners, FirstMark Capital, Mayfield, and Greycroft. http://axios.link/gXjC

Morgan Stanley Infrastructure Partners will pay $2.3 billion to a 49.99% stake in fiber business Lightpath from Altice USA (NYSE: ATUS). http://axios.link/YK1m

Permira acquired a 60% stake in a chain of English language schools for kids in China and Indonesia from Switzerland's EF Education First, at a $1.5 billion enterprise value, per Reuters. http://axios.link/jpND

Validity Finance, a New York-based commercial litigation firm, raised $100 million in new funding from backers that include insider TowerBrook Capital Partners. www.validity-finance.com

Public Offerings

BigCommerce, an Austin, Texas-based outsourced builder of e-commerce sites, set IPO terms to 6.9 million shares at $18-$20. It would have a fully-diluted market value of $1.4 billion, were it to price in the middle, 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 General Catalyst (17.4% pre-IPO stake), Revolution Growth (12%), GGV Capital (5.2%), WestRiver Group (5.2%), and SVB (5%). http://axios.link/jdwE

Hut Group, a British health and beauty e-commerce company whose backers include BlackRock, hired banks for an IPO that could come later this year, per the FT. http://axios.link/XU5A

🚑 Inhibrx, a La Jolla, Calif.-based developer of biologic immunotherapeutics, refiled for a $100 million IPO. The company previously filed for a $75 million offering last June before withdrawing the registration in November. It plans to list on the Nasdaq (INBX). Backers include RA Capital. http://axios.link/Bu4Y

Liquidity Events

🚑 Recursion Pharma, a Salt Lake City-based biotech that’s raised $250 million in VC funding, agreed to buy Vium, a San Mateo, Calif.-based digital biomarkers developer that had raised $54 million from DCVC, Founders Fund, Lux Capital, AME Cloud Ventures, Dolby Family Ventures, and Future Shape. http://axios.link/798R

Zebra Technologies (Nasdaq: ZBRA) agreed to buy Reflexis Systems, a Dedham, Mass.-based provider of workforce management and communications solutions, from Great Hill Partners and Sageview Capital. www.reflixisinc.com

More M&A

Air Liquide (Paris: AIRP) will pay $515 million to buy the world’s largest oxygen production facility, located in South Africa, from Sasol (JSE: SOLJ). http://axios.link/hXRu

Occidental Petroleum (NYSE: OXY) is in talks to sell $4.5 billion worth of MENA energy assets to Indonesia’s PT Pertamina, per Bloomberg. http://axios.link/DF96

Fundraising

Adams Street Partners raised nearly $1.1 billion for a new private credit fund, per Bloomberg. http://axios.link/Ckbc

It's Personnel

Timur Akazhanov joined H.I.G. Capital as a managing director of its Advantage fund, which focuses on control deals for companies with between $25 million and $150 million in EBITDA. He previously was an industrials-focused managing director with The Blackstone Group. www.higcapital.com

Lilly Green joined Indianapolis-based private equity firm HKW as VP of deal generation. She previously was with Welsh, Carson, Anderson & Stowe. www.hkwinc.com

Nnamdi Iregbulem joined Lightspeed Venture Partners as a partner. He previously was with Iconiq Capital. www.lsvp.com

Gene Lockhart, former president and CEO of Mastercard, joined The Blackstone Group as a senior advisor. www.blackstone.com

Jerome Lorrain joined ATL Partners as an executive board member and non-exec chairman of portfolio company Pilot Freight Services. He previously was CEVA Logistics’ CEO for North America. www.atlpartners.com

UBS named Nestor Paz-Galindo as co-head of global M&A and Jason Auerbach as head of tech banking, per Bloomberg. http://axios.link/C7rE

Final Numbers: SPAC underwriters for 2020
Source: SPAC Research. Note: Bookrunner volume is based on the total amount of the offering sold, including over-allotment. Full credit is awarded to the sole bookrunner or split equally among joint bookrunners.
Dan Primack

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