Axios Pro Rata

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February 16, 2022

Top of the Morning

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Illustration: Aïda Amer/Axios

What's old is new again. Even if it shouldn't be.

Driving the news: Bolt Financial, led by "Silicon Valley mob" warrior Ryan Breslow, has begun offering loans to employees who want to buy their vested stock options.

  • The laudable goal is to start the capital gains tax clock, so that employees can keep more cash after a liquidity event.
  • The problem is that it could end up financially maiming the same people that Bolt is seeking to help.

Key is the price at which employees can ultimately sell their shares.

  • Bolt was most recently valued by venture capitalists at $14 billion, but employee stock options are priced lower.
  • If the company gets acquired at a higher per-share price than what employees paid, then they're in the clear and everyone smiles. Same if Bolt goes public and the share price is higher once lockups expire.
  • But if the per share price is lower, then employees owe the company money. Possibly a lot of money. And, in a worst case scenario, they owe that money to unsympathetic creditors instead of to Bolt.
  • It's the sort of thing that could get worked out when it only applies to a handful of C-suiters, but becomes extraordinarily troublesome at scale.

It's been tried before, most notably during the dotcom boom. Several VCs who were around during that era, including as operators, have tweeted at Breslow, asking him to reconsider.

  • Some have linked to this 2014 Medium post by Ted Wang, a onetime startup lawyer who's now a partner with Cowboy Ventures.
  • One VC tells me: "It comes up one or two times per year and is usually quickly killed by experienced board members, investors, CFOs and legal counsel who understand the consequences."
  • Also worth noting that Sarbanes-Oxley banned such loans by publicly-traded companies.

There are other ways for startups to help employees keep more of what they've earned. Offer the option of cash bonuses, RSUs or straight stock grants. And extend the option exercise window out 10 years (seriously, do this right now... no excuses).

  • Those don't resolve the capital gains issue — presuming there's still a capital gains differential in the future — but they also don't make employees literally indebted to their employer.

Breslow tweets that Bolt provided a financial advice stipend for employees considering this option, and that over half of employees still took the loans.

  • I don't usually root for or against startups, but I'm rooting for Bolt; because failure could crush these folks.

The bottom line: Sometimes the mob is right.


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Illustration: Rae Cook/Axios

Flutterwave, a Lagos-based digital payments platform, raised $250 million in Series D funding led by B Capital Group at a valuation north of $3 billion.

Why it's the BFD: This makes Flutterwave the most valuable startup in Africa, topping OPay and Chipper Cash. It also comes amid a funding boom for fintechs operating in countries like Nigeria, where over half the population is unbanked.

Other investors include Alta Park Capital, Whale Rock, Lux Capital and insiders Avenir Growth, Tiger Global, Glynn Capital, Green Visor and Salesforce Ventures.

The bottom line: "While Nigeria's banks allow for easy digital payments, more than 90% of transactions are still performed in cash, providing a huge opportunity for new entrants. Investors are betting on growth despite Nigeria's moribund economy, rampant joblessness and soaring inflation." — Neil Munshi, FT

Venture Capital Deals

• Uniphore, a Palo Alto-based conversational automation company, raised $400m in Series E funding at a valuation north of $2.5b. NEA led, and was joined by insiders like March Capital.

Epirus, an L.A.-based developer of directed energy systems and power management solutions, raised $200m in Series C funding at a $1.35b valuation. T. Rowe Price led, and was joined by 8VC, Bedrock, Broom Ventures, EPIQ Capital Group, Gaingels, General Dynamics Land Systems, I Squared Capital, Moore Strategic Ventures, Parkwood, Piedmont Capital Investments, Red Cell Partners and StepStone Group.

Genesis, a low-code/no-code app platform for financial markets, raised $200m. Tiger Global led, and was joined by Insight Partners, Accel, GV, Illuminate Financial, Tribeca Early Stage Partners and Salesforce Ventures.

Spotter, an LA-based monetization platform for creator back catalogs, raised $200m in Series D funding at a $1.7b valuation led by SoftBank.

Employment Hero, an Australian HR platform, raised A$181m at an A$1.25b valuation. Seek Investments led, and was joined by OneVentures and AirTree Ventures.

Funding Societies, a Singapore-based digital lender, raised $144m in Series C+ funding. SoftBank led, and was joined by VNG Corp., Rapyd Ventures, EDBI, Indies Capital, K3 Ventures, Ascend Vietnam Ventures and insiders Sequoia Capital India and BRI Ventures. It also secured $150m in credit lines.

🚑 Third Harmonic Bio, a Cambridge, Mass.-based developer of treatments for severe hives, raised $105m in Series B funding. General Atlantic and insider BVF Partners co-led, and were joined by Boxer Capital, RA Capital, RTW, Deep Track Capital, Ajax Health/Zeus and Commodore Capital.

🚑 Electra Therapeutics, a South S.F.-based developer of antibodies that target signal regulatory proteins, raised $84m in Series B funding. Westlake Village BioPartners and OrbiMed co-led, and were joined by Redmile Group, Cormorant, Cowen Healthcare Investments, RA Capital, and New Leaf Venture Partners.

Appboxxo, a Singapore-based startup that helps developers turn apps into superapps, raised $7m in Series A funding. RTP Global led, and was joined by Antler, 500 Southeast Asia, SciFi VC and Gradient Ventures.

CrowdForce, a Nigerian agency banking startup, raised $3.6m in equity and debt funding led by Aruwa Capital Management.

🚑 Ro, a DTC healthcare company, raised $150m at around a $7b valuation. ShawSpring Partners led, and was joined by fellow insiders General Catalyst, FirstMark Capital, TQ Ventures, SignalFire, BoxGroup, The Chernin Group, Initialized Capital, Altimeter Capital, Baupost Group and Seven Seven Six.

ViaBill, a Danish provider of BNPL services for physical retailers, raised $120m in equity and debt funding led by Fasanara Capital.

Evolve, a Denver-based vacation rentals startup, raised $100m led by Durable Capital Partners.

WSC Sports, an Israeli sports video startup, raised $100m in Series D funding. ION Crossover Partners led, and was joined by Intel Capital, O.G. Tech and Detroit Venture Partners.

🚑 Memora Health, an S.F.-based healthcare patient communications software company, raised $40m led by Transformation Capital.

Tropic, a New York-based SaaS software procurement platform, raised $40m in Series B funding led by Insight Partners.

Cann, a cannabis-infused beverage brand, raised $27m in Series A funding led by Imaginary Ventures.

Raydiant, an S.F.-based media experience management platform for physical retailers, raised $30m in Series B funding co-led by Atomic VC and 8VC.

Vivvi, a New York-based on-site child care startup, raised $15m in Series B funding led by Tribecca Venture Partners.

🚑 PatientFi, an Irvine, Calif.-based patient financing startup, raised $15m from Patriot Financial Partners and Curgl Collective.

Eyrus, a Washington, D.C.-based construction workforce management startup, raised $12m in Series A funding. Spring Mountain Capital led, and was joined by Autodesk and insiders Motley Fool Ventures and Fuel VC.

Tilled, a Boulder, Colo.-based "PayFac-as-a-service" provider, raised $11m in new Series A funding. G Squared led, and was joined by Peterson Ventures and Abstract Ventures.

• Haul, a Cupertino, Calif.-based platform that connects truckers with assignments, raised $10m led by B Capital Group., an Israeli permissioning startup, raised $6m in seed funding. NFX led, and was joined by Rainfall Ventures.

Passthrough, a New York-based SaaS for fund subscription documents, raised $5m. Positive Sum led, and was joined by Okta Ventures, Great Oaks VC and Company Ventures.

Zavvy, a German employee enablement platform, raised $4m in seed funding. La Famiglia led, and was joined by Emerge Education and Picus Capital.

SiteKick, a Minneapolis-based commercial real estate construction site-monitoring startup, raised $1.2m in seed funding. Great North Ventures led, and was joined by Rice Park Capital Management.

Payhawk, a British corporate spend management startup, is raising $100m at a $1b valuation led by Lightspeed Venture Partners, per The Information.

ShopBack, a Singapore-based e-c0mmerce rewards app backed by such firms as East Ventures and Temasek, hired Morgan Stanley to help it raise $150m at around a $1b valuation, per Bloomberg.

Private Equity Deals

American Industrial Partners bought Strike, a Texas-based pipeline, facilities and energy infrastructure solutions provider.

🚑 Bain Capital and Hellman & Friedman completed their $17b buyout of Athenahealth, a Watertown, Mass.-based EHR and medical billing software provider, from Veritas Capital and Elliott Management (both of which retained minority stakes).

Blackstone led more than a $100m secondary investment at a $2b valuation in Cloudinary, a Santa Clara, Calif.-based media experience cloud company.

• Blackstone agreed to buy Preferred Apartment Communities (NYSE: APTS) for $5.8b, or $25 per share (40% premium to APTS price before media reports of a possible deal).

Parthenon Capital reinvested in CardWorks, an Austin, Texas-based consumer finance and payments company.

🚑 Probo Medical, a Fishers, Ind.-based portfolio company of Varsity Healthcare, bought Remetronix, a Port St. Lucie, Fla.-based installer and uninstaller of medical equipment.

The Riverside Company invested in PaleoWest, a Phoenix-based cultural resource management consultancy.

SMC Infrastructure Partners bought Miami-based paving contractor General Asphalt, with Turning Rock Partners also participating via a $25m investment.

TruArc Partners invested in New Directions, a Toronto-based provider of natural ingredients to the cosmetics, health and personal care markets.

🚑 Viscogliosi Brothers invested $55m in Companion Spine, a provider of diagnostics and devices for treating degenerative disc disease and lumbar spinal stenosis.

SPAC Stuff

Billtrust, a Lawrenceville, N.J.-based provider payment cycle management software, acquired Order2Cash, an Amsterdam-based electronic invoicing and payments company. VC-backed Billtrust recently agreed to go public via a SPAC called South Mountain Merger Corp. (Nasdaq: SMMC).

Liquidity Events

Brookfield Asset Management is seeking a buyer for Student Roost, a British student housing provider that could fetch more than £3.5b, per Bloomberg.

🍕 Levine Leichtman Capital Partners sold Newport Beach, Calif.-based restaurant chain Mountain Mike’s Pizza to the company’s co-CEOs.

• Masimo (Nasdaq: MASI) agreed to buy Sound United, a Carlsbad, Calif.-based maker of audio products under such brands as Denon and Marantz, from Charlesbank Capital Partners.

• Meta (Nasdaq: FB) completed its $1b purchase of enterprise customer service SaaS provider Kustomer, following EU antitrust approval. Kustomer had raised $173 million in VC funding, most recently in late 2019 at a $710 million valuation, from firms like Redpoint Ventures, Social Leverage, Canaan Partners, Battery Ventures, Tiger Global Management and Coatue.

More M&A

Illustration of a Juul sticking out of a carton of Marlboro cigarettes
Illustration:Aïda Amer/Axios

An FTC judge dismissed the agency’s efforts to force cigarette maker Altria (NYSE: MO) to sell its 35% stake in vaping company Juul.

Akamai (Nasdaq: AKAM) acquired Linode, a Philadelphia-based infrastructure-as-a-service provider, for around $900m.

BBVA (Madrid: BBVA) is investing $300m in Brazilian neobank Neon.

Cedar Fair (NYSE: FUN) rejected a takeover offer from fellow theme park operator SeaWorld (NYSE: SEAS) that would have given Cedar Fair a $3.4 billion equity value.

Deutsche Bahn, Germany's national railroad, has begin work on a possible sale of float of its DB Schenker logistics unit, which could be worth around €20b, per Bloomberg.

🚑 Equillium (Nasdaq: EQ) acquired Bioniz Therapeutics, an Irvine, Calif.-based developer of cytokine inhibitors, for up to $329m (including $21.5m upfront in stock).

Fireblocks, a New York-based crypto custodian valued by VCs at $8b, agreed to buy stablecoin-focused First Digital for around $100m in cash and stock.


Fifth Wall, a real estate tech VC firm, raised €140m for its first European fund.

Grand Ventures of Michigan is raising $100m for its second fund, per an SEC filing.

🚑 Hildred Capital Management, a New York-based healthcare PE firm, raised $362.5m for its first institutional fund.

Stronghold, an Oakland-based payments infrastructure company, launched a $100m VC arm.

Twelve Below, a seed firm led by Taylor Greene (ex-Lerer Hippeau), raised $50m for its debut fund.

It's Personnel

Brent Blake joined Charlotte-based Task Force X Capital as a venture partner. He previously was with Venture Back Office.

Neil Chatterjee, former chair of the Federal Energy Regulatory Commission, joined KKR as an advisor to its infrastructure team.

Neil Cunningham will step down as president and CEO of PSP Investments in March 2023.

Sally Cunningham joined One Rock Capital Partners as an operating partner. She previously was CFO of Synalloy Corp. www.onerockcapital.cokm

Jennifer Davis is stepping down as head of retail investment banking at Goldman Sachs, to join Bain Capital, per Bloomberg.

🚑 Lisa Dombro joined Revelstoke Capital Partners as an operating partner. She previously was chief experience and innovation officer at Agilon Health.

Justin Slaughter joined crypto-focused VC firm Paradigm as policy director. He previously was with the SEC.

Sam Todd joined Thoma Bravo as a VP. He previously was with Spectrum Equity.

Vestar Capital Partners promoted Kimberly Lu to VP.

Final Numbers

Data: U.S. Bureau of Labor Statistics via FactSet; Chart: Axios Visuals
Data: U.S. Bureau of Labor Statistics via FactSet; Chart: Axios Visuals

Go deeper: Wholesale prices on the rise

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