Mar 1, 2019

Axios Pro Rata

By Dan Primack
Dan Primack

Hello, readers! Dan is off today, so I'm here to take you through Friday's news before we all enjoy the weekend. Here we go...

Top of the Morning

Illustration: Lazaro Gamio/Axios

🚨 Breaking news! Lyft just filed its S-1, finally letting all of us get a full look at its business and financials. Check for the latest.

But in the meantime, something interesting from the pink ride-hailing company and rival Uber’s IPO plans emerged in the Wall Street Journal yesterday: both have plans to help some drivers purchase IPO stock.

  • Lyft: Drivers that have completed 10,000 rides will get $1,000 that can be kept or saved to purchase IPO shares. Those who have hit the 20,000 ride mark will get $10,000 in cash or that equivalent amount of stock.
  • Uber: Drivers will get either a cash bonus or the option to use the money to purchase shares at the IPO price, according to the WSJ. This will based on how long the driver has worked for the company and number of trips. Eligible rivers outside the U.S. would still get the cash bonus.
  • This isn’t surprising—Uber, for its part, has been looking into giving its drivers equity for years, but faced regulatory roadblocks. Last year, it told the SEC it would support rule changes that would allow companies like itself, Lyft, and Airbnb to give out stock to non-employee drivers and hosts. Airbnb also expressed support.
  • And yes… the obvious question is, why aren’t Uber and Lyft drivers employees to begin with — a question drivers, their lawyers, judges, and many others have asked for several years now.

Speaking of Uber… The company is said to be in advanced talks to buy Mideast rival Careem, according to Bloomberg. The talks have been going on for at least six months at this point.

  • While the deal could be quite further along and nearly done, it could still add some complications and delays to Uber’s IPO plans if anything unexpected comes up. The latter is expected to go public later this spring.

Caldbeck v. Teo: About a month ago, ex-Binary Capital partner Justin Caldbeck (who resigned in 2017 after several allegations of sexual harassment from female entrepreneurs emerged), filed a lawsuit against his former partner Jonathan Teo.

  • Caldbeck's main claims are that Teo abandoned (and took property from) the VC firm instead of working to salvage it, and that he misappropriated funds from a startup in which Binary invested, among other shenanigans.
  • While a lot of folks focused on the former, the latter is much more notable. In short, Teo apparently used funds from Trillex (formerly called Binary Financial), where he became an employee, to purchases fancy watches and other luxuries. Trillex's founder and CEO, Harry Yeh was also a friend of Teo's, but allegedly fired him after all this.
  • Even more alarming is something the lawsuit briefly mentions, but that I've heard from sources: Teo apparently marked down Binary's investment in Trillex to near nothing, misrepresenting how well the company was doing.
  • A lawyer for Teo called the lawsuit "appalling" in a statement to Forbes.

📰 Elsewhere on Axios: No podcast from yesterday, so instead I recommend you peruse my colleagues' Markets newsletter from this morning — and sign up!


Photo: Justin Sullivan/Getty Images

Gap Inc. (NYSE: GPS) announced yesterday that it will split itself into two companies — Old Navy as a standalone, and Gap, Banana Republic, Athleta, and its other brands together as a separate business. (It’s yet to be named, though the obvious name would be...Gap.)

  • Why it’s the BFD: This could finally make shareholders happy. Gap Inc. has been struggling to balance its successful Old Navy retailer (alone, it has $8 billion in annual revenue, nearly as much as the others combined) with the rest of its brands, including namesake Gap, which has struggled in recent years.
  • Bonus: Old Navy CEO Sonia Syngal will become an addition to the still-small number of women leading Fortune 500 companies.
  • The bottom line: “Separating Old Navy to a standalone company is what we have argued for over the past few years. Doing so allows the market to properly value Old Navy for its high margins and strong cash flows.” — Jefferies analyst Randal Konik, Reuters
Venture Capital Deals

Chehaoduo Group, a Chinese car trading platform, is raising $1.5 billion in funding from SoftBank's Vision Fund, valuing it at more than $9 billion, according to Bloomberg.

Danke Apartment, a Chinese startup building dorm-like housing, raised $500 million in Series C funding led by Tiger Global Management and Ant Financial.

Medallia, a San Mateo, Calif.-based customer experience management platform, is railing up to $70 million in Series F funding at a $2.4 billion valuation, according to a Delaware filing obtained by TechCrunch.

Mirakl, a Paris-based e-commerce software company, has raised $70 million in funding led by Bain Capital, with 83North, Felix Capital and Elaia Partners also participating.

Contrast Security, a Los Altos, Calif.-based cybersecurity company, has raised $65 million in Series D funding led by Warburg Pincus, with Battery Ventures, General Catalyst,M12, AXA Venture Partners and Acero Capital also participating.

Jet Edge International, a Van Nuys, Calif.-based aviation services platform, has raised $60 million in funding led by Solace Capital Partners.

🚙 Ola Electric Mobility, an electric car deployment company backed by Indian ride-hailing company Ola, has raised 4 billion rupees ($56.4 million) in new funding round led by several of Ola’s early investors including Tiger Global and Matrix India.

Ionic Security, an Atlanta, Ga.-based data security platform, has raised $40 million in Series E funding led by JPMorgan, with Google, Kleiner Perkins, GV, Icon Ventures, Meritech Capital, TechOperators and Ten Eleven Ventures also participating.

🚙 Zūm, a Redwood City, Calif.-based startup providing transportation for children, has raised $40 million in Series C funding led by BMW i Ventures, with NGP Capital, Volvo Cars Tech Fund, Clearvision, Draper Nexus, Sequoia Capital and Spark Capital also participating. .

ClassDojo, a San Francisco-based startup providing communication apps between teachers and parents, has raised $35 million in Series C funding led by GSV and SignalFire, with General Catalyst and Uncork Capital also participating.

Bandier, a New York-based activewear retailer, has raised $34.4 million in funding from C Ventures and Eurazeo Brands, among others.

Cloud Elements, a Denver-based startup providing tools to businesses for software integration, has raised $25 million in Series C funding led by Mercato Partners, with Access Ventures, American Express Ventures, Grotech Ventures, Harbert Growth Partners, Rally Ventures, and Upslope Ventures also participating.

SpyCloud, an Austin, Texas-based breach detection service, has raised $21 million in Series B funding led by M12, with Altos Ventures, Silverton Partners and March Capital Partners also participating.

Ceros, a New York-based interactive content platform for marketers, has raised $14 million in Series C funding led by Greenspring Associates, with Grotech Ventures, CNF Investments, Sigma Prime Ventures, StarVest Partners, Greycroft andSilicon Valley Bank also participating.

🚑 StemoniX Inc, a Minnesota-based biotech company, has secured $14.4 million in Series B funding led by Brightstone Venture Capital, with Crescent Ridge Partners, SEED San Diego, Alumni Ventures Group, Keshif Ventures and Mayo Clinic also participating.

Odaseva, a cloud data management platform for businesses, has raised $11.7 million in Series A funding led by Partech, with Salesforce Ventures and Serena also participating.

VNDLY, a Cincinnati, Oh.-based work management system for gig economy workers, has raised $11 million in Series A funding led by Battery Ventures and Hyde Park Venture Partners, with EPIC Ventures, Bowery Capital and the Cintrifuse Syndicate Fund also participating.

🚑 Sight Diagnostics, an Israel-based provider of diagnostic testing, has raised $10 million in funding from Longliv Ventures.

Datical, an Austin-based maker of database automation software, has raised $10 million in Series C funding led by River Cities Capital Funds, with S3 Ventures and Mercury Fund also participating.

🚑 Rightway Healthcare, a New York-based enterprise healthcare platform, has raised $8 million in Series A funding from undisclosed investors.

Little Spoon, a New York-based direct-to-consumer organic baby food company, has raised $7 million in funding from Vaultier7, Kairos,Interplay Ventures, and SoGal Ventures, among others.

TeamApt, a Nigeria-based digital banking company, has raised $5.5 million in Series A funding led by Quantum Capital Partners.

ShiftOne, an Arlington, Va.-based restaurant employee retention app, has raised $2.6 million in funding led by the Entrepreneurs Fund, with Bowery Capital and NRD Capital also participating.

🚑 Ikonopedia, a Richardson, Texas-based company building radiology technology to diagnose breast diseases, has raised $2 million in Series C funding from investors such as Texas Women Ventures Capital.

Coin Metrics, a Cambridge, Mass.-based provider of crypto-asset analysis, has raised $1.9 million in seed funding led by Castle Island Ventures, with Fidelity Investments, Highland Capital Partners and Dragonfly Capital also participating.

Beanfields, a Los Angeles-based maker of healthy chips, has secured an undisclosed amount of Series B funding led by PowerPlant Ventures with NRV and Western Technology Investment also participating.

Private Equity Deals

KnowBe4, a Tampa Bay, Fla.-based provider of security awareness training and simulated phishing platform, is raising an undisclosed amount of funding from KKR, with participation from Ten Eleven Ventures, valuing the company at over $800 million.

Argonaut Private Equity has invested in Mammoth Carbon Products, a Houston-based pipeline distribution company.

Wynnchurch Capital has closed its buy of Mid-America Fittings, an Overland Park, Kansas-based maker of industrial fittings and valves.

Platinum Equity has acquired the water care business of Lonza, an Alpharetta, Ga.-based water treatment solutions, in a transaction valued at approximately $630 million.

The Carlyle Group has bought a 9% stake in India’s SBI Life Insurance from French bank BNP Paribas in a deal that could be worth about $653 million, according to Reuters.

Public Offerings

Global Switch, a U.K.-based data center operator, has chosen CLSA, Goldman Sachs and JPMorgan as sponsors for its Hong Kong IPO of up to $1 billion, according to Reuters.

ESR Cayman Limited, a logistics real estate developer backed by private equity firm Warburg Pincus, has filed for a Hong Kong IPO to raise $1 billion to $1.5 billion, according to Reuters.

Liquidity Events

KKR and Tencent Music Entertainment Group are exploring rival bids for up to half of Vivendi’s Universal Music division, a deal that could be worth up to 20 billion euros ($23 billion), according to Reuters.

More M&A

🚙, a Mountain View, Calif.-based self-driving car startup, is reportedly looking for a buyer, according to The Information.

Future PLC has acquired Mobile Nations, a U.S.-based publisher of gadget-focused publications such as Android Central and TechnoBuffalo, for a total of $120 million, including cash, stock and future payments based on business milestones.


New Enterprise Associates (better known as NEA) is raising $3.6 billion for its seventeenth fund, according to an SEC filing.

Siris Capital Group has closed $3.45 billion for its fourth fund, beating its $3 billion target.

Boulder Food Group, a Boulder and Los Angeles-based venture capital firm focused on food, has raised $100 million for its second fund.

Human Ventures, a New York-based startup studio, has raised $50 million for its first venture capital fund.

It's Personnel

Genstar Capital has promoted David Golde to managing director, and Ben Marshall and David Graham to director.

Excellere Partners, a Denver-based private equity firm, has promoted Mike Vieth to principal and Nick Coleman and Matt Halverson to vice president. It has also hired Tyler Ashley as origination associate.

Final Numbers
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Data: Haver and IIF; Chart: Axios Visuals
Dan Primack