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Cryptocurrency exchange Coinbase made big headlines yesterday, after a Recode report that it's closing in on a $500 million investment led by Tiger Global at an $8 billion valuation.
- Kia and I hear the report is accurate, and means that Coinbase would effectively quintuple its valuation from a round just 14 months ago. Huge validation for the company and the broader digital token market.
- But, as we've also learned, Coinbase's valuation increase could have been even larger, but instead was negatively affected by the 2018 price deterioration of cryptocurrencies like bitcoin.
Talk of a new Coinbase funding began in the first half of 2018, with sources telling us that firms like Sequoia Capital expressed interest at an expected valuation in the $6 billion to $8 billion range. But Coinbase wasn't enthusiastic. Not so much because it didn't like the suitors, but because it had an offer from Vy Capital at a $12 billion valuation. There also may have been other superior term sheets.
- At the same time, cryptocurrency prices were sagging. Bitcoin had experienced a massive drop between January and February, and never recovered. By the end of June, it was 67% off its highs the prior December.
- "Their performance right now is pretty tightly correlated to the price of bitcoin," an early Coinbase investor explains.
Vy Capital then pulled the offer, leading Coinbase to entertain the price it had earlier rebuffed (this time with Tiger).
- Sources says that the Tiger deal isn't finalized yet, but they expect it to be soon. The final close could occur later this month or in November.
- Reps from Coinbase, Vy Capital and Sequoia Capital all either declined or didn't return requests for comment.
• Toys story: The creditors that opted to liquidate Toys "R" Us, despite having takeover offers on the table, now say that they might revive the brand — including the possible opening of new retail locations. This comes after calling off an auction for the retailer's brand name and other IP assets.
If you're a fired Toys "R"" Us worker right now, this development must make you want to scream. Almost everyone, including company management and Toys' previous private equity sponsors, told the creditors that liquidation was the wrong move, both financially and morally. No clue why it took them so long to reach the same conclusion.
🎤 Pro Rata Podcast: Our latest episode focuses on the midterms, which are five weeks from yesterday, and the possibility of a "blue wave." Listen here
Aston Martin, the British sports car maker, listed in London today after pricing its IPO at £19 per share. That gave it an initial market cap of around $5.6 billion, but shares were off more than 6% in early trading.
- Why it's the BFD: Because many are viewing this as something of an investor referendum on both Brexit, particularly in terms of how it will affect supply chains, and on the looming prospect of U.S. auto tariffs on imports from Europe.
- Bottom line: "The listing marks the first initial public offering of a UK car-maker in more than three decades, since Jaguar was spun into an independent company under Margaret Thatcher’s government in 1984." — Bloomberg
Venture Capital Deals
• Hopper, a Montreal-based travel booking app, raised US$100 million in Series D funding. OMERS Ventures led, and was joined by Citi Ventures and return backers CDPQ, Accomplice, Brightspark Ventures, Investissement Québec, BDC Capital IT Venture Fund. http://axios.link/qBXn
• Talkdesk, a San Francisco-based “contact center as-a-service” company, raised $100 million in Series B funding. Viking Global led, and was joined by return backer DFJ. http://axios.link/whav
• Braze (fka AppBoy), a New York-based customer engagement SaaS platform, raised $80 million in Series E funding at an $850 million post-money valuation, led by Meritech Capital Partners. www.braze.com
• Heed, a New York-based engagement platform for sports leagues and clubs, raised $35 million led by SoftBank. http://axios.link/WflI
• Foursquare, a New York-based location platform that has pivoted its focus from consumers to brands, raised $25 million of an expected $33 million Series F round. Simon Ventures and Naver Corp. co-led, and were joined by return backer USV. http://axios.link/RDmz
• Ctera Networks, a New York-based provider of cloud storage services, raised $30 million in Series D funding. Red Dot Capital Partners led, and was joined by Singtel Innov8 and return backers Benchmark, Bessemer Venture Partners, Cisco, Venrock, Vintage Investment Partners and Viola Group. www.ctera.com
• First Circle, a Philippines-based SME lending platform, raised $26 million. Venturra Capital led, and was joined by Insignia Venture Partners, SIlverhorn Investment Advisors and Tryb Group. http://axios.link/hevB
• Brightwheel, a San Francisco-based provider of management and communication software for early education providers, raised $21 million in Series B funding. Bessemer Venture Partners led, and was joined by Chan Zuckerberg Initiative, Eniac Ventures, GGV Capital, Golden Venture Partners and Lowercase Capital. www.mybrightwheel.com
• Hysolate, a New York-based cybersecurity startup focused on software-defined endpoints, raised $18 million in Series B funding. Bessemer Venture Partners and Innovation Endeavors co-led, and were joined by NGP Capital. www.hysolate.com
• Cover, a San Francisco-based mobile-first insurance platform, raised $16 million in Series B funding. Tribe Capital led, and was joined by YC, Social Capital, Exor and Samsung Ventures. http://axios.link/NRJS
• Kooltra, a Toronto-based cloud platform for automating foreign exchange operations, raised C$6.5 million from Hyde Park Venture Partners, Round 13 Capital, Salesforce Ventures and Real Ventures. www.kooltra.com
• Lumina, a digital assets prime dealer and financial platform for family offices and hedge funds, raised $4 million in seed funding. Craft Ventures led, and was joined by Bain Capital Ventures and Dragonfly Capital Partners. www.lumina.app
• Tiny, a Palo Alto-based rich text editing platform, raised $4 million led by BlueRun Ventures. http://axios.link/Fi9P
• Zuoyebang, a Chinese online education company, is in talks to raise around $500 million from SoftBank Vision Fund, according to Bloomberg. http://axios.link/28UA
Private Equity Deals
• Altice Europe (AS: ATCA) has received private equity interest in buying between a 40% and 60% stake in its French fiber-to-the-home business, per Bloomberg. Suitors include Allianz, KKR, OMERS and Macquarie. http://axios.link/7Kyl
• Amware, a Lawrenceville, Ga.-based portfolio company of Rotunda Capital Partners, acquired the fulfillment services of Iron Mountain (NYSE: IRM). www.amwarelogistics.com
• Belmond (NYSE: BEL), a hotel and restaurant company with a market cap of around $1.8 billion, has received takeover interest from private equity firms like KSL, Blackstone and KKR, plus strategics like Hilton and Hyatt, per Bloomberg. First-round bids are due later this month. http://axios.link/Tgds
• Clayton, Dubilier & Rice completed its purchase of PowerTeam, a Plymouth, Mich.-based provider of maintenance and construction services to the U.S. utility industries, from Kelso & Co. www.powerteamservices.com
• Clearlake Capital agreed to buy ASP Unifrax, a Tonawanda, N.Y.-based maker of specialty fibers for industrial applications like emissions control, from American Securities. No financial terms were disclosed, but Forbes puts the price north of $1.7 billion, making it Clearlake’s largest-ever deal. http://axios.link/gMU5
• Climate Pros, a Glendale Heights, Ill.-based portfolio company of Saw Mill Capital, acquired J&D Refrigeration Service, a provider of refrigeration services to grocery retailers in northern California. www.climateprosinc.com
• Graycliff Partners acquired PebbleTec, a Scottsdale, Ariz.-based maker of swimming pool finishes. www.pebbletec.com
• Implus, a Durham, N.C.-based portfolio company of Berkshire Partners, acquired RockTape, a maker of kinesiology tape and other health products. www.implus.com
• Pestell Group, a Canadian portfolio company of Wind Point Partners, acquired BPV, a Byron Center, Mich.-based maker of paper-based animal litters and lawn and garden producers. www.pestell.com
• PSP Investments agreed to buy a majority stake in Forth Ports, a British port group, from Arcus. http://axios.link/EE4w
• Sign-Zone, a Brooklyn Center, Minn.-based portfolio company of Pfingsten Partners and HarbourVest, acquired Jansen Display Group, a Czech maker of promotional display hardware and signage systems. www.signzoneinc.com
• Vista Equity Partners agreed to buy Starhome Mach, a Luxembourg-based provider of telecom roaming solutions, from Fortissimo Capital. Starhome will be merged with existing Vista portfolio company Telarix. http://axios.link/dy4g
🚑 Allogene Therapeutics, a South San Francisco-based developer of CAR-T cancer therapies set IPO terms to 16 million shares at $16-$18. The pre-revenue company would have a fully-diluted market value of around $2.1 billion, were it to price in the middle, and will trade on the Nasdaq (ALLO) with Goldman Sachs as lead underwriter. Shareholders include TPG (25.1%), Pfizer (24.6%), Gilead Sciences (8.4%) and Vida Ventures (8.4%). http://axios.link/AeIb
🚑 Equillium, a La Jolla, Calif.-based developer of therapies for autoimmune disorders, set IPO terms to 4.7 million shares at $14-$16. The pre-revenue company would have a fully-diluted market value of $252 million, were it to price in the middle, and plans to trade on the Nasdaq (EQ) with Jefferies as lead underwriter. Shareholders include Biocon (18.8% stake). http://axios.link/zoT9
• Eurotorg, the largest food retailer in Belarus, is prepping a London IPO that could value the company north of $3 billion, per Reuters. http://axios.link/lO2K
• Tencent Music, a Chinese music streaming service, filed for an IPO that is expected to seek to raise around $1 billion. http://axios.link/6TRD
⛽ Avista Capital Partners is considering a sale of Laredo Energy VI, a Houston-based natural gas exploration company in the Eagle Ford Shale, is considering a sale that could value the company at upwards of $300 million, per Bloomberg. http://axios.link/ZMB6
• PWP Growth Equity sold BuildASign, an Austin, Texas-based provider of online custom printing services, to Cimpress (Nasdaq: CMPR) for around $280 million. http://axios.link/Ryvq
• Walmart (NYSE: WMT) acquired Eloqqui, a Columbus, Ohio-based e-commerce company focused on plus-sized women’s fashion, for a reported $100 million. Eloqqui had raised over $40 million from Beringea, Greycroft, Cherry Tree Investments, Acton Capital, Wildcat Capital, Daher Capital and Female Founders Fund. http://axios.link/bJIR
⛽ Exxon Mobil (NYSE: XOM) is considering the sale of many of its U.S. Gulf of Mexico assets, per Reuters. http://axios.link/B2Wi
• Google (Nasdaq: GOOG) acquired Onward, a New York-based provider of customer service and sales workflow automation tools. http://axios.link/4HKR
• Honda Motor Co (Tokyo: 7267) plans is investing $750 million into General Motors' Cruise self-driving car unit, with plans to invest another $2 billion over the next 12 years. http://axios.link/nVfa
⛽ Marathon Oil (NYSE: MRO) is seeking a buyer for its British North Sea oil and gas fields, which could fetch around $200 million, per Reuters. http://axios.link/TLKX
⛽ Saudi International Petrochemical agreed to buy Sahara Petrochemical in an all-stock deal valued at around $2.2 billion. http://axios.link/ezqn
• TimesSquare Capital Management is publicly pushing for a sale of RenaissanceRe (NYSE: RNR), in which it holds around a 2% stake. http://axios.link/YjWg
• Balderton Capital raised $145 million for a fund that will buy equity stakes from early shareholders in European-founded tech startups.
• The Blackstone Group is pre-marketing its second fund for buying stakes in other alternative asset managers, with a target of $3.3 billion, per Bloomberg. http://axios.link/SxMN
• Cinven may seek to raise upwards of €8 billion for its seventh flagship buyout fund, according to Reuters. http://axios.link/TXnv
• Initialized Capital raised $225 million for its fourth early-stage VC fund.
• Rajeev Amara is stepping down as a managing director with Golden Gate Capital, in order to launch a new firm called Arcline Investment Management, per Fortune. Also joining are Golden Gate principal Shyam Ravindran and vice president Alex Iannaccone.
• Matt Carbonara has joined Citi Ventures as a managing director, per his LinkedIn profile. He previously was with Cisco Investments.
• David Ulevitch joined Andreessen Horowitz as a general partner. He previously led security for Cisco, which he joined when it bought his company, OpenDNS, for $635 million in 2016. http://axios.link/1jDm
• Jun Wu stepped down as co-head of Asia-Pacific healthcare banking for JPMorgan, in order to lead Asian healthcare coverage for Jefferies, per Bloomberg. http://axios.link/ZlO8
More from PitchBook:
- There are still arguments in favor of club deals — including a 2016 study that showed club buyouts outperform sole sponsor buyouts — but they've come under pressure from LPs who believe they're often paying big fees for free riders. Plus, there was lots of media scrutiny prompted by the Dahl collusion case.
- Not only are the number of club buyouts declining, but so are the number of sponsors within the ones still getting done: "In 2000, 38.5% of club deals involved three or more sponsors; by 2018, that figure has fallen to 27.1%."