Jul 9, 2019

Axios Pro Rata

By Dan Primack
Dan Primack
Top of the Morning

The private equity world was shocked yesterday by the sudden death of Alex Navab, the former top North American deal-maker at KKR who had launched his own eponymous firm earlier this year.

  • No word yet on the cause of death, although Navab was publicly known to have had a cardiac condition, having collapsed during a KKR investor meeting in 2013.
  • As Josh Kosman of the NY Post reports, there was industry speculation that the incident took Navab out of the running to eventually succeed KKR co-CEOs Henry Kravis and George Roberts. He left KKR in 2017.

Alex and I last met in April at the Milken Global Conference, where he was in great spirits and outwardly excited about the prospects for Navab Capital Partners, which he felt would do the sorts of deals that KKR and Blackstone had dominated when they were smaller. It also would have a significant philanthropic arm.

In short: He relished being an entrepreneur, after a career spent with other people's names on his business cards.

  • Fundraising never formally began, but Navab had been meeting LPs with hopes of eventually raising $3 billion.
  • He had recruited an experienced roster that includes Bob Berlin (ex-Baupost Group), Ram Jagannath (Carlyle), Annette Rodriguez (Warburg Pincus), Georgia Levenson Keohane (Pershing Square Foundation), and Michael Gaviser (KKR).
  • The firm's future is now TBD.

Statement from Navab Capital Partners:

“It is with deep sadness that we share the news of the untimely passing of our founder, Alexander ("Alex") Navab. He passed away unexpectedly on Sunday while on holiday with his family. Alex was an accomplished business leader and generous philanthropist who loved his family and played an important role in the professional and personal lives of many. Our thoughts and prayers are with his loved ones, and we ask that their privacy be respected at this very difficult time.”

Statement from Henry Kravis and George Roberts:

“We are heartbroken. A longtime member of the KKR family, Alex was an outstanding investor, leader, mentor and a friend to many. His contributions in business and philanthropy over his lifetime will forever remain part of his remarkable legacy. Our deepest condolences to his family who we know he cherished more than anything else.”

Alex is survived by his wife and three children. May he rest in peace.

The BFD

Illustration: Sarah Grillo/Axios

Virgin Galactic, the commercial space tourism company founded by Richard Branson, said it will go public via a reverse merger with Social Capital Hedosophia (NYSE: IPOA), a special purpose acquisition vehicle formed in 2017 by venture capitalist Chamath Palihapitiya.

  • Why it's the BFD: Because it would be billionaire boys' first commercial space startup to go public, and remains the only one focused exclusively on human travel.
  • Details: SCH will acquire a 49% stake in Virgin Galactic at an enterprise value of $1.5 billion. It will be paid in stock and cash, including $100 million in cash from Palihapitiya, who will replace Branson as chairman.
  • Backstory: Branson and Palihapitiya first discussed a possible deal after the British billionaire last year backed out of a $1 billion investment from Saudi Arabia's Public Investment Fund, due to the murder of Jamal Khashoggi. A source says the two hit it off famously — thus explaining the chairman swap — and that SCH was particularly intrigued by how Virgin Galactic is effectively its own OEM. We also hear that SCH had gotten fairly far along with other potential acquisition targets before focusing all its efforts on Virgin Galactic.
  • Bottom line: "Virgin Galactic's development of its suborbital space system has been marked by delays and major setbacks — including a fatal accident in 2014. This new deal could free the company up a bit financially, allowing it to focus efforts on getting its first paying customers to space. That said, human spaceflight is a risky business, so further delays could be on the horizon." — Miriam Kramer, Axios Space
Venture Capital Deals

🚑 BioNTech, a German immunotherapies startup that reportedly is prepping an IPO, raised $325 million in Series B funding. Fidelity led, and was joined by Redmile Group, Invus, MiraeAsset Financial Group, Platinum Asset Management, Jebsen Capital, Steam Athena Capital, BVCF Management and the Struengmann Family Office. http://axios.link/56NQ

🚑 IGM Biosciences, a Mountain View-based cancer drug developer, raised $102 million in Series C funding from Redmile Group, Janus Henderson Investors, Vivo Capital and Haldor Topsøe Holding. http://axios.link/bpuv

Signpost, a New York-based marketing cloud for local businesses, raised $52 million from HighBar Partners, BMO Bank and return backers Georgian Partners and Spark Capital. www.signpost.com

Sensibill, a Toronto-based receipt management startup, raised C$31.5 million in Series B funding. Radical Ventures led, and was joined by National Bank of Canada, Information Venture Partners and First Ascent Ventures. http://axios.link/I8Xi

15Five, a San Francisco-based provider of continuous performance management software, raised $30.7 million in Series B funding. Next47 led, and was joined by Matrix Partners, PointNine Capital, Launch fund, Newground Ventures, Bling Capital, Chaifetz Group and Origin Ventures. http://axios.link/SOSb

NeuroBlade, an Israeli developer of AI inference chips, raised $23 million in Series A funding. Marius Nacht led, and was joined by Intel Capital and return backers StageOne Ventures and Grove Ventures. http://axios.link/96kM

Sinequa, a Paris-based cognitive search and analytics startup, raised $23 million in Series B funding led by Jolt Capital. www.sinequa.com

Staffbase, a Germany-based mobile platform for internal employee communications, raised $23 million in Series C funding. Insight Partners led, and was joined by return backers e.ventures, Capnamic Ventures and Kizoo Technology Capital. http://axios.link/5KQ6

Jacobi, an investment portfolio design platform, raised $7.7 million from Illuminate Venture Partners, 8VC and Credit Ease Venture Fund. http://axios.link/fuFL

4th & Heart, a Los Angeles-based food brand whose products feature grass-fed ghee, raised $7.6 million in Series C funding. Harbinger Ventures led, and was joined by Cambridge Cos SPG, Blueberry Ventures, Boulder Food Group, Monogram Capital Partners, Finn Capital Partners and Everplus Capital. http://axios.link/BDhE

🚑 Blue Water Vaccines, a Cincinnati-based developer of a universal flu vaccine, raised $7 million in seed funding led by CincyTech. http://axios.link/7IMB

DriveNets, an Israeli networking software startup, raised $7 million in new Series A funding from C4 Ventures, Steve Luczo, Mark McLaughlin and John Thompson. The round total is now $117 million, including prior infusions from Bessemer Venture Partners and Pitango Growth. http://axios.link/EBXV

🚑 MedaRed, a San Francisco-based developer of therapeutics targeting fibrin, raised $6.5 million in seed funding from the Dementia Discovery Fund and Dolby Family Ventures. http://axios.link/6Kah

Aryballe Technologies, a French digital olfaction company, raised €6.2 million from IFF and Hyundai Motor Co. www.arybelle-technologies.com

🚑 Bond Vet, a New York-based operator of tech-enabled veterinary clinics, raised $6 million in seed funding from Talisman Capital Partners. http://axios.link/H2Zp

Perq, an Indianapolis-based marketing cloud, raised $6 million in Series A funding led by Poplar Ventures. http://axios.link/yLtM

Kaleidoscope Labs, a New York-based CBD capsule brand, raised $4 million in seed funding led by RRE Ventures. http://axios.link/oQTC

Private Equity Deals

Cinven agreed to invest in Jaggeer, a Morrisville, N.C.-based provider of procurement software for SMEs, at a valuation of around $1.5 billion. Existing shareholder Accel-KKR will maintain a stake. http://axios.link/jjFq

Frontier Capital invested in GovQA, a Chicago-based provider of public sector compliance software. www.govqa.com

🚑 Genstar Capital completed its acquisition of Advarra, a Columbia, Md.-based provider of compliance solutions for drug development, from Linden Capital Partners. http://axios.link/qU3w

Marlin Equity Partners acquired Clarus Commerce, a Rocky Hill, Conn.-based provider of loyalty programs for retailers. Sellers include Balance Point Capital, Trivergance, Falcon Investment Advisors and Landon Capital Partners. www.clarusmarketing.com

Partners Group agreed to buy a majority stake in German toy manufacturer Schleich from Ardian.

The Riverside Co. invested in Compana, a German provider of recruiting software for the temp staffing market.

Public Offerings

AssetMark Financial, a Concord, Calif.-based wealth management platform, set IPO terms to 12.5 million shares at $19-$21. It would have an initial market cap of $1.4 billion, were it to price in the middle, and plans to list on the NYSE (AMK) with JPMorgan as lead underwriter. The company reports $99 million of net income on $296 million in revenue for 2018, with shareholders including China’s Huatai International.

Liquidity Events

Capital One (NYS: COF) bought BlueTarp Financial, a Portland, Maine-based credit management service company that had raised $63 million in VC funding from firms like Long Ridge, Flybridge Capital Partners and Highland Capital Partners. http://axios.link/huGH

More M&A

ABB (Swiss: ABBN) will pay $470 million to Italy’s FIMER, in order to hand over its money-losing solar inverter business. http://axios.link/H53L

• Piper Jaffray (NYSE: PJC) is in advanced talks to buy investment bank Sandler O’Neill + Partners for $485 million in cash and stock, per the WSJ. Sellers would include The Carlyle Group and Kelso & Co. http://axios.link/IHt9

Republic, a New York-based equity crowdfunding platform, acquired SheWorx, a New York-based event series and networking platform for female entrepreneurs. http://axios.link/UjWC

Fundraising

Great Hill Partners, a Boston-based growth equity firm, raised $2.5 billion for its seventh fund. www.greathillpartners.com

Maniv Mobility, an Israeli VC firm, raised $100 million for its second fund. www.maniv.com

Prospect Hill Growth Partners, a Waltham, Mass.-based private equity firm focused on control investments for North American consumer and healthcare companies, raised $380 million for its second fund. www.phgrowth.com

It's Personnel

Bill Cooling joined TSG Consumer Partners as a New York-based managing director. He previously led consumer and retail M&A for Jefferies. www.tsgconsumer.com

Joe Heyer is joining Credit Suisse as head of auto tech investment banking. He previously was head of global biz dev for Ford Motor Co. http://axios.link/buO5

Richard McDerby joined the VC practice of law and consulting firm Manatt, Phelps & Phillips as a San Francisco-based partner. He previously co-founded his own firm. www.manatt.com

Suzanne Passalacqua joined Carrick Capital Partners as SVP of the private equity firm’s operations execution group. She previously co-founded 5Lights and, before that, was with DLJ and McKesson. www.carrickcapitalpartners.com

Chase Roberts joined Vertex Ventures as a principal, per his LinkedIn page. He previously was senior manager of strategic partnerships with Segment and, before that, spent nearly five years with Box. www.vertexventures.com

Elgin Thompson joined JMP Securities as a New York-based managing director, per his LinkedIn page. He previously pent five years as a tech investment banker with Digital Capital Advisors. www.jmpg.com

Genstar Capital promoted Sid Ramakrishnan to principal. www.genstarcap.com

🚑 Pharos Capital Group promoted Ryan Shelton to principal and Javaun Francis to associate. www.pharosfunds.com

Final Numbers
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Data: Federal Reserve Bank of St. Louis, FactSet; Chart: Axios Visuals

The TED spread, a measure of perceived credit risk in the U.S. economy, last week matched its lowest level in at least 40 years. Go deeper.

Dan Primack

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