Mar 8, 2019

Axios Pro Rata

Happy Friday, readers! I'm back (again) today to take you through the news from cloudy San Francisco. And since it's International Women's Day, I want to give special shout-out to my fellow women journalists out there covering business and technology! 💪

Situational awareness: Sen. Elizabeth Warren unveiled a proposal to break up Facebook, Google, and Amazon as part of her presidential campaign.

Top of the Morning

Illustration: Aïda Amer/Axios

Since Google’s IPO in 2004, some Silicon Valley entrepreneurs have sought ways to retain control of their companies via dual-class stock with super-voting rights, including at the earliest stages of startups.

  • Yes, but: It’s still only found in a minority of startups, and founders often end up using alternative routes to retain control. Super-voting stock, several lawyers tell Axios, is most useful once a company is public.
  • Lawyers said only between 10% and 20% of their clients use these structures.
  • Still, some early-stage startup founders do opt for one of these alternative structures. "When I raise money, my question to VCs is 'how are you gonna screw me?'' one founder told Axios, admitting his decision stems from a lack of trust that investors' incentives will be in line with his own.
  • Read my full story here.

Lyft bull case: Unsurprisingly, Lyft's S-1 filing a week ago confirmed it's still losing a lot of money, prompting a lot of skeptics to sound the alarm about its prospects. But Lead Edge Capital partner Mitchell Green, whose firm invested in Uber, is a believer in the pink ride-hailing company's IPO. "The stock is gonna go berserk," he predicts.

  • It's all about growth, according to him, adding that the markets don't care about losses as long as there's sustained growth. "The reason Snap’s price got cut from the IPO price has nothing to with losses, it's because it stopped growing."
  • He points to Lyft's rider cohort numbers (in the S-1) which show that customers take more rides over time.
  • Still, he does question why Lyft is spending so much on sales and marketing, especially on existing drivers and riders (in the form of discounts and incentives).

VC bits: Brud, the Los Angeles based company behind virtual influencer Lil Miquela, has closed its rumored $20 million round, according to an SEC filing. Partners from Spark Capital and Sequoia Capital are listed on the board, per funding rumors, as well as Jeff Berman of Magnet Companies and Village Global.

  • Unrelatedly, The Information reported yesterday that organization (and Netflix) sensation Marie Kondo's company is in the market for new funding after raising a small round last year led by Sequoia (which a source confirms to Axios). And what exactly would make her company interesting to VCs, you ask? "Influencers have distribution. Distribution can sell products," one investor familiar with her company tells me.

📰 Elsewhere on Axios: Dan will be back with the Pro Rata podcast on Monday! But in the meantime, reminder to check out my colleagues' daily Markets newsletter for more business news.

The BFD

Photo: Joe Robbins/Getty Images

The New York Yankees have reached an agreement to repurchase the Yankees Entertainment Sports (YES) network from Disney at a price of $3.4 billion in a deal that is expected to close on Friday, FOX Business and other outlets have reported.

The Yankees will be the majority owner of the YES network, with Amazon and Sinclair as the next largest shareholders, and others like Blackstone also joining.

  • Why it's the BFD: The $3.4 billion valuation of YES is higher than the value of most sports franchises, according to FOX.
  • The bottom line: "YES is considered the crown jewel of the 22 RSNs, the impetus for its early sale that allowed the Yankees to leverage the team's nationally recognized brand to Amazon and Sinclair." — FOX Business
Venture Capital Deals

Betterworks, a Redwood City, Calif.-based enterprise HR software company, has raised $27 million in additional Series B funding led by Emergence Capital and Kleiner Perkins. www.betterworks.com

🚑 Ritual, a Los Angeles-based vitamin subscription company focused on women, has raised $25 million in Series B funding from existing investors Founders Fund, Norwest Venture Partners, and Forerunner Ventures. http://axios.link/tP5s

Transposit, a San Francisco-based provider of an API composition platform, has raised $12.2 million in Series A funding led by Sutter Hill Ventures, with SignalFire and Unusual Ventures also participating. www.transposit.com

PolyAI, a London-based maker of conversational software for customer support centers, has raised $12 million in Series A funding led by Point72 Ventures, with participation from Sands Capital Ventures, Amadeus Capital Partners, Passion Capital, and Entrepreneur First. http://axios.link/dpap

Knock, a Seattle-based provider of customer relationship management software for property managers, has raised $10 million in Series A funding led by Madrona Venture Group. www.knockcrm.com

Hadean, a London-based distributed computing platform, has raised £7 million ($9.1 million) in new funding led by Draper Esprit, with Aster, London Venture Partners, Luminous Ventures, and Entrepreneur First also participating. http://axios.link/CJjk

LinkSquares, a Boston-based maker of contract analytics software, has raised $4.8 million in new funding led by Hyperplane Venture Capital and MassMutual Ventures. www.linksquares.com

Hammerhead, a New York-based startup building navigation and training software for cycling, has raised $4.2 million in seed funding led by Primary Ventures, with Courtside Ventures, Maveron, Drummond Road Capital, MapMyFitness co-founder Robin Thurston and Zipp CEO Andy Ording also participating. http://axios.link/ovrX

StrongBlock, a Santa Monica, Calif.-based enterprise blockchain startup, has raised $4 million in seed funding from Pangea Blockchain Fund, Copernicus Asset Management, and others. www.strongblock.io

Osano, an Austin-based online privacy company, has raised $3 million in new funding led by LiveOak Ventures, with Next Coast Ventures, Capital Factory, Social Starts, Barracuda Networks and 345Partners Co-Founder Michael Perone, data.world and Bazaarvoice Founder Brett Hurt, and Indeed Founder Rony Kahan also participating. http://axios.link/38rR

🚙 Xapix, a San Francisco-based API and data platform for the automotive and insurance industries, has raised $2 million in seed funding from Speedinvest, Anthemis, and others. www.xapix.io

🚑 Spill, a London-based maker of a therapy app for the workplace, has raised £650,000 ($850,000) in seed funding from Passion Capital, Seedcamp, and others. http://axios.link/1oQC

GoJava, a Canada-based office snacks company, has raised CA$1 million ($743,000) in a second seed round led by Crux Capital, with Active Impact Investments also participating. www.gojava.ca

Private Equity Deals

An affiliate of AE Industrial Partners has acquired Resolute Industrial Holdings, a Boca Raton, Fla.-based provider of specialty HVAC&R equipment rental solutions, compressor remanufacturing, and refrigerant storage services. www.resolute-industrial.com

Mason Wells has made an investment in RJW Logistics Group Inc, a Woodridge, Ill.-based provider of supply chain logistics services for consumer packaged goods companies. www.rjwgroup.com

JMC has acquired Mansfield Sales Partners, an Andover, Mass.-based provider of revenue and business sales consulting services to technology and private equity portfolio companies. www.mansfieldsp.com

SFW Capital Partners has made a strategic investment in Greenshades Software, a Jacksonville, Fla.-based provider of payroll tax and human capital management (“HCM”) information and software tools. www.greenshades.com

The Legacy Companies has acquired Avanti Products, a Miami-based compact appliances company, from Gen Cap America. www.avantiproducts.com

Public Offerings

Crescent Acquisition, a Los Angeles-based blank check company formed by Crescent Capital, raised $250 million in an IPO by offering 25 million units at $10. It plans to list on the Nasdaq under the symbol “CRSAU”. Credit Suisse and BofA Merrill Lynch were lead managers on the deal. http://axios.link/EKQm

Iswill Acquisition, a Burlingame, Calif.-based blank check company targeting the software and internet technology industries, has filed to raise up to $230 million in an IPO. It will offer 23 million units at a price of $10, where it would a market value of $294 million. It plans to list on the Nasdaq under the symbol “IWAC.U.” Cantor Fitzgerald is the only bookrunner on the deal. http://axios.link/5TVT

Tradeweb Markets, a New York-based electronic trading platform backed by Blackstone and Thomson Reuters, filed to raise $500 million in an IPO. It plans to list on the Nasdaq under the symbol “TW.” J.P. Morgan, Citi, Goldman Sachs and Morgan Stanley are the joint bookrunners on the deal. http://axios.link/7Pi6

🚑 ShockWave Medical, a Santa Clara, Calif.-based company that sells medical systems used in treating cardiovascular disease, raised $97 million in an IPO, offering 5.7 million shares at $17. Additionally, existing investor Abiomed agreed to invest $10 million in a concurrent private investment. It listed on the Nasdaq under the symbol “SWAV.” Morgan Stanley and BofA Merrill Lynch acted as lead managers on the deal. http://axios.link/Fsr6

⛽️ Linde, a German industrial gases group, has agreed to sell its South Korean assets to private equity firm IMM for 1.3 trillion won ($1.15 billion), according to Reuters. http://axios.link/2TOO

The Parsons Corporation, a Pasadena, Calif.-based construction and engineering company known for building airports and subways, has filed to go public at a valuation of $3 billion, according to Reuters. http://axios.link/DddI

More M&A

Airbnb has acquired HotelTonight, a San Francisco-based last-minute hotel booking service, for close to $463 million, a source tells Axios. http://axios.link/INHN

Okta has agreed to acquire Azuqua, a Seattle-based cloud-based integration and automation company, for $52.5 million in cash. http://axios.link/70hH

HeadSpin has acquired NimbleDroid, a New York-based Android app performance testing company. www.nimbledroid.com

RPC Group, a U.K.-based consumer packaged goods company, has agreed to a higher takeover offer from plastics maker Berry Global Group worth 3.34 billion pounds ($4.37 billion), over an offer from Apollo Group Management. http://axios.link/HKJf

Fundraising

SoftBank Group announced a $5 billion fund to invest in tech startups in Latin America. The company has committed $2 billion and will work with its Vision Fund to maker bigger investments. http://axios.link/GLv3

Jan Stahlberg, a co-founder of private equity group EQT, has left to set up his own impact investing fund and has raised €300 million to €500m from the bank Nordea, according to the Financial Times. http://axios.link/BEFa

It's Personnel


Edgewater Capital Partners has named Chris Springer as an operating partner. Previously, Springer was an operating partner at Alliance Holdings Inc. www.edgewatercapital.com

Final Numbers
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Data: Bureau of Labor Statistics; Chart: Axios Visuals