Nov 28, 2018

Axios Pro Rata

By Dan Primack
Dan Primack

Reminder that tonight we're holding an Axios Happy Hour for undergrad and graduate students in Boston, which will include some Q&A with me about what matters in business. Doors open at 5pm at John Harvard's in Cambridge (2 minute walk from the Harvard Square T stop), and you can RSVP here.

Top of the Morning
Illustration:Rebecca Zisser/Axios

You can't miss them if you drive around Los Angeles: Giant billboards for Eaze, a marijuana delivery platform whose marketing taglines include "for super chill vibes" and "for pesky hangovers."

  • Yes, this is basically Uber for pot, except the actual delivery workers are legally required to be W-2 employees of local dispensaries (i.e., Eaze is just the software intermediate). And, like Uber in the early days, it's beginning to raise big money.

Axios has learned that Eaze is in the process of closing a $65 million Series B round at a pre-money valuation of around $250 million. New investors include Jim Clark (of Silicon Graphics and Netscape fame), while return backers include venture firm DCM (whose partner David Chao sits on the Eaze board of directors and is a user of medicinal marijuana).

The San Francisco-based company only currently delivers within California, but did recently launch a marketplace for shipping cannabidiol products to 41 states and Washington, D.C.

  • A source close to the deal says he expects Eaze to focus much of its on-the-ground expansion to states that have legalized recreational marijuana, as that's viewed as a much larger long-term market than medicinal. It currently does both in California.
  • This is part of a broader trend of startups in the cannabis logistics space, including ones like Eaze that don't actually touch "product" (thus making it easier for some investors to participate).

Eaze declined comment, via a spokesperson.

Snap mafia: Axios' Sara Fischer scoops that Imran Khan, the former Credit Suisse banker turned Snap chief strategy officer, has raised $17.5 million for a new e-commerce startup focused on millenials.

  • Lightspeed Venture Partners led, with early snap backer Jeremy Liew taking a board seat.
  • Khan's wife Kate is a co-founder, which also means she's stepping down as head of retail for Amazon-owned Quidsi.
  • Per Liew: “Like the alumni of PayPal and other great companies, Snap employees will go on to build a new generation of startups. We are thrilled to partner with Imran and Cate Khan to fund the first of the Snap mafia.”

Guns and money: Christopher Ailman, chief investment officer for CalSTRS, was on the podcast yesterday to discuss why he helped put together a large investor coalition that is asking gun makers, distributors and retailers to act more responsibly. The group represents $5 trillion in assets under management, but isn't using divestiture as a threat. Listen via Apple or via Axios.

Source: GIphy

ChargePoint, a Campbell, Calif.-based electric vehicle charging network, raised $240 million in Series E funding led by Quantum Energy Partners.

  • Why it's the BFD: Because this comes just one day after President Trump threatened to end federal electric vehicle subsidies (or at least refuse to support a cap expansion, which is what General Motors and others want).
  • Investors: Quantum, American Electric Power, CPPIB, Chevron Technology Ventures, Clearvision, Daimler Trucks & Buses, GIC and return backers BMW i Ventures, Braemar Energy Ventures, Linse Capital and Siemens.
  • Bottom line: "The money — and who it's from — signal investor and corporate confidence that EVs are an important growth market, even though today they're a tiny share of the global auto industry." — Ben Geman, Axios
Venture Capital Deals

Plusgrade, a Montreal-based provider of revenue optimization SaaS for the travel industry, raised C$200 million from Caisse de dépôt et placement du Québec at a valuation north of C$600 million.

Oriente, a Hong Kong-based provider of lending and credit scoring for unbanked consumers in Asia, raised $105 million in first-round funding from backers like Berjaya Group, Sinar Mas and JG Summit Holdings.

NeueHouse, a private club and workspace for artists and entrepreneurs, raised $30 million. The Diller-von Furstenberg Family Office led, and was joined by Gaw Capital and Revolt Ventures.

Evoke Creative, a UK-based maker of interactive digital kiosks and video walls, raised £6 million from BGF.

Hotelmize, a UK-based trading platform for hotel room resellers, raised $3.8 million from Australia’s Investible.

🚑 Keyto, a San Francisco-based developer of personalized ketogenic diet programs, raised $2.5 million in seed funding. Craft Ventures led, and was joined by Floodgate, Abstract Ventures, Hydra Ventures and Julia and Kevin Hartz.

Private Equity Deals

Advent International is among several private equity bidders for French cosmetics maker L’Occitane International (HK: 0973), per the FT.

🚑 Bow River Capital acquired Precision Spine Care, a Tyler, Texas-based physician group focused on the treatment of back and neck pain.

🚑 JLL Investors and Water Street Healthcare Partners invested in Cato Research, a Durham, N.C.-based provider of regulatory and clinical research services.

🚑 Marlin Equity Partners acquired SimplyWell, a Dallas-based provider of employee health management software that will be merged with existing Marlin portfolio company Virgin Health.

🚑 Pharos Capital Group acquired ABA of North Texas, a Plano, Texas-based provider of outpatient autism services.

PPC Flexible Packaging, a Buffalo Grove, Ill.-based portfolio company of Morgan Stanley Capital Partners, acquired Temkin International, a Payson, Utah-based maker of film packaging products.

Voyager Innovations, a PLDT (NYSE: PHI) affiliate that provides digital services in the Philippines, raised $175 million in minority equity funding from KKR and Tencent.

Sentinel Capital Partners acquired Apex Companies, a Rockville, Md.-based water resources, environmental services, and industrial hygiene firm.

Public Offerings

🚑 Moderna Therapeutics, a Cambridge, Mass.-based developer of synthetic mRNA that is then injected into patients so that they can create their own therapies, set IPO terms to 21.74 million shares at $22-$24. It would have a fully-diluted market value of around $8.8 billion, were it to price in the middle, and plans to trade on the Nasdaq (MRNA) with Morgan Stanley as lead underwriter. The company raised nearly $2 billion in VC funding, most recently at a $7.5 billion valuation, from firms like Flagship Pioneering (19.5% pre-IPO stake), AstraZeneca (8.4%) and Viking Global Investors (5.5%).

🚑 Synthorx, a La Jolla, Calif.-based developer of immunotherapies for solid tumors and autoimmune disorders, set IPO terms to 9.1 million shares at $10-$12. It would have a fully-diluted value of $324 million were it to price in the middle, and plans to trade on the Nasdaq (THOR) with Jefferies as lead underwriter. Shareholders in the pre-revenue company include Avalon Ventures (32%), RA Capital (28.2%), OrbiMed (21.5%) and Correlation Ventures (6.1%).

Liquidity Events

🚑 Roche (Swiss: ROG) agreed to buy Jecure Therapeutics, a San Diego-based developer of liver disease treatments that had raised around $28 million from firms like Versant Ventures.

SFW Capital Partners sold Spectro Scientific, a Chelmsford, Mass.-based provider of predictive analytics of fuel and other in-use industrial fluids, to Ametek (NYSE: AME) for $190 million.

Tailwater Capital is considering an IPO or sale process for Goodnight Midstream, a Dallas-based provider of wastewater management services to oil and gas producers, per Bloomberg. The company reportedly could fetch upwards of $2 billion.

More M&A

Alliance Data Systems (NYSE: ADS) said it will explore options, including a possible sale, for its Epsilon online marketing unit, which generated nearly 30% of ADS’ $10.7 billion in 2017 revenue.

Biosev, a listed Brazilian sugar and ethanol company controlled by Louis Dreyfus Co., hired Rabobank to explore a sale of nine of its sugar production facilities in center-south Brazil, per Reuters.

KAR Auction Services (NYSE: KAR) agreed to buy Belgian online auto auction company CarsOnTheWeb for €91 million.

🍕 Trian Fund Management, the hedge fund led by Nelson Peltz, has taken itself out of the auction for pizza chain Papa John’s (NYSE: PZZA), per the WSJ.

🚑 Unilever entered exclusive talks to buy India-focused health nutrition business Horlicks from GlaxoSmithKline (LSE: GSK), per the FT.


Coatue Management is seeking to raise $500 million for its first fund focused on early-stage tech investing, as Axios first reported yesterday.

Colombia’s government is launching a $926 million private equity fund to invest in domestic infrastructure. Around two-thirds of the money comes from the Caisse de depot et placement du Quebec.

Goldman Sachs is seeking to raise up to $7 billion for its eighth private equity secondaries fund, per PE International.

New Mountain Capital, a New York-based buyout firm, is planning to launch a non-control investing effort next year, per PE International.

It's Personnel

Kay Blackwell has left The Rohatyn Group to join Argand Partners as director of investor relations and corporate communications.

Ben Dahl joined Signal Peak Ventures as a managing director. He previously was a partner with Pelion Venture Partners.

Joe Delaney joined Berkshire Partners as an advisory director. He’s executive chairman of Affordable Care, a dental support company owned by Berkshire.

JetBlue Technology Ventures promoted Alex Kaufman to principal.

🚑 Mimi Hancock joined Frazier Healthcare Partners as a senior advisor. She previously was in the life sciences practice of executive recruiter Spencer Stuart.

Dan Primack

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