Axios Pro Rata

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April 12, 2021

🎧 Axios Re:Cap talks with Rep. Katie Porter (D-Calif.) about how she defines "infrastructure" and what comes next for Biden's $2 trillion+ plan. Take a listen.

Top of the Morning

Illustration of hands in suits making fists
Illustration: Sarah Grillo/Axios

Venture capitalists used to be Corporate America's political outliers, more likely to support Democrats than Republicans. Now they're beginning to look more like first movers.

Driving the news: Around 90 business leaders gathered via Zoom on Saturday to discuss strategies for opposing proposed new state voting restrictions.

  • The meeting was organized by Yale School of Management's Jeff Sonnenfeld, and also included participation by representatives of advocacy groups like the NAACP.
  • There were disagreements over the best courses of action to pursue, and differences based on "type" of organization led (i.e., law firm vs. pro sports club), but there was unanimity of purpose.
  • "This was a clarion call and a stand of defiance when any political leader would say to give us your money and be quiet," Sonnenfeld tells me, referencing walked-back comments last week from Sen. Mitch McConnell (R-Ky.).

To be clear: There was no card-burning ceremony by registered Republican participants on the Zoom. And voting rights, at least in political theory, shouldn't be a partisan issue.

  • But you'd need blinders on right now to miss which party is advocating for which policies, and how it plays into the deeper fraying of a decades-long alliance between big business and the GOP.

Call participants included Ken Chenault, Ken Frazier, Reid Hoffman, James Murdoch, Levi Strauss CEO Chip Bergh, Snap-On CEO Nicholas Pinchuk and Atlanta Falcons owner Arthur Blank.

  • The big question is if the talk turns into action. Particularly given that some of those political donation "pauses" after Jan. 6 have already been unpaused.
  • A post-summit statement read: "CEOs who participated in a live poll indicated they will re-evaluate donations to candidates supporting bills that restrict voting rights and many would reconsider investments in states which act upon such proposals."
  • That latter part could include relocations or not pursuing investments in new facilities.
  • But, but, but... Just over one-third of participants refrained from voting in the live poll.

Sonnenfeld says the Zoom also included lots of advocacy for supporting a Democrat-sponsored voting bill called H.R. 1, while some wanted to put more muscle behind H.R. 4. There was also talk of increasing paid time off for employees to vote and/or volunteer at the polls.

The bottom line: Donald Trump won the Republican nomination and presidency by promising to bring business acumen to the White House. Now, the still-burning embers of his tenure appear to be turning big business away from Republicans, costing the party one of its richest and most reliable constituencies.

The BFD

Illustration of balloons carrying the Microsoft logo up and away over other balloons
Illustration: Aïda Amer/Axios

Microsoft (Nasdaq: MSFT) agreed to buy Massachusetts-based AI and speech recognition company Nuance Communications (Nasdaq: NUAN) for around $19.7 billion (including debt assumption).

  • Why it's the BFD: This is Microsoft's second-largest acquisition, behind the $26.2 billion deal for LinkedIn in 2016, and may reflect Redmond confidence that most tech antitrust eyes are pointed 800 miles south.
  • Details: Microsoft will pay $56 per share, a 23% premium to Friday's closing price.
  • Alt targets: Other recent reports have Microsoft kicking the M&A tires on both Discord and Pinterest.
  • Bottom line: "Buying Nuance could expand Microsoft's capabilities in voice software. Microsoft already has tools that developers can use to enable applications to transcribe speech into written words, and it incorporates speech recognition into its own products, such as the Bing search engine and the Teams communication app." — Alex Sherman, CNBC

Venture Capital Deals

🦓 The Zebra, an Austin, Texas-based insurance comparison site, raised $150 million in Series D funding at a valuation north of $1 billion from backers like Weatherford Capital and Accel. www.thezebra.com

🚑 Tend, a New York-based dentistry startup, raised $125 million in Series C funding. Addition led, and was joined by insiders Redpoint Ventures, GV, Juxtapose and Zigg Capital. www.hellotend.com

Veriff, an Estonian identity verification startup, raised $69 million in Series B funding co-led by Accel and IVP. www.veriff.com

SafeGuard Cyber, a Charlottesville, Va.-based provider of digital risk protection SaaS, raised $45 million in equity and debt. NightDragon led, and was joined by Cisco Investments and insider Allegis Cyber. www.safeguardcyber.com

Klevu, a Finnish developer of e-commerce search personalization solutions, raised $12 million in Series A funding led by Alfvén & Didrikson. http://axios.link/JVxi

Appzone, a Nigerian developer of software for financial institutions, raised $10 million in Series A funding. CardinalStone Capital Advisers led, and was joined by V8 Capital, Constant Capital, Itanna Capital Ventures and Lateral Investment Partners. http://axios.link/03xl

Shorthand, an Australian no-code platform for publishing multimedia stories, raised A$10 million from Fortitude Investment Partners. http://axios.link/4m5X

Wonder Dynamics, a Los Angeles-based developer of VFX solutions for indie filmmakers, raised $2.5 million from Founders Fund, Cyan Banister, Realize Tech Fund, Capital Factory, MaC Venture Capital and Robert Schwab. http://axios.link/enIE

Private Equity Deals

Investcorp and Trilantic North America agreed to buy RoadSafe, a Chicago-based provider of traffic control and pavement marking services, from Orix Capital Partners. www.roadsafetraffic.com

🚑 Medline Industries, a family-owned medical supply business, hired Goldman Sachs to find a buyer, per WSJ. The Northfield, Ill.-based company could fetch upwards of $30 billion, with expected suitors to include Blackstone Group, Carlyle and KKR. http://axios.link/KBsx

Platinum Equity agreed to buy the golf cart unit of Ingersoll Rand (NYSE: IR) for $1.7 billion. http://axios.link/fMM3

Prime Pensions, a Florham Park, N.J.-based portfolio company of Mill Point Capital, acquired Squire Retirement Plan Services, a Verona, N.J.-based provider of retirement plan design, administration, consulting and actuarial services. www.primepensionsinc.com

Public Offerings

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Five companies plan to price IPOs on U.S. exchanges this week: AppLovin, Agilon Health, Karat Packaging and TuSimple. Plus, Coinbase is expected to complete its direct listing on Wednesday. http://axios.link/XqEE

The Honest Co., the all-natural household products company co-founded by Jessica Alba, filed for an IPO. It plans to list on the Nasdaq (HNST) and reports a $14.5 million net loss for 2020 on $300.5 million in revenue. Honest Co. raised nearly $500 million from firms like L Catterton (37.5% pre-IPO stake), IVP (13.9%), Lightspeed Venture Partners (12.3%), Fidelity (9.3%) and General Catalyst (5.1%). http://axios.link/IHS9

Darktrace, the British cybersecurity firm, said it plans to go public in London. It’s raised around $240 million from firms like Summit Partners, KKR, TenEleven Ventures, Insight Partners, Invoke Capital and Hoxton Ventures. http://axios.link/TBVt

KnowBe4, a Clearwater, Fla.-based cybersecurity awareness training company backed by KKR, set IPO terms to 11.8 million shares at $16-$18. It would have a fully diluted market value of $3.1 billion, were it to price in the middle, and plans to list on the Nasdaq (KNBE). The company reports a $2.4 million net loss for 2020 on $175 million in revenue. http://axios.link/PdB9

🚑 PolyPeptide Group, a Danish contract manufacturer that makes ingredients for Novavax's COVID-19 vaccine, said it plans to go public in Sweden. It's currently controlled by the foundation of Swedish billionaire adventurer Frederik Paulsen Jr. http://axios.link/bolT

UiPath, a VC-backed robotic process automation software company, set IPO terms to 21.3 million shares at $43–$50. It would have a fully diluted market value of $26 billion, were it to price in the middle. The company plans to list on the NYSE (PATH) and reports a $92 million net loss on $607 million in revenue for the fiscal year ending Jan. 31, 2021. http://axios.link/qfVB

🚑 Vaccitech, a British biotech that helps Oxford/AstraZeneca develop their COVID-19 vaccine, filed for a $100 million IPO. It reports an $18 million net loss on $4.8 million in revenue for 2020, and raised $230 million from firms like Oxford Sciences Innovation, GV, M&G Investment Management, Gilead Sciences, Tencent and the Monaco Constitutional Reserve Fund. http://axios.link/mFPc

🚑 Valneva, a Paris-listed developer of vaccines for infectious diseases, filed for a $100 million float on the Nasdaq (VALN). It reports €66 million in 2020 revenue. http://axios.link/C3fZ

SPAC Stuff

Lakeshore Acquisition I, a SPAC formed by former execs of Shanghai Renaissance Investment Management, filed for a $50 million IPO. http://axios.link/mJoL

🎧 Podcast Potpourri

(I promise this will not become a regular thing.)

Libsyn, an OTC-listed podcast hosting company, agreed to buy Glow, a Seattle-based podcast monetization platform that had raised $2.3 million in seed funding led by Greycroft. http://axios.link/pSmL

Vox Media agreed to buy Cafe Studios, publisher of podcasts affiliated with ex-Manhattan U.S. attorney Preet Bharara. Cafe is a spinoff from Some Spider Studios, which is backed by NEA and Red & Blue Ventures. http://axios.link/HTF1

Spotify (NYSE: SPOT) last month agreed to buy the parent company of sports-centric social audio app Locker Room, which had been seeded by firms like GV, Precursor Ventures, Chapter One Ventures and Maveron. Axios has since learned that the purchase price was around $80 million in cash.

More M&A

BancorpSouth Bank (NYSE: BXS) of Tupelo, Miss., agreed to a $6 billion all-stock merger with Houston-based Cadence Bancorporation (NYSE: CADE). www.bancorpsouth.com

Bank of Montreal (TSX: BMO) agreed to sell its EMEA asset management unit to Ameriprise Financial (NYSE: AMP) for C$1.1 billion in cash. http://axios.link/PzGN

Brookfield Asset Management is in talks to buy the retail parks portfolio of Hammerson (LSE: HMSO), which could fetch around £350 million, per The Sunday Times. http://axios.link/Mb2V

Evolution Gaming (STO: EVO) agreed to buy Big Time Gaming, an Australian online slot machine company, for up to €450 million (including earnouts). http://axios.link/Mr8v

GrandVision (Amst: GVNV), a Dutch eyewear group awaiting regulatory approval for its takeover by EssilorLuxottica, agreed to sell its Chilean business to HAL Trust. http://axios.link/CgrY

Suez (Paris: SEV) agreed to a $15.44 billion takeover from rival water and waste management firm Veolia (Paris: VIE), after months of negotiation. http://axios.link/y66K

Fundraising

Ardian raised €7.5 billion for its seventh buyout fund. http://axios.link/Pvdl

IK Investment Partners raised €1.2 billion for its third small-cap buyout fund, per PE International. www.ikinvest.com

• Starting Line, a Chicago-based VC firm, raised $30 million for its second fund. www.startingline.vc

It's Personnel

Benoit Allehaut and Tim Short joined KKR as managing directors on the firm’s global infrastructure team, focused on renewable energy and energy transition investments, while Benjamin Droz joined as a principal. All three come over from Capital Dynamics. www.kkr.com

Erick Bronner joined Palladium Equity Partners as managing director of fundraising and IR. He previously was with The Riverside Company. www.palladiumequity.com

Bill Strong, Morgan Stanley's former Asia-Pacific co-CEO, joined Anzu Partners as a partner. He most recently founded and chaired Longford Capital Partners. www.anzupartners.com

Erik Terjesen, a former Ionic Materials and Qualcomm exec, joined Silicon Foundry as a partner. www.sifoundry.com

Final Numbers

Stock inflows chart
Data: Bank of America; Chart: Axios Visuals

Money flowing to stocks globally in just the past five months ($576 billion) has exceeded the inflow seen over the prior 12 years, per Bank of America Global Research. Go deeper.

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