Feb 12, 2021

Axios Pro Rata

Welcome to the last newsletter before the long weekend! Dan is out on a fancy assignment right now, but will be back in your inboxes on Tuesday morning.

🎧 Axios Re:Cap digs into the economics and politics of the federal minimum wage, on which it seems everyone has an opinion. Listen here.

Top of the Morning

Photo Illustration: Eniola Odetunde. Photo via Yoshikazu Tsuno/Getty Images

SoftBank's Vision Fund went from being in the red, with an annual operating loss of $18 billion at one point, to an $8 billion net profit in its most recent quarter β€” thanks in no small part to the past year's unexpected events.

Why it matters: While the Vision Fund's bet on a global shift to digital services is likely correct, it's hard to believe its financial performance would have rebounded so quickly had 2020 gone differently.

The pandemic...

  • It's been a huge accelerant for trends central to Vision Fund's thesis and many of its portfolio companies β€” food delivery, online education, e-commerce, and so on.
  • SoftBank's defensive moves in the spring, including stock buybacks and writing down more poorly performing companies, put it a position to benefit even more from the surprising boom on the stock market that followed.
  • Even WeWorkβ€”which fell so hard, so fast when it tried to go public in 2019 β€” could be the one office co-working company left standing after the pandemic. Regus properties have been filing for bankruptcy (and its parent company just acquired a majority stake in embattled women-focused clubhouse The Wing), as has Knotel, another venture-backed rival that was once valued at $1.6 billion.

The stock market...

  • It didn't get the memo that there's a global pandemic and massive economic hit β€” it just kept going up and to the right.
  • 11 of SoftBank's portfolio companies have gone public since the pandemic began, helping to contribute to the Vision Fund's $13 billion in investment gains just in the last quarter.
  • Even portfolio companies that were already public performed well, adding to the fund's recent success.

The other side:

  • For one, luck isn't everything β€” the fund's performance is tied to CEO Masayoshi Son's fundamental investment thesis staying focused on digital technologies.
  • A great market won't do very much for a portfolio of weak companies that won't be able to go public or continue to grow in value. In short: SoftBank did well in picking eventual winners.
  • And now, three-and-a-half years into the Vision Fund, SoftBank is past the trough of the expected J-curve, which is par for the course in venture investing. As they say: things get worse before they get better.

The bottom line: "Luck is what happens when preparation meets opportunity," Roman philosopher Seneca once wrote.

The BFD

Illustration: Eniola Odetunde/Axios

Public.com, a New York-based free stock trading service with an emphasis on its social network, is reportedly raising a $200 million Series D led by Tiger Global Management at a $1.2 billion post-money valuation, according to Business Insider and TechCrunch.

  • Why it's the BFD: The recent trading frenzy driven by social media has put "democratic" apps like Robinhood and Public in the spotlight. Public also announced last week that it would no longer partake in payment for order flow after the practice saw renewed criticism.
  • Bottom line: "Investors betting on Public, then, would be placing a wager on not merely future user growth, but the startup's ability to monetize effectively in the future." β€” Mary Ann Azevedo and Alex Wilhelm, TechCrunch.
Venture Capital Deals

πŸš‘ Zocdoc, a New York-based healthcare scheduling platform, has raised $150 million in new funding led by Francisco Partners. http://axios.link/QnrJ

β€’ Cameo, a Chicago-based startup whose app lets customers pay for custom celebrity videos, is reportedly raising about $100 million at a $1 billion valuation, according to Bloomberg. http://axios.link/PkJB

πŸš‘ Hyperfine, a Guilford, Conn.-based maker of analytics software for medicine, has raised $90 million in Series D funding from GV, Nextrans, Axiom Associates, Huami, Colle Capital, LSS, and Altium Capital. www.hyperfine.io

πŸš‘ Ensoma, a Boston-based genomics medicine company, has raised $70 million in Series A funding led by 5AM Ventures, with F-Prime Capital, Takeda Ventures, Viking Global Investors, Cormorant Asset Management, RIT Capital Partners, Symbiosis II, and Alexandria Venture Investments also participating. http://axios.link/pdEf

πŸš‘ Immunai, a New York and Tel Aviv-based biotech company, has raised $60 million in new funding led by Schusterman Family Investments, Duquesne Family Office, Catalio Capital Management, and Dexcel Pharma, with Viola Ventures and TLV Partners also participating. www.immunai.com

β€’ Labelbox, a San Francisco-based data annotation and labeling platform, has raised $40 million in Series C funding led by B Capital Group, with Andreessen Horowitz, First Round Capital, Gradient Ventures, and Kleiner Perkins. http://axios.link/2qro

β€’ Maisonette, a New York-based e-commerce company focused on children, has raised $30 million in Series B funding led by G Squared, with NEA and Thrive Capital also participating. http://axios.link/FRMJ

β€’ UpEquity, an Austin-based mortgage platform, has raised $25 million in Series A funding led by Next Coast Ventures, including $17.5 million of venture debt. www.upequity.com

β€’ SecuriThings, an Israel-based IoT security startup, has raised $14 million in Series A funding led by Aleph, with Firstime VC also participating. http://axios.link/8HgX

β€’ WireWheel, an Arlington, Va.-based data privacy management company, has raised $20 million in Series B funding led by ForgePoint Capital, with New Enterprise Associates, Revolution's Rise of the Rest Fund, PSP Growth, Grotech Ventures, and Sands Capital Ventures also participating. http://axios.link/ly4w

πŸš™ BusUp, a San Francisco-based startup connecting employers with transportation providers, has raised $6 million in Series A funding led by Proeza Ventures, with Autotech Ventures and Finaves V also participating. www.busup.com

β€’ Kargo, a San Francisco-based smart loading dock platform, has raised $6 million in seed funding from Founders Fund, Accomplice, and Sozo Ventures among others. http://axios.link/bxgi

β€’ Reduct.Video, a San Francisco-based artificial intelligence startup for video editing, has raised $4 million in funding led by Greylock and South Park Commons, with Dylan Field, Elad Gil and other also participating. http://axios.link/AhDl

β€’ MutualMarkets, a New York-based-based marketing company, has raised $3 million in seed funding led by Greycroft and Bessemer Venture Partners, with Peak Opportunity Partners, and others also participating. www.mutualmarkets.net

β€’ Base Operations, a Washington, D.C.-based cybersecurity startup, has raised $2.2 million in seed funding led by Good Growth Capital, with Magma Partners, First In Capital, Gaingels and Howard Morgan also participating. http://axios.link/rwkm

β€’ Brightly, a Seattle-based e-commerce platform for eco-friendly products, has raised $1 million in funding led by The Female Founders Alliance, with Tacoma Venture Fund and Keeler Investments also participating. www.brightly.eco

β€’ U.S. Integrity, a Las Vegas and New York-based sports betting monitoring company, has raised $1 million in seed funding led by New York Angels led the round, with Harvard Business School Alumni Angels of New York and SeventySix Capital also participating. www.usintegrity.com

Private Equity Deals

β€’ Consulting Solutions, a portfolio company of White Wolf Capital, has acquired TEK Connexion, a Chicago and Pittsburgh-headquartered technology services and workforce solutions company. http://axios.link/rTXg

β€’ RunTide Capital has invested in ATSG, a New York-based management services company. http://axios.link/2L5v

β€’ Bunker Hill Capital has sold Taos Mountain, a San Jose-based cloud consulting firm, to IBM. http://axios.link/nAQb

β€’ Riata Capital Group has invested in Greenix Pest Control, a residential pest control company. www.greenixpc.com

β€’ Sherpa Capital is selling Macrolibros, a Spain-based printing and binding company for children's and educational books, to GrΓ‘ficas Ceyde. http://axios.link/83sL

Public Offerings

πŸš‘ Longeveron, a Phase 2 biotech company developing cellular therapies for aging-related conditions, raised $27 million by offering 2.7 million shares at $10. It has a fully diluted market value of $180 million. It plans to list on the Nasdaq under the symbol LGVN. Kingswood Capital Markets acted as a lead manager on the deal. http://axios.link/WkHk

β€’ Urban-gro, a provider of equipment and services for the commercial indoor horticulture market, raised $54 million in an IPO by offering 5.4 million shares at $10. It commands a diluted market cap of about $103 million. It plans to list on the Nasdaq under the symbol UGRO. ThinkEquity acted as lead manager on the deal. http://axios.link/0Bye

πŸš‘ NexImmune, a Phase 1-2 biotech company developing T cell immunotherapies for cancer, raised $110 million by offering 6.5 million shares at $17, the high end of the range of $15 to $17. Existing shareholders intended to purchase $20 million worth of shares in the offering. It plans to list on the Nasdaq under the symbol NEXI. Barclays, Cantor Fitzgerald, Raymond James and Allen & Co. acted as lead managers on the deal. http://axios.link/YJD9

πŸš‘ Talis Biomedical, a company developing diagnostic tests for COVID-19 and other infectious diseases, raised $221 million by offering 13.8 million shares at $16. It plans to list on the Nasdaq under the symbol TLIS. JPMorgan, BofA Securities and Piper Sandler acted as lead managers on the deal. http://axios.link/FcFc

SPAC Stuff

β€’ RXR Acquisition, a blank check company formed by RXR Realty targeting real estate technology, filed to raise up to $250 million in an IPO. http://axios.link/dsrd

β€’ Haymaker Acquisition III, the third consumer-focused blank check company led by the former CEO of Starwood Hotels, filed to raise up to $300 million in an IPO. http://axios.link/xDRM

β€’ Churchill Capital Corp VI, the sixth blank check company founded by former Citi executive Michael Klein, raised $480 million by offering 48 million units at $10. http://axios.link/Mmur

β€’ Churchill Capital Corp VII, the seventh blank check company founded by former Citi executive Michael Klein, raised $1.2 billion by offering 120 million units at $10. http://axios.link/Pjji

🍟 Bite Acquisition, a blank check company targeting the restaurant sector in North America, raised $175 million by offering 17.5 million units at $10. http://axios.link/TxGt

β€’ Catcha Investment, a blank check company formed by Catcha Group and targeting "new economy" sectors in Asia Pacific, raised $275 million by offering 27.5 million units at $10. http://axios.link/J0ZF

β€’ Tishman Speyer Innovation II, the second blank check company from Tishman Speyer targeting real estate and property technology businesses, raised $300 million by offering 30 million units at $10. http://axios.link/wVOn

β€’ Rosecliff Acquisition I, a blank check company formed by Rosecliff Venture Management targeting technology, raised $220 million by offering 22 million units at $10. http://axios.link/oJLC

Liquidity Events

πŸš‘ Volpara Health has agreed to acquire CRA Health, a Boston-based breast cancer risk assessment company spinoff of Harvard Medical School, for $22 million including earn-outs. www.volparahealth.com

β€’ Datadog, a New York-based cloud-monitoring company, has agreed to acquire startups Sqreen and Timber. http://axios.link/Kryj

More M&A

β€’ II-VI has made a $6.5 billion bid ($260 a share) to acquire Coherent, a Santa Clara, Calif.-based maker of lasers and related products, becoming the third company to vie for the acquisition. http://axios.link/xtxA

β€’ Regus parent company IWG, the office coworking and rental company, has acquired a majority stake in The Wing, a women-focused co-working and social club that's been struggling amid the pandemic and allegations against its former CEO of mistreating employees, according to Bloomberg.

Fundraising

πŸš‘ DexCom, a San Diego-based continuous glucose monitoring company, has formed a venture arm, Dexcom Ventures. www.dexcom.com

β€’ Eurazeo, a France-based investment firm, has raised €80 million for a first close of its second smart city fund focused on energy, mobility proptech and logistics startups worldwide. http://axios.link/XvZv

β€’ Knife Capital, a South Africa-based venture firm, is raising a $50 million fund to back Series B startups in its country. http://axios.link/yuaN

β€’ Kraken, a San Francisco-based cryptocurrency exchange, has formed a venture unit called Kraken Ventures to target early stage companies and protocols across the crypto and fintech ecosystem. http://axios.link/tgxr

β€’ Nationwide, a Columbus-based insurance company, is expanding its venture investing program to $350 million. http://axios.link/7IRJ

β€’ RPM Ventures, an Ann Arbor, Michigan-based seed and early-stage venture firm, has raised $88.4 million for its fourth fund, per an SEC filing that lists a $135 million target. www.rpmvc.com

πŸš‘ Peloton Equity, a Connecticut-based private equity firm focused on growth capital investments in the healthcare industry, has raised $152.25 million for its second fund. www.pelotonequity.com

Final Numbers

Chart courtesy of eMarketer/InsiderIntelligence.com

πŸ’° Thanks for reading Axios Pro Rata! Please ask your friends, colleagues and care-free stock traders to sign up.