Dec 14, 2017

Axios Pro Rata

By Dan Primack
Dan Primack
Top of the Morning

DNA design company Ginko Biologics this morning announced that it has raised $250 million in new VC funding (at a unicorn valuation), while VC firm Andreessen Horowitz also disclosed that it has raised $450 million for its second fund focused on the intersection of biology and computer science.

  • Even though Ginko didn't raise from Andreessen, both announcements are related to a burgeoning belief that the future of biotech is as much about non-healthcare applications as healthcare ones. For example, a fragrance company can pay Gingko Bioworks for a project that would otherwise be too expensive to do in-house.
  • Andreessen Horowitz's Vijay Pande: "We really expect this to be the century of biology. The opportunity right now is that traditional biotech has had to deal with science risk but, through things like machine learning, companies can avoid a lot of that risk."

More from bio-land: Yesterday we learned more about Calico, the stealthy anti-aging company that launched in 2014 with around $1 billion from Google (before it became Alphabet). Chief computing officer Daphne Koller (ex-Coursera) appeared at the CB Insights conference and, despite saying that "we don't like to talk about our work until it's complete," dropped some tantilizing clinical details.

  • No, venture capitalist Steve Jurvetson didn't end up appearing. He pulled out the night before, apparently over disagreements related to what questions would and wouldn't be off-limits (i.e., he wanted to talk Tesla and SpaceX, but not his departure from DFJ).

• New player: Koch Industries has launched an early-stage venture capital arm that will be led by Chase Koch, the son of chairman/CEO Charles Koch. Also on the team will be new hire Jason Illian, founder and ex-CEO of Dallas-based BookShout.

  • It's called Koch Disruptive Technologies, and will be separate from the Koch Equity Development unit that is supporting Meredith Corp.'s takeover of Time Inc.
  • No word on dollar allocations, but a Koch source calls it a "significant focus" for the company, as evidenced by putting the boss' son in charge.
  • Its first deal was announced this morning: Leading a $150 million Series E round for INSIGHTEC, an Israel-based developer of MRI-guided ultrasound devices for surgery.
  • Per an internal email from Koch CFO Steve Feilmeier: "We all know that the rate of change in the marketplace is accelerating. This is a threat to every business we operate; however, it also creates opportunity if we identify and invest in those entrepreneurs and technologies that can improve our businesses or potentially create a new business platform."
  • Go deeper: Politico's Nancy Scola recently wrote on the unexpected partnership between Charles Koch and Silicon Valley tech.
The BFD

The Walt Disney Co. (NYSE: DIS) has officially agreed to acquire the entertainment assets of 21st Century Fox (Nasdaq: FOXA), including Fox's movie studio and entertainment television networks, as well as Fox's international TV assets. The deal is valued at $52.4 billion in stock, which is well below the $60 billion expectations (let alone "more than $75 billion," per a Reuters report last night).

  • Why it's the BFD: Because a $2.5 billion breakup fee in the event of government opposition either means that Bob Iger is supremely confident in regulatory approval, or means that Rupert Murdoch is very wary.
  • Follow along: Here's ourfull write-up on the deal, while Sara Fischer has been live-tweeting the investor call.
  • Timing: It's notable that this announcement comes on the same day as the expected net neutrality repeal vote, plus the opening of Disney's new Star Wars film.
  • Bonus: Yes, The Simpsons knew back in 2010:

With the possibility of 20th Century Fox being sold to Disney, let me be one of the first to point out the Simpsons predicted it: pic.twitter.com/U1uN5VjiEp— A Very Ryan W. Meady Christmas (@rwmead) November 6, 2017

Venture Capital Deals

🚀 Ispace, a Japanese commercial space startup, has raised $90.2 million in Series A funding from backers like Network Corp. of Japan, Development Bank of Japan, Tokyo Broadcasting System and Konika Minolta. http://axios.link/A8sV

🚑 Relay Therapeutics, a Cambridge, Mass.-based startup focused on drug discovery via protein motion, has raised $63 million in Series B funding. BVF Partners led, and was joined by GV, Casdin Capital, EcoR1 Capital, Section 32 and return backers Third Rock Ventures and Alexandria Venture Investments. http://axios.link/mL0J

Insikt, a San Francisco-based online lender for low-income individuals, has raised $50 million in new funding. Grupo Coppel led, and was joined by FirstMark Capital, Revolution Ventures and Colchis Capital. http://axios.link/O8ru

🚑 Kyn Therapeutics, a Cambridge, Mass.-based developer of immunometabolism therapies for treating cancer, has raised $49 million in Series A funding from Atlas Venture and OrbiMed. http://axios.link/AW1w

Instana, a German application performance management automation solution, has raised $20 million in Series B funding. Accel led, and was joined by return backer Target Partners. http://axios.link/pDQx

OTA Insight a London-based data intelligence platform for the hospitality market, has raised $20 million in growth equity funding. Eight Roads Ventures led, and was joined by F-Prime Capital Partners. http://axios.link/IZSw

Kasisto, a conversational AI platform for finance, has raised $17 million in Series B funding. Oak HC/FT led, and was joined by return backers Propel Venture Partners, Two Sigma Ventures, Commerce Ventures, Mastercard and Partnership Fund for New York City. www.kasisto.com

Bizzabo, an Israel and New York-based provider of event marketing solutions, has raised $15 million in new funding. Pilot Growth Equity led, and was joined by Maor Investments. http://axios.link/uoYL

Paddle, a British provider of all-in-one sales software, has raised $12.5 million in Series B funding. Notion Ventures led, and was joined by return backers BGF Ventures and Kindred Capital. http://axios.link/h8b9

FollowAnalytics, a San Francisco-based mobile marketing communication and automation startup, has raised $11 million in VC funding from firms like Orange Digital Ventures. http://axios.link/1572

Finiata, a German financial services platform for freelancers and small businesses, has raised €10 million in Series A funding from DN Capital, Point Nine, Fly Ventures, Redalpine, ENERN and Kulczyk Investments. The company also secured €8 million in debt financing. http://axios.link/qwO9

Workboard, a Redwood City, Calif.-based “active management strategy” startup, has raised $9 million in VC funding co-led by Floodgate and Microsoft Ventures. http://axios.link/8wpp

Teabox, an India-based direct-to-consumer tea retailer has raised $7 million in Series B equity and debt funding. RB Investments led the equity tranche (no breakout was provided), and was joined by return backers Accel and Robert M. Bass. Singaporean bank DBS provided the debt. http://axios.link/9Woo

Fanchest, a Brooklyn-based provider of sports team-based gift boxes, has raised $4 million in seed funding from GoAhead Ventures, Connected VC and individuals like Drew Brees. http://axios.link/ycdq

Curisium, a Manhattan Beach, Calif.-based developer of blockchain-based healthcare contracting solutions, has raised $3.5 million in seed funding from Flare Capital Partners, NEA, Shuttle Fund, Sanofi Ventures and Green Bay Ventures. www.cirisium.com

Helpster, a Bangkok-based temp job listings site focused on Southeast Asia, has raised $2.5 million in new funding from Convergence Ventures, Wavemaker Partners and Mojo Partners. http://axios.link/VlF3

Lily, a Los Angeles-based personalized stylist startup, has raised $2 million in seed funding from firms like NEA. http://axios.link/ci49

Private Equity Deals

ABRY Partners has acquired NexusTek, a Denver-based IT services and consulting firm. Sellers include Lightview Capital. www.nexustek.com

Apollo Global Management has agreed to acquire Minnesota-based commercial airline Sun Country Airlines from Marty and Mitch Davis. www.suncountry.com

L Catterton has agreed to invest in Denmark-based contemporary fashion brand Ganni. www.ganni.com

🚑 Revelstoke Capital Partners has acquired ONsite Mammography, a Westfield, Mass.-based provider of in-office mammography services. www.onsitemammography.com

Silverfleet Capital has acquired British tour operator Riviera Travel for more than £200 million from Phoenix Equity Partners, per AltAssets. http://axios.link/W7Bf

⛽ TPG Capital has won an auction for the Brazilian transmission assets of Spain's Abengoa SA, per Reuters. It will pay around $146 million in cash, and assume nearly $400 million in debt. http://axios.link/9HaK

TSG Consumer Partners, the private equity owner of Planet Fitness, has acquired a majority stake in Sunshine Fitness, a Florida-based franchisee of Planet Fitness clubs.

TSG Consumer Partners has acquired a minority stake in cosmetics brand Huda Beauty. www.hudabeauty.com

Correction: Alexandria Molding, a wood moldings and millwork distributor owned by Industrial Opportunity Partners, has acquired La Porte, Ind.-based House of Fara. We previously reported it the other way around. Apologies.

Public Offerings

LexinFintech Holdings, a Chinese online consumer lender, has set its IPO terms to 12 million shares being offered at $9-$11. It would have a fully-diluted market value of around $1.8 billion were it to price in the middle, and plans to trade on the Nasdaq under ticker LX. Goldman Sachs (Asia) is serving as lead manager. Shareholders include Matrix Partners China and JD.com.

Liquidity Events

eBay (Nasdaq: EBAY) has agreed to acquire Terapeak, a Toronto-based e-commerce analytics platform that had raised over $6 million in VC funding from firms like Georgian Partners. http://axios.link/MUw2

H2 Equity Partners has agreed to sell Brink Group, a Dutch manufacturer of branded towing and trailering equipment, to Horizon Global (NYSE: HZN) for €169 million. www.brinkgroup.eu

Lindsay Goldberg Vogel has hired Morgan Stanley to find a buyer for German stainless steel maker VDM Metals, which generates between €70 million and €75 million in EBITDA, according to Reuters. http://axios.link/qHy7

T-Mobile (Nasdaq: TMUS) has agreed to acquire Layer3 TV, a Denver-based provider of cable television broadcasting service, for an undisclosed amount. Layer3 had raised over $70 million in VC funding from firms like Evolution Media and North Bridge Venture Partners. http://axios.link/QfV

More M&A

🍕 Domino’s Pizza (LSE: DOM), a UK-based master franchisee of Domino’s Pizza Inc. (NYSE: DPZ) plans to buy an additional 44.3% stake in Domino’s Iceland for €30.2 million (bringing its ownership position to 95.3%). http://axios.link/foz9

The Rockport Group, a Canton, Mass.-based shoemaker, has hired Houlihan Lokey to explore options that could include a sale, according to Reuters. The move comes after creditor Crescent Capital took ownership of the company from private equity firm Berkshire Partners. http://axios.link/jtsu

It's Personnel

Arsenal Capital Partners has promoted Gene Gorbach, Roy Seroussi and Brian Orkin to investment partner. The New York-based buyout firm also promoted Yoonmo Yang to VP. www.arsenalcap.com

George Pallis, former head of global marketing for Deliveroo, has joined seed investment firm Felix Capital as an entrepreneur-in-residence. www.felixcap.com

Final Numbers

  • Thought bubble: There is a case to be made for revisiting private equity's "Golden Age," in light of current public equity values. One big difference, however, is today's relative lack of large take-private transactions.
  • News: You might have noticed that the chart comes from PitchBook, which today announced a new benchmarking service to compete with Cambridge Associates. It's a welcome development. Not because I don't trust Cambridge, but because more data means we should get an even more accurate understanding of market performance.
Dan Primack