Apr 14, 2021

Axios Pro Rata

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🚨 Situational awareness: Ponzi schemer Bernie Madoff has died in prison at age 82.

Top of the Morning

Illustration: Annelise Capossela/Axios

The cryptocurrency industry is about to get its Wall Street seal of approval, trading in its stained hoodie for a custom-tailored suit.

Driving the news: Coinbase, the largest U.S. crypto exchange, today will go public via a direct listing on the Nasdaq. Don't be surprised if early trades push the market cap north of $100 billion.

Long & winding path: "Coinbase had more near-death experiences than most successful startups I've been involved with," one of its earlier investors tells me, citing everything from executive churn to bitcoin price crashes.

  • He adds of CEO Brian Armstrong: "Brian doesn't get everything right and lacks some of the Silicon Valley EQ we see with other founders, but he got the big picture stuff very, very right."

Timing: Coinbase is going public in the midst of an extended bull run for bitcoin prices, which has translated into an enviable income statement.

  • Coinbase reports between $730 million and $800 million of net income for the first quarter of 2021, on a whopping $1.8 billion of revenue.
  • It generated a $322 million profit on $1.28 billion in revenue for 2020, compared to a $30 million net loss on $534 million in revenue for 2019.
  • So far, it doesn't appear that Armstrong's controversial political proclamation has hurt his company's top or bottom lines.

Pricing: Coinbase was valued at over $100 billion in private stock sales earlier this year, which the company launched to help determine a reference price for today's trades.

  • But the actual reference price conferred by the Nasdaq last night was $250 per share, which would work out to a $65 billion valuation.
  • Be smart: Ignore the reference price. Slack, for example, began trading 48% higher than its reference price. And former NYSE president Tom Farley tweets that Spotify's reference price was required by the SEC, despite the exchange's believe that a reference price was "unnecessary" and "would be misleading."

The big question for investors is how to assess risk for a company whose own value is so tightly correlated to crypto asset values, and the potential of fee compression as more trading platforms add crypto functionality.

🎧 Today's Axios Re:Cap podcast features a conversation with Coinbase president and COO Emilie Choi, including how she describes her job to friends and family.

  • She says of the direct listing choice: "It's exactly in the spirit and ethos of crypto... Let the market determine what the price should be without intermediaries."
  • Listen here.
The BFD

Illustration: Annelise Capossela/Axios

Tempo, a San Francisco-based connected home gym company, raised $220 million in Series C funding led by SoftBank Vision Fund 2.

  • Why it's the BFD: This is a signal that VCs don't buy into skepticism that the connected fitness market peaked with COVID-19, or at least that the increasingly crowded field doesn't have much more room for exponential growth.
  • Comp: Peloton stock is off 27% from its all-time high on Jan. 13, giving it a market cap of around $36 billion, although it remains 322% higher than the Sept. 2019 IPO price.
  • Other Tempo investors include Bling Capital, DCM, General Catalyst, Norwest Venture Partners and Steadfast Capital Ventures.
  • Bottom line: "Tempo intends to use its new funding on technology development and additional content, such as introducing yoga and adding cardio-boxing. It also launched new hardware, including an adjustable kettlebell system, folding squat rack, weight plate storage and a folding bench." — Christine Hall, Crunchbase
Venture Capital Deals

Scale AI, a San Francisco-based data labeling platform, raised $325 million in Series E funding at a valuation north of $7 billion. Dragoneer, Greenoaks Capital and Tiger Global co-led, and were joined by Wellington Management, Durable Capital Partners and insiders Coatue, Index Ventures, Founders Fund and YC. http://axios.link/vzfl

Degreed, a Pleasanton, Calif.-based upskilling platform, raised $153 million in Series D funding co-led by Sapphire Ventures and Riverwood Capital at a valuation north of $1.4 billion. CEO Chris McCarthy is stepping down, to be replaced by ex-Box COO Dan Levin. http://axios.link/vj3l

🚑 Jaguar Gene Therapy, a Lake Forrest, Ill.-based gene therapy startup, raised $139 million in Series B funding. Lilly Ventures and Deerfield Management co-led, and were joined by Goldman Sachs, Arch Venture Partners and Nolan Capital. http://axios.link/RjYc

HomeX, a Chicago-based app that connects homeowners with home services providers, raised $90 million led by New Mountain Capital. http://axios.link/y996

Netstars, a Japanese QR code payments company, raised around $61 million in new funding. KKR led, and was joined by SIG and LUN Partners. http://axios.link/3tQD

Papa, a Miami, Fla.-based provider of care and companionship solutions to seniors, raised $60 million in Series C funding. Tiger Global led, and was joined by Comcast Ventures, Canaan, Initialized Capital, Sound Ventures, Pivotal Ventures and Magnify Ventures. http://axios.link/pFgT

Plex, a streaming media software provider, raised $50 million from insider Intercap. http://axios.link/qS80

Upstack, a New York-based provider of colocation procurement SaaS, raised $50 million from Berkshire Partners. http://axios.link/VfjW

🍕 Slice, a New York-based online ordering platform for pizzerias, raised $40 million in Series D funding. Cross Creek led, and was joined by 01 Advisors and insiders GGV Capital, KKR and Primary Ventures. http://axios.link/WzfU

Connected Cannabis, a Sacramento-based designer weed cultivator, raised $30 million in equity and debt funding from Navy Capital, One Tower Group, Emerald Park Capital and Presidio View Capital. http://axios.link/c5Zp

Wire, an end-to-end encrypted messaging app, raised $21 million in Series B funding led by UVC Partners. http://axios.link/MsTh

Hatch, a San Francisco-based neobank for SMBs, raised $20 million from Kleiner Perkins, Foundation Capital and SVB. http://axios.link/7zjy

Virtualitics, a Pasadena, Calif.-based data analytics and 3D visualization platform, raised $18 million in Series B funding led by North Sound Ventures. www.virtualitics.com

Co-Star, the maker of an astrology app, raised $15 million in Series A funding, Axios reports. Spark Capital led, and was joined by Maveron and Female Founders Fund. http://axios.link/UmQn

🚑 ImmunoScape, a Singapore-based immunomics platform, raised $14 million from EDBI and insiders Anzu Partners and UTEC. www.immunoscape.com

Atrium, a San Francisco-based data platform for sales teams, raised $13.5 million in seed funding from Bonfire Ventures, CRV and Bullpen Capital. http://axios.link/ErCq

Standard Energy, a South Korean developer of vanadium ion batteries, raised $8.9 million in Series C funding from SoftBank Ventures Asia. http://axios.link/v32B

Deeplite, a Montreal-based ML edge deployment startup, raised US$6 million in seed funding. PJC led, and was joined by Innospark Ventures, Differential Ventures, Smart Global Holdings, Somel Investments, BDC Capital and Desjardins Capital. http://axios.link/fSk6

Bandwango, a Murray, Utah-based experience activities marketplace, raised $3.1 million in seed funding. Next Frontier Capital led, and was joined by Kickstart, Signal Peak Ventures, SaaS Ventures and Ocean Azul Partners. http://axios.link/vHK0

Wyng, a New York-based provider of zero-party data software for social marketing, raised $2 million from insiders Edison Partners and Windcrest Partners. www.wyng.com

Techsembly, a London-based e-commerce SaaS startup, raised £1 million led by Superseed Ventures. http://axios.link/aOVc

Private Equity Deals

Accelalpha, a Bellevue, Wash.-based portfolio company of Century Park Capital Partners, acquired Key Performance Ideas, a managed services and IT consulting firm focused on Oracle EPM. www.accelalpha.com

Apollo Global Management agreed to buy a 51% stake in ABC Technologies (TSX: ABCT), a Canadian maker of technical plastics for light vehicles that's controlled by Cerberus Capital Management, at C$10 per share http://axios.link/Uc3W

The Blackstone Group agreed to buy Sabre Industries, an Alvarado, Texas-based maker of engineered structured and infrastructure for the electrical utility and telecom markets, from The Jordan Co. http://axios.link/Fkmi

Hellman & Friedman agreed to buy a majority stake in energy data and analytics provider Enverus, an Austin, Texas-based provider of data analytics SaaS for the oil and gas industry, from Genstar Capital for $4.25 billion (including debt). http://axios.link/EV9C

KKR agreed to buy Ensono, a Downers Grove, Ill.-based IT services provider, from Charlesbank Capital Partners and M/C Partners. Reuters pegs the price at around $1.7 billion. http://axios.link/nxPj

RGI, a Milan-based portfolio company of Corsair Capital, acquired Flexperto, a German provider of B2C communication and collaboration software. www.rgigroup.com

Silver Lake agreed to invest around $800 million for a minority stake in G42, an Abu Dhabi-based provider of AI and cloud computing products. http://axios.link/Y2Q5

Sverica invested in WinWire, a Santa Clara, Calif.-based digital consultancy focused on Microsoft cloud platforms. www.winwire.com

VertiGIS, a German geographic info systems software company owned by Battery Ventures, acquired KMS Computer, a German provider of computer-aided facility management software. www.vertigis.com

🚑 WindRose Health Investors acquired Bluestone Physician Services, a Stillwater, Minn.-based chronic disease management provider. www.bluestonemd.com

Public Offerings

🚑 Cue Health, a maker of portable health testing solutions, picked Morgan Stanley and Goldman Sachs to manage an upcoming IPO, per Bloomberg. It's raised over $480 million from firms like ACME Capital, J&J, Decheng Capital, Section 32 and Synergy Ventures. http://axios.link/RPaS

• Squarespace, a New York-based content management platform, is pursuing a direct listing for later this year, rather than an IPO, per Bloomberg. The company recently raised $300 million at a $10 billion valuation from Dragoneer, Tiger Global, D1 Capital Partners, Fidelity, T. Rowe Price, Spruce House and insiders Accel and General Atlantic. http://axios.link/Mh1b

Tristar Transport, a liquid transport firm backed by Gulf Investment Corp., is planning to pull its Dubai IPO due to soft investor interest, per Bloomberg. http://axios.link/HDgw

SPAC Stuff

🚑 Babylon, a London-based digital health app, is in talks to go public at between a $3 billion and $4 billion valuation via Alkuri Global Acquisition (Nasdaq: KURI), a SPAC led by ex-Groupon CEO Rich Williams, per Bloomberg. Babylon has raised over $630 million from firms like Vostok New Ventures, Saudi Arabia's Public Investment Fund, Hoxton Ventures, Munich Re Ventures, Centene and Kinnevik. http://axios.link/Qpu0

🚑 Tango Therapeutics, a Cambridge, Mass.-based developer of cancer therapies, agreed to go public at an implied $353 million valuation via BCTG Acquisition Corp. (Nasdaq: BCTG), a biotech SPAC formed by Boxer Capital. Tango had raised $165 million from firms like Boxer, Third Rock Ventures, Casdin Capital, Gilead Sciences and Cormorant Asset Management. www.tangotx.com

Liquidity Events

SMAC, a French building envelope and waterproofing company owned by OpenGate Capital, sold its skylights unit to a division of Kingspan Group (LSE: KGP). www.smac-sa.com

More M&A

Prudential Financial (NYSE: PRU) is seeking a buyer for most of its retirement business, which could garner more than $2 billion, per Bloomberg. http://axios.link/IfsW

Fundraising

CenterOak Partners, a Dallas-based PE firm, raised $690 million for its second fund. www.centeroakpartners.com

Inflexion Partners, a London-based midmarket PE firm, is raising £2 billion for its sixth fund, per WSJ. http://axios.link/RWQY

Pale Blue Dot, a European early-stage climate tech VC firm, secured €34 million more for its debut fund, on top of a €53 million first close. http://axios.link/cx08

It's Personnel

John Browne, former CEO of BP, joined General Atlantic as a London-based senior advisor. http://axios.link/wcSO

Clinton Foy joined UTA Ventures, the VC arm of talent agency UTA, as a general partner. He previously was with Crosscut Ventures. http://axios.link/nvAf

Steve Reynard joined Hermes GPE as a partner. He previously was private equity portfolio manager for the State Teachers Retirement System of Ohio. www.hermesgpe.com

Final Numbers
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Data: Coindesk; Chart: Sara Wise/Axios

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