Axios Pro Rata

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January 20, 2023

🚨 Breaking: Google and Wayfair are the latest companies to announce massive layoffs, with the search giant to shed 12,000 employees and the furniture retailer to cut 1,750 workers.

Top of the Morning

Fly GIF by Angry Birds - Find & Share on GIPHY
Source: Giphy

Angry Birds may be flying to a new roost, at a time when old gaming IP is getting an unexpected lift.

Driving the news: Playtika, a Nasdaq-listed Israeli company mostly known for its mobile casino games, said that its offered to buy Finland's Rovio for nearly €689 million (US$745 million) in cash.

  • The €9.05 per share bid represents around a 55% premium to where Rovio's stock closed on Wednesday.
  • It's also 6% higher than what Playtika says it quietly offered Rovio last November.
  • Rovio was valued at around $1.1 billion when it went public in 2017, and previously had raised VC funding from Accel and Atomico.

Behind the scenes: Rovio is basically a one-trick pony, although it's been a pretty neat trick. Angry Birds has spawned eight mobile games, two films and enough merhandise to fill a small stadium.

  • Playtika likely believes its casino chops can help it better monetize Rovio's users.
  • It's also taking a page out of Emerson Electric's recent playbook, hoping that public disclosure will pressure its target to accept.
  • One complication could be that Playtika itself has been under pressure, last month laying off around 15% of its global workforce, or 615 employees.

The big picture: All of this comes against the backdrop of "The Last of Us," the blockbuster streaming series on HBO Max that's based on a legacy gaming franchise.

  • I'm not suggesting that Playtika is seeking to create an apocalyptic, live-action version of Angry Birds, but rather that acquisitive gaming companies might be taking a fresh look at older names.
  • (Actually, scratch that ... I totally want Playtika to create an apocalyptic, live-action version of Angry Birds).

The BFD

Illustration of pixelated coins falling as dominos.

Illustration: Aïda Amer/Axios

Genesis Global, the crypto lender owned by Barry Silbert's Digital Currency Group, last night filed for Chapter 11 bankruptcy protection.

Why it's the BFD: This reflects how the crypto contagion didn't begin with FTX, to which Genesis had only around $175 million in exposure, and that it didn't end with Sam Bankman-Fried's arrest.

  • It's also a negotiating failure, as Genesis creditors reportedly were offered cash and DCG equity prior to the bankruptcy filing.

Cap table: SoftBank led a $700 million secondary investment in DCG in late 2021, at a $10 billion valuation. Other backers included CapitalG, Ribbit Capital, GIC, Tribe Capital and Emory University.

  • Silbert at the time held a 40% stake, having never sold shares.
  • DCG, which also owns the Grayscale Bitcoin Trust and media site CoinDesk, recently suspended quarterly shareholder dividends.

The bottom line: DCG, one of the crypto industry's most highly valued conglomerates and most active investors, is falling to bits.

Venture Capital Deals

PhonePe, an Indian payments and financial services firm, raised $350m in new funding from General Atlantic at a $12b valuation. The company could raise an additional $650m as part of the round. https://axios.link/3wev0BX

🚑 SetPoint Medical, a Valencia, Calif.-based startup focused on chronic autoimmune diseases, raised $80m co-led by Norwest Venture Partners and Viking Global Investors. The company also secured a $65m credit facility led by Runway Growth Capital. https://axios.link/3D1ApjE

Flashbots, an Ethereum infrastructure service, is in discussions to raise up to $50m at a billion-dollar valuation, per The Block. https://axios.link/3Xyz4bU

aiOla, an Israeli voice and image recognition startup focused on manufacturing inspection, raised $25m. New Era led, and was joined by Hamilton Lane. https://axios.link/3kzcSAk

iLife Technologies, a Sunnyvale, Calif.-based life insurance sales SaaS, raised $17m in Series A funding from Foundation Capital, Brewer Lane Ventures and SCOR Ventures. https://axios.link/3QTpEW4

Rive, an SF-based provider of real-time animation software, raised $10m in Series A funding led by Two Sigma Ventures. https://axios.link/3XKv6gy

Presso, an Atlanta-based dry cleaning robotics startup, raised $8m in seed funding from Uncork Capital, 1517 Fund, AME Cloud Ventures, HAX, SOSV, Pathbreaker Ventures, VSC Ventures and YETI Capital. https://axios.link/3kuBUjH

Thirteen Lune, an e-commerce portal for inclusive beauty brands, raised $8m in seed funding led by The BrainTrust Fund. https://axios.link/3iQlZff

Wristcheck, a Hong Kong-based luxury watch consignment retailer, raised $8m in seed funding. Gobi Partners led, and was joined by K3 Ventures. https://axios.link/3iPYN0I

Core10, a Franklin, Tenn.-based provider of lending and account opening products, raised $6.5m in Series B finding. Patriot Financial Partners led, and was joined by JAM Fintop and ICBA. www.core10.io

Akia, an SF-based customer experience automation platform, raised $6m in Series A funding. Altos Ventures led, and was joined by GSR Ventures. www.akia.com

🚑 Kinspire, a Denver-based pediatric occupational therapy platform, raised $3.6m in seed funding. Corazon Capital and Looking Glass Capital co-led, and were joined by Bradley Tusk, Difference Partners, Great Oaks VC, Service Provider Capital, The Fund and Copper Wire Ventures. www.kinspirehealth.com

GoodOnes, an SF-based AI that declutters camera storage by picking out the best photos, raised $3.5m in seed funding. TLV Partners led, and was joined by Liquid2 Ventures, Rich Miner and Peter Welinder. www.goodones.app

Tiny Digital Factory, a mobile racing and motorsport game publisher with offices in France and Canada, raised $3.25m from Sandsoft Games. www.tinydigitalfactory.com

SphereOne, a cross-chain crypto payments platform, raised $2.5m in seed funding. Distributed Global led, and was joined by Newark Venture Partners and Zero Knowledge. https://axios.link/3QYpUU4

Higharc, a Durham, N.C.-based homebuilding platform, raised $1.3m in strategic funding from Simpson Strong-Tie. www.higharc.com

Private Equity Deals

Astara Capital Partners invested in Jeffersonville, Ind.-based snackfood and cereal maker Wyandot. www.wyandotsnacks.com

Exterro, a Beaverton, Ore.-based portfolio company of Leeds Equity Partners, acquired a majority stake in Zapproved, a Portland, Ore.-based e-discovery software provider owned by Vista Equity Partners and K1 Investment Management (both are retaining minority positions). www.zapproved.com

🚑 HGGC invested in Dentive, a Provo, Utah-based provider of management services to dental practices. www.godentive.com

• Quad-C Management agreed to buy QED Technologies, a Rochester, N.Y.-based provider of MRF polishing and SSI metrology manufacturing solutions, from Entegris (Nasdaq: ENTG). www.qedmrf.com

Sun Capital Partners acquired Fresh Origins, a San Marcos, Calif.-based grower of microgreens and edible flowers for foodservice and retail customers. www.freshorigins.com

TerraSource, a St. Louis-based subsidiary of Right Lane Industries, acquired Elgin Separation Solutions, a Stafford, Texas-based maker of materials processing parts. www.terrasource.com

Warren Equity recapitalized KV Power, an Andrews, Texas-based electrical infrastructure solutions provider backed by Rock Hill Capital. KV Power also acquired Irvine, Calif.-based Station Electric. www.kv-p.com

Correction: We misplaced a decimal point on Wildfire Energy's deal for some South Texas assets of Chesapeake Energy. The correct figure is $1.43b.

SPAC Stuff

Openmarkets, an Australian provider of trading and wealth management platform, agreed to go public at an implied $90m valuation via Broad Capital Acquisition Corp. (Nasdaq: BRAC). https://axios.link/3wlSiFT

5G Edge Acquisition, a TMT SPAC chaired by ex-IBM exec Douglas Maine, withdrew registration for a $300m IPO. https://axios.link/3HerJsG

Vector Capital withdrew registration for two tech SPACs, Vector Acquisition III and IV, which had been expected to raise a total of $600m. www.vectorcapital.com

Liquidity Events

Vice Media, which once was valued by VCs at $5.7b, is restarting its sales process with expectations that it will fetch less than $1b, per CNBC. Backers include TPG, The Raine Group, Disney and TCV. https://axios.link/3WygWy4

More M&A

🚑 Caris Life Sciences, an Irving, Texas-based liquid biopsy developer, secured $400m from OrbiMed and Braidwell via a senior secured term loan. The company has raised a total of $1.7b since 2018. https://axios.link/3D1RAla

Lufthansa, the German flagship air carrier, offered to buy a minority stake in Italy's ITA Airlines. https://axios.link/3IYWF1m

  • Lufthansa also is seeking minority investment in aircraft maintenance unit Lufthansa Technik, per Reuters.

🚑 Sun Pharmaceutical Industries of India agreed to buy Concert Pharmaceuticals (Nasdaq: CNCE), a Lexington, Mass.-based developer of treatments for alopecia areata. The deal includes a $576m upfront payment, or $8 per share, plus up to $3.50 per share more in earnouts. https://axios.link/3HjM4wR

U.K. antitrust regulators ordered French pastry-mix maker Cérélia to sell Jus-Rol, a ready-bake products maker it acquired last year from General Mills. https://axios.link/3HfHgIF

Fundraising

Galdana Ventures of Spain closed on over $650m for its third fund, which is seeking to hold a $700m+ final close in August. www.galdanaventures.com

Garnett Station Partners raised $850m for its fourth fund. www.garnettstation.com

KKR halted redemptions from its $1.6b non-traded REIT, following a similar move by Blackstone. https://axios.link/3iLvYCN

Waterland Private Equity Investments of the Netherlands raised €3.5b for its ninth flagship fund and €500m for a new fund that will take minority stakes in Waterland portfolio companies after they’re exited. www.waterland.be

Correction: Yesterday's newsletter mistakenly lowballed the final close of Audax Private Debt's second direct lending fund. The proper figure is $3b, not $2.25b.

It's Personnel

Kelly McCarthy joined The Vistria Group as head of impact. She previously was with Global Impact Investing Network. www.vistria.com

Chris McKinnon rejoined law firm Morrison Foerster, after having been legal director and associate general counsel at SoftBank. https://axios.link/3J5juRb

Alpine Partners promoted Dorothy Walter, Daniel Cohen and Jake Brodsky to partners. It also promoted Jacob Zodikoff to principal, Tal Lee Anderman to chief talent officer and hired Alexandria Stuart (ex-Vista Equity) as general counsel and chief compliance officer. www.alpineinvestors.com

BBG Ventures promoted Claire Biernacki to principal. www.bbgventures.com

Bernhard Capital promoted Julius Bedford and Ryan Lemoine to principals, Michael Bernhard to VP and Michael Beutner and Matthew Kowalczyk to senior associates. www.bernhardcapital.com

Rose Park Advisors promoted Chris Calder to managing director. https://axios.link/3wgDkBe

Final Numbers

Data: Netflix earnings reports; Chart: Thomas Oide/Axios

It was the end of an era at Netflix yesterday, when co-founder and CEO Reed Hastings kicked himself upstairs to become executive chairman.

  • This comes as the streaming industry is facing pressure to bundle ... err ... consolidate.

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