May 21, 2020

Axios Pro Rata

🎧 Pro Rata Podcast talked with Sen. Amy Klobuchar about her opposition to an Uber-Grubhub merger, her skepticism of Facebook's deal for Giphy, and why she didn't sign onto Elizabeth Warren's M&A moratorium proposal. It's also our 300th episode! Listen via Apple or via Axios.

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Top of the Morning

Illustration: Sarah Grillo/Axios

Ex-Juul CEO Kevin Burns is in advanced talks to join SoftBank-backed digital pharmacy Alto, Axios has learned from multiple sources.

Why it matters: He'd be going from a company that was the scourge of public health officials to one that seeks to become an integral part of America's health care delivery system.

Résumé: Burns was a private equity executive with TPG Capital until leaving in 2014 to become president and COO of Greek yogurt company Chobani. He took over e-cigarette maker Juul in late 2017, before stepping down last September.

  • During his time at Juul, the company faced increased regulatory scrutiny and product bans. He also oversaw its sale of a 35% stake for $12.8 billion to Altria, which since has turned into an albatross around Altria's balance sheet.

Alto Pharmacy was founded in 2015 by Matt Gamache-Asselin, and operates as a digital drug distribution platform whose rivals include Amazon's PillPack.

  • It has raised around $350 million in venture capital, from firms like SoftBank Vision Fund, Jackson Square Ventures, Greenoaks Capital Partners, Olive Tree Capital, and Zola Global. The SoftBank investment was tranched-out, with the second piece coming within the past few weeks.
  • Gamache-Asselin and Burns first began talking as part of a COO search, but one of the job titles now being discussed is co-CEO. A formal board vote is likely within days.

The bottom line: Alto is betting that Burns' operational value will outweigh any blowback the decision prompts from customers, partners and employees.


Illustration: Aïda Amer/Axios

SelectQuote, an Overland Park, Kansas-based insurance policy comparison site backed by Brookside Equity Partners, raised $570 million in its IPO. It priced 28.5 million shares at $20, above its $17-$19 range, for an initial market cap of $3.25 billion.

  • Why it's the BFD: This is the largest U.S. IPO since early February, and just one of a small handful of non-biotech or non-SPAC issuers to price at all.
  • Details: SelectQuote will trade on the NYSE (SLQT), while Credit Suisse and Morgan Stanley were lead underwriters. It reports $60 million of profit on $263 million in revenue for the nine months ending March 31, 2020.
  • The bottom line: "Since late February, the Cboe Volatility Index, known as Wall Street’s fear gauge, has been above the 20-point threshold that most IPO hopefuls monitor to gauge investor jitters. But it has trended downwards in recent weeks, giving some companies confidence to test the market." — Joshua Franklin, Reuters
Pro Rata for Kids

Today's project is for your kid(s) to make a potato person. Kind of like Mr. Potato Head, but with a real potato. Paint it, or otherwise draw a face on it, and then kind some things to stick in for legs, arms, etc. Can you give it hair or a hat? For ideas, just Google image search "potato people crafts."

  • Per usual, please send me photos of what they create.

Yesterday's project was to make animal face toast:

Niles, age 3 (left), and a creation by Abby, age 8 (right)
Venture Capital Deals

Samsara Networks, a San Francisco-based provider of IoT sensors and cameras, raised $400 million at a $5.4 billion valuation (down from last mark of $6.3 billion), per Bloomberg. AllianceBernstein, Franklin Templeton, General Atlantic, Sands Capital Management, and Warburg Pincus were joined by return backers Andreessen Horowitz, General Catalyst, Dragoneer, and Tiger Global Management.

🚑 Amwell, a Boston-based telehealth, raised $194 million in Series C funding from firms like Allianz X and Takeda.

Aspiration, a Los Angeles-based provider of socially-conscious financial advisory services, raised $135 million in Series C funding. Alpha Edison led, and was joined by UBS O’Connor Capital Solutions, DNS Capital, Radicle Impact, Sutter Rock, Jeff Skoll, Joseph Sanberg, Social Impact Finance, the Pohlad Companies, and AGO Partners.

States Title, a San Francisco-based automation platform for real estate closings, raised $123 million in Series C funding led by Greenspring Associates.

Coalition, a San Francisco-based cybersecurity insurance startup, raised $90 million in Series C funding. Valor Equity Partners led, and was joined by Greyhound Capital and Felicis Ventures.

🚑 Nautilus Biotech, a San Carlos, Calif.-based platform for analyzing and quantifying the human proteome, raised $76 million in Series B funding. Vulcan Capital led, and was joined by Perceptive Advisors, Bezos Expeditions, Defy Partners, and return backers AME Cloud Ventures, Andreessen Horowitz, Bolt, and Madrona Venture Group.

Imperfect Foods, a San Francisco-based online food marketplace aimed at reducing food waste, raised $72 million in Series C funding. Insight Partners led, and was joined by Norwest Venture Partners.

🚑 HotSpot Therapeutics, a Boston-based developer of allosteric therapies, raised $65 million in Series B funding. S.R. One led, and was joined by Tekla Capital Management, MRL Ventures Fund, Solasta Ventures, Brace Pharma, and return backers Atlas Venture and Sofinnova Partners.

Amplitude, a San Francisco-based product intelligence startup, raised $50 million in Series E funding at a $1 billion valuation. GIC led, and was joined by return backers Sequoia Capital, Benchmark, Battery Ventures, IVP, and Lead Edge Capital.

Spruce, a New York-based provider of real estate transaction processing software, raised $29 million in new funding. Scale Venture Partners led, and was joined by Zigg Capital and Bessemer Venture Partners.

Rent the Runway, a New York-based clothing rental platform, is in talks to raise at least $25 million led by T. Rowe Price at around a $750 million valuation (down from last mark of $1 billion), per Bloomberg.

🚑 Artms, a Canadian developer of radioisotope technologies, raised US$19 million in Series A funding. Deerfield Management led, and was joined by GHS Fund.

🚑 ObvioHealth, an Orlando, Fla.-based virtual health research organization, raised $17 million led by TKS1.

Evervault, an Ireland-based data privacy startup, raised $16 million in Series A funding. Index Ventures led, and was joined by return backers Sequoia Capital, Kleiner Perkins, and Frontline Ventures.

🚑 UroMems, a French developer of an artificial urinary sphincter, raised €16 million in equity and debt funding. Hil-Invent and Financière Arbevel co-led, and were joined by return backers Wellington Partners, Bpifrance, Cita Investissement, Supernova Invest, and btov Partners.

Human Interest, a San Francisco-based provider of 401(k) services for small and mid-sized businesses, raised $10 million in new Series C funding led by Glynn Capital.

Strapi, an open-source headless CMS, raised $10 million in Series A funding led by Index Ventures.

Xwing, an autonomous aviation startup, raised $10 million in Series A funding. R7 Partners led, and was joined by Alven, Eniac Ventures, and Thales Corporate Ventures.

Brainbase, a Los Angeles-based rights management platform for Hollywood studios, raised $8 million in new funding. Bessemer Venture Partners and Nosara Capital co-led, and were joined by Alpha Edison, Struck Capital, Bonfire Ventures and FJ Labs.

🚑 Clara Insurance, a New York-based provider of supplemental health benefits, raised $5.5 million in seed funding. Two Sigma Ventures led, and was joined by Founder Collective, RGAX LLC, and SymphonyAI.

New Vector, a London-based developer of a decentralized communications standard, raised $4.6 million in new funding from Automattic.

Private Equity Deals

The Blackstone Group is seeking to renegotiate terms of its planned €1.3 billion acquisition of Dutch lender NIBC, per Bloomberg.

Development Partners International invested $56 million into Société Industrielle des Conserves Alimentaires, a Tunisian food business and tomato processor.

Forescout Technologies (Nasdaq: FSCT) is suing Advent International for walking away from its $1.9 billion acquisition of the device visibility and control company.

Lion Capital invested $25 million for a minority equity stake in residential real estate brokerage startup REX.

Greencoat Capital agreed to buy a 156-megawatt portfolio of British solar assets from BlackRock and Lightsource BP.

Public Offerings

🚑 Inari Medical, an Irvine, Calif.-based maker of medical devices for treating venous diseases, raised its IPO price range from $14-$16 to $17-$18. It will plans to offer 7.33 million shares and list on the Nasdaq (NARI) with BAML as lead underwriter. The company reports a $1 million net loss on $51 million in 2019 revenue, and raised $53 million in VC funding from such firms as USVP (20% pre-IPO stake), Gilde Healthcare (19.6%), Versant Ventures (14.9%), and Crown Venture Fund (8.9%).

Liquidity Events

Affirma Capital hired JPMorgan to find a buyer for its minority stake in Jordanian food processing company Al Jazeera Agriculture Co., per Reuters.

🚑 Clayton Dubilier & Rice sold NaviHealth, a Brentwood, Tenn.-based provider of post-acute care management services, to OptumHealth a subsidiary of UnitedHealth Group (NYS: UNH), at a reported enterprise value of $2.5 billion.

More M&A

Cboe Global Markets agreed to buy MatchNow, a Toronto-based dark-trading platform, from Virtu Financial (Nasdaq: VIRT).

SoftBank Group said it plans to sell 5% of its Japanese telecom unit, which could be valued at around $3.1 billion, as part of its plan to raise $41 billion via asset sales.


Ares Management is seeking to raise €9 billion for its fifth European debt fund, per the WSJ.

Cyberstarts, an Israeli VC firm focused on cybersecurity, is raising $100 million for its second fund, per an SEC filing.

Founder Collective raised $85 million for its fourth seed-stage fund.

Periscope Equity, a Chicago-based private equity firm, is raising $200 million for its second fund, per an SEC filing.

Vance Street Capital, a Los Angeles-based mid-market private equity firm, is raising $375 million for its third fund, per an SEC filing.

It's Personnel

Casey Simmons joined Qatar Investment Authority as a tech-focused private equity investor, per his LinkedIn page. He previously was a principal with Next47.

Tom St. Geme joined Thompson Street Capital Partners as a vice president, per his LinkedIn page. He previously was a VP with Thomas H. Lee Partners.

Hajime Tamachi is leaving Nomura Holdings, where he was a Hong Kong-based managing director for financial deals, per Bloomberg.

Final Numbers
Data: U.S. Employment and Training Administration via FRED; Chart: Andrew Witherspoon/Axios

Go deeper: Jobless claims keep coming

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