Dec 1, 2020

Axios Pro Rata

🎧 Axios Re:Cap dug into the upcoming Senate runoff elections in Georgia, including a chat with former Georgia Gov. Roy Barnes. Listen via Apple, Spotify or Axios.

🚨 Situational awareness: CNBC's David Faber reports that the Salesforce/Slack merger will be announced after market close today, when Salesforce reports its Q3 earnings.

Top of the Morning

Illustration: Sarah Grillo/Axios

Carey Smith founded a company, sold it for a ton of money and became a full-time venture capitalist. Pretty standard evolution. But that's where the ordinary ends.

  • Smith, who runs Austin-based Unorthodox Ventures, doesn't invest in software. He doesn't think entrepreneurs should give up much equity, and that they should seek to become profitable as soon as possible. He doesn't have return expectations, nor does he have interest in managing anyone else's money.
  • In short, he's an iconoclast in an industry that worships at the altar of pattern matching.

"I'm not a finance guy," says Smith, who bootstrapped Kentucky-based Big Ass Fans before selling it for $500 million to private equity firm Lindsay Goldberg.

  • "With the fan company we always said we had to make money to stay in business, but that wasn't our primary interest."

The backstory: Unorthodox Ventures includes many of his former Big Ass Fans colleagues — with expertise in areas like industrial engineering and marketing.

  • Its portfolio companies range from a startup that makes bidets to an underwater fishing camera to spiked seltzer. Plus, Awkward Essentials, which makes after-sex cleanup sponges.
  • Smith says he wishes there were more industrial manufacturing startups, but has struggled to find them.

Behind the scenes: "Sometimes it's a good idea that really needs help with engineering," says Smith, whose firm can invest up to $10 million per company.

  • "Some entrepreneurs have a tendency to outsource everything ... which can make quality control very difficult and, if you do it in China, you lose your IP rights."
  • He bristled when I asked why he doesn't just run a consultancy, given his philosophies on ROI and founder equity maintenance: "You can... get a prostitute or get married. They involve the same thing, but there's a difference in approaches. We want to be partners with our companies."

The bottom line: Smith's fan company was known for doing things differently, from compensation to pricing to where it manufactured its products. He's now carried that over to venture capital.

The BFD

Illustration: Aïda Amer/Axios

Collectors Universe (Nasdaq: CLCT), a provider of authentication and grading services for collectibles, agreed to be taken private for around $700 million by an investor group that includes D1 Capital Partners, Steve Cohen’s family office and Flatiron Health co-founder Nat Turner.

  • Why it's the BFD: As a kid I collected lots of sports autographs, usually by hanging around before or after games. I've since learned they have no monetary value unless I pay to have them authenticated by a company like CU.
  • Details: The deal values CU at $75.25 per share, a 3.7% premium to last Friday's closing price and a whopping 230% premium to where CU shares began 2020.
  • The bottom line: "Sports trading cards are enjoying something of a renaissance, fetching greater value than ever before and engendering excitement on a level not seen since their last golden age in the 1990s... If you'd invested in both stocks and trading cards a dozen years ago, your card portfolio would be worth nearly twice as much." — Jeff Tracy, Axios
Venture Capital Deals

CRED, an Indian credit card startup , raised $80 million in Series C funding. DST Global led, and was joined by return backers Sequoia Capital and Ribbit Capital. http://axios.link/mKS1

Flexe, a Seattle-based on-demand warehousing and fulfillment company, raised $70 million in Series C funding. T. Rowe Price led, and was joined by insiders Activate Capital, Tiger Global, Madrona Ventures, Redpoint Ventures and Prologis Ventures. www.flexe.com

🚑 Tallac Therapeutics, a Burlingame, Calif.-based developer of cancer immunotherapies, raised $62 million in Series A funding from VenBio Partners, Morningside Venture, Lightstone Ventures, Matrix Partners China and MRL Ventures Fund. www.tallactherapeutics.com

Aurora Solar, a San Francisco-based solar panel installation startup, raised $50 million in Series B funding. Iconiq Capital led, and was joined by insiders Energize Ventures, Fifth Wall and Pear VC. http://axios.link/coem

GoSite, a San Diego-based website building platform for SMBs, raised $40 million in Series B funding. Left Lane Capital led, and was joined by Longley Capital, Cove Fund, Stage 2, Ankona Capital and Serra Ventures also participating. http://axios.link/mCIW

Materialize, a New York-based SQL streaming database startup, raised $32 million in Series B funding. Kleiner Perkins led, and was joined by Lightspeed Venture Partners. http://axios.link/P0eR

Surfline, a media company focused on surfing coverage, raised $30 million from TCG, the venture affiliate of The Chernin Group, per Axios. http://axios.link/oIMF

Ankorstore, a French wholesale marketplace for independent retailers, raised €25 million. Index Ventures led, and was joined by return backers GFC, Alven and Aglaé. http://axios.link/Q8bI

Infogrid, a London-based startup that retrofits buildings to make them “smart,” raised $15.5 million in Series A funding. Northzone led, and was joined by JLL Spark, Concrete VC, The Venture Collective and Jigsaw VC. http://axios.link/RNc5

Databand, an Israeli observability platform for dev ops, raised $14.5 million in Series A funding. Accel led, and was joined by Blumberg Capital, Lerer Hippeau, Ubiquity Ventures, Differential Ventures and Bessemer Venture Partners. http://axios.link/XwJy

Pier, a Brazilian digital insurer, raised $14.5 million in Series A funding. Monashees led and was joined by Canary, Mercado Livre and BTG Pactual. http://axios.link/HJWN

🚑 iVexSol, a Worcester, Mass.-based lentiviral vector manufacturing startup, raised $13 million in Series A funding. Backers include Casdin Capital and BioLife Solutions. www.ivexsol.com

Vivenu, a German live event ticketing platform, raised €12.6 million in Series A funding. Balderton Capital led and was joined by seed backer Redalpine. http://axios.link/1U3F

Newomics, a Berkeley, Calif.-based developer of mass spectrometry devices, raised $7.9 million in Series B funding. MSA Capital led, and was joined by LDV Partners, Berkeley Catalyst Fund and the Photon Fund. www.newomics.com

Vanti Analytics, an Israeli manufacturing AI startup, raised $4.5 million in seed funding. True Ventures and More VC co-led, and were joined by i3 Equity Partners. http://axios.link/je1P

EarlyBird, a Chicago-based fintech gifting platform for families, raised $2.4 million led by Network Ventures. http://axios.link/TF0u

Super Normal, an AI platform for business video recordings, raised $2 million in seed funding led by EQT Ventures. www.supernormnal.app

Salut, a virtual fitness class hosting app, raised $1.25 million led by Precursor Ventures. http://axios.link/oMly

Private Equity Deals

AEA Investors acquired a majority stake in Process Sensing Technologies, a U.K.-based maker of precision measurement and monitoring equipment, from Battery Ventures (which will retain a minority stake). www.processsensing.com

The Carlyle Group acquired a majority stake in Every Man Jack, a Corte Madera, Calif.-based men’s person care brand. www.everymanjack.com

Entrepreneurial Equity Partners invested in Salm Partners, a Denmark, Wisc.-based contract manufacturer of fully cooked sausages and hot dogs. www.salmpartners.com

🚑 H.I.G. Capital made a growth equity investment in Pinnacle GI Partners, a management services organization for Michigan-based digestive health services firm CDH. www.troygastro.com

🚑 Kelso & Co. agreed to buy Refresh Mental Health,, from Lindsay Goldberg, per PE Hub. http://axios.link/5xX7

🚑 Kohlberg & Co. and Mubadala completed their previously-announced buyout of a majority stake in PCI Pharma Services, a Philadelphia-based provider of pharma supply chain solutions, from Partners Group. http://axios.link/w9Qc

🚑 Market Access Transformation, a Short Hills., N.J.-based insights platform for life sciences, raised $30 million in growth equity funding from Silversmith Capital Partners. www.marketaccesstransformation.com

MidOcean Partners acquired FullSpeed Automotive, a Greenwood Village, Colo.-based auto aftermarket services provider, from CenterOak Partners. www.fullspeedautomotive.com

Sycamore Partners agreed to buy Anne Taylor, Lane Bryant and other retail assets from bankrupt Ascena Retail Group for $540 million. http://axios.link/OkCA

Vista Equity Partners agreed to buy Gainsight, a San Francisco-based customer success platform, for $1.1 billion. Gainsight had raised over $180 million in VC funding from such backers as Battery Ventures, Summit Partners, Sixth Street Partners, Bessemer Venture Partners, Lightspeed Venture Partners, Bain Capital Ventures, Founders Circle Capital, Salesforce Ventures, Cisco and Insight Partners. http://axios.link/qZ3Y

Public Offerings

Illustration: Sarah Grillo/Axios

Airbnb, the San Francisco-based hospitality giant, set IPO terms to 51.9 million shares at $44-$50. It would have an initial market cap of $28 billion, or an enterprise value of $32 billion, were it to price in the middle of its range. http://axios.link/A0YV

SPAC Stuff

🦁 The Lion Electric, a Canadian electric truck and bus maker owned by BDC Capital, will go public via a reverse merger with Northern Genesis Acquisition Corp. (NYSE: NGA) at a $1.9 billion valuation (including a $200m PIPE). http://axios.link/27jD

View, a Milpitas-based maker of smart glass for buildings, will go public via a reverse merger with CF Finance Acquisition Corp II (Nasdaq: CFII), a SPAC formed by Cantor Fitzgerald. The deal values view at $1.6 billion (including $300m PIPE), which is less than view raised in private funding from firms like SoftBank Vision Fund, TIAA, BlackRock, Corning, DBL Partners, Khosla Ventures, Union Grove Venture Partners and Madrone Capital Partners. http://axios.link/3W0W

Altitude Acquisition, a travel industry-focused SPAC, cut its IPO size from $300 million to $250 million. http://axios.link/2dpk

Corner Growth Acquisition, a tech-focused SPAC formed by Corner Ventures, filed for a $300 million IPO. http://axios.link/SjIt

🚑 MedTech Acquisition, a U.S. medtech-focused SPAC , filed for a $200 million IPO. Its CFO is David Matlin, co-founder of MatlinPatterson Global Advisers. http://axios.link/YnBl

ScION Tech Growth I, a tech-focused SPAC formed by ION Investment Group, filed for a $500 million IPO. http://axios.link/C7tU

Seaport Global Acquisition, a distressed business-focused SPAC formed by Global Asset Management (SGAM) targeting distressed businesses, raised $125 million in its IPO. http://axios.link/FcNE

Thayer Ventures Acquisition, a travel and transport-focused SPAC formed by Thayer Ventures, cut its IPO size from $175 million to $150 million. http://axios.link/XQ3z

Liquidity Events

🚑 AdaptHealth (Nasdaq: AHCO) agreed to buy AeroCare, an Orlando, Fla.-based provider of home respiratory therapy services and medical equipment, for $2 billion in cash and stock. Sellers include Peloton Equity, Lunsford Capital, SV Health Investors and Morgan Stanley. http://axios.link/xeox

Facebook (Nasdaq: FB) acquired Kustomer, a New York-based SaaS platform for enterprise customer service, for $1 billion. Kustomer had raised $173 million in VC funding, most recently in late 2019 at a $710 million valuation, from firms like Redpoint Ventures, Social Leverage, Canaan Partners, Battery Ventures, Tiger Global Management and Coatue. http://axios.link/kZir

Jacobs Engineering (NYSE: J) agreed to buy a 65% stake in management consultancy PA Consulting from The Carlyle Group at a 1.83 billion enterpriser value. http://axios.link/wi98

Uber (NYSE: UBER) completed its all-stock acquisition of on-demand delivery company Postmates, which had raised over $900 million from firms like Founders Fund, Spark Capital, Uncork Capital, and Tiger Global Management.

🚑 Vance Street Capital sold A&E Medical, a Farmingdale, N.J.-based maker of sternal closure devices, to Zimmer Biomet (NYSE: ZBH) for $250 million. www.aemedical.com

More M&A

🚑 AstraZeneca (LSE: AZN) agreed to sell the rights for cholesterol drug Crestor to German drug company Gruenenthal for upwards of $350 million ($320m upfront). http://axios.link/a7iR

JD Sports Fashion (LSE: JD) said it won’t pursue a takeover of troubled British department store chain Debenhams. http://axios.link/1dW8

SoftBank invested around $610 million for a 10.1% stake in listed Swedish cloud computing company Sinch. http://axios.link/K8jJ

Fundraising

Longship of Norway raised around €160 million for its second lower mid-market buyout fund. http://axios.link/3W0W

R42, a Palo Alto-based VC firm led by Ronjon Nag (ex-Motorola, BlackBerry), is raising $20 million for its debut fund, per an SEC filing. http://axios.link/74KJ

It's Personnel

Josh Elman, a former partner with VC firm Greylock, is joining Apple to work on its App Store team. He will step off the boards of Medium, Discord and Mammoth Media. http://axios.link/HMIM

António Horta-Osório, the outgoing CEO of Lloyds Banking Group, agreed to join Credit Suisse as chairman. http://axios.link/egwT

Kelly Griffin (ex- Caxton Associates) joined Sun Capital Partners as a managing director and head of IR. It also added Angela Geffre (Jones Lang LaSalle) as chief HR officer. www.suncappart.com

Final Numbers
Data: PwC; Table: Axios Visuals

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