Axios Pro Rata

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August 06, 2021

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Top of the Morning

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Illustration: Sarah Grillo/Axios

With everything going up and to the right, it's only fitting that corporate venture capital investments did too during the past quarter.

What's happening: Global CVC-backed funding reached $79 billion across 2,099 deals in the first half of 2021 — more than the $74 billion invested in all of 2020, according to new CB Insights data.

Between the lines: Corporate VCs can be large check writers thanks to their parent companies' large balance sheets, making them hefty players who can supply a lot of capital to the right opportunities.

By the numbers:

  • Exits of CVC-backed companies were up 95% year-over-year in H1 2021, with a record of 438. There were 120 CVC-backed companies that went public, a near tripling from H1 2020.
  • Mega-rounds of more than $100 million hit 10% of all CVC deals, compared to just 5% in the first half of 2020. They nearly tripled from 78 in the first half of 2020 to 218 in the first half of 2021.
  • The average CVC-backed deal size grew by 75% year-over-year to an all-time high of $46.9 million. For comparison, the average venture-only-backed deal size only grew by 68% year-over-year to $30.1 million in H1 2021.

Zooming in: GV (formerly known as Google Ventures) was the most prolific corporate VC in that period, with 64 deals.

  • This shouldn't be a surprise: GV may be a corporate venture investor, but it's always operated much more akin to independent VC funds, from how it compensates its partners, to prioritizing returns over backing startups for strategic purposes for its parent, Google.
  • Meanwhile, Salesforce Ventures came in second place with 59 deals, but kept the top spot as a "unicorn" investor with 18 deals, reminding us yet again that selling software to big businesses is great for returns even if it's less sexy and headline-grabbing than fun consumer apps.
  • CB Insights also notes that Coinbase Ventures, the cryptocurrency exchange's VC arm, came in third place with 37 deals, nearly doubling its 2020 activity — highlighting the growing important of its industry.

The bottom line: Startups are hot — and corporations want an increasingly bigger piece of them.

Also...

💸 Just when the crypto industry thought it had been saved by a trio of senators' proposed amendment to the infrastructure bill's provision on reporting requirements, a plot twist emerged: another trio of senators introduced a competing — and less-than-ideal — amendment.

  • State of play: While the amendment from Sens. Ron Wyden, Pat Toomey, and Cynthia Lummis would exclude node operators, software developers and the like from qualifying as a "broker," the new one from Sens. Mark Warner, Rob Portman, and Kyrsten Sinema would only give a pass to proof-of-work node operators and digital wallet makers.
  • Even the White House jumped into the debate last night, calling the Warner-Portman-Sinema amendment a good "compromise" — something the industry vehemently disagrees with.
  • That amendment, crypto insiders say, would "pick winners and losers" by exempting certain protocols (like bitcoin) while imposing what they see as unworkable requirements on others, and effectively stifling them.

The BFD

Illustration of George Washington meditating. 
Illustration: Aïda Amer/Axios

Levi's has agreed to acquire Beyond Yoga, a Los Angeles-based yoga and fitness apparel company, for an undisclosed sum.

  • Why it's the BFD: With the pandemic-induced "new normal" of working from home and signs that we'll be oscillating between looser and stricter restrictions, it's no surprise the iconic San Francisco denim company is betting on yoga pants. (I'm quite sure I've worn yoga pants almost daily since March 2020!)
  • The bottom line: "As some people start going back to the office, you're not seeing suits anymore, you're seeing people go into the office in more casual clothing, even athleisure-type products .... And it's a truly global phenomenon." — Levi's CEO Chip Bergh, CNBC

Venture Capital Deals

GoGuardian, a Los Angeles-based company that sells software to K-12 schools, raised $200 million in funding from Tiger Global. http://axios.link/lK2Y

PepGen, a Boston-based maker of therapies for neurologic diseases, raised $112.5 million from RA Capital Management, Oxford Sciences Innovation, CureDuchenne Ventures, Viking Global Investors, Deerfield Management Company, Adage Capital Management, Samsara Biocapital, and Laurion Capital Management. http://axios.link/ePop

Mindtickle, an Indian sales software company, raised $100 million in Series E funding led by SoftBank, with Norwest Venture Partners, Canaan, NewView Capital, and Qualcomm Ventures also participating. http://axios.link/aFTi

Knowde, a San Jose, Calif.-based marketplace for ingredients, polymers, and chemistry, raised $72 million in Series B funding led by Coatue, with Mantis, Sound Ventures, Sequoia Capital, and others also participating. http://axios.link/10q6

SentiLink, a San Francisco-based identity fraud detection startup, raised $70 million in Series B funding led by Craft Ventures, with Felicis Ventures, Andreessen Horowitz, and NYCA also participating. http://axios.link/BuJs

Crehana, a Mexico-based edtech company, raised $70 million in Series B funding led by General Atlantic. http://axios.link/Yyma

ReversingLabs, a Cambridge, Mass.-based cybersecurity company, raised $56 million in Series B funding led by Crosspoint Capital Partners, with ForgePoint Capital and Prelude also participating. http://axios.link/xSbt

Refurbed, a German online marketplace for refurbished electronics, raised $54 million in Series B funding led by Evli Growth Partners and Almaz Capital, with Speedinvest, Bonsai Partners and All Iron Ventures, and others also participating. http://axios.link/uvh5

Voi, a Swedish scooter rental company, raised $45 million in Series C extension funding led by The Raine Group. www.voiscooters.com

SINAI Technologies, a San Francisco-based decarbonization platform, raised $10 million in seed funding led by Obvious Ventures, with Ajax Strategies, Valo Ventures, High Alpha, Climactic, Afore Capital, MCJ Collective and Climate Capital also participating. www.sinaitechnologies.com

Correlated, a New York-based user data analytics company, raised $8.3 million in seed funding led by NextView Ventures and Harrison Metal. http://axios.link/zQOY

Encellin, a San Francisco-based maker of a thin-film cell encapsulation device for cell-based therapeutics, raised $5.9 million in seed funding led by Khosla Ventures and SV Latam Capital, with Sandhill Angels and Y Combinator also participating. http://axios.link/Icix

Comma, a U.K.-based payments startup, raised £4.4 million ($6 million) in seed funding led by Octopus Ventures and Connect Ventures, with Village Global, Peter Briffet and Portman Wills also participating. http://axios.link/a8jw

FlowAccount, a Thai online invoice management company, raised $4 million in Series A funding led by Sequoia Capital India, with Money Forward and SBI Investment also participating. http://axios.link/SaIs

Kensho Health, a Venice, Calif.-based online directory of holistic health care providers, raised $3.5 million in seed funding led by KB Partners, with Company Ventures and Gaingels. http://axios.link/sVlw

Offlimits, a New York-based plant-based cereal startup, raised $2.3 million in funding from Science, Crosslink and Canaan, and others. http://axios.link/Bfo1

VersusGame, a San Francisco-based predictions app and money marketplace, raised $3 million in seed funding from Mark Pincus, Kevin Hart, Will.i.am, Jeffrey Katzenberg and others. www.versusgame.com

Tab32, a Sacramento, Calif.-based dental electronic health record startup, raised an undisclosed amount of Series B funding led by Spark Growth Ventures. www.tab32.com

Private Equity Deals

Clearlake Capital Group has agreed to acquire Cornerstone OnDemand, a Santa Monica, Calif.-based human resources software company, for $57.50 per share in cash, an enterprise value of approximately $5.2 billion.

Mainsail Partners invested in Boostlingo, an Austin-based maker of language interpretation management software. www.boostlingo.com

PGIM Private Capital invested $60 million in Rougaroux Power Holdings, a Louisiana-based holder of a hydroelectric plant. www.pgim.com

Gen Cap America has sold L.W. Allen, a Madison-based water and wastewater control systems company, to SJE. www.lwallen.com

Public Offerings

Pasithea Therapeutics, a Miami Beach, Fla.-based preclinical biotech researching drugs for psychiatric and neuro disorders, plans to raise $17 million by offering 2.9 million shares and warrants at a price range of $5 to $7. It plans to list on the Nasdaq under the symbol KTTA. EF Hutton is the sole bookrunner on the deal. http://axios.link/1rD6

Adagio Therapeutics, a Phase 2/3 biotech developing antibody therapies to treat and prevent COVID-19, raised $309 million by offering 18.2 million shares at $17. It offered 0.5 million more shares than anticipated. http://axios.link/2aOC

SPAC Stuff

Hash Space Acquisition, a blank check company targeting the blockchain sector, filed on for an IPO. It plans to raise $40 million by offering 4 million units at $10. http://axios.link/0Qq1

Cascadia Acquisition, a blank check company formed by Cascadia Capital targeting "Industry 4.0," filed for an IPO. It plans to raise $150 million by offering 15 million units at $10. http://axios.link/N5Bp

Riverview Acquisition, a blank check company targeting consumer, energy, and financial services enterprises, raised $250 million by offering 25 million units at $10. http://axios.link/EAlU

Roth CH Acquisition IV, the fourth blank check company formed by executives of Roth Capital and Craig-Hallum, raised $100 million by offering 10 million units at $10. http://axios.link/bFVx

Nova Vision Acquisition, a blank check company targeting businesses in Asia, raised $50 million by offering 5 million units at $10. http://axios.link/AT13

Liquidity Events

John Deere has agreed to acquire Bear Flag Robotics, a Newark, Calif.-based autonomous farming heavy machinery company, for $250 million. http://axios.link/Ldol

Ondas has acquired American Robotics, a Marlborough, Mass.-based drone company, for $70.1 million. www.american-robotics.com

WeCommerce has agreed to acquire the assets of Archetype Themes, a Canadian designer of Shopify storefront themes, for $20 million upfront and additional earn-outs of up to $12 million. www.archetypethemes.co

Zynga has agreed to acquired StarLark, a video games studio known for Golf Rival, from Betta Games for $525 million in cash and stock. http://axios.link/67pA

Fundraising

Stage 2 Capital, a Boston-based venture capital firm, has raised $80 million for its second fund. www.stage2.capital

Craft Ventures has raised $612 million for its third flagship fund, and $510 million for its first growth fund. www.craftventures.com

Meaningful Partners, a Los Angeles-based private equity firm, raised $175 million for its debut fund. www.meaningfulpartners.com

Jeff Housenbold has raised nearly $100 million in capital commitments from SoftBank for Honor Ventures, a venture fund aimed at consumer tech startups, per the Financial Times. It aims to raise $500 million to $600 million in total. http://axios.link/dn08

Final Numbers

Credit: CB Insights

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