Apr 6, 2020

Axios Pro Rata

Top of the Morning

Illustration: Sarah Grillo/Axios

America's economy won't reopen anytime soon, despite frantic CEO whispers, but a glimmer of hope may be emerging in the form of serological testing.

  • Why it matters: Serologic tests aren't to determine whether or not you're infected with COVID-19. They are to determine if you have potential immunity that could allow you to safely return to work.

How it works, per Axios' Alison Snyder and Eileen Drage O'Reilly:

  • When the body is exposed to a virus, the immune system begins to produce antibodies to fight the virus and future infections from it.
  • Those antibodies stick around after the virus is cleared from the body, making them an indicator of past infection.
  • Serological tests check the blood for these antibodies — providing confirmation of infection and possible protection.

Driving the news: Ortho Clinical Diagnostics, a New Jersey company that the Carlyle Group carved out of Johnson & Johnson in 2014, is beginning mass production of serologic tests that will be able to be run on the company's already-installed analyzers in more than 1,000 U.S. hospital and reference labs.

  • Each instrument is expected to be able to process 150 tests per hour.
  • A source familiar with the situation says that Ortho is ramping up production now and by the end of April expects to be making 500,000 tests per week (initially via its Rochester, New York, manufacturing facility). By May, it plans to be at 1 million tests produced per week.
  • Early testing work will be done in partnership with Creative Testing Solutions, a nonprofit blood donor testing lab owned by the American Red Cross, OneBlood, and Vitalant.

But, but, but: It is not yet 100% certain that people with the antibodies will be immune, particularly if the virus mutates, or how long any immunity would last. So far, the optimism is a highly educated guess.

The bottom line: People are unlikely to work or shop while still fearful of getting sick, even if politicians remove shelter-in-place orders. Serologic tests at scale, from Ortho and hopefully from others, could be the safety blanket that warms our economic engine.


More PE-backed good news: Apollo Global Management has sourced and will donate 200,000 KN95 masks to New York City hospitals (100k, the first 10k of which were delivered to Elmhurst Hospital on Friday) and to New York State (the other 1ook).

  • Apollo sourced the masks from China via one of its energy portfolio companies, which first had to release its reserve. Apollo co-founder Josh Harris personally donated to the effort.

PE-backed bad news: Medical staffing firms, including KKR-backed Envision Healthcare and Blackstone-backed TeamHealth, are cutting pay and benefits for some of their emergency room workers, per ProPublica:

"The staffing companies said they’re responding to dropping revenue as non-coronavirus patients avoid the ER and hospitals cancel elective procedures. The companies also emphasize that they’re not cutting physicians’ hourly rates.
But by assigning fewer hours to doctors and other providers such as physician’s assistants and nurse practitioners, the companies are effectively paying them less. It also means that some hospitals have fewer clinicians working in the ER at a time."

Source: Giphy

Platinum Equity completed its acquisition of Italian wine distributor Farnese Group from NB Renaissance Partners.

  • Why it's the BFD: Because the deal actually closed, despite everything that's happened in the U.S. and Italy since it was agreed to in December.
  • Financial terms weren't disclosed, but earlier reports were that the deal is worth around €170 million.
  • The bottom line: U.S. wine sales were up 66% for the week ending March 21, compared to the same period last year, per Nielsen data. Overall U.S. alcoholic beverage sales have climbed 55%.
Pro Rata for Kids

Today's project is for your kid(s) to build a fort. I know, some of them might already do this regularly. If so, ask them to step up their game. They should add flags, or something besides just couch cushions, etc. The. Best. Fort. Ever.

  • Per usual, please send me photos of the creations.

On Friday, I asked your kid(s) to make a thank you card or sign. Some of what came in:

Isabella, age 6
Zane, age 4
Valentina, age 12
Venture Capital Deals

PsiQuantum, a Palo Alto-based developer of a commercial quantum computer, raised $215 million. Atomico led, and was joined by BlackRock, Founders Fund, and Redpoint Ventures. http://axios.link/cU8i

Intellifusion, a Chinese AI chipmaker, raised $141 million in new funding from Utrust VC, Forebright Capital, Walden International, CCB International, BOCOM International, BOC & Trust Private Equity Fund, Topping Capital, Tsinghua Holdings Capital, HCSD Capital, Sino-US VC, and Sirius Capital. http://axios.link/IxLO

• Pure Harvest Smart Farms, a UAE-based greenhouse developer, secured an equity commitment of up to $100 million from Kuwaiti investment firm Wafra. http://axios.link/JfAj

• Privitar, a London-based data privacy platform, raised $80 million in Series C funding. Warburg Pincus led, and was joined by Accel, Partech, IQ Capital, Salesforce Ventures, and ABN AMRO Ventures. www.privitar.com

• Swiggy, an Indian food delivery company, raised $43 million in new Series I funding (round total now $154m) from Ark Impact, Korea Investment Partners, Samsung Ventures, Mirae Asset Management, and return backer Tencent. http://axios.link/AH22

• Phantom AI, a Burlingame, Calif.-based vehicle-agnostic autonomous driving platform, raised $22 million in Series A funding. Celeres Investments led, and was joined by Ford Motor Co., KT, and return backers Millennium Technology Value Partners and DSC Investment. http://axios.link/IHr4

• Lessonly, an Indianapolis-based online training platform for teams, raised $15 million in Series C funding. AXA Venture Partners led, and was joined by Zendesk, Allos Ventures, Atlas Peak Capital, Rethink Education, and The Yard Ventures. http://axios.link/c63i

• Yapily, a London-based open banking startup, raised $13 million in Series A funding. Lakestar led, and was joined by seed backer HV Holtzbrinck Ventures and LocalGlobe. http://axios.link/b2l3

• Ably, a London-based data streaming platform, raised $7 million in Series A funding. MMC Ventures led, and was joined by Forward Partners. http://axios.link/2gSe

• Tailscale, a Toronto-based corporate VPN startup, raised C$3 million in seed funding. Heavybit led, and was joined by Uncork Capital. http://axios.link/Zezt

Private Equity Deals

🤡 Cirque du Soleil is in talks with Caisse de Depot et Placement du Quebec about rescue financing, per Bloomberg. The Montreal-based circus company, acquired by TPG in 2015, laid off most of its staff after coronavirus required it to cancel its shows. http://axios.link/LHSO

• Pine Island Capital Partners and Bain Capital Credit acquired Precinmac, a manufacturer of high-precision machined components and assemblies for the aerospace & defense, semiconductor, and general industrials sectors. www.precinmac.com

Public Offerings

🚑 Keros Therapeutics, a Lexington, Mass.-based drug startup focused on neuromuscular diseases, is the only company planning to go public this week on a U.S. exchange. http://axios.link/GnWA

🚑 WeDoctor, a Chinese mobile medical scheduling and information company backed by Tencent, dropped Credit Suisse from the list of banks for its upcming $1 billion IPO. Credit Suisse was among the IPO bankers for Luckin' Coffee, which recently admitted to inflating its revenue. http://axios.link/cRRj

Liquidity Events

• Apple (Nasdaq: AAPL) acquired Voysis, an Ireland-based natural language platform for digital voice assistants. Voysis had raised around $10 million from Enterprise Ireland and Polaris Partners. http://axios.link/ihwK

• Bruin Sports Capital shelved the sale process for Deltatre, an Italy-based provider of back-end streaming tech for sports and entertainment, per Bloomberg. Earlier reports were that Deltatre could fetch €1 billion. http://axios.link/VasX

• Cisco (Nasdaq: CSCO) agreed to buy Fluidmesh Networks, a Brooklyn, N.Y.-based provider of wireless backhaul systems. Sellers include Generation3 Capital and Waveland Investment. www.fluidmesh.com

• Koch Equity Development completed the purchase of the 30% stake it didn't already own in enterprise cloud software company Infor from Golden Gate Capital, at an enterprise value of around $13 billion.

• Voodoo, a French mobile game maker, is considering a sale process that could net more than €1.5 billion, per Bloomberg. Backers include Goldman Sachs’ West Street Capital Partners. http://axios.link/ugyV

More M&A

• GrubMarket, a San Francisco-based farm-to-table food delivery service, acquired smaller Charlestown, Mass.-based rival Boston Organics. GrubMarket has raised $112 million in VC funding. http://axios.link/RGNy


• Alamar Partners has launched as a Santa Barbara, Calif.-based investment firm focused on acquiring and operating a single small business. It’s led by Chris Lueck and Ben Knoll, the former CEO and CFO of e-commerce billing platform FastSpring.

• Silver Lake plans to seek $16 billion for its sixth flagship fund, per Reuters. http://axios.link/14vA

It's Personnel

• Jason Mok joined Andreessen Horowitz as an operating partner and head of the VC firm’s corporate development team. He previously spent 16 years with Silicon Valley Bank. www.a16z.com

Final Numbers
Data: Federal Reserve; Chart: Axios Visuals

Go deeper: Backed by the Fed, bond investors get bullish

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