Jan 9, 2020

Axios Pro Rata

By Dan Primack
Dan Primack
Top of the Morning
Source: Giphy

J.D. Vance has launched a new VC firm called Narya Capital and raised $93 million for its debut fund, which is targeting a total of $125 million, Axios' Kim Hart reports.

  • Vance's 2017 bestselling memoir, "Hillbilly Elegy," gave voice to the rural, working-class resentment that helped Trump win, and has been a vocal proponent of investing in often-overlooked geographies.
  • The strategy is to invest in Series A rounds for startups in cities like Cincinnati (where Tolkien-inspired Narya is based), Salt Lake City, Atlanta, and Raleigh.
  • Limited partners include Peter Thiel, Marc Andreessen, Eric Schmidt, and Scott Dorsey.

Vance previously was managing partner of Steve Case's first Rise of the Rest Seed Fund, which had a similar mission to Narya, and before that worked for Thiel's Mithril Capital in San Francisco. He'll continue to advise Rise of the Rest, as will his Narya partner Colin Greenspon.

⚖️ On the docket: The ousted co-founder of Modern Health, a Kleiner Perkins-backed mental health startup, claims that the company bribed and lied to prospective corporate customers, according to a lawsuit filed in San Francisco Superior Court.

  • The plaintiff is Erica Johnson, a former neurobiology researcher and engineer who co-founded Modern Health in 2017 with CEO Alyson Friedensohn.
  • Modern Health and its attorney emphatically deny all of the allegations, as does a current company employee who Johnson claims was instructed to lie. The company also argues that it has re-upped many of its large customers, which would not have been possible if it had misrepresented its capabilities.
  • Axios' Kia Kokalitcheva writes: "Silicon Valley is known for encouraging startups to “move fast and break things." But, in recent years, companies have come under stricter scrutiny, particularly in highly-regulated industries like healthcare where rule-breaking can have severe consequences for the end-user."
  • Read Kia's full story here.

🎧 Pro Rata Podcast drills into why U.S. gas prices remain stable amid Middle East tensions, and if this is the new normal. Listen here.

The BFD

Source: Quibi

Quibi, the short-form mobile video content startup co-founded by Jeffrey Katzenberg and Meg Whitman, announced $400 million in new funding.

  • Why it's the BFD: The Los Angeles-based upstart has signed lots of production deals with big-name directors, and yesterday unveiled a new technology that lets users seamlessly switch between watching the same video on their smartphones either vertically or horizontally — enabling different perspectives of the same scene. No, that's not a killer differentiator, but does suggest that Whitman's tech chops are being utilized.
  • Investors were not disclosed. Quibi previously raised $1 billion from a group that included Alibaba and movie studios like Disney, Warner Brothers, and 21st Century Fox. Quibi views Alibaba as its pathway to China, while the movie studios are supporting an alternative mobile video platform to Google or Facebook.
  • Bottom line: "Whitman and Katzenberg stress that although this is a creative product that leverages Hollywood talent and creativity, it will operate much more like a consumer service than a movie studio, which is hyper-focused on fast success, like opening weekend box office results." — Sara Fischer, Axios
Venture Capital Deals

EcoVadis, a Paris-based provider of business sustainability ratings for supply chains, raised $200 million from CVC Growth Partners. www.ecovadis.com

Sisense, a New York-based analytics platform for builders, raised over $100 million in new funding at a valuation north of $1 billion. Insight Partners led, and was joined by Access Industries and return backers Bessemer Venture Partners, Battery Ventures, and DFJ Growth. www.sisense.com

🚑 Komodo Health, a San Francisco-based healthcare insights platform, raised $50 million in Series C funding. Andreessen Horowitz led, and was joined by Oak HC/FT, IA Ventures, and Felicis Ventures. www.komodohealth.com

Clearcover, a Chicago-based auto insurer, raised $43 million in Series C funding. OMERS Ventures led, and was joined by return backers American Family Ventures, Cox Enterprises, and IA Capital Group. http://axios.link/cNA8

🚑 Kyruus, a Boston-based provider of search and scheduling software for health systems, raised $42 million in Series D funding. Venrock and Highland Capital Partners co-led, and were joined by Providence Ventures and Salesforce Ventures. www.kyruus.com

🚑 Novome Biotechnologies, a South San Francisco-based drug developer that leveraged engineered gut bacteria, raised $33 million in Series A funding. DCVC Bio led, and was joined by 5AM Ventures, Alta Partners, Alexandria Venture Investments and Mayo Clinic. http://axios.link/gL35

🚑 Virtual Incision, a Lincoln, Neb.-based developer of miniaturized surgical robots, raised $20 million in Series B funding. Return backer Bluestem Capital led, and was joined by PrairieGold Venture Partners and Genesis Innovation Group. http://axios.link/cGGQ

Outlier.org, an online platform for college credit courses, raised $11.6 million in Series A funding. GSV Ventures led, and was joined by Harrison Metal, Tectonic Capital, and Jackson Square Ventures. http://axios.link/PztX

🚑 Emergex, a UK-based developer of set-point vaccines to prevent infectious diseases, raised $11 million in Series A funding led by Vickers Venture Partners. www.emergexvaccines.com

Legalpad, a Seattle-based work visa process automation startup, raised $10 million in Series A funding led by Amplo. http://axios.link/rth9

Sweepr, a Dublin-based customer care platform for connected homes, raised €8 million in Series A funding from firms like Amazon Alexa Fund. http://axios.link/JuzI

Private Equity Deals

🚑 Bain Capital, CVC Capital Partners, Clayton Dubilier, Nordic Capital, and PAI Partners each submitted first-round bids for Curium Pharma, a French medical imaging supply company that could fetch more than $3 billion, per Bloomberg. Curium is currently owned by CapVest. http://axios.link/kDXE

Bullhorn, a Boston-based portfolio company of Insight Partners and Genstar Capital, acquired Herefish, a provider of automation solutions for staffing firms. www.bullhorn.com

Encore Consumer Capital acquired Lion Beverages, a Wilkes-Barre, Penn.-based contract manufacturer of specialty beverages http://axios.link/H9mb

🚑 Galen Partners acquired Evolve Treatment Centers, a Los Angeles-based adolescent behavioral health services provider. www.evolvetreatment.com

Genstar Capital is in talks to buy RS Energy Group, a Calgary-based energy research firm, from Warburg Pincus for around $1 billion, per Bloomberg. http://axios.link/LwQj

Graycliff Partners sold 901D, an Airmont, N.Y.-based maker of electronic systems to U.S. Navy shipbuilders, to Curtiss-Wright (NYSE: CW) for $132 million. www.901d.com

Industrial Opportunity Partners acquired Midwest Paper, a Combined Locks, Wis.-based maker of recycled containerboard and other paper products. www.mwpaper.com

🚑 InformedDNA, a St. Petersburg, Fla.-based genetic testing company, raised an undisclosed amount of growth equity from NovaQuest, TripleTree Capital Partners, and Frist Cressey Ventures. www.informeddna.com

Insight Partners agreed to buy Veeam Software, a data backup company that plans to move its headquarters from Switzerland to the U.S., at an enterprise value of around $5 billion. Insight last January co-led a $500 million minority investment into Veeam, alongside CPPIB. http://axios.link/9IBy

Navis Capital Partners is seeking a buyer for Texon, a Hong Kong-based footwear materials supplier that could fetch between $200 million and $300 million, per Bloomberg. http://axios.link/hIhs

🚑 Osceola Capital acquired Healthcents, an Austin, Texas-based provider of medical reimbursement services. www.healthcents.com

Serent Capital invested in ePayPolicy, an Austin, Texas-based provider of electronic payments software for the excess and surplus insurance market. www.epaypolicy.com

TA Associates acquired a 75% stake in Netrisk, a Hungarian online insurance broker, from MCI Group for €55 million. www.netrisk.hu

Valet Living, a Tampa, Fla.-based portfolio company of Ares Management and Harvest Partners, acquired Trojan Waste Solutions, a San Antonio-based provider of doorstep waste and recycling services to the multi-family housing industry. www.valetliving.com

Weld North, digital curriculum company owned by Silver Lake, acquired LearnZillion, a Washington, D.C.-based K-12 curriculum startup that had raised $23 million from firms like Omidyar Network, OATV, Owl Ventures and DCM Ventures. http://axios.link/9F5T

Public Offerings

🚑 Ardent Health Partners, a Nashville, Tenn.-based operator of 31 acute care hospitals, withdrew IPO registration. Shareholders include Ventas (NYSE: VTR) and Equity Group Investments. http://axios.link/vd1z

🚑 PPD, a Wilmington, Del.-based pharma contract research group owned by The Carlyle Group and Hellman & Friedman, filed for a $100 million IPO. Renaissance Capital estimates the float could ultimately raise around $1 billion. http://axios.link/nGsf

Liquidity Events

Calisen Group, a British smart meter maker owned by KKR, is prepping a London IPO that could value the company at nearly $2 billion, per Reuters. http://axios.link/lacr

More M&A

Aflac’s (NYSE: AFL) asset management arm agreed to acquire a minority stake in Varagon Capital Partners, a direct lender to middle-market companies. http://axios.link/oeEU

The Fenix Group of Hong Kong is seeking a buyer for high-end grocery chain City Super Group, which could fetch upwards of $400 million, per Bloomberg. http://axios.link/d7of

Grubhub (Nasdaq: GRUB), a Chicago-based food delivery company, has hired banks to explore strategic options, including a possible sale, per the WSJ. http://axios.link/I9xH

IAC (Nasdaq: IAC) sold a majority stake in content site CollegeHumor to the company’s chief creative officer, Sam Reich, in a deal that will result in more than 100 layoffs. http://axios.link/w4cB

SoftBank Group reportedly is in talks to sell is majority stake in an India renewable energy joint venture, which it set up with Bharti Enterprises and Foxconn. http://axios.link/PtC7

Voya Financial (NYSE: VOYA), a New York-based retirement and insurance plan provider, is seeking a buyer for more than $10 billion, per the FT. One of the suitors reportedly is AIG, which considered a similar deal in 2017. http://axios.link/dwlY

Fundraising

Five Arrows, the North American private equity arm of Rothschild & Co., raised €1 billion for a private equity secondaries fund.

Goodyear Tire & Rubber Co. (Nasdaq: GT) has launched a $100 million corporate VC fund, focused on mobility startups.

Shoreline Equity Partners, a Jacksonville-based private equity firm focused on lower mid-market companies in the U.S. Southeast, raised $300 million for its debut fund. www.shorelineequitypartners.com

It's Personnel

Guidepost Growth Equity promoted Chris Cavanagh and Eugene Nogi to general partner. www.guidepostgrowth.com

Cory Pulice, a digital commerce and marketing consultant, joined private equity firm Yellow Wood Partners as an operating partner. www.yellowwoodpartners.com

🚑 Ian Read, former chairman and CEO of Pfizer, joined The Carlyle Group as an operating executive focused on healthcare. www.carlyle.com

TA Associates promoted both Ethan Liebermann and Kevin Masse to managing director. It also promoted Lovisa Lander, Aditya Sharma, and Amara Suebsaeng to principal, and Stefan Dandl, Jérémy Dréan, and Jessica (Cohen) Gilligan to senior VP. www.ta.com

TCG promoted Michaela Venuti to vice president. www.tcg-cap.com

Mark Villanueva joined Union Square Advisors as a managing director in the firm’s capital structure advisory practice. He previously was a principal with Eaglehill Advisors. www.usadvisors.com

Vincent Vo, a former BCG consultant, joined Anacapa Partners as a principal. www.anacapapartners.com

Elizabeth Weil has quietly stepped down as co-managing partner of 137 Ventures, the startup stock liquidity firm she joined in 2017 after stints at Andreessen Horowitz and Twitter. No word yet on her future plans.

Final Numbers
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Data: Yahoo Finance; Chart: Andrew Witherspoon/Axios
Dan Primack

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