Dec 19, 2019

Axios Pro Rata

Happy Thursday! Kia here, for my last Pro Rata edition of 2019—Dan will be back tomorrow for what will be his last edition of the year.

🚨CES: I'm going to the Vegas-based tech extravaganza for the first time, and I would love to meet investors who are there as well. Drop me a note!

Top of the Morning

Illustration: Aïda Amer/Axios

As 2019 comes to a close, I can’t help but still think about the question that’s been floating in my head for much of the year: We’ve been in a boom period, but what happens next?

This question was partly answered when the first stampede of private unicorns hit the public market in the spring. The results were mixed — but mostly not good. (Uber, anyone?) And of course, WeWork didn’t even make it to the Nasdaq bell-ringing, instead breaking down shortly after it filed its S-1.

  • Some pundits were quick to mock Silicon Valley as the “myth of the unicorns,” to call everyone with a Patagonia vest and VC job an idiot, and to predict a collapse of startup life as we know it.
  • However, I’d say a more nuanced view is that the last decade gave birth to a new generation of tech-enabled companies whose novelty resides in their business models—many of them made possible only by the advent of the iPhone. Ordering groceries didn’t go so well in the Dotcom era (RIP Webvan)… but what about doing it from your phone via Instacart's app, which pays an independent contractor (with a smartphone) to deliver your precious Oat milk from a store to your door? Could still fail, of course.
  • But one thing has been clear: For the most part, the public markets haven’t shared the same optimism about a lot of these business models, which is why we’ve seen Uber's and Lyft’s stock prices struggle as they try to shine a very dim flashlight on a faraway era of profits. Even Slack has to explain why it has not turned a profit, while its top rival, Microsoft, is printing money and using it to go after Slack’s lunch with its increasingly popular rival, Teams.
  • The fun part? There’s a whole other cast of companies prepping to go public next year, so we’ll have plenty more opportunities to watch unicorns gallop (or stumble) into the market. As Dan warned, don’t necessarily leave the unicorns for dead.
  • Who’s in the pipeline? CB Insights has some predictions here.

Seeking comment: The U.S. Securities and Exchange Commission is considering changing the requirements for accredited investors, and has opened up a 60-day comment period.

  • Quick definition: Right now the only folks who are allowed in to certain swanky non-public investments, like private placements, are people who meet various big-money requirements ( and who are, thus, presumably savvier than most).
  • Now the SEC is considering letting people qualify if they have certain certifications or credentials (like FINRA licenses) or work for venture capital firms, etc.
  • The thinking is that these folks can demonstrate the “sophistication” necessary to invest in riskier offerings, or ones that provide fewer disclosures. In other words (the SEC seems to be saying): Maybe just having a lot of money isn’t always the best way to assess whether you're smart with it.
  • Why it matters: This could fundamentally change who can access investment opportunities, including startups and their older, fatter pre-IPO siblings, which have increasingly generated returns previously seen in the public markets.
  • Yes, but: There’s no guarantee the SEC will make any changes.

🎙 Podcast: Mike Bloomberg is hardly a Democratic Party darling, but one of his former campaign managers believes he's still a smart bet to win its presidential nomination. Dan digs in with Bradley Tusk, venture capitalist, philanthropist, political strategist and the campaign manager for Bloomberg's successful 2009 mayoral re-election. Listen here.

Editor's note: The story has been updated to note that it's Microsoft that's "printing money" (not Teams, an error inserted during editing).

The BFD

Illustration: Rebecca Zisser/Axios

IAC (InterActiveCorp.) agreed on Thursday to separate one of its largest subsidiaries, Match Group, which houses several dating apps, including Tinder.

  • Why it’s the BFD: Match Group has become an online dating powerhouse, with Tinder alone generating around half of the company’s revenue.
  • Bottom line: “We’ve long said IAC is the ‘anti-conglomerate’ – we’re not empire builders," said Barry Diller, Chairman and Senior Executive of IAC. "We’ve always separated out our businesses as they’ve grown in scale and maturity and soon Match Group, as the seventh spin-off, will join an impressive group of IAC progeny collectively worth $58 billion today,”
Venture Capital Deals

Glovo, a Spain-based on-demand delivery company, has raised €150million ($167 million) in Series E funding led by Mubadala, with Drake Enterprises, Idinvest and Lakestar also participating. http://axios.link/wP76

🚑 Epirium Bio, a San Diego, Calif.-based clinical stage biopharmaceutical company, has raised $85 million in Series A funding from Longitude Capital, ARCH Venture Partners, Bluebird Ventures, Adams Street Partners, Vertex Ventures HC, and The Longevity Fund. www.epirium.com

ZestMoney, an India-based consumer lending startup, has raised $15 million from Goldman Sachs, Naspers, Quona Capital, and Omidyar Network. http://axios.link/FIBG

ABAKA, a London-based provider of retirement digital tools, raised $6.5 million in Series A funding from Thames Trust, Ace&Co and Downing Ventures. www.abaka.me

Ant Financial has acquired an undisclosed sizable stake in eMonkey, a Vietnam-based digital wallet startup, according to Reuters. http://axios.link/FqF6

Private Equity Deals

FineLine Technologies, backed by L Squared Capital Partners, has acquired Consolidated Printing, a Van buren, Ark.-base provider of printed tickets for professional and collegiate sporting events and major event venues. www.teamcpi.com

Carbon60, backed by M/C Partners, has acquired Cirrus9, a Canada-based managed cloud and hosting company. www.cirrus9.net

Public Offerings

🚑 Monopar Therapeutics, a Wilmette, Ili.-based developer of therapies for chemotherapy-induced mucositis and cancers, raised $9 million by offering 1.1 million shares at $8, the low end of the range of $8 to $10, to command an $89 million market value. Insiders indicated on $6 million worth of shares in the offering (67%). It plans to list on the Nasdaq under the symbol MNPR. JonesTrading and Arcadia Securities acted as lead managers on the deal. www.monopartx.com

Liquidity Events

Facebook has acquired PlayGiga, a Spain-based company focused on cloud-based video gaming, for a reported $70 million. http://axios.link/Q5QY

🚙 Palladium Equity Partners has sold Raben Tire Company, an Evansville, In.-based chain of tire and service centers, to Goodyear.

Sumeru Equity Partners has sold Buildium, a Boston-based property management software company, to RealPage. www.buildium.com

Clariant is selling its masterbatches unit to PolyOne Corp, an Avon Lake, Ohio-based polymer materials maker, foor $1.6 billion and will pay shareholders about $1 billion from the proceeds. http://axios.link/n1ak

More M&A

Xperi Corporation and TiVo Corporation have agreed to an all-stock merger with a combined enterprise value of $3 billion, with Xperi stockholders owning about 46.5% of the new company and TiVo stockholders owning the rest. http://axios.link/2gT8

Rubicon and Telaria have agreed to an all-stock merger, with Telaria stockholders owning about 47.1% and Rubicon Project stockholders owning the rest. http://axios.link/8nPU

Corsair has acquired Scuf Gaming, a Johns Creek, Ga.-based maker of high-end gaming controllers. http://axios.link/0JQB

Broadcom is looking to sell its radio frequency segment, which could be worth $10 billion, according to the Wall Street Journal. http://axios.link/fgun

Valence Media (Billboard’s parent company) has acquire Nielsen Music from Nielsen Holdings, a New York-based media measurement company. http://axios.link/Pefg

Fundraising

Acrew Capital, a Bay Area-based venture firm co-founded by Theresia Gouw, has raised $250 million for its first fund that will be focused on early-stage startups. http://axios.link/Zmlz

🚑 Rev1 Ventures, a Columbus-based venture firm, has raised a new $15 million fund to invest in medical and biotech startups. http://axios.link/LtvX

Tusk Ventures, the New York-based venture firm, has raised $70 million for a second fund. http://axios.link/Zeti

Värde Partners, an alternative investment firm founded in Minnesota, has raised $2.47 billion for its 13th flagship fund. www.varde.com

It's Personnel

NMS Capital, a New York-based private investment firm, has promoted Noel Jeon to managing director, and Michael Lehman and Donza Worden, and Neal Monga to vice president. www.nmsadvisors.com

Verod Capital Management, a West Africa-based private equity firm, has raised $200 million for its third growth fund. www.verod.com

Kainos Capital, a Dallas-based food and consumer-focused private equity firm, has promoted Jeff Moredock to principal and Julie Sanders to director. www.kainoscapital.com

Final Numbers
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Data: Docket Alarm; Chart: Andrew Witherspoon/Axios

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