New startup formation has slowed significantly, with fading hopes for a late 2020 rebound.

Driving the news: Carta, a startup that manages employee equity for other startups (including Axios), last week laid off 161 employees, or around 16% of its staff. The basic takeaway was tempered expectations for the number of potential new customers to sign and service.

Carta arguably is an index for startups, which makes these layoffs a major indicator.

• Yes, many of today’s most iconic tech companies were born from the ashes of past economic crises, but this one might be different.
• No more serendipitous meetings at parties, no more sitting down with a friend to change the world on the back of a napkin.
• Even if you and a possible co-founder are tight, and you can get past the daunting idea of all-remote hiring, you’re in unchartered waters when it comes to customer demand and supply chain stability.
• Even if you want to build, can you?

To its credit, Carta is treating laid-off employees about as well as a company can. They all get three months of severance and COBRA coverage through year-end. Carta also removed the one-year vesting cliff for those hired within the past 12 months, and already had a generous post-termination exercise period.

But there were still a lot of ex-employee grumbles, based on a subsequent Bloomberg report that the company was "seeking to raise" $200 million in new funding at a $3 billion valuation. Plus, it's likely that many former Carta employees were aware that this money would be on top of the $200 million that sources say Carta already had in the bank.

• The new funding is real, per multiple sources. In fact, it's basically done, co-led by existing investors Lightspeed Venture Partners. The negotiations began prior to the coronavirus outbreak, but terms never changed. The closing was delayed a bit by complications related to some overseas investors.
• The company hasn’t yet announced the deal, although Tribe Capital did explain its thinking in a lengthy memo sent to LPs over the weekend (which it just posted here).

The bottom line: Carta is building for the future in which it hopes to thrive, while acknowledging lowered expectations for the present. Just like startup-land at large.

STX Entertainment, a U.S. production studio whose titles include "Bad Moms" and "Hustlers," agreed to merge with Indian film producer Eros International (NYSE: EROS) in an all-stock deal that will value the combined company north of $1 billion (including debt).

• Why it's the BFD: It's as much a merger between Hollywood and Bollywood as it is between two companies.

• Deal details: The agreement includes $125 million in new equity funding from existing STX investors TPG Capital, Hony Capital, and Liberty Global, plus a $350 million credit facility led by JPMorgan. Other STX backers include Tencent, NEA, DNS Capital, and PCCW.
• The bottom line: "The merger comes after a trying year for STX, the studio that was created in hopes of offering the kind of mid-budget movies most studios stopped making in favor of pricey blockbusters ... [Eros' streaming platform], currently being offered free as a coronavirus pandemic gesture to a lockdown audience, has 188 million registered users worldwide, with 26 million of them being paid subscribers. It has more than 12,000 titles, the largest collection of Indian content in the world." — Naman Ramachandran, Variety

Today's project is a throwback to how this section began, five long weeks ago. Please ask your kids for their favorite joke(s) and then email them to me ([email protected]), so that we can create another joke book for them all to read. E leads us off:

Why did the bike fall over?

Because it was two tired.

On Friday, I asked your kids to put together all of the Legos they've got. And a bunch of them did:

🚑 Aledade, a Bethesda, Md.-based network of accountable care organizations, raised $64 million in Series C funding. OMERS led, and was joined by Echo Health Ventures, the California Medical Association, and return backers Meritech Capital Partners, CVF and GV. www.aledade.com

🚑 Alan, a French health insurance startup, raised €50 million in Series C funding. Temasek led, and was joined by return backer Index Ventures. http://axios.link/Ey0q

• FaZe Clan, a Los Angeles-based esports organization, raised $40 million in Series A funding co-led by Jimmy Iovine and NTWRK. http://axios.link/1lVe

• BibliU, a London-based digital textbook platform, raised $10 million in Series A funding. Nesta Impact Investments led, and was joined by Guinness Asset Management, Stonehage Fleming clients, and ClearlySo. http://axios.link/rdFD

• MindsDB, a Berkeley, Calif.-based provider of tools for applying machine learning to enterprise data, raised $3 million. OpenOcean led, and was joined by Rogue Capital, Amber Atherton, SCM Advisors, and Berkeley SkyDeck. http://axios.link/0nF5

• Aceto, a Port Washington, N.Y.-based portfolio company of New Mountain Capital, acquired Syntor Fine Chemicals, a British manufacturer of fine chemicals for life sciences. www.syntor.co.uk

• CVC Capital Partners has slowed its talks to invest £300 million for around a 14% stake in rugby tournament operator Six Nations, due to the pandemic, per the FT. http://axios.link/ignI

• Morgan Stanley Infrastructure Partners bought a 50% stake in the Portuguese fiber network of Altice Europe (AS: ATCA) for around €2.3 billion. http://axios.link/20nR

🚑 Onex agreed to buy London-based health care staffing firm ICS from TowerBrook Capital Partners (which will retain a minority stake). www.ukics.com

🚑 ORIC Pharmaceuticals, a San Francisco-based developer of therapies for treatment-resistant cancers , is the only company expecting to go public this week on a U.S. exchange. It set IPO terms to 5 million shares at $14-$16, which would give it a fully-diluted market cap of $424 million were it to price in the middle. The company raised around $173 million in VC funding from firms like The Column Group, Topspin Fund, OrbiMed, and EcoR1 Capital. http://axios.link/aN9s

• KKR is considering a sale of its 60% stake in Indian waste collection company Ramky Enviro Engineers, which it acquired just last year for $510 million, per Bloomberg. http://axios.link/m93p

• Alimentation Couche-Tard (TSX: ATD) abandoned its $8.8 billion offer for Caltex Australia (ASX: CTX). http://axios.link/pnok

🍾 Campari (Milan: CPRI) is in talks to buy an 80% stake in French champagne brand Lallier from Sarl Ficoma. http://axios.link/e92y

• Norwegian Cruise Line (NYSE: NCLH) hired Goldman Sachs to explore strategic options that could include the sale of a company equity stake, per Reuters. http://axios.link/WPAX

🚑 Novartis acquired Amblyotech, a Marietta, Ga.-based developer of digital technologies to treat amblyopia (i.e., lazy eye). Novartis first invested in the company last year. http://axios.link/SXJQ

• Shanghai Pehchaolin Daily Chemical, a Chinese skincare company whose brands include Pechoin, is in talks to sell a minority equity stake, per Bloomberg. The company reportedly generated around $2.5 billion in 2017 sales. http://axios.link/VcL2

• TVS Motor, an Indian motorcycle maker, bought English bike-maker Norton Motorcycles for $20 million. http://axios.link/0X3p

• Arbour Lane Capital Management raised $1.2 billion for a credit opportunities fund. www.arbourlanecapital.com

• New Mountain Capital is raising its sixth flagship buyout fund, per an SEC filing. www.newmountaincapital.com

• Caisse de dépôt et placement du Québec promoted Macky Tall to head of private equity, infrastructure, and related assets. He succeeds Charles Émond, who in January was named CDPQ’s president and CEO. www.cdpq.com

• John Melas-Kyriazi, a former investor with Spark Capital who still sits on some of its portfolio company boards, has launched Quaestor, an automated data platform for startups and their investors. www.quaestor.com

• Ontario Teachers' Pension Plan Board promoted Jane Rowe to vice chair of investments, effective October 1. She currently is Ontario Teachers’ executive managing director and head of equities. www.otpp.com

• Go deeper: Congress and White House near deal on PPP+