Oct 20, 2017

Axios Pro Rata

By Dan Primack
Dan Primack

Greetings from the home office. Reminder for those attending Money 20/20 in Las Vegas: I'm interviewing Stripe's John Collison at 7pm Sunday night (yes, during the Pats game). Hope to see some of you there. Okay, here we go...

Top of the Morning

Venture capital is well-known to be dominated by white men, and Kia reports that many of the industry's few people of color are opting to raise their own funds.

  • Data: Only 2% of senior venture investors are black or Latino, per a 2015 analysis by Social Capital.
  • Key quote: "I just wanted to be able to bring every single piece of me into the office every day," Cross Culture Ventures co-founder Marlon Nichols (ex-Intel Capital) explains.
  • Pros/cons: The rise of micro seed funds is helping members of all under-represented demographics hang their own shingles, but there continues to be tangible value in learning the ropes at an established firm.
  • Go deeper: Read Kia's full piece.

• Building bridges: TPG Capital is dipping its foot into infrastructure investing, with a new emerging markets-focused strategy that would effectively launch as a pledge fund. This comes from LP sources who attended a TPG investors meeting earlier this week. More:

  • The infrastructure effort would be partially led by recent hire Jin-Yong Cai, who previously was CEO of The World Bank's International Finance Corp.
  • TPG has previously employed the fundless sponsor model when launching new business lines, such as credit and real estate.
  • TPG told investors that it could begin raising its eighth flagship buyout fund by the end of Q1 2018, although it did not provide a target.

• Acceleration: Yesterday we noted that email marketing company SendGrid had filed for an IPO. What we hadn't realized is that, if successful, SendGrid would be the first-ever IPO from a tech accelerator alumni (it went through TechStars Boulder in 2009). No other TechStars company has ever gone public, nor has any company born of Y Combinator.

• Today in SoftBank: Lots of talk this week about how SoftBank plans to raise more Vision Funds. Pretty sure we mentioned that would happen... back in January.

• Crypto: CoinList, a provider of financial services for staging and managing ICOs, tells Axios that it is spinning out of AngelList as a standalone company that will be led by former Sidewire CEO Andy Bromberg.

• Sincerest form of flattery: MongoDB shares closed up over 34% on their first day of trading, and Axios has learned that it had a bit of company on its IPO roadshow. CEO Dev Ittycheria says that smaller rival Couchbase — which is raising new funding, with the help of Wells Fargo — effectively trailed MongoDB to cities like Chicago and New York, often meeting with investors who had just gotten the MongoDB pitch.

A source close to Couchbase confirms the strategy, while CEO Matt Cain would only say: "We are now spending a lot of time with prospects, customers, partners, analysts, and investors, helping them understand the market, the Couchbase proposition and the impact our technology is having within the Enterprise."


Alphabet yesterday announced that it has led a $1 billion in ride-hailing company Lyft at an $11 billion post-money valuation, one month after Axios first reported that the two companies were in talks. The investment came via CapitalG, Alphabet's growth equity unit, with CapitalG partner David Lawee joining Lyft's board of directors.

  • Why it's the BFD: Because it's so deliciously petty. I have no doubt that Lawee and CapitalG believe this is a good investment, even at a valuation north of what Lyft wanted last year in an acquisition. But I also have no doubt that this is tied to the Waymo situation, with Larry Page playing a role. Remember, Google Ventures once plugged nearly $260 million into Uber, and it is by far the group's largest paper return. CapitalG and Google Ventures may be operated independently, but they both report to the same guy (who, in turn, reports to Page), and it's impossible to imagine CapitalG making this move without getting tacit endorsement from above. Not surprisingly, some folks at GV are pissed off.
  • Bottom line: You can take the Travis out of Uber, but you can't take the anger out of Alphabet.
Venture Capital Deals

• Coda, a spreadsheet startup led by a pair of ex-Googlers, has come out of stealth and announced that it raised $60 million over two rounds of funding from Greylock, General Catalyst, Khosla Ventures, NEA and Kleiner Perkins. http://axios.link/tRWW

• Contrast Security, a Los Altos, Calif.-based developer of "self-protecting" software, has raised $30 million in Series C funding. Battery Ventures led the round, and was joined by return backers Acero Capital and General Catalyst. http://axios.link/ue3a

• Spoke, a San Francisco-based internal request management platform, has raised $28 million in funding from firms like Accel and Greylock. http://axios.link/9uwd

• Madison Reed, a San Francisco-based hair coloring product company led by former VC Amy Errett, has raised $25 million in new funding. Comcast Ventures led the round, and was joined by return backers Norwest Venture Partners, True Ventures and Calibrate Ventures. http://axios.link/Gjmp

• PayKey, an Israel-based bank access keyboard for smartphones, has raised $10 million in Series B funding. MizMaa led the round, and was joined by SBI Group, Siam Commercial Bank, SixThirty and FinTech71. http://axios.link/ktCi

• Robart, an Austria-based developer of consumer robots, has raised €6.1 million in Series B funding. CM-CIC Innovation led the round, and was joined by return backers Innovacom, Robert Bosch Venture Capital and SEB Alliance. www.robart.com

• NYIAX, a New York-based ad contract exchange, has raised $5.6 million in seed funding led by WestPark Capital. www.nyiax.com

• Feather, a San Francisco-based modern furniture rental startup, has raised $3.5 million in seed funding from Bain Capital Ventures, Kleiner Perkins and SV Angel. http://axios.link/I4xx

• Atlas Informatics, a Seattle-based digital content organization startup, has shut down. Last year it raised over $20 million from Microsoft, Aspect Ventures and Nathan Myhrvold. http://axios.link/bKNg

• Horizon Robotics, a Chinese maker of robotics chips, is raising up to $100 million in new VC funding, with commitments from firms like Intel Capital, Harvest Investments, Hillhouse Capital, Wu Capital, Linear Ventures and Morningside Venture Capital. http://axios.link/NH5G

Private Equity Deals

• CIP Capital has invested in WilsonHCG, a Tampa, Fla.-based provider of recruitment process outsourcing, from sellers like Frontier Capital. www.wilsonhcg.com

• High Road Capital Partners has acquired Akron Hardware Consultants, a wholesale distributor of commercial and institutional door hardware that will be merged with existing High Roads portfolio company Wholesale Hardware. www.akronhardware.com

⛽ KKR and Ausgrid are the final two bidders for Origin Energy's (ASX: ORG) Acumen smart metering business, which is expected to fetch around A$200 million, according to The Australian. http://axios.link/4lbc

• Knox Capital has recapitalized HaystackID, a Boston-based e-discovery and digital forensics company. Maranon Capital provided mezzanine debt, while TCF Bank provided senior debt. www.haystackid.com

• Unilever reportedly is expecting bids from three private equity groups for its spreads business: Bain Capital with Clayton Dubilier & Rice; Blackstone with CVC Capital Partners; and KKR with GIC. Apollo Global Management is prepping a solo bid. http://axios.link/2azz

• Webster Capital has acquired Cirrus Medical Staffing, a Charlotte-based provider of travel nurse and travel allied healthcare professionals. www.cirrusmedicalstaffing.com

Public Offerings

• Altair Engineering, a Troy, Mich.-based provider of engineering software, has set its IPO terms to 12 million shares being offered at between $11 and $13. It would have a fully diluted market value of $852 million, were it to price in the middle of its range. The company plans to trade on the Nasdaq under ticker symbol ALTR, with J.P. Morgan serving as lead underwriter. www.altair.com

• RumbleOn, a Charlotte-based online marketplace for motorcycles, raised $16 million in its IPO. It priced 2.9 million shares at $5.50, and will trade on the Nasdaq under ticker symbol RMBL. www.rumbleon.com

• Stitch Fix, a San Francisco-based personal shopping subscription service that had raised $47 million in VC funding, has filed for a $100 million IPO. It plans to trade on the Nasdaq under ticker SFIX, with Goldman Sachs and J.P. Morgan serving as lead managers. The company reports a net loss of just under $1 million on $977 million in revenue for the year ending in July, but profitability in the prior two fiscal years. Yes, e-commerce startup profitability. It's like the 2017 version of the 2016 Chicago Cubs. http://axios.link/QLDU

• WatchGuard, an Allen, Texas-based provider of mobile video solutions for law enforcement, has filed for a $75 million IPO. It plans to trade on the Nasdaq under ticker symbol WGRD, with Barclays and SunTrust serving as lead underwriters. The company reports $8 million of net income on $71 million in revenue for the first nine months of 2017. www.watchguard.com

Liquidity Events

• First Data (NYSE: FDC) mistakenly posted a draft of a press release that said it is acquiring credit card processor BluePay from TA Associates, but then pulled the doc and said the deal hasn't been finalized. http://axios.link/sehn

More M&A

• Booz Allen Hamilton (NYAE: BAH) has agreed to acquire Morphik, a Bkue Ash, Ohio-based provider of managed detection and response services. www.boozallen.com

⛽ RWE is considering a takeover offer for rival Uniper's coal-fired plants in Germany, Britain and the Benelux countries, according to Reuters. http://axios.link/eIL2

⛽ Vitol Group is nearing an agreement to acquire the global oil liquids business of Noble Group, which could be worth around $1 billion, according to Reuters. http://axios.link/Hm8E


• Guardian Media Group has launched a £42 million venture capital fund. http://axios.link/FTly

• Mad Dog Ventures of Birmingham, Mich. has secured over $18 million for a $30 million-targeted debut fund, per an SEC filing. www.maddogvc.com

• Mountain Partners of Switzerland is forming a $100 million fund to invest in Southeast Asia startups. http://axios.link/nLnZ

RLH Equity Partners, a Los Angeles-based private equity firm, has closed its fourth fund with nearly $511 million in capital commitments. www.rlhequity.com

It's Personnel

• Afsheen Afshar is joining Cerberus Capital Management as a senior managing director and its first chief AI officer. He previously was J.P. Morgan's chief data science officer.

• Tom Davis and Matthew Alfieri have joined Centana Growth Partners as a principal and VP, respectively. Davis previously was with General Atlantic, while Alfieri was with Goldman Sachs. www.centanagrowth.com

• Benjamin Erhart has joined Germany's Unternehmertum VC Partners as a partner. He previously was an investment director with High-Tech Gruenderfonds. www.uvcpartners.com

• Richard Kerby has stepped down as a vice president with Venrock, which had first joined in 2012. No word yet on his future plans.

• Seth Lawry has stepped down as a managing director with Thomas H. Lee Partners, which he first joined in 1989. He will continue serve as an advisory partner. www.thl.com

• Robin Selati and Nicholas Alexos, co-founders of Madison Dearborn Partners, have stepped back, per peHUB. Selati, who led consumer investing, is now a senior advisor. Alexos, who led healthcare, is now chief administrative officer with dental equipment company Dentsply Sirona. www.madisondearborn.com

Final Numbers: Q3 earnings estimates

More from S&P Global Market Intelligence:

  • S&P 500's 3rd quarter growth is 3.78% compared to 5.98% a month ago.
  • Consumer Staples was trending up the most to 5.33% from 4.47% a month ago.
  • IT was trending up the most to 10.18% from 9.69% a month ago.
  • Financials was trending down the most to -5.87% from 4.51% a month ago.
Dan Primack