Aug 29, 2017

Axios Pro Rata

By Dan Primack
Dan Primack

Tuesday greetings from the home office. Please remember that you can shoot me info or feedback via email (dan@axios.com), anonymous tip (http://axios.com/tips), Twitter DM (@danprimack), Facebook Messenger or confidential apps like Confide, Telegram and Signal (Dan Primack /857-472-3072). Here we go...

Top of the Morning

Uber may have a new CEO, but that hasn't yet settled down the unprecedented legal battle between Travis Kalanick and Benchmark Capital.

  • The latest: Kalanick yesterday reiterated his request for arbitration via a new court filing, which argues that Benchmark's legal strategy is driven by its "desire to... publicly slander Mr. Kalanick with its fabricated allegations."
  • Timeline: A judge is expected to rule on the arbitration issue tomorrow. If he agrees with Kalanick, then the legal mess goes behind closed doors. If he sides with Benchmark, then he would construct a schedule of depositions and document creation that would result in Kalanick providing specific rebuttals to Benchmark's charges that he withheld material information prior to last summer's decision to amend the company's voting rights agreement
  • Alt argue: If the judge rejects arbitration, he also could rule on Benchmark's request for an expedited process, which had been based on Kalanick's alleged interference with the CEO selection process. Now that a chief has indeed been picked (albeit not yet formally named), Benchmark may need to amend its primary argument in favor of expedition.
  • Baseless optimism? It sounds like both sides are too pot-committed to let this whole thing drop, but it's clearly a distraction that does incoming CEO Dara Khosrowshahi no good. If the board managed to rise above its squabbles to support Khosrowshahi in the first place, perhaps similar sensibilities could seep into Benchmark vs. Kalanick.

• Harvey's hell: Axios' Ben Geman has the latest on how Hurricane Harvey is affecting the energy markets, including the expected rise in gasoline prices but unexpected stability in natural gas prices.

  • Size matters: Houston-area S&P 500 companies have total market cap of approximately $552 billion, per S&P Global Market Intelligence. The largest is Schlumberger (NYSE: SLB), with a market cap just north of $88 billion.
  • How to help: CharityNavigator, a nonprofit watchdog and ratings site, has created a Harvey-specific page for those who want the best ROI (relief on investment).

• Auction action: Final bids are due today for eVestment, a Georgia-based provider of cloud data intelligence and analytics for institutional investors. A source says that expected 2017 EBITDA is in the ballpark of $35 million, and that first-round bid multiples were in the mid-teens (i.e., the ultimate winner will need to hit a higher mark). The primary seller would be Insight Venture Partners, which retained Evercore to manage the process earlier this year.

• New fund alert: Ryan Hoover, founder and CEO of popular tech leaderboard and forum Product Hunt, is getting into the VC game with an effort called Weekend Fund. Kia has more.

• Divestment: Varma Mutual Pension Insurance, a $53 billion Finnish pension fund, is cutting its exposure to U.S. stocks — due to concerns over Trump. Per a Bloomberg interview with Varma CEO Risto Murto, who said that Trump's post-Charlottesville comments were the breaking point: "It seems as if there is no president... The lesson from 2008 is that if we have a problem in the U.S., then we all have a problem.

The BFD

Gigster, a San Francisco-based provider of automation tools for smart software development, has raised $20 million in Series B funding. Redpoint Ventures led the round, and was joined by Michael Jordan, Marc Benioff, Adam D'Angelo and return backers Andreessen Horowitz, Y Combinator and Sound Ventures.

  • Why it's the BFD: Big enterprises are turning more to outsourced tech project development as things like machine learning and blockchain gain traction within... Oh, who am I kidding? Gigster gets this spot because Michael Jordan has become the latest pro athlete to dabble in venture tourism. A company spokesman tells me the introductions to the NBA all-timer came through two existing Gigster investors: Ashton Kutcher (co-founder of Sound Ventures) and Vivec Ranadivé (who also owns the Sacramento Kings).
  • Bottom line: "He was my childhood hero. It's just fun to have him on the cap table. He didn't put a ton into the round. We thought it'd be cool to have someone involved that we really look up to." — Gigster CEO Roger Dickey, via TechCrunch
Venture Capital Deals

• Qiniuyun, a Chinese provider of enterprise cloud services, has raised around $140 million in new VC funding from Alibaba Group and Yunfeng Capital. http://axios.link/MmCA

🚑 Akeso Biopharma, a Chinese antibodies developer, has raised around $45 million in Series B funding. GTJA Investment Group led the round, and was joined by Shenzhen Capital Group, Qianhai Fund of Funds and TriWise Capital. http://axios.link/ll8c

🚑 SetPoint Medical, a Santa Clarita, Calif.-based developer of bioelectronic therapy for chronic inflammatory diseases, has raised $30 million in Series D funding from return backers NEA, Morgenthaler, Medtronic, Boston Scientific, Topspin and Action Potential Venture Capital. http://axios.link/ma5G

• Anonyome Labs, a Salt Lake City-based consumer privacy startup, has raised $20.4 million in Series B funding. Todd Davis (LifeLock founder), Ken Eldred (Ariba co-founder) and Hanna Ventures were joined by return backers John Mumford (Crosspoint Ventures founder) and Greg Clark (Symantec CEO). http://axios.link/pALN

Amplero, a Seattle-based provider of core AI marketing technology, has raised $17.5 million in Series B funding. Greycroft and Ignition Partners co-led the round, and were joined by return backers Wildcat Venture Partners, Seven Peaks Ventures, and Trilogy Equity Partners. www.amplero.com

🚑 Freenome, a South San Francisco-based liquid biopsy startup, has raised $7 million in new Series A funding (bringing the round total to $72 million). Section 32 led the round extension, and was joined by Anne Wojcicki. The initial round was led by Andreessen Horowitz. www.freenome.com

• Zūm, an on-demand ride service for kids and families, has raised $5.5 million in Series A funding led by Sequoia Capital. www.ridezum.com

• Next Caller, a New York-based phone fraud detection startup, has raised $5 million in seed funding led by Crystal Towers. http://tcrn.ch/2vxIuYv

• BillingPlatform, an Englewood, Colo.-based monetization startup, has raised $4 million in new funding from Columbia Capital (with an additional $14m possible over the next 18 months). http://axios.link/kh8n

Private Equity Deals

⛽ AE Industrial Partners has acquired BHI Energy, a Weymouth, Mass.-based provider of staffing for the power generation, energy and government industries, from Harvest Partners. No financial terms were disclosed. www.bhienergy.com

• DiscoverOrg, a Vancouver, Wash.-based sales and marketing intelligence company owned by TA Associates, has acquired Bethesda, Md.-based RainKing from Spectrum Equity for an undisclosed amount. http://axios.link/r2dG

• Leonard Green & Partners has agreed to acquire CPA Global, a Channel Islands-based IP management and technology company, from Cinven for £2.4 billion. http://on.ft.com/2wYGP1G

🚑 Resonetics, a Nashua, N.H.-based portfolio company of Sverica, has acquired Aduro Laser, a Davis, Calif.-based provider of laser processing of tubular components for the medical device industry. No financial terms were disclosed. http://axios.link/RzXU

🚑 Parcom Capital has acquired Dutch clinical research organization Viroclinics Biosciences, from Gilde Healthcare Partners for an undisclosed amount. www.viroclinics.eu

• Vista Equity Partners has agreed to acquire the education business of The Advisory Board Co. (Nasdaq: ABCO) for around $1.55 billion. Advisory Board Co. also agreed to sell its healthcare business to OptumHealth for just over $1 billion. http://axios.link/G9IZ

IPOs
Liquidity Events

• Century Park Capital Partners and Akoya Capital Partners have sold ICM Silicones Group, a Cassopolis, Mich.-based formulator and manufacturer of specialty silicone materials, to German specialty chemicals company CHT Group for an undisclosed amount.

🚑 CSL Behring, a Pennsylvania unit of Australia's CSL Ltd. (ASX: CSL), has acquired Calimmune, a Tucson, Ariz.-based developer of ex vivo hematopoietic stem cell gene therapies. The deal is valued at upwards of around $400 million, including $91 million up-front. Calimmune shareholders had included Alexandria Venture Investments, RA Capital Management and Translational Accelerator. http://axios.link/Wm0E

More M&A

• LG Electronics is among the bidders for ZKW Group, an Austrian maker of automotive lights that could garner $1.2 billion, according to Korea Economic Daily. http://reut.rs/2wFvxQk

• Toromont Industries (TSX: TIH) has agreed to acquire Hewitt Group, a Canadian owner and operator of Caterpillar dealerships, for around C$1.02 billion in cash and stock. http://reut.rs/2iFZcCT

It's Personnel

Christine Kelleher has been named chief investment officer for the National Gallery of Art, overseeing an $850 million endowment. She previously was a managing director with Avec Capital.

Bruno Werneck, a former investment banking analyst at J.P. Morgan, has joined Spectrum Equity's San Francisco office, per his LinkedIn account. www.spectrumequity.com

Final Numbers
Dan Primack