Oct 28, 2019

Axios Pro Rata

By Dan Primack
Dan Primack
Top of the Morning

Photo by Steve Jennings/Getty Images.

"Legend" is a word that gets tossed around a lot in Silicon Valley, where everyone is always "crushing it." But Don Valentine was the genuine article, with a resumé indelibly etched into the Sand Hill Road pavement.

  • Valentine, who died Friday at the age of 87, founded Sequoia Capital and was an early investor in such companies as Apple, Atari, Cisco, and Oracle.

Valentine began investing in tech startups while still working at a semicondcutor company, before raising $3 million in 1974 for what would later evolve into Sequoia. His $150,000 Apple investment came after first investing in Atari, and meeting a young engineer there named Steve Jobs. He would help incubate both Electronic Arts and Sierra Semiconductor in Sequoia's offices and, when it came time to pass firm management on to Doug Leone and Mike Moritz, he didn't ask for cash in return. To Valentine, Sequoia belonged to whoever was making the next deal, not the last one. That's why he named it after a rugged tree, not after himself.

  • As Sequoia wrote in its tribute to Valentine, his foundational question to all aspiring entrepreneurs was the same: "Who cares?"
  • But once he bought in, Valentine was an originator of founder-friendly. Per Marc Andreessen, Valentine once said: "The world of technology thrives best when individuals are left alone to be different, creative, and disobedient."

Valentine is survived by his wife Rachel, three children and seven grandchildren.

  • The family asks that in lieu of flowers any donations go to the Donald T. Valentine Memorial Fund c/o Trish Gerber, Office of Development, Stanford University.
  • A memorial service is still being arranged.

🌴 Saudi Arabia's Future Investment Initiative has finally released its agenda, just 24 hours before the controversial conference is set to begin. Some things we learned:

  • Blackstone Group CEO Steve Schwarzman isn't just a panelist. He'll be "interviewing" Jared Kushner. Hopefully the swag bag includes softball mitts.
  • The Bloomberg News moderators have been replaced with a hodgepodge of independent British journalists and members of a Chinese news network. (Note: Bloomberg still won't explain why they agreed to put its people on stage in the first place).
  • MBS does not appear to be on the program. Instead, opening remarks will come from Saudi Public Investment Fundf chief, and Uber board member, Yasir Al-Rumayyan.
  • Plenty of U.S. tech startups will be on stage, including from companies like Plenty and Sprinklr. Confirmed U.S. venture capitalists include Jim Breyer (who spoke last year) and 500 Startups' Christine Tsai.

🎧 Pro Rata Podcast digs into the GM strike settlement, and why it's just a short-term fix. Listen here.

Source: Giphy

LVMH (Paris: MC) confirmed that it has approached Tiffany & Co. (NYSE: TIF) about a possible takeover.

  • Why it's the BFD: This is as much about trade war opportunism as it is about diamond bracelets in little blue boxes. Tiffany has been hit hard by a decrease in Chinese tourism to the U.S., and has been trying to play catch-up by opening more locations inside of China. It's also assumed the added costs of new Chinese tariffs on U.S.-made jewelry.
  • Pricing remains unclear, although reports are that LVMH is contemplating a $120 per share bid that would value Tiffany at around $14.5 billion. That would be a 22% premium to where Tiffany closed on Friday, but traders expect a richer bid — with shares climbing past $130 at today's open. Tiffany's all-time high was $137.56, back in July 2018.
  • Bottom line: LVMH is synonymous with luxury, and would use Tiffany to bolster a relatively small jewelry business whose current crown jewel is Bulgari.
Venture Capital Deals

Weave, a Lehi, Utah-based dental and optometry patient communications platform, raised $70 million in Series D funding at a $970 million valuation. Tiger Global led, and was joined by return backers Crosslink Capital, Catalyst Investors, Bessemer Venture Partners, LeadEdge Capital, and Pelion Venture Partners. http://axios.link/Ekuh

Aviatrix, a Santa Clara, Calif.-based provider of networking and security services for multi-cloud enterprises, raised $40 million in Series C funding. CRV led, and was joined by fellow insiders Formation 8, Ignition Partners, and Liberty Global Ventures. www.aviatrix.com

Shipwell, an Austin, Texas-based provider of freight logistics software, raised $35 million in Series B funding. Georgian Partners led, and was joined by Aspect Ventures, Fifth Wall, Global Founders Capital, and Box Group. http://axios.link/vNuk

Duffel, a UK-backed platform that connects travel agencies with airline reservation systems, raised $30 million in Series B funding. Index Ventures led, and was joined by return backers Benchmark and Blossom Capital. http://axios.link/n9HG

Twiga Foods, a Kenyan B2B food distribution platform, raised $23.75 million in Series B funding. Goldman Sachs led, and was joined by IFC, TLcom Capital, and Creadev. Goldman also arranged $6.25 million in debt funding. http://axios.link/JqHX

🎸 Welcome to the Jungle, a French recruitment startup, raised €20 million. Gaia Capital Partners led, and was joined by return backers Bpifance, XAnge, and Jean-Paul Guisset. http://axios.link/Zqvx

Young Alfred, a Philadelphia-based home insurance marketplace, raised $10 million in Series a funding. Gradient Ventures led, and was joined by Pear Ventures, ERA, and Newfund Capital. http://axios.link/YpNN

Zamna, a UK-based airline passenger identity verification startup, raised $5 million in seed funding co-led by LocalGlobe and Oxford Capital. http://axios.link/Gxgt

EnsureDR, a San Jose, Calif.-based provider of disaster recovery readiness software, raised $2.5 million in Series A funding led by Awz Ventures. www.ensuredr.com

ACV Auctions, a Buffalo, N.Y.-based wholesale auto auction site, is seeking to raise upwards of $150 million in Series E funding at a post-money valuation north of $1 billion, per a Delaware stock authorization filing. http://axios.link/BdPT

Private Equity Deals

🚑 Acadia Health (Nasdaq: ACHC) is seeking buyers for rehab center operator Priory Group for around £1 billion, with CapVest as a possible suitor, per The Daily Telegraph. http://axios.link/PTIf

Peppertree Capital Management will pay around $680 million to purchase around 1,000 wireless communications towers from AT&T (NYSE: T), via a sale-leaseback transaction. http://axios.link/imTj

SK Capital completed its purchase of the Avon Lake, Ohio-based plastic compounded solutions group of PolyOne (NYSE: POL), and renamed it GEON Performance Solutions. www.geon.com

Public Offerings

Two companies plan to go public on U.S. exchanges this week: Fangdd Network Group and Oyster Point Pharma. http://axios.link/XULs

🚑 89Bio, a San Francisco-based metabolic drug developer, set IPO terms to 4.4 million shares at $15-$17. The pre-revenue company would have an initial market cap of $193 million, were it to price in the middle, and plans to trade on the Nasdaq (ETNB) with BAML as lead underwriter. Shareholders include OrbiMed (41.2% pre-IPO stake), Longitude Venture Partners (24.9%), RA Capital (21.6%), and Pontifax (11.5%). http://axios.link/yo2z

🚑 Galera Therapeutics, a Malvern, Penn.-based developer of drugs for reducing inflammatory side effects of radiation therapy, set IPO terms to 5 million shares at $14-$16. It would have an initial market cap of $365 million, were it to price in the middle, and plans to trade on the Nasdaq (GRTX) with BAML as lead underwriter. The pre-revenue company raised $143 million in VC funding from firms like NEA (20.4% pre-IPO stake), Novartis (17%), Novo Holdings (15%), Sofinnova Venture Partners (12.1%), and Blackstone (7.4%). http://axios.link/pm19

JFrog, an Israeli software management company, is considering a Nasdaq IPO for 2020 at a $1.5 billion valuation, per TheMarker. JFrog has raised over $220 million in VC funding from firms like Genesis Israel Ventures, Dell, Insight Partners, Sapphire Ventures, and Scale Venture Partners. http://axios.link/FYa1

JS Global Lifestyle, a Chinese home appliance maker that sells in the U.S. under the SharkNinja brand, canceled a Hong Kong IPO designed to raise around $464 million. http://axios.link/PgJO

Q&K International Group, a Chinese long-term apartment rental platform, set IPO terms to 5.2 million shares at $17-$19. It would have a market cap of $899 million, were it to price in the middle, and plans to trade on the Nasdaq (QK) with Morgan Stanley as lead underwriter. The company reports a $54 million net loss on $131 million in revenue for the first nine months of 2019, while shareholders include Crescent Capital, SAIF Capital, and North Haven Private Equity. http://axios.link/gTDX

Siam Cement is prepping a $1 billion Thailand IPO for its packaging unit, per Reuters. http://axios.link/o5eY

Liquidity Events

📺 Banijay, a French media company, agreed to buy Endemol Shine, the Dutch TV production company behind The Voice and Black Mirror, from Apollo Global Management for around €2 billion. http://axios.link/E9EH

More M&A

The Daily and Sunday Telegraph newspapers reportedly are on the block. http://axios.link/a5SE

📺 PPF, a Czech investment group led by Petr Kellner, agreed to buy broadcaster Central European Media Enterprises for $2.1 billion in cash. http://axios.link/bAHp

Prologis (NYSE: PLD) agreed to buy rival industrial warehouse operator Liberty Property Trust (NYSE: LPT) for $12.6 billion. http://axios.link/HWaq


Altamar Capital Partners, a Spanish private equity secondaries firm, reportedly is raising €750 million for its eleventh fund. http://axios.link/thTh

Qualcomm Ventures said it will allocate $200 million for startups focused on 5G technologies. http://axios.link/pQCZ

It's Personnel

Todd Manley joined Marvell Semiconductor (Nasdaq: MRVL) as senior director of M&A integration, per his LinkedIn page. He previously led M&A integration at Symantec.

Sumit Sinha launched a new India-based private equity firm called Filter Capital, per his LinkedIn page. He previously was a managing director with Multiples Alternate Asset Management and, before that, was a principal with Warburg Pincus.

Final Numbers
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Data: Yahoo! Finance; Chart: Axios Visuals

AT&T this morning reached a truce with activist investor Elliott Management, six weeks after Elliott became the company's sixth-largest shareholder and signaled that it wanted major management and strategy changes.

  • Elliott will appoint two directors to AT&T's board, upon retirement of existing directors.
  • AT&T also will split the chairman and CEO roles upon the retirement of Randall Stephenson, who it appears will stay on through the end of next year.
  • AT&T has agreed to sell around $10 billion of non-core assets next year, and retire all of the debt taken on via the Time Warner purchase. Elliott, meanwhile, remains able to publicly criticize AT&T, if it so chooses.
Dan Primack

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