Feb 25, 2020

Axios Pro Rata

By Dan Primack
Dan Primack

Bleary-eyed greetings from San Francisco, where I'm on assignment for "Axios on HBO." Speaking of which...

  • Our third season kicks off this Sunday on HBO at 6pm ET/PT. Check out the trailer.
Top of the Morning

Illustration: Aïda Amer/Axios. Photos: Zach Gibson/Stringer, The Washington Post/Getty Contributor

Bernie Sanders is poised to become an economic scapegoat for both the White House and corporate America, assuming that Sanders comes through Super Tuesday unscathed.

  • If the U.S. economy remains strong, President Trump and CEOs will claim credit (as they've been doing for three years). If it turns sour, they'll blame Bernie (even though it's a largely baseless charge).
  • We got a sneak preview yesterday, when a Fox Business Network anchor pinned the Dow drop on Nevada caucus results, rather than on rising coronavirus infections outside of China.

Presidents receive too much credit and criticism for the economy, a popular maxim that we've seen manifested in past reelection results.

But the core validity of American capitalism wasn't at issue in those prior tilts; Bernie Sanders opens that door by virtue of his self-described democratic socialism, giving Trump a rhetorical shield unavailable to past incumbents. And the same goes for CEOs and boards, who normally bear the brunt of poor performance.

  • This isn't to say that such arguments would necessarily work, particularly given that GDP growth and corporate earnings both softened before Sanders surged.
  • Nor that they should work, as only one president at a time sets policy.
  • It's just that they may work, particularly when the only alternative for Trump and CEOs would be accepting blame.

The bottom line: Sanders, just by virtue of his ascendant existence, gives today's political and business leaders a "heads I win, tails you lose" response to whatever the economy throws at us heading into November.

  • Pro Rata Podcast has more on Sanders, and how the Democratic Party didn't see him coming. Listen here.
Also...

Wing Venture Capital later today will release its second-annual list of the 30 "most promising" private companies in enterprise tech.

  • How it works: Wing's research arm identifies a universe of hundreds of eligible companies, but the actual voting is done by 96 partners at 72 VC firms (with methodology restrictions to limit self-selection bias). As such, it's a strong gauge of venture sentiment around both individual companies and enterprise tech trends.
  • What it found: Axios got a sneak peek of the results, which are broken out evenly by lifecycle stage. The leaders were Zapier (early-stage), Figma (mid-stage), and HashiCorp (late-stage).
    • 15 of the 30 companies are new to this year's list. Two of last year's companies exited (DataDog and Plaid), while some of the other churn was due to a glut of companies raising new rounds/moving into the "later-stage" category.

"There were some very clear trends we saw," says Wing co-founder Peter Wagner. "For the later-stage companies, in particular, a large number of them are next-generation data platforms... Among the earlier-stage companies, it's often ones participating in the API economy."

The BFD

Photo Illustration by Miguel Candela/SOPA Images/LightRocket via Getty Images

Grab, a Southeast Asian "super-app" for everything from ride hail to payments, raised $856 million from Japanese investors Mitsubishi UFJ Financial Group and TIS Inc.

  • Why it's the BFD: This appears designed to help Grab maintain its market lead over rival GoJek — the companies were most recently valued at $14 billion and $9 billion, respectively — although it comes less than 24 hours after a report about merger talks.
  • Extra intrigue: Gojek denied that the two sides are in negotiations, while Grab declined comment.
  • The bottom line: "Grab’s growth of its super app — in which it (like others pursuing a similar strategy) provides a one-stop shop for consumers to both see to their transportation needs, but also other aspects of their connected consumer life, such as eating, entertainment and managing their money — has involved the company partnering with a number of other financial giants." — TechCrunch
Venture Capital Deals

Revolut, a British app-based challenger bank, raised $500 million in Series D funding at a $5.5 billion valuation. TCV led, and was joined by return backers Ribbit Capital, DST Global, Lakestar, and GP Bullhound. http://axios.link/b6Uf

Graphcore, a UK-based AI chipmaker, raised $150 million in new Series D funding at a $1.95 billion post-money valuation. Baillie Gifford, Mayfair Equity Partners, and M&G Investments were joined by return backers Merian Chrysalis, Ahren Innovation Capital, Amadeus Capital Partners, and Sofina. http://axios.link/ivqZ

Behavox, a New York-based provider of compliance and employee-monitoring software, raised $100 million at a $500 million valuation from SoftBank Vision Fund 2, per Bloomberg. http://axios.link/5alE

ServiceMax, a Pleasanton, Calif.-based provider of field service management software, raised $80 million from Salesforce Ventures and return backer Silver Lake. http://axios.link/6neA

Ripcord, a Hayward, Calif.-based robotics digitization startup, raised $45 million in Series B-2 funding. CDK Global led, and was joined by return backers Kleiner Perkins, GV, SVB, Lux Capital, Tyche Partners, Icon Ventures, Baidu, and Steve Wozniak. www.ripcord.com

🚑 KAHR Medical, an Israeli immune-oncology startup, raised $18 million from Flerie Invest, Oriella, HBL Capital, and Mirae Asset Venture Investment. http://axios.link/veiP

Whales English, a Beijing-based online provider of K-12 English learning classes, raised $14.2 million in Series B funding. Sino-Ocean Group led, and was joined by Hike Capital and Fresh Capital. http://axios.link/CHHg

Lucy Goods, a Los Angeles-based maker of nicotine gum, raised $10 million in Series A funding. RRE Ventures led, and was joined by FundRX, Vice Ventures, Greycroft, and YC. http://axios.link/Ds11

Pet Plate, a New York-based fresh pet food subscription service, raised $9 million in Series A funding. DFE Capital Management and 301 INC co-led, and were joined by Marco Polo Capital, Fernbrook Capital Management, The Yard Ventures, and Castor Ventures. http://axios.link/FxfN

Mantl, a New York-based provider of bank account opening software, raised $8 million in Series A funding. Point72 Ventures led, and was joined by Endicott Group. http://axios.link/v47w

Pipe, a Los Angeles-based financing platform for SaaS companies, raised $6 million in seed funding. Craft Ventures led, and was joined Fika Ventures, MaC Ventures, Naval Ravikant, WorkLife Ventures, Liquid2, and The Weekend Fund. www.pipe.com

BlueWire, a sports podcasting startup, raised $1.2 million in seed funding from Dot Capital and 500 Startups, per Axios. http://axios.link/kPck

Private Equity Deals

Align Capital Partners recapitalized Marco Rubber & Plastics, a Seabrook, N.H.-based distributor of elastomer components. www.marcorubber.com

Bain Capital, Boyu Capital, and MBK Partners are among first-round bidders for SML Group, a Hong Kong-based garment label maker that could fetch between $400 million and $500 million, per Bloomberg. http://axios.link/jCPx

Equistone Partners agreed to acquire Accès Industrie, a French renter of rental of aerial work platforms and telescopic forklift trucks, from Parquest Capital, Crédit Mutuel Equity, and Irdi Soridec Gestion.

Industrial Opportunity Partners acquired PolyVision, a Johns Creek, Ga.-based maker of surfaces used in whiteboards and chalkboards, from Steelcase (NYSE: SCS). www.polyvision.com

McAfee, a portfolio company of TPG Capital, Thoma Bravo, and Intel, agreed to buy Light Point Security, a Washington, D.C.-based provider of browser isolation solutions. http://axios.link/feLh

🚑 Partners Group offered to buy Australian medical center operator Healius (ASX: HLS) for A$2.12 billion. http://axios.link/28d8

📺 Searchlight Capital Partners and ForgeLight agreed to buy a 64% stake in Spanish-language broadcaster Univision from backers like Saban Capital Group, Madison Dearborn Partners, THL Capital, and Providence Equity Partners. Mexican TV network Televisa will retain its 36% position. http://axios.link/zAKs

Small World, a UK-based money transfer firm owned by Equistone Partners, acquired French payments company MoneyGlobe. www.smallworldfs.com

Stonepeak Infrastructure Partners agreed to buy Canadian broadband service provider Xplornet Communications for around $2 billion (including debt), per Bloomberg. http://axios.link/bVFX

TA Associates agreed to buy AffiniPay, an Austin, Texas-based payments tech company owned by Great Hill Partners, per Barron’s. http://axios.link/J708

🚑 Warburg Pincus agreed to buy French biotech Polyplus-Transfection from ArchiMed SAS for more than $500 million, per Reuters. http://axios.link/y1uv

🚑 Water Street Healthcare Partners agreed to invest in Solvias, a Swiss pharma lab. www.waterstreet.com

Public Offerings
Source: Giphy

Big Hit Entertainment, the music label of K-pop band BTS, chose JPMorgan and other banks for an IPO that could value the company at upwards of $5 billion. http://axios.link/HaG2

Liquidity Events

Intuit (Nasdaq: INTU) confirmed that it will pay $7.1 billion in cash and stock to buy Credit Karma, a San Francisco-based provider of consumer credit-score checks and monitoring services. Credit Karma raised around $370 million in VC funding from firms like Ribbit Capital, Felicis Ventures, CapitalG, QED Investors, and Susquehanna Growth Equity. Silver Lake purchased a 12.5% stake from insiders in early 2018 at an estimated $4 billion valuation.

More M&A

Berkshire Hathaway would not have interest in buying Bloomberg LP, were it to be put on the block by a President-elect Michael Bloomberg, according to comments made yesterday by Warren Buffett.

Boingo Wireless (Nasdaq: WIFI), a Los Angeles-based WiFi provider in airports and other public places, is exploring a sale after receiving takeover interest, per Bloomberg. Its current market cap is $629 million. http://axios.link/7hH4

HP (NYSE: HPQ) is pledging to repurchase $15 billion of its stock, in an effort to fend off a hostile takeover bid from Xerox (NYSE: XRX). http://axios.link/feUc

Tesco (LSE: TSCO), Britain’s largest retailer, is exiting China via a £275 million sale of its JV stake to partner China Resources Holdings. http://axios.link/9I2v

Third Point, Dan Loeb’s activist hedge fund, disclosed more than a $2 billion stake in British insurer Prudential (LSE: PRU), and called for it to split into two companies. http://axios.link/cQdo

TripActions, a Palo Alto-based corporate travel platform valued at $4 billion by VCs, secured $500 million in debt financing to launch a new product line. Lenders are SVB, Goldman Sachs, and Comerica. http://axios.link/3CL0

Fundraising

Lakestar, a European VC firm, raised a combined $375 million for its latest early-stage and growth-stage funds. www.lakestar.com

Speedinvest raised €190 million for its third pan-European VC fund. http://axios.link/p4T4

It's Personnel

Nikhil Sachdev joined Insight Partners as a managing director. He previously was a partner with Altimeter Capital. www.insightpartners.com

Final Numbers
Expand chart
Data: Yahoo Finance; Chart: Andrew Witherspoon/Axios
  • Why it matters, per Axios' Sara Fischer: "The company is now worth far less combined ($17 billion in market capitalization) than the two companies were worth separately (around $30 billion) prior to their merger."
Dan Primack

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