Nov 25, 2020

Axios Pro Rata

🦃 Axios Re:Cap talks turkey with Butterball president and CEO Jay Jandrain. Listen via Apple, Spotify or Axios.

  • We also posted today's pod a bit early, including a conversation with Walmart U.S. CEO John Furner on Thanksgiving grocery and Black Friday consumer trends, plus what the country's largest retailer is doing differently this year. Apple, Spotify, Axios.

Axios Pro Rata is off until Monday. Have a safe and delicious holiday.

Top of the Morning

Illustration: Aïda Amer/Axios

We don't yet know who President-elect Biden wants as his DOJ antitrust chief, but it's looking likely that his administration's first major antitrust test will involve books.

Driving the news: Bertelsmann, the German owner of Penguin Random House, agreed to buy U.S. book publisher Simon & Schuster from ViacomCBS for nearly $2.2 billion in cash.

  • Losing bidders included News Corp, which owns HarperCollins, and Vivendi, which holds a minority stake in Lagardère.

Antitrust argument: Book publishing is dominated by the "Big 5," with Penguin at the top.

  • DOJ doesn't typically seek to block 5-to-4 market consolidations, but this deal could make Penguin nearly double the size of its next-largest rival, based on global 2019 book publishing revenue.
  • But it does sometimes have a hankering for horizontal mergers of legacy businesses. Plus, this merger would be a 3-2 consolidation if viewed in terms of U.S. unit sales.
  • News Corp CEO Robert Thomson recently said in an earnings call that a Bertlesmann/S&S merger would be create "a profound antitrust issue for the entire book industry and, no doubt, for authors around the world.”
  • Caveat: It's unlikely that a Biden DOJ would care too much what a Rupert Murdoch lieutenant has to say, although don't be surprised if we get similar statements from other book publishers.

The bottom line: Biden will inherit all sorts of antitrust issues, particularly around Big Tech. But this would be the first one in which his people will be asked to start from scratch.

The BFD

Illustration: Aïda Amer/Axios

Stripe, a San Francisco-based digital payments infrastructure company, is in talks to raise new private funding at a valuation of at least $70 billion, and perhaps as high as $100 billion, per Bloomberg.

  • Why it's the BFD: This would make Stripe the world's second-most valuable venture-backed company, or maybe the most valuable if ByteDance divests its majority stake in TikTok by this Friday's CFIUS deadline. It's also another indication that Stripe's founding Collison brothers are reticent to bring the company public.
  • $$ history: Stripe raised $600 million at nearly a $36 billion valuation back in April. Overall it's raised nearly $2 billion from firms like Sequoia Capital, Andreessen Horowitz, Founders Fund, CapitalG and Thrive Capital.
  • The bottom line: "The company has benefited during the pandemic with more shoppers turning to e-commerce. It’s gone on offense during the downturn this year, starting a card-issuing service for U.S. clients and agreeing to acquire a Nigerian startup to expand in Africa." — Bloomberg
Venture Capital Deals

Hippo, a Palo Alto, Calif.-based home insurance startup, raised $350 million in new funding from Mitsui Sumitomo Insurance Co. In July it raised a $150 million Series E round at a $1.5 billion valuation. http://axios.link/UEtu

Chainalysis, a New York-based blockchain analysis company, raised $100 million in Series C funding. Addition led, and was joined by insiders Accel, Benchmark and Ribbit Capital. http://axios.link/TKif

Percepto, an Israeli industrial drone startup, raised $45 million in Series B funding. Koch Disruptive Technologies led, and was joined by investors State of Mind Ventures, Atento Capital, Summit Peak Investments, Delek-US and return backers U.S. Venture Partners, Spider Capital and Arkin Holdings. http://axios.link/0AT8

🚑 FirstVet, a Swedish veterinary telemedicine startup, raised $35 million. Mubadala led, and was joined by Cathay Innovation and return backers OMERS Ventures and Creandum. http://axios.link/yofE

Dija, a pre-launch British delivery startup, is raising $20 million in new funding led by Blossom Capital, per TechCrunch. http://axios.link/1jqU

Elevian, a Boston-based preclinical biotech focused on stroke and other age-related diseases, raised $15 million. Prime Movers Lab led, and was joined by Bold Capital Partners, For Good Ventures, Kizoo Ventures, Lauder Partners, Longevity Fund, SavEarth Fund and WTI. http://axios.link/sqR4

DefenseStorm, an Alpharetta, Ga.-based cybersecurity and compliance management platform for small banks and credit unions, raised $12 million in Series B funding. Georgian Partners led, and was joined by TTV Capital. www.defensestorm.com

WeGift, a London-based incentive marketing platform for businesses, raised $8 million in new Series funding. AlbionVC led, and was joined by insiders Stride.vc, SAP.iO fund and Unilever Ventures. http://axios.link/SBOJ

Mother Raw, a Toronto-based maker of plant-based dressings and condiments, raised US$6.1 million in Series A funding. Forage Capital Partners led, and was joined by Export Development Canada and Whitecap Venture Partners. http://axios.link/hplO

F3, a Latvia-based anonymous Q&A app from the founders of controversial app Ask.fm, raised $3.9 million in seed funding from groups like AdFirst. http://axios.link/RBs7

Socialeads, a Milwaukee-based data science startup focused on insurers, raised $1.75 million from Northwestern Mutual, Winnebago Seed Fund, Cameron Ventures, Rock River Capital and Plug & Play Ventures. http://axios.link/UBak

Feast & Fettle, a Rhode Island-based fully prepared meal delivery startup, raised $1.2 million in seed funding led by the family office of Paul Salem (Providence Equity Partners). http://axios.link/iwn7

Discord, a San Francisco-based online chat app, is raising new funding at a $7 billion valuation, per TechCrunch. It previously raised $100 million led by Index Ventures at a $3.5 billion valuation, back in June. http://axios.link/CFWB

Private Equity Deals

Advent International and BC Partners are among several private equity firms seeking a minority stake in the foreign media rights of top German soccer organization DFL, per Bloomberg. http://axios.link/6p6o

CITIC Capital plans to acquire AsiaInfo Technologies (HK: 1675), a Beijing-based telecom equipment provider, for around $1.8 billion, per Reuters. http://axios.link/8gAE

Northwest Hardwoods, a Tacoma, Wash.-based lumber manufacturer backed since 2014 by Littlejohn & Co. and CITIC Capital Partners, filed for Chapter 11 bankruptcy protection. http://axios.link/LjyR

OneShield Software, a Marlborough, Mass.-based provider of software to P&C insurers, secured growth funding from an investor group led by Bain Capital Credit and Pacific Lake Partners. www.oneshield.com

Warburg Pincus and TowerBrook Capital Partners agreed to acquire troubled British roadside recovery group AA (LSE: AA), at an equity value of £219 million. http://axios.link/qMTI

Public Offerings

Marqeta, an Oakland-based card issuing platform, picked Goldman Sachs and JPMorgan for a 2021 IPO, per Bloomberg. The company has raised $525 million in VC funding, most recently at a $4.3 billion valuation, from Goldman Sachs, Coatue Management, Vitruvian Partners, Visa, 83North, Granite Ventures, and Iconiq Capital. http://axios.link/xE2p

Sabic of Saudi Arabia is considering a 2021 IPO for its specialty chemicals unit, which generates around $2 billion in annual revenue, per Bloomberg. http://axios.link/T2Sv

SPAC Stuff

Illustration: Aïda Amer/Axios

Metromile, a Tempe, Ariz.-based pay-per-mile auto insurer, agreed to go public via a reverse merger with INSU Acquisition Corp. II (Nasdaq: INAQ) at a pro forma enterprise value of $956 million. The deal includes a $160 million PIPE led by Social Capital. Metromile had raised $285 million in VC funding from backers like NEA, Hudson Structured, Intact Ventures, Tokio Marine, Index Ventures and Mark Cuban. http://axios.link/BAfC

Subversive Capital Acquisition Corp. (OTC: SBVCF), a cannabis-focused SPAC, agreed to buy direct-to-consumer cannabis brand Caliva and cannabis producer acquisition platform Left Coast Ventures. The company will be renamed TPCO Holding Corp., and said that rapper Jay-Z would join as “chief visionary officer.” http://axios.link/f6gP

Forest Road Acquisition, a TMT-focused SPAC whose board of directors includes Shaquille O’Neal (yes, it’s a Shaq SPAC!), raised $261 million in an upsized IPO. http://axios.link/uHel

Globis Acquisition, a SPAC focused on “economic globalization,” filed for a $100 million IPO. http://axios.link/PPc6

Marlin Technology Corp., a tech-focused SPAC formed by Marlin Equity Partners, filed for a $300 million IPO. http://axios.link/s8hm

Roth CH Acquisition II, a SPAC formed by Roth Capital, filed for a $100 million IPO. http://axios.link/l34C

Senior Connect Acquisition I, a senior market-focused SPAC formed by former UnitedHealth CEO Richard Burke, filed for a $300 million IPO. http://axios.link/OtgD

Spartan Acquisition II, a North American energy-focused SPAC formed by Apollo Global Management, raised $300 million in its IPO. http://axios.link/7Iwm

Liquidity Events

CoStar Group (Nasdaq: CSGP) agreed to buy Homesnap, a Bethesda, Md.-based residential real estate agent management platform, for $250 million in cash. Homesnap raised around $27 million from firms like Revolution, Moderne Ventures and Updata Partners. http://axios.link/ZKSr

Splunk (Nasdaq: SPLK) acquired Flowmill, a Palo Alto-based network observability startup that had been seeded by Dorm Room Fund, WestWave Capital and Amplify Partners. http://axios.link/q34T

More M&A

Nestle (SWX: NESN) agreed to sell its Yinlu peanut milk and canned rice porridge unit in China to Food Wise Co. http://axios.link/fj9W

Fundraising

Committed Advisors of France raised €1.6 billion for its fourth private equity secondaries fund. http://axios.link/4EHo

Franklin Hill, an Illinois-based mid-market private equity firm, is raising $100 million for its debut fund, per an SEC filing. Co-founders include Pat Hartmann (Rock Island Capital) and Jeff Kolke (Gladstone Capital and Monroe Capital). www.franklinhillcap.com

Sinai Capital Partners of Los Angeles raised $500 million for a tech-focused VC fund and $100 million for a media-focused VC fund. http://axios.link/9sV1

It's Personnel

Jake Petkovich joined Patrick Industries (Nasdaq: PATK) as EVP of finance, CFO and treasurer. He previously was a managing director of leveraged finance at Wells Fargo. www.patrickind.com

Norm Winarsky, former president of SRI Ventures and co-founder of Siri, is now a partner with Relay Ventures. He previously was a venture partner with the Toronto-based firm. www.relayventures.com

Final Numbers
Data: Yahoo Finance; Chart: Andrew Witherspoon/Axios

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