23 hours ago

Axios Pro Rata

🌎 Axios Re:Cap focuses on how the U.S. is funding climate tech overseas, including a conversation with Jake Levine, who this week was named the first-ever "chief climate officer" for the Development Finance Corp. Take a listen.

⚖️ Situational awareness: Bill McGlashan, the former TPG investor arrested in 2019 for his role in a college bribery scheme, yesterday was sentenced to three months in prison.

  • This means a federal judge approved a February settlement whereby McGlashan would plead guilty to one count of wire fraud and prosecutors would drop all other charges.
Top of the Morning

Shoshana Gordon/Axios

Pennsylvania's $64 billion teachers pension fund is under fire for misstating its investment returns.

Why it matters: The dispute impacts whether or not around 100,000 active Pennsylvania teachers need to increase their annual pension contributions.

Background: PSERS is legally required to increase employee contribution rates if it doesn't meet certain investment benchmarks. In this case, it's 6.36% over the prior nine years.

  • PSERS appeared to have just cleared that hurdle, in December reporting a 6.38% rate, which meant teacher contributions would remain flat.
  • In March, PSERS announced that its outside consultant had made a "calculation" error, and that the correct nine-year performance figure was 6.34%. Thus, teachers would need to pay more — with the new rates in effect through at least July 2024.

The big question, of course, is if this was just an honest mistake or an intentional effort to keep PSERS below the threshold.

  • Under normal circumstances, PSERS would get the benefit of the doubt. But the pension is under federal investigation related to around $13.5 million in real estate investments near its Harrisburg headquarters, and it's possible that the probe also extends to the portfolio performance figures.
  • Just yesterday, a PSERS board member hired an outside "transparency council," after being unable to obtain satisfactory answers about how the returns were calculated.

Collateral damage: The controversy also has stirred up animus toward alternative investments, in which PSERS is very heavily involved.

  • Just check out this NY Times story that somehow manages to conflate all of the above troubles with PSERS also backing a buyout fund whose portfolio includes a prison payphone operator.
  • It seems the tenuous argument goes something like: Alternative investments are more exotic and more secretive than are public equities, so more prone to book-cooking

The bottom line: PSERS needs to get its house in order.

The BFD

Illustration: Lazaro Gamio/Axios

Alex Rodriguez and former Walmart e-commerce boss Marc Lore have formed a venture capital firm called Vision/Capital/People (VCP).

  • Why it's the BFD: The strategy, not the people. VCP plans to build a concentrated portfolio, acquiring between 40% and 80% stakes in startups. It's antithetical to VC conventional wisdom, particularly at the earlier stages when success is tough to guarantee.
  • But speaking of the people: A-Rod and Lore are in the process of buying the NBA's Minnesota Timberwolves, and Lore is a special adviser to a SPAC that A-Rod formed earlier this year.
  • Details: VCP will begin with $50 million of the pair's own money, but may seek to raise hundreds of millions in outside capital. It also is investing $10 million for a 40% stake in NOW//with, a U.S. social commerce startup that's preparing to launch.
  • The bottom line: "Owning 40% to 80% of a company means that you don't really need as many hits. One big hit at a 40% stake pays for everything else. I do like the idea of these concentrated bets rather than just sprinkling dollars around. We have the ability to actually influence and be a leader.” — Marc Lore to CNBC
Venture Capital Deals

🚑 Cue Health, a San Diego-based developer of portable health testing solutions, raised $325 million from Perceptive Advisors, MSD Capital, Koch Strategic Platforms and insiders J&J, Decheng Capital, CAVU Ventures and ACME Capital. Cue reportedly has hired bankers for an IPO. www.cuehealth.com

• Inari, a Cambridge, Mass.-based plant breeding startup, raised $208 million in Series D funding at a $1.2 billion valuation from founding investor Flagship Pioneering, G Squared, Alexandria Venture Investments, Investment Corp. of Dubai, Rivas Capital, Banque Pictet and Pavilion Capital. http://axios.link/0nSS

🚑 Axtria, a Berkeley Heights, N.J.-based provider of life sciences data analytics software, raised $150 million from Bain Capital at nearly a $1 billion valuation, per Bloomberg. http://axios.link/uPPy

🚑 Flare Therapeutics, a Cambridge, Mass.-based developer of precision medicines for cancer, raised $82 million in Series A funding. Third Rock Ventures led, and was joined by Boxer Capital, Nextech Invest, Casdin Capital, Invus Financial Advisors and Eventide Asset Management. www.flaretx.com

🚑 Impress, a Barcelona-based DTC orthodontics startup, raised $50 million in Series A funding. Hillhouse Capital led, and was joined by Nickleby Capital and UNIQA Ventures. http://axios.link/aAee

• Stampli, a Mountain View, Calif.-based accounts payable automation startup, raised $50 million in Series C funding. Insight Partners led, and was joined by SignalFire, Nextworld Capital, UpWest, Hillsven, Bloomberg and Naver Corp. http://axios.link/M3HD

• Collective, a San Francisco-based back-office platform for the self-employed, raised $20 million in Series A funding. General Catalyst led, and was joined by Sound Ventures and individuals. http://axios.link/oUt2

• Planck, a New York-based commercial insurance data analytics platform, raised $20 million. 3L Capital and Greenfield Partners co-led, and were joined by insiders Team8, Viola Fintech, Arbor Ventures and Eight Roads. http://axios.link/oqSL

• Morressier, a Berlin-based virtual conference and publishing platform for scientists, raised $18 million in Series A funding. Owl Ventures led, and was joined by Cherry Ventures and Redalpine. http://axios.link/lwKn

• Automize, an Israeli cloud authorization startup, raised $16 million in Series A funding. Innovation Endeavors led, and was joined by Blumberg Capital, Entree Capital and M12. http://axios.link/TcFD

• Anvilogic, a Palo Alto-based cybersecurity detection automation startup, raised $10 million in Series A funding. Cervin Ventures led, and was joined by Foundation Capital, Point 72 Ventures and Dan Warmenhoven. www.anvilogic.com

• Pomelo, a Buenos Aires-based payments infrastructure solution for Latin American fintechs, raised $9 million in seed funding co-led by Index Ventures and Monashees. http://axios.link/3T1V

🚑 DeepScribe, a San Francisco-based AI for medical note-taking, raised $5.2 million in seed funding led by Bee Partners. www.deepscribe.ai

🎮 Lightforge Games, a Raleigh, N.C.-based role-playing game studio, raised $5 million in first-round funding from Galaxy Interactive, NetEase Games, Dreamhaven, Maveron and 1UP Ventures. http://axios.link/mMcJ

🎮 Hidden Lead Games, a Los Angeles-based multiplayer online gaming studio, raised $3.2 million led by Lightspeed Venture Partners. http://axios.link/4frO

• Aryeo, a Boston-based real estate content startup, raised $3.65 million in seed funding co-led by Hyperplane VC and Amplo, per Crunchbase. http://axios.link/5Bnd

• Nano Technologies, a Vietnamese flexible pay startup, raised $3 million in seed funding. Golden Gate Ventures and Venturra Discovery co-led, and were joined by FEBE Ventures, Openspace Ventures and Goodwater Capital. http://axios.link/pNO5

• WeRide, a Chinese autonomous vehicle developer, raised an undisclosed amount of Series C funding at a $3 billion valuation from IDG Capital, Homeric Capital, CoStone Capital, Cypress Star, Sky9 Capital, K3 Ventures and insiders CMC Capital Partners, Qiming Venture Partners and Alpview Capital. http://axios.link/77t6

Private Equity Deals

🐶 Apax agreed to invest in Nulo, an Austin, Texas-based premium pet food brand, by buying out an existing investor group that includes CAVU Venture Partners and Main Post Partners. www.nulo.com

• H.I.G. Capital invested in Homewerks, a Lake Bluff, Ill.-based provider of home improvement products. www.homewerks.com

• Insight Partners acquired CivicPlus, a Manhattan, Kan.-based provider of local government interaction software, from BV Investment Partners. www.civicplus.com

• Reconor, a Danish portfolio company of Agilitas, agreed to buy Sten & Grus Prøvestenen, a provider of environmental solutions for soil and waste management in the Copenhagen area, from Belgium's Group De Cloedt. www.stenoggrus.dk

Public Offerings

• Alphawave IP Group, a Toronto-based semiconductor tech provider, raised £856 million in a London IPO, with BlackRock and Janus Henderson buying over 40% of the shares. http://axios.link/jnKa

• Enact Holdings, a private mortgage insurance firm being spun out of Genworth Financial, postponed an IPO that had planned to raise around $500 million at a $3.6 billion market value. http://axios.link/66G1

SPAC Stuff

🚑 Larkspur Health Acquisition, a SPAC led by OncoSec Medical CEO Daniel O'Connor, filed for a $75 million IPO. http://axios.link/KEuz

🚑 Orion Biotech Opportunities, a SPAC formed by MSD Partners and Panacea Venture, raised $200 million in its IPO. http://axios.link/bwpG

Liquidity Events

• Advent International is seeking a buyer for its stake in ASK Group, an Indian investment and wealth management firm that could be valued at more than $1 billion, per Bloomberg. http://axios.link/0f1o

🚑 Bain Capital hired Bank of America to find a buyer for its 44.4% stake in Seoul-listed botox maker Hugel, which could fetch upwards of $2 billion, per Bloomberg. http://axios.link/WiZ9

• Baring Private Equity Asia agreed to sell Australian second-party audit provider SAI Global Assurance to Intertek (LSE: ITRK) for A$855 million. http://axios.link/NOSq

• Brookfield Asset Management and IFM Investors are prepping bids for Singapore Telecom's portfolio of Australian mobile phone towers, per Bloomberg. A sale could fetch around A$2 billion. http://axios.link/Nhtd

• Cisco (Nasdaq: CSCO) acquired Socio, an Indianapolis-based startup focused on hybrid and virtual events that had raised over $6 million (plus got a PPP loan) from firms like High Alpha and Greenspring Associates. http://axios.link/M9jr

• Eurazeo agreed to sell its 49% stake in Trader Interactive, a Norfolk, Va.-based provider of online advertising solutions to the powersports and RV markets, to Australia-based Carsales (ASX: CAR) at a $1.63 billion enterprise value. http://axios.link/cqAS

More M&A

🍕 Pershing Square Capital Management, the activist firm led by Bill Ackman, disclosed just under a 6% stake in Domino's Pizza (NYSE: DPZ). His position is worth nearly $1 billion. http://axios.link/d3Fr

• Snyk, a London-based provider of cybersecurity analysis tools, bought FossID, a Swedish software composition analysis tool. Snyk was recently valued by VCs at $4.7 billion, in a round co-led by Accel and Tiger Global. www.snyk.com

• ValueAct Capital disclosed a 4.4% stake in Seven & Seven Holdings (Tokyo: 3382), the Japanese owner of 7-Eleven. The position is valued at over $1.5 billion. http://axios.link/5PYD

Fundraising

• Deerpath Capital Management raised $1.1 billion for its fifth senior debt fund, which focuses on smaller companies. http://axios.link/eUST

• IVP raised $1.8 billion for its 17th growth-stage fund. http://axios.link/hrz5

It's Personnel

• Bobby Bassman and Ravi Sarin joined AEA Investors to focus on growth equity deals. Bassman previously was a managing director of Morgan Stanley Expansion Capital, while Sarin founded ROCA Partners. www.aeainvestors.com

• Emily Libresco is joining VC firm Lerer Hippeau as head of communications and marketing. She previously was with Melinda Gates’ Pivotal Ventures. www.lererhippeau.com

Final Numbers
Data: Investing.com; Chart: Axios Visuals

The price of bitcoin fell as much as 15%, after Elon Musk said that Tesla would no longer accept the cryptocurrency as payment, because of its negative environmental impact.

  • Bitcoin's fundamental nature as an energy hog isn't new information. But Musk's change of heart could reverse the Tesla-inspired trend of big Bitcoin purchases by institutions.
  • If large institutional buys don't materialize, it could be a drag on Coinbase's future growth prospects, as the company has been building out that capability.

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