May 29, 2024

Top of the Morning

Illustration: Shoshana Gordon/Axios

Hello. This is your reminder that the IPO window is open, even if precious few companies are willing to hurl themselves through it.

Why it matters: At some point that window will close, perhaps suddenly due to an external shock, and there will be rampant remorse.

The big picture: U.S. stock markets are being positively distorted by the Magnificent Seven, but that shouldn't detract from IPO successes.

  • Renaissance Capital's IPO ETF is outpacing the S&P 500 for the past year.
  • Four of the past five companies to raise $100 million+ IPOs sold more shares than originally expected, and did so at or above the tops of their ranges.
  • Four of those companies also are trading above their IPO prices. So are most of the high-profile offerings we've discussed in this newsletter, including Reddit, Rubrik, Ibotta, Centuri, UL Solutions, PACS Group, and Astera Labs.
  • Go back into last fall, and you'll see that Arm, Birkenstock, Cava, and Instacart also are all trading above their IPO prices. Klaviyo is underwater, after pricing strong, but that's the exception to a pretty compelling rule.

The bottom line: If your company isn't going public because you're "waiting for IPO conditions to improve," at least admit to yourself (and your investors) that it's more about feels than facts.

The BFD

Illustration: Annelise Capossela/Axios

ConocoPhillips (NYSE: COP) has agreed to buy Marathon Oil (NYSE: MRO) in an all-stock deal valued at $22.5 billion.

Why it's the BFD: The energy consolidation train keeps accelerating, thanks to robust oil and gas demand predictions.

  • This deal puts global energy M&A value above $200 billion for the year, per LSEG, topping any other industry sector. Well, so long as U.S. antitrust regulators sign off.

Details: Marathon's enterprise value includes $5.4 billion of assumed debt, and its shareholders will receive the equivalent of a 14.7% premium to yesterday's closing stock price.

  • Both companies are technically independent producers, since they each shed their refining arms in 2011.

The bottom line: "The move expands ConocoPhillips' footprint in domestic shale fields from Texas to North Dakota and hands the company reserves as far afield as Equatorial Guinea." — Mitchell Ferman, Bloomberg

Venture Capital Deals

Solutions by Text, a Dallas startup that helps users pay bills via text, raised $110m (including around $16.5m in venture debt) co-led by Edison Partners and StepStone Group. axios.link/3yGobO8

Cloover, a German subscription service for renewable energy, raised €104.8m in seed funding. Lowercarbon Capital led, and was joined by 9900 Capital and QED. axios.link/3QY7aVF

Frore Systems, a San Jose, Calif., maker of solid-state chips for active device cooling, raised $80m in Series C funding. Fidelity led, and was joined by Prosperity7 and insiders Mayfield, Clear Ventures, Addition, Qualcomm Ventures, MVP Ventures, Stepstone Group, and Alumni Ventures. axios.link/3yEADxI

🚑 Natural Cycles, maker of a fertility app, raised $55m in Series C funding led by Lauxera Capital Partners, per Axios Pro. axios.link/3x1b9Ko

🚑 Wayspring, a Nashville provider of value-based care for substance use disorders, raised $45m. CVS Health Ventures led, and was joined by insiders Valtruis, HLM Venture Partners, and .406 Ventures. axios.link/3V1IEEo

Transcend, a Walnut, Calif., data privacy platform, raised $40m in Series B funding. StepStone Group led, and was joined by HighlandX and insiders Accel, Index Ventures, 01 Advisors, Script Capital, and South Park Commons. axios.link/3VgEQ3E

🚑 Gameto, a New York developer of an in vitro maturation solution, raised $33m in Series B funding. Two Sigma Ventures with RA Capital co-led, and were joined by insiders Insight Partners, Future Ventures, and Bold Capital Partners. gametogen.com

Relay, a provider of SMB cashflow management solutions, raised $32.2m in Series B funding. Bain Capital Ventures led, and was joined by BTV, Garage, Industry Ventures, and Tapestry. axios.link/4aDwIyv

Firefly, a multi-cloud control plane startup, raised $23m in Series A funding. Vertex led, and was joined by Hanaco, SoftBank, InMotion Ventures, and Redseed. firefly.ai

Relectrify, an Australian developer of inverter-free batteries, raised A$17m, per Axios Pro. At One Ventures led, and was joined by insiders Toyota Ventures, the Australian Clean Energy Finance Corp., Energy Innovation Capital, GS Futures, Creative Ventures, and NOAB Ventures. axios.link/3R5Ydtw

Felix Pago, an SF-based money transfer startup focused on LatAm remittances, raised $15.5m in Series A funding led by Castle Island Ventures. axios.link/4bZydbz

CBiGroup, a Puerto Rican provider of banking services for international trade businesses, raised $15m in Series A funding led by Alpol Capital Family Office. axios.link/3KgKlJp

🚑 ExpressionEdits, a British protein expression startup, raised $13m in seed finding. Octopus Ventures led, and was joined by BlueYard Ventures, Wilbe Capital, Acequia Capital, Amino Collective, and Hawktail. expressionedits.com

🚑 HoneyNaps, a South Korean sleep disorder diagnosis startup, raised $11.6m in Series B funding from Korea Industrial Bank, Hi investment Partners and Quad Investment Management. axios.link/4bzOLad

Authentic, which helps SaaS platforms and franchisors provide insurance to SMB customers, raised $11m in Series A funding. FirstMark Capital led, and was joined by Slow Ventures, Altai Ventures, MGV, Upper90, and Commerce Ventures. authenticinsurance.com

Iris.ai, a Norwegian AI engine for scientific text understanding, raised €7.6m. Silverline Capital led, and was joined by the EIC. axios.link/3UX8R7f

SwitchBoard, an on-chain Oracle startup, raised $7.5m co-led by Tribe Capital and RockawayX. axios.link/457TVaX

EverFence, a fencing marketplace for homeowners and contractors, raised $7m in Series A funding from HighPost Capital. axios.link/4e2kzWI

AgroUrbana, a Chilean vertical farming startup, raised $6m led by ALB. axios.link/3Vi6soT

Kintsugi AI, an SF-based tax assistance startup, raised $6m in Series A funding. Link Ventures led, and was joined by Venture Highway, KyberKnight, Plug and Play, and DeVC. axios.link/3V3xgrT

Scrypt, a Swiss provider of crypto asset financial services, raised $5m led by Brazil's Braza Bank. scrypt.swiss

🌎 Vizcab, a French provider of software for reducing construction emissions, raised €4.5m in Series A extension funding. Kompas VC led, and was joined by Global Brain and Brick and Mortar Ventures. axios.link/3V1ZOSw

Faircado, a German browser extension for discovering used goods, raised €3m. World Fund led, and was joined by Accel, General Catalyst, Lightspeed Venture Partners, NEA, Northzone, BackBone Ventures, Earlybird, and Minc. axios.link/4bxCBib

STON.fi, a decentralized automated market maker exchange, raised $3.6m. CoinFund led, and was joined by Delphi Ventures, Karatage, and TON Ventures. axios.link/44XKUkP

Private Equity Deals

2.0 Ventures acquired a majority stake in Feat Clothing, an Inglewood, Calif., athleisure brand. featclothing.com

Aethon Energy Management agreed to buy the upstream assets of Tellurian (NYSE Arca: TELL) for $260m. axios.link/3wU4GRt

🚑 Blue Owl Capital and Lunate Capital acquired a passive, minority ownership stake in Linden Capital Partners, a Chicago-based PE firm focused on health care. axios.link/4aEwffq

Bernhard Capital Partners acquired Apogee Engineering, a Colorado Springs, Colo., provider of tech services to federal government clients. apogeeusa.com

Bridgepoint acquired a majority stake in LumApps, a French social intranet for the enterprise, for $650m. LumApps had raised just over $100m in VC funding from firms like Goldman Sachs, Bpifrance, Idinvest Partners, Iris Capital, and Famille C. axios.link/3yLb2Db

Cambridge Capital acquired a majority stake in STAT Recovery ("STAT"), a Bentonville, Ark., provider of revenue recovery and audit software for retail suppliers. statrecovery.com

Cerberus Capital Management acquired a control stake in M1 Support Services, a Denton, Texas, provider of MRO and related services for U.S. government and military aircraft. m1services.com

Dominus Capital acquired Safe Haven Defense, a Phoenix provider of security window films. safehavendefense.com

KKR agreed to buy a minority stake in Labrador Island Link, a Canadian clean energy transmission project, from Emera Inc. for C$1.19b. axios.link/44Zxpko

Public Offerings

Lionheart Holdings, a SPAC formed by Miami investment firm Lionheart Capital, filed for a $200m IPO. axios.link/3R5NzmF

Novelis, an Atlanta-based maker of aluminum products, set IPO terms to 45m shares at $18-$21. It would have an $11.7b market value, were it to price in the middle, and plans to list on the NYSE (NVL). The company reports $600m of net income on $16.2b in revenue for the year ending March 31, 2024. axios.link/3yAtC0W

🚑 Sunrise Medical, a German wheelchair maker owned by Nordic Capital, will seek to raise 240m in a Frankfurt IPO. axios.link/453ggXl

Liquidity Events

🚑 Johnson & Johnson (NYSE: JNJ) will pay $1.25b in cash to buy the rights to an atopic dermatitis antibody from Numab Therapeutics, a Swiss biotech that's raised $132m in VC funding from Forbion, Cormorant, BVF Partners, RTW Investments, BlackRock, Novo Holdings, HBM Partners, and Octagon Capital Advisors. axios.link/3UT5DkU

🚑 Merck (NYSE: MRK) agreed to buy EyeBio, a London eye disease drug developer, for up to $3b (including $1.3b upfront in cash). EyeBio had raised around $130m in VC funding from SV Health Investors on Nov. 14, 2023. MRL Ventures Fund, Gershon Capital, Bain Capital Life Sciences, Jeito, Samsara BioCapital, Vertex Ventures HC, and Omega Funds. axios.link/4e11Z1m

OMERS is seeking to sell a stake in Leeward Renewable Energy, a Dallas wind farm operator that could be valued at around $3.5b (including debt), per Bloomberg. axios.link/4bZXjah

TransDigm (NYSE: TDG) agreed to buy Raptor Scientific, an acquisition platform for the aerospace/defense-focused testing and measurement markets, from L Squared Capital Partners for $655m in cash. raptor-scientific.com

More M&A

Cleveland-Cliffs (NYSE: CLF) is in talks to acquire the Midwestern U.S. assets of Russian steelmaker Novolipetsk, which could fetch more than $500 million, per Bloomberg.

Hess (NYSE: HES) shareholders approved a $53b takeover offer from Chevron (NYSE: CVX). axios.link/3wX5Iw7

HSBC (LSE: HBCA) completed the sale of its Russian unit to Expobank. axios.link/3wWEVjv

Daniel Kretinsky, a Czech billionaire, has agreed to buy the parent company of Royal Mail (LSE: IDS) for £5b (including assumed debt). axios.link/4bzCtyp

Northeastern University of Boston is acquiring Marymount Manhattan College, a small NYC college. axios.link/3wLEGIa

Fundraising

Ardian raised €530m for its third growth equity fund. ardian.com

🌎 Clean Energy Ventures raised $305m for its second fund. CEV: axios.link/4c1fz33

Energy Capital Partners raised $6.7b for its fifth flagship fund and associated co-investment vehicles. axios.link/3WUetSi

Goldman Sachs Alternatives raised $13.1b for its fifth senior direct lending fund, plus nearly $7b in associated commitments. gs.com

Laude Ventures is raising its debut fund, per an SEC filing. Its partners are Pete Sonsini (NEA), Andy Konwinski (co-founder of Databricks and Perplixity AI), and Andrew Krioukov (co-founder and CEO of Antimatter).

Solamere Capital of Boston disclosed in SEC filings that it's raised nearly $900m for its fourth flagship fund, focused on direct PE deals in the lower midmarkets, and another $660m for a "Leaders Fund" that will sponsor minority recaps of other PE firms' portfolio companies. It originally had targeted a total of $1.5b.

  • Fun fact: Solamere was co-founded by Tagg Romney, who first came to my attention in 2005 when his startup (Season Perks) sued Ticketmaster.
  • In short, Season Perks let sports team season ticket holders transfer their tickets via bar codes (which was a new thing at the time). Ticketmaster expressed interest in buying the startup, conducting detailed diligence, but then allegedly told major sports leagues to stop doing business with Season Perks and soon released a pair of very similar products. It also rescinded its buyout offer.
  • The two sides settled out of court, although my guess is that Romney is smiling a bit at the DOJ's recent antitrust lawsuit against Ticketmaster.

It's Personnel

Chris Evans joined law firm Simpson Thacher & Bartlett as a partner focused on fund transactions. He previously was with Blackstone. stblaw.com

Elijah Kaplan joined Gordon Brothers Capital as a managing director. He previously was with SLR Capital Partners. axios.link/3Vg24H4

Mary Murtagh joined Silas Capital as a VP. She previously was with CAVU Consumer Partners. axios.link/4e2slQk

Crestline Investors promoted Will Palmerand Jesús Payán to partners. crestlineinvestors.com

Final Numbers

Consumer Confidence Index
Source: The Conference Board; Data: The Conference Board and NBER

America's economic dissonance gets more pronounced with every new survey.

  • Consumer confidence ticked up last month, with the Conference Board saying its index rose to 102 from 97.5.
  • Yet more than half of Americans mistakenly believe the U.S. is in a recession, while 49% wrongly think the S&P 500 is down for the year, per a recent Harris poll conducted for The Guardian.

Reality check: The labor market continues to be historically strong, U.S. stock markets are at record highs and wage gains finally are outpacing inflation (even if inflation doesn't mean what it used to mean).

Thanks for reading Axios Pro Rata, and to copy editor Bryan McBournie! Please ask your friends, colleagues, and wildcatters to sign up.