| | | | | | | Pro Rata | | By Dan Primack ·Jul 31, 2020 | | 🎧 Axios Re:Cap talks with one of the ex-Deadspin writers who just formed Defector, which is being watched closely by many in the media industry. Listen via Apple or via Axios. 🤦♂️ Situational awareness: The Senate has adjourned for the week without coming to a deal on expanded unemployment benefits (which expire today), let alone on a broader stimulus package. It remains scheduled to go on August recess next Friday. | | | | | | Top of the Morning |  | | | Illustration: Sarah Grillo/Axios | | | | The IPO market has boomed during the pandemic era, both for real companies and shell companies, reflecting the broader decoupling of the equity economy and real economy. - Things could soon change. And fast.
What's happening: Here's the basic flowchart... - Investors have been giving issuers mulligans for recent financial performance. If the first half was strong, great. If it was weak, that's okay too because, you know, COVID. Everyone into the pool.
- That added IPO lubricant was based on assumptions that Q2 earnings would be across-the-board awful. But they haven't been, particularly when it comes to technology.
- IPO investors now may need to recalibrate. Maybe only those with demonstrated strength deserve to go public. If performance has been weak, it may be more about the issuer than about the virus.
[Caveat: I am presuming some semblance of market rationality, without much basis for doing so.] The bottom line: The IPO window opens and shuts without much warning, and it's never a good idea to let your fingers rest on the sill. |     | | | | | | The BFD |  | | | Illustration: Aïda Amer/Axios | | | | SenseTime, a Chinese developer of facial recognition technologies, is wrapping up a $1.5 billion funding round at a $10 billion valuation and is in talks to list on China's STAR market, per Reuters. - Why it's the BFD: This is the company's first fundraise since being placed on a U.S. blacklist for alleged involvement in human rights abuses against Uyghur Muslims in China. It previously raised nearly $3 billion, including from U.S.-based firms like Fidelity, Glade Brook, Qualcomm Ventures, and Silver Lake Partners.
- Bottom line: "SenseTime's founder Tang Xiaoou [said] in 2017 that the startup was considering a listing in U.S, Hong Kong, or China. The U.S. ban has made an overseas listing difficult, if not impossible." — Reuters
| | | | | | | | Venture Capital Deals | | • Buildots, a London and Tel Aviv-based computer vision startup focused on the construction market, raised $16 million in seed and Series A funding led by TLV Partners. http://axios.link/mCVe • MomentFeed, a Santa Monica, Calif.-based provider of proximity search optimization software, raised $10 million. Level Equity led, and was joined by Signia Venture Partners, Draper Nexus, and DFJ Frontier. http://axios.link/Oy2E • JetClosing, a Seattle-based digital closing service for home resales and refinancings, raised $9 million in Series B funding. T. Rowe Price led, and was joined by Pioneer Square Labs and Trilogy Equity. http://axios.link/UGct • Spyderbat, an Austin, Texas-based developer of cyberthreat prioritization software, raised $4.2 million in seed funding co-led by LiveOak Venture Partners and Benhamou Global Ventures. http://axios.link/JL2L • Grubbly Farms, an Atlanta-based maker of insect-based snacks and feed for backyard chickens, raised $2.9 million in seed funding. Overline led, and was joined by Oval Park Capital, Techstars, and Create-X. http://axios.link/Z9HT • New Age Meats, a Berkeley, Calif.-based cultivated pork startup, raised $2 million in new seed funding. TechU Ventures led, and was joined by Losa Group and return backers ff Venture Capital, SOSV, Sand Hill Angels, and Siddhi Capital. http://axios.link/Qc81 | | | | | | | | Private Equity Deals | | • Ardian acquired a majority stake in Finaxy, a French B2B and B2B insurance broker, from Equistone Partners Europe. http://axios.link/3uiG • Corsair Capital agreed to acquire MSTS, a global B2B payments and credit solutions, from World Fuel Services (NYSE: INT). www.msts.com • KKR acquired a majority stake in Spanish vocational training company MasterD. http://axios.link/4jTn • LINE Man, a Thai food delivery unit of Japanese chat app LINE (Tokyo: 3938), raised $110 million from BRV Capital Management. It also plans to merge with Thai restaurant review and discovery platform Wongnai Media. http://axios.link/Rm4C 🚑 PAI Partners is in exclusive talks to buy a majority stake in Amplitude Surgical (Paris: AMPLI), a French provider of surgical tech for lower-limb orthopedics. www.amplitude-ortho.com • Thyssenkrupp (DE: TKAG) completed the €17.2 billion sale of its elevator unit to Advent International, Cinven, and RAG Foundation. http://axios.link/vKFH | | | | | | | | Public Offerings | | • Affirm, the Max Levchin-led provider of microloans for online purchases, is working with Goldman Sachs on a potential IPO or sale to a SPAC, per the WSJ. Affirm has raised $1.1 billion from firms like Founders Fund, Thrive Capital, Lightspeed Venture Partners, and Spark Capital. http://axios.link/GssN • Fathom Holdings, a Cary, N.C.-based digital real estate brokerage, raised $34 million in its IPO. It will list on the Nasdaq (FTHM) and reports a $43 million net loss on $29 million in revenue for Q1 2020. http://axios.link/Ue5m • Goedeker's, a Ballwin, Mo.-based e-commerce site for appliances and home goods, raised $10 million in its IPO. It will list on the Nasdaq (GOED) and reports a $2.5 million net loss on $47.5 million in revenue for 2019. http://axios.link/47vT • Vasta Platform, a Brazilian K-12 curriculum provider being spun out of Cogna, raised $353 million in its IPO. The company priced 18.6 million shares at $19 (above $15.50–$17.50 range), for a $1.6 million market cap, and will list on the Nasdaq (VSTA). http://axios.link/gOJ2 🐔 Vital Farms, the country's largest producer of pasture-raised eggs, raised $172 million in its IPO. The company priced 7.8 million shares at $22 (above upwardly-revised range), for a fully diluted value of $958 million. It will list on the Nasdaq (VITL), while shareholders include Manna Tree Partners (8.2% pre-IPO stake), SJF Ventures (8.2%), and Arborview Capital Partners (6.6%). http://axios.link/lvso | | | | | | | | SPACs | | • CC Neuberger Principal Holdings II, a SPAC co-led by Chinh Chu's CC Capital and Neuberger Berman, raised $720 million in its IPO. http://axios.link/tXfm • E.Merge Technology Acquisition, a tech-focused SPAC led by former Eastman Kodak CEOs, raised $522 million in its IPO. http://axios.link/UJux • NewHold Investment, an industrial tech-focused SPAC, raised $150 million in its IPO. http://axios.link/7TUN • INSU Acquisition II, an insurance-focused SPAC formed by Cohen & Co., filed for a $175 million IPO. http://axios.link/AcUD • One, a tech-focused SPAC led by Eventbrite co-founder Kevin Hartz and chaired by venture capitalist Pierre Lamond, filed for a $200 million IPO. http://axios.link/OFhN | | | | | | | | More M&A | | • Atlassian (Nasdaq: TEAM) acquired Mindville, a Swedish enterprise asset management firm. http://axios.link/QqhE • George Weston (TSX: WN), a Canadian grocery and bakery group, is considering a takeover of struggling Swiss baker Aryzta (SWX: ARYN), per Bloomberg. Other possible suitors include Apollo Global Management and Cerberus Capital Management. http://axios.link/BLXF 🚑 Taisho Pharma (Tokyo: 4581) has emerged as the leading bidder for Takeda's (T: 4582) Japanese consumer health care unit, which could fetch more than $3 billion, per Bloomberg. http://axios.link/yV1n | | | | | | | | Fundraising | | • Greycroft is raising up to $300 million for its sixth flagship VC fund, and its first not to list founder Alan Patricof, per an SEC filing. www.greycroft.com • Notation Capital, a New York-based pre-seed firm, raised $42 million for its third fund. http://axios.link/FeKv | | | | | | | | It's Personnel | | • Marc Rowan is taking a "semi sabbatical" from Apollo Global Management, where he's a co-founder and senior managing director. This includes stepping back from day-to-day management of its Athene insurance platform. No word on if or when he'll return to Apollo full time. http://axios.link/TAfV • Ian Drysdale joined Great Hill Partners as an executive-in-residence. He previously was president of Zelis Payments. www.greathillpartners.com • Andrew Rosato and Sim Ketchum joined placement agency Triago Partners as a New York-based partner and principal, respectively. Rosato previously was with MVision and Ketchum was with Astor Place Holdings. www.triago.com | | | | | | | | Final Numbers | | Source: EY Private Equity Pulse report, August 2020 | | | | | | 🙏 Thanks for reading Axios Pro Rata! Please ask your friends, colleagues, and IPO bankers to sign up. | | | | Axios thanks our partners for supporting our newsletters.
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