| | | | | | | | | | Axios Pro Rata | | By Dan Primack · Jul 31, 2023 | | Big thanks to Kia Kokalitcheva for filling in over the last two weeks while I beached. And a reminder that you can send me tips and feedback either via email (just hit reply) or anonymously via http://tips.axios.com. OK, here we go... | | | | | | Top of the Morning |  | | | Illustration: Aïda Amer/Axios | | | | The Inflation Reduction Act is a mighty boon to the climate tech sector, with its hundreds of billions of dollars in federal spending, grants and tax incentives. - It's also creating a schism among climate tech-focused venture capitalists, who are warily eyeing next fall's elections.
State of play: The IRA was passed via a partisan vote in late 2022, and the political rhetoric has remained largely unchanged. - House Republicans unsuccessfully tried to gut IRA climate and energy provisions during the debt ceiling standoff earlier this year, and several leading GOP presidential candidates have suggested similar intentions.
- Democrats, including President Biden, remain strongly supportive.
Look ahead: Were Democrats to retain the White House, climate tech investors would breathe a sigh of relief, at least in terms of their business interests. Particularly those with portfolio companies whose IRA tailwinds are expected to be stronger in the bill's later years. - The risk comes with Republican control of the executive and legislative branches. So does the aforementioned schism.
The cautious case: Some climate tech investors are preparing for a worst-case scenario of full IRA repeal. - This means ignoring potential IRA benefits beginning in 2025 for prospective portfolio companies, and hardening revenue streams for existing ones. Not only in terms of direct government spend, but also in terms of IRA incentives for company clients.
- This strategy risks slower growth, but still gets to benefit from the federal largesse if either Democrats win or the GOP doesn't follow through.
The courageous case: Other climate tech investors remain all-in on IRA benefits, believing that a victorious GOP would be more talk than walk. - Their basic argument is that big IRA money is flowing fast to red states, and that a Republican rep won't vote to stop construction on the new EV battery plant that just opened in their district. Let alone kill the slew of new renewable energy jobs in oil-rich places like Texas and Oklahoma.
The bottom line: Venture capitalists will continue to support the energy transition, regardless of federal spending. Their investment strategies, however, won't be uniform. |     | | | | | | The BFD |  | | | Illustration: Maura Losch/Axios | | | | The FDIC announced that it's seeking buyers for $18.5 billion in private equity-linked loans from Signature Bank, which collapsed in March. Why it's the BFD: A reminder that it can take less time for banks to fail than for bank regulators to dispose of the wreckage. Details: The sealed-bid process is being managed by Newmark, with closing anticipated by October. It's split into four pools. Bidders must be FDIC-insured depository institutions or commercial banks that don't compete with the borrowers. The bottom line: "The portfolio comprises 201 performing capital-call loans tied to firms including Starwood Capital Group, Carlyle, Blackstone, Thoma Bravo and Brookfield Asset Management, according to a person familiar with the matter .... Newmark is still working on preparing a sale of Signature's commercial real estate loans, although timing remains unclear." — Natalie Wong, Bloomberg | | | | | | | | Venture Capital Deals | | 🚑 Octave Bioscience, a Menlo Park, Calif.-based biotech focused on multiple sclerosis, raised $30m in Series B extension funding from Novartis, Hikma Ventures, Intermountain Ventures and insiders Blue Venture Fund, Echo Health Ventures, Section 32, Northpond Ventures, Deerfield Management, Casdin Capital and Merck Global Health Innovation Fund. www.octavebio.com • Plotlogic, an Australian mining tech startup, raised US$28m in Series B funding. Galvanize Climate Solutions and SE Ventures co-led, and were joined by Main Sequence Ventures and insiders Innovation Endeavors, DCVC, Bentley iTwin Ventures and Grids Capital. https://axios.link/3Kk8vD0 🌎 Carbon Upcycling Technologies, a Canadian developer of circular decarbonization solutions, raised US$26m in Series A funding. Climate Investment and BDC Capital co-led, and were joined by Clean Energy Ventures, Amplify Capital, Oxy Low Carbon Ventures, CRH Ventures and Cemex Ventures. https://axios.link/43U31Wp • Cyble, an Alpharetta, Ga.-based cyber threat intelligence provider, raised $24m in Series B funding. Blackbird Ventures and King River Capital co-led, and were joined by Spider Capital, January Capital and Summit Peak Ventures. https://axios.link/3rYfye8 🚑 HerMD, a Cincinnati-based women's health provider, raised $18m in Series A-1 funding.JAZZ led, and was joined by B-Flexion and Amboy Street Ventures. www.hermd.com • Topline Pro, a New York-based online scaling service for home services businesses, raised $12m in Series A funding. Forerunner Venturesled, and was joined by Bonfire Ventures, TMV and BBG Ventures. https://axios.link/3DCcZ4k • Plerion, an Australian cloud security startup, raised US$10m in seed funding. Prosus Ventures led, and was joined by Cercano and Atlassian Ventures. www.plerion.com | | | | | | | | A message from Axios | | Break through the noise with Axios | | |  | | | | Reach execs and business leaders with Axios. We'll help you tell your story in the right way: - We'll distill your brand's message into its most effective form with Smart Brevity.
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Contact us to learn more. | | | | | | Private Equity Deals | | • Francisco Partners and TPG agreed to acquire SF-based observability platform New Relic (NYSE: NEWR) for $6.5b, or $87 per share. - The private equity firms had been linked to New Relic earlier this year, but Reuters reported in May that they'd ended their pursuit after struggling to secure enough debt financing.
- This morning's announcement said that the deal is not subject to a financing condition, although it does have a go-shop period.
🚑 Apax Partners is in talks to buy a 50% stake in Spanish med-tech distributor Palex at around a €1b enterprise value from Fremman Capital, per Reuters. https://axios.link/3KniW8R • Bluestone Equity Partners invested in PMY Group, an Australian provider of tech solutions for live event venues. https://axios.link/3KmfZFx • KKR completed its previously announced buyout of Industrial Physics, a New Castle, Del.-based maker of testing and measurement instruments, from Union Park Capital. www.industrialphysics.com • MiddleGround Capital acquired Xtrac, a British maker of transmissions for professional motorsport and specialist high performance auto applications. www.xtrac.com • OAG, a London-based travel data company owned by Vitruvian Partners, acquired Infare, a Copenhagen-based provider of competitor air travel data, from Ventiga Capital for over $500m. www.oag.com | | | | | | | | Public Offerings | | 🚑 Adlai Nortye, a cancer immunotherapies developer with offices in China and the U.S., filed for a $115m IPO. It plans to list on the Nasdaq (ANL) and has raised over $200m in VC funding. https://axios.link/3DyL05h • Draslovka, the world's largest maker of sodium cyanide, is speaking with banks about a 2024 IPO, per Reuters. https://axios.link/45beCBL | | | | | | | | SPAC Stuff | | ⚡ ZOOZ Power, a Tel Aviv-listed EV charging infrastructure company, agreed to dual-list in the U.S. via an acquisition by Keyarch Acquisition Corp. (Nasdaq: KYCH), a SPAC led by Keywise Capital Management execs. https://axios.link/3QgAQOj | | | | | | | | Liquidity Events | | • Bobbie, an SF-based infant formula maker that's raised $130m in VC funding, acquired Ohio-based pediatric nutrition company Nature's One from Juggernaut Capital Partners. https://axios.link/3pMi7iW • TDF may seek a buyer for its fiber business, which could fetch up to €1b, per Reuters. The French telco is owned by Brookfield Asset Management, Arcus Infrastructure and Public Sector Pension Investment Board. https://axios.link/44NWKwP • Walmart (NYSE: WMT) paid $1.4b to buy out Tiger Global's remaining stake in Indian online retailer Flipkart at a $35b valuation (down from where Flipkart was valued in 2021). Walmart also added a 1% stake from venture firm Accel, reportedly pushing its Flipkart ownership stake to around 77%. https://axios.link/44OydYs | | | | | | | | More M&A | | 🚑 Alexion, a unit of AstraZeneca (LSE: AZN) agreed to buy an early-state rare disease drug portfolio from Pfizer (NYSE: PFE) for up to $1b, plus possible royalties. https://axios.link/3QfHsfR ⚡ BP (LSE: BP) is in talks to sell its Turkish gas station network to a unit of Switzerland's Vitol, per Bloomberg. https://axios.link/3KmdhjA • Richemont (Swiss: CFR) acquired a control stake in Italian luxury shoemaker Gianvito Rossi. https://axios.link/3KmcXkS • Telefónica (Madrid: TEF) has approached Vodafone (LSE: VOD) about a merger or other arrangement related to Spanish broadband networks, per Bloomberg. https://axios.link/3DzZMZD | | | | | | | | Fundraising | | • Greenoaks, an SF-based venture firm, raised $2.1b for its fifth fund, Kia reports. It had targeted $1.9b, which is the same amount it raised for Fund IV in 2021. ⚡ Breakthrough Energy Ventures, founded by Bill Gates, is raising its third fund, per an SEC filing. • Glendower Capital, the secondaries unit of CVC Capital Partners, raised $5.8b for its fifth opportunities fund. www.cvc.com • Lucas Venture Group of Palo Alto is raising up to $30m for its second fund, per an SEC filing. • Precursor Ventures, a VC firm led by Charles Hudson, is raising up to $120m for its fifth fund, per an SEC filing. | | | | | | | | It's Personnel | | • Nikhil Gahrotra is stepping down as an India-based partner with Apollo Global Management to join CVC Capital Partners, per Bloomberg. https://axios.link/47emBQ4 • HCI Equity Partners said that Dan Dickinson will transition from managing partner to executive chair, with CIO Doug McCormick leading the Washington, D.C.-based PE firm. www.hciequity.com • J.B. Kiley joined Bridgepoint as a managing director. He's been at GCM Grosvenor since 2021, before which he spent 11 years with KKR. https://axios.link/43ODAFK • Marlene Pelage joined private capital fund admin Gen II Fund Services as CFO. She previously was with IPG Mediabrands. www.gen2fund.com 🚑 Nick Richitt joined JPMorgan as head of health care services banking, after previously been global co-head of health care banking for Deutsche Bank. https://axios.link/3qd2txm | | | | | | | | Final Numbers |  Data: Federal Reserve via FRED; Chart: Axios Visuals Go deeper: The U.S. is deleveraging | | | | | | | | A message from Axios | | Break through the noise with Axios | | | | | | | | Reach execs and business leaders with Axios. We'll help you tell your story in the right way: - We'll distill your brand's message into its most effective form with Smart Brevity.
- No clutter, no filler — just clean, smart and effective.
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