Axios Pro Rata: WeWork settlement — Largest SPAC deal — So much VC news

Top of the Morning | Tuesday, February 23, 2021

Open in app View in browser   Presented By EY   Pro Rata By Dan Primack ·Feb 23, 2021 🎧 Axios Re:Cap on the story behind plans for the first all-civilian space flight. Listen via Apple, Spotify or Axios.     Top of the Morning Illustration: Aïda Amer/Axios   SoftBank and former WeWork CEO Adam Neumann are nearing a detente in their long-running legal battle, as first reported by WSJ and confirmed by Axios. Why it matters: WeWork isn't a party to the litigation, but having it settled would help smooth the company's post-pandemic path, which is expected to include a second stab at the public markets. Backstory: SoftBank in the fall of 2019 agreed to buy up to $3 billion of WeWork shares via a tender offer, as part of a broader rescue package in the aftermath of the company's failed IPO. Included was around $970 million for Neumann, who also received nearly $200 to leave the CEO spot and give up his voting rights. SoftBank bailed on the tender offer last April, arguing that WeWork hadn't met certain closing conditions. SoftBank was then sued by a special committee of WeWork's board, including a representative of venture capital firm Benchmark, who claimed SoftBank just had "buyer's remorse" as COVID-19 took a blowtorch to the co-working market. Neumann subsequently filed his own suit, in case a judge agreed with SoftBank that the special committee didn't have standing. Fast forward: Sources say that the proposed settlement would apply to both lawsuits, with the $3 billion effectively cut in half. SoftBank would still pay the $20 per share it had originally agreed to pay. The difference is that the number of shares it buys would be cut in around half, meaning the overall tender size shrinks from $3 billion to around $1.5 billion. For Neumann, that means a $480 million payday and he retains around 75% of his current stake in the company. The rest would go to WeWork employees and investors (including Benchmark). Final details are still being ironed out, with a formal announcement expected before the weekend. WeWork is in advanced discussions to go public via a SPAC sponsored by Vivek Ranadivé's Bow Capital Management, per multiple sources. That deal, however, wouldn't be papered until the settlement is signed. "No comments" from WeWork, SoftBank and Neumann. Bottom line: Given everything that's transpired since SoftBank first agreed to the tender, this feels like a win for all parties. SoftBank de-risks a bit on WeWork and saves itself $1.5 billion upfront. Neumann and other shareholders get paid at pre-pandemic pricing, albeit much lower than the proposed IPO mark, and get to ride any post-pandemic upside. And WeWork itself gets to move on.     The BFD Illustration: Eniola Odetunde/Axios   Lucid Motors, a Newark, Calif.-based electric car maker led by former Tesla chief engineer Peter Rawlinson, agreed to go public at an implied $24 billion valuation via reverse merger with Churchill Capital Corp IV (NYSE: CCIV), a SPAC led by Michael Klein. Why it's the BFD: It's the largest SPAC merger ever, although that record might not last too long. Details: The deal includes a $2.5 billion PIPE anchored by Saudi Arabia's Public Investment Fund, which paid $1.3 billion for a majority stake in Lucid three years ago. Other participants include BlackRock, Fidelity, Franklin Templeton, Neuberger Berman, Wellington Management and Winslow Capital Management. Bottom line: CCIV has been giving off some GameStop vibes since Bloomberg first reported on the Lucid talks. Shares soared from their $10 IPO price to close yesterday at $57.37, while 10-day average volume is 73 million vs. a total float of 207 million. Oh, and then the inevitable fall — with CCIV shares plummeting around 40% at today's market open.     Venture Capital Deals • Plume, a Palo Alto-based provider of smart home services, raised $270 million from Insight Partners at a $1.35 billion post-money valuation. www.plume.com • Zomato, an Indian food delivery company, raised $250 million at a $5.4 billion post-money valuation from Kora, Fidelity, Tiger Global, Bow Wave and Dragoneer. http://axios.link/5l9o 🚑 Clover Biopharma, a Chinese developer of vaccines for COVID-19 variants, raised $230 million in Series C funding. GL Ventures and Temasek co-led, and were joined by Oceanpine Capital, OrbiMed and insider Delos Capital. http://axios.link/zAwV • Highspot, a Seattle-based provider of enterprise sales enablement software, raised $200 million in Series E funding. Tiger Global led, and was joined by Bain & Co. and insiders Iconiq, Madrona Venture Group, OpenView, Salesforce Ventures, Sapphire Ventures and Shasta Ventures. http://axios.link/XXDm • TymeBank, a South African digital bank, raised around $109 million from Apis Partners and JG Summit Holdings. http://axios.link/YMmI • Anuvia, a Winter Garden, Fla.-based developer of crop fertilizer alternatives, raised $103 million from TPG ART, Pontifax Global Food and Agriculture Technology Fund, Generate Capital and Piva Capital. http://axios.link/TJxr • ScienceLogic, a Reston, Va.-based IT operations management company, raised $105 million in Series E funding. Silver Lake Waterman led, and was joined by insiders Goldman Sachs, Intel Capital and NewView Capital. www.sciencelogic.com 🚑 ABclonal Biotech, a life science research and diagnostic reagents manufacturer, raised $93 million in Series C funding. Sequoia Capital China and LYFE Capital co-led, and were joined by Sigma Square Capital, Kinghall Ventures and Lucion Capital. http://axios.link/sNVM • Aviatrix, a Santa Clara, Calif.-based cloud network platform, raised $75 million in Series D funding at a valuation north of $700 million. General Catalyst led, and was joined by Greenspring Associates, Meritech Capital, TrueBridge and insiders CRV, Formation 8, Ignition and Liberty Global Ventures http://axios.link/gCSn • Creatio, a Boston-based low-code startup, raised $68 million led by Volition Capital. http://axios.link/IpEE • Burrow, a modular furniture startup, raised $55 million in Series C funding. Parkway VC led, and was joined by NEA, Red & Blue Ventures, Winklevoss Capital and Michael Seibel. http://axios.link/R4Bo • Splice, a New York-based music creation platform, raised $55 million led by a joint venture by Liontree and music exec Matt Pincus. Existing backers include Flybridge Capital Partners, DFJ Growth, True Ventures and USV. http://axios.link/Pa4Q • Shippo, a San Francisco-based provider of shipping software, raised $45 million in Series D funding. D1 Capital led, and was joined by insiders Bessemer Venture Partners, Union Square Ventures, Uncork Capital and Version One. www.goshippo.com • Codeacademy, a New York-based coding class provider, raised $40 million in Series D funding. Owl Ventures led, and was joined by Prosus and USV. http://axios.link/vDBw • Electric, a New York-based provider of IT support services for SMBs, raised $40 million in Series C funding. Greenspring Associates led, and was joined by Atreides Management, Vintage Investment Partners and insiders Bessemer Venture Partners, GGV Capital, 01 Advisors and Primary Venture Partners. www.electric.ai • NextCar, a startup for car leases and subscriptions formed by TrueCar and Fair founder Scott Painter, raised about $30 million in seed funding from investors like Reid Hoffmann and Mark Pincus, per Axios. http://axios.link/gZzQ 🚑 January AI, a Menlo Park-based diabetes management startup, raised $21 million from Felicis Ventures, Hand Capital and Marc Benioff. http://axios.link/icFF • Heyday, a New York-based skincare brand, raised $20 million in Series B funding. Level 5 Capital Partners led, and was joined by insiders Lerer Hippeau and Fifth Wall Ventures. www.heydaytskincare.com • Rows, a Berlin-based startup that lets users build and analyze web apps via spreadsheet, raised $16 million in Series B funding. Lakestar led, and was joined by insiders Accel and Cherry Ventures. http://axios.link/KhTA • Platform9, a Mountain View-based managed private and edge cloud platform, raised $12.5 million in new Series D funding. WRVI Capital led, and was joined by insiders NGP Capital, Mubadala Ventures, Canvas Ventures, Menlo Ventures and Redpoint Ventures. www.platform9.com • Katana, an Estonian provider of manufacturing ERP software for SMBs, raised $11 million in Series A funding led by Atomico. http://axios.link/Luuh • CGTrader, a Lithuanian 3D model provider, raised $9.5 million in Series B funding. Evli Growth Partners led, and was joined by return backers Karma Ventures and LVV Group. http://axios.link/xObh • Blocpower, a Brooklyn-based provider of energy efficiency solutions for urban buildings, raised $8 million in Series A equity funding and $55 million in debt. Backers include American Family Insurance Institute, AccelR8, Goldman Sachs, Kapor Capital, CityRock Venture Partners, Salesforce Ventures, Elemental Excelerator and Schmidt Family Foundation. www.blockpower.io • HowGood, a New York-based sustainability database for the food and personal care industries, raised $6 million. Contour Venture Partners led, and was joined by FirstMark Capital, Danone Manifesto Ventures and Trailhead Capital. http://axios.link/55bv • ErudiFi, a Singapore-based education financing startup, raised $5 million in Series A funding co-led by Monk's Hill Ventures and Qualgro. http://axios.link/Pa4A • Gophr, a British last-mile delivery startup, raised £4 million led by Nauta Capital. http://axios.link/WkS9 • Laundryheap, a British on-demand laundry and dry cleaning startup, $3.5 million in Series A funding led by Sova VC. http://axios.link/nDzF • Snack, a video-based online dating startup, raised $3.5 million. Kindred Ventures and Coelius Capital co-led, and were joined Golden Ventures, Garage Capital, Panache Ventures and N49P. http://axios.link/oOtA • Better Origin, a British startup that converts food waste into chicken feed, raised $3 million led by Fly Ventures. http://axios.link/2yMk     A message from EY EY NextWave Private Equity podcast     Listen to our latest podcast about how technology, tighter regulation, retail investor empowerment, growing digitalization and increased competition will impact heavily how the PE industry functions in the coming years. Find out more.     Private Equity Deals ⛽ ArcLight Capital Partners will pay $830 million for a 25% stake in Natural Gas Pipeline Co., one of the country's largest interstate pipeline systems, from Kinder Morgan and Brookfield Infrastructure Partners. http://axios.link/VPTY • Ares Management is nearing a deal for a control stake in the asset management unit of Australia's AMP (ASX: AMP) at an enterprise value north of $3 billion, per Bloomberg. http://axios.link/zNWN • Computer Design & Integration, a New York-based portfolio company of One Equity Partners, acquired Kintyre, a Wilmington, Del.-based system integrator. www.cdillc.com • GTCR and Reverence Capital Partners agreed to buy Wells Fargo Asset Management from Wells Fargo (NYSE: WFC) for $2.1 billion. http://axios.link/mcjo • KKR agreed to acquire a majority stake in Chile's largest fiber optic network, Telefónica Chile, for around $1 billion. http://axios.link/xheO • NovaQuest Private Equity invested in Pro-ficiency, a Durham, N.C.-based provider of training and compliance solutions for clinical trial investigators and site staff. www.pro-ficiency.com 🚀 Redwire, a Jacksonville, Fla.-based portfolio company of AE Industrial Partners, acquired Deployable Space Systems, a Goleta, Calif.-based provider of deployable solar arrays, structures and mechanisms for space applications. www.redwirespace.com 🚑 SPT Labtech, a sample-prep company owned by Battery Ventures, acquired both Apricot Designs (Covina, Calif.) and BioMicroLab (Concord, Calif.). www.sptlabtech.com     Public Offerings Source: GIPHY • Oatly, the Swedish oat milk company backed by Blackstone, Oprah and Jay-Z, filed confidential IPO papers. http://axios.link/uKWg ⛽ Vine Energy, a Blackstone-backed natural gas E&P operating in Louisiana's Haynesville Basin, filed for an IPO that Renaissance Capital estimates could raise $500 million. It previously filed for an IPO in April 2017, but later withdrew. http://axios.link/5sWf     SPAC Stuff • Ardagh Group (NYSE: ARD) said it will spin off its metal packaging unit via a reverse merger with Gores Holdings V (Nasdaq: GRSV) at an implied valuation of $8.5 billion. http://axios.link/U8B7 • Acies Acquisition II, a SPAC chaired by ex-MGM Resorts CEO Jim Murren, filed for a $250 million IPO. http://axios.link/q1G8 • ESM Acquisition, a low carbon SPAC formed by The Energy & Minerals Group, filed for a $300 million IPO. http://axios.link/xZjf • FTAC Athena Acquisition, a financial services-focused SPAC led by Betsy Cohen and Amanda Abrams, raised $220 million in its IPO. http://axios.link/RUzI • Khosla Ventures filed to raise $200 million for its fourth SPAC. http://axios.link/QLW0 • PWP Forward Acquisition I, a "women-forward" SPAC backed by Perella Weinberg, filed for a $200 million IPO. http://axios.link/oJwg • Queen's Gambit Growth Capital II, a SPAC formed by Colle Capital Partners, filed for a $300 million IPO. http://axios.link/G5R5 ⚾ Slam Corp., a SPAC led by Alex Rodriguez, raised $500 million in its IPO. http://axios.link/vFFC • Tio Tech A, a Europe tech-enabled SPAC led chaired by HelloFresh CEO Dominik Richter, filed for a $300 million IPO. http://axios.link/n6h6 • Waldencast Acquisition, a SPAC chaired by the former Anheuser-Busch InBev, filed for a $250 million IPO. http://axios.link/IM9e     Liquidity Events 🚑 Audax Private Equity agreed to sell Canadian early drug development services firm Altasciences to Novo Holdings. http://axios.link/sRdk     More M&A • Aviva (LSE: AV) agreed to sell its French operations to Aéma Groupe for €3.2 billion. http://axios.link/RZm4 • Estee Lauder (NYSE: EL) offered to pay around $1 billion for a control stake in DECIEM Beauty Group, parent company Ordinary skincare products. http://axios.link/io8N 🍾 Moet Hennessy, owned by LVMH, agreed to buy a 50% stake in Jay-Z's champagne brand Armand de Brignac. http://axios.link/4oJb • Standish, a San Francisco fund administrator, invested in Redwood Valuation, a provider of valuation services to tech and life sciences companies. www.standishmanagement.com     It's Personnel • Pauline Chatin joined 17Capital as a Paris-based director of IR and fundraising. She previously was with Lyxor Asset Management. www.17capital.com • Jason Neal rejoined Landmark Partners as a director of IR and biz dev. He left Landmark in 2018, after which he worked at both FlowStone Partners and Pomona Capital. • Joel Stanwood stepped down as a partner with American Industrial Partners to launch StoneTree Investment Partners, a Dallas-based private equity firm focused on industrials.     Final Numbers Data: FactSet; Chart: Andrew Witherspoon/Axios M&T Bank (NYSE: MTB) yagreed to buy People's United Financial (Nasdaq: PBCT) for $7.6 billion in stock. Why it matters, per Courtenay Brown in the debut issue of her new afternoon biz newsletter, Axios Closer: "It adds to the parade of regional lenders — which have taken an active role in distributing PPP loans — swallowing each other in an effort to survive a more treacherous backdrop."     A message from EY How is 2021 unfolding for private equity?     As 2021 dawns, there exists a great deal of optimism, yet uncertainty remains. In our latest report, we look at predictions based on our read of current dynamics, with the caveat that we remain in uncharted waters. Read our latest quarterly EY PE Pulse report.   ✔️ Thanks for reading Axios Pro Rata! Please ask your friends, colleagues and Tesla alums to sign up.   Axios thanks our partners for supporting our newsletters. Sponsorship has no influence on editorial content. Axios, 3100 Clarendon B‌lvd, Suite 1300, Arlington VA 22201   You received this email because you signed up for newsletters from Axios. 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