| | | | | | | Presented By EY | | | | Pro Rata | | By Dan Primack ·Apr 30, 2021 | | 🚨 Breaking: TikTok just announced that its new CEO will be Shouzi Chew, CFO of parent company ByteDance. Interim TikTok CEO Vanessa Pappas becomes COO. This suggests ByteDance no longer thinks there's much chance it will need to spin off its U.S. business. | | | | | | Top of the Morning |  | | | Illustration: Annelise Capossela/Axios | | | | In my early days of covering private markets, there were two pieces of data that were almost impossible to come by: Fund performance and VC-backed valuation. These were "trade secrets" whose disclosure could be catastrophic, all of my sources insisted. Fast forward: All of my sources were wrong. Most funds gave up the performance ghost years ago, when several large public pension systems began publishing fund-level returns. There were some legal threats and a few firms stopped taking public pension money, but the upshot was that "disclosed" firms still managed to raise new funds, do deals and generate returns. The VC-backed valuation piece took longer, but now it's unusual if a large funding round doesn't include some sort of valuation information (including today's two largest deals). - This evolution is mostly about marketing, harkening back to Slack's Stewart Butterfield saying in 2015 that raising at a $1 billion valuation was more about the cachet than the cash. Particularly when it comes to hiring and securing enterprise clients, as unicorn status can imply deep-pocketed stability.
- The most remarkable example came earlier this month, when sources close to Clubhouse were willing to disclose that it had raised at a $4 billion valuation — but not how much money the audio app actually raised, or if it was primary capital. Bizarro trade secret world.
But, but, but... There can be some drawbacks to VC-backed valuation disclosure. Not the disclosure itself, in a "competitive advantage" sense, but the unnatural acts it can lead companies to commit. - Doubling a valuation in a few months might feel great, but it also can create unreasonable growth pressures.
- It also can create some hiring issues, even for startups that have moved from options to RSUs. In short, certain people want to feel there's more runway to valuation blast-off, rather than get aboard once already in orbit.
- "Unicorn" announcements can spark trickle-down valuation creep, which isn't always matched by commensurate option pool growth.
The bottom line: Private markets still cling to several disclosure taboos, including some information that's kept from a fund's own limited partners. Don't be surprised to see more of them fall by the wayside, without all hell breaking loose. |     | | | | | | The BFD | | Source: Giphy Nestlé (Swiss: NESN) agreed to buy The Bountiful Co., a Ronkonkoma, N.Y.-based maker of nutritional supplements, for $5.75 billion from KKR and minority owner The Carlyle Group. - Why it's the BFD: Supplements haven't been talked about much as a pandemic play, but Nestlé Health Science CEO Greg Behar says that 91% of vitamin-takers have increased consumption over the past year, in an effort to boost their immune systems. And Behar should know, given that he previously shelled out $2.3 billion for Atrium Innovations.
- Included brands are Nature's Bounty and Puritan's Pride, Solgar and Osteo Bi-Flex. Not included are Bountiful's sports and active nutrition products, including Pure Protein and MET-Rx, plus Dr Organic and its Canadian OTC business. Expect KKR and Carlyle to seek a buyer for the remaining assets.
- History: Carlyle took Bountiful private in 2010 in a $3 billion deal, before selling a majority stake to KKR in 2017. Bountiful had filed for an IPO earlier this month.
- Bottom line: "Nestle's $5.75 billion acquisition, at a price of 3.1x sales and 16.8x EBITDA, fits its specialist nutrition and wellness focus and adds another lever to growth once integrated into the business. The deal increases Nestle's net debt-to-EBITDA ratio to about 2x from 1.7x, so it won't affect its ability to either acquire further assets, or buy back shares." — Duncan Fox, Bloomberg Intelligence
| | | | | | | | Venture Capital Deals | | 🚑 Capsule, a New York-based digital pharmacy, raised $300 million at a valuation north of $1 billion. Durable Capital Partners led, and was joined by Baillie Gifford, T. Rowe Price and Whale Rock. http://axios.link/Pvwp • Mux, a San Francisco-based video platform for developers, raised $105 million in Series D funding at a valuation north of $1 billion. Coatue led, and was joined by Dragoneer and insiders Andreessen Horowitz, Accel and Cobalt. www.mux.com ⚡ Solidia, a Piscataway, N.J.-based developer of low-carbon cement and concrete, raised $78 million. Imperative Ventures and Zero Carbon Partners co-led, and were joined by CPP Investments, Breakthrough Energy Ventures, Prelude Ventures, PIVA Capital and insiders John Doerr, Bill Joy, BP and OCGI Climate Investments. http://axios.link/aBSt 🚑 Adcendo, a Danish developer of antibody-drug conjugates, raised €51 million in Series A funding. Novo Seeds and Ysios Capital co-led, and was joined by RA Capital Management, HealthCap and Gilde Healthcare. http://axios.link/mpHR • RapidDeploy, an Austin, Texas-based provider of dispatch software for 911 centers, raised $29 million in Series B funding. Morpheus Ventures led, and was joined by GreatPoint Ventures, Ericsson Ventures, Samsung Next Ventures, Tao Capital Partners, Clearvision Ventures and Tau Ventures. http://axios.link/5vWA • Manna, an Irish developer of drone-based food delivery solutions, raised $25 million in Series A funding. Draper Esprit led, and was joined by Team Europe, DST and insiders Dynamo Ventures, Atlantic Bridge and Elkstone. http://axios.link/l349 • Pachema, a San Francisco-based marketplace for forest carbon credits, raised $15 million from backers like Amazon's Climate Pledge Fund, Breakthrough Energy Ventures, Lowercarbon Capital, Saltwater, tMCJ Collective and OATV. http://axios.link/fPtX • PortalOne, a Palo Alto-based mixed reality gaming startup, raised $15 million in seed funding from Atari, ARRI, Founders Fund, TQ Ventures, Coatue, Rogue Capital Partners, Signia Venture Partners, Seedcamp, Talis Capital and SNÖ Ventures. http://axios.link/CXTR • Sorbet, an Israeli startup that helps remove employee liabilities (like PTO) from company balance sheets, raised $6 million in seed funding led by Viola Ventures. www.getsorbet.com • PreShow Interactive, a startup that helps gamers get in-game currency in exchange for watching ads, raised $3 million. Harlem Capital led, and was joined by Canaan Partners, Wavemaker Ventures, Front Row Fund, ROC Fund, BK Fulton and Monroe Harris. http://axios.link/jgIM • ReleaseHub, a developer of staging management solutions, raised $2.7 million in seed funding. Sequoia Capital led, and was joined by YC, Liquid Capital and Rogue VC. www.releasehub.com 🚑 Strap Technologies, developer of a wearable replacement for white canes used by the blind and visually impaired, raised $1.3 million led by Platform Capital. www.strap.tech ⬇️ Madefire, a Berkeley, Calif.-based digital comics startup, is shutting down. It had raised nearly $20 million in VC funding from firms like True Ventures and Plus Capital. http://axios.link/ovlj | | | | | | | | A message from EY | | PE firms should be embedding ESG in their portfolio | | |  | | | | For PE, there is an emphasis on purpose and transparency, driven by: - A demand from LPs.
- The dynamics of origination.
- Regulatory developments.
- Attracting the best talent.
Learn more from EY's latest article on articulating the value of ESG. | | | | | | Private Equity Deals | | 🚑 G-CON, a College Station, Texas-based provider of portable cleanrooms for biotech manufacturing, is being circled by several private equity firms, per PE Hub. A deal could be worth around $400 million. G-CON has raised around $24 million in VC funding from firms like Pfizer Ventures and WB Global Partners. http://axios.link/hAwD • L Catterton completed its previously announced buyout of German sandal maker Birkenstock. No financial terms were disclosed, but earlier reports put the price tag at around €4 billion. http://axios.link/NbDG • Leeds Equity Partners invested in OptionMetrics, a New York-based options and futures database and analytics provider. www.optionmetrics.com | | | | | | | | Public Offerings | | • Allvue Systems, a Coral Gables, Fla.-based investment management software firm owned by Vista Equity Partners, is prepping a 2021 IPO at up to a $3 billion valuation, per Bloomberg. http://axios.link/Us6O 🚑 Vaccitech, a British biotech that helps Oxford/AstraZeneca develop their COVID-19 vaccine, raised $111 million in its IPO. The company priced in the middle of its $16-$18 range, for a fully diluted value of $614 million. It will list on the Nasdaq (VACC) and raised $230 million from firms like Oxford Sciences Innovation, GV, M&G Investment Management, Gilead Sciences, Tencent and the Monaco Constitutional Reserve Fund. http://axios.link/uunV 🚑 Werewolf Therapeutics, a Cambridge, Mass.-based developer of cancer drugs, raised $120 million in its IPO. The pre-revenue company priced in the middle of its $15-$17 range, for a fully diluted value of $450 million, and will list on the Nasdaq (HOWL). It raised over $125 million from MPM Capital (20.6% pre-IPO stake), UBS Oncology (11.6%), RA Capital (11.3%), Taiho Ventures (8.9%), Deerfield (8.8%), Arkin BioVentures (8.2%), Longwood Fund (7.1%) and UPMC Enterprises (5.4%). http://axios.link/zmTR | | | | | | | | SPAC Stuff | | Sen. John Kennedy (R-La.) yesterday introduced legislation to increase disclosure requirements for SPAC sponsors. • Plus, a self-driving truck developer, plans to go public at an implied valuation north of $3 billion via Hennessy Capital Investment Corp. V (Nasdaq: HCIC), per Bloomberg. It's raised over $800 million from firms like Sequoia Capital China, GSR Ventures, Manbang Group and FountainVest Partners. http://axios.link/rHRN • Sonder, a San Francisco-based hotel and short-term apartment rental platform, agreed to go public at an implied $2.2 billion valuation via Gores Metropoulos II (Nasdaq: GMII). Sonder has raised over $500 million in VC funding, most recently at a $1.3 billion valuation, from firms like Fidelity, Westcap, Inovia Capital, Greenoaks, Spark Capital, Greylock, Valor Equity, Tao Capital, Atreides Capital and Lennar. http://axios.link/XUpX | | | | | | | | Liquidity Events | | • Clayton, Dubilier & Rice completed its previously announced $1.45 billion sale of Capco, a London-based management and technology consultancy, to Wipro (NYSE: WIT). www.capco.com • Coinbase (NYSE: COIN) agreed to buy Skew, a London-based institutional data visualization and analytics platform for crypto. Skew had raised around $7 million from Octopus Ventures, Digital Currency Group, Kleiner Perkins, Firstminute Capital and Seedcamp. http://axios.link/U8mc • Compass Group USA, a Charlotte-based contract foodservice and hospitality firm, acquired EAT Club, a Redwood City, Calif.-based corporate catering startup that had raised nearly $60 million (plus a PPP loan) from firms like August Capital, Sodexo, Trinity Ventures and Alium Capital Management. http://axios.link/MH6l • IBM (NYSE: IBM) agreed to buy Turbonomic, a Boston-based application resource and network performance management company. Reuters puts the price tag at between $1.5 billion and $2 billion. Turbonomic had raised around $200 million from firms like Globespan Capital Partners, Iconiq Capital, General Atlantic, Cisco, Bain Capital Ventures, Trend Forward Capital and Highland Capital Partners. http://axios.link/PUEc 🚑 Investindustrial a seeking a buyer for LifeBrain, an Italian lab diagnostics firm that could fetch more than €1 billion, per Reuters. http://axios.link/xhOk | | | | | | | | More M&A | | ⚡ Chesapeake Energy (Nasdaq: CHK) is seeking a buyer for its South Texas shale assets, which could fetch upwards of $2 billion, per Reuters. http://axios.link/MnMH | | | | | | | | Fundraising | | • Eclipse Ventures raised $500 million for its fourth fund. http://axios.link/j5B7 • Ince Capital, a Chinese VC firm, is raising $500 million for its second fund, per Bloomberg. http://axios.link/wlnL | | | | | | | | It's Personnel | | • Ryan Gilbert has formed Launchpad Capital, a fintech-focused VC firm. He previously was a general partner with Propel Venture Partners. www.launchpad.vc • Work-Bench promoted Kelley Mak to partner and Priyanka Somrah to senior analyst. www.work-bench.com | | | | | | | | Final Numbers |  Data: YCharts; Chart: Will Chase/Axios Endeavor, owner of the William Morris talent agency and Ultimate Fighting Championship (UFC), priced its IPO at $24 per share, and opened trading yesterday at $27 before closing at $25.20. - Endeavor was one of few companies to eschew Saudi money in the wake of Jamal Khashoggi's murder — rejecting a $500 million investment — and exec chair Patrick Whitesell tells me that it didn't take Saudi money in the IPO.
- Listen to my interview with Whitesell for Axios Re:Cap, in which he discusses the IPO, the future of live events and new board member Elon Musk.
| | | | | | | | A message from EY | | Where to focus your post-pandemic workplace reimagination | | |  | | | | In this episode of our EY NextWave Private Equity podcast, our speakers describe the focus areas and priorities of a robust workplace reimagination strategy including health and safety, cost savings and cultural implications. Listen to our latest podcast for more details. | | | | ✔️ Thanks for reading Axios Pro Rata! Please ask your friends, colleagues and Mac Jones to sign up. 📚 Other stuff to read: Private debt trading follows PE playbook, Apollo sidelines Josh Harris, and What really happened at Basecamp. | | | | 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.
Change your preferences or unsubscribe here. | | | Was this email forwarded to you?
Sign up now to get Axios in your inbox. | | | | Follow Axios on social media:    | | | | | |
