Axios Pro Rata: SPACs attacked

Plus, there's gold in them thar Russia. | Thursday, March 31, 2022

Open in app View in browser   Presented By Latham & Watkins   Axios Pro Rata By Dan Primack ·Mar 31, 2022 🚨 Next week we're launching Axios Crypto, a daily newsletter authored by Brady Dale. Sign up here.     Top of the Morning Illustration: Annelise Capossela/Axios   The SEC yesterday began installing traffic lights on the SPAC freeway, more than a year after it was first warned about the likelihood of crashes. Flashback: The SEC Investor Advisory Committee held a meeting on the SPAC boom. As we reported, a top issue was how SPAC sponsors and their target companies have safe harbor protections for long-term projections that are not afforded to traditional IPO issuers. In short, the discrepancy let SPAC targets say just about anything without fear of liability. Want to claim your pre-commercial spaceship company will make $1 billion in 2026 revenue? Go for it. Flash forward: SEC commissioners voted 3-1 in favor of a proposal that effectively strips that safe harbor from SPACs and SPAC targets, thus evening the playing field. It also could require some SPACs to register as investment companies, and increase ownership disclosures. What they said: SEC chair Gary Gensler quoted Aristotle's admonition that "like cases should be treated alike." Hester Peirce, the lone dissenter and lone Republican on the Commission, said the proposal seemed "designed to stop SPACs in their tracks." She did seem open to some SPAC rules changes, but hinted that she'd prefer the resolution to be in the opposite direction, with safe harbor being extended to traditional IPO issuers. Namely because she claimed the fact that SPACs offer long-term forward guidance is evidence that sponsors believe it's useful to investors. A less charitable view, seemingly adopted by the Democratic majority, would be that SPACs believe such guidance snows investors Process: The new rules are now subject to a public comment period, so may shift a bit before final adoption. What to know: These new rules could increase the costs and length of SPAC processes, but SPACs likely will remain cheaper and faster than traditional IPOs. They also could help improve performance, given how many of the more speculative SPACs have stumbled post-merger. It's also worth adding that the death of SPACs has been greatly exaggerated. 54 SPACs have already raised $10 billion in 2022, on top of the 600+ SPACs in market, and we've seen several mergers close in recent weeks (e.g. Forge Global, Starry Internet, etc.). It's not the insanity of 2021, when SPACs raised over $160 billion, but it's not nothing. The bottom line: Better late than never.     The BFD Illustration: Megan Robinson/Axios   Kinross Gold of Canada is in exclusive talks to sell its Arctic Russian mine to Fortiana, a Cypress-based investment firm controlled by Russian businessman Vladislav Sviblov, per the WSJ. Why it's the BFD: Lots of Western firms announced plans to leave Russia after the Ukraine invasion, but this would be the first successful sale. As we previously noted, divestiture is easier said than done. Pricing: Kinross valued its Russian assets just north of $600 million at year-end 2021. Since then, however, the price of gold has spiked, while the price of Russian assets has tanked. More nyet news: BP has contacted state-backed firms in China and the Middle East, as it keeps seeking a buyer for its 20% stake in Russian oil giant Rosneft, according to Bloomberg. The bottom line: "The Toronto-based miner has more than a 25-year history operating in Russia and has survived several prior crises. But waves of Western sanctions against Russia for its invasion of Ukraine have prompted companies across various industries to re-evaluate their operations in the country amid increasing struggles of getting new parts and accessing banking services to do business." — Ben Dummett & Alistair MacDonald, WSJ     Venture Capital Deals 🌎 Deepki, a Paris-based provider of ESG data software for the real estate sector, raised €150m in Series C funding. One Peak and Highland Europe co-led, and were joined by Revaia, Hi Inov and Statkraft Ventures. www.deepki.com • LayerZero Labs, a protocol to connect decentralized apps across multiple blockchains, raised $135m. Sequoia Capital, FTX Ventures and Andreessen Horowitz co-led, and were joined by Coinbase Ventures, PayPal Ventures, Tiger Global and Uniswap Labs. http://axios.link/LwBy • Chief, a social network for professional women in senior leadership positions, raised $100m in Series B funding at a $1.1b valuation. CapitalG led, and was joined by insiders GGV Capital, Inspired Capital, Primary Venture Partners, Flybridge Capital Partners and BoxGroup. www.chief.com • Collectors Holdings, a Santa Ana, Calif.-based sports card appraiser and marketplace, raised $100m at a $4.3b valuation from existing investors Nat Turner, D1 Capital Partners, Cohen Private Ventures and TCG Capital Management. http://axios.link/hUCa • Modern Treasury, as S.F.-based payments infrastructure startup, raised $50m from SVP Capital and Salesforce Ventures. http://axios.link/9BEh • Pine Labs, an Indian digital payments provider, raised $50m in new funding at a valuation north of $5b led by Vitruvian Partners. http://axios.link/k6BR • Yami, an Eastvale, Calif.-based online marketplace for Asian groceries, raised $50m in Series B funding. Altos Ventures and Balsam Bay Partners co-led, and were joined by JPMorgan and GGV Capital. http://axios.link/FPUV • Skan, a Menlo Park-based enterprise process discovery and monitoring platform, raised $40m in Series B funding. Dell Technologies Capital led, and was joined by GSR Ventures, Liberty Global Ventures and insiders Cathay Innovation, Zetta Venture Partners, Citi Ventures and Firebolt Ventures. www.skan.ai • Khazna, an Egyptian financial super-app, raised $38m in Series A equity and debt funding. Quona Capital led, and was joined by Nclude and a trio of Egyptian banks. http://axios.link/ZyQA • Flight Schedule Pro, an Overland Park, Kan.-based provider of management software for flight schools raised $31m from Mainsail Partners. www.flightschedulepro.com 🚑 Incyclix Bio, a cell cycle control startup, raised $30m in Series B funding. Boxer Capital led, and was joined by RA Capital and insider Eshelman Ventures. www.incyclixbio.com • Cyberpion, a Kirkland, Wash.-based cyber attack surface management startup, raised $27m in Series A funding. USVP led, and was joined by insiders Team8 Capital and Hyperwise Ventures. http://axios.link/Qo7y 🚑 Apploi, a New York-based healthcare staffing startup, raised $25m in Series B funding. m]x[v Capital led, and was joined by Defy VC and Underscore. http://axios.link/ahSK • Black Crow AI, a New York-based no-code ML infrastructure startup, raised $25m in Series A funding. Imaginary Ventures led, and was joined by Left Lane, Good Friends, Interplay and Red Antler. www.blackcrow.ai • Mosaic, a San Diego, Calif.-based strategic finance platform, raised $25m in Series B funding. Founders Fund led, and was joined by insider General Catalyst. http://axios.link/k7zf • SIA, a Seattle-based go-to-market learning platform, raised $22m from HubSpot Ventures, MIT Investment Management Co., Stage 2 Capital and Emerge Education. www.salesimpact.io 🚑 Zephyr AI, a personalized medicine and drug discovery startup, raised $18.5m in a seed funding. Lerner Group Investments and M-Cor Holdings co-led, and were joined by AME Cloud Ventures, BoxGroup, MedStar Health and Verily. www.zephyrai.bio • TransFICC, a London-based electronic trading startup, raised $17m. AlbionVC led, and was joined by Citi, HSBC, Illuminate Financial, ING Ventures and Main Incubator. http://axios.link/sGA2 • Garden.io, a Berlin-based dev automation platform for Kubernetes and container environments, raised $16m in Series A funding. Sorenson Ventures and 468 Capital co-led, and were joined by Crowberry Capital and Fly Ventures. http://axios.link/z6Os • Flux Marine, an East Greenwich, R.I.-based electric boat maker, raised $15.5m. Ocean Zero led, and was joined by Boost VC and Winklevoss Capital. http://axios.link/7BPJ 🚑 Altoida, a Washington, D.C.-based diagnostics app for Alzheimer's disease, raised $13.7m in new Series A funding (round total now $20m). Whitecap Venture Partners and M Ventures co-led, and were joined by Hikma Pharma, HonorHealth, btov, Alpana Ventures, Fyrfly and VI Partners. http://axios.link/w3Rm • Card91, an Indian payment infrastructure startup, raised $13m in from Infinity Ventures, Point72 Ventures, Sabre Partners, EMVC and Commerce Ventures. http://axios.link/lApb • January, a New York-based debt resolution platform, raised $10m. Brewer Lane Ventures led, and was joined by IA Ventures, Third Prime Capital, Tribe Capital and Reciprocal Ventures. http://axios.link/vtLw 🚑 Inner Cosmos, an S.F.-based neurotech startup, raised $10m in seed funding. Lool Ventures led, and was joined by KittyHawk VC and Loup Ventures. www.innercosmos.io 🚑 Jeenie, a Washington, D.C.-based virtual interpreting platform for healthcare, raised $9.3m in Series A funding led by Transformation Capital. www.jeenie.com • Glean, a data insights dashboard startup, raised $7m in seed funding led by Matrix Partners. http://axios.link/LWml • Sona, a London-based management platform for deskless workers, raised $7m in seed funding led by Gradient Ventures. www.getsona.com • BODS, a digital fashion startup with garment-fitting technology, raised $5.6m in seed funding. Stellation Capital led, and was joined by Long Journey Ventures and Third Kind VC. http://axios.link/NKOo • Wert, a payments gateway that enables direct NFT purchases with credit cards, raised $5m in seed funding led by Tagus Capital led, and was joined by Digital Horizon. www.wert.io • Archie, a New York-based fintech focused on freelancers, raised $4.5m in from B Capital Group, Mac Ventures, Worklife Ventures, Day One Ventures, Hof VC and Dash Fund. www.witharchie.com 🚑 Valar Labs, a Palo Alto-based oncology data science startup, raised $4m in seed funding led by Andreessen Horowitz. www.valarlabs.com • Quintar, a Santa Clara, Calif.-based AR platform for live sports and entertainment, raised $3m. SeventySix Capital led, and was joined by Nreal and SharpLink Gaming. http://axios.link/xOIE • Tushop, a Kenyan social commerce startup, raised $3m led by 4DX Ventures. http://axios.link/BjGK • Sprout, a Hong Kong-based provider of cap table software, raised $3m led by Sequoia Capital India. http://axios.link/4Rt8 🐉 Blockchain.com, a London-based digital assets platform, said it raised an undisclosed amount of funding at around a $14b valuation. Lightspeed Venture Partners led, and was joined by fellow insider Baillie Gifford. http://axios.link/SmEi     A message from Latham & Watkins Exit this way to find your path to going public     These days, startups can consider multiple exit methods, from de-SPACs to direct listings. Here's why: These alternatives offer advantages to certain companies compared to the traditional IPO. Check out Latham & Watkins' Exit This Way webinar on LathamDrive to help you maintain momentum.     Private Equity Deals 🚑 Amulet Capital Partners recapitalized Lighthouse, a Columbus, Ohio-based network of outpatient substance abuse and mental health treatment facilities. www.lighthousebhsolutions.com • Apollo Global Management ended its pursuit of British educational publisher Pearson (LSE: PSON), after its £7b takeover bid was rejected. http://axios.link/x5CN 🚑 Dynamic Infusion Therapy, a Dallas-based portfolio company of RiverGlade Capital, bought Austin-based Vascular Access Consultants, a provider of expert services to healthcare facilities. http://axios.link/aHZa • Hg agreed to buy minority stakes in cloud software firms IFS and WorkWave from EQT (which remains majority shareholder) and TA Associates, at a $10b combined enterprise value. http://axios.link/GeVG • HighPost Capital, a consumer PE firm co-founded by Mark Bezos, bought Centr, a digital fitness startup founded by actor Chris Hemsworth. http://axios.link/1vyg • The Jordan Co. agreed to buy Houston-based flexible packaging maker Five Star Holding, with Bloomberg reporting a $1.5b price tag. http://axios.link/6rhd • NPD Group, a Port Washington, N.Y.-based market research firm bought last year by Hellman & Friedman, is in talks to buy Chicago-based rival Information Resources, which could fetch around $5b, per Bloomberg. Sellers would include Vestar Capital Partners, New Mountain Capital, Cohesive Capital Partners and Constitution Capital Partners. http://axios.link/uzqs 🚑 Paine Schwartz Partners invested in Hendrix Genetics, a Dutch animal genetics company. www.hendrix-genetics.com • PRO Unlimited, an S.F.-based portfolio company of EQT, agreed to buy Geometric Results, an outsourced workforce management firm, from Bain Capital. www.grimsp.com • The Riverside Co. acquired EventsAIR, an Australian events management software provider. www.eventsair.com • TA Associates agreed to buy TouchTunes, a New York-based in-venue interactive music platform, from Searchlight Capital Partners and Newlight Partners. Per an email from Axios Pro's Kerry Flynn: "I am a BIG TouchTunes fan. A must-do when my grandpa and I go to Waffle House in Florida." 🚑 Thomas H. Lee Partners agreed to Rosemont, Ill.-based healthcare data enablement company Intelligent Medical Objects for over $1.5b, per Axios. http://axios.link/vT4M     Yesterday in Axios Pro Source: Giphy Highlights from yesterday's Axios Pro Deals newsletters: Climate: Reading the solar tariff tea leaves, and deal scoop on a forest restoration startup. Fintech: Interview with Ukraine's vice minister of digital transformation, on what he wants from Western crypto companies. Health tech: Inside SVB's rise to the big leagues, and scoop on what Tabula Rasa HealthCare wants to sell. Media: The NFL wants to deal with Hollywood, and how gaming changes the streaming biz model. Retail: Carl Icahn gets piggy with Kroger's, and Figs' plan to boost its sagging stock. Start your 14-day trial to any of our Axios Pro newsletters by going here, or request a quote for custom group pricing. Our introductory All Access offer, which gets you all five newsletters for the price of three, ends today. Subscribe now.     SPAC Stuff • Good Commerce Acquisition, a consumer SPAC led by former Gap CEO Art Peck, withdrew registration for a $200m IPO. http://axios.link/Y2z1     Liquidity Events • Intel (Nasdaq: INTC) confirmed its purchase of Granulate, an Israeli provider of computing workload optimization solutions, for a reported $650m. Granulate had raised over $45m from firms like Red Dot Capital Partners, Dawn Capital, Insight Partners, TLV Partners, and Hetz Ventures. • Kidd & Co. and Firmament agreed to sell Logistyx Technologies, a Chicago-based multi-carrier shipping software provider, to E2open (NYSE: ETWO) for $185m. www.logistyx.com • Macquarie Group is seeking buyers for its India toll road assets, which could fetch $400m, per Bloomberg. http://axios.link/qJxr • Navis Capital Partners hired BDA Partners to find a buyer for Texon, a Hong Kong-based footwear materials supplier whose clients include Nike, per Bloomberg. The deal could fetch around $300m. http://axios.link/LHtZ     More M&A ⚡ Cnooc, a Chinese energy firm, is seeking a buyout for its U.K. North Sea portfolio, which could fetch up to $3b, per Bloomberg. http://axios.link/QRjP • Royal Bank of Canada (TSX: RY) agreed to buy British wealth management firm Brewin Dolphin (LSE: BRW) for around £1.6b. http://axios.link/JtnG     Fundraising • Altitude Ventures of Nashville is raising $100m for its third fund, per an SEC filing. www.altvc.com • Arctos Sports Partners, a PE firm that buys into pro sports teams, is raising its second fund, per SEC filings. www.arctospartners.com • BDT Capital Partners held a $6.5b first close for its fourth fund, per an SEC filing. A source puts the total target at $13b. www.bdtcapital.com • Gumi Cryptos Capital, a blockchain-focused VC firm with offices in S.F. and Tokyo, raised $110m for its second fund. http://axios.link/pq7R 🚑 HealthQuest Capital is raising $585m for its fourth fund, per an SEC filing. www.healthquestcapital.com     It's Personnel • Antonio Botija (ex Columbia Threadneedle) and George Watts (ex-Stonepeak Partners) joined H.I.G. Capital's infrastructure teams as managing directors in London and New York, respectively. www.higcapital.com • Eric Grib joined Brand Velocity Group as a principal. He previously was with Acamar Partners. www.brandvelocitygroup.com • Sun Capital Partners hired four new VPs: Erik Hällström (ex-CEO of Snipp Interactive), Ziad Jawadi (Waze/Google), Alex Ott (PwC) and Uri Perry (Tacit Capital). www.suncappart.com     Final Numbers Data: Yahoo Finance; Chart: Axios Visuals     A message from Latham & Watkins Exit this way and take a closer look at SPACs     As the SPAC trend matures, it's now more important for investors and company owners to understand the nuances of SPACs. Here's how: Take a deep dive with Latham & Watkins, the leading de-SPAC advisor to startups, on how to successfully navigate today's market. Watch the webinar on LathamDrive.   🙏 Thanks for reading Axios Pro Rata! Please ask your friends, colleagues and gold bugs to sign up. Go deeper with Axios Pro: Deals, featuring hyper-relevant news and analysis across PE, VC and M&A.   Axios thanks our partners for supporting our newsletters. 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