| | | | | | | | | | Axios Pro Rata | | By Kia Kokalitcheva · Jul 28, 2023 | | Congrats, we made it! You'll see me one more time in your inbox, tomorrow, before Dan returns as your news captain for Monday's newsletter. | | | | | | Top of the Morning |  | | | Illustration: Sarah Grillo/Axios | | | | The IPO window is still only slightly cracked open, but aviation travel company Surf Air debuted on the New York Stock Exchange yesterday via direct listing. Why it matters: Direct listings are still few and far between, so Surf Air's came with its own unique set of circumstances, including an opening trade nearly 75% below its reference price, and a simultaneous merger with another company. Zooming in: Surf Air began trading at $5 — far below its $20 reference price. But: - Reminder that reference prices are not the same as an IPO price, so there's no "pop" here.
- This also remains a tough public market. Restaurant chain Cava did well on its IPO, but that's a sample size of one.
What they're saying: "You didn't see a lot of tranches today on the sell side," says Stan Little, who is now Surf Air's CEO. "Today showed us that we have a lot of long-term investors." - The company's shares didn't start trading until after 3pm ET; it took a while to get enough volume (about half a million shares) for an initial trade, according to Little.
- It closed out the day at $3.15 per share.
Yes, but: The company is shaking this off, pointing out that it chose a direct listing because it doesn't need to raise capital. Notably: The recent U.S. Supreme Court decision stemming from a Slack investor lawsuit didn't really come up in the company's discussions as it forged ahead with its listing. The bottom line: So far, the breeze coming out of the cracked IPO window is blowing in a lot of different directions. |     | | | | | | Also... | | Sequoia Capital has reduced the size of its crypto and ecosystem funds, the Wall Street Journal reported yesterday, which Axios confirmed via a source. State of play: This move was announced to limited partners back in March. - The committed capital Sequoia is "giving back" is being moved to LP's accounts within the firm's main fund that feeds into the sub-funds.
- Because of the liquidity crunch, Sequoia also let LPs redeem up to 12.5% in a one-time exception to the two-year lockup. The firm applied the redemption to the total amount in an investor's balance (including the capital shuffled back from the crypto and ecosystem funds).
Between the lines: Sequoia's move to shrink those funds is a response to market conditions, a source tells me. - In short, the crypto market's downturn means there's simply no need to have a $585 million fund as the company is shifting its crypto focus to early-stage investments. (It's now $200 million.) And it can always invest from its growth fund into a crypto company should that opportunity arise.
The bottom line: The writing was on the wall — in December, Sequoia cut its management fees on those two funds. And some LPs haven't been particularly impressed by the crypto investments. | | | | | | | | The BFD |  | | | Illustration: Lazaro Gamio/Axios | | | | Biogen has agreed to acquire Reata Pharmaceuticals, a Plano, Texas-based maker of therapies for rare diseases, in a deal worth $7.3 billion. Why it's the BFD: Biogen isn't very acquisitive, making this its largest acquisition. It's also reeling from the controversy surrounding its Alzheimer's drug. Details: Biogen agreed to pay $172.50 per share, a nearly 60% premium from Reata's share price at Thursday's close. The deal is expected to close by the end of this year. The bottom line: "Biogen is in transition as it attempts to broaden its focus and come up with new growth sources to replace aging multiple sclerosis drugs. Chief Executive Officer Christopher Viehbacher, who took over last year, has promised to redesign the company and reduce its dependence on risky neurology research without eliminating the ability to pursue hard diseases like Alzheimer's." — Michelle Davis, Dinesh Nair, Bloomberg | | | | | | | | A message from Axios | | Break through the noise with Axios | | |  | | | | Reach CTOs, CIOs and other tech 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. | | | | | | Venture Capital Deals | | • Protect AI, a Seattle-based AI security startup, raised $35m in Series A funding led by Evolution Equity Partners, with Salesforce Ventures, Acrew Capital, boldstart ventures, Knollwood Capital, and Pelion Ventures also participating. https://axios.link/43GrcHP ⛽️ EV.energy, a U.K.-based EV charging station network, raised $33m in Series B funding led by National Grid Partners, with Aviva Ventures, WEX Venture Capital, InMotion Ventures, Energy Impact Partners, Future Energy Ventures, and ArcTern Ventures also participating. https://axios.link/3OaSqAD ⛽️ Bright, a Mexican distributed solar company, raised $31.5m in Series C funding led by Danish SDG Investment Fund, with an unnamed family office also participating. https://axios.link/3Ovor7U 🐶 Airvet, a Los Angeles-based telehealth veterinary startup, raised $18.2m in Series B funding led by Mountain Group Partners, with Canvas Ventures, Headline, Burst Capital, Bob Antin, and others also participating. https://axios.link/3rP7a0R 🚑 Helpful, a Cambridge, Mass.-based app for caregivers, raised $7.5m in seed funding led by Redesign Health. https://axios.link/44QzoHa • MSPbots, a Chicago-based business process automation company, raised $5m in seed funding from Mercury. www.mspbots.ai • Effectiv, a San Francisco-based AI payment fraud detection startup, raised $4.5m in additional seed funding led by Better Tomorrow Ventures, with Accel also participating. https://axios.link/3QiVNbG • SuperFi, a U.K.-based debt prevention startup, raised $1m pre-seed funding led by Ascension and Fair By Design, with Force Over Mass and others also participating. www.joinsuperfi.com | | | | | | | | Private Equity Deals | | • Alpine Investors acquired Cherry Roofing & Siding, McHale Roofing, Rogers Roofing, and Victors Home Solutions to form Vertex Service Partners, a Charlotte, N.C.-based residential improvement business. www.vertexservicepartners.com • Premier International, backed by Renovus Capital Partners, acquired Information Asset, an Old Tappan, N.J.-based data governance and risk management firm. www.information-asset.com • TopBuild agreed to acquire Specialty Products and Insulation, a Charlotte, N.C.-based supplier of mechanical, building and spray foam insulation products, from Incline Equity Partners. https://www.spi-co.com/ • Evantic, backed by Edgewater Capital Partners, acquired Plastic Distributors and Fabricators, a Haverhill, Mass.-based manufacturer and fabricator of high-precision, difficult to machine plastic components. www.plasticdistributors.com • Tricor and Vistra, both Hong Kong-based business service companies backed by EQT, completed their merger. https://axios.link/3YfxH3w | | | | | | | | Liquidity Events | | • Kering agreed to acquire a 30% stake in Valentino, the Italian fashion house, for €1.7 billion ($1.9 billion) in cash from Mayhoola, with the option to buy 100% by 2028. https://axios.link/44N7Imk | | | | | | | | More M&A | | ⛽️ Saudi Arabia's PIF and mining company Maaden agreed to acquire a 10% stake in the base metal unit of Vale, a Brazilian mining company, for $2.6b. Engine No. 1 is also acquiring a 3% stake in the company. https://axios.link/44NuGtI | | | | | | | | Fundraising | | • A/O, a U.K.-based venture firm, raised €100 million of a targeted €250 million for its second fund. https://axios.link/3q9NVyq • Molten Ventures, a U.K.-based publicly-traded venture firm, raised €50m for a first close of a new Ireland-focused fund. www.moltenventures.com | | | | | | | | It's Personnel | | • Battery Ventures, the Boston-based tech investment firm, promoted Danel Dayan and Max-Julian Kaye to principal and Becca Jones to vice president. www.battery.com 🚑 HealthQuest Capital, a Redwood City, Calif.-based growth equity firm focused on health care, hired Sam Brasch as partner. He was previously at Kaiser Permanente Ventures. www.healthquestcapital.com • Merced County Employees' Retirement Association hired Gaurav Patankar as its first chief investment officer. He was previously at Bloomberg LP. https://axios.link/3DA4GGe • Sixth Street, a San Francisco-based investment firm, hired Julian Salisbury as co-chief investment officer. He was previously chief investment officer of Goldman Sachs' Asset and Wealth Management Division. www.sixthstreet.com | | | | | | | | Final Numbers |  | | | Screenshot: Preqin | | | | | | | | | | A message from Axios | | Break through the noise with Axios | | | | | | | | Reach CTOs, CIOs and other tech 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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