Axios Pro Rata: IPO party like it's 1999

Top of the Morning | Thursday, September 17, 2020

View in browser   Presented By Cooley   Pro Rata By Dan Primack ·Sep 17, 2020 🗳️ You're invited to an Axios virtual live event tomorrow on the lead-up to Election Day, with Rep. Susan Brooks (R-Ind.) and Rep. Ro Khanna (D-Calif.). Register here. 🎧 Axios Re:Cap digs into how 2020 has changed advertising, including yesterday's celeb boycott of Facebook/Insta. Listen via Apple or Axios.     Top of the Morning Illustration: Sarah Grillo/Axios   Snowflake yesterday went public in the largest software IPO of all time, and then kept running like the Energizer Bunny on speed. By the time it was over, the company was worth over $80 billion. The big picture: This time might be different, but it sure does feel a lot like 1999. Backstory: Snowflake was founded in 2012 to build data warehousing and analytics services for other businesses — audaciously seeking to both compete with Amazon while also building on top of it. It raised seed funding at a valuation south of $6 million, led by Sutter Hill Ventures. Sutter Hill's stake, including shares acquired in later rounds, was valued at around $12.5 billion at yesterday's market close. For context, the entire U.S. venture capital market raised only $25 billion in the year of Sutter Hill's initial investment. Axios' Kia Kokalitcheva goes deeper with early Snowflake investors. Snowflake's final VC round, just seven months ago, valued the company at $12.5 billion. What happened yesterday: Applying logic or fundamentals analysis to tech stocks right now is a fool's errand, but two possible explanations for why Snowflake's debut stood out from the froth. Warren Buffett's halo: Berkshire Hathaway committed to buy $250 million of stock from the company, concurrent to the IPO, and another 4 million shares from insiders ($480m at IPO price). Not only was it Berkshire's first IPO play since Ford Motor Company and first-ever tech IPO investment, but it also was because money-hemorrhaging Snowflake seemed to clash with Buffett's typical investing gospel. The *other* Oracle: Many investors are desperately seeking the next tech whale, having already exposed to the hilt on FAANG. So why not follow the crowd like they've done so successfully before, particularly if they feel that one of Snowflake's most formidable rivals is preoccupied with TikTok? What happened today: Snowflake shares melted a bit at the open, and as of this writing are down around 10% to $226 per share (the IPO price was $120 per share). What to watch: Tomorrow's listing for gaming company Unity Software. Not because it competes with Snowflake (it doesn't), but because it's utilizing a new online bidding process that's designed to find the most efficient IPO price. If successful, this could be a game-changer, given that Snowflake arguably left more than $3.5 billion on the table yesterday via the "pop." Both Snowflake and Unity share a lead IPO manager, Goldman Sachs.     The BFD Illustration: Sarah Grillo/Axios   LG Chem of South Korea said it will spin off its electric vehicle battery unit into a new company, and that it may seek to take the business public. Why it's the BFD: It's the largest EV battery maker in the world, recently overtaking China's CATL, with customers like Tesla, GM, and Audi. The bottom line: This is validation for EVs from a major industrial conglomerate, and creates a tantalizing target for a SPAC market that's already jumped all over electric vehicles from the OEM side.     Venture Capital Deals • Infarm, a Berlin-based urban vertical farming startup, raised $170 million in Series C equity and debt funding. LGT Lightstone led, and was joined by Hanaco, Bonnier, Haniel, Latitude, and return backers Atomico, TriplePoint Capital, Mons Capital, and Astanor Ventures. http://axios.link/s700 • Tonal, a San Francisco-based connected at-home strength and personal training platform, raised $110 million. Sapphire Sport, Shasta Ventures, Mayfield, Evolution Media, and THVC were joined by L Catterton, Delta-v Capital, Amazon Alexa Fund, and Mousse Partners. Plus Steph Curry, Paul George, and Michelle Wie. http://axios.link/2b9A • Olive, a Columbus, Ohio-based provider of health care administration automation software, raised $106 million. General Catalyst and Drive Capital co-led, and were joined by Ascension Ventures, Oak HC/FT and SVB Capital. www.oliveai.com 🚑 Finch Therapeutics, a Somerville, Mass.-based microbiome drug development company, raised $90 million in Series D funding. Baupost Group, Humboldt Fund, MSD Capital, MSD Partners, Octave Group, and OMX Ventures, were joined by return backers Avenir Growth Capital, OCV Partners, Shumway Capital, SIG, SymBiosis, TPTF, and Willett Advisors. www.finchtherapeutics.com 🚑 Synthekine, a Menlo Park-based engineered cytokine therapeutics startup, raised $82 million in Series A co-led by Canaan Partners, Samsara BioCapital, and The Column Group. www.synthekine.com • ApplyBoard, a Canadian application platform for international students, raised C$70 million in new Series C funding (round total now C$170m). The original round was led by Drive Capital at a C$2 billion valuation, while new backers include ETS, Index Ventures, Blue Cloud Ventures, and Harmonic Growth Partners. http://axios.link/GAyQ 🚑 Ready, a New Orleans-based provider of on-demand home health care services, raised $54 million from GV, Deerfield Management, City Light Capital, Town Hall Ventures, and Frist Cressey Ventures. http://axios.link/DHMR 🚑 Graphite Bio, a San Francisco-based gene editing startup focused on sickle cell disease, raised $45 million in Series A funding. Versant Ventures led, and was joined by Samsara BioCapital. http://axios.link/w5Gc • Humatics, a Waltham, Mass.-based developer of microlocation sensors for industrial robots, raised $30 million in Series B funding. Blackhorn Ventures led, and was joined by Tenfore Holdings, Fontinalis Partners, Airbus Ventures, Lockheed Martin Ventures, and Presidio Ventures. http://axios.link/QYOB 🚑 Joint Academy, a New York-based digital treatment for chronic joint pain, raised $23 million in Series B funding. Kinnevik led, and was joined by return backers Karl-Johan Persson and Alfvén & Didrikson. www.jointacademy.com • Seeqc, an Elmsford, N.Y.-based quantum computing startup, raised $22.4 million in Series A funding. EQT Ventures led, and was joined by FAM AB. http://axios.link/N02w 🚑 Aidoc, an Israeli developer of medical scanning software, raised $20 million in new Series B funding (round total $47m) from return backer Square Peg Capital. http://axios.link/VkjV • Bunch, a New York-based party app for multiplayer games, raised $20 million in Series A funding. General Catalyst led, and was joined by EA, PUBG, mixi, Take-Two Interactive, Ubisoft, Supercell, Riot Games, Miniclip, COLOPL, LVP, Northzone, Streamlined Ventures, Konvoy Ventures, OneTeam Ventures, Velo Partners, Golden Venture Partners, and Alven Capital Partners. http://axios.link/roqR • JupiterOne, an Indianapolis-based cyber asset management automation startup, raised $19 million in Series A funding. Bain Capital Ventures led, and was joined by Rain Capital and LifeOmic. http://axios.link/7zx7 • Air, a New York-based provider of cloud collaboration tools for visual work, raised $12 million in Series A funding. Tiger Global led, and was joined by Lerer Hippeau, WndrCo, Slack Ventures, Red Sea Ventures, and Advancit Capital. http://axios.link/0lhw • Kbox Global, a British startup that turns unused commercial kitchen space into cloud kitchens, raised £12 million led by Balderton Capital. http://axios.link/FC94 • eFileCabinet, a Lehi, Utah-based document management startup, raised $11.5 million in Series C funding. Allegis Capital and Signal Peak Ventures co-led, and were joined by Camden Partners, Allegis Nippon Life, and Oquirrh Ventures. http://axios.link/Mr3H • Antaios, a French developer of spin orbit torque MRAM technology, raised $11 million from Innovacom, Sofimac Innovation, Applied Ventures, and Bpifrance http://axios.link/0nuB 🚑 Signifier Medical Technologies, a London-based developer of solutions to sleep disordered breathing conditions, raised $10 million in Series C funding. Hedge fund manager Alan Howard led, and was joined by James Blair (Domain Associates) and return backer The Pritzker Organization. http://axios.link/1NRp • Sun Genomics, a San Diego-based DTC provider of custom probiotics, raised $9.25 million in Series A funding. Pangaea Ventures led, and was joined by K3 Ventures, Emerging Technologies Partners, Danone Manifesto Ventures, SOSV, Human Longevity, and Nascita Ventures. http://axios.link/Mmvc • Narrator, a New York-based data warehousing startup, raised $6.2 million in Series A funding. Initialized Capital led, and was joined by Flybridge Capital Partners and YC. http://axios.link/ngKa • Mobilize, a San Francisco-based provider of community mobilization software, raised $6 million in Series A funding. Sorenson Ventures led, and was joined by Kickstart. http://axios.link/kazr • Factris, a Dutch fintech focused on unpaid invoices, raised €5 million in Series A funding. AB Ventures led, and was joined by Speedinvest and Optima Investments. http://axios.link/sKKE • Wisdom Gaming Group, a Minneapolis-based e-sports content company, raised $3 million in Series A funding led by Excelsior Ventures. http://axios.link/nE0y     A message from Cooley Life sciences venture financing deals robust through Q2     Amidst the pandemic, VC dollars flocked to the life sciences sector in Q2. Half of the deals tracked focused on earlier stage companies raising A and B rounds, an indication of continued investor appetite for new innovation in the sector. See more at our venture financing dashboard on Cooley GO.     Private Equity Deals • Clearlake Capital Group agreed to buy Zywave, a Milwaukee-based provider of front office insurance SaaS, from Aurora Capital Partners. www.zywave.com • EQT Partners agreed to buy Italian online real estate classifieds group Casa.it from Oakley Capital. http://axios.link/AvTC • J.C. Flowers is considering a bid for the wealth management unit of Australia's AMP, per The Australian. • Lineage Logistics, a Colton, Calif.-based cold storage company, raised $1.6 billion from Oxford Properties Group, BentallGreenOak and D1 Capital Partners. http://axios.link/E3RA • Peak Rock Capital acquired Halo Foods, a U.K.-based maker of cereal bars and other snacks. www.halofoods.co.uk 🚑 PWNHealth, a New York-based provider of diagnostic testing enablement solutions, raised growth equity led by Spectrum Equity. Others backers include Blue Venture Fund and Sandbox. www.pwnhealth.com • Sun Capital Partners invested in Mancini's, a mattress retailer in Northern California. www.sleepworld.com     Public Offerings 🚑 Oscar, the health insurance company co-founded in 2012 by Joshua Kushner and Mario Schlosser, has hired banks for a 2021 IPO, Axios has learned from multiple sources. The New York-based company has raised around $1.5 billion in venture capital, including from Kushner's Thrive Capital, Alphabet and Founders Fund. http://axios.link/2WTb 🚑 Amwell, a Boston-based telehealth company, raised $742 million in its IPO. The company priced 41.2 million shares at $18, versus plans to offer 35m at $14-$16, for a fully diluted market value of $4.5 billion. It will list on the NYSE (AMWL) with Morgan Stanley as lead underwriter, and reports a $113 million net loss on $122 million in revenue for the first half of 2020. Shareholders include Allianz and Teva Pharmaceutical Industries. http://axios.link/1PbY 🚑 Dyne Therapeutics, a Cambridge, Mass.-based biotech startup focused on rare types of muscle diseases, raised $233 million in its IPO. It priced 12.3 million shares at $19 (above range), for an initial market cap of $791 million, and will list on the Nasdaq (DYN) with JPMorgan as lead underwriter. The pre-revenue company raised $165 million in VC funding from Atlas Venture (31.1% pre-IPO stake), Forbion Capital, (19.6%), MPM Capital (15.8%), RA Capital (6.9%), Vida Ventures (6.9%), Citadel (5.1%), and Wellington Management (5.1%). http://axios.link/5zIl • Sumo Logic, a Redwood City, Calif.-based machine data analytics platform, raised $326 million in its IPO. The company priced 14.8 million shares at $22 (above range), for an initial market cap of over $2 billion, and will trade on the Nasdaq (SUMO) with Morgan Stanley as lead underwriter. It reports a $92 million net loss on $155 million in revenue for 2019, and raised around $345 million in VC funding from firms like Greylock (22.6% pre-IPO stake), Sapphire Ventures (7.1%), Accel (6.8%), IVP (5.6%), DFJ Growth (5.1%), Battery Ventures, Tiger Global, Sutter Hill Ventures, Workday Ventures, and Franklin Templeton. http://axios.link/W3SO     SPAC Stuff • Apollo Strategic Growth Capital, a SPAC formed by Apollo Global Management, filed for a $750 million IPO. http://axios.link/sRnY • Avanti Acquisition, a European business-targeted SPAC formed by NNS Group and Sienna Capital, filed for a $500 million IPO. http://axios.link/DSo1 • Executive Network Partnering Corp., the SPAC that includes former House Speaker Paul Ryan, raised $360 million in an upsized IPO. It was formed by Solamere Capital and is led by former Vivint Smart Home CEOP Alex Dunn. http://axios.link/b7Lw • Reinvent Technology Partners, a tech-focused SPAC led by Reid Hoffman and Mark Pincus, raised $600 million in its IPO. http://axios.link/kZdt • Oaktree Acquisition II, the second SPAC formed by Oaktree Capital, raised $225 million in its IPO. http://axios.link/DTCA • VG Acquisition Corp., a SPAC formed by Richard Branson's Virgin Group, filed for a $400 million IPO. It plans to target a consumer-facing business. http://axios.link/3ZpK     Liquidity Events • Delivery Hero (EXTRA: DEHR) agreed to buy the Latin America operations of Spanish on-demand delivery company Glovo for up to €230 million (€170m upfront). Glovo has raised over $500 million in VC funding. http://axios.link/U3ae • Deutsche Boerse agreed to buy a majority stake in Quantitative Brokers, a New York-based provider of execution algorithms and analytics for global futures and interest rate markets. No financial terms were disclosed. Existing QB backers include Centana Growth Partners. http://axios.link/iK6T 🎵 Kobalt Music Group, a London-based music publishing and rights management services company, is seeking a buyer, per Bloomberg. A deal could be worth more than $1 billion, with Kobalt having raised over $550 million from firms like GV, Section 32, MSD Capital, and Balderton Capital. http://axios.link/s2Gm 🚑 MetLife (NYSE: MET) agreed to buy Versant Health, an eyecare services company whose brands include Davis Vision and Superior Vision, from Centerbridge Partners and FFL Partners for $1.675 billion in cash. www.versanthealth.com • Uber (NYSE: UBER) is in talks to sell part of its $6.3 billion stake in Chinese ride-hail company Didi Chuxing, per Bloomberg. http://axios.link/5Br8     More M&A • China Tianying, a listed Chinese urban environmental services firm, is seeking a buyer for between a $400 million and $600 million minority stake in Spanish waste management company Urbaser, per Bloomberg. http://axios.link/QzHq 🍔 TAB Food Investments, the world's largest Burger King franchisee, seeking a buyer for its China business, which could fetch more than $1.2 billion, per Bloomberg. http://axios.link/ijg6 • Volkswagen is in talks to sell Bugatti to Croatian entrepreneur Mate Rimac, per Reuters. http://axios.link/epp9     Fundraising • Antares Capital raised $3 billion for its mid-market senior loan fund. www.antares.com • Ardian raised €2 billion for its fifth mid-cap European buyout fund. http://axios.link/0WdU • Atlassian (Nasdaq: TEAM) launched a $50 million VC fund to back companies building products in the Atlassian ecosystem. http://axios.link/yI5c • Lightspeed Venture Partners is launching a Singapore-based South Asia unit, co-led by existing partners Akshay Bhushan and Bejul Somaia. www.lsvp.com 🚑 Questa Capital Management raised $348 million for its second healthcare-focused venture growth fund. www.questacapital.com     It's Personnel • Marcelino Pantoja joined venture firm Tribe Capital as a vice president, per his LinkedIn page. Past stops included Costanoa Ventures and Stanford Management Co. www.tribecap.co • Susan Somersille Johnson joined Prudential Financial as CMO. She previously was CMO for Truist Financial. www.prudential.com 🚑 Karey Witty joined Welsh, Carson, Anderson & Stowe as an operating partner. He previously was COO at Envision Healthcare. www.wcas.com     Final Numbers Data: FactSet; Chart: Axios Visuals     A message from Cooley Considering a SPAC?     Thinking of going public and wondering if doing so through a special purpose acquisition company is right for you? Cooley shares 10 key considerations for going public with a SPAC on its new capital markets blog, CapitalXchange. Learn more.   🙏 Thanks for reading Axios Pro Rata! Please ask your friends, colleagues, and Mr. Plow 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. 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: