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Affirm, Poshmark IPOs Give VCs Reason to Celebrate
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By Yuliya Chernova, WSJ Pro
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Good day. Public markets gave an emphatic welcome to two venture-backed companies in recent days.
Fintech company Affirm Inc. nearly doubled in value in its debut Wednesday to close at $97.24 from a $49 opening price. That gave the company, founded in 2012, a market cap of $11.8 billion.
Poshmark Inc., a marketplace for clothing and other used items, saw its valuation soar to more than $7 billion as its shares closed at $101.50 each on Thursday, 141.67% above its $42 initial public offering price.
“The public markets are really strong,” commented Jeremy Liew, partner at Lightspeed Venture Partners and a board member at Affirm. “Literally the window is open. A lot of people are thinking about how to get out,” he said, adding: “When they are passing hors d’oeuvres, it’s a good time to eat.”
Lightspeed’s 18.74 million shares in Affirm were worth about $918.28 million at the IPO price of $49. Founders Fund’s Affirm stake had a value of about $835.46 million. The stake of Khosla Ventures, another top investor in the fintech company, was worth about $680.9 million. Singapore’s sovereign-wealth fund GIC had the largest outside investor stake worth about $1.08 billion. Other investors in Affirm that had stakes of less than 5% include Spark Capital, GGV Capital, Thrive Capital and others.
Poshmark, meantime, proved a boon to its venture investors. The biggest beneficiary was Mayfield, whose Managing Director Navin Chaddha led the company’s Series A round in 2011. Mayfield’s 17.25 million shares, accumulated by participating in every single round the company ever raised, were worth about $742 million at Poshmark’s $42 IPO price.
The other 5% or greater shareholders include Menlo Ventures, whose stake was worth about $433.4 million; Bangalore, India-based Inventus Capital, with a stake worth $284.72 million; and GGV Capital, with a stake of about $215.29 million. Uncork Capital and NFX are among the smaller shareholders that participated in multiple rounds for Poshmark over the years, according to PitchBook Data Inc.
Note: There will be no newsletter on Monday, Jan. 18 in observance of Martin Luther King Jr. Day.
And now on to the news...
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Oracle and other firms are working with health groups on the Vaccination Credential Initiative. PHOTO: JOHN G MABANGLO/SHUTTERSTOCK
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Vaccination status. Businesses including Microsoft Corp., Oracle Corp. and Cerner Corp. are working with health groups on an effort to help people easily show they have received a Covid-19 vaccine, The Wall Street Journal reports. The companies and organizations, including the Mayo Clinic, are behind the Vaccination Credential Initiative, which aims to ensure consumers can access their vaccination records as the economy opens back up and daily life returns to more normal conditions following the pandemic.
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ArcLight-Backed SPAC Connects With E-Bus Maker Proterra
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A blank-check company backed by energy investment firm ArcLight Capital Partners agreed to acquire and take public electric vehicle company Proterra Inc. in a deal that gives it an enterprise value of about $1.6 billion, WSJ Pro reports. ArcLight Clean Transition Corp., the special-purpose acquisition company, will use $278 million raised through an initial public offering in September as well as $415 million being raised in a private investment in public securities transaction to help finance the deal, regulatory filings show. The deal is expected to close in the first half of the year.
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Zico Beverage Brand Founder Buys Company Back From Coca-Cola
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Zico Beverages LLC founder Mark Rampolla is bringing his beverage baby back home after seven years apart, WSJ Pro’s Isaac Taylor reports. PowerPlant Ventures, a venture-capital firm co-founded by Mr. Rampolla that backs emerging plant-based products and brands, acquired the coconut water-based beverage brand Zico from Coca-Cola Co. and will rename it Zico
Rising.
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Last week, we asked what effect Democratic control of the Senate would have on the venture industry.
Mike Janke, co-founder and investment board member of cybersecurity-focused venture firm DataTribe, said tax increases to long-term capital gains and qualified dividends, if ushered in by a Democrat-controlled Senate, would dissuade institutional investors from putting money into venture, and “crush innovation.”
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“There would be no incentive to build companies if the entrepreneurs get taxed at the same rate as someone working higher up in management of most Fortune 1000 companies,” Mr. Janke wrote.
Oliver Libby, managing partner of venture firm Hatzimemos Libby Holdings, said a Democratic Senate’s handling of big-tech regulations could benefit the venture sector.
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“Additionally, we believe the uncertainty on regulation for big tech is unhealthy for VC over the long term, so a Congress that finally provides appropriate, modest controls on the sector is likely to create more clarity for investors,” Mr. Libby wrote.
This week’s question, courtesy of Marc Vartabedian: Tech giants have taken sweeping action to remove President Trump from various platforms after the Capitol Hill riot. How, if at all, could this action trickle down into the startup world, and does it have the potential to alter the investor calculus going forward?
Please email WSJ Pro with responses at marc.vartabedian@wsj.com
Thanks!
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Funds
Clean energy investor WAVE Equity Partners raised $135 million for its second fund, according to a regulatory filing. Last year, the Boston-based firm participated in funding rounds for carbon dioxide capture and separation technology provider Carbon Clean Solutions Ltd. and wind energy startup WindESCo Inc.
People
Madrona Venture Group promoted Anu Sharma and Daniel Li to partners. Prior to joining Madrona earlier this year, Ms. Sharma led product management teams in Elastic Compute Cloud for Amazon Web Services. Mr. Li previously worked at the Boston Consulting Group.
Small business accounting software provider FreshBooks appointed Don Epperson to the post of chief executive. Prior to joining the company, Mr. Epperson co-founded HookMedia, Simpli.fi and Enervee. Toronto-based FreshBooks counts Georgian Partners, Accomplice and Oak Investment Partners as investors.
Exits
Mobile-phone chip giant Qualcomm Inc. said its subsidiary Qualcomm Technologies Inc. agreed to acquire Nuvia Inc., a startup developing central processing chips for data centers, for about $1.4 billion before working capital and other adjustments. Founded two years ago by three former Apple Inc. and Google engineers, Santa Clara, Calif.-based Nuvia raised a $240 million round last year from Mithril Capital Management, Dell Technologies Capital and funds managed by BlackRock Inc. and Fidelity Investments.
LogRhythm, which is focused on security information and event management, acquired threat-detection platform MistNet for an undisclosed amount. Private-equity firm Thoma Bravo bought a majority stake in Boulder, Colo.-based LogRhythm in 2018. Based in Mountain View, Calif., MistNet was backed by investors including Foundation Capital and Westwave Capital.
Top Hat, a higher education learning platform, purchased textbook publisher Fountainhead Press for an undisclosed sum. Toronto-based Top Hat last February raised a $55 million Series D equity and debt round from Georgian Partners, Inovia Capital, Union Square Ventures, Emergence Capital and Leaders Fund.
Digital trading technology provider DriveWealth acquired broker-dealer Cuttone & Co. for an undisclosed amount. In October, Chatham, N.J.-based DriveWealth raised a $56.7 million Series C round from Point72 Ventures, Raptor Group, SBI Holdings, Route 66 Ventures, Mouro Capital and Fidelity International Strategic Ventures.
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Grab Financial Group, a Singapore-based fintech platform, raised over $300 million in Series A financing. Hanwha Asset Management led the round, which included contributions from K3 Ventures, GGV Capital, Arbor Ventures and Flourish Ventures.
MX Technologies Inc., a Lehi, Utah-based financial data provider, scored $300 million in Series C funding, increasing the company’s valuation to $1.9 billion. TPG Growth supplied half the round, with the remainder coming from CapitalG, Geodesic Capital, Greycroft, Cota Capital, Canapi Ventures, Digital Garage, Point72 Ventures, Pelion Venture Partners and Regions Financial Corp.
NewAmsterdam Pharma, a Dutch startup developing therapies for cardio-metabolic diseases, completed a $196 million Series A round. Forbion, Morningside Ventures and Ascendant BioCapital co-led the investment, which included participation from Kaiser Foundation Hospitals, BVF Partners, Population Health Partners, LSP Dementia Fund, Peter Thiel, Janus Henderson Investors, Medpace, GL Capital, JVC Investment Partners and Presight Capital. Morningside Ventures’ Jason Dinges and Ascendant BioCapital’s Gaurav Gupta will join the company’s board.
Sennder GmbH, a Berlin-based freight forwarder, raised a $160 million Series D round, bringing the company’s valuation to over $1 billion. Sennder is backed by Accel, Lakestar, HV Capital, Project A, Next47, Scania Growth Capital, Earlybird and Perpetual.
Webflow Inc., a San Francisco-based startup whose technology enables people and businesses to create websites and apps without having to write code, closed a $140 million Series B round. Returning backers Accel and Silversmith Capital Partners led the round, which included participation from new investor CapitalG, and all existing investors. Laela Sturdy, general partner at CapitalG, will join the board.
Jedox Inc., a Germany-based enterprise performance-management software provider, secured a new investment of more than $100 million. Lead investor Insight Partners was joined by Iris Capital, eCapital and Wecken & Cie in the round. Rachel Geller and Henry Frankievich, both from Insight Partners, will join the board.
Harness, a San Francisco-based software delivery platform, picked up an $85 million Series C investment giving the company a $1.7 billion valuation. Alkeon Capital led the round, which included participation from new investors Battery Ventures, Citi Ventures, Norwest Venture Partners, Sorenson Capital and Thomvest Ventures. Previous backers include Menlo Ventures, IVP and Unusual Ventures.
Premise Data, a San Francisco-based market intelligence platform, landed an $85 million Series E round. WestCap Group led the investment, which included support from Valor Equity Partners, 8VC, Tao Capital, Hanover Technology Investment Management, Atreides Management, NightDragon, Winslow Capital and others. WestCap’s Laurence Tosi, 8VC’s Alex Moore, along with former Documentum chief executive Dave DeWalt, will join the board.
Capchase, a Boston-based provider of non-dilutive capital for software-as-a-service companies, added $60 million in funding led by i80 Group. In August, the company raised a seed round led by Bling Capital, SciFi VC and Caffeinated Capital.
JobNimbus, a Lehi, Utah-based project management platform for the home services construction industry, grabbed a $53 million investment from Mainsail Partners. Vinay Kashyap and KC Kanoff, both from Mainsail, along with former Zen Planner chief executive Jeff Gardner, will join the board.
iziwork, a Paris-based temporary staffing marketplace, snagged a $43 million investment from Cathay Innovation and Bpifrance.
Modern Treasury, a San Francisco-based payments-management software maker, fetched a $38 million Series B round. Altimeter Capital led the investment, which saw participation from prior backers Benchmark and Y Combinator.
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Makan Delrahim, the outgoing head of the Justice Department’s antitrust division, says music-licensing rules still need to be modernized.
PHOTO: NIKKI RITCHER FOR THE WALL STREET JOURNAL
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