Draper Esprit, a London-based VC firm that has been backing European startups since 2006, is now publicly-traded on London’s AIM. The IPO raised GBP103 million, with proceeds being used to buy out LP positions in existing funds (it had last raised in 2010). Around GBP24 million of the IPO came via LPs rolling over their stakes, while the other GBP79 million was new capital.
Simon Cook, the firm’s co-founder and CEO, says that he and his partners were planning to launch a new fundraise, but ultimately felt that a “patient capital” model would make more sense, given how few startups are mature enough for exit within the 10-year investment life of a traditional fund.
“Look at how many U.S. funds are extended,” Cook says. “Or all of the other things that firms are adding, like opportunity funds. In Europe, venture capital is not as well understood by LPs, so adding lots of things can create confusion. Plus, there are a lot of investors that, for regulatory reasons, can’t invest in an illiquid fund structure.”
To be sure, this isn’t novel. 3i Group ― where Cook once worked ― has been publicly traded for years. So is Imperial Innovations. Last year, Neil Woodford raised £800 million via an LSE float (Woodford also is a Draper Esprit backer).
Cook doesn’t believe the model would necessarily work in the U.S. although, to be honest, I’m not so sure. Private equity has been moving a bit in this direction, with balance sheets at firms like KKR actually supporting growth equity deals in tech startups, and there was talk before the financial crisis of Sequoia Capital trying to pull off an IPO. Remember, the UK had equity crowdfunding long before the U.S. got around to it….
• Surge fundraising: Chinese ride-hailing company Didi Chuxing last night announced that it has sewed up its massive $7.3 billion financing round. This includes previously-disclosed $4.5 billion in equity from new investors like Apple, China Life Insurance Co., Ant Financial and return backers like Alibaba Group, Tencent, China Merchants Bank and SoftBank. The rest comes via a new syndicated loan (arranged by China Merchants Bank) of up to $2.5 billion, plus around $300 million in new long-term debt directly from China Merchants Bank.
A source close to the situation adds that the equity tranche also included participation from Oppenheimer and BlackRock (an existing Didi shareholder that also has a piece of rival Uber).
• Related: In the past 24 hours, we’ve gotten word of Didi, Uber and Airbnb each raising $1 billion or more in debt financing. So much for the theory that you need to be publicly-traded in order to adequately access the broader capital markets. Or that banks need to underwrite IPOs in order to generate giant fees from tech startups.
• Recommended reading: Malathi Nayak of Reuters has an interesting argument about how the Supreme Court’s recent decision to uphold net neutrality rules could lessen AT&T and Verizon’s interest in acquiring Yahoo.
From the piece: “Both Verizon and AT&T… are primarily interested in Yahoo’s advertising technology tools that leverage user data to deliver targeted ads. A part of the new rules could limit their ability to collect and use customer data to boost ad revenue.” Read the rest here.
• Delay tactic: Last month we reported that the private equity sponsors of Caesars ― Apollo Global Management and TPG Capital ―have been (indirectly) pushing Congress to revive an arcane piece of bankruptcy legislation that would retroactively shield them from junior bondholder claims related to the casino giant’s nightmarish bankruptcy (technically, the bankruptcy of its operating unit). There even was talk that it would get tacked onto the Puerto Rico debt restructuring bill, but that does not yet appear to have happened.
In the meantime, the bondholder claims continue to work their way through the courts. Yesterday morning, a U.S. bankruptcy judge in Chicago put a stop to related proceedings in other courts until August 29. This is basically a reversal of the judge’s earlier position — following a request to reconsider by a different court — but he told the parties that the injunctive relief is unlikely to get another extension if settlement talks don’t accelerate. “There better be some talking and it better be fast.”
• Correction: On Monday, we reported that the U.S. Justice Department has sued to block Cision, a PR software maker owned by GTCR, from buying PR Newswire Association from UBM PLC (LSE: UBM) for $841 million. What we neglected to mention was that DoJ simultaneously filed a proposed settlement and that GTCR says that, in light of the settlement, “the parties anticipate closing shortly.”
THE BIG DEAL
• Renaissance Acquisition Holdings, an Illinois-based contract research organization owned by RoundTable Healthcare Partners, has sold its topical pharma business to Mylan NV (Nasdaq: MYL) for $950 million in cash (plus up to another $50 million in earn-outs). www.renaissanceah.com
VENTURE CAPITAL DEALS
• Payoff, a Costa Mesa, Calif.-based online lender for people trying to pay off credit card debt, has secured $46.7 million of a new VC funding round that could total $67.4 million. The company previously raised over $38 million from firms like Anthemis Group, FirstMark Capital and Great Oaks Venture Capital. Read more.
• Mersana Therapeutics Inc., a Cambridge, Mass.-based developer of antibody drug conjugates, has raised $33 million in Series C funding. Wellington Management Co. led the round, and was joined by Cormorant Asset Management, Arrowpoint Partners, Takeda Pharmaceutical Co. and return backers NEA and Rock Springs Capital. www.mersana.com
• Eyeview, a New York-based video marketing technology company, has raised $21.5 million in new funding. Qumra Capital led the round, and was joined by return backers Marker LLC, Innovation Endeavors, Nauta Capital, Gemini Israel Ventures and Lightspeed Venture Partners. www.eyeviewdigital.com
• Sapho, a San Bruno, Calif.-based platform that helps organizations “transform existing business systems into secure micro apps,” has raised $9.5 million in Series A funding led by Alsop Louie Partners. www.sapho.com
• Overbond Ltd., a Toronto-based platform for digital bond insurance, has raised $7.5 million in seed funding from Morrison Financial Services Ltd. www.overbond.com
• Vow To Be Chic, a Santa Monica, Calif.-based bridesmaid dress rental company, has raised $5 million in Series A funding. Women’s Venture Capital Fund was joined by return backers Pritzker Group Venture Capital and Wavemaker Partners. www.vowtobechic.com
• Samba Tech, a distributor of online videos in Latin America, has raised $3 million in new VC funding from Brazilian billionaire José Augusto Schincariol. Existing backers include DFJ. www.samba-group.com
• MyTaskIt, a West Palm Beach, Fla.-based software platform for connecting service professionals to their technicians, subcontractors and customers, has raised $2.5 million in seed funding from individual angels. www.mytaskit.com
• Collokia, a San Francisco-based provider of a machine learning-based collaboration platform, has raised $1.3 million in seed funding co-led by Globant and Fundo Pitanga. www.collokia.com
• Qimple, a Canadian provider of HR software, has raised C$1.1 million in seed funding. The New Brunswick Innovation Foundation led the round, and was joined by Green Century Investment. www.qimple.com
• Elementum, a Mountain View, Calif.-based cloud supply chain platform, has raised an undisclosed amount of equity funding from Fontinalis Partners. www.elementum.com
PRIVATE EQUITY DEALS
• The Clear View Group has acquired the assets of Ebony Media, the publisher of Ebony Magazine. No financial terms were disclosed. www.ebony.com
• GI Partners has acquired Napa Valley-based Far Niente Wine Estates for an undisclosed amount. www.gipartners.com
• LogicMonitor, a Santa Barbara, Calif.-based IT infrastructure monitoring platform, has raised $130 million in growth equity funding from Providence Equity Partners. www.logicmonitor.com
• Macquarie Group has agreed to sell German gas grid operator Thyssengas to Dutch infrastructure fund DIF and French utility EDF for around EUR 700 million, according to Reuters. Read more.
• Ontario Systems, a Muncie, Ind.-based portfolio company of Arlington Capital Partners, has acquired Columbia Ultimate Business Systems, a Vancouver, Wash.-based provider of software to outsourced revenue cycle management firms, accounts receivables management firms and government clients. No financial terms were disclosed. www.ontariosystems.com
• Petrobras is nearing an agreement to sell an 81% stake in a Brazilian natural gas pipeline for nearly $6 billion to a consortium led by Brookfield Asset Management, according to Bloomberg. Other members of the buying group would include First Reserve Corp., GIC and China Investment Corp. Read more.
• No IPO news this morning.
• The Carlyle Group has agreed to sell its remaining stake in Applus (Madrid: APPS), a Spanish provider of industrial testing and inspection services, for EUR 146 million to a fund created by Southeastern Asset Management and Egyptian billionaire Nassef Sawiris. Read more.
• EQT Partners has hired JPMorgan to find a buyer for BSN Medical, a German maker of bandages and plaster casts, in a deal that could be worth more than $2.25 billion, according to Reuters. Read more.
• Samsung has agreed to acquire Joyent, a San Francisco-based provider of application containers in the enterprise. No financial terms were disclosed. Joyent has raised over $225 million in VC funding, from firms like Intel Capital, Orascom TMT Investments, El Dorado Ventures, EPIC Ventures, Greycroft and LGI Ventures. Read more.
• Airbnb has secured a $1 billion debt facility from JPMorgan, Citigroup, Morgan Stanley and Bank of America, according to Reuters. Read more.
• Crisis Text Line, a free text-messaging support service for people in crisis, has secured a $23.8 million donation from such individuals as Reid Hoffman, Melina Gates, Steve Ballmer, Mark and Ali Pincus, Craig Newmark and Pierre Omidyar. Read more.
• Envision Healthcare Holdings Inc. (NYSE: EVHC) has agreed to merge AmSurg Corp. (Nasdaq: AMSG) in an all-stock deal that will create a $10 billion physician and medical services company. Read more.
• FireEye (Nasdaq: FEYE) recently rejected takeover offers from Symantec (Nasdaq: SYMC) and at least one other suitor, according to Bloomberg. The cybersecurity company currently is valued at around $2.67 billion. Read more.
• Munich Re said that it will seek a buyer for primary insurer Great Lakes Australia, as it plans to refocus its Australia and New Zealand business on reinsurance. Read more.
• Tencent is progressing in its talks to acquire a majority stake in Supercell, the Finnish gaming company whose titles include Clash of Clans, according to Reuters. Supercell is currently majority-owned by Softbank, and could be valued at more than $9 billion. The WSJ had first reported on the talks earlier this year. Read more.
FIRMS & FUNDS
• 1315 Capital, a Philadelphia-based growth equity firm focused on the healthcare space, has closed its inaugural fund with $200 million in capital commitments. The firm is led by Adele Oliva (ex-Quaker Partners, Apax) and Michael Kolby (ex-Palm Ventures). www.1315capital.com
• FirstMark Capital of New York has raised $275 million for its fourth flagship venture capital fund, and another $205 million for a new opportunities fund. Read more.
• Silver Rock Financial has raised more than $500 million for a new hedge fund focused on high-yield bonds and distressed debt, according to Bloomberg. The firm is led by Carl Meyer, the former chief investment officer for Michael Milken’s family office. Read more.
MOVING IN, ON & UP
• Stephen Jacobs has joined Herrick, Feinstein LLP as a partner and co-chair of the law firm’s corporate department. He most recently was with Spectrum Group Management, a distressed credit and real estate investment firm, as COO, general counsel and chief compliance officer. www.herrick.com
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