If nothing else, it’s proof why startups find value in offering stakes to strategic investors.

Late last week, Major League Baseball and its players association ended a 70-year deal with Topps that allowed the latter to produce MLB-licensed trading cards and other products. Instead, the MLB chose to hand the deal over to Fanatics, a sports merchandising startup backed by the likes of Silver Lake and SoftBank. 

This deal’s financial importance cannot be understated: After news broke of MLB’s decision to move away from this multi-decade long relationship, Topps’ plan to go public via merger with Mudrick Capital Acquisition II, a SPAC valuing the company at $1.2 billion, collapsed. With a business largely built on trading cards, Topps’ future growth is now unclear, especially after its deal formally ends in 2025.

So how did Fanatics squeeze into a 70-year relationship? Giving the sports organizations a vested interest in seeing Fanatics succeed seemed to have helped. Now valued at about $18 billion, the company offered a stake to the National Football League and MLB for about $150 million in 2017 when the company was valued at about $4.5 billion. Both organizations then added another $100 million in 2020.

Fanatics then offered equity stakes in a new company focused on trading cards to the NFL and MLB’s player unions per the Wall Street Journal. While the MLB and NFL control the rights to logos and trademarks, their player unions dictate the use of players’ images. 

It begins to make sense in that context as to why the MLB would choose Fanatics over Topps for the deal. It may have a 70-year relationship with Topps, but the MLB could also gain a lot more upside by helping Fanatics win in the booming space of sports memorabilia. The MLB has already gotten a taste of what that’s like, having seen the valuation of Fanatics balloon from a few billions to $18 billion over the course of its holding period.

Another way of looking at it? Fanatics has effectively used its equity as a bargaining chip to acquire new lines of revenue. Strategic investors might not be very outspoken in venture capital-backed companies, but for Fanatics at least, it’s already making a big difference in the business.

THE ECONOMICS OF ILLUMINA’S FINE: In an insult to antitrust regulators in the EU and the U.S., biotech company llumina last week completed a cash-and-stock takeover of Grail, a cancer detection business, for $8 billion, despite a lack of regulatory clearance. 

So why run the risk of big fees from regulators? Well, here’s the numbers, from Evercore ISI analysts: Effectively, if the European Commission did not approve the deal, Illumina would have to pay an estimated $300 million breakup fee. Now, it could instead face a $500 million penalty. It appears Illumina decided the fine is likely worth it to avoid further delays from regulators and for the potential market opportunity around Grail’s technology.

Lucinda Shen
Twitter: @shenlucinda
Email: lucinda.shen@fortune.com

Jessica Mathews compiled the IPO and SPAC sections of this newsletter.

VENTURE DEALS

- OPay, an Africa-focused fintech, raised $400 million. SoftBank Vision Fund 2 led the round and was joined by investors including Sequoia Capital China, DragonBall Capital, Redpoint China, Source Code Capital, SoftBank Ventures Asia, and 3W Capital. The deal values it at $2 billion.

- Zepz, a London-based payments company formerly known as WorldRemit, raised $292 million valuing it at $5 billion. Investors include Farallon Capital and existing investors such as Leapfrog, TCV, and Accel.

- QuintoAndar, a Brazilian proptech, raised $300 million in Series E funding. Greenoaks Capital, and Tencent led the round valuing it at $5.1 billion.

- Zetwerk, an Indian marketplace for manufacturing items, raised $150 million in Series E funding. D1 Capital Partners led the round and was joined by investors including  Avenir, IIFL, Greenoaks Capital, Lightspeed Venture Partners, Sequoia Capital, and Accel Partners.

- DEEPEXI, a Chinese data intelligence service, raised $100 million. Guotai Junan Securities and China Industrial International Trust Asset Management led the round.

- Shelf.io, a maker of a platform for customer service, raised $52.5 million in Series B funding. Tiger Global and Insight Partners led the round.

- Balto, a St. Louis Mo.-based contact center tech platform, raised $37.5 million in Series B funding. Stripes led the round and was joined by investors including RingCentral Ventures, Sierra Ventures, TIA Ventures, OCA Ventures, Stage Venture Partners, SaaS Venture Capital, Sandalphon Capital, Cultivation Capital, and Atreides Management.

- Elixiron Immunotherapeutics, a San Francisco-based therapeutics company focused on cancer, neurological diseases, and inflammatory disorders, raised $27 million in Series A-1 funding. Pangu Capital and Taiwania Capital led the round.

- XREX, a Taiwan-based blockchain startup focused on cross-border services, raised $17 million in pre-Series A funding. CDIB Capital Group led the round and was joined by investors including SBI Investment, Global Founders Capital, ThreeD Capital, E.Sun Venture Capital, Systex Corporation, MetaPlanet Holdings, AppWorks, BlackMarble, New Economy Ventures, and Seraph Group. 

- Alerzo, a Nigerian e-commerce startup, raised $10.5 million in Series A funding. Nosara Capital led the round and was joined by investors including FJ Labs.

- Monolith AI, an A.I. software company, raised £8.5 million ($11.7 million) in Series A funding. Insight Partners led the round and was joined by investors including Pentech and Touchstone.

- Urban Sky, a Denver-based high-altitude balloon startup focused on imaging, raised $4.1 million in seed funding. Catapult Ventures and Union Labs led the round and were joined by investors including TenOneTen Ventures, NewStack Ventures, and Techstars.

- Breef, a New York City-based marketplace for finding a marketing agency, raised $3.5 million. Greycroft led the round and was joined by investors including Rackhouse Ventures, The House Fund, John and Helen McBain, Lance Armstrong, and 640 Oxford Ventures.

- Cardiomatics, a Polish health tech startup, raised $3.2 million in seed funding. Kaya led the round and was joined by investors including Nina Capital, Nova Capital, and Innovation Nest.

- Odiggo, an Egypt and Dubai-based auto parts marketplace startup, raised $2.2 million in seed funding. Investors include Y Combinator, 500 Startups, Plug and Play Ventures, Seedra Ventures, LoftyInc Capital, and Essa Al-Saleh (CEO of Volta-Tucks).

- BoardClic, a Swedish company maker of safer for team evaluations, raises a total of €1.6 million ($1.9 million) in seed funding. Subvenio Invest led the round and was joined by investors including Curitas Ventures and Brofund.

PRIVATE EQUITY

- Morrisons (LON: MRW), a British supermarket chain, agreed to a takeover offer from Clayton, Dubilier & Rice valuing it at £7 billion ($9.5 billion).

- A consortium led by KKR & Co will acquire Spark Infrastructure Group, an Australian energy company, for about A$5.2 billion ($3.7 billion).

EXIT

- ​​Adobe (Nasdaq: ADBE) will acquire Frame.io, a New York City-based maker of video collaboration software, for about $1.3 billion in cash. Accel and FirstMark Capital back Frame.io.

- Baring Private Equity Asia will acquire Straive, a Singapore-based outsourcing company, from Partners Group Holding. Financial terms weren't disclosed.

OTHER

- Ampol offered to acquire Z Energy (NZE: ZEL), a New Zealand-based energy company, for about $1.3 billion.

IPOS

- Dutch Bros Inc., a Grants Pass, Or.-based drive-through coffee chain company, filed for an initial public offering. The company generated $327.4 million in total revenue in 2020 and net income of $5.7 million. TSG Consumer Partners backs the firm.

- Definitive Healthcare, a Framingham, Mass.-based healthcare data and analytics company, filed for an initial public offering. The company posted net revenue of $118.3 million in 2020 and a net loss of $51.2 million. Advent International, Spectrum Equity, and 22C Capital back the firm.

- Thoughtworks Holding, a Chicago-based tech consultancy company, filed for an initial public offering. The company posted $803.4 million in revenue in 2020 and net income of $79.3 million. Apax Partners, Siemens AG, and GIC back the firm.

- Tyra Biosciences, a Carlsbad, Calif.-based cancer therapy company, filed for an initial public offering. The company reported a net loss of $9.3 million in 2020 and has yet to post revenue. Alta Partners, RA Capital, and Boxer Capital back the firm.

Vividion Therapeutics, a San Diego, Calif.-based drug development company, withdrew its registration to go public.

- Fruugo, a U.K.-based online marketplace, has selected bankers for a planned IPO in London, per Sky News.

- BYD Semiconductor, a unit of Chinese electric car manufacturer BYD, has had its Chinese IPO delayed due to regulatory probe, per Bloomberg.

SPAC

- Virgin Orbit, a Long Beach, Calif.-based satellite launch company, plans to go public via a merger with NextGen Acquisition Corp. II, a SPAC. A deal would value the company at $3.2 billion.

F+FS

- Blue Owl Capital is in talks to acquire a minority stake in CVC Capital Partners, a European private equity firm, per Bloomberg. A deal would value the latter at about $15 billion.

- Ares Management, the New York City-based private investor, is looking to raise $4 billion for a second fund focused on distressed companies, per Reuters.

- Radial Equity Partners, a New York City-based firm, raised $368 million for its debut fund.

- Goanna Capital, a technology-focused firm founded by former Coatue Management investor Robert Hilmer, is looking to raise at least $250 million for its second technology fund.

PEOPLE

- GTCR, a Chicago-based private equity firm, promoted John D. Kos to managing director.