Typically, macro issues like war can spell doom for the IPO market, but Birkenstock is going forward with its initial public offering. On Tuesday, the shoe company raised about $1.5 billion after selling 32.3 million shares at $46 each, the midpoint of its $44 to $49 price range. Birkenstock will open Wednesday on the New York Stock Exchange, under the ticker BIRK. More than 20 investment banks are listed as working on the Birkenstock IPO. Goldman Sachs, along with J.P. Morgan and Morgan Stanley, are lead bookrunners on the deal.

“The outlook is definitely cloudier than it was a few weeks ago,” noted Matt Kennedy, senior IPO strategist at Renaissance Capital, a provider of pre-IPO research, “but I don’t think the [Gaza-Israel] war will totally derail U.S. IPOs.” In September, a trio of well-known companies—Arm Holdings, Instacart and Klaviyo— went public. Instacart is trading below its offer price, while Arm has lost much of its first day gains. Only Klaviyo has risen since its market debut in September. 

The company with the most to gain from a successful Birkenstock IPO? Private equity firm L Catterton. Founded in 1989, L Catterton is led by global co-CEOs J. Michael Chu and Scott Dahnke. The PE firm has made more than 250 investments in consumer brands, including pet food company Canidae, luxury fitness chain Equinox, as well as online beauty products retailer Oddity Tech and Honest Company. The last two have both gone public but are now trading at a big discount.

L Catterton and Financiere Agache acquired Birkenstock in 2021 in a deal Reuters said was valued at about 4 billion euros ($4.35 billion). The transaction included a roughly 3.3 billion euros ($3.49 billion) equity investment, according to an Oct. 4 regulatory filing. Most, or nearly all, of the $3.49 billion equity investment apparently came from L Catterton, which owned 100% of Birkenstock ordinary shares before the IPO.

“Birkenstock is fundamentally a very strong brand that has Ebitda margins of 30%-plus as well as double digit growth,” Kennedy said. Revenue for the shoe retailer has jumped nearly 71% in two years, and the company is also profitable. But Birkenstock is highly leveraged. Debt stood at 1.4 billion euros ($1.5 billion) as of June 30. Birkenstock plans to use proceeds from the IPO to pay off debt. Kennedy does note that of the four major consumer IPOs from this year, which include Oddity, Savers Value Village, Kenvue and Cava Group, all but Cava are trading below their offer prices.

L Catterton is likely to make out well from the Birkenstock IPO, according to Fortune’s calculations. Of the 32.3 million shares sold, about 10.8 million shares are coming from the company, while another 21.5 million are from L Catterton. At $46, L Catterton will make $989 million from the sale of shares. The firm’s remaining stake of 155.6 million shares is valued at about $7.2 billion (at $46 each). This comes to $8.2 billion, most of which are paper gains.

Assuming that all of the $3.49 billion equity commitment came from Catterton, then the PE firm is making about 2.33 times its money right now ($989 million plus $7.2 billion divided by $3.49 billion). Of course, this return could drop if Birkenstock shares don’t trade well. Or it could rise if the stock pops.

After the IPO, L Catterton will see its stake fall to about 80.8%, while Financière Agache, which is controlled by Arnault family group, will have 2%, according to the S-1.

Over the weekend…California Governor Gavin Newsom signed a new law in California that, starting in 2025, will require VC firms to annually survey the companies they backed in the last calendar year, reporting on company founding members’ gender identity, race, ethnicity, disability, and veteran status to the state Civil Rights Department. Portfolio companies will be allowed to opt out of the survey if they choose. “This bill resonates deeply with my commitment to advance equity and provide for greater economic empowerment of historically underrepresented communities,” Newsom said in a statement. —Jessica Mathews

See you tomorrow,

Luisa Beltran
Twitter: @LuisaRBeltran
Email: luisa.beltran@fortune.com
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Joe Abrams curated the deals section of today’s newsletter.

VENTURE DEALS

- Saronic, an Austin, Texas-based developer of autonomous defense ships, raised $55 million in Series A funding. Caffeinated Capital led the round and was joined by 8VC, Andreessen Horowitz, Lightspeed Venture Partners, Point72 Ventures, Silent Ventures, Overmatch Ventures, Ensemble VC, Cubit Capital, and the U.S. Innovative Technology Fund.

- Gutsy, a Baton Rouge, La.-based cybersecurity platform, raised $51 million in seed funding. YL Ventures and Mayfield led the round and were joined by others.

- Cleanlab, a San Francisco-based platform that curates data for AI model training, raised $25 million in Series A funding. Menlo Ventures and TQ Ventures led the round and were joined by Bain Capital Ventures and Databricks Ventures. 

- Formant, a San Francisco, Calif.-based platform for the control and management of robots, raised $21 million in funding. BMW i Ventures led the round and was joined by new investors Intel Capital, GS Futures and previous investors SignalFire, Hillsven, Pelion Ventures, Holman, Ericsson, Goodyear Ventures, PICUS Capital, and Thursday Ventures. 

- Mana.bio, a Tel Aviv, Israel-based drug developer, raised $19.5 million in seed funding from Andreessen Horowitz Bio + Health, Base4 Capital, NFX, LionBird, and Technion.  

- Thread, a Grand Forks, N.D.-based network designed to automatically collect and analyze data, raised $15 million in Series A funding. Badlands Capital led the round and was joined by Minnkota Power Cooperative, Generational Partners, Rosecliff Ventures, Excell Partners, Homegrown Capital, and Wonder Fund North Dakota. 

- Acceldata, a Campbell, Calif.-based data observability platform designed to show companies the health of their data set, raised $10 million in Series C funding from Prosperity Ventures. 

- Vellum Insurance, a New York City-based data management and analytics platform for insurance and reinsurance companies, raised $7 million in seed funding. Acrew Capital led the round and was joined by Flourish Ventures, Fin Capital, Vera Equity, Endurance, and 1 Sharpe Ventures.

- minds.ai, a Santa Cruz, Calif.-based company looking to integrate AI into semiconductor manufacturers, raised $5.3 million in seed funding. Monta Vista Capital led the round and was joined by Momenta and others.

- TransactionLink, a London, U.K. and Berlin, Germany-based builder of digital onboarding and onboarding management platforms, raised €5 million ($5.3 million) in seed funding. White Star Capital led the round and was joined by existing investor Target Global and angel investors.

- Audoo, a London, U.K.-based company that tracks what music is played publically and translates that to royalties for musicians, raised $5 million in new funding from MPL Ventures, Elton John, Bjorn Ulvaeus, and others. 

- Goodwrx, a Las Vegas, Nev.-based shift management platform for the hospitality industry, raised $4 million in Series A funding from Advantage Capital. 

- SOTAI, a Los Angeles, Calif.-based platform designed to help companies train AI to make specific decisions, raised $2 million in seed funding from Four Rivers. 

- Fantix, a New York City-based platform that provides infrastructure for data comparison and training AI models, raised $1.6 million in funding from Gaingels, Notion Capital, Founders Factory, Fastweb, Connect Ventures, and others.

PRIVATE EQUITY

- Adenia Partners acquired a majority stake in Enfin, a Bloemfontein, South Africa-based company that finances solar panel installation. Financial terms were not disclosed.

- BharCap Partners acquired ARMStrong Receivable Management, an Itasca, Ill.-based insurance and corporate debt services provider. Financial terms were not disclosed.

- Bonaccord Capital Partners acquired a minority stake in Revelstoke Capital Partners, a Denver, Colo.-based private equity firm. Financial terms were not disclosed. 

- Huron Capital acquired RK Electric, a Fremont, Calif.-based electrical contractor. Financial terms were not disclosed.

- Robot Morning, backed by AEI HorizonX, acquired Enterprise Solutions Implementation Specialists, a San Diego, Calif.-based supply chain management platform. Financial terms were not disclosed.

- Salt Creek Capital recapitalized Four Wheel Campers, a Woodland, Calif.-based manufacturer of off-road pop-up truck campers. Financial terms were not disclosed. 

- Trafilea, backed by McWin Capital Partners, acquired The Spa Dr., a Park City, Utah-based developer of skincare products. Financial terms were not disclosed.

EXITS

- Apax Partners acquired Bazooka Candy Brands, a New York City-based portfolio of candy brands, from Tornante Company and funds affiliated with Madison Dearborn Partners. Financial terms were not disclosed. 

- Ara Partners acquired Vacuumschmelze, a Hanau, Germany-based producer of magnetic materials, from Apollo. Financial terms were not disclosed. 

FUNDS + FUNDS OF FUNDS

- Warburg Pincus, a New York City-based private equity firm, raised $17.3 billion for their 14th fund.

PEOPLE

- One Rock Capital Partners, a New York City-based private equity firm, hired Christine McClure as operating partner. Formerly, she was with Unispace.

- THL Partners, a Boston, Mass.-based private equity firm, hired Mark Forbis as executive partner. Formerly, he was with Jack Henry & Associate.

Clarification, Oct. 11. 2023: The online version of this newsletter has clarified what Fantix does.