The Strand 🌴 - April 28, 2019
Uber aims to price IPO at $44 to $50 per share, some PE firms are asking for a bigger cut of investment profits, Masayoshi Son lost $130M on bitcoin, and Tesla reports losses of $700M in Q1.
|Apr 29, 2019|
Welcome to the thirty-second edition of The Strand, a weekly-ish newsletter covering venture capital, private equity, and general business news from around the Los Angeles area. My name is Brendan Boken, a native of Southern California. Feel free to connect with me on LinkedIn, send deals/news to firstname.lastname@example.org.
Venture Capital Funding
Astound, a 2.5-year-old, Menlo Park, California-based company that sells automated employee help desk services, has raised $15.5 million in new funding led by Santa Monica-based March Capital Partners. Previous investors including Vertex Ventures, Pelion Venture Partners, Moment Ventures, and the Slack Fund also joined the round. TechCrunch
Embrace, a three-year-old, Culver City, California-based startup that produces automated analysis of every user session within apps, has raised $4.5 million in funding led by Pritzker Group Venture Capital, with other investors in the round including Greycroft and Vy Capital. TechCrunch
Happy Returns, a 3.5-year-old, Santa Monica, California-based startup whose technology helps online and omni-channel retailers with the customer returns process, has raised $11 million from PayPal. Earlier investors including USVP and Santa Monica-based Upfront Ventures also participated in the round. Los Angeles Business Journal
Private Equity Funding
No Los Angeles-based companies or investors were involved in private equity transactions this past week.
Liquidity / Exits / M&A
No Los Angeles-based firms announced new funds this past week.
Beyond Meat, a nearly 10-year-old, El Segundo, California-based company that makes plant-based alternatives to meat, set terms for its IPO this past week. The company expects to raise up to $183.3 million and be valued at $1.21 billion. Shares will originally price at $19 to $21 per share and the company will list on the NASDAQ. TechCrunch
On The Move
Perry Leon left Platinum Equity to become an investor with Beverly Hills-based ROCA Partners. Roca Partners
Factual, a location data company the world’s most valuable brands and technology companies trust to understand and intelligently grow their businesses, is hiring a Chief People Officer in the company’s greater LA office.
News, Resources, & Required Reading
All in: Here’s how product pros at 3 LA tech companies keep their teams excited and engaged. Built in LA
An inside look at how Series A and seed rounds have ballooned in recent years. TechCrunch
Big data, big deal: Here’s the real-world impact data makes at 4 LA tech companies. Built in LA
How the Kleiner Perkins Empire Fell. Fortune
Less than a month after rebranding as Canoo, the Los Angeles-based electric vehicle company formerly known as Evelozcity is on the hunt for $200 million in new capital. The startup, which is backed by a number of private individuals and family offices hailing from China, Germany, and Taiwan, has brought on a number of new hires recently, including a former Uber executive as well as the former manufacturing chief at BMW. TechCrunch
Per a Financial Times story, some big-name private equity firms are asking for a bigger cut of investment profits. Funds at Altor, Bain Capital, The Carlyle Group, EQT Partners, Eurazeo, and Vista Equity Partners are now implementing a 30% carry structure, rather than the 20% structure which has been the norm in PE for several years. This is partly happening because PE returns have been strong, giving general partners more negotiating leverage over prospective limited partners. Axios Pro Rata
Post-IPO, Lyft launches driver councils in 45 cities - including Los Angeles. Built in LA
SoftBank founder Masayoshi Son lost $130 million on a large personal investment in bitcoin. Son made the investment in late 2017 at the recommendation of a well-known bitcoin booster, whose investment firm SoftBank bought that year, according to people familiar with the matter. Wall Street Journal
Tesla reported earnings this past week, including a loss of $702 million, or $4.10 a share, due to lower-than-expected delivery numbers, rising costs, and pricing changes to Tesla vehicles. CEO Elon Musk had warned earlier this month that the company expected first-quarter profits to be negatively affected by lower than expected delivery volumes as well as several pricing adjustments. The results reported Wednesday follow two consecutive quarters of profitability that were fueled by sales of the Model 3. TechCrunch
Uber updated its S-1 this past week to reveal a price range of $44 to $50 per share. The ride-hailing company plans to sell 180 million shares, so a midpoint pricing would raise around $8.46 billion and reportedly result in a valuation somewhere in the range of $80 to $90 billion, much lower than the originally reported possible valuation of $100 to $120 billion. The updated filing also includes some other updates, including Uber estimating a loss of between $1 billion and $1.1 billion for 1Q 2019, after reporting a $1.8 billion loss for all of 2018. Pitchbook
Take a Break
A recap of the 2019 NFL Draft, including analysis for every-first round pick from Kyler Murray to N’Keal Harry.
GQ’s Best New Restaurants in America for 2019.
You can have breakfast at Tiffany’s in Los Angeles next month.