Axios Pro Rata: Square buys now (will pay later)

Plus: Crypto's infrastructure fight | Monday, August 02, 2021

Open in app View in browser   Presented By Fidelity   Axios Pro Rata By Kia Kokalitcheva ·Aug 02, 2021 Welcome back, readers! As previously mentioned, Dan is spending the next two weeks on an island, so I'll be steering this ship in his absence. As usual, send thoughts and scoops to kia@axios.com (or hit reply to this email), or on Twitter at @imkialikethecar. Let's get into it...     Top of the morning Illustration: Sarah Grillo/Axios   It's finally "Infrastructure Week" (or month? Summer??) and Congress is hammering out the details of a $1 trillion bill inching closer to the finish line. But one area that could face unpleasant consequences from the bill is cryptocurrencies. Why it matters: Nearly $30 billion in taxes from cryptocurrency transactions, as part of the bill's "pay-fors," is at stake. Driving the news: In an updated text of the bill, senators have narrowed the definition of "brokers" that would fall under the new transaction reporting requirements, but it's still not specific enough, according to industry insiders. The new version defines a broker as "Any person who (for consideration) is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person." The worry is that even the new definition still doesn't explicitly (or more clearly) exclude parties like miners, node operators, and software developers. "Such a requirement is essentially forcing miners, lightning nodes, etc., to identify others on the network," Coin Center executive director Jerry Brito tweeted. "Not only is this nonsensical from a technical perspective, such a mandate would very likely be unconstitutional surveillance." Between the lines: This is yet another example of the cryptocurrencies only getting attention from lawmakers when they want something. The industry has been clamoring for clearer regulations and laws, and a slew of bills have emerged over the years, but things today are far from a neat and comprehensive set of rules. Moreover: While many a hearing on the topic has included dramatic accusations by lawmakers that cryptocurrencies are only used by criminals or "a crock," the current situation shows that more members of Congress should have a solid understanding of how things work. The industry's got a few champions in Congress, but it can't be comfortable knowing that most don't understand its fundamentals, or don't even want to. What's next: Senators will now begin a dayslong amendment process—so there's still an opportunity for the cryptocurrency industry to get the tweaks it wants.     The BFD Illustration: Brendan Lynch/Axios   Square has agreed to acquire Afterpay, an Australian company in the "buy now, pay later" (BNPL) category, for $29 billion. Why it's the BFD: This is Square's second big-ticket acquisition this year (after Tidal), showing that it's not shy when it comes to bold moves to expand its business lines. Details: Square is paying a premium of about 30% over Afterpay's closing price on Friday, though still below the company's all-time high of A$160 per share. Also: Multiple sources tell Axios' Dan Primack that Square didn't reach out to Affirm, another buzzy BNPL company. The bottom line: "'There's a lot of growth occurring in this shift away from credit to debit, and it's due to the fact that we've flipped the model on its head,'" Afterpay co-founder Nick Molnar told the NY Times. "The banks' credit model 'doesn't work,' he said. 'The incentive is the opposite of how we built our product, which is to charge the retailer a small fee instead of making our money from the consumer.'"—Lauren Hirsch, NYT     Venture Capital Deals 🚙 Bolt, an Estonian ride-hailing company, raised $713 million in new funding at a $4.75 billion valuation from Sequoia Capital, Tekne Capital, Ghisallo Capital Management, G Squared, D1 Capital and Naya. http://axios.link/1lTK • Unacademy, an Indian online learning platform, raised $440 million in Series H funding at a $3.44 billion valuation led by Temasek, with Mirae Asset, SoftBank Vision Fund 2, General Atlantic, Tiger Global, Deepinder Goyal, Ritesh Agarwal, and others also participating. http://axios.link/SVIq • iCapital Network, a New York City-based financial technology provider, raised $440 million in new funding led by Temasek, with Owl Rock, MSD Partners, and others also participating. http://axios.link/A31R • Movile, a Brazilian tech investment group and holding company, raised about $194 million in new funding from Prosus. http://axios.link/Qgtj 🐶 Modern Animal, a Los Angeles based veterinary company, raised $75.5 million in Series A and Series B funding, led by True Ventures and Addition, and Founders Fund, respectively. http://axios.link/BrHR • Kuda, a U.K. and Nigeria-based digital bank, raised $55 million in Series B funding at a $500 million valuation led by Valar Ventures and Target Global, with SBI and others also participating. http://axios.link/xhtN • MoEngage, a San Francisco-based customer engagement platform, raised $32.5 million in Series C funding led by Multiples Alternate Asset Management, with Eight Roads VEnture, F-Prime and Matrix Partners also participating. http://axios.link/eJQ0 • Xepelin, a Chilean fintech startup, raised $30 million in new funding led by Kaszek Ventures, with Picus Capital, Kayak Ventures, Cathay Innovation, MSA Capital, Amarena, FJ Labs, Gilgamesh Ventures, and several angels also participating. http://axios.link/6tnz • Exoticca, a Spanish tour operator, raised $30 million in Series C funding led by 14W and Mangrove Capital Partners, with Aldea Ventures, Milano Investment Partners SGR and others also participating. http://axios.link/abfb 🐶 Mixlab, a New York-based pet pharmacy partner, raised $20 million led by Sonomya Brands, with Global Founders Capital, Monogram Capital, Lakehouse Ventures, Brand Foundry and others also participating. http://axios.link/qhZR • DoNotPay, a San Francisco-based provider of automated legal services, raised $10 million in Series B funding at a $210 million valuation from Andreessen Horowitz, Lux Capital, Tribe Capital, Day One Ventures, Felicis Ventures, Sam Bankman-Fried, Balaji Srinivasan, Daniel Dines, Jack Newton, Dylan Field, and others. www.donotpay.com • Catch, a NYC-based provider of benefits for independent contractors, raised $12 million in Series A funding led by Crosslink, with Khosla Ventures, NYCA Partners, Kindred Ventures and Urban Innovation Fund also participating. http://axios.link/4en4 • Trading.TV, a New York-based social livestreaming platform for traders and financial content creators, raised $6.1 million in seed funding led by L Catterton Growth, Activant, Navy Capital and Tribe Capital. www.trading.tv • Nektar.ai, a Singapore-based B2B sales software maker, raised $6 million in seed funding led by B Capital Group, with 3One4 Capital and Nexus Venture Partners also participating. https://nektar.ai/ • Revel, a San Francisco based social platform for midlife women, raised $3.5 million in a seed round led by August Capital. It also acquired The Woolfer, an NYC-based social platform for women over 40. www.hellorevel.com • Outvio, an Estonian provider of fulfillment software for online retailers in Spain and Estonia, raised $3 million in new funding led by Change Ventures, with TMT Investments, Fresco Capital, Lemonade Stand, James Berdigans, and Kristjan Vilosius also participating. http://axios.link/w1Ty     A message from Fidelity Going public changes everyone's equity compensation needs     An IPO can affect equity compensation programs for both employers and employees. Learn how Fidelity Stock Plan Services can help you strategize and plan for changes in equity compensation on your journey to, through, and beyond your IPO.     Private Equity Deals • Gryphon Investors acquired Wittichen Supply Company, a Birmingham, Ala.-based wholesale distributor of HVAC/R equipment. www.wittichen-supply.com 🚑 Blue Venture Fund invested in Bluestone Physician Services, a Stillwater, Minn.-based chain of health care providers and backed by WindRose Health Investors. www.bluestonemd.com     Public Offerings • PolicyBazaar, an Indian online insurance aggregator, has filed to go public. It seeks to raise $504 million, with an additional $305 million offered via shares sold by existing investors like SoftBank. http://axios.link/iwsI • Southern States Bancshares, an Alabama-based bank, plans to raise $40 million in its IPO. http://axios.link/vDf8 🚙 Clarios, a Milwaukee-based car battery maker, postponed its $1.8 billion IPO on Thursday due to market conditions. http://axios.link/k5GI 🚑 ​​Eliem Therapeutics, a Redmond, Wash.-based Phase 2a biotech company developing therapies for neuronal excitability disorders, announced it plans to raise $81 million by offering 4.5 million shares at a price range of $17 to $19, with a fully diluted market value of $464 million at the mid-point. It plans to list on the Nasdaq under the symbol ELYM. SVB Leerink, Evercore ISI, Stifel, and Guggenheim Securities are the joint bookrunners on the deal. http://axios.link/dZWz 🚑Adagio Therapeutics, a Waltham, Mass-based Phase 1 biotech company developing antibody therapies for COVID-19 and other infectious diseases, announced it plans to raise $301 million by offering 17.7 million shares at a price range of $16 to $18, with a fully diluted market value of $2.0 billion at the midpoint. It plans to list on the Nasdaq under the symbol ADGI. Morgan Stanley, Jefferies, Stifel, and Guggenheim Securities are the joint bookrunners on the deal. http://axios.link/TcmL     SPAC Stuff • Waverley Capital Acquisition 1, a blank check company formed by Waverley Capital, lowered the proposed deal size for its upcoming IPO on Monday, from offering 30 million $10 units to only 20 million. http://axios.link/SLQB     Liquidity Events 🚑 Abcam agreed to acquire BioVision, a Milpitas, Calif.-based supplier of life science research tools, for $340 million. www.biovision.com • Foot Locker is reportedly acquiring athletic retailer WSS for $750 million and Atmos, a Japan-based streetwear and sneaker store, for $360 million, according to the WSJ. http://axios.link/FcVG     Fundraising • BoxGroup closed two new funds, BoxGroup Five (early stage) and BoxGroup Strive (opportunity fund), each at $127.5 million. Venture partner Greg Rosen is also joining as full partner. www.boxgroup.com     It's Personnel 🚑Edward Liu has left Morgan Stanley, where he was co-head of Americas Technology Banking, to join Zocdoc as its new CFO. www.zocdoc.com     Final Numbers Data: Bureau of Economic Analysis via FRED; Chart: Axios Visuals     A message from Fidelity Get equity plan recordkeeping that supports you-all the way     Can one equity compensation plan provider support you before, during, and after an IPO? Fidelity Stock Plan Services can. Learn how our expertise in equity comp can be your roadmap through changes in equity plan recordkeeping and employee services.   🙏 Thanks for reading Axios Pro Rata! Please ask your friends, colleagues and August babies to sign up. Like this email style and format? Learn more about Axios HQ. It'll help you deliver employee communications more effectively.   Axios thanks our partners for supporting our newsletters. 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