#270
Shutting It Down

Published:

Jan 12, 2019


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Published:

Jan 12, 2019


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The first half of 2019 was supposed to mark the resurgence of the flashy megatech IPO, with large platforms such as Uber, Lyft, Airbnb, and Slack expected to finally make their public debut. Fintech enthusiasts were also eyeing possible upcoming offerings from TradeWeb, Palantir, and Robinhood.

Unfortunately, these IPOs have become collateral damage to Trump’s month long government shutdown. While all the forms are still up on the SEC website, only 285 of 4,500 employees are currently actively working at the SEC. The IPO delays won’t be temporary either, as the agency will face a serious document review backlog once it's finally back to full operation.

The government shutdown comes at a time when investors were hoping new direct listing rules would create less IPO friction. Messaging app Slack was set to follow in the footsteps of Spotify by doing a direct listing, allowing secondary shares to be priced by the open market and bypassing hefty underwriting fees.

Moreover, the shutdown is affecting other pockets of the capital markets. The flow of key economic data such as agriculture production numbers has stopped, leaving the current state of the American economy nebulous to investors and policymakers.

And even if the POTUS government shutdown nets him the wall, John Oliver is quick to point out that it may not be insurmountable…


Portfolio News


Plaid acquires Quovo - We are proud to have seeded Quovo in April 2014, led the Series A in July 2015 and participated in each round of financing since. Together, Plaid and Quovo are building the infrastructure for the future of digital financial services. Read more

Why MEPs aren't right for all 401(k) plan sponsors - Aaron Schumm, CEO of portfolio company Vestwell, cautions SMEs that multi-employer plans often lack sorely needed customization and can suffer from their fiduciary complexity. Read more

Reonomy welcomes new tech and revenue leadership - Portfolio company Reonomy welcomes new Chief Revenue Office Michael Manne (previously SVP of Sales at Namely), as well as VP of Engineering Bhaskar Maddala and Director of Data Science Maureen Teyssier (previously technical leads at Enigma). Welcome aboard! Read more

2018 year in review - Portfolio company Flutterwave reviews their massive growth in 2018. The company has now processed $2.6b with over 26k businesses over the past 3 years. Bravo! Read more

Where are they now: catch up with 12 of MIT’s smartest startups - Co-founders of Sigma Ratings, Stuart Jones and Gabrielle Haddad, founded their company while at MIT. The Sloan School of Management caught-up with them and other breakout companies here. Read more

Shutting It Down


US government shutdown deprives markets of key data - The information black out is depriving Wall Street, policymakers, and farmers of crucial data about the state of trade and economic production. Read more

Uber and Lyft IPOs could be delayed by the government shutdown - On the fintech front, bond-trading platform Tradeweb also filed confidentially for an IPO that could value it at more than $4b, but the timing may be delayed by the shutdown. Read more

Slack plans to follow Spotify on unconventional IPO route - Slack will be pursuing a direct listing - in which current insiders sell shares in a public offering, but no new capital is raised. The development begs the question of whether this potentially lower friction option will encourage more unicorns to finally go public. Read more

Industry News


Wall Street firms plan new exchange to challenge NYSE, Nasdaq - A group including Morgan Stanley , Fidelity and Citadel plans to launch a new low-cost stock exchange called Members Exchange or MEMX, to challenge the New York Stock Exchange and Nasdaq. Read more

‘Extraordinary’ month heaps further pain on hedge funds - While many in the financial community believe that volatility is good for hedge funds, it's only true if you are on the right side of the trade! Hedge funds finished 2018 down 4% (their biggest decline since 2011). The continued poor performance may foretell continued capital outflows from the industry. Read more

Year in Monzo is giving people the financial reality check nobody asked for - This has generated some super Tweets including: "My #yearinmonzo was just about the most tragic thing I've ever seen. My biggest food spend was McDonalds and my biggest entertainment spend was HayU which I use exclusively to watch the Kardashians." Read more

Insiders say ConsenSys faces a hurdle to 2019 rebound: Joe Lubin’s grip - The massive experiment that was ConsenSys 1.0, with its incubated venture projects or "spokes," is now fully in transition into Consensys 2.0. Yet, the spin out of many of these spokes is potentially being stymied by a lack of a clear decision-making protocol and Lubin's outsized equity ownership in each project. Read more

Bloomberg hits $10b annual revenue, and employees are set to cash in- According to a report published on LinkedIn by analyst Jennifer Miton, the $10b milestone was thanks to the growth of Bloomberg's data and research tools, which outpaced the growth of its terminal revenue in 2018. Read more

Crypto mining giant Bitmain is reportedly getting a new CEO as its IPO plan stalls - The Chinese crypto hardware maker is reportedly laying off over half its staff and replacing its founder-CEO after losing $400m in Q3 (and likely more in Q4) during a prolonged crypto slump and its failed strategic bet on Bitcoin Cash. Read more

Goldman has plans to enter the 'mundane' but hugely lucrative wholesale cash management business - Goldman is considering paying big multinational corporates more for their deposits than other banks - wholesale payments and cash management business generated $250 billion in global revenue in 2017 for big banks. Read more

Activist shareholders score with record moves in 2018 - Activists had a record year in 2018, with 226 companies facing activist campaigns (versus 199 the prior year) and $65b invested in the targets. Read more

Bitcoin philanthropists - One of the BitMEX founders, Ben Delo, became one of the youngest major donors to his alma mater Worcester College at the University of Oxford. Meanwhile Coinbase founder Brian Armstrong has signed the Giving Pledge. Read more

Financings


Bowery Valuation - NYC based commercial real estate appraisal startup has raised a $12m Series A led by Builders VC. Read more

LendingFront - New York based lending-as-a-service platform has raised $4m of Series A funding led by Information Venture Partners. Read more

N26 - German neo-banking startup has raised a $300m Series D led by Insight Venture Partners and GIC. The valuation of the company is now $2.7b. Read more

TaxJar - Massachusetts based sales tax calculator and filer for SMEs has raised $60m of growth equity from Insight Venture Partners. Read more

Vena Solutions - Toronto based financial planning and analysis software startup has raised $115m from JMI and Centana Growth Partners. Read more

Yallacompare - UAE based comparison site for financial products has raised $8m in equity funding from STC Ventures, Wamda Capital, and Argo Ventures. Read more


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