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Carta’s former marketing VP is suing over gender discrimination after spearheading report on unequal pay

Emily Kramer joined the Silicon Valley company Carta to build up the company’s brand. Now, the company’s former VP of marketing is looking to shine a light on Carta for another reason: in a new lawsuit against Carta, which makes equity management software, Kramer accuses the eight-year-old outfit of gender discrimination, retaliation, wrongful termination, and of violating the California Equal Pay Act.

Carta declined an interview request today, saying through a spokesperson that it isn’t commenting because the suit is a “pending legal matter.”  But we spoke earlier this afternoon with Kramer, and she accuses the company of both unfair labor practices and of being disingenuous in its stated “commitment to transparency and equality in equity.”

The equality piece is certainly the bigger of the two issues, by Kramer’s own telling. She says she learned that she was underpaid when, in the summer of  2018, roughly six months after she joined Carta, it partnered with the women-led investment collective #ANGELS to produce a report that highlighted ownership of venture-backed companies’ equity by gender.

The suspicion driving the report  — and later proved out by its findings — is that as with salary, where women continue to earn less than their male peers, they are also given less equity ownership in the startups for which they work. Kramer, who says she spearheaded the effort, posted the report, which included internal analysis that showed that Carta too, was allocating less equity to women than men.

In response, says the report, 40% of the women at Carta received an equity fix, compared to 32% of the men.

Perhaps unsurprisingly, Kramer, the only female executive at Carta at the time, says she discovered she was herself underpaid by $50,000 relative to her peers, and that her original equity grant was just one-third of the same amount of shares paid to comparable employees, who she says were all men.

Indeed, at the crux of her suit against Carta is that equity grant. While on the heels of the report, the company bumped up her pay by $50,000 and provided her nearly 300,000 more stock options in addition to the 150,000 options she was originally provided, it declined to backdate or accelerate the options to account for the previous six months of her tenure.

That might not seem like a big deal. But given Carta’s ever-soaring valuation — it was marked at half a billion dollars when Kramer joined the company and it was more recently assigned a $3 billion valuation by its investors — that’s tantamount to a “significant” amount money, notes Kramer. And she wasn’t about to leave it on the table.

The disparity wasn’t a complete shock to Kramer, who’d previously worked in marketing at Ticketfly, Asana, and Astro Technology (acquired by Slack) . According to her lawsuit, filed by attorney Sharon Vinick, Kramer emailed Carta’s founder and CEO, Henry Ward, when she was initially offered the job, noting that the equity offered was “lower than my expectations.”

According to Kramer, Ward told her that any more equity would be “unfair,” as compensation at her level was uniform for all employees. He also said Carta planned a company-wide review of its salaries and stock options later in the year, and that if it revealed that she was being underpaid, her compensation would be adjusted.

Clearly, Ward and Kramer have different views on whether or not that ultimately happened.

In our call with Kramer, she said still believes in the company’s mission to make equity more understandable for its users. She declined to say whether she has exercised any of her shares, but she said that Carta gives its employees a longer window to do this than many other startups. (How much time is is based in part on their tenure with the company, she’d added.)

Kramer also said that she hopes the company can “live up to” how it markets itself externally, as an ally of women who are paid less for the same amount of work.

Kramer says her experience inside of Carta — which still has an exclusively male board of directors —  was not of a company that values women as much as men. She alleges that not only was she the only woman who reported directly to Ward during her tenure,  but that two other VP-level execs who joined at roughly the same were promoted to C-level positions despite having “less, and less relevant” work experience in their respective fields, whereas her efforts to be promoted went nowhere. (Asked if there were other VP-level male colleagues who were also not promoted during the same period, Vinick said that no one at the time had a comparable role to Kramer, who grew to oversee 27 other people.)

Kramer adds that she stopped being included in meetings where a marketing head would normally be included, fundraising meetings among them, and believes that her efforts to remedy what she perceived as a “sexist culture” within the male-dominated company were at the root of all of these developments.

Eventually, Kramer says, she felt she was forced to resign after a meeting with Ward turned heated and he said Kramer was in violation of the company’s “no asshole policy.” When she wrote him two days later to quit, he wrote back within eight minutes, accepting her resignation and suggesting that they both might learn from their experience working together.

Vinick, Kramer’s attorney, tells us Carta is being sued for emotional, punitive, and economic distress and says that now that her law firm has filed the suit, Carta will be served officially with the complaint within another week or two, at which point the discovery process can begin.

Carta does not ask its employees to sign arbitration clauses in their employment agreements, so unless it settles with Kramer or a judge finds some reason to dismiss the case, it could eventually head to trial.

In the meantime, the decision to sue is a big gamble for Kramer, but Vinick says she is proud of her client. “Standing up to these situations is an extraordinarily difficult and potentially career-limiting move to take,” but will ultimately help “shine a light on the problem of this equity gap.”

Carta has raised more than $600 million from investors to date, including Andreessen Horowitz, Lightspeed Ventures, and Goldman Sachs. In April, as it was sealing it up its newest round of funding, it also conducted its first major layoff, parting ways with 161 employees.

At the time, Business Insider spoke with eight former employees and one investor who described Carta as a “quickly changing company with huge vision but little focus, where hiring and hypergrowth” had become its core priorities.

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China Roundup: Mega trade fair goes online, anti-China sentiment hobbles developers

Hello and welcome back to TechCrunch’s China Roundup, a digest of recent events shaping the Chinese tech landscape and what those events mean to people in the rest of the world. This week, we are seeing the backlash Chinese tech companies face around the world as anti-China sentiment escalates. In China, one of the world’s largest trade fairs kicked off, virtually.

China tech abroad

Boycotting Chinese tech  

Chinese apps are facing major challenges in India after an app named Remove China Apps that made it easy for users to delete China-related services went viral. Though Google has pulled the app, anti-China sentiment will likely haunt Chinese apps in India as political tensions between the countries heighten. Several Indian celebrities in recent days have supported deleting Chinese apps. Yoga guru Baba Ramdev tweeted a video over the weekend that showed him deleting several apps with an affiliation with China.

Decoupling from Chinese tech might not be easy in practice. Four out of the top five smartphone brands in India are Chinese, according to Counterpoint data, three of which belong to the enigmatic BBK Electronics group based in Shenzhen. These Android phones normally come bundled with a suite of Chinese utility apps, so users would have to find alternatives were they to abandon the Chinese options.

Indian smartphone shipments market share (Counterpoint)

China tech back home

Tencent Cloud powers mega trade show

The coronavirus outbreak is prompting people to bring everything online — including mega-size trade shows. This week, Tencent announced that it will provide technological infrastructure to digitize China’s oldest and biggest trade fair Canto Fair, which was postponed due to the coronavirus and later rescheduled to run virtually from June 15 to 24.

The project is no small feat for Tencent. Last year, the trade show, which took place in China’s major trade city Guangzhou, attracted just below 200,000 buyers with turnover reaching nearly $30 billion.

The social networking and gaming giant, which has a growing cloud unit, will deploy more than 1,300 acceleration nodes across some 30 countries to handle the traffic of several hundred thousand exhibitors and buyers (1,100 of these acceleration nodes will be in China).

The virtual system will support essential trade show functionalities such as matchmaking between exhibitors and buyers, product demonstrations through videos and interactive live streaming.

The project will also acquire users for Tencent’s enterprise-facing services, which have become the giant’s new growth focus. For instance, Tencent Meeting, a Zoom equivalent, can host up to 300 participants per session. The app is currently the most downloaded iOS “business” app in China, according to App Annie.

ERP startup Jushuitan raised $100 million

Jushuitan, a six-year-old Shanghai-based startup focused on ERP (enterprise resources planning) tailored to e-commerce, announced completing a $100 million Series C round led by Goldman Sachs. While China’s consumer-facing internet companies are in many ways on par with their American counterparts, the country is still “5-10 years behind in the area of enterprise software,” stated Sun Mengxi, managing director at Goldman Sachs.

The firm’s software-as-a-service solutions have served more than 500,000 e-commerce clients in China, but it’s looking for overseas expansion — which will use some of the proceeds from this round of funding. The fresh capital will also help upgrade the Jushuitan’s products and services, work on its integration into supply chains, as well as allow it to invest in or acquire other companies.

Jushuitan is betting on the need for digitization in China’s massive online retail industry, which has seen exponential growth since the early 2010s. Chief executive and founder Luo Haidong contended in a previous interview that the “watershed” in Chinese e-commerce happened around 2013-2014.

“When e-commerce first emerged, stores were able to sell all their inventory as long as they managed their orders well. But as the number of stores increased and growth slowed after 2014, there was a greater need to improve management. I clearly felt that the market was calling for an integrated system to manage orders, warehouses and supply chains — that gave Jushuitan a great opportunity.”

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Zipline begins US medical delivery with UAV program honed in Africa

Drones are being deployed in the fight to curb COVID-19 in the U.S.

Novant Health and California based UAV delivery startup Zipline have launched distribution of personal protective gear and medical equipment in North Carolina.

Novant is a non-profit healthcare provider with a network in the Southeastern United States.

Through the partnership, Zipline’s drones will make 32 mile flights on two routes between Novant Health’s emergency drone fulfillment center in Kannapolis to the company’s medical center in Huntersville, North Carolina — where front line healthcare workers are treating coronavirus patients.

Zipline and Novant are touting the arrangement as the first authorized long-range drone logistics delivery flight program in the U.S. The activity has gained approvals by the U.S. Federal Aviation Administration and North Carolina’s Department of Transportation — though the FAA offered TechCrunch nuanced guidance on how it classifies the undertaking.

The story behind the Novant, Zipline UAV collaboration has a twist: the capabilities for the U.S. operation were developed primarily in Africa. Zipline has a test facility in the San Francisco area, but spent several years configuring its drone delivery model in Rwanda and Ghana.

Co-founded in 2014 by Americans Keller Rinaudo, Keenan Wyrobek and Will Hetzler, Zipline designs its own UAVs, launch and landing systems and logistics software for distribution of critical medical supplies.

The company turned to East Africa in 2016, entering a partnership with the government of Rwanda to test and deploy its drone service in that country. Zipline went live with UAV distribution of life saving medical supplies in Rwanda in late 2016, claiming the first national drone-delivery program at scale in the world.

Zipline co-founder Keller Rinaudo (L) with Rwandan President Paul Kagame (Middle) in 2016

The company expanded to Ghana in 2016, where in addition to delivering blood and vaccines by drone, it now distributes COVID-19 related medication and lab samples.

Based on its Africa operations, Zipline was selected by regulators to participate in medical drone delivery testing in the U.S. in 2016, in coordination with the FAA.

The company’s Africa business also led to its pandemic response partnership with Novant Health. The North Carolina based company was in discussion with Zipline on UAV delivery before the coronavirus outbreak in the U.S., but the crisis spurred both parties to speed things up, according to Hank Capps, a Senior Vice President at Novant.

That included some improvisation. For its current launch site the operation is using space donated by a local NASCAR competition team, Stewart-Haas Racing.

According to Capps, the current collaboration using drones to deliver medical supplies from that site could grow beyond the 32 mile route Zipline and Novant began flights on last Friday.

“Right now we plan to expand it geographically within our footprint, which is fairly large within North Carolina, South Florida, and Virginia,” he told TechCrunch on a call.

That, of course, will depend on regulatory approval. The FAA granted Novant Health permission to operate the current program — which the FAA classifies as a distribution vs. delivery operation — through a 107 waiver. This rolls up into the evolving federal code on operation of unmanned aircraft in the U.S. and allows Novant and Zipline to operate “until Oct. 31, 2020, or until all COVID-related restrictions on travel, business and mass gatherings for North Carolina are lifted, whichever occurs first,” according to the FAA. The U.S. regulatory body also stipulated that “Part 107 is a waiver, not a drone licence.”

The FAA offered cautious confirmation that the Zipline, Novant partnership is the first approved long range unmanned delivery service in the United States.

“I am not aware of any that are flying routes as far as what they are doing in North Carolina, but I try to be careful when talking about firsts,” an FAA spokesperson told TechCrunch.

Last month UPS and CVS announced a shorter range drone delivery program of prescription drugs to a retirement village in Florida.

Image Credits: Novant Health

The arrangement between Zipline and Novant is not for financial gain — according to both parties — but still supports Zipline’s profitability thesis advanced by co-founder Keller Rinaudo.

“Healthcare logistics is a $70 billion global industry, and it’s still only serving a golden billion on the planet,” he told me in a 2016 interview.

On a recent call, Rinaudo noted the startup is generating income on operations to serve that market, through the company doesn’t release financial data.

“At the distribution centers that have been operating for more than a year, Zipline is making money on the deliveries that we do,” he said.

Rinaudo pointed to the more favorable margins of autonomous delivery using small, electric powered UAVs versus large internal combustion vehicles.

“I think that these kinds of services are going to operate, much more profitably than traditional logistic services,” he said.

Zipline sold investors on that value proposition. The company has raised (a reported) $233 million in VC from backers including Andreeson Horowitz and Goldman Sachs. Zipline intends to expand its drone delivery business in the U.S. and anywhere in the world it finds demand, according to its CEO.

In addition to partner Novant Health, Zipline has caught the attention of big logistics providers, such as UPS — which has supported (and studied) the startup’s Africa operations back to 2016.

The Zipline, Novant launch of UAV delivery of medical supplies in the U.S. is a high-point for the thesis that Africa’s tech ecosystem — which has become a hotbed for VC and startups — can produce innovation with global application.

The presidents of Rwanda and Ghana  — Paul Kagame and Nana Akufo-Addo — were instrumental in supporting Zipline’s partnerships in their countries. Other nations on the continent, such as Kenya, South Africa, and Zambia, continue to advance commercial drone testing and novel approaches to regulating the sector.

Image Credits: HHP/Harold Hinson

For all the talk that COVID-19 may force an isolationist shift across countries, the Zipline, Novant Health partnership is very much a globally incubated solution — applied locally in the U.S. — to an international problem.

The program combines a medical drone delivery startup founded in San Francisco with a model tested in Africa to an American healthcare venture in North Carolina, with a little help from a NASCAR race team. This could reflect the unique application of tech and partnerships to come in the fight against COVID-19.

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Novastar Ventures becomes $200M African VC fund after $108M raise

African startups have another $100 million in VC to pitch for after Novastar Ventures’ latest raise.

The Nairobi and Lagos based investment group announced it has closed $108 million in new commitments to launch its Africa Fund II, which brings Novastar’s total capital to $200 million.

With the additional resources, the firm plans to make 12 to 14 investments across the continent, according to Managing Director Steve Beck. He spoke to TechCrunch on Novastar Ventures’ plans for the new fund.

A notable update to Novastar’s VC focus is geographic scope. The firm was originally co-founded in Kenya by Beck and British investor Andrew Carruthers and built its first portfolio largely around companies based in East Africa. Novastar Ventures made 15 investments with its first fund, including companies such as Uganda and Kenya focused energy startup SolarNow and agtech venture M-Farm.

“The second fund is basically the same strategy as the first, but…the biggest difference is that we opened up a second front in West Africa — more particularly to be in and around the entrepreneurial system in Lagos,” Beck told TechCrunch on a call.

Before closing its Africa Fund II, Novastar Ventures had already made several investments in West Africa, including leading a round in Nigerian on demand motorcycle transit startup Max.ng in and backing Ghanaian health company, MPharma. Novastar opened an office Lagos in 2019.

On the types of startups Novastar will target with its new fund, the focus is more on mission than industry silos, according to co-founder Steve Beck. “We’re sector agnostic. I would describe us more as a segment fund than a sector fund,” he said.

“We really try to look for businesses called breakthrough businesses, [those] that are addressing the biggest problems in the largest markets.”

That has led Novastar Ventures to invest in digital companies in education, information access, agtech, mobility and off-grid energy.

“Essentially what we’re doing is looking for those businesses that are addressing the basic needs, basic goods and services across the true mass markets of the continent,” said Beck.

On whether the firm is a dedicated impact fund, Beck said, “The way we characterize ourselves is we’re a commercial venture fund with an impact screen.”

On investment amounts and types, Novastar Ventures is fairly flexible on ticket size, from seed to later stage.

“We’re gonna…have some portfolio companies where we put to work a million dollars or less or were going to have some where we put $8 or $9 million dollars in through capital rounds. That’s…the deployment strategy,” Beck said.

Novastar Ventures maintains a close relationship with its portfolio companies, according to its co-founder.

“We’re very active investors and always take a board seat to be close to the entrepreneurs. We often are the first institutional investor that they have.”

Image Credits: TechCrunch

Startups who want to pitch to the company can reach out to fund’s founders and directors via the website or LinkedIn, according to Beck. He added that Novastar Ventures is recruiting to add another member to its investor team in 2020.

The firm’s latest raise and $200 million capital amount creates another high value fund focused on African startups.

On the high end of estimates, the continent’s tech ecosystem reached $2 billion in VC to startups in 2019, compared to less than half a billion dollar five years ago.

Other large Africa focused VC shops include TLcom Capital — which closed a $71 million fund in February —  and Partech, which doubled its Africa fund to $143 million in 2019. The venture arms of major global companies have also become more active in Africa recently, including that of Goldman Sachs and Visa.

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Latin America Roundup: Big rounds, big mergers and a $3.8M pandemic fund from Nubank

Despite the global panic caused by the current pandemic, startups in Latin America have continued to attract international capital. In April, Mexico’s Alphacredit, Colombia’s Frubana and Brazil’s CargoX were among those that raised particularly large rounds to support their growth during this challenging time. All three companies target markets that may have grown since the start of the pandemic, namely lending, food delivery and cargo delivery, respectively.

Alphacredit, a Mexican lending startup, raised a $100 million equity round from SoftBank and previous investors to continue to expand its digital banking services across Mexico. This round comes just months after the startup received a $125 million Series B round from SoftBank in January of this year. Alphacredit’s CEO explained that the round would enable the company to help clients during the current liquidity crisis, increasing financial inclusion in Mexico.

Meanwhile, fresh produce delivery platform Frubana raised a $25 million Series A led by GGV and Monashees, with support from SoftBank, Tiger Global and several other private investors. The startup delivers fresh produce to restaurants and small retailers directly from farmers across Colombia, and participated in Y Combinator in 2019.

Frubana has seen a boom in demand for its products since the start of the COVID-19 pandemic. People have shied away from visiting large grocery stores, preferring to visit local mom-and-pop shops that receive the startup’s deliveries. Frubana raised $12 million in mid-2019 to help scale into Mexico and Brazil after it hit a monthly growth rate of 50% in the Colombian market. The startup’s founder, Fabián Gomez, started Frubana after serving as head of Expansion at Rappi, one of Latin America’s fastest-growing startups and Colombia’s first unicorn.

Finally, Brazil’s “Uber for Trucks,” CargoX raised an $80 million Series E round led by LGT Lightstone Latin America, with contributions from Valor Capital, Goldman Sachs and Farallon Capital. The startup has quietly grown to become one of the largest players in Brazil’s inefficient trucking industry, managing a fleet of nearly 400,000 truck drivers, without owning a single truck.

This investment brings CargoX’s total capital raised to $176 million and has enabled the company to launch a $5.6 million fund for the delivery of essential goods in Brazil during COVID-19. This fund will help CargoX keep drivers employed and ensure the proper delivery of essential goods like medication, food and cleaning products.

Nubank launches $3.8 million COVID-19 fund to support clients

Brazil’s largest neobank, Nubank, announced a $3.8 million (R$20 million) fund to help its clients survive the current pandemic. The fund also relies on partnerships with iFood, Rappi, Hospital Sírio-Libanês and Zenklub to help struggling clients access food, supplies, medical care and online psychological treatment throughout the pandemic.

Nubank will use the fund to grant credits to people who cannot leave their home, providing them with discounted groceries and free delivery service. Through the partnership with Hospital Sírio-Libanês, the neobank will pay for more than 1,000 free online consultations with doctors for its home-bound clients.

Nubank has more than 20 million clients across Brazil and Mexico, where it launched in 2019. CEO David Velez stated that he believed the fund could serve tens of thousands of people in need by the end of April. Customers who wished to receive these benefits were directed to reach out to Nubank via phone, email or chat to be connected with a representative who could grant the appropriate credits.

iFood merges with Domicilios to fight Rappi in its home territory

Brazil’s largest food deliverer, iFood, recently announced a partnership with Delivery Hero to merge with their Colombian subsidiary, Domicilios. The parties did not disclose the price of the deal but have shared that iFood is now the majority shareholder in Domicilios, holding 51% of the company.

IFood operates in Mexico and Colombia, as well as Brazil, but has struggled to gain traction in Spanish-speaking Latin America. This merger makes iFood geographically the largest food delivery company in the country, with more than 12,000 restaurants in its network. However, local last-mile delivery startup Rappi continues to dominate the market, using SoftBank backing to blitzscale across the region.

By comparison, iFood has focused on developing its technology, using artificial intelligence to improve the user experience across its platforms in Mexico, Colombia and Brazil. Using these systems, iFood processes more than 26 million deliveries each month, helping restaurants across the region adapt to the new protocols caused by the virus and social-distancing policies. IFood hopes the merger will help provide a more competitive delivery service for Colombians, as well as helping boost growth for local restaurants.

News and Notes: Nuvocargo, Kueski, Magma Partners, SouSmile

Freight-forwarding startup Nuvocargo raised $5.3 million in seed funding to support the growth of its trade routes across the U.S.-Mexico border. Founded by Ecuadorian-born Deepak Chhugani in 2018, Nuvocargo has grown quickly since participating in Y Combinator, although this funding was their first institutional round. The round drew investors from both sides of the border, including Mexico’s ALLVP. Nuvocargo also marks the first investment by new partner Antonia Rojas Eing. Nuvocargo is working hard to ensure its truck drivers are safe as they continue to deliver essential supplies across the border through the pandemic.

Mexican online credit platform Kueski announced that it would lay off employees due to the economic crunch caused by COVID-19. Kueski provides microloans to more than 500,000 Mexicans and has been struggling financially as business slows during the pandemic. While Kueski did not disclose an official number, it is estimated that they laid off around 90 employees.

Latin American venture capital firm Magma Partners acquired Guadalajara-based accelerator Rampa Ventures to intensify its investments in Mexico. Rampa’s headquarters will serve as a Mexican base for Magma Partners as it continues to invest in the country, where it already has 12 startups in its portfolio. As a part of the deal, Rampa’s founder Mak Gutierrez will take over as CEO of Magma Partners’ internal agency, Magma Infrastructure, which helps startups grow and market themselves in the region.

The Brazilian direct to consumer dental tech startup SouSmile raised a $10 million Series A this month, closing the deal before investors began to show concerns about COVID-19. SouSmile uses 3D scanners to rapidly create invisible alignment devices for customers to provide them with affordable orthodontics for 60% cheaper than current models. This model has proved highly successful in Latin America, where access to orthodontics is quite low and cost-prohibitive.

Despite an impending global economic crisis, startup investment in Latin America showed signs of resilience in April. Startups in industries like delivery, healthcare and essential services have seen growth this month, and many are providing support to their customers and suppliers in this challenging time.

It is hard to predict what the world will look like for startups, let alone for anyone, by the end of next month. The resilience of Latin America’s startups provides hope that some businesses will bounce back and continue to support their customers throughout the global recovery from this pandemic.

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M&A wrap: Clearlake, JPMorgan, Goldman Sachs, Coronavirus, W20, Autodesk, M&A Mid-Awards

Clearlake Capital has raised its sixth private equity fund at $7 billion, raising the firm’s total assets under management to about $18 billion. Clearlake focuses on the consumer, industrials and technology sectors. “The Clearlake strategy has positioned our firm to take advantage of defensive growth as well as turnaround opportunities in this market,” says Clearlake co-founder Behdad Eghbali. “These are extraordinary times, and we believe our team is well-prepared to support existing portfolio companies as well as source new platforms as we invest this new fund.” In 2019, Clearlake raised its second non-control middle-market fund at $1.4 billion. “In this dynamic market, we believe our experience, focus, and flexibility will allow us to partner with more exceptional management teams as we build lasting value for our platforms and limited partners,” adds Clearlake co-founder José E. Feliciano. Credit Suisse Securities (USA) LLC served as Clearlake’s placement agent on the latest fundraise and Kirkland & Ellis LLP provided legal advice.

In the challenging times we face now, it’s more important than ever to come together as a community and recognize the people and companies that excel and lead. We invite you to join us in honoring the 2019 winners of Mergers & Acquisitions’ M&A Mid-Market Awards. In contrast with the volatile coronavirus-driven conditions unfolding in 2020, the dealmaking environment of 2019 was remarkably stable. Among the PE firms benefitting from the auspicious fundraising climate was Vista Private Equity, which raised a $16 billion fund – the largest technology-focused PE fund ever raised. Mergers & Acquisitions is honoring Vista founder and CEO Robert F. Smith with our 2019 Dealmaker of the Year Award. In addition to leading his firm’s unprecedented fundraising, Smith excelled in philanthropy. When he spoke at the commencement of Morehouse College, he announced he would pay off all the student loans of the HBCU’s 2019 graduates, providing a helping hand in the student debt crisis facing many U.S. families. The financial services sector saw a lot of consolidation in 2019. Piper Jaffray wins our 2019 Deal of the Year for buying Sandler O’Neill to form Piper Sandler, which instantly became a leading investment bank in the financial services sector. And Stifel wins our 2019 Investment Bank of the Year for growing dramatically and making several acquisitions. Read our full awards coverage: Meet the winners of Mergers & Acquisitions’ M&A Mid-Market Awards.

CORONAVIRUS IMPACT
W20 has acquired Symplur, a social media analytics firm for the healthcare sector. “Partic ularly in these challenging, uncertain times reverberating across global communities and economies, healthcare companies are looking to track essential information in an urgent and immediate manner utilizing data and analytics to discern insights for decision-making,” says W2O CEO Jim Weiss.

Autodesk Inc. (Nasdaq: ADSK) has acquired a minority stake in construction software company Aurigo Software. “Difficult economic environments and labor shortages consistently prove the need to optimize the building process for the future,” says Jim Lynch, vice president and general manager for Autodesk Construction Solutions.

JPMorgan Chase & Co. said first-quarter profit tumbled 69 percent to the lowest in more than six years as credit costs surged, giving investors a first glimpse at the extent of the damage Covid-19 is wreaking on bank results. Read the full story by Bloomberg News: JPMorgan profit sinks to lowest since 2013 on virus fallout.

Advanced economies will shrink about 35 percent this quarter from the prior three months, four times as much as the previous record set in 2008 during the financial crisis, according to annualized figures from Goldman Sachs Group Inc. Read the full story by Bloomberg: Goldman sees advanced economies shrinking 35 percent amid pandemic.

The global impact is one that no business can ignore. The outbreak is an international issue that touches all aspects of business, including M&A. Before the outbreak, middle market M&A transactions were on the rise and were predicted to steadily increase over the upcoming years. However, against this new backdrop, the outlook for M&A activity is—understandably—highly uncertain. Read full coverage: How to manage post-closing disputes in M&A as a result of the coronavirus.

The coronavirus continues to impact the global economy. In the middle market, companies are proactively drawing down on revolving lines of credit and other sources of financing to put cash on the balance sheet to weather the storm. Mergers & Acquisitions interviews dealmakers from Alvarez & Marsal, Merrill Corp., M33 Growth, M-III Partners, Paul Hastings and the Riverside Co. Read our full coverage: “Brace for impact,” say private equity firms to portfolio companies about the coronavirus

There is no question the global pandemic is disrupting the M&A landscape, injecting significant uncertainty into the deal-making market. In addition to delaying or derailing potential transactions, Covid-19 is forcing M&A practitioners to assess appropriate risk allocation mechanisms to address the impact of the virus on global business operations, including Representations and Warranties Insurance (RWI). Read the full story: How the coronavirus forces dealmakers to assess effectiveness of RWI policies.

Genuine economic deterioration is a primary risk to private capital markets – PE tends to behave as a GDP-linked business. As consumer spending and business investment is set to decline, we expect to see a slowdown in PE transaction volume that follows the expected economic contraction. Read the full story: Private equity deals will slow down, as global economy stalls amid coronavirus pandemic.

While the long-term economic impact on American companies remains uncertain, there are important lessons to learn on how to manage future pandemic risks. Read the full story: Coronavirus contingency planning checklist for the middle market.

The coronavirus threat is the type of risk that material adverse change, or MAC, clauses are designed to address in M&A. Why the coronavirus makes material adverse change (MAC) clauses more important than ever.

FEATURED CONTENT
Once venture capital-backed startups themselves, today’s tech giants know a thing or two about VC seed money. It’s fitting that many of them have created corporate venture capital groups of their own. These CVCs help their owners experiment and nurture new technologies and ideas in the early stages, without requiring the commitment of an acquisition. The CVC strategy often augments a company’s research and development efforts as well as complementing its M&A strategy. Middle-market dealmakers would be wise to track the VC investments of the five companies we highlight: Amazon.com Inc. (Nasdaq: AMZN), Google (Nasdaq: GOOG), Intel (Nasdaq: INTC), Microsoft Corp. (Nasdaq: MSFT) and Salesforce.com Inc. (NYSE: CRM. Read our full coverage: Venture forth: How five of the biggest tech companies explore new territory through early-stage investments.

In a period of accelerating technology innovation and investment, it’s critical to stay aware of new technologies, offerings, data and analytics types and business models in your space, and adjacent spaces. Most companies are looking for ways to get better and earlier access to the startup space. While corporate venture capital (CVC) is only one method, it can be a fairly powerful one. Read full coverage: How corporations can benefit from VC investments in technology

Houlihan Lokey, Lincoln International, Jefferies Financial Group, William Blair and Piper Sandler Cos. rank as the top five most active M&A investment banks in 2019, based on the volume of completed private equity-backed deals in the U.S., according to PitchBook. Besides advising on M&A deals, the investment banks on the top 10 list also had a busy year with acquisitions of their own in 2019, including two acquisitions by Houlihan Lokey and three by Stifel Financial. Piper Sandler Cos., was created when Minneapolis-based Piper Jaffray Cos. acquired New York-based Sandler O’Neill & Partners in a deal representing more than half of Piper Jaffray’s $930 million market capitalization. The firm also had another acquisition in 2019 and sold a company to exit the traditional asset management business. See our full coverage: Top investment banks for PE-backed deals in 2019: Houlihan Lokey led the pack.

Audax, HarbourVest and Genstar ranked as the top three most active private equity firms in 2019, based on the volume of completed deals in the U.S., according to PitchBook. Three companies tied for fourth place: Abry, Carlyle and Shore Capital. Where were these PE firms looking for deals? Eight of the firms on our list name the software and technology sector among their top investment targets, and seven put healthcare companies on their priority list. Financial services and consumer services are each named by five of the firms as industries they focus on, with four naming business services companies. Fundraising from investors in 2019 led to two notable fund launches earlier in 2020: KKR’s Global Impact Fund and HarbourVest’s $2.6 billion HarbourVest Fund XI. See our full coverage: Top private equity firms in U.S. deals in 2019: Audax Private Equity ranked No. 1.

To celebrate deals, dealmakers and dealmaking firms, Mergers & Acquisitions produces three special reports every year: the M&A Mid-Market Awards; the Rising Stars of Private Equity; and the Most Influenital Women in Mid-Market M&A. For an overview of what we’re looking for in each project, including timelines, see Special reports overview: M&A Mid-Market Awards, Rising Stars, Most Influential Women.

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Goldman sees advanced economies shrinking 35 percent amid pandemic

Advanced economies will shrink about 35% this quarter from the prior three months, four times as much as the previous record set in 2008 during the financial crisis, according to annualized figures from Goldman Sachs Group Inc.

How fast economies will rebound is an open question because nobody knows how quickly people can get back to work, New York-based economist Jan Hatzius wrote in a note to clients dated April 13.

The number of new virus cases appears to be peaking globally, but the bad news is that “the improvement is probably a direct consequence of social distancing and the plunge in economic activity, and could reverse quickly if people just went back to work,” Hatzius wrote.

Overall, global policy makers have mounted an impressive response to try to replace people’s incomes and keep credit flowing so that households and businesses can stay afloat, but Europe should do more and wealthy countries will need to help developing economies, he wrote.

“The response in Europe needs to be scaled up, via greater (and ideally centrally funded) fiscal easing and a more unconditional ‘whatever it takes’ commitment to the integrity of the euro area,” Hatzius wrote. “Emerging economies will need a lot more help from the rich world” to get through the crisis.

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During coronavirus, CEOs David Solomon and Brian Moynihan stand alone on Wall Street—literally



During coronavirus, CEOs David Solomon and Brian Moynihan stand alone on Wall Street—literally | Fortune



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Latin America Roundup: Grupo ZAP, Grow Mobility, Wavy get acquired; Credijusto adds $100M; Cornershop, iFood brace for delivery boom

Sophia Wood
Contributor

Sophia Wood is a Venture Partner at Magma Partners. Sophia is also the co-founder of LatAm List, an English-language Latin American tech news source.

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As the world locks down borders and capital flows to brace for the impact of coronavirus, Brazilian startups continue to attract international attention. Three large acquisition deals dominated the Latin American tech headlines this month, all …

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Alternative Investing Startup iCapital Network Closes On $146M Amid Skyrocketing Growth





iCapital Network, a fintech startup which has developed a platform for investing in alternative assets, announced this morning it has raised $146 million in a funding round led by Hong Kong-based Ping An Global Voyager Fund.
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New investors Goldman Sachs, Affiliated Managers Group, Hamilton Lane and …

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