In the time of coronavirus, a big deal is still made
Personal finance platform SoFi announced Tuesday that it had acquired Galileo, a payments software company that powers the likes of Robinhood, Revolut, and Chime, for about $1.2 billion—a deal that could give the company leverage over some of its competitors that also use Galileo.
It’s an interesting example of big dealmaking in coronavirus-times when many others have died. The talks began pre-coronavirus—and eventually migrated to being held Zoom as lockdowns began.
What’s also incredible about this deal: It’s a speedy(ish) exit for Accel, which made its first investment in Galileo a mere six months ago. The typical exit for Accel takes about six to seven years.
Accel, which has a general preference for profitable and bootstrapped companies, led a $77 million round in mid-October, back when Galileo wasn’t looking for an investor. The venture capital firm only became intrigued when portfolio company and U.K.-based challenger bank, Monzo, began building on top of Galileo as part of its U.S. expansion last year, according to Accel partner John Locke. Galileo didn’t have a pitch deck for venture capitalists—just one for selling to customers. But that failed to deter Accel or Galileo, and here we are, with a reported fourfold return for Accel, no less.
I say the exit is speedy-ish because the deal was not all in cash. Accel will hold equity in SoFi. The majority of the acquisition, $875 million of it, came in the form of SoFi shares. Another $75 million will be paid in greenback and the rest financed by $250 million in debt. Accel, for its part, says it’s “excited” to work with SoFi.
SO… We might get better at washing our hands, even after a vaccine is found for the coronavirus.
At least, that’s what one PE firm is betting $980 million on. Predicting that the coronavirus will fundamentally instill a fear of germs in all of us and boost sanitizer use in the long run, EQT Partners is in talks to buy the hand sanitizer and disinfectant unit of Air Liquide, a French industrials group, for roughly €900 million ($980 million). Granted, EQT didn’t approach the deal with the impulsive panic of consumers stocking up on supplies—Air Liquide was previously seeking a €1 billion price tag. Read more.
SO MUCH HAS HAPPENED in the last 24 hours: Jack Dorsey pledged over a fourth of his wealth to the fight against the coronavirus…WeWork has sued SoftBank for bailing on its $3 billion share buyout agreement…Workers at Target’s Shipt are staging a walkout…Former Google CEO Eric Schmidt is telling folks to invest in big tech’s competitors… And in an answer to yesterday’s questions about Airbnb, new investors will get warrants valuing the company at $18 billion.