StrictlyVC: October 9, 2013

110611_2084620_176987_thumbnailGood morning. It’s Wednesday, woot! Hope you have a great one.


Top News in the A.M.

OMG. Apple is reportedly hosting an invitation-only event to roll out new stuff on October 22.Our lawmakers are truly unbelievable. Now they’re trying to open the government piece by piece to ease the political pressure they’re feeling.


Flipkart Raises a Fresh $160 Million, While Others in Bangalore Watch and Wait

A couple of years ago, venture capitalists began aggressively funding e-commerce sites in Bangalore, largely inspired by the success of Flipkart, the e-commerce Indian company that’s raking in rupees by delivering goods to villages and far-flung towns. Just today, the company revealed that it has raised $160 million in fresh capital, atop a $200 million capital injection it closed in July. (The six-year old has now raised $540 million altogether, according to Crunchbase.)

Unfortunately, e-commerce riches have been hard to come by. While Flipkart has pulled ever further ahead, racking up 10 million registered users and over a million daily unique visitors, roughly 40 other venture-funded e-commerce startups have since bit the dust.

Insiders say there’s a light at the end of the tunnel for a small number of companies that have benefited from government efforts to keep U.S. companies out. The question is, how long can these sanctions last?

According to Subu S.V., a managing director with BVP India in Bangalore, the absence of a strong retail infrastructure has significantly hampered the growth of  Indian e-commerce. While in the U.S., the online shopping revolution followed the rise of the giant shopping mall, in India, “offline never really happened,” he notes. “It’s still mom and pop stores ruling the country. So offline and online are happening simultaneously, and while the market size is huge, there are many bottlenecks” to overcome, he says.

Nandu Madhava, a Harvard MBA and Texan who is CEO of, a WebMD for India based in Bangalore, lays the blame for so many busted e-commerce companies on a faulty investment premise.

Pointing to India’s fast-growing base of 165 million Internet users, Madhava observes, “Give a man or woman access to the Internet for the first time in their life, and their natural inclination isn’t to go buy a pair of shoes, a polo shirt, or fancy watch.  It’s likely to go: porn, cricket, Facebook, politics, jobs, health, YouTube, news, pirated media. Unfortunately, most Indian VCs had never run a business, much less an online business. Most were former bankers or consultants from MBA schools trying to lift US models and place them into India.”

Still, some companies will make it, say both men. Madhava points to startups in the mobile, consumer Internet, online video, Saas and payment transaction industries that are “incredible” but “need patient capital ready to take a 24- to 36-month view of the Indian opportunity.”

As examples, S.V. points to the lifestyle goods e-tailer, which is gaining traction, and to the fast-growing e-commerce site SnapDeal, backed by Bessemer, which attracted a $50 million investment from eBay earlier this year. The 1,000-employee company is a marketplace for more than 10,000 small merchants and more than 20 million registered users.

S.V. says that complicated and onerous government regulations have enabled Jabong and SnapDeal and FlipKart to get a jump on global giants like Amazon, which launched operations in India in June. For now, at least, Amazon and other foreign companies may host marketplaces that brings buyers and sellers together, but they can’t maintain inventory to sell directly to shoppers.

Nevertheless, those rules may change, particularly after India’s general election next year. In fact, S.V. tells me the “general expectation is that [things] are going to change in another six to 12 months.” In the meantime, he says, the country’s most successful “home-grown companies are getting a four- to six-year head start.”

It will be “interesting to see what happens,” he adds.


New Fundings

B5M, a five-year-old, Shanghai-based shopping search portal, has raised a $16 million Series B investment round led by ClearVue Partners. The round also included Oak Investment Partners, the lead investor from its $7.1 million Series A investment, as well as existing investors and several new angel investors.

Divide, a nearly four-year-old, New York-based company whose software allows smartphone users to configure separate profiles for business and personal use on their mobile devices, has closed a $12 million Series B round led by Google Ventures. Other new investors in the round included Globespan Capital Partners and Harmony Partners, which were joined by existing investors Comcast Ventures and Qualcomm Ventures. Divide, formerly known as Enterproid, has raised $23 million to date.

Grabit, a two-year-old, Santa Clara, Calif.-based company that makes electro adhesion-based materials and which spun out of the nonprofit research institute SRI International, has raised an undisclosed amount of Series A funding led by Formation 8Nike and ABB Technology Ventures also participated in the round.

Luminate Health, a New York-based software-as-a-service company whose platform provides patients access to and analysis of their lab test results, has raised $1 million in seed funding led by KEC Ventures. Luminate graduated from the New York City-based health tech accelerator Blueprint Health earlier this year.

iScreen Vision, a three-year-old Memphis, Tenn.-based maker of pediatric vision screening equipment and services, has raised $4 million in a Series B funding led by MB Venture PartnersInnova, who led the company’s Series A round, also participated along with other (undisclosed) new and existing private investors.

Molecular Templates, a Georgetown, Tex.-based company that creates anti-cancer agents using protein engineering, has raised $8.5 million in Series C funding led by Excel Venture Management, with existing investor Santé Ventures also participating in the round.



EchoPass, a 13-year-old, Pleasanton, Calif.-based company that makes call and contact center software, has been acquired by the 23-year-old call center software giant Genesys, located in Daly City, Calif. EchoPass had raised $9 million in recent years, including from Canaan PartnersOutlook VenturesNew Enterprise Associates, and the now-defunct Advanced Equities. Terms of the deal weren’t disclosed.

GlobalLogic, a 15-year-old, McLean, Va.-based offshore software development company, is being acquired by the private equity group Apax Partners. Terms of the deal aren’t being disclosed, but GlobalLogic has raised at least $26 million over the years, including from New Atlantic VenturesWestbridge Capital Partners, and New Enterprise Associates.



Zulily — the four-year-old, Seattle-based online retail site for moms, kids, and babies — has filed to go public, and AllThingsD dives into the numbers. Among the interesting tidbits it finds: Andreessen Horowitz paid roughly $69 million for 7 percent of the company in an $85 million venture round that closed last November. Maveron, which already cashed out part of its stake in the company last year, is also poised to make a bundle.

Tandem Diabetes Care, a five-year-old, San Diego, CA-based company that develops medical devices to treat diabetes, has filed for an IPO, according to an SEC filing. Tandem, which is looking to raise $100 million, is backed by Delphi VenturesDomain Associates, TPG Biotechnology PartnersHLM Venture Partners and Kearny Venture Partners, which own 26.9 percent, 26.2 percent, 20.3 percent, 11.4 percent and 6.4 percent of the company, respectively.



Michael Nolet, a cofounder and the CTO of the real-time online ad buying platform AppNexus, is leaving the six-year-old New York company, he announced in a blog post yesterday. Nolet, who formed the company with AppNexus CEO Brian O’Kelley and AppNexus president Michael Rubenstein, said in his note that he’s “ready for my next adventure,” adding that he’s planning to start an “online business” next month with his wife.

Ashley Dombkowski has joined Bay City Capital, the life sciences-focused venture firm, after serving more than two years as chief business officer at 23andMe, a company that makes the human genome searchable and which has raised more than $160 million since is 2006 founding. Dombkowski has plenty of previous experience in the investing world. Before joining 23andMe, she worked as a managing director at the venture firm MPM Capital; earlier in her career, she was a healthcare equity analyst for the hedge fund Tiger Management and for the institutional asset management firm Dresdner RCM Global Investors. (H/T: Dan Primack)

Dana Deasy has been named chief information officer at JPMorgan Chase. The position is a new one for the financial services company. Deasy, on the other hand, has been chief information officer at a number of corporate giants, including BP, General Motors, Tyco International, and Siemens Corporation Americas.

Top Tier Capital Partners, a San Francisco-based venture capital fund of funds, has appointed Jeff Watts as its chief business development officer.



If you’re in or near Cambridge, Mass., today, you might want to head to the EmTech conference, presented by MIT Technology Review. The three-day event is designed to showcase emerging technologies with the “greatest potential to change our lives.” You can find much more information here.


Job Listings

500 Startups, the venture capital firm and startup accelerator, is looking to hire a director of global community development, to help the firm expand the team and the reach of its startup conferences, tours, and other programs. To apply, send your resume and a YouTube video that answers who you are, where you’re from, what you’ve done that makes you ideal for the role, and who your biggest role model is, to


Essential Reads

“Jack’s gone rogue.” The New York Times excerpts Nick Bilton’s new Twitter book and it is good.

San Francisco gave numerous tech startups tax breaks in exchange for promises of local charity and outreach work. But while some have done volunteer work, others are really stretching expectations, reports Justine Sharrock. “Instead of job training, there are cocktail parties. Community engagement equals Yelp reviews written by and for techies.”

It’s hard for an acquired company to be heard once part of a bigger company. It’s even harder when that bigger company is also being acquired, writes Erin Griffith.



A new study suggests we unlock our phones a lot each day.

The New Republic looks at the future of China’s public toilets.

Retail Therapy

These chrome-coated, vintage Polaroid SX-70s are pretty neat, though shop around for the best price. They’re delicate, and you don’t want to be crying onto a pile of automatically ejected pictures when yours invariably breaks.

If you’re willing to pay up — as in, up to $750,000 — for a camera, we also have you covered.

[Correction: Today’s StrictlyVC originally reported that Michael Rubenstein, AppNexus’s cofounder and president, was leaving the company. We sincerely regret the error.]

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