StrictlyVC: October 10, 2013

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Top News in the A.M.

Treasury Secretary Jack Lew warns lawmakers that he’ll be unable to guarantee payments to any group – whether Social Security recipients or U.S. bondholders – unless Congress approves an increase in the federal debt limit.

A Global VC Shares His World View

Mathias Schilling is the cofounder and managing partner of, an early-stage venture firm that invests out of dedicated funds in five geographies: the U.S., Russia, Germany, Asia, and Brazil. The vantage point gives Schilling a unique perspective on how the world sees the U.S. debt crisis. During a quick chat yesterday, he told me his partners are, in a word, “confused.” We also talked about what he’s seeing around the globe.

You have these dedicated funds where you share carry. Do you sign off on deals as individual firms?

We look at every region very locally, but we [employ] different structures for different deals. Sometimes, we’ll have an investment committee where I’ll participate in the decision-making. Sometimes, we don’t get involved at all. Our mantra is to keep local teams to two to three partners so we can make decisions quickly.

Last year, you and Redpoint Ventures joined forces for your Brazil-focused venture fund, raising $130 million. What are you seeing there in late 2013?

Brazil has had many lost decades, including after 2000. So many basic [online] categories still haven’t been created and funded. There’s also a lack of capital, and entrepreneurship culture, and there’s a difficult regulatory environment. But I’m very positive on Brazil. We’re not only seeing copycats, which obviously makes sense, as large categories need to be created; we’re also seeing a lot of very high quality entrepreneurs. We’ve [backed]10 companies in the last 18 months or so, in e-commerce, financial services, advertising, travel.

Right now, it’s cooled off on a macro level, in terms of investors going there, because if you aren’t local and make a commitment to stay, it’s very difficult. It puts us in a good position there.

What can you share about the other markets you’ve entered?

Japan is an interesting market. It’s traditionally been a tough venture market – people are very hierarchical and risk averse, which is also true of Brazil and, to some extent, Germany. But on the mobile side, we’re seeing a lot of advanced things happening. Half of Android’s revenue is coming from apps being made in Japan and South Korea.

Berlin is building great critical mass; it’s cheap, exciting, and innovative. Russia is more technology driven, with a lot of very strong engineering. But it lacks general management skills.

Each is distinct, but I believe you have to go into these markets and build a commitment there and stay for the long run, because I don’t think you can stop the trend. We are globalizing.

Is entrepreneurship as widely celebrated in other parts of the world?

I think it’s cool to be an entrepreneur in most countries at this point. Everyone knows some fantastic success story of some guy who really did it. And some of these people really had to pull through to be the first [success story], so they’re great role models.

Culturally and psychologically, people don’t want to work for big companies anymore.

I gather the rest of the world is very concerned by the U.S. government right now. What are you hearing from your far-flung partners about this mess?

I think people are speechless. Honestly, they’re shrugging their shoulders. They don’t get what’s happening and why. And to some extent, it is a bigger deal elsewhere than it is here. They think it will be resolved. It has to be resolved.


New Fundings

BizBrag, a nearly three-year-old Baltimore, Md.-based platform that connects advertisers with local social networking feeds, is raising $600,000 in seed funding, according to an SEC filing. It has so far raised $200K, including from Bluewater International, an investment firm in Washington, D.C.

Blab, a two-old Seattle-based analytics company that tries to help customers understand where social media conversations are headed, has raised $342,000 in debt, according to an SEC filing that shows the company is looking for up to $2.5 million. The company has raised nearly $3.6 million to date.

City Notes, a year-old, Brooklyn, NY-based mobile city guide cofounded by former tech writer and editor Dan Frommer, is looking to raise up to $800,000 in debt, according to an SEC filing. The company’s cofounder, Mark Dorison, formerly a director of application development at Martha Stewart Living Omnimedia, is also listed on the filing.

CTI Towers, a wireless tower operator that is based in Franklin, Mass., has raised $30 million in debt financing, just as it has completed an acquisition of five towers from an unnamed wireless carrier for undisclosed terms. CTI Towers launched two years ago with a portfolio of roughly 800 towers that were previously owned and operated by Comcast Cable subsidiaries. It’s backed by Comcast Ventures.

Refresh, an 18-month-old, Palo Alto-based company whose mobile application delivers users an instant dossier about people based on what’s publicly available about them, has raised a $10 million Series A round from Redpoint Ventures, Charles River Ventures, and Foundation Capital.

Smartling, a four-year-old, New York-based startup that helps its business customers understand and interact with their global customers by helping them translate their sites, apps, and more, has raised a $24 million Series C round led by Tenaya Capital. Other investors in the round included Harmony PartnersVenrockIDG VenturesU.S. Venture PartnersFelicis Ventures and First Round Capital. The company has raised a little more than $38 million to date.

Splice, a new, online workflow platform for music creators that lets that back up their songs, share changes and more, has raised $2.75 million in seed funding led by Union Square Ventures. Other investors in the round included True VenturesSV AngelLerer VenturesFirst Round Capital and Code Advisors. Splice has an office in New York and in Santa Monica.

TempoDB, a two-year-old, Chicago-based database service for time series data — everything from measuring networking latencies to heart rates — has raised $3.2 million in Series A funding led by Hyde Park Venture Partners, with participation from Chicago Ventures and Divergent Ventures. TempoDB had raised roughly a million dollars in seed funding previously, including from Data Collective and TechStars.


Fund News

Alibaba, the China-based e-commerce juggernaut is apparently getting into yet another business, acquiring a 51 percent stake in a Chinese mutual fund called THFund for more than $190 million. In summer, Alibaba’s payment service, Alipay, and THFund launched a mutual fund called Yuebao; consumers can invest in Yuebao via their Alipay accounts.



Validity, 13-year-old San Jose, Calif., company that makes sensors used in biometric identification, is being purchased for $92.5 million in cash and stock, reports VentureBeat. The acquiring company, Synaptics, a publicly traded manufacturer of touch pads, will pay up to $255 million for Validity based on performance targets over time. Validity had raised $82 million over the years, including from TeleSoft PartnersQualcomm VenturesCrosslink CapitalPanorama Capital and individuals like founder Marc Benioff and famed angel investor Ram Shriram.



Looks like Twitter has accidentally revealed its IPO date.



Mike Gridley has joined Akkadian Ventures, a direct secondary investment firm based in San Francisco, as a managing director. Gridley was most recently a managing director at Industry Ventures in San Francisco, which he joined in 2004. Before Industry Ventures, Gridley worked as an associate at BV Capital/Bertelsmann Ventures. Akkadian Ventures founder Ben Black has much on Gridley’s new role here.

Zack Urlocker is rejoining Scale Venture Partners as an executive-in-residence. Urlocker was most recently chief operating officer at the venture-backed customer support platform company Zendesk, which he joined in December 2010. Between September 2010 until his appointment at Zendesk, he worked with ScaleVP as an EIR, evaluating new investment opportunities in data and NoSQL companies.

Gregory Silva is also joining Scale Venture Partners, as a new associate. Silva was most recently an investment banking analyst at Piper Jaffray and briefly before that, Silva worked as a financial analyst for Bayer HealthCare.

Joe Montana, the legendary San Francisco 49ers quarterback, has a new pastime in — you guessed it — technology investing.



If you’re in Cambridge, Mass., it isn’t too late to check out Emtech, an emerging tech conference being hosted by MIT Technology Review.

If you happen to be in Kiev, Ukraine, you might hustle over to the two-day IDCEE conference, where Alan Patricof of Greycroft PartnersPavel Bogdanov of Almaz Capital Partners and many other investors will be speaking, mingling, and hearing startup pitches.


Job Listings

WI Harper, a venture capital firm that focuses on early and early expansion investments in Mainland China, Taiwan and Silicon Valley, is looking for a venture capital analyst intern at its office in San Francisco’s Financial District. Applicants should have a GPA of 3.5 or higher; fluency in reading and writing English, along with speaking Mandarin, are big plusses.


Essential Reads

Bloomberg publishes a juicy excerpt of The Everything Store: Jeff Bezos and the Age of Amazon by its senior writer, Brad Stone. One small snippet: “The one unguarded thing about Bezos is his laugh-a pulsing, mirthful bray that he leans into while craning his neck back. He unleashes it often, even when nothing is obviously funny to anyone else. And it startles people. ‘You can’t misunderstand it,’ says Rick Dalzell, Amazon’s former chief information officer, who says Bezos often wields his laugh when others fail to meet his lofty standards. ‘It’s disarming and punishing. He’s punishing you.’”

In its S-1, Twitter says that through the “eyes of management,” the company had a profit of just over $21 million in the first six months of the year. Through an accountant’s eyes, though, Twitter actually lost just over $69 million.

Revenue from mobile ads accounted for 15 percent of Internet advertising’s $21 billion haul in the first half of this year, says the Internet Advertising Bureau. That’s more than double its market share this time last year.



“Who was that muscle man who decided that he’d get more money from Amazon than from [Crown Publishing] and sold seventeen books when he’d sold six hundred thousand before? He swan dived into the pavement.”  — Legendary literary agent Andrew Wylie on Tim Ferriss, Amazon, and dealing with young writers.

Examining the word “bro.”

Check out your timid first tweet (and anyone else’s) right here.


Retail Therapy

We can’t imagine who’d want this watch for themselves, but it would make a pretty clever parting gift for a terrible roommate or evil landlord.

If you love maple syrup and you love bourbon, you are going to love this smoked maple bourbon. (Not for pancakes.)


Correction: Yesterday, we mistakenly reported that App Nexus cofounder and president Michael Rubenstein was leaving the company, when in fact App Nexus cofounder and CTO Michael Nolet is leaving. Rubenstein is now replacing Nolet on the board. We sincerely regret the error. 


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