StrictlyVC: October 23, 2013

110611_2084620_176987_imageTop News in the A.M.

The pressure builds on Kathleen Sebelius to resign as President Obama’s health secretary in the wake of the troubled rollout of the country’s new online insurance exchange.

Mark Zuckerberg’s CEO compensation last year, most of it from exercised shares, was a robust $2.28 billion.


Michael Chasen’s New “Billion-Dollar Idea”

Michael Chasen speaks a mile a minute, and maybe there’s a reason why. He’s a serial entrepreneur who has discovered his next calling – providing location-based connections for young, mobile users. It’s a well-worn story at this point, but Chasen may just be the one to make money in this space.

If Chasen’s name sounds familiar, it’s likely because of Blackboard, an education software company that he cofounded with his college roommate in 1997. Blackboard went public in 2004 before it was acquired in 2011 by Providence Equity Partners for $1.64 billion.

Needless to say, Chasen never has to work again. But while visiting colleges during his Blackboard days, he realized his latest idea – connecting people who are in close proximity to each other through their phones – might be an even bigger opportunity than Blackboard. As a result, he quickly put together a 20-person company and, in June, closed on $12.5 million from NEA, Grotech Ventures, and a long line of celebrity entrepreneur-investors, including Steve Case, Ted Leonsis, and Dave Morin. He could have raised more. (“We actually had over $20 million in interest for the $12 million round,” Chasen tells me at at a San Francisco coffee shop. “We had investors we said no to, and we had to scale people back.”)

Investors were presumably taken with Chasen’s track record. But Chasen also argues that his company, SocialRadar, which is based in Washington, D.C., is a billion-dollar idea. Its objective: to cross-reference the location beacons in our pockets – our smartphones – with the now two billion social profiles online, to create real-time information about the people around us, whether they’re 300 feet or 50 miles away.

“With SocialRadar,” says Chasen, “you can walk into a room, and we’ll tell you there are 10 people here who you know: five coworkers, three people you went to college with, and two people who live on your street. Beyond that, we’ll tell you that your one college friend recently got his MBA and another was recently married.” Adds Chasen, “Right now, people might think, Why do I need to know who’s around? But it’s about having that information at your fingertips. You might not act on it, but maybe you will. It all depends on the context.”

SocialRadar is still in beta, with plans to launch by year end. (Chasen says the team is still working on all kinds of features, including around privacy, so that if you want to see who is around you but don’t want to be seen, you can list yourself as “anonymous” or use the app completely invisibly.)

Once it scales, SocialRadar intends to make money through directed commerce, by presenting location-aware offers and the like. But Chasen says the focus is very much on growing the business first  — something he thinks he can do quickly by leveraging location information from Facebook, Instagram, Twitter, LinkedIn, and Google to show users who’s around, regardless of whether those acquaintances already have the SocialRadar app.

The strategy isn’t without huge risks. The location-based landscape is filled with the bones of entrepreneurs who’ve tried to make money off seemingly useful services and failed. More, some of these services might object to SocialRadar monitoring their users’ data. If Facebook, in particular – the veritable 900-pound gorilla in this space – decides that it doesn’t want to play nice, SocialRadar could find itself in a very tight position.

Then again, Chasen has proven that he can make money in a tough space. The number of investors who’ve made money in education is minuscule, and yet he succeeded twice, first in taking the company public, then in selling it to a major private equity firm. Chasen also seems realistic, the product of his many years as an entrepreneur, no doubt. As he puts it: “Just like mapping software has fundamentally influenced the way that people use technology and get around, this technology has the same potential. Five to 10 years from now, everyone will have this technology and use it on a daily basis — whether or not it’s SocialRadar.”


New Fundings

Bromium, a three-year-old, Cupertino, Calif.-based data security company, has raised $40 million led by Meritech Capital Partners, with existing investors Andreessen HorowitzIgnition PartnersHighland Capital Partners, and Intel Capital participating. Bromium analyzes malware for IT administrators after an attack; it has raised roughly $75 million to date.

CoolaData, a year-old, Tel Aviv-based company behind a behavioral analytics service, has raised $7.4 million in a Series A funding from Greylock Partners Israel and Carmel Ventures.

Easy Taxi, a three-year-old, Sao Paulo-based, Uber-like mobile application has raised $7 million from iMENA Holding and Rocket Internet, a six-year-old Berlin-based e-commerce incubator that was founded by the renowned Samwer brothers and which raised $500 million in June. The round for Easy Taxi is just the latest in a recent succession, reports TechCrunch, which notes that in July, Easy Taxi raised $10 million from Africa Internet Holding (AIH), a joint venture between Rocket Internet and AIH’s 35% owner Millicom, and that the two investors invested $15 million in Easy Taxi in June through another joint venture: Latin American Internet Holding, to help give Easy Taxi runway to grow in Latin America.

Handybook, an 18-month-old, Cambridge, Mass.-based start-up that invites users to book preapproved cleaners and repairmen, has raised $10 million in Series A funding, led by General Catalyst Partners and Highland Capital Partners. The two firms invested $2 million in Handybook a year ago.

Monteris Medical, a 14-year-old company headquartered in Winnipeg, Manitoba, has raised $13.3 million in equity and debt financing. BDC Venture Capital Healthcare Fund led the equity round, with SWMF Life Science Fund and other unnamed investors filling out the rest of the equity financing. Oxford Finance provided the debt financing. Monteris has developed a system that uses lasers, catheters, MRI machines and proprietary software to help surgeons treat brain cancer. Altogether, it has raised $34.5 million in funding.

OneClass, a three-year-old, Toronto-based company that’s been creating an interactive library for college-level content, has raised  $1.6 million in Series A funding from the private equity firm SAIF Partners. Existing investors, including Real Ventures, also participated.

Outbrain, a seven-year-old, New York-based company known for creating viral advertising links, has raised $35 million in a round that was led by HarbourVest and included Carmel VenturesIndex Ventures, and Gemini Israel VenturesGlenRock IsraelRhodium and Lightspeed Venture Partners also participated in the financing. The company has raised $64 million to date.

Perpetuuiti TechnoSoft Services, a 2.5-year-old, Mumbai-based discovery recovery management firm, has raised an undisclosed amount of funding from Intel Capital, which manages a $250 million India-focused pool of capital. Others of Intel’s India-based investments include SnapdealHealthkart, and Yatra Online. Peretuuiti, along with SkySQL (see below) are among 16 new investments around the world that Intel Capital revealed yesterday. The entire list can be found here found here.

Prism Skylabs, a two-year-old, San Francisco-based video analytics startup, has raised $15 million in Series B funding led by Intel Capital, which was joined by Triangle PeakPresidio VenturesData Collective and Expa. The company has raised $25 million to date. Previous investors include TomorrowVenturesSV AngelData CollectiveAndreessen Horowitz and CrunchFund.

Pronutria, a two-year-old, Cambridge, Mass.-based company, raised $10.8 million in Series A funding from Flagship Ventures. Founded by Flagship VenturesLabs, the company, which has been operating in stealth mode for the past two years, describes itself as a “revolutionary platform for identifying protein nutrients from within the human diet that have potent pharmacological effects.”

SkySQL, a three-year-old, Espoo, Finland-based open source software company, has raised $20 million led by Intel Capital, with California Technology VenturesFinnish Industry InvestmentOpen Ocean Capital and Spintop Private Partners, participating.

Zen Planner, an eight-year-old, Denver-based maker of business management software for the health and fitness community, has raised $10 million in Series A funding from the growth equity firm Mainsail Partners.


IPOs, an online sports-lottery operator in Shenzhen, China, has filed for a $150 million IPO in the U.S. The company is largely owned by executives. Those institutions with a sizable stake include Clear Treasure Group Limited, which owns 10.4 percent of the company; DeLite Limited, which owns 12.4 percent; Brothers Union International Limited, which owns 11.3 percent, and Smart Mega Holding Limited, which owns 11 percent. Sequoia Capital is also mentioned on the listing, though its holdings aren’t listed.

Moelis & Co, the seven-year-old, New York-based boutique investment bank, is reportedly mulling an IPO.

Sungy Mobile Ltd., a Guangzhou, China-based mobile applications maker, has filed to raise $80 million in a U.S. IPO. Among its shareholders are Freedom First Holdings, which owns 30.1 percent of the company, IDG Ventures, which owns 28.7 percent, and JAFCO, which owns 9.6 percent.

Twitter updated its S-1 yesterday, revealing that it has obtained a $1 billion credit facility this month. The move is reminiscent of Facebook and Zynga, two other companies that tapped the debt market in advance of their IPOs.



The FundingPost is featuring a venture and angel investor event this afternoon in New York. You can learn more here.

The Venture Atlanta conference also kicks off today. Dick Kramlich of NEA and John Balen are among the event’s featured speakers. Details are here.

If you’re in L.A. you might want to check out PandoDaily‘s monthly “Fireside Chat,” featuring investor Mark Suster. The program begins at 6 pm PST.

A two-day “predictive analytics” conference is also getting underway in London today. Click here for more information.



Kim Kardashian and Kanye West became engaged(!!!) at AT&T Park in San Francisco Monday night, and their friends were there to see it, including Ben HorowitzMark and Ali Pincus, and Girls Gone Wild founder Joe Francis.

Barry McCarthy, who spent 11 years as the CFO of Netflix, beginning in 1999, has joined Clinkle, the San Francisco-based payments company that raised the “largest seed round in Silicon Valley history” and which is expected to formally launch its service next year. McCarthy, who has been an advisor for the past few years at Technology Crossover Ventures, is Clinkle’s new COO.

Tina Sharkey, the former CEO of BabyCenter, is joining Sherpa Foundry as CEO. Sherpa Foundry is a 10-month-old venture co-founded by investors Shervin Pishevar and Scott Stanford. AllThingsD has the lowdown.


Job Listings

GrowthCap, a New York-based deal network that looks to pair private growth-stage companies with institutional investors, is looking for a VP of business development to help grow the company’s relationships in the PE and VC communities. The ideal candidate has a background in financial services.


Essential Reads

Everything you need to know about yesterday’s Apple event.

Facebook is still struggling to find the line between violent content for the sake of raising awareness and violent content that simply celebrates violence.



From a fun New York Times profile of Deadspin video editor, Tim Burke. The 35-year-old is “known among sports journalists for his ability to capture the moment – whether as a still, a video clip or in his favored format, a GIF – better, faster, more frequently and from more sports events than just about anyone. How he does it is a matter of wonder.”

Fatter animals are evidently translating into new business opportunities. Think pet gyms, pet pools — even fat camp for dogs.

A brief, visual history of beautiful coffeemakers, in FastCo.


Retail Therapy

We love this: An instant photo lab for those iPhone pictures you just have to convert into film.

This $45 million Falcon 5X private jet is none too shabby (we especially like its oversize windows).

This may be the perfect app for the person who not only doesn’t mow his own lawn but can’t be troubled to turn on the spigot outside to water it.


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