StrictlyVC: November 6, 2013

110611_2084620_176987_imageGood morning and thank you for reading! Please feel free to get in touch with tips, observations or good old-fashioned gossip any time; I’m at and on Twitter as @cookie. If you haven’t signed up for the newsletter yet, you can do that here.


Top News in the A.M.

Microsoft has narrowed its list of external CEO candidates to about five people, including Ford’s chief executive, Alan Mulally.

The price of bitcoin just hit an all-time high.

To Save Other Startups, Exitround Must First Prove Itself

Many thousands of companies have been funded in recent years, and most of them will fail. Exitround, a San Francisco-based startup, hopes it can find buyers to snap them up.

Exitround was founded about a year ago by Jacob Mullins, who was working at the time as a senior associate at Shasta Ventures. (He left the firm this summer.) “We’d see really smart entrepreneurs with great ideas and great products who potentially wouldn’t be able to get that next round of funding but that would be interesting to a Facebook or Twitter; I started thinking there was more of a marketplace [opportunity] here.”

One can see why. Just yesterday, the outlet The Verge lavished several thousand words on the failure of Everpix, a startup that helped users easily store and organize their photos. Everpix’s founders include a French entrepreneur who sold his first company to Apple a decade ago. Beyond the founders’ pedigree, the team had also raised seed funding from some top-notch VCs, including Index Ventures. Exitround would seem a great alternative to shutting down completely, as Everpix was abruptly forced to do.

Here’s how it works: Exitround makes introductions between startup teams and corporate development types. It also provides plenty of anonymity to startups seeking buyers. Exitround supplies buyers with a rough sketch of a startup’s offering. If a buyer expresses interest, Exitround checks with the founding team before providing more information or setting up a meeting. For its matchmaking, Exitround charges a recruiting fee of between $10,000 and $20,000 per hire.

So far, Exitround has convinced more than 500 buyers to sign on to the platform, Mullins tells me. Among them, he says, are “growing startups with super-aggressive growth goals,” big tech names that are known to be serial acquirers, and “legacy companies, including in manufacturing, insurance, healthcare and hospitality. These are companies that, while their core business may not be tech, realize that they need to deliver a better customer experience.” He also says Exitround has attracted “hundreds” of startups to its platform.

Still, not everyone is convinced that M&A can be automated.  One corporate development executive privately tells me his company’s experience “acquiring and integrating companies has been very difficult,” adding that using a middleman like Exitround would “just be adding on another layer of complication.”

Scott Rafer, a serial entrepreneur who has been in acqui-hire situations numerous times, also sees problems with Exitround’s model. First, he notes that the “likelier buyers know everyone in their sector  … if there’s any IP value at all.” Also, he questions Exitround’s ability to keep its deals completely anonymous. “If a company is described [to a potential acquirer] in any way that’s useful, three minutes on Google, and any decent corp dev guy can figure out who it is.”

Such issues may explain why Exitround is a bit cagey about its progress. Although the company announced its first “exit” in July, Mullins tells me he can’t release any transaction details. Similarly, he says Exitround has “sold some [startups] subsequently,” but he doesn’t disclose how many or any other details about these deals. Mullins also isn’t revealing how much capital Exitround has garnered to test out its business. (He says the company has raised seed funding but that the round remains open, with Exitround hoping to bring aboard “a few other investors strategic to our business.”)

Either way, a veteran who has been shutting down companies for decades – Martin Pichinson of Sherwood Partners – thinks there’s plenty of room for a company like Exitround in today’s market.

“I think this is a fantastic idea,” says Pichinson. “It’s hard for corp dev people and others to always and easily have quick and easy access to new technologies, ideas and know-how. We are in an exciting new world, and anything that can expedite adoption is a total win.”


New Fundings

2nd Watch, a three-year-old, Seattle-based company that helps businesses more easily move their applications to Amazon Web Services, has raised $23 million led by Columbia Capital. Existing investor Madrona Venture Group also participated. Madrona had led a $4.2 million round for the company in December of last year.

Appboy, a three-year-old, New York-based customer engagement platform used by mobile app developers, has raised $7.6 million in what it’s calling an “oversubscribed” Series A funding led by Icon Venture Partners, which was joined by IDG Ventures and Buddy Media founder Mike Lazerow. Previous investors to participate in the round included Accelerator VenturesBlumberg CapitalBullpen Capital and T5 Capital, which have provided he company with seed funding over the last two years.

ANDalyze, an eight-year-old, Champaign, Ill.-based company that makes a handheld device designed to test drinking water for heavy metals, has raised $1.54 million of a targeted $2 million round of debt funding, according to an SEC filing.

Betable, a five-year-old, London-based startup focused on monetizing the social gaming industry, has raised $18.5 million in Series A funding led by Venture51, with participation from previous investors including Greylock Partners and Founders Fund. (This seemingly represents a big bet for Venture51. I’d interviewed the founders in June and the firm was targeting $25 million for a new fund at the time.)

Coho Data, a two-year-old, Sunnyvale, Calif.-based  company that enables businesses to build their own high-performance data storage repositories, has raised $25 million in Series B funding. Ignition Partners led the round; previous investor Andreessen Horowitz also participated. The company has raised $35 million to date.

Garantia Data, a 2.5-year-old, Santa Clara, Calif.-based cloud-computing company, has raised $9 million in Series A funding led by Bain Capital Ventures and Carmel Ventures. The company had previously raised a $3 million round of funding, including from Zohar Gilon, a managing partner at Tamar Technology Ventures.

LiveQoS, a nine-year-old, Ottawa-based company whose software finds and fixes problems on wired and wireless networks, has raised $4 million in Series C financing led by the Canadian venture capital firm Miralta Capital. Last month, the company — formerly known as iPeak Networks — acquired a startup, Openera, in an all-stock transaction. According to Crunchbase, LiveQoS has raised roughly $4.5 million altogether.

Mobli, a three-year-old Israel-based photo- and video-sharing platform that competes with Instagram, has raised $60 million in funding from America Movil, the Latin American telecom led by billionaire investor Carlos Slim. The round brings the company’s funding to $86 million, money that has come from celebrity investors, including Leonardo DiCaprio, Serena Williams, and Lance Armstrong. GigaOm has more information about the deal here.

Seeq Corp., a months-old, Seattle-based startup that aims to work with manufacturers to more effectively mine and gain insights from their sensor and other data, has raised $6 million in Series A funding led by Second Avenue Partners. Other participants in the round included Madrona Venture GroupClear Fir PartnersGaylord KelloggJohn Meisenbach and unnamed individual investors.

Seriously, a months-old, L.A.based company behind a new mobile gaming platform, has raised $2.35 million in seed funding led by Upfront Ventures and Sunstone Capital of Denmark. Seriously’s founders are former Rovio executives, reports TechCrunch in a longer story about the company here.

SiTime Corporation, an eight-year-old, Sunnyvale, Calif.-based, analog semiconductor company, has raised an undisclosed amount of funding led by Innovative Venture Fund and SMBC Venture Capital. Previous investors in SiTime include Greylock PartnersJAFCO VenturesRusnano, and Bosch Group.

Sprinklr, a four-year-old, New York-based social media management platform, has raised $17.5 million in Series C Funding from existing investors Battery Ventures and Intel Capital. The company has raised $37.5 million to date.

View, a seven-year-old, Milpitas, Calif.-based company formerly known as Soladigm, has raised $72.6 million in equity, debt, and a combination of other warrants and securities, a new SEC filing shows. The company appears to be targeting around $110 million, according to the filing, which shows fundraising for the round began in June. Investors in the round include Sigma Partners; the investment firm VenFinKhosla VenturesNanoDimension, a nanotechnology-focused venture capital firm; Harold Hughes, the former CEO of Rambus; George Hambro, a longtime exec with First Solar; and Jeffrey Evenson, a senior VP at Corning.

Zemanta, a six-year-old, New York-based content discovery and audience development partner for media outlets like VentureBeat and AP, has raised $2 million in new funding from Union Square Ventures and the angel investment fund Social Starts. The capital brings the company’s total funding to date to $7.3 million.

Zola, a brand-new, New York-based wedding registry startup, has raised a $3.25 million Series A funding round led by Thrive Capital.

Zomato, a five-year-old, Gurgaon, India-based restaurant discovery service that competes globally with Yelp, has raised $37 million. Sequoia Capital led the round with the help of India-based investor Info Edge. According to TechCrunch, which has a longer write-up of the company here, Zomato has raised roughly $55 million to date.

Zoomingo, a two-year-old, New York-based company behind a shopping and deal-finding app, has raised $1.25 million from existing investors Benaroya Capital and Naya Ventures, along with other angels. The capital brings Zoomingo’s total funding to date to $2.75 million.



CardioDX, a Palo Alto, Calif.-based molecular diagnostics company that specializes in cardiovascular genomics,  has set pricing terms for its IPO, according to an amended S-1. The company plans to offer the shares at between $14 and $16 and to trade on Nasdaq. The company’s principal shareholders include V-Sciences InvestmentsLongitude Venture PartnersArtiman VenturesJP MorganMohr Davidow Ventures and Kleiner Perkins Caufield & Byers.

Tandem Diabetes Care, a seven-year-old, San Diego-based medical device maker, has set pricing terms for its IPO in its newest S-1 that shows it plans to offer roughly 7.1 million shares on the Nasdaq at between $13 and $15. Tandem has raised about $90 million in funding over the years. Its principal shareholders include Delphi VenturesDomain AssociatesTPGHLM Venture Partners, and Kearny Venture Partners.

Twitter has revealed in the newest update to its S-1 that IBM is alleging the company infringes on “at least three U.S. patents” held by IBM. IBM is “inviting us to negotiate a business resolution of the allegations,” Twitter added in the filing, but it noted: “We believe we have meritorious defenses to IBM’s allegations, although there can be no assurance that we will be successful in defending against these allegations or reaching a business resolution that is satisfactory to us.”



SiteScout, a three-year-old, Toronto-based ad tech company with a self-serve, real-time bidding platform, has been acquired by the Chicago-based, digital media software and services company Centro. It sold for $40 million in cash and stock. Ad Age has detailed overview of why the deal is relevant.



In Term Sheet this morning, my old colleague Dan Primack reports that Peter Fenton of Benchmark may have pulled a fast one on Institutional Venture Partners when it came time to join forces for Twitter’s Series C round in 2009. According to Primack’s sources, Twitter originally agreed to a Series C term sheet from Institutional Venture Partners, which is what Todd Chaffee told StrictlyVC last month. Said Chaffee, “Eventually, that news [that Twitter had accepted our term sheet] broke, and it brought everyone out of the weeds to outbid us. We asked [Williams and Stone], ‘Who do you like best of these groups?’ and they said Benchmark [Capital], so we dialed Benchmark into the deal.”

Primack reports this morning that Fenton “somehow convinced Williams to tear that [term sheet] up to let Benchmark lead the round, with IVP participating as a co-investor.”  (Though the deal will prove hugely lucrative for both firms, Benchmark clearly ended up with a bigger stake; it’s on Twitter’s  S-1 while IVP isn’t.)



Today, ad tech giant AppNexus is hosting its third annual New York Summit featuring industry leaders from the digital ecosystem today. If you can’t attend but want to tune in for part of the conference, you can follow along remotely by signing up here.

It’s the second and last day of the GigaOm Roadmap conference in San Francisco. Instagram founder Kevin Systrom and Franz von Holzhausen, chief designer at Tesla Motors, are among other featured speakers.

Today, Fast Company’s Innovation Uncensored conference takes place in downtown San Francisco. Among those speakers expected to appear: Pinterest CEO Ben Silbermann; Yelp CEO Jeremy Stoppleman; PayPal cofounder Max Levchin; and designer Hartmut Esslinger. You can check out the agenda here.


Job Listings

The Bill & Melinda Gates Foundation is looking for a program investment officer to help manage a $1.5 billion pool of money designed to advance the foundation’s charitable goals. The job’s requirements include investment and finance experience at a “top-tier” venture capital, private equity, or investment banking firm, as well as PhD-level scientific expertise in a field relevant to global health.


Essential Reads

Perhaps you’ve noticed: China’s homegrown Internet giants are buying their way into Silicon Valley. (CB Insights has more on the trend here.)



How being a tax dummy cost the New York Times a whopping $60 million.

Tesla’s Model S is now the most-registered car in eight of the 25 wealthiest U.S. zip codes.

The brother of journalist Michael Hastings sheds more light on Hastings’ life and death.

“Is Eric there, please?”


Retail Therapy

Glowdoggie LED dog collars, so you can spot Spot long after the sun sets.

Yin-Yang bathtubs for couples who don’t quite understand the concept of taking a bath together.

Star Trek hoodies. Oh, just do it. Embrace your inner nerd.


Correction: Yesterday, StrictlyVC flagged an SEC filing that appeared to show that Apple Tree Partners, a 14-year-old, Princeton, N.J.-based venture capital firm that invests in pharmaceuticals, biotech, and healthcare services, has raised $13.5 million for an annex fund to its second fund. We also noted that the firm’s second fund, which the firm began raising in 2008, had targeted roughly $30 million, according to a separate SEC filing. A representative for the firm has since told us that over the years, Apple Tree has raised a total of $112 million for its second fund and its annex fund.

Please feel free to send us any and all story suggestions (anonymous or otherwise) by clicking hereIf you’re interested in advertising in our email newsletter, please click here. To sign up for the newsletter, visit



Filed Under:

Don’t Miss Out!

Sign up today to receive a free daily email with everything you need to start your day. Plus, keep track of the companies and personalities that will shape the industry in the months and years to come. Let StrictlyVC be your very own venture capital concierge.

StrictlyVC on Twitter