Is it really Thursday already?! Hope you’re in for a fabulous day. Also, a quick reminder that you can reach out any time with tips, complaints, broken links, etc., at connie@strictlyvc.com or @cookie.
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At long last, Twitter has its female board member, announcing the appointment of Marjorie Scardino, former CEO of the media company Pearson, in a filing today. The appointment is effective immediately.
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Meet the VC Who Single-Handedly Raised $150 Million from Investors
In all likelihood, you’ve never heard of Rami Elkhatib. He isn’t Twitter-famous. He seldom speaks with reporters. He hasn’t worked at a brand-name firm. Before launching Acero Capital on Sand Hill Road in 2010, Elkhatib quietly represented the Raleigh, N.C.-based venture firm Southeast Technology Funds, where he worked as a West Coast-based general partner for roughly eight years.
But while Elkhatib may be a stranger to you, enough institutional investors know him — and apparently think quite highly of him – that they committed $150 million to his debut fund in 2010, where he was (and remains) the sole general partner.
Earlier this week, I caught up with Elkhatib, whose hits include the 2006 sale of Pixel Magic to Dai Nippon and the 2007 sale of the managed storage solution company Arsenal Digital to IBM. Our conversation has been edited for length.
You’ve been investing this fund since 2010. What are you shopping for, and how many startups have you backed?
The fund closed in 2010, but it’s still pretty early. We’ve made six investments, and the plan is to make 20 or so. As for focus, it’s on Enterprise IT broadly. We’ll probably invest in up to 18 [related] companies, along with a couple outside that space. Within Enterprise IT, the approach is to look at what enterprises are interested in, and for us, right now, that focus translates into analytics, mobility, infrastructure, and virtualization.
How big are the bets that you’re making?
We tend to be pretty agnostic: we’re focused more on the opportunity and the management team, but the investments we’ve made so far have been A or B rounds in the $4 million to $6 million range, with reserves set aside [for follow-on fundings].
What themes are interesting to you right now?
Enterprise mobility is an area I’m really interested in. There’s still a lot of room for innovation; I’m personally focused on finding mobility middleware – the equivalent of systems management companies from the traditional IT space.
We’re also very interested in real-time data, meaning true real-time. When people talk about real-time in big data, they’re talking about minutes, but I think we’re moving to a world where real-time insights come in milliseconds, where data that’s going through the network hasn’t even been stored yet.
You say “we.” Explain to readers how Acero works. You rely on “venture consultants,” which seems like a new twist on things.
Well, I’m the sole GP, but I’m not the only person. We [including an associate and venture partner] have a corporate, enterprise-focused sourcing strategy, meaning that for every subsector, our approach is to cultivate very strong relationships with large public platform companies in that sector, and we use those relationships to decide [what themes to pursue]. Toward that end, we have venture consultants with us who happen to be senior VPs in product management at platform companies [who we] talk with about their needs or, if we are interested in, say, the storage space, we make it our job to talk with them about where they see the market headed.
It’s not a casual effort. It’s the cornerstone of how we’ve been sourcing deals.
Have you modeled these scouts after another firm?
I’ve modeled it more on my own experience within Toyota and Procter & Gamble, where I spent the first third of my career as a software engineer focused on database design – an early ’90s version of big data. If anyone back then had wanted to talk about how you collect information about every [stock-keeping unit] in every store in the United States, and how you do trend analysis on that, there was probably no one better to talk with than my team.
Are these consultants compensated?
They are, though I’d rather not get into specifics. Ultimately, I hope that it will become a recruiting strategy. There are three to five people who have worked for us in that capacity, and I’m sure our next partner will be one of those people. It’s very challenging to add someone new to a team; I think [our way of interacting with these individuals] is a good way to get to know them.
I’ve never heard of a single-GP firm managing so much money. Will you hire another GP shortly?
We’ll be adding a principal and an associate … but I think it will take more time to add a GP. I don’t have it calendared. Partly, that’s because we just made our sixth investment [leading the $11 million Series B round of Gridstore, a startup that makes low-cost storage devices] the same week we sold one portfolio company [Bitzer Mobile, a company that makes mobile applications management software and that Oracle acquired in the middle of last month for undisclosed terms; Acero had led its lone, $4.83 round in 2011, joined by Chevron Technology Ventures]. So net net, my board commitments didn’t increase.
If you start a fund with one or two or three GPs, it almost always takes a long time. Whoever starts the fund needs to establish its personality and approach and strategy. After that, you can add GPs.
New Fundings
3D Robotics, the four-year-old, San Diego-based unmanned aerial vehicle company headed by former Wired editor Chris Anderson, has raised $6 million in new funding from Mayfield. The money is reportedly part of a $30 million round that was announced in September and that also includes True Ventures, Foundry Group, and O’Reilly AlphaTech Ventures. The company has raised $35 million to date.
Clarity Health, a six-year-old, Seattle-based, software-as-a service company focused on helping doctors, hospitals, and other parties coordinate the care of patients, has raised $6.6 million in funding. Columbia Pacific Advisors’ Opportunity Fund, which invested $3 million into the company in 2011, led the round.
ClearDATA Networks,a 14-year-old, Phoenix, Az-based healthcare cloud computing platform and services company, has raised $14 million in Series B funding. Merck Global Health Innovation Fund, Excel Venture Management and Norwest Venture Partners participated in the round. (ClearDATA previously had a first, $7 million, closing of its Series B round in August; it just held a second closing for Merck.)
Juno Therapeutics, a brand-new, Seattle-based, clinical-stage biotechnology company focused on developing immunotherapies for cancer, has raised $120 million from investors, including ARCH Venture Partners and the Alaska Permanent Fund. Juno is a spin-out of the Fred Hutchinson Cancer Research Center, Memorial Sloan-Kettering Cancer Center and Seattle Children’s Research Institute. According to Geekwire, it plans to launch clinical trials for prostate, lung, breast and pancreatic cancer as soon as next year.
Misfit Wearables, a two-year-old, Redwood City, Calif.-company that makes a wearable activity tracker called Shine, has raised $15.2 million in Series B funding led by Horizon Ventures. Previous investors, including Founders Fund, Khosla Ventures, Norwest Venture Partners, O’Reilly AlphaTech Ventures, and serial entrepreneur Max Levchin, also participated in the round. To date, Misfit has raised $23 million.
OrderWithMe.com, a 2.5-year-old, Las Vegas-based company that lands discounts for small businesses by aggregating their orders with other small business, has raised $6 million in Series B funding from Vegas TechFund, BaseVC, and other local Las Vegas investors. Previous investors Infinity Venture Partners, SOS Ventures and Silicon Valley Bank also participated in the round, which brings the company’s total funding to date to $9 million.
Playnery, a two-year-old, Korea-based game development studio, has raised $2.8 million in Series B financing led by JAFCO Asia. The company has raised $6.5 million altogether to date, including from Softbank Ventures, Qualcomm Ventures, and Stonebridge Capital.
Shareable Ink, a four-year-old, Nashville, Tenn.-based company that makes a digital pen and other software designed to easily document and organize patient visits, has closed a $10.7 million Series C funding round. Previous investor Lemhi Ventures led the round.
Snapsheet, a three-year-old, Chicago-based company whose mobile app promises to settle auto insurance claims by photo, has raised $10 million in Series B funding. No investors were named in an announcement about the round, though previous investors in the company, which has raised just north of $11 million altogether, include the Chicago-based firms Pritzker Group Venture Capital, Lightbank, and OCA Ventures.
Sweetgreen, a six-year-old, Washington, D.C.-based chain of farm-to-table eateries, has raised $22 million in new funding from Revolution Growth, an injection that brings the company’s total funding to $39 million. Revolution cofounder Steve Case had backed the company previously with his personal capital and decided to supercharge its growth after watching it expand, says the WSJ.
Ticketland, a Moscow-based event ticketing company, has raised $10 million in funding from the Russia-based investment firm iTech Capital. TechCrunch has much more on the company here.
Yetu AG, a Berlin-based startup at work on a smart home platform that will enable consumers to monitor and adjust their heat, energy and Internet usage from a single point of contact, has raised $8 million in Series A capital from Bilfinger Venture Capital and KfW, reports TechCrunch.
Zalora, an 18-month-old, Berlin-based online fashion start-up that sells roughly 500 different brands across Southeast Asia, has raised $112 million in new capital from billionaire Leonard Blavatnik’s Access Industries and U.S. asset management firm Scopia Capital Management. Zalora was incubated by Berlin-based Rocket Internet. Reuters has more here.
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New Funds
5AM Ventures, an 11-year-old early-stage, life sciences-focused venture firm with offices in Menlo Park, Calif., and Waltham, Mass., has closed its fourth fund with $250 million. The firm says the capital came from existing and new institutional investors, including endowments, family offices, foundations, funds-of-funds and pension funds.
Hoxton Ventures, a new, London-based early-stage venture firm, has raised a $40m (£24m) fund that it plans to invest in startups across Europe. The firm’s founders include Hussein Kanji, who spent more than two years as an associate with Accel Partners in London prior, and several years with Microsoft before that; and Rob Kniaz, who spent more than four years as a product manager at Google, as well as worked as a venture capitalist at Fidelity Ventures for more than a year. Wired.co.uk has much more on Hoxton and its strategy.
Persistent Systems, a four-year-old, Pune, India-based software products and technology services company, has launched a seed-stage venture fund that will focus on “supporting innovation in social, mobile, analytics and cloud computing technologies.” Its first investment, says the company, is Ustyme, a Sausalito, Calif.-based company that makes a free video call app for the iPad. Persistent hasn’t disclosed how much it plans to invest in startups; Ustyme raised $2 million in seed funding in September, according to the outlet FinSMEs.
Volition Capital — the Boston-based growth equity firm previously known as Fidelity Ventures before spinning off on its own in 2010 — has closed on a new, $170 million, fund. In a release yesterday, the firm said the it was originally targeting $150 million but it raised more to accommodate investor interest. Volition focuses on software and technology-enabled services businesses with at least $5 million in revenue and between 30 percent and 100 percent top-line growth.
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People
Snapchat‘s Evan Spiegel is still living with his father (for now), but his cofounder, Bobby Murphy, has just acquired a very nice, glass-lined home/box not far from the startup’s new Venice Beach, Calif., headquarters.
John Maeda, a former MIT professor turned president of the Rhode Island School of Design has accepted a role as “design partner” at Kleiner Perkins Caufield & Byers, a job he’ll assume in January. Maeda will also spend a small portion of his time at eBay, as chair of eBay’s new Design Advisory Board. AllThingsD has more here.
Brian O’Malley, long a general partner at Battery Ventures, has joined Accel Partners as a partner on its early-stage team. (StrictlyVC recent sat down O’Malley for this piece and this piece.)
Six months after entrepreneur Dave Morin‘s interview about his bespoke phone app with Vanity Fair, Kevin Rose of Google Ventures dares to share with VF how he uses his own phone.
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IPOs
Biotech IPOs: from hot to cold like that.
Soon, Twitter will settle into a ranking as the fourth biggest IPO of 2013. Can you name the top three?
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Exits
Health Guru Media, a six-year-old, New York-based online video company focused on health content, has been acquired by the privately held digital media company Kitara Media Corp. Terms of the deal weren’t disclosed, though Health Guru’s stockholders will receive a collective 18 million shares of Kitara’s stock. Health Guru had raised just less than $10 million, according to Crunchase. Its backers include Village Ventures, Castile Ventures, and Long River Ventures.
Nearbuy Systems, a 3.5-year-old, San Mateo, Calif.-based company that offers shopping customers opt-in WiFi in exchange for allowing retailers to track them, has been acquired. The buyer: in-store analytics company RetailNext. Terms of the all-stock deal were not disclosed. Nearbuy Systems had raised a little more than $3 million over the years, including from Innovation Endeavors and Metamorphic Ventures.
Stayz Group, a subsidiary of Fairfax Media, has been acquired by HomeAway, the Austin, Tex.-based online marketplace for vacation rentals. Venture-backed HomeAway, which went public in 2011, paid $198 million in cash.
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Job Listings
LinkedIn is looking for a business operations associate/senior associate to focus on predictive business planning and strategic initiatives for its mobile team. Applicants should have two to four years of experience at a management consulting, investment banking, private equity or venture capital firm, along with experience working with large datasets. An undergrad degree in a technical major is preferred.
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Data
“Civic tech” companies — which help people better interact with the government and their neighbors — are gaining steam, reports Inc. Picking up on a study released yesterday by the Knight Foundation, the outlet reports that between January 2011 and May 2013 alone, individuals, venture firms, and philanthropic organizations poured $431 million into 102 related start-ups.
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Essential Reads
The Journal looks at Beijing’s Zhongguancun district, calling it “China’s answer to Silicon Valley.”
The Economist notes that while European venture capital has had a bad rep since the dotcom bubble’s implosion, things are turning around, with at least six new European venture firms to emerge recently on the scene.
Valleywag confirms your suspicions: Uber really is minting money.
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Detours
Bloomberg Business week looks at Politico’s newest ambition in “expanding beyond the Beltway [and] heading for a destination almost as obsessed with itself as Washington and with just as many self-appointed know-it-alls: New York.”
In news that will bolster the perception that Harvard grades “more softly than some of its rivals in the Ivy League,” the college just disclosed that its most commonly awarded grade is an A.
Urban Outfitters has been cast into the cold by Goldman Sachs over one lousy bear coat (well, and a rogues’ gallery of other terrible items).
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Retail Therapy
Nike’s tricked-out Lunarendor QS snowboard boots are (almost) ready for purchase for the extreme snowboarder in your life. Cost: $500.
Ah, yes, of course, Ron Burgundy Blended Scotch Whiskey, for those times when nothing will do like good old-fashioned scotchy, scotch scotch, down into your belly.
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Correction: Yesterday, StrictlyVC flagged a Form D reflecting that Industry Ventures had raised $100 million for a special opportunities fund, but the firm has collectively raised much more than that: Yesterday, it said it has closed on a $425 million secondary fund – Industry Ventures Secondary VII – to buy up founder and employee stakes. It also announced that it has closed a $200 million Special Opportunities Fund that it plans to use to invest in larger transactions. Apologies for any confusion.
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