StrictlyVC: February 18, 2014

110611_2084620_176987_imageHi, everyone, welcome back and happy Tuesday!


Top News in the A.M.

Another day, another leaked document from Edward Snowden. This time, everyone is buzzing over the news that British spies targeted WikiLeaks readers.


Innovation in Snapchat Time

There’s been a lot of talk of “ephemerality” in tech circles lately, driven in part by the rise of Snapchat, the popular mobile app that allows users to send self-destructing messages and images. But Niko Bonatsos, a principal at General Catalyst Partners — which participated in Snapchat’s A and B funding rounds — thinks the trend is becoming ubiquitous and that Internet startups have less time than ever to prove themselves before their window of opportunity slams shut.

Yesterday, I chatted with Bonatsos about the “rapid decay” of so-called digital assets, with Bonatsos noting that our loyalty to digital products at an all-time low. To make his point, Bonatsos ticked off a list of “digital” companies to fall from their perches, many disrupted in the span of five years or less (think MySpace, Blackberry, AOL, and Firefox, among others).

Bonatsos also pointed to mobile phone apps, noting that more than half the top 100 Android and iOS apps today didn’t exist just a year ago, and that the lists are almost entirely different than two and three years ago.

“Unlike 10 years ago, when we still had product life cycles, today, [users migrate to a new technology] as more of an impulse, and there isn’t a lot of time to act if your product isn’t perfect. People will just migrate to the next form factor, the next paradigm.”

I asked Bonatsos how this constant migration of users is impacting the way he invests. After all, what’s to say people won’t move on from Snapchat to some other app that gains their confidence? He said Snapchat serves a core human need right now – to be authentic and express ourselves privately — which is one of his firm’s criteria. Bonatsos said another buffer against fickle consumers is to back companies that are “used every day to solve a real world problem.” Here, he pointed to Uber, which has largely replaced the frustrating process of calling a cab, and the travel metasearch engine Kayak, a General Catalyst portfolio company that was acquired by Priceline last May.

Still, he noted that it’s never been so important for digital startups to “be on top of their numbers” to “deeply understand the intensity of [their users’] engagement,” and to “be smart [and] leverage user acquisition channels really early on, when they are cheap.”

Bonatsos – who was raised in Athens and holds engineering degrees from Stanford, the University of Cambridge, and the National Technical University of Athens — acknowledged that all of it is “easier said than done.” He also said that startups typically have “some time” to take action if their metrics aren’t heading in an ideal direction — but not much.

“Even when something becomes mainstream,” he said, “the clock is ticking.”


New Fundings, a 10-year-old, Suzhou, China-based online travel services platform, has raised $82.5 million in Series C funding from Tencent HoldingsBoyu Capital and Oriza Holdings, according to Chinese media reports. Previously, received $5.8 million in Series A funding from Oriza Holdings in 2008, and an undisclosed amount of Series B funding from Tencent in 2012.

Cheyipai, a 4.5-year-old, Beijing-based, used-car trading platform, has received $50 million in Series C funding, according to the company.Sequoia Capital led the round. CITIC Capital and earlier investorsMorningside Ventures and Matrix Partners also participated. Cheyipai has raised $75 million to date.

Clue, a year-old, Berlin-based digital fertility startup, has raised $836,000 in seed funding led by individuals, including Christophe MaireJoanne Wilson, and earlier investor Thomas Madsen-

Elastica, a 1.5-year-old, San Jose, Ca.-based company that sells cloud application security services, has raised $6.3 million in a Series A funding led by Mayfield Fund.

EnModus, a 3.5-year-old, Wales-based smart home automation startup, has raised $2.5 million in seed investment from current investorAndromeda Capital Partners and new investor Finance Wales. The company’s core technology is Wattwave, a power line communications protocol for appliances and buildings.

Hampton Creek Foods, a 2.5-year-old, San Francisco-based company that’s creating alternatives to animal-based foods (including an organic product that tastes like chicken eggs), has raised $23.3 million in Series B funding, led by Horizons Ventures. Other investors to participate in the round included Khosla Ventures, Yahoo co-founder Jerry Yang and serial entrepreneur Ali Partovi. Hampton Creek has raised roughly $30 million to date.

Hyperfair, a 3.5-year-old, San Francisco, CA-based virtual trade show platform, has raised $1.2 million in seed funding led by New Enterprise Associates, with participation from Atlante Ventures and Como Venture.

Intacct, a 15-year-old, San Jose, Ca.-based company that makes cloud-based financial management software, has raised $45 million led byBattery Ventures, which was joined by Silicon Valley Bank and Morgan Creek Capital Management. Previous investors, including Bessemer Venture PartnersCostanoa Venture CapitalEmergence Capital,Sigma Partners and Split Rock Partners, also participated.

Little Bird, an 18-month-old, Portland, Or.-based company whose technology makes it easier for brands to find and interact with online “influencers”, has raised $1.7 million in seed funding led by the Oregon Angel Fund. The company, led by former TechCrunch writer Marshall Kirkpatrick, has raised $2.7 million altogether.

Novimmune, a 16-year-old, Geneva, Switzerland-based biotech company focused treating immune-related disorders, has raised $66 million in Series B funding led by Rosetta Capital, which was joined by one new, undisclosed investor and earlier investors. The company has raised $211 million over the years, according to Crunchbase.

Palantir Technologies, the 10-year-old, Palo Alto, Ca.-based data insights company with roots in the intelligence world, has raised a lot of money, shows a couple of new SEC filings that were processed on Friday. The first filing shows a close on $111 million from a fundraising effort that began in June of last year. The second filing shows a separate fundraising effort that began in late November; it says the total offering sold since is $279 million.

Safello, a year-old, Stockholm-based online processing exchange, has received $600,000 in seed money from individual investors. VentureBeat has much more here. The company has raised roughly $1 million to date.

Transcriptic, a two-year-old, Menlo Park, Ca.-based maker of remote robotic labs, has raised $2.8 million from investors. The company has raised $4 million to date, including from Google Ventures and Founders Fund. VentureWire has more here.

TutorGroup, a nine-year-old, Shanghai-based online language-learning platform, has raised nearly $100 million, including from Chinese e-commerce giant Alibaba Group, Singapore’s sovereign wealth fundTemasek, and Qiming Venture Partners, which earlier invested $15 million in the company.

Uniquedu, a Beijing-based education-based company has raised $16 million in Series A funding led by Fosun Group’s venture capital arm Fosun Venture Capital Investment.


New Funds

Capital Partners, a new, Palo Alto-based investment fund founded byRonny Conway, son of renowned angel investor Ron Conway, is raising a $51 million fund, according to an SEC filing. (Though the filing, dated February 13, says the first sale has yet to occur, a TechCrunch source says the fund is already closed.) Conway additionally filed for two separate funds on Friday, one called Capital Parallel Fund A, which lists $5 million as its target, and Capital Parallel Fund B, which lists $14 million as a target. Fortune reported last fall that Conway was raising a fund to back seed-funded companies before they seek out Series A funding.

Commerce Ventures, an 18-month-old, San Francisco-based micro-VC fund focusing on the “future of commerce,” has raised $13.3 million, according to a new SEC filing. Commerce Ventures was founded in the fall of 2012 by Dan Rosen, a former principal with Highland Capital Partnerswho focused on mobile and payments startups for the firm. Before joining Highland, Rosen was an associate at HarbourVest Partners, worked in corporate development at RSA Security; and served as a software consultant for American Management Systems.

Greenspring Associates, a 13-year-old, Owings Mills, Md.-based venture capital fund of funds, is nearing a close of its latest venture capital and growth equity fund of funds, even as the firm prepares two new offerings,an investor tells the WSJ. The firm has raised $182.8 million so far forGreenspring Global Partners VI LP, show SEC filings.

Inimiti Capital Partners, a two-year-old, Herzelia, Israel-based venture fund that describes its focus as “software platforms and services in the new media space,” has raised $30 million of a planned $35 million fund, according to a new SEC filing that shows the firm has been raising the capital since June 2012. Founders include Ofer Timor, who co-founded and managed Delta Ventures, a seed and early stage Israeli fund; Nimrod Lev, a serial entrepreneur whose startup kSolo was later acquired by MySpace (Lev then served as a senior VP and general manager for MySpace); and Alon Geva, who previously founded Nuvisio, a software company in the direct marketing space.

Siemens Venture Capital is launching a new, $100 million fund to back early-stage startups working in the areas of industrial automation and other digital technologies that can transform manufacturing. Learn more here.



Akebia Therapeutics, a 6.5-year-old, Cambridge, Ma.-based biotech that’s developing treatments for anemia, has filed to raise up to $75 million in an IPO. The company’s principal shareholders include Novartis Bioventures, which owns 25.1 percent of Akebia; Venture Investors Early Stage Fund IV, which owns 11.3 percent; trusts and other affiliates of Muneer Satter, which own 11.1 percent; Kearny Venture Partners, which owns 10.4 percent; Novo, which owns 10.2 percent, and Triathlon Medical Ventures, which owns 8.7 percent.

Borderfree, a 15-year-old, New York-based service that helps retailers handle transactions with online customers in foreign countries, has confidentially filed to go public, reports the WSJ. Borderfree raised roughly $10 million from investors in 2012, including Delta VenturesPitango Venture CapitalAdam Street Partners, and financing from Viola Credit.

Japan Display, the world’s biggest maker of displays for smartphones, incuding the iPhone 5s and iPhone 5C, is planning to raise up to $4 billion in what would be Asia’s biggest IPO so far this year, reports the WSJ. The company was formed from the liquid crystal display units of Hitachi, Toshiba, and Sony Corp., with a Japanese government-backed fund pouring $2 billion into the combined entity.

King Digital Entertainment, the Irish publisher behind “Candy Crush” and several other big mobile games, has filed its initial IPO papers with the SEC. Re/code has more here.

Spotify is eyeing an IPO, says Reuters, which reported yesterday that the online music streaming service has hired a a U.S. financial reporting specialist. According to the report, one banker said Spotify could be valued at as much as $8 billion. (Publicly traded Pandora is valued at $7 billion currently.) Spotify has raised roughly $540 million since its 2006 founding, including from Horizons VenturesWellington PartnersKleiner Perkins Caufield & ByersAccel Partners, and Technology Crossover Ventures.

Why India’s answer to Alibaba and eBay is the tech IPO to watch.



CoStim Pharmaceuticals, a two-year-old, Cambridge, Ma.-based biotechnology firm, is being acquired by Switzerland-based Novartis for an undisclosed sum. CoStim was backed by Atlas VentureMPM Capital, and Partners Innovation Fund. The Boston Globe has much more about the acquisition here.

SlickLogan, a year-old Israeli security startup, has been acquired byGoogle for an undisclosed sum. Under the terms of the deal (financial details of which aren’t being disclosed), Google will be absorbing the workforce of the sound-based password developer.



Y Combinator cofounder Jessica Livingston on the incubator’s earliest days nine years ago: “Paul Buchheit, who’s one of the YC partners who invented Gmail, gives this great advice which is, ‘It’s so much better to make a few people love you, than a lot of people just like you.’ And that is just so true, with whatever you’re doing. And that’s what it was for us. A few people loved us, and we just sort of just grew from there. So even though reporters didn’t love us, they wouldn’t return my phone calls and could care less that we were doing this new way of funding, we just moved on. We didn’t need them.”

Google is moving into San Francisco’s Mission neighborhood. At least, it looks to be moving up to 200 of its employees — mostly engineers who don’t want to trek down to its Mountain View headquarters — to the Mission, according to a report in the Financial Times.

Eighteen “power couples” in tech, care of Business Insider.



The Columbia Business School is hosting its 20th annual Private Equity & Venture Capital conference in New York on February 28. Greycroft Partners founder Alan PatricofCanaan Partners cofounder Eric Young, and NEA managing partner Peter Barris are speaking at the event, which you can register for here.

The Launch festival is coming to the San Francisco Design Center Concourse, February 24 through February 26. More information here.



CB Insights mined its app store data to identify which apps in the ephemeral app ecosystem are doing well (or not). At the top of CB’s list, unsurprisingly, are Snapchat and Whisper; slightly more surprising is how little the rest of the players in the space have received as of yet.


Job Listings

Aarki, a three-year-old, Mountain View, Ca.-based mobile ad platform company, is in the market for a COO with a media background.


Essential Reads

study released Friday by UC-Hastings Professor Robin Feldman and Harvard Fellow Dr. Nicholson Price predicts that biopharmaceutical companies will become a growing target of patent trolls. In their deliberately “light, rather than an exhaustive, search,” they identify dozens of patents that could be deployed against current industries, from active ingredients of drugs to dosage forms to screening methods to identify new drugs.

Meet Deborah Liu, the woman behind Facebook‘s fast-growing mobile app install ads.

Robocoin, a Las Vegas company, says that later this month, it will install the first ATMs in the United States that let users buy and sell bitcoin, the latest step into the mainstream for the digital currency. Reuters has more.

Secret revealed: a look inside the most scandalous social network.



Watch as a 900-foot asteroid zips by Earth.

What does it take to be so fabulous that your wardrobe overshadows the Olympics? According to Johnny Weir and Tara Lipinski, a lot of preparation.

German table tennis player Timo Boll versus the Kuka KR Agilus robot. Coming soon.


Retail Therapy

Keep track of how many drinks you’ve consumed with the Bevometer. (If you need this, you should just check yourself straight into rehab.)


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