StrictlyVC: April 9, 2014

Good Wednesday morning, everyone! StrictlyVC is off to a late start, so the newsletter is slightly abbreviated today; if we missed anything major, apologies!


Top News in the A.M.

Amazon is now the third-biggest streaming service after Netflix and YouTube.

As soaring stocks have fueled a surge in IPOs, signs emerge that investors are beginning to sour on the fresh arrivals.


Preempting Others, Tiger Leads $80 Million Round in Quora

Quora, the question-and-answer platform cofounded roughly five years ago by top Facebook engineers Adam D’Angelo and Charlie Cheever, has just raised a whopping $80 million in new funding led by Tiger Global Management, the 13-year-old Park Avenue-based hedge fund. Its new valuation, reportedly: $900 million.

The deal marks the third outsize funding that Tiger has led in the last six weeks alone. In March, Tiger led a $77 million growth round in OnDeck Capital, reportedly to fuel the small business lending site’s international and product expansion plans while making it harder for other market entrants to compete. Tiger and T.Rowe Price also plugged $60 million into the online ticketing and event planning company Eventbrite at a valuation of more than $1 billion.

Tiger and T.Rowe Price had invested a separate, $60 million in Eventbrite in just April of last year, and according to the Wall Street Journal, Eventbrite wasn’t looking to raise more money.

Tiger’s funding of Quora — which earlier investors Peter Thiel, Matrix Partners, North Bridge Venture Partners and Quora cofounder Adam D’Angelo also joined — sounds like a similar case.

In fact, other venture firms never really had a chance, suggests Quora’s business head, Marc Bodnick, who left the private equity firm he co-founded, Elevation Partners, to join Quora in January 2011. Quora “wasn’t actually raising money,” he tells me. “In fact, we had most of the money from the last round [$50 million round, closed in 2012] in the bank. But we’d improved the company in the two years since, and Tiger approached us about investing in the company a couple of months ago.” Tiger’s 33-year-old partner, Lee Fixel, was the one to make the call.

Quora, which has now raised roughly $140 million altogether, plans to do four things with the funding: expand Quora into other languages, à la Wikipedia; create “great mobile products” (its ever-improving email digests are one example); scale up the product technically by hiring more engineers and product managers; and put the rest in the bank. “We want to stay independent and make sure Quora lasts forever,” says Bodnick.

Given that the company “hasn’t even started to monetize,” according to Bodnick, it might need all that cushioning.

“Our ultimate goal is to share and grow the world’s knowledge,” he says. “In the last two years, we’ve built the biggest [online] library of first-hand knowledge, and the second-biggest [online] library after Wikipedia of general knowledge.” (It now has material on more than 500,000 topics.)

While the company’s revenue model is “likely going to be advertising-related” — Bodnick notes that a third of Quora’s traffic is looking for something specific and that its direct intent traffic “should create exciting financial opportunities” — that won’t be the focus for a while. “Right now,” says Bodnick, “the big question is: How do we make the product better and keep scaling it?”


New Fundings

Ability Network, a 14-year-old, Minneapolis, Mn.-based health care software company, has raised a whopping $550 million from Summit Partners. The company had previous raised roughly $33 million over several rounds, including from Bain Capital Ventures and Lemhi Ventures.

AdvanDx, a 12-year-old, Woburn, Mass.-based company that makes molecular diagnostics kits to diagnose and prevent infectious diseases, has raised $12 million in Series B-1 funding led by Merck Global Health Innovation Fund. Earlier investors LD Pensions and SLS Ventures also participated. The company has raised approximately $22 million to date, according to Crunchbase.

Altia Systems, a three-year-old, Cupertino, Ca.-based company whose main product enables users to participate in video conferencing with panoramic views and other interactive features, has raised $10.5 million in Series B funding led by Intel Capital. The company has raised $17.2 million altogether, including an earlier investment from Naya Ventures.

Aveillant, a 2.5-year-old, Cambridge, U.K.-based specialist in 3D surveillance radar technology, has raised $9 million in new funding from earlier investors including ESB NovusmodusDFJ Esprit and Cambridge Consultants, from where Aveillandt spun out. The company has raised roughly $21 million to date, shows Crunchbase.

Crittercism, a three-year-old, San Francisco-based company whose software monitors mobile app performance, has raised a $30 million Series C round led by Scale Venture Partners. Other participants includedInterWest Partners and VMware. The company has raised $48.7 million to date.

DerbySoft, a 12-year-old, Shanghai-based software company that connects its hotel customers’ central reservations systems with online booking and metasearch sites, has raised $9 million in Series C funding from DCMaccording to China Money Network. DerbySoft previously received $6.5 million in Series A funding from Northern Light Venture Capital in 2009. It received “tens of millions” of Series B funding from Keytone Ventures and Northern Light in 2011.

EquityNet, an eight-year-old, Fayetteville, Ak.-based business software company and equity crowdfunding platform, has raised $2.1 million from Proton Enterprises and individual angel investors.

The Flatiron School, a two-year-old, New York-based school that teaches Web application development, has raised $5.5M in funding led by CRV and Matrix Partners, with additional investment coming from Box Group and angel investors.

GrabTaxi, a 2.5-year-old, Singapore-based smartphone booking and dispatch platform for the taxi industry in South East Asia, has raised an undisclosed amount of Series A funding from Vertex Ventures, a wholly-owned subsidiary of Temasek, an investment company owned by Singapore’s government. The startup confirmed to TechCrunch that the that the investment is more than $10 million. More here.

Ineda Systems, a three-year-old, Santa Clara, Ca., and Hyderabad, India-based developer of low-power systems-on-a-chip for use in the wearables and the connect-device market, has raised $17 million in Series B funding led by Walden-Riverwood Ventures. Other participants in the round included Samsung Catalyst FundQualcomm VenturesIndusAge Partners and others. The company has raised roughly $26 million to date, shows Crunchbase.

InfoBionic, a three-year-old, Lowell, Ma.-based company whose device and software for the remote monitoring of patients with cardiac arrhythmia, has closed a first tranche of Series B round that the company says will reach $17 million. The round was led by new investor Safeguard Scientifics. Earlier investors Mass Medical AngelsBroadview VenturesTiEBeta FundLaunchpad Venture GroupCherrystone TCAHTCBoynton and Keiretsu also participated.

JenaValve Technology, a 7.5-year-old, Munich-based heart-valve replacement maker, has added $10 million to its Series C round from U.K.-based Valiance Asset Management and Belgium-based RMM. Other participants in the round included Atlas VentureEdmond de Rothschild Investment PartnersgimvLegend CapitalNeoMed Management,Omega FundsSunstone Capital and VI Partners. The round now totals $72.5 million, JenaValve said in a release. The company has raised at least $86 million altogether, shows Crunchbase.

Move Loot, a months-old, San Francisco-based company that’s building a platform to buy and sell used furniture online, just raised about $2.5 million, according to an SEC filing that was first flagged by VentureBeat. The company had participated in Y-Combinator’s winter 2014 class.

NetBrain Technologies, a 10-year-old, Burlington, Ma.-based company whose software helps engineers map, analyze and troubleshoot enterprise and service provider networks, has received a minority investment from Summit Partners.

NetProspex, a 7.5-year-old, Waltham, Ma.-based maker of marketing data management software, has raised $13 million in Series C funding led by Spring Lake Equity Partners. The round, which included the participation of earlier investors like Edison Ventures, brings the company’s total capital investment to date to $27 million.

Omada Health, a three-year-old, San Francisco-based startup that makes digital health therapy programs for people with type 2 diabetes and other serious but potentially treatable issues, has raised $23 million in Series B funding led by Andreessen Horowitz — marking one of the firm’s first big healthcare-related investments. Also participating in the round were Kaiser Permanente Ventures and earlier investors U.S. Venture Partners and The Vertical Group. TechCrunch has much more here on Omada, which has raised $28.5 million to date.

Ookbee, a three-year-old, Bangkok-based online bookstore, has raised $7 million led by Transcosmos. The financing, Ookbee’s second, values the startup at $70 million, according to Tech In Asia, which notes that the Thai venture firm InVent (formerly Shin Corporation), already owns a 25 percent stake in the company.

Peerform, a four-year-old, New York-based peer-to-peer lending platform, has raised $1 million in seed funding led by Corporest Development, a European-based advisory and investment firm.

Updater, a 3.5-year-old, New York-based company behind a relocation and address-change technology, has raised $8 million in Series A funding from SoftBank CapitalSecond Century VenturesIA Ventures, andCommerce Ventures. The company has raised $9.5 million to date, shows Crunchbase.



Market Metrix, an 18-year-old Larkspur, Ca.-based enterprise feedback management platform for the leisure and hospitality industries, has been acquired by Clarabridge, a Reston, Va.-based “customer experience management” software company backed by roughly $84 million in funding from General Catalyst PartnersSummit Partners, and Yuchen Lee. No financial terms were disclosed.



Andreessen Horowitz is warning its portfolio startups against “certain” investors outside Silicon Valley, says the WSJ, basing its report on the recent tweets of Marc Andreessen, who says the firms, which he declines to name specifically, are using term sheets as a starting (rather than an end) point for negotiations and forcing founders to break off talks with other investors. “[The non-Silicon Valley] investor can then renegotiate [the] deal arbitrarily and with impunity since company may be screwed if that investor walks,” he tweeted. “People in SV generally consider this unethical and abusive. Investors from outside SV, though, may consider [it] standard operating procedure.”

It’s “Silicon Valley” meets “Shark Tank” and “Cash Cab,” says the San Francisco Chronicle (aptly). Today, Google Ventures, in a promotion with its portfolio company Uber, will place six partners in the back seat of Uber cars that will then cruise through Silicon Valley from 11 a.m. to 3 p.m, listening to pitches that entrepreneurs can submit through Uber’s smartphone app. “This sounds like a ton of fun,” said a not-entirely-convincing David Krane to the Chronicle. Krane is general partner at Google Ventures who will be along for the ride.

Scott Griffith, the former chief executive of Zipcar Inc., has joined General Catalyst Partners as part of its investment team. Griffith spent a decade at Zipcar, leading it through an IPO and its subsequent sale to Avis Budget Group. Earlier in his career, he worked at Boeing.

It’s all part of what might be called the “credentials caucus,” says the Washington Post, the period before the 2016 campaign when the Republican Party’s presidential aspirants “quietly study up on issues and cultivate ties to pundits and luminaries from previous administrations.” According to the report, Senator Rand Paul, a Republican from Kentucky, has already made several trips to Silicon Valley and spoken “multiple times” to investor-entrepreneur and self-described libertarian Peter Thiel. He has also met separately with Bill Gates.


Job Listings

UC Davis‘s Venture Catalyst, a unit of the university that facilitates the translation of its research and technology into the development of new ventures, is looking for an associate director.



Exitround, a San Francisco-based online marketplace that matches acquirers with potential targets, now features more than 1,200 buy-side companies and 850 sell-side companies in more than 36 countries on its platform — big enough numbers to highlight some trends. Among them, says the company: 43 percent of buyers are outside of the tech sector; 168 of them are large publicly traded corporations; and the average active sell-side company on its platform gets introduced to three new buyers each month. CEO (and former VC) Jacob Mullins has more here.


Essential Reads

Atlassian, a 12-year-old Australian company that makes online collaboration tools for businesses, competes directly with Box. And like Box, it’s among the most richly valued venture-backed startups in the world right now, with a newly established valuation of $3.3 billion. That’s where the similarities stop, says the WSJ.

India’s biggest e-commerce company, Flipkart, is in the final stages ofcompleting a merger deal with the country’s fast-growing online fashion retailer Myntra, potentially creating a powerhouse far more capable of fending off aggressive rivals AmazonWalmart and the eBay-backed Snapdeal.



What the heartbleed security bug means for you.

The restorative power of music. (H/T: Liz Phair.)

Design Font War: Inside the design world’s $20 million divorce.

Classic album covers, as seen through Google Street View.


Retail Therapy

Bose’s newly released SoundTrue around-ear headphones, for when you’re ready for an upgrade.

A checker set that is also a bandana. (We know we let you down yesterday with those horrid jeans. This is recompense.)


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