StrictlyVC: April 16, 2014

Happy Wednesday morning, everyone! Quick reminder: you can reach out to me any time about anything at or on Twitter: I’m here and here.


Top News in the A.M.

Google is announcing its first-quarter earnings today. Here is RBC analyst Mark Mahaney’s quarterly cheat sheet, via Re/code.

Alibaba is filing for its U.S. IPO next week, sources tell Reuters.


For Beckon CEO Jenny Zeszut, It Pays to Be Nice

Jenny Zeszut knows what it’s like when things don’t go as planned.

Today, Zeszut is the CEO of Beckon, a two-and-a-half-year-old San Francisco-based marketing analytics software company that helps customers like Converse, Nokia, and BSkyb transform messy data inputs into useful insights about their marketing efforts.

But Zeszut’s future didn’t always look so rosy. Back in 2006, Zeszut cofounded Scout Labs, among the first startups to harness social media as a tool for companies looking to better understand and engage their customers. Writing for TechCrunch in 2007, Michael Arrington called it “one of the more interesting startups” to launch that year.

The problem was, Scout Labs was growing up inside Minor Ventures, a venture fund started by CNet founder Halsey Minor. Minor’s expensive tastes coupled with the economic meltdown of 2008 were bankrupting him and making it impossible for Scout to pay its growing number of employees. More, his involvement made raising capital from other investors more difficult, suggests Zeszut. (Minor has famously battled with many VCs in the past.)

When Javelin Ventures and El Dorado Ventures stepped in to give Scout a lifeline, Zeszut was relieved. In 2010, when an opportunity arose to sell the company, she seized it. (Lithium Technologies paid $20 million to $25 million for Scout, which had raised $9 million altogether.) Zeszut knew she and her startup had dodged a bullet.

Investor Ron Palmeri, who was a managing director at Minor Ventures, has told me he thought Scout Labs could have become a much bigger company under different circumstances. “If anyone knows marketers and their needs, it’s Jenny,” Palmeri said yesterday in an email.

Talking with me yesterday, however, Zeszut didn’t sound remorseful. Though she loved Scout, four years of ups and downs had made “an early-ish exit more attractive than sticking it out over the long term,” she says. The experience also taught her plenty of lessons that inform how she’s running Beckon today.

The biggest lesson she learned was that it pays to be nice. When Scout wasn’t able to pay “a big team of employees, almost with no notice, I told them to go home. But they stuck with us,” says Zeszut of herself and Jochen Frey, her CTO at Scout Labs and now Beckon’s CTO and cofounder. “They took money from their 401(k)s to pay their nannies.” Almost everyone on that team is now at Beckon, which has 27 employees. “I’m probably more proud of that than any exit,” she says.

It turns out that this lesson applies to investors, as well. “One thing you learn is that the biggest decision isn’t who your cofounders are but who your investors are, because you’re [stuck with them] unless you sell your company.”

When I ask her if she resents Minor, she maintains her equanimity. “There are no hard feelings there,” she says. “It’s a bummer, what happened. But he gave me an amazing opportunity; I might never have had a chance [to become an entrepreneur] if he didn’t.”


New Fundings

AVLife, a year-old, Paris-based gene-therapy company focusing largely on an autosomal recessive inherited disease called Friedreich’s ataxia, has raised $12 million in Series A financing. Versant Ventures led the round with participation from Inserm Transfert Initiative, a French seed-investment firm.

Act-On Software, a 5.5-year-old Beaverton, Or., maker of cloud-based marketing automation tools, has raised $42 million in new funding led by Technology Crossover Ventures. Earlier investors Norwest Venture PartnersTrinity VenturesU.S. Venture Partners and Voyager Capital also participated in the round, which brings the company’s total funding to $72.5 million, shows Crunchbase.

Automattic, the nine-year-old, San Francisco-based company behind the popular blogging platform WordPress, is raising between $100 million and $150 million in new funding at a valuation north of $1 billion, according to Fortune’s sources. To date, the company has raised just $30.6 million in primary funding, including from True VenturesNew York TimesPolaris PartnersRadar Partners and Blacksmith Capital, a small angel fund co-founded in 2003 by True Ventures’s cofounders Phil Black and John Burke. (True was founded in 2005.)

Avvo, a seven-year-old, Seattle-based online legal advice marketplace, has raised $37.5 million in Series D funding led by new investor Coatue Management. Earlier investors BenchmarkIgnition Partners and DAG Ventures also participated in the round, which brings the company’s total funding to $60.5 million.

Beepi, a year-old, Los Altos, Ca.-based peer-to-peer marketplace for buying and selling used cars, has raised $5 million in Series A funding from Redpoint Ventures, with participation from Silicon Valley Bank and numerous individual investors, including entrepreneur Fabrice Grinda. Beepi has raised $6.25 million to date.

Boxbee, a two-year-old, San Francisco-startup that delivers boxes to its customers, then takes way whatever they want to store, has raised $2.3 million in seed funding led by Floodgate Capital, with Google Ventures,500 StartupsTechstarsJason Calacanis and Ludlow Ventures taking part. The company passed through AngelPad, the San Francisco-based accelerator, last year

The Currency Cloud, a two-year-old, London-based fintech startup offering cross-border payments as a service, has raised $10 million in Series B funding from earlier investors, including Atlas VentureAnthemis GroupNotion Capital and XAnge Private EquitySilicon Valley Bank also provided an unspecified line of capital. The company has raised $19 million to date.

ezCater, a nearly seven-year-old, Boston-based Web marketplace that helps people discover and order from local caterers everywhere in the U.S., has raised $4 million in funding to bolster the number of caterers on its platform and to reach more customers. The company’s investors include LaunchPad VenturesBreton Capital Management, and individual investors, including CheapFlights co-founder Chris Cuddy. The company has raised $6.5 million to date.

Greats Brand, a year-old, New York-based maker of men’s sneakers and casual footwear, has raised $1.5 million in seed funding led by Resolute Ventures. Other investors to participate in the round include High Peaks Venture Partners, and Mark Gerson of the Gerson Lehrman Group.

HeiaHeia, a 3.5-year-old, Helsinki-based startup whose gamified corporate wellness platform aims to help employees live a healthier lifestyle, has raised €1.5 million ($1.9 million) in funding led by Finland’s Wallstreet Financial ServicesTekes, the Finnish taxpayer-funded agency for innovation, and unnamed individual investors

ItsOn, a 5.5-year-old, Redwood City, Ca.-based cloud-based service that promises to help mobile operators more quickly and cheaply deploy new services, has raised $12.5 million in Series C funding led by Tenaya Capital, with participation from earlier investor Andreessen Horowitz. The company has raised $40.1 million to date, shows Crunchbase.

Jasper, a 10-year-old, Sunnyvale, Ca.-based company whose software enables all types of objects to communicate, has raised $50 million in funding at a valuation of more than $1 billion, reports Deborah Gage of the WSJ. The funding was led by Temasek, in Singapore, and takes Jasper’s total funding to $205 million. Earlier investors in the company include AllianceBernsteinBenchmarkBridgeScale PartnersDAG Venturesand Sequoia Capital.

KeyMe, a two-year-old, New York-based startup that allows users to store, share, and duplicate their physical keys based on a digital image, has raised $7.8 million in funding from investors that include White Star CapitalBattery Ventures7-Ventures (the investing subsidiary of 7-Eleven), and early investor Ravin Gandhi. The company has raised $10.1 million to date, shows Crunchbase.

Kinetic Social, a 2.5-year-old, New York-based maker of social media advertising software, has raised $18 million in Series B funding led by Blue Chip Venture Company. Kinetic’s management and new investors have also bought the ownership interest of legacy shareholders, the company said yesterday. Altogether, the company has raised $74 million in equity and another $6 million in debt, shows Crunchbase.

Liepin, a Beijing-based Chinese Internet recruitment company, has raised $70 million in Series C funding from Warburg Pincus and Matrix Partners China. Matrix had made its first (undisclosed) investment in Liepin in 2011, around the time of the company’s A round; it helped organize its B round, too, said the companies in a statement.

LearnVest, a seven-year-old, New York-based online financial planning platform. has closed a $28 million round of financing led by Northwestern Mutual Capital. Earlier investors Accel Partners and American Express Ventures also participated in the round, which brings LearnVest’s total funding to more than $72 million.

NantHealth, a 6.5-year-old, Culver City, Ca.-based company focused on delivering next-generation care, is now minority owned by BlackBerry, which said yesterday it was taking a stake in order to collaborate with NantHealth on a new smartphone aimed at the health-care industry. Terms of the investment weren’t disclosed. NantHealth is run by billionaire Patrick Soon-Shiong, who sold his cancer-treatment company Abraxis BioScience to publicly traded Celgene Corp. in 2010.

OwnZones Media Network, a four-year-old, Phoenix-based content curation platform, has raised $5.9 million in Series A funding, it says; the company isn’t disclosing its backers.

PanOptica, a five-year-old, Bernardsville, N.J.-based biopharmaceutical company whose eye drop treatment is designed to treat age-related macular degeneration, has raised $45 million in new funding led by Novo Ventures and earlier investors Third Rock Ventures and SV Life Sciences. The company has raised at least $75 million to date, shows Crunchbase.

Paperless Post, a 5.5-year-old, New York-based startup that produces both online and offline greeting cards, has raised $25 million in Series C funding led by August Capital, with participation from existing investors. The company has raised $37 million altogether, including from RRE VenturesSV AngelTim DraperRam Shiram, and Mousse Partners.

Squarespace, a 10-year-old, New York-based Website building platform, has raised $40 million in new funding from General Atlantic. The company has raised $78.5 million altogether, including from Index Ventures and Accel Partners.


New Funds

Column Group, a nearly eight-year-old, San Francisco-based venture firm focused primarily on early-stage drug discovery companies, has raised $175.9 million for a second fund that’s targeting $250 million, according to a regulatory filing.

Fronterra Ventures, a months-old, Calgary-based venture firm, is raising between $100 million and $150 million in funds to invest in startups in the oil, gas and mining industries, says VentureWire. More here.



Doozton, a 16-month-old, New Delhi, India-based fashion products discovery site, has been acquired by Snapdeal, India’s biggest e-commerce marketplace, reports TechCrunch. Terms of the deal aren’t being disclosed; Doozton was reportedly bootstrapped.

Reliance Holding, a 15-year-old, California-based company whose SchoolMessenger notification system and app sends alert messages to students, their parents and school employees to notify them of emergencies and other situations, has been acquired for an undisclosed sum by West Corp., a publicly traded telecom services provider.



Chris Beard, an executive-in-residence at Greylock Partners, has been named interim CEO of Mozilla Corporation, as well as appointed to its board. Beard has deep ties to Mozilla; he was previously its chief marketing officer, chief innovation officer, and vice president of products.

Twitter founders Ev Williams and Jack Dorsey and Twitter president Dick Costolo have seen their fortunes rise along with Twitter’s publicly traded stock, but none have “current plans to sell any of their shares of Twitter common stock,” says a new SEC filing. Benchmark also has “no intention to sell or distribute stock to their limited partners before or immediately after the expiration of our lockup on May 5, 2014,” says the filing. Forbes has more here.


Job Listings

Montreal-based BDC (the Business Development Bank of Canada) is looking for an associate director, venture capital.



Engineers are feeling pretty good about their station in life, shows a recent survey picked up by Re/code. The survey of 1,000 software developers, conducted last month by the Seattle-based code-automation company Chef, suggests that 69 percent of engineers think their role is “recession-proof,” while 91 percent say they feel they are the “most valued” employees at their company, and fully 56 percent believe they will become millionaires at some point.

Researchers at Mercom Capital say healthcare IT companies raised more VC money in the first quarter of this year than in any quarter before. Almost 190 venture capital and private equity investors pumped $858 million into companies in the sector, says Mercom. That’s almost double the $439 million they invested in the first quarter of last year.


Essential Reads

Better late than never: Yesterday, the wireless industry announced a voluntary commitment to include new anti-theft technology on phones starting next year, with backing from Apple, Google, HTC, Huawei, Motorola, Microsoft, Nokia and Samsung. Based on the agreement, devices sold after July 2015 will be capable of being rendered inoperable by their owners (who can restore them fully later if their devices are recovered). Re/code has more here.



Zuckberg Vows Facebook Will Shoot Down Google Drones.

Inventors killed by their own creations. (Watch out, Evan Spiegel!)

Remember that Porsche 918 Spyder we highlighted last week? Take it for a test drive.


Retail Therapy

A desk that gently reminds you to get off your arse? We want one.

Can You Handlebar?


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