StrictlyVC: April 28, 2014

Good Monday morning, everyone!


Top News in the A.M.

What jurors in the Apple-Samsung case will hear today instead of closing arguments.


Bigcommerce Primes Itself for a Big Round

Bigcommerce, a five-year-old, Austin-based start-up whose software-as-a-service helps more than 55,000 companies create and manage their online stores, is in the market for more funding, co-founder and CEO Mitchell Harper suggested in a wide-ranging conversation with StrictlyVC last week.

The company — which charges its customers a flat rate of between $24 per month, all the way up to $1,000 per month for “white glove service” — raised $40 million last July from Revolution, the investment firm cofounded by AOL cofounder Steve Case. At the time, Case told me that neither BigCommerce nor its previous investors, including General Catalyst Partners and Floodgate, were looking for such a big injection of fresh capital. The company, which has raised $75 million altogether, is operating in a space that has since heated up considerably, though.

Most notably, Shopify, an eight-year-old, Ottawa-based startup with which BigCommerce competes most directly, raised $100 million in December led by OMERS Ventures and Insight Venture Partners. The funding is helping Shopify in its ongoing expansion from online commerce into the brick-and-mortar world, where it has launched a point-of-sale version of its software that’s optimized to run on tablets like the iPad. (Shopify has raised $122 million altogether.)

In our conversation, Harper wasn’t specific about whether BigCommerce’s strategy going forward will involve the same path. But he did say the company might soon begin acquiring its way into new markets.

“Most decisions have been build versus buy or partner,” he said, “but that could change. Small business use a lot of tools, from email marketing to social media to inventory; there are probably 30 or 40 adjacent products” that the company could explore. While it doesn’t have specific plans to launch into any of them, he added that in “three months that could change, the market is moving so quickly.”

In the meantime, BigCommerce, whose revenue is currently growing 20 60 percent year over year, appears to be stepping on the gas. For example, the company, which has offices in Austin and Sydney, is opening an office in San Francisco, too, and earlier this month used some guerrilla tactics to staff it, including descending on engineers at tech bus stops that fill with Facebook, Google, and Yahoo employees. (Using both recruiters and its own engineers to hand out invitations to a happy hour, BigCommerce managed to engage with roughly 1,000 people and snag about a dozen, Harper says.)

Harper noted that no new funding announcement is imminent, but that because capital right now is “cheap,” a new round is “definitely not off the table at the moment. It depends on the valuation, the dilution, the potential upside that an investor can bring . . . and whether they share the same vision that we do.”

He added that that while the 320-employee company has been “optimizing for growth” and isn’t profitable as a result, it could be “very profitable” if management were focused instead on getting the company into the black.


New Fundings

Big Health, a five-year-old, London-based digital health start-up, has raised $3.3 million in Series A funding from Index Ventures andForward Partners. The company tracks data to create highly personalized behavioral medicine programs; its first product, Sleepio, targets customers with sleeping issues.

Blue Apron, a two-year-old, New York-based grocery delivery service company, is raising $50 million in Series C funding led by Stripes Groupaccording to TechCrunch. To date, Blue Apron has raised a total of $8 million, according to CrunchBase, with two earlier rounds led by Bessemer Venture Partners.

Datumate, a two-year-old, Nazareth, Israel-based image-mapping software maker whose technology aims to reduce the time civil engineers and architects spend taking technical measurements for projects, has raised $5 million in funding by Battery Ventures. Earlier investor Al-Bawader, an Israel-based investment firm, also participated in the round.

Fundrise, a two-year-old, Washington, D.C.-based company that helps any resident (and not just accredited investors) invest in properties in their local market, has raised $20.5 million, according to an SEC filingthat shows a target of $32.8 million. The company had previously raised a $2 million seed round, including from WestMill Capital, according to Crunchbase., a 10-year-old, Provo, Ut.-based company whose predictive analytics software aims to help salespeople close deals, has raised $100 million at a valuation of nearly $1 billion, according to Venture Capital DispatchPolaris Partners led the round — contributing “sizably more than anyone else,” it says in the story — joined by Kleiner Perkins Caufield & Byers, which chipped in $25 million from its $1 billion digital growth fund. InsideSales has raised $143 million altogether, shows Crunchbase.

OurCrowd, a 1.5-year-old, Jerusalem, Israeli-based equity crowdfunding platform for accredited investors, has raised $25 million in Series B funding from unnamed investors.

Paddle8, a 3.5-year-old, New York-based virtual auction house focused on fine art, has raised $7 million in debt, according to an SEC filing that shows the company is looking to raise $18 million in debt. The company has raised $10 million in equity to date, including from Mousse PartnersFounder Collective, the Mellon FamilyRedline Capital Management,Haystack, and artist Damien Hirst.

SI-BONE, a six-year-old, San Jose, Ca.-based medical device company that’s focused on lower back pain and making surgery for the sacroiliac joint minimally invasive, has closed a $33 million round of funding led by OrbiMed and Novo A/S. Earlier investors Skyline Ventures andMontreux Equity Partners also participated.

SocialFlow, a five-year-old, New York-based social media platform that helps brands engage with existing and potential customers, has raised $2.4 million in new funding, according to an SEC filing that lists a target of $2.6 million. SocialFlow had previously raised $24.8 million, shows Crunchbase, including from AOL VenturesFairhaven Capital PartnersRRE VenturesSV Angel and Betaworks.

Streem, a nearly two-year-old, San Francisco-based cloud storage startup, has raised $875,000 in seed funding, including from Y Combinator500 StartupsIronFire CapitalArbor VenturesStart Fund, and numerous angel investors, according to TechCrunch.

Tiny Speck, a five-year-old, San Francisco-based company behind a real-time messaging, archiving and search tool called Slack, has raised a fresh $42.75 million in Series C funding led by Social+Capital Partnership. Other participants in the round included Accel Partners and Andreessen Horowitz, which had funded an earlier iteration of Tiny Speck that had focused all of its efforts on a multiplayer game called “Glitch.” The company released an early version of the Slack app last summer and launched it officially in February. Tiny Speck had raised $17.2 million previously.

Tradier, a 1.5-year-old, Charlotte, N.C.-based brokerage platform and trading and analytics application hosting environment, has raised $3 million in new funding from its founders and Devonshire Investors, which is the private investment arm of Fidelity Investments’ owners, the Johnson family.

Verdezyne, a nine-year-old, Carlsbad, Ca.-based industrial biotechnology company focused on producing renewable chemicals, has raised $48 million led by the Malaysian multinational conglomerate Sime Darby Berhad. Earlier investors in Verdezyne include BP Alternative Energy VenturesDSM Venturing B.V.OVP Venture Partners, and Monitor Ventures.

Voluntis, a 13-year-old, Suresnes, France-based healthcare software company that specializes in Patient Relationship Management (PRM), has raised $29 million in Series D financing co-led by Bpifrance Large Venture and Innovation Capital. Earlier investors, including CapDecisif ManagementCM-CIC Capital Innovation and Sham, also participated in the round.


New Funds

Hamilton Lane, the Bala Cynwyd, Pa.-based fund-of-funds firm, has closed its newest vehicle with $426.8 million. It says its original target was $400 million.



Three newly public companies had a rough first day on the stock market Friday, joining the broader market sell-off. Shares of stent maker Lombard Medical closed down 9.1 percent. Quotient, a blood test developer, also saw its shares sink 6.9 percent. And app maker Viggle dropped the most at 28 percent. Viggle’s biggest venture backers include Adage Capital Management, which owned 6.5 percent of the company heading into its IPO; DAG Ventures, which owned 9.2 percent; Accel Partners, which owned 6.4 percent; and Frazier Technology Ventures, which owned 6.2 percent. Quotient’s majority shareholder is the healthcare venture firm Galen Partners, which has a 51 percent stake in the company. And Lombard’s biggest shareholders include Invesco, which owned 39 percent going into its IPO; Abingworth, which owned 17.8; Fidelity, which owned 9.5; and Life Sciences Partners, which owned 5.7 percent. USA Today has more here.

Radius Health, an 11-year-old, Cambridge, Ma.-based company that tried to go public in 2012 but withdrew its application, is again trying to go public in an effort to raise $92 million from investors. Radius Health, originally called Nuvios, makes a bone-density-boosting drug that’s in the middle of a Phase III study. Xconomy had written about some of the company’s earlier woes, including turnover at the top, in December. Its shareholders include MPM CapitalThe Wellcome TrustHealthCare VenturesSaints Capital, and BB Biotech Ventures.



Over the weekend, the board of RadiumOne, a five-year-old, San Francisco-based venture-backed ad tech company, voted to remove its founder, Gurbaskh Chahal, from his job as CEO after he was convicted of two misdemeanors for domestic violence and battery. Its official statement is here. Chahal has posted his reaction to his firing here. (Disclosure: A family member of StrictlyVC is among RadiumOne’s roughly 300 employees, so you’ll have to go elsewhere for more extensive coverage of this one!)

Jack Ma and Joe Tsai, who cofounded the Chinese e-commerce giantAlibaba, have set up philanthropic trusts funded by share options that represent about 2 percent of the Alibaba’s current equity. In an interview with the WSJ, Ma talked of his growing alarm at lung and liver cancers that have impacted his family, friends, and colleagues, saying he believes environmental pollution is the cause. “Somebody has to do something,” he added. The Journal says the trusts highlight what many see as the dawn of a new era of giving among China’s freshly minted billionaires.

Elon Musk‘s SpaceX plans to sue the U.S. Air Force to challenge a $7.2 billion contract awarded to a company called United Launch Alliance, Musk said at a news conference on Friday. Musk alleges the United Launch Alliance contract is costing taxpayers “billions of dollars, for no reason” as SpaceX could provide launch rockets far more inexpensively.

San Francisco Magazine interviews tech reporter and entrepreneur Kara Swisher, who calls Google, where her wife, Meghan Smith, is a VP, “pretty dangerous and thuggish.” Asked how Smith feels about her assessment, Swisher says, hilariously: “She doesn’t care. She’s, like, a computer genius. She doesn’t pay attention. She’s not a political person, she’s not a corporate person—she’s a techie. And she has a different opinion of Google: She thinks it’s all daffodils and sunshine and that they’re helping the world—like most of these idiot techies. I gotta listen to that sh_t all day. But they believe it. So whatever.”

Time released its annual list of “the 100 most influential people,” and asked big-league influencers to write about the winners. Peter Thielwrites glowingly of Amazon founder Jeff BezosJack Dorsey of Twitter and Square fame, meanwhile gushes about Snapchat founders Evan Spiegel and Bobby Murphy, calling them “fresh, a little raw and just plain cool.” In a twist, Uber CEO Travis Kalanick gets called “super rad” not by another tech celebrity but by actor Neil Patrick Harris. The broader list might be worth checking out(?).

Job Listings

Lending Club is looking for a VP of corporate development. The job is in San Francisco.



ThingsCon, a two-day conference about the future of the hardware business, gets underway in Berlin this Friday.

TechCrunch Disprupt kicks off one week from now in New York. Here‘s the agenda.



According to the analytics company RJMetrics, the top 10 startup cities in the U.S., in descending order, are 1.) San Francisco 2.) New York 3.) Seattle 4.) Washington, D.C. 5.) Austin 6.) Boston 7.) Chicago 8.) Mountain View, Calif. 9.) Palo Alto, Calif., and 10.) Denver. You can learn more about RJMetrics’s methodology, along with other highlights from its startup report, here.

China-based venture firms raised $1.07 billion in the first quarter of this year, 35 percent more than in the first quarter of 2013, according to Dow Jones VentureSource. But only six firms managed to close new funds in the first three months of the year, a meager number compared to previous quarters. The WSJ has more here.


Essential Reads

Turning New York into a hotbed of innovation has been harder than people anticipated, reports Jenna Wortham of the New York Times. “The most harmful thing that limits a company in New York is that they are not part of the milieu of Silicon Valley,” Roelof Botha, a partner at Sequoia Capital, tells her. Being in the San Francisco area, he said, helps start-up founders know the right people to pick up on bits of gossip about new product releases or venture financing rounds.



Why the Internet fetishizes old photos.

New York City in 17 syllables.

three-bedroom, three-bath penthouse at the Four Seasons in San Francisco just hit the market for $11 million, or a stunning, $3,056 per square foot. Yahoo CEO Marissa Mayer and husband Zachary Bogue reportedly own a penthouse at the same Four Seasons, while other luminaries have come and gone, including PayPal cofounder Peter Thiel, who looks to have sold his penthouse in 2005 for $6.5 million.


Retail Therapy

Hooray — earphones that don’t fall out.

A table for you and your cats, at long last.


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