StrictlyVC: May 16, 2014

Happy Friday, everyone, hope you have a terrific weekend!


Top News in the A.M.

Despite all the hand-wringing statements about net neutrality, tech actually had a pretty good day in D.C. yesterday, argues Re/code.


VC Josh Felser: Small Steps Can Have An Impact

This week, a new study found that tropical cyclones worldwide are moving out of the tropics and more toward populations of people, especially in the Northern Hemisphere. It’s the kind of news about which we should be more aware, and concerned. But in the land of social media, it commanded about as much attention as a new software update from Blackberry — which is to say it went largely unnoticed.

Josh Felser isn’t okay with that. Which explains why the successful entrepreneur turned venture capitalist is trying to change the conversation through #climate, a new nonprofit that has enticed a small but growing number of people to download its app.

Here’s how the process works, loosely: The months-old organization researches and produces information on hundreds of climate-oriented nonprofits. It then produces shareable “actions” based on users’ interests. If I were predominately focused on the Amazon rainforest, for example, I might be pointed to the Rainforest Trust organization, along with a tweetable link about saving the cotton-top tamarin. My Facebook friends or Twitter followers could then click on that link to learn more about why these small primates are endangered and, hopefully, donate to Rainforest Trust.

It’s a tall order, of course — getting people to use the app, as well as ensuring the prompts are so compelling that social media users, despite their short attention spans, take the time to click on them.

Felser argues that he had to start somewhere. “You can’t look at this as a viral media app,” he told me during a chat last week. “Getting people to focus or take action on a negative [like global warming] is hard. But we know that in the last three weeks, we’ve driven 35,000 unique visitors to various nonprofits’ sites. That’s hard to do and I feel really good about it.” (Asked if his team can track how many donations have resulted from those visits, he says the technology exists, but that getting nonprofits to change their code is “a bit of a challenge.”)

So far, certain sports and entertainment figures have had the most impact on social media, including the band Gun N’ Roses, which has been asking fans to help save the Amazon, and the NBA, which has been promoting green initiatives and sustainability.

Felser would like to see many more of his colleagues in tech take an interest, though. Tweets of congratulation on his efforts have been nice, he suggests, but as far as he’s concerned, the Silicon Valley startup community needs to get more visibly involved in amplifying the work of climate organizations.

“We’ve created climate change and we have to fix it or it will destroy us,” says Felser, alluding to drought in the Middle East and Africa and rising sea levels that are putting people at risk in coastal regions like eastern India and and the Mekong Delta in Vietnam. “It makes poverty worse, it makes malaria worse, it makes everything worse.”

Felser says not everyone has to get behind climate change, though he thinks they should. Eventually, his organization will broaden its mandate to include many other causes.

Either way, he persuasively argues that the tech industry is missing an easy opportunity to be helpful. “I’m not sure that people in tech understand the impact they can have, with their knowledge, expertise, and reach. All are underutilized resources. They’re so passionate about entrepreneurship and tech that many forget the substantial impact they could have on the world if only they’d apply [themselves] to a cause.”


New Fundings

Compare Metrics, a 1.5-year-old, Austin, Tx.-based analytics software company that aims to help retailers boost shopper engagement, has raised $3.8 million in funding led by earlier investor Austin Ventures. Other participants in the round included Capital FactoryJulie Allegro of Allegro Venture Partners, Bob Greene of Contour Ventures, Mike Maples of Floodgate, and Brett Hurt of Hurt Family Investments. The company has raised $8 million to date.

Giphy, a year-old, New York-based search engine for GIFs, has raised $2.4 million in Series A funding led by Betaworks, with participation from Lerer VenturesRRE Ventures, and CAA Ventures. Giphy, which was launched by Betaworks last year, raised $1 million from the company at the outset; it plans to top off its new round with another $100,000 via Alphaworks, a new crowdfunding platform that was also created at Betaworks.

Inspire Medical Systems, a seven-year-old, Maple Grove, Mn.-based company behind an implantable stimulation device that treats sleep apnea, has raised $40 million in Series E funding led by OrbiMed. Other new investors in the round include the Johnson & Johnson Development Corporation and Aperture Venture Partners. Earlier investors Kleiner Perkins Caufield & ByersUS Venture PartnersSynergy Life Science PartnersMedtronicGDN Holdings and TGap Ventures also participated in the funding.

Innometrics, a four-year-old, Stockholm, Sweden-based company that makes cloud-based marketing and sales software, has raised $5 million in Series A funding led by SEB Venture Capital. Earlier investor Fortunator Invest, a Stockholm-based investment firm that focuses on e-commerce opportunities, also participated, along with unnamed angel investors.

Keystone Heart, a 10-year-old, Caesarea, Israel-based medical device company focused on protecting the brain from emboli during heart surgery, has raised $14 million in Series B funding led by OrbiMed.

MediaV, a 4.5-year-old, Shanghai-based Chinese developer of online marketing analytics and tracking technologies, has become a subsidiary of the Chinese Internet giant Qihoo 360 Technology Co. According to reports, Qihoo bought a majority stake in the company for more than $100 million. The WSJ has more on what the move means here.

Odoo, a nine-year-old, Belgium-based open-source software company with enterprise resource planning features and more (the company used to be named OpenERP), has raised $10 million in new funding. Investors in the round include the French venture firms XAnge and Soffinova Partners, and the Beligum firm SRIW Belgium.

OpenGov, a two-year-old, Mountain View, Ca.-based company that helps cities and other local governments move their financial data into the cloud, has raised $15 million in Series B funding led by Andreessen Horowitz, with participation from earlier investors Thrive Capital andFormation 8. According to Crunchbase, OpenGov has raised about $22 million to date.

Pinterest, the 5.5-year-old, San Francisco-based scrapbooking website, has raised $200 million in new funding led by SV Angel (TechCrunch is reporting). Other previous investors to participate in the round included Bessemer Venture PartnersFidelityAndreessen Horowitz and Valiant Capital Partners. As notes the WSJ, Pinterest’s valuation has risen 32 percent since seven months ago, when the company raised $225 million at a valuation of $3.8 billion. The unprofitable company has raised a total of $764 million in funding to date.

Posiq, a four-year-old, San Jose, Ca.-based company that develops restaurant customer-relationship management software, has raised $3.2 million in Series A funding from Thayer VenturesSVG Partners and angel investors.

Sinch, a new, Stockholm-based communications platform that enables mobile developers to add voice and messaging to their apps, has raised $12 million from Rebtel, “Sweden’s smaller answer to Skype,” says TechCrunch. The company — which was, in fact, spun out of Rebtel — also counts Index Ventures and Balderton Capital as backers.

Soldsie, a two-year-old, San Francisco-based social commerce platform, has raised $4 million in Series A funding led by First Round Capital, with participation from SoftTechVCLerer VenturesCorrelation Ventures,Great Oaks Venturese.Ventures500 Startups, and angel investors. The company has raised $5.6 million altogether.

Sorbent Therapeutics, a nine-year-old, Sunnyvale, Ca.-based biopharmaceutical company developing therapies for cardiovascular and renal diseases, has raised a $6.5 million tranche in a $15 million Series D financing. Existing investors CMEA CapitalARCH Venture Partners,Sofinnova VenturesAgeChem and Novartis Venture Funds participated in the round, which has brought the company’s current funding to at least $90 million, shows Crunchbase.

StepOne, a three-year-old, Austin, Tx.-based company whose self-service system lets consumers solve their tech problems online, has raised $4 million in Series A funding co-led by earlier investor LiveOak Venture Partners and new investor Silverton Partners. Last summer, StepOne raised an undisclosed amount of seed funding from LiveOak.

Terra Motors, a four-year-old, Tokyo, Japan-based electric vehicle maker, has raised $10 million Fenox Venture Capital and the Japanese venture capital Mizuho Capital Co. led the round. Other investors included Shinsei BankSMBC Venture Capital Co., and Aizawa Securities Co., all of which are based in Tokyo.

Uber Technologies, the five-year-old, San Francisco-based logistics company, is in talks to raise new financing in a round that may value it at more than $10 billion, according to Bloomberg sources. The valuation would be nearly triple the valuation Uber commanded a year ago when it raised $258 million.

Urban Engines, a two-year-old, Los Altos, Ca.-based company that uses spatial analytics and behavioral economics to alleviate urban congestion and shorten commutes, has raised an undisclosed amount of funding from Google VenturesEric SchmidtRam ShriramA16Z and SV AngelTechCrunch has more here.


New Funds

Expansive Ventures, a new venture capital firm, is looking to raise roughly $100 million, reports the WSJ. Its founders are Adeo Ressi, head of the entrepreneur-training program Founder Institute, and Jon Soberg, a former managing director of Blumberg Capital. The pair plan to invest up to $2 million in early-stage startups that they source through the roughly 3,000 entrepreneurs who are affiliated with Founder Institute. The idea: that these entrepreneurs who live around the world can help Expansive discover startup gems, particularly in foreign markets.

Resolute Ventures, the three-year-old venture firm of former Polaris Partners investor Mike Hirshland, is in the market for its second fund, according to an SEC filing first spied by Fortune. The firm, which makes seed investments, is targeting $40 million. Hirshland, who is Resolute’s sole GP, targeted $25 million for its first fund. He has since brought aboard serial entrepreneur Matt Meeker as a venture partner and earlier this year had advertised a search for a principal. (If Resolute has hired one, it hasn’t listed that person at its site yet.)



Those watching the debut of Zendesk on the NYSE yesterday were undoubtedly feeling relieved last night. Shares of the 6.5-year-old, San Francisco-based on-demand customer service platform provider finished up at $13.45 from their offering price of $9. The IPO raised just under $100 million for Zendesk, about $50 million less than the company originally planned to raise.



Everyone has to find their investing sweet spot, and Aneel Bhusri‘s is not consumer Internet, he said in an interview earlier this week at the NVCA conference in San Francisco. Bhusri said he came to this conclusion the hard way, during his first year as an investor at Greylock Partners in 1999. For example, he talked of backing an e-commerce site focused on cameras, saying, “I invested $25 million, Amazon waged a price war and we were out of business in 12 months.” A second investment in an online portal quickly also became “good-bye $15 million,” he added, noting that he might have lost $70 million before famously finding his groove in enterprise investing.

Venture capitalist Ken Lerer and his cofounder in Huffington PostArianna Huffington, have reportedly settled a three-year-old lawsuit over the site, which remains one of the one of the most heavily visited online destinations in the country. Filed by Democratic consultants Peter Daou and James Boyce, the suit alleged that the men helped shape Huffington Post, which sold to AOL in 2011 for $315 million, and that they were denied proceeds from the sale as well as recognition for their contributions. As Forbes notes, Lerer and Huffington have always insisted the claims were meritless, but a judge ruled in February that that the case could proceed to trial. Interestingly, Daou and Boyce published joint statements yesterday afternoon, praising Huffington for making Huffington Post “a far greater success than anyone could have imagined. Neither mentioned Lerer.

Cnet cofounder and beleaguered tech personality Halsey Minor is back with a new bitcoin-related company, though “there are also some oddities about the company that might give customers pause,” reports Bloomberg BusinessWeek. Minor told the outlet that he only recently emerged from “six years of depression . . . It’s hard to describe to someone who has not been through what I went through, but my only goal was to get through this part of my life alive.”

Venrock, the 45-year-old technology and health care investor — with offices in Cambridge, Ma.; Palo Alto, Ca.; and New York City — has added two new investment professionals to its Palo Alto office: Camille Samuels and Doug Dooley. Samuels, previous a managing director at Versant Ventures, is a partner and will focus on biotech and consumer health investing. Dooley, whose title isn’t clear, has a long history of working at infrastructure technology companies, including Cisco, Intel, Neoteris, NetScreen, and RingCube. Venrock filed paperwork in March to raise $200 million for its newest fund, Venrock Healthcare Partners II.

Google Glass’s lead electrical engineer Adrian Wong has defected to Oculus VR. Techcrunch has more here. Meanwhile, the company has also reportedly brought aboard a seasoned marketing pro, Ivy Ross, to lead the division. (The moves aren’t related, says a source. Wong was simply presented with a great offer from Oculus.)

A Bay Area real estate developer has filed a lawsuit accusing Facebook CEO Mark Zuckerberg of breach of contract in a case that dates back to Zuckerberg’s decision to acquire several properties that surround his own Palo Alto home. Zuckerberg made the move after discovering that developer Mircea Voskerician planned to build a mansion on a lot behind Zuckerberg’s home. In exchange for Voskerician’s cooperation, Zuckerberg told him he’d provide introductions to potential clients who might want to buy homes from him, says the developer, who alleges in his complaint that Zuckerberg hasn’t upheld his end of the bargain. The San Jose Mercury News has the story here.


Job Listings

Adidas Group, the sporting goods giant, is looking for a manager to join its M&A and corporate venture group. The job is near Nürnberg, Germany.


Essential Reads

To protest against the FCC’s new rules relating to Internet traffic, various companies and organizations have added code to their websites that kicks in whenever there’s a visit from someone who works at the FCC. While everyone else is enjoying these websites at ordinary broadband speeds, this code ensures that FCC staffers view them at dial-up speeds reminiscent of the 1990s.



Why salaries shouldn’t be secret.

The most expensive city in America to hire a babysitter.

What do animals see in the mirror?


Retail Therapy

Beer lollipops.


St. Tropez is coming to San Francisco, apparently. (We wish.)


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