StrictlyVC: May 29, 2014

Good Thursday morning! (By the way, is StrictlyVC the only one who didn’t go to the Bruno Mars show in Oakland last night? FOMO is real, people.)


Top News in the A.M.

Ten things you might have missed at the second day of the Code conference.


Wearable That Relies on Your Heartbeat Nears Series A Close

If things go its way, you may be hearing more about Bionym, if not using its product. The spin-off from the University of Toronto has been developing a wristband that distinguishes wearers by their heartbeat. The big idea: there’s no reason to use keys and pass codes and credit cards when we can be identified instead through our unique electrocardiography.

A lot of pieces have to fall into place for the wristband, called the Nymi, to work out. But because the potential also seems substantial, I asked company president Andrew D’Souza to walk me through what’s happening as the company prepares to dot the i’s and cross the t’s on a Series A round that it’s closing.

I know the company’s founders studied biometrics and cryptography at the University of Toronto. What’s the core technology here?

It’s a set of algorithms that helps identify you based on your unique ECG. This was a tech licensing company initially, but we realized the way this functionality should be put out in the world is through a wearable wristband.

Which still hasn’t been produced yet, is that right?

We’ll start the production efforts over the summer and expect to ship the first 10,000 [units] next fall.

How confident are you of that?

It’s a fair question. [The successful production of the Nymi] was the biggest risk for me in joining the company [last year]. But we bought in James Elson, who led the complete product development cycle for the AirHog, the best-selling radio-controlled helicopter in the world. He has shipped about 8 million units, spent a third of his career in China, and has all kinds of relationships and knows what to ask.

How is the Nymi designed, loosely?

It’s basically a polymer wrapped around a hard plastic puck that houses the electronics, like a Fitbit, which also has an enclosed puck. Jawbone’s UP band and Nike’s FueldBand use flex circuits, which introduce more manufacturing risk.

Something like 2.7 million people have already purchased wearable bands, most of them fitness trackers – and most of them Fitbits. Is there any concern over asking people to put another piece of hardware around their wrist?

No, we think the wearable market is where mobile was in the ’90s. Most of the devices sold so far have a single use case – like tracking steps, or notifying me when I get texts. Going forward, we’ll see platforms emerge. When Apple announces its iWatch, [it’s likely to be] a health-focused platform. Android Wear, [Google’s software platform for wearables] will [center] on context-aware, location-based services. We think there’s also an opportunity for an [identity-centric] personalized platform, and that there’s a market of people who will prefer it.

What about all the peripherals you’ll need for Nymi to work?

We’ve had phenomenal interest from Fortune 100 companies about building applications integrations into some of their products. We have an open SDK, so in the same way that people build apps on iPhones, we’re giving early access to key partners [to create related apps]. Essentially, we want to allow people to bypass whatever credential they use and use Bionym as a proxy for it, from laptops and smart phones to payment companies to home security.

More than 7,000 developers have signed up for the SDK – from college students to major corporations. That’s what we’re most excited about.

You’re accepting pre-orders at your site. Will you sell exclusively through the site or will people be able to order the Nymi through major retailers?

Amazon is essentially ready to start selling and other major retailers have reached out about listing us. But we’ve been hesitant to go to physical or digital retail until we know exactly why people are ordering our devices and who they are.


New Fundings

51Fanli, an eight-year-old, Shanghai-based rebate shopping guide platform, has raised $20 million in Series B funding led by SIG China, according to Chinese media reports. The company had previously raised $10 million in Series A funding from Qiming Venture Partners and Steamboat Ventures.

Apixio, a five-year-old, San Mateo, Ca.-based company that extracts and analyzes clinical unstructured and coded data for healthcare industry clients, has raised a $13.5 million Series C round from Bain Capital Ventures, along with numerous unnamed individual investors. The company has raised at least $22.6 million altogether, shows Crunchbase.

ARMO BioSciences, a 1.5-year-old, Redwood City, Ca.-based clinical-stage biotechnology company that’s trying to turn a drug licensed from Merck & Co. into a cancer treatment, has raised $30 million in Series B funding by NanoDimension. Earlier investors Kleiner Perkins Caufield & ByersOrbiMed and DAG Ventures also participated in the round, which brings the company’s total funding to $50 million.

Bindo, a six-month-old, New York-based company that’s come up with an iPad point-of-sale system and associated cloud-based payment platform for small merchants, has raised $1.8 million in seed funding co-led by Gary VaynerchukEast Ventures, and Metamorphic Ventures.

Coupang, a four-year-old, Seoul-based e-commerce company that offers goods ranging from fashion to produce, has raised $100 million in financing led by Sequoia Capital Global Equities and Sequoia Heritage, with participation by earlier investors Greenoaks Capital Management, Rose Park Advisors’ Disruptive Innovation Fund and LaunchTime. Others of the company’s earlier investors include Maverick CapitalAltos VenturesBill AckmanClay Christensenand others. The company is now valued at $1 billion-plus, it says. The company’s CEO tells Dealbook that more than 70 percent of its transactions are done on mobile devices.

Datalogix, a five-year-old, Westminster, Co.-based company that sells offline purchase data to giant publishers, has closed a $45 million round led by Wellington Management Company. Earlier investor investor Institutional Venture Partners joined the round, investing more than pro rata. The round is “incremental to the recently announced investment in Datalogix by Jim Breyer’s Breyer Capital,” says the company. (In April, the WSJ reported that Breyer had invested “a significant” amount in the company.) Datalogix has raised at least $111 million to date, shows Crunchbase.

ExtraHop, a seven-year-old, Seattle-based app management system, has raised raised $41 million in Series C funding led by Technology Crossover Ventures. Other participants in the round include earlier investors Meritech Capital Partners and Madrona Venture Group.

HackerOne, a 19-month-old, Bay Area-based security firm whose platform makes it easy for companies to report their bug tracking and process their flaw reports, has raised $9 million in funding led by Benchmark. TechCrunch has much more on the startup, which has ties to Facebook and Microsoft, here.

Matrixx Software, a 24-year-old, Mountain View, Ca.-based developer of online charging and subscriber policy management software, has raised an undisclosed amount of new funding led by Telstra Ventures. Earlier investors Swisscom VenturesInnovacomGreylock PartnersAdams Street Partners and Tugboat Ventures also participated in the round. Previously, the company had raised at least $33.6 million, shows Crunchbase.

MedCPU, a six-year-old, New York-based company whose real-time clinical decision support tool rides atop most hospital and ambulatory electronic medical records and “reads” the complete clinical information to deliver clinical care advice, has raised $9.3 million in Series B funding from investors that include Merck Global Health Innovation FundEaston Capital Investment Group and New Richmond Ventures. The company has raised at least $10.9 million to date, shows Crunchbase.

Message Bus, a nearly four-year-old, San Francisco-based application service that enables messaging across different email and mobile infrastructures, has raised $4 million in funding led by previous investor True Ventures. Other earlier investors North Bridge Venture Partnersand Ignition Partners also participated in the round, which brings the company’s total funding to $18 million, it says.

Neuway Pharma, a months-old, Bonn, Germany-based company that focuses on the preclinical and clinical development of therapeutics for treating orphan brain diseases, has raised $3.6 million in Series A financing led by Wellington Partners. The company is the first spin-off of the Life Science Inkubator in Bonn.

Newlans, an 11-year-old, Acton, Ma.-based fabless semiconductor company that makes a reconfigurable broadband analog signal processing architecture, has raised $5 million from Verizon Ventures to complete its Series B financing round. Intel Capital, with the participation of Paladin Capital and Lockheed Martin, had led the Series B, which initially closed with $15 million in February. The company has raised at least $23.9 million to date.

PatientPay, a nearly six-year-old, Durham, N.C.-based patient billing and payment services company, has raised $2.5 million in funding led by Mosaik Partners, a new, San Francisco-based firm that just held a first close on $15 million for its debut fund. PatientPay has raised $6 million to date.

Rodin Therapeutics, a year-old, Cambridge, Ma.-based biotechnology company that’s focused on creating therapeutics for neurological disorders, has raised $12.9 million in Series A funding led by earlier investors Atlas Venture and Johnson & Johnson Development Corporation. The company raised an undisclosed amount of seed funding from both firms last summer.

Standard Treasury, a year-old, San Francisco-based company that offers standard APIs that make it easier for businesses to transact with their banks, has raised $2.7 million in seed funding. Investors in the round include RRE VenturesIndex VenturesData CollectiveSV AngelY CombinatorJay Mandelbaum, a former chief operating officer of JP Morgan; and Gmail creator Paul Bucheit. The WSJ has much more here.

Swipely, a 4.5-year-old, Providence. R.I.-based company whose online software works with point-of-sale systems and terminals used by independent businesses to manage their credit card processing, reward programs and more, has raised $20 million in Series C funding. The Pritzker Group led the round; previous investors Shasta Ventures and First Round Capital also participated. The company has now raised $40.5 million altogether, shows Crunchbase.

XLV Diagnostics, a three-year-old, Thunder Bay, Ontario-based company that makes low-cost, next-generation digital mammography machines, has raised $3 million in Series A funding from the Boston-based Bernard M. Gordon Charitable Remainder Unitrust. The company had previously raised $600,000 in funding from the regional development organization FedNor and the Northern Ontario Heritage Fund.


New Funds

Omron, a Japan-based manufacturer of control equipment, factory automation systems, electronic components, automotive electronics, ticket vending machines and medical equipment, is earmarking an estimated 3 billion yen ($29.1 million) for agricultural and life sciences startups over the next three years, reports the Nikkei.

Spark Capital, the nine-year-old, Boston-based venture capital firm, closed its first-ever growth capital fund yesterday with $375 million that was raised over “several” months. (Spark is also investing from a $450 million early-stage fund closed last year.) The head of the new fund is Jeremy Philips, formerly a managing partner of Occam Partners, as well as an executive at News Corporation. He tells Dealbook more about his team’s plans, including that they will be aiming to invest slugs of $15 million and $30 million in companies that already have roughly $1 billion in revenue but aren’t yet ready to go public. Bijan Sabet, a partner at Spark, tells Dealbook: “We’re planning on helping companies scale, whether they’re existing companies of Spark or not.”



Only two companies have set terms for upcoming IPOs in the past week, notes Renaissance Capital, calling it a reflection of “both fallen tech and biotech valuations and the typically lower volume around a holiday week.” More here.

Twitter’s shares rose nearly 11 percent yesterday, to $33.77, after Nomura Equity raised its rating to buy from neutral, with a price target of 43. Investors Business Daily notes that the shares are still 55 percent off their peak price of $74, reached roughly one month after the company’s November IPO.



Apple finally announced yesterday that it has acquired the subscription streaming music service Beats Music, and Beats Electronics, which makes Beats headphones, speakers and audio software. As part of the acquisition, Beats co-founders Jimmy Iovine and Dr. Dre will join Apple, Iovine in a full-time capacity, Dr. Dre, whose real name is Andre Young, for “as much as it takes,” he said yesterday. Apple is acquiring the two companies for a total of $3 billion, including $400 million that will vest over time. The Beats brand will remain separate from Apple’s, and Apple will offer both Beats’s streaming music service and premium headphones, reports the New York Times.

Distimo, a five-year-old, Netherlands-based app analytics and data company, has been acquired by its direct competitor, App Annie, which has been looking to expand into Europe. As part of the transaction, App Annie announced a fresh $17 million in funding yesterday from earlier investors IDG Capital PartnersGreycroft Partners and Sequoia Capital; the company has now raised $39 million altogether. Distimo had raised an undisclosed amount of funding from Wellington Partners.



Highly disturbing emails written by Snapchat cofounder Evan Spiegel during his (not-so-distant) college years were leaked to the media yesterday. Spiegel quickly issued an apology for the “idiotic emails,” saying they “don’t reflect my views toward women.” The media world has seemed to let the issue go.


Job Listings

Spark Capital is hiring a team of six to eight people for its new growth fund. (See “New Funds.”) Time to invite a partner or two out for coffee?



VentureBeat’s MobileBeat conference is coming up in July in San Francisco. You can register for it here.



Mary Meeker‘s Internet trends presentation, 2014. (The gist: There’s no tech bubble. Also, people love using the Internet from their phones, and that’s only growing faster.)

What startup founders typically pay themselves, or should, according to their venture investors.


Essential Reads

As promised Google has disclosed its diversity record, and it’s not good. Among the data released: 79 percent of the company’s leadership positions are occupied by men, 72 percent of whom are white.



No, really? The Ice Diet?

What a hiring manager scans for when reviewing resumes.

Sixty years of nuclear energy (slide show).


Retail Therapy

Inflatable hot tub, you look right up our alley.

Topanga Canyon, a “limited-edition, trail-foraged fragrance that takes you on a springtime hike through the coastal mountains of California,” and you only need your nostrils to get there.

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