• In Accelerator Wars, the Teacher Becomes the Student

    Dave McClureDave McClure once followed Y Combinator’s moves closely, looking to emulate parts of its structure. Now, the famed, nine-year-old tech accelerator looks to be playing catch-up with Dave McClure.

    This week, for example, Y Combinator announced it would start running its Startup School, a one-day networking event, in New York and London. Y Combinator, which will continue to run its three-month sessions from its headquarters in Mountain View, Ca., is casting a wider net because “if we focus on the U.S., we miss maybe 95 percent of the best founders,” said the outfit’s new president, Sam Altman, at a TechCrunch conference in New York.

    Y Combinator also announced its intentions this year to “get bigger,” with Altman handed the reins by cofounder Paul Graham to grow it. Toward that end, the incubator has recently added six people to its roster of partners, and Altman says Y Combinator’s upcoming class could have upwards of 95 companies, making it the biggest in the program’s history.

    Y Combinator’s new initiatives have received a fair amount of attention. But they look oddly familiar to McClure, founder of the four-year-old venture fund and accelerator program, 500 Startups. Indeed, 500 Startups was premised on the idea that venture investing is far more scalable than widely believed, and that to really nab the best deals, an outfit has to go global.

    Each year, 500 Startups backs roughly 300 startups. Half of them pass through the firm’s three-month-long accelerator program, where they’re hosted at 500 Startup’s offices in San Francisco or Mountain View. (The outfit accepts roughly 30 startups each quarter, alternating between the two places.) 500 Startups also invests in another 150 seed-stage firms outside its accelerator program each year. About 20 percent of all of those companies are international, says McClure; 80 percent are U.S.-based companies, with roughly half coming from the Bay Area.

    Part of what makes 500 Startups work at its scale, seemingly, is that it’s investing in far more than ideas. Most of the startups it funds have a functional prototype. Most have customers at some scale. Some even have million-dollar-per-month revenue run rates

    It also believes in “failing on a budget, and failing quickly,” says McClure. (500 Startups invests a net $75,000 in each of its accelerator companies for a 7 percent stake.) And 500 Startups thinks investing is something that can be taught in little time to other people, who now represent the outfit’s interests around the world, including Brazil, India, Southeast Asia, China, and Mexico. “Some say it takes 10 years to become a great investor. We think it takes 20 decisions,” says McClure.

    We’ll see what happens. 500 Startups has yet to land an Airbnb or Dropbox – companies that have pushed the value of Y Combinator-backed startups into the tens of billions of dollars, at least on paper.

    Then again, 500 Startups is younger and has a promising portfolio, along with several big exits under its belt. Among them: the 3D printing company Makerbot (acquired for roughly $600 $400 million), the social marketing company Wildfire (acquired by Google for $350 million), and the video site Viki (acquired by Japan’s Rakuten for $200 million).

    500 Startups has closed two funds totaling $73 million so far and is now investing out of a third fund that’s targeting $100 million, shows an SEC filing.

    I ask McClure what he thinks of Y Combinator’s newest moves, and he says, laughing: “Welcome to the party, Sam.” But he also notes that, “We’ll have to work harder. We were hoping to have the international stage to ourselves for five years and it now it looks like it might have been four.”

    In the meantime, McClure takes some pleasure in noting that “we were the first out of the gate on a number of things that Y Combinator is just now paying attention to. I’m a huge fan of [Paul Graham] and Y Combinator itself,” he adds. “But I think we probably influenced their strategy.”

    Sign up for our morning missive, StrictlyVC, featuring all the venture-related news you need to start you day.

    Connie

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  • StrictlyVC: May 7, 2014

    Hello, and happy Wednesday morning, everyone!

    For an easier-to-read version of today’s newsletter (we’ve been having some formatting issues with a new email service provider we’re been trying out) click here.

    —–

    Top News in the A.M.

    Wow. In 2013, the USPTO granted nine patents for every patent application that was rejected and then abandoned by its applicant. That’s 92 percent, up from 68 percent in 2009, reports Vox.

    —–

    Mike Abbott of Kleiner Perkins on Snapcat, Box, and the Inherent Danger in High Valuations

    Mike Abbott has only been a general partner at Kleiner Perkins Caufield & Byers for two-and-half years, but he’s a grizzled veteran of the startup industry nonetheless. Abbott previously served as Twitter’s VP of Engineering, for example, and as an SVP at Palm. In 2002, he also founded the data virtualization startup Composite Software, which was acquired by Cisco last year for $180 million in cash. (Composite had raised at least $38 million, including from Apax Partners, Palomar Ventures, and Clearstone Venture Partners.)

     

    Little wonder that Abbott has a pretty strong perspective on many things startup related. The other day, we talked about a few of them, including attractive places to shop right now, why some transition on a startup’s board can be good, and what companies can do about spiraling valuations.

     

    How would you characterize what you’re looking for right now?

     

    Predominately, I spend time [considering] applications that are driven from large data processing . . . And I probably have a little more of a bias toward either design-centric and engineering-centric companies. That sounds generic, I realize, but that’s what I’ve done operationally. So . . looking at novel things around mining email in the enterprise, or what the implications are for sales forecasting, or mining digital health data for consumers or insurance providers.

     

    I’ve also spent some time looking into the ephemeral content space.

     

    That’s interesting. Ephemeral content seems afield from your other interests. 

     

    I do office hours at Stanford and every time I meet with a student, I ask what’s on their phone’s home screen and take a peek. And over the last few years, [it’s gone from] students using Facebook to not using Facebook not having it on their phones to the rise of Snapchat [and the idea that] not having content on your phone is a cool thing.

     

    What does that mean for Twitter’s prospects? The Atlantic has already pronounced it a dead duck, as you likely know.

     

    It’s funny, because [reporters] write these articles, then use Twitter to spread the word about them. A number of pieces have said that it’s dying, only to report six months later, “Oh, it’s back!” No one can doubt that Twitter is a meaningful information network that’s changing the world. Is everyone on it? No. And I think the company needs to evolve the product to make it easier for the masses to use. But there isn’t a clear number two, and it’s continuing to grow. I’m very bullish on the company.

     

    Kleiner has gone through a transition and is a much smaller operation going forward. Have you taken on any of your colleagues board seats? 

     

    I haven’t and for the most part, we’ve hoped to have partners stay on those boards on behalf of KP even if they’re [transitioning out of the firm].

     

    Speaking generally, do you think there’s a particularly good way to transfer board seats? 

     

    We always look at companies and ask if we have the right person on that board to help the company. So there may be changes in the future, depending on [partners’] different strengths and the different stages of a company. When I joined Kleiner, for example, I took over a seat at InMobi, the private ad network, where it happened to be that my background specifically at Twitter was helpful and they were excited. I do think it has to be a conversation between the company and the firm to get the right person.

     

    There’s been a lot of talk this week about the impact of high valuations when the market turns less hospitable. How sensitive is Kleiner to price, and is that changing in this increasingly unpredictable environment?

     

    For those of us who saw of this firsthand in 1999 and 2000, you [know that] you have to be cautious when you’re doing this higher-altitude fundraising because the market can change . . . I do think it’s going to be tough for some of these companies that have raised at these upper bounds to weather the storm.

     

    Does the correction we’re seeing make you nervous? 

     

    It’s not that much of a surprise, I guess. Also, at the early stage, it hasn’t impacted us too much. The venture world lags the public markets by six months typically. I do think for certain companies, there’s a new question being asked, which is: If the economy changes, will this service or product still be in demand. I won’t name any specific companies, but if you have a service that’s in higher demand along with higher disposable incomes when the economy is doing really well, what happens when it changes? I don’t necessarily know that that question would have been asked nine months ago. You could argue that it should have been.
    —–
    Founder Showcase
    —–
    New Fundings
    Bloomlagoon, a two-year-old, Helsinki-based mobile games company, has raised $3.6 million in Series A funding round led by Northzone. Other investors in the round included Inventure and 360 Capital Partners along with earlier investors Jari Ovaskainen and London Venture Partners.
    Delectable, a year-old, San Diego-based company whose iOS app allows users to find and share wine recommendations, has raised $3 million in Series A funding from Deep Fork Capital and numerous individual investors, including Ron Conway, Max Levchin, and David Sacks.
    Fever, a year-old, Madrid, Spain-based event discovery and booking app, has raised $3 million in seed funding from a long line of individual investors, including professional soccer player Sergio Ramos of Real Madrid, and singer-songwriter Alejandro Sanz.

     

    HG Data, a 3.5-year-old, Santa Barbara, Ca.-based business intelligence company,
    has raised $2 million in additional Series A funding led by Rincon Venture Partners. Earlier investor Epic Ventures also participated in the round, along with several individual investors. The company has raised $6.3 million to date, shows Crunchbase.
    Loxo Oncology, a year-old, New York-based company that’s focused on targeted cancer therapies, has raised $24 million in Series B funding from New Enterprise Associates, OrbiMed Advisors, and Aisling Capital. The company has raised $57 million to date.

     

    Metacloud, a 2.5-year-old, Pasadena, Ca.-based company that deploys and supports production clouds for companies across a range of industries, has raised $15 million in Series B funding from new investors Pelion Venture Partners, Silicon Valley Bank, and UMC Capital, as well as earlier investors AME Cloud Ventures, Canaan Partners, and Storm Ventures. The company has raised $25 million to date.
    Roseonly, a year-old, Beijing-based e-commerce company that sells on flowers, chocolates, and other high-end gifts, has raised $10 million in Series B funding from IDG Capital and Accel Partners, according to China Money Network. The latest round values the company at $100 million, says the report.
    Smore, a nearly three-year-old, Palo Alto-based platform for easily creating single-page promotional websites, has raised $1.7 million in seed funding led by Founder’s Co-op, with participation by Greylock Partners Israel and various angels. Smore is a graduate of the TechStars accelerator program.
    TrademarkNow, a two-year-old, Helsinki-based company whose online trademark search tool promises to make it easier to find potential trademark infringements, has raised $3.5 million in Series A funding led by Balderton Capital. Others of the company’s investors include Lifeline Ventures, Tekes, and angel investors.
    Vaurum, a two-year-old, Palo Alto-based cryptocurrency company developing bitcoin exchange software for financial institutions, has raised $4 million in seed funding from Battery Ventures and angel investors, including Tim Draper and Steve Case.
    —-
    IPOs
    Everything you need to know about Alibaba‘s IPO filing, along with everything to know about its early winners.
    —–
    Exits
    Adometry, a nine-year-old, Austin, Tx.-based marketing analytics and optimization platform that had raised $44.6 million from investors, has been acquired by Google for an undisclosed amount. Adometry’s investors included Austin Ventures, Sierra Ventures and Shasta Ventures. The WSJ has more here.

    Convertro, a five-year-old, Santa Monica, Ca.-based that (like Adometry), runs a marketing optimization platform, has been acquired by AOL for $89 million plus up to $10 million in earn-outs. Convertro had raised north of $5 million from MHS Capital,Bessemer Venture Partners, Founder Collective, and DAG Ventures.

    Kippt, a two-year-old, San Francisco-based collaborative bookmarking system for professional networks, allowing users to collect and share content, has been acquired by the digital wallet technology company Coinbase for an undisclosed amount of money. Both companies are graduates of the summer 2012 Y Combinator accelerator program.
    —–
    People
    Saydeah Howard, formerly a VP of human resources at the educational toy maker FrogLeap Enterprises, has joined Institutional Venture Partners as its VP of talent and venture services. Earlier in her career, Howard worked as an associate at Russell Reynolds Associates.
    James Loftus, formerly the head of corporate development at Yahoo, has left the company to become a partner at Andreessen Horowitz, reports Business Insider. Loftus had worked at Yahoo for nearly two years and for more than two years at Google before that, where he was in charge of mergers and acquisitions.
    Anne Wojcicki is taking her genetics startup 23andme to English-speaking markets abroad after facing hurdles from the U.S. FDA, reports Reuters. In a company blog post, Wojcicki had stressed that she “stands behind the data” and would work in concert with the FDA to “lay the groundwork” for regulatory approval. Yet a friend of Wojcicki tells Reuters that without testing the waters outside the U.S., “it might be more difficult to get the data to support authorization in the U.S.”
    —–
    Job Listings
    Twitter is looking for a business development manager for its mobile and connected devices group. The job is in San Francisco.
    —–
    Data
    The National Venture Capital Association‘s annual Yearbook has new data on the incredibly shrinking venture industry. According to its findings, over the last decade the number of venture funds has fallen by 25 percent; the number of venture firms has fallen by 8 percent; and the number of venture capital professionals has fallen off a cliff, down to 5,891 in 2013 from 14,777 in 2003. Geekwire has more here.
    —–
    Essential Reads
    Amazon remains the clear frontrunner when it comes to online sales. But new data reveals that the race is heating up, with Apple now in second place.
    Yahoo is selling roughly 40 percent of its Alibaba stake in the Chinese Internet company’s upcoming IPO, a move that could generate more than $10 billion for the struggling Internet giant. Naturally, analysts are already weighing in on where CEO Marissa Mayer should invest it.
    Wired takes readers inside Tindie, a thriving new marketplace for DIY gadgets.
    —–
    Detours
    NFL Commission Roger Goodell agreed yesterday to do an online Q&A with followers of the NFL’s official Twitter account. He received lots of questions, too. Among them: “Is there anyone anywhere more out of touch and incompetent than you?” “How much wood could a woodchuck chuck if it wasn’t suffering brain trauma from 12 years as an NFL offensive lineman?” “Any predictions on who the next NFL player to be convicted of murder will be?”
    —–
    Retail Therapy
    Star Trek cakes.
    PostalPix aluminum prints.
    The very last thing the world needs.
    —–
    Correction
    In a people item in Monday’s newsletter about Fran Hauser, the newest partner at San Francisco-based Rothenberg Ventures, we reported that firm founder Mike Rothenberg was “formerly a director at his family’s residential real estate investment firm in Austin, Texas.” That wasn’t quite right; apologies. Rothenberg founded the firm with his brother, he told us in an email yesterday, explaining that it was “more of a startup than a family operation.”

    Connie

    ,

  • Mike Abbott of Kleiner Perkins on Snapchat, Box, and the Inherent Danger of High Valuations

    Mike Abbott high resMike Abbott has only been a general partner at Kleiner Perkins Caufield & Byers for two-and-half years, but he’s a grizzled veteran of the startup industry nonetheless. Abbott previously served as Twitter’s VP of Engineering, for example, and as an SVP at Palm. In 2002, he also founded the data virtualization startup Composite Software, which was acquired by Cisco last year for $180 million in cash. (Composite had raised at least $38 million, including from Apax Partners, Palomar Ventures, and Clearstone Venture Partners.)

    Little wonder that Abbott has a pretty strong perspective on many things startup related. The other day, we talked about a few of them, including attractive places to shop right now, why some transition on a startup’s board can be good, and what companies can do about spiraling valuations.

    How would you characterize what you’re looking for right now?

    Predominantly, I spend time [considering] applications that are driven from large data processing . . . And I probably have a little more of a bias toward either design-centric and engineering-centric companies. That sounds generic, I realize, but that’s what I’ve done operationally. So . . looking at novel things around mining email in the enterprise, or what the implications are for sales forecasting, or mining digital health data for consumers or insurance providers.

    I’ve also spent some time looking into the ephemeral content space.

    That’s interesting. Ephemeral content seems afield from your other interests.

    I do office hours at Stanford and every time I meet with a student, I ask what’s on their phone’s home screen and take a peek. And over the last few years, [it’s gone from] students using Facebook to not using Facebook to not having it on their phones to the rise of Snapchat [and the idea that] not having content on your phone is a cool thing.

    What does that mean for Twitter’s prospects? The Atlantic has already pronounced it a dead duck, as you likely know.

    It’s funny, because [reporters] write these articles, then use Twitter to spread the word about them. A number of pieces have said that it’s dying, only to report six months later, “Oh, it’s back!” No one can doubt that Twitter is a meaningful information network that’s changing the world. Is everyone on it? No. And I think the company needs to evolve the product to make it easier for the masses to use. But there isn’t a clear number two, and it’s continuing to grow. I’m very bullish on the company.

    Kleiner has gone through a transition and is a much smaller operation going forward. Have you taken on any of your colleagues’ board seats?

    I haven’t and for the most part, we’ve hoped to have partners stay on those boards on behalf of KP even if they’re [transitioning out of the firm].

    Speaking generally, do you think there’s a particularly good way to transfer board seats?

    We always look at companies and ask if we have the right person on that board to help the company. So there may be changes in the future, depending on [partners’] different strengths and the different stages of a company. When I joined Kleiner, for example, I took over a seat at InMobi, the private ad network, where it happened to be that my background specifically at Twitter was helpful and they were excited. I do think it has to be a conversation between the company and the firm to get the right person.

    There’s been a lot of talk this week about the impact of high valuations when the market turns less hospitable. How sensitive is Kleiner to price, and is that changing in this increasingly unpredictable environment?

    For those of us who saw of this firsthand in 1999 and 2000, you [know that] you have to be cautious when you’re doing this higher-altitude fundraising because the market can change . . . I do think it’s going to be tough for some of these companies that have raised at these upper bounds to weather the storm.

    Does the correction we’re seeing make you nervous?

    It’s not that much of a surprise, I guess. Also, at the early stage, it hasn’t impacted us too much. The venture world lags the public markets by six months typically. I do think for certain companies, there’s a new question being asked, which is: If the economy changes, will this service or product still be in demand. I won’t name any specific companies, but if you have a service that’s in higher demand along with higher disposable incomes when the economy is doing really well, what happens when it changes? I don’t necessarily know that that question would have been asked nine months ago. You could argue that it should have been.

    Sign up for our morning missive, StrictlyVC, featuring all the venture-related news you need to start you day.

    Connie

    ,
    ,

  • StrictlyVC: May 6, 2016

    Good morning, everyone! You can click here for a better reading experience today (you’ll avoid some of the weird formatting issues below).
    —–
    Top New in the A.M.
    Vanity Fair takes on the great smartphone battle between Apple and Samsung.

    “‘We’ve been ripped off.’ Christopher Stringer, one of the iPhone designers, looked at the Galaxy S in near disbelief. All that time, he thought, all that effort trying out hundreds of designs, experimenting with the size of the glass, drawing different icons and buttons, and then these guys at Samsung just take it?”
    —–
    Founder Showcase
    —–
    New Fundings

    AirPR, a 2.5-year-old, San Francisco-based tech platform designed to increase public relations performance, has raised $4 million in Series A funding led by Mohr Davidow Ventures. Crosslink Capital, Correlation Ventures and angel investors also participated in the round, which brings the company’s funding to date to $5 million.

    Area 1 Security, a months-old, Menlo Park, Calif.-based cyber-security startup founded by three former NSA analysts, has raised $2.5 million in seed funding fromKleiner Perkins Caufield & Byers, Cowboy Ventures, Data Collective, First Round Capital, Allegis Capital, Ray Rothrock and Derek Smith.

    Automattic, the nine-year-old, San Francisco-based company behind the popular blogging platform WordPress, has raised $160 million in new funding led by Insight Venture Partners. New investors Chris Sacca and Endurance also participated in the round, along with earlier investors True Ventures, Tiger Global Management,and Iconiq. In a post about the funding, company cofounder and CEO Matt Mullenweg writes that, “This is obviously a lot of money, especially considering everything we’ve done so far has been built on only about $12 million of outside capital over the past 8 years.” But “there was an opportunity cost to how we were managing the company toward break-even, and we realized we could invest more into WordPress and our products to grow faster.”

    Drivy, a three-year-old, Paris-based peer-to-peer car rental platform, has raised $8.3 million in funding from Alven Capital and Index Ventures. To date, the company has raised roughly $10 million, shows Crunchbase.

    Embibe, a two-year-old, Mumbai, India-based online education platform, has raised $4 million in funding from Kalaari Capital and Lightbox Ventures, reports Times of India. Initially, the company was backed by Sandeep Murthy, who led the India investments of venture firms Kleiner Perkins Caufield & Byers and Sherpalo Ventures. Recently Murthy with his partners launched Lightbox, a $90 million fund that StrictlyVC mentioned last week. (An interview with Murthy is coming.) Lightbox has absorbed six companies that Sherpalo and Kleiner Perkins Caufield & Byers funded in India. Embibe is its first new investment, however.Flux, a new, San Francisco-based company that creates collaborative design software for the building construction industry, has raised $8 million in Series A financing led by DFJ. Borealis Ventures also participated in the funding. Flux was born out of Google’s moonshot factory, Google[x].

    Guangzhou Xianhai Internet Technology, a China-based online game developer, has struck a deal with Beijing Enlight Media, one of China’s largest film and television content suppliers. Specifically, Enlight is paying $37 million in cash for a 20 percent stake in Guangzhou, a move should help Enlight expand into China’s online and mobile game industry and adapt its movies into online games.
    NavInfo, a China-based digital mapping provider, will see an 11.3 percent stake in its business transfer hands from its state-owned parent, China Siwei Surveying & Mapping Technology Corp., to Tencent Holdings, Asia’s biggest Internet company, which is paying $187 million for the position. Alibaba Group Holding announced a similar deal earlier this year; it’s buying AutoNavi Holdings in a deal that values the mapping company at $1.5 billion.Optimizely, a nearly four-year-old, San Francisco-based web optimization platform, has raised $57 million in Series B funding led by Andreessen Horowitz. Earlier backers Benchmark Capital and Bain Capital Ventures also participated in the round, which brings the company’s total funding to $88 million.

    Orbotix, a four-year-old, Boulder, Colo.-based maker of smartphone-controlled robotic toy balls, has raised $15.5 million funding led by Shea Ventures and Grishin Robotics. Earlier investor Foundry Group also participated in the round, which brings the company’s funding to roughly $30 million.
    Pear Sports, a  four-year-old, Irvine, Ca.-based company that provides online fitness tracking and interactive coaching, has raised $5 million in Series B funding led by earlier investors Innovate Partners and Nordic Ventures. Unnamed individual investors and TV maker Vizio also participated in the round, which brings the company’s total funding to $6.2 million, shows Crunchbase.
    Perfecto Mobile, a 7.5-year-old, Woburn, Ma.-based testing and monitoring platform for mobile apps and websites, has raised $20 million in Series D funding led by FTV Capital. The found brings the company’s total funding to nearly $50 million. Others of its investors include Globespan Capital Partners, Waisbein Fund, Carmel Ventures, and Vertex Venture Capital. 
    Planday, a year-old, Copenhagen-based maker of workforce scheduling and HR software, has raised $3.75 million from the Nordic VC Creandum.
    QPID Health, a year-old, Boston-based electronic health records spinout from Massachusetts General Hospital, has received a $12.3 million investment led by New Leaf Venture Partners. The company has raised $16.3 million to date, including from Massachusetts General Physicians Organization, Matrix Partners, Partners Innovation Fund, and Cardinal Partners.
    Top Hat, a five-year-old, Toronto-based mobile and web-based classroom response and engagement tool, has raised $10 million in Series B funding led by Georgian Partners. Earlier investors Emergence Capital Partners, iNovia Capital, SoftTech VC, Version One Ventures and Golden Venture Partners also participated in the round, which brings the company’s total funding to roughly $22 million, shows Crunchbase.
    Smartsheet, a nine-year-old, Bellevue, Wash.-based company that makes collaborative work management software, has raised $35 million in funding led by Sutter Hill Ventures. Earlier investors Insight Venture Partners and Madrona Venture Group also participated in the round, which brings the company’s total funding to roughly $65 million.UberMedia, a four-year-old, Pasadena, Calif.-based mobile ad targeting and social app company, has raised $8 million in funding led by Blue Chip Ventures and Gordon Crawford. The company has raised $25 million to date, including from Accel Partners, Index Ventures, Lerer Ventures and Revolution Ventures.

    WealthEngine, a 23-year-old, Bethesda, Md.-based wealth research services firm (it helps its users find well-heeled prospects to target), has raised $7 million in Series B funding from earlier investors Novak Biddle Venture Partners, Streamlined Ventures, HKB Capital, and others. The company has raised $15.7 million to date, according to Crunchbase.
    —–
    New Funds
    DH Investments, a 12-year-old, Beijing-based private equity and venture capital firm, is raising a third venture capital fund that is targeting $150 million, according to VentureWire sources. At $150 million, CDH Venture III will be much smaller than its predecessor, CDH Venture II, which totaled $500 million, and closer to the firm’s first, $200 million, venture fund closed in 2006. The firm’s areas of interest are broad; among some of its newer information technology bets are Lailaihui, an e-commerce site focusing on outbound travel sales in China; Gewara, an online movie ticket seller through which users can buy tickets at discounts and choose seats; and Wacai, a Chinese mobile app developer and the creator of a personal finance management mobile app.

    CommonAngels, a well-known startup investing group of around 50 Boston-area angel investors, is looking to raise a $35 million new pooled fund and is nearly halfway there, according to a new SEC filing that lists the group’s managing directors, James Geshwiler and Maia Heymann. CommonAngels began raising the fund some time last year.

    —–
    IPOs
    The real impact of Alibaba has yet to be felt here. But it’s coming. Re/code’s Kara Swisher counts the ways as it prepares to file its IPO.
    TrueCar, an eight-year-old, Santa Monica, Ca.-based car pricing information site, disclosed in a filing yesterday that it plans to sell 7.775 million shares at a range of between $12 and $14 a piece, which would give the company a valuation of just less than a billion dollars. The company had initially filed to go public about a month ago. Its biggest shareholders include Capricorn Management, which owns 16.02 percent of the company; Upfront Ventures, which owns 15.23 percent; Anthem Ventures, which owns 9.31 percent; Vulcan Capital, which owns 9.08 percent; and Peppy Capital Partners, which owns 6.62 percent.
    —–
    Exits
    Adchemy, a 10-year-old, Foster City, Ca.-based SaaS-based software company that helps marketers optimize their paid ad campaigns – has been acquired by WalmartLabs, the company’s Silicon Valley-based innovation lab and R&D center. Terms of the deal weren’t disclosed, but TechCrunch hears this was mostly a talent acquisition, with 60 of Adchemy’s employees now expected to head off to WalmartLabs. Adchemy had raised nearly $120 million over the years, shows Crunchbase. August Capital, Mayfield Fund, Accenture and Microsoft were among its investors.
    BrandAds, a 2.5-year-old, Emeryville, Ca.-based application that measures the effectiveness of video advertising, has been acquired by Extreme Reach, a Needham, Ma.-based video platform for integrated TV, digital, and mobile video advertising. Terms of the deal weren’t disclosed. According to Crunchbase, BrandAds had raised just $180,000 in seed funding. Extreme Reach, meanwhile, has raised nearly $150 million from investors, including Greycroft Partners, Village Ventures, and Spectrum Equity.
    ClearEdge Power, an 11-year-old, Hillsboro, Or.-based fuel cell maker, has filed for Chapter 11 bankruptcy proceedings. Last month, facing a cash shortfall, the company laid off 268 employees and closed two manufacturing hubs in South Windsor, Cn. ClearEdge had raised at least $144.3 million from investors, shows Crunchbase. Among its backers are Applied Ventures, Kohlberg Ventures, Southern California Gas Company, and Artis Ventures.

    Lyfe Mobile, a two-year-old, Santa Monica, Ca.-based mobile demand-side platform (DSP), has been acquired by the British video advertising company Blinkx in an all-cash transaction. The purchase price wasn’t disclosed. Lyfe had not disclosed any outside funding.

    Nixter, a two-year-old, Santiago, Chile-based company whose mobile app promised to make it easier for users to access tickets, bottle service and RSVPs for nightclubs, has been acquired by Skout, a 6.5-year-old, San Francisco-based maker of a social networking app. Nixter had raised just $200,000 in angel fund; Scout has raised $22 million from investors, most of it from Andreessen Horowitz.
    Testhub, a two-year-old, Berlin-based app testing outfit, has been acquired by its better-funded U.S. competitor uTest, which has been renamed Applause. Testhub had raised an undisclosed amount of funding from WestTech Ventures. Applause, founded in 2007 and based in Framingham, Ma., has raised about $80 million from investors, including Goldman Sachs, Egan-Managed Capital, QuestMark Partners,Longworth Venture Partners, Scale Venture Partners, and MassVenture. Exact terms of the deal aren’t being disclosed, though the companies said in a statement that it was a multi-million euro deal based on cash and equity.
    —–
    People
    An SEC filing flagged by 9to5 Mac gives some sense of the enticements that former Burberry CEO Angela Ahrendts received to join Apple as its new retail chief. (Think 113,334 Apple shares, which comes out to about $68 million at today’s price, though they won’t fully vest until 2018.)
    If you live or work in Mountain View, Ca., expect some heavier-than-usual traffic on Thursday. President Barack Obama will be in town to attend that fundraiser at the headquarters of Y Combinator.
    Fred Wilson of New York’s Union Square Ventures predicted yesterday that by 2020, the biggest tech company in the world – Apple – will likely cease to be the most important, and won’t even be in the top three. More here.
    —–
    Happenings
    TechCrunch Disrupt continues. You can find its live stream here.
    —–
    Job Listings
    Rubicon Project, the newly public digital ad tech company, is looking for a VP of business development. The job is in L.A.
    For what it’s worth, the NSA is also recruiting in its own unique way.
    —–
    Data
    Chart of the day: Here’s who’s winning the smartphone market share war in China, according to the research firm Counterpoint.
    —–
    Essential Reads
    Looks like John McAfee is back from his wild adventures. His new project (or one to which he has lent his name, at least): an encrypted private messaging app called Chadder.
    Roughly 22,000 new San Francisco residents are now hunting for apartments that don’t exist.
    —–
    Detours
    Michael Pollan on “nutritionism,” food culture, and unhealthy obsessions with healthy eating.
    As you suspected: New research out of Yale and the Smithsonian provides fresh evidence that turtles are more closely related to birds and crocodiles than to lizards and snakes.
    An open letter to your unreadable hashtag.
    Larry Page’s Google business card, circa 1998.
    —–
    Retail Therapy
    Fifteen things to do at stunning tropical locations around the world.
    The best airline seat that $21,000 can buy, ostensibly. (We’d have to confirm this directly — wink, wink — Etihad Airlines.)
    “It’s so hard to describe just how incredible it is to drive this car at speed.”

    Connie

  • StrictlyVC: May 5, 2014

    Hello and happy Monday morning, everyone! We have some new formatting issues we don’t have time to address at the moment. For an easier way to read today’s edition (versus scrolling down), just click here.

    —–

    Top News in the A.M.

    Target just replaced its CEO over that massive data breach over the holidays.

    —–

    Trusted Insight, the Social Network for LPs, Look to Next Round

    Trusted Insight is a four-year-old, New York-based platform that has made itself valuable to institutional investors – 100,000 of them and counting – by giving them a place to research one another, scout out new deals and trends, and connect on due diligence — all with the help of advanced algorithms and semantic analysis.

     

    Now the 16-person company is gearing up for its next phase, suggests cofounder Alex Bangash, who previously founded Rumson Group, an advisory firm that specialized in private equity and venture investments.

     

    Most notably, the company will be unleashing some financial products of its own, though Bangash won’t be more specific than that today, citing competitors that are copying Trusted Insight down to “features we want to throw away.” He merely says to “think of us as the Netflix of investment management. Netflix can create ‘House of Cards.’ We can [create our own offerings] in this business, too.”

     

    Trusted Insight is also preparing to open its doors a bit wider to “different tribes,” says Bangash, who cites fund managers, companies, and “high net worths” who are accredited but don’t necessarily have a billion dollars behind them. (The platform will “still retain its exclusivity,” he insists.)

     

    Trusted Insight also has numerous new features up its sleeve, including “certifications” that help to highlight who is truly expert in what, regardless of their academic credentials.

     

    As for how it achieves what’s on its road map, Bangash says the company has three options, including organic growth. To wit, Bangash says Trusted Insight is poised to double or even triple its user base in the next year, as well as to increase the data it’s managing by five times. Considering that a “small but meaningful portion” of its 100,000 members already pay for one of Trusted Insight’s varying tiers of service, which range in price from $99 to $499 per month, the platform could “be a very large business on [its software-as-a-service fees] alone,” he says.

     

    A second option includes partnering with another outfit (Bangash says Trusted Insight is “talking with two or three players”) or raising a big fat round of funding, which seems like the most likely scenario. Already, Data Collective, Founders Fund, RRE Ventures, Morado Ventures, Real Ventures, and 500 Startups are among those that have invested an undisclosed amount of money in Trusted Insight. And Bangash says he’s been receiving “inbound interest from prestigious investors” anew.

     

    Either way, Bangash sounds confident in the network effects that Trusted Insight now enjoys, noting that “someone could develop a nicer LinkedIn, too, but people probably wouldn’t use it.” The trick going forward is turning Trusted Insight from a “transformational company,” as he calls it, into a transactional one.
    Founder Showcase
    New Fundings
    Electric Objects, an eight-month-old, New York-based developer of an Internet-connected screen for walls, has raised $1.7 million in seed funding led by
    RRE Ventures and First Round Capital, with participation from SV Angel and numerous individual investors, including Foursquare cofounder Dennis Crowley. Earlier investors, including Betaworks and individuals Strauss Zelnick, Nate Westheimer, and Alex Rosen, also joined the round.
    Evariant, a 5.5-year-old, Farmington, Ct.-based software company that helps health care companies launch marketing campaigns and track doctor referrals, has raised $18.3 million in Series B funding led by Lightspeed Venture Partners. Other participants included Dignity Health, Salesforce, and Health Enterprise Partners. The company looks to have raised $27.7 million in mostly equity to date, judging by Crunchbase data.
    Insightra Medical, a 13-year-old, Irvine, Ca.-based surgical device company focused on inguinal and ventral hernias, has raised $6 million in equity, shows an SEC filing. The funding might reflect the undisclosed amount of Series C financing the company announced in October of last year, co-led by Baird Capital‘s venture capital group and Tekla Capital Management.
    Kabbage, a four-year-old, Atlanta, Ga.-based provider of working capital to small businesses, has raised $50 million in Series D funding led by Softbank Capital, with Lumia Capital and TCW/Craton participating. Earlier investors Thomvest, Mohr Davidow Ventures, BlueRun Ventures, David Bonderman, SV Angel and UPS Strategic Enterprise Fund also participated. Kabbage has now raised a whopping $465 million in equity and debt financing.
    Prosper, an eight-year-old, San Francisco-based peer-to-peer lending marketplace, has raised $70 million in new funding led by Francisco Partners. Institutional Venture Partners and Phenomen Partners also participated. As Dealbook notes, the round comes less than a year after Prosper raised $25 million in a round that included BlackRock. The company has raised $190 million altogether, shows Crunchbase.
    SEE Forge, a 2.5-year-old, Perth, Australia-based reporting and analytics platform that largely targets the oil and gas industries, has raised $1 million in funding led by Mercury Fund, a Houston-based venture capital group. Correlation Ventures and unnamed gas and oil industry professionals also participated in the round. The company has raised $2 million to date.
    Sherpaa Health, a two-year-old, Brooklyn, N.Y.-based company that sells healthcare consultancy services, along with access to on-call doctors, has raised $3.9 million, according to a new SEC filing. The company’s earlier investors include SV Angel, O’Reilly AlphaTech Ventures, First Round Capital, and Collaborative Fund. The company has raised $5.7 million to date.
    SupportPay, a 2.5-year-old, Santa Clara, Ca.-based platform that automates child support payments and related expenses, has raised $1.1 million in seed funding led by Draper Associates. Other participants in the round included TEC Ventures, Broadway Angels, Aspect Ventures, RPM Ventures, and Salesforce, along with numerous angel investors.
    —–
    New Funds
    Draper Fisher Jurvetson has closed its newest growth fund, an “oversubscribed” $470 million pool, says the firm, which opened its DFJ Growth practice in 2006. The new fund, led by the same four investors who cofounded DFJ Growth — John Fisher, Mark Bailey, Randy Glein, and Barry Schuler — already counts five portfolio companies, including the location-based social network Foursquare, the space company SpaceX, and the 3D printing company Formlabs. If there was outsize demand for its newest effort, it’s no surprise, given the winners in the firm’s last growth fund, including AdMob (acquired by Google for $750 million in stock in 2009), Tesla Motors (which went public and is now valued at $26 billion), Tumblr (acquired by Yahoo in a $1.1 billion deal last year), Twitter (currently valued at $22 billion on the public market), and Yammer (acquired by Microsoft for $1.2 billion in cash in 2012). Combined with DFJ Venture XI, the firm’s recently closed, $325 million, venture fund, the firm is managing roughly $800 million in new capital.
    Nokia Growth Partners, the company’s venture capital arm, has announced plans to plug up to $100 million into new startups that bring computing and communications technologies into cars. More here.
    Northgate Capital, a 14-year-old, Danville, Ca.-based investment firm that specializes in fund of funds investments and direct investments, is raising its sixth fund of funds, shows an SEC filing that doesn’t list a target and states that the first sale has yet to occur. Northgate was founded by former San Francisco 49ers teammates and looks to have closed its sixth venture fund last year with roughly $153 million, per this SEC filing. Some of Northgate’s recent direct investments include AdRoll, the seven-year-old, San Francisco-based ad retargeting company that raised $70 million in new funding last month from a variety of investors, and Health Digital Systems, an 11-year-old, Mexico-based electronic health records company that raised $25 million last month from Northgate Capital.
    Startup Capital Ventures, a nine-year-old, Menlo Park, Ca.-based early-stage venture firm, is looking to raise a $50 million second fund, according to an SEC filing that states the firm has yet to sell any shares. The firm principally invests in Silicon Valley and opportunistically in Hawaii, Texas, and Oklahoma, where, according to its site, it has “extensive investor relationships.” It also has offices in Hong Kong and Shenzhen. Managing general partner John Dean was formerly the CEO of Silicon Valley Bank (from 1993 to 2001).
    —–
    IPOs
    Aldeyra Therapeutics, a 10-year-old, Burlington, Ma.-based clinical-stage biotech developing treatments for rare skin and eye diseases, saw its shares close Friday at $7.20, down 10 percent in their first day of trading. (Aldeyra had initially planned to offer shares at between $10 and $12.) Domain Associates owned 50.1 percent of the company heading into its IPO. Johnson & Johnson Development Corp. held 44.5 percent.
    Ambrx, an 11-year-old, La Jolla, Ca.-based biotech company developing protein therapeutics for cancers and growth hormone deficiency, has filed paperwork to raise up to $86 million in an IPO. No pricing terms were disclosed. The company’s principal shareholders are Tavistock Group, which owns 19.3 percent of the company; Maverick Capital (17.4 percent); Apposite Capital (9.5 percent); Versant Ventures (7.5 percent); and 5AM Ventures (6.9 percent).
    Zendesk, the 6.5-year-old, San Francisco-based maker of cloud-based customer service software, set a price range this morning of between $8 and $10 million for its proposed IPO. The company’s biggest shareholders, heading into an offering, include Charles River Ventures, which owns 23.8 percent of the company; Benchmark (18.2 percent); and Matrix Partners (7.2 percent).
    —–
    Exits
    LuxVue Technlogy, a four-year-old, Santa Clara, Calif.-based company that makes low-power, micro-LED-based displays for consumer electronics applications, has been acquired for an undisclosed amount by Apple. LuxVue had raised $43.8 million, according to Crunchbase, including from Kleiner Perkins Caufield & Byers.
    Rangespan, a three-year-old, London-based automated supply chain service for online retailers, has been acquired by Google for an undisclosed amount of funding. Rangespan’s founders and other employees will now work within the company’s e-commerce unit, Google Shopping.
    OVM Solutions, a 14-year-old, New Rochelle, N.Y. -based automated messaging service, has been acquired by the contact center company Genesys for an undisclosed amount of funding. Gensysys, in Daly City, Ca., is majority owned by Permira Funds. Technology Crossover Ventures is also an investor.
    Tvinci, a seven-year-old, Tel Aviv-based company whose technology helps TV operators and media companies create personalized, social TV experiences, has been acquired by Kaltura, an open source video platform. Tvinci had raised $6.1 million from Trellas Enterprises, Kaedan Capital Group, and investor
    Zohar Gilon. Kaltura, a 7.5-year-old, New York-based company, has raised roughly $116 milllion from investors, including Avalon Ventures, Commonfund, Intel Capital, SAP Ventures, Gera Venture, Nexus Venture Partners, Nokia Growth Partners, Silicon Valley Bank, .406 Ventures, Mitsui & Co.
    —–
    People
    In early March, Rakesh “Rocky” Agrawal, a veteran of America Online and Microsoft, became PayPal‘s director of strategy to help grow the company’s base of small business customers. Over the weekend, however, Agrawal’s employment ended publicly with a series of stunning tweets that Agrawal thought were private, including about Christina Smedley, PayPal’s VP of global communications. (Agrawal wrote that Smedley was a “useless middle manager” as well as a “piece of s–t.”) It didn’t take long for PayPal to issue a public tweet of its own, stating that Agrawal is “no longer with the company. Treat everyone with respect. No excuses. PayPal has zero tolerance.” Yesterday morning, Agrawal told Re/code in an email that he’d quit before sending the tweets. He also declined to apologize to the targets of his tweets, including Smedley.
    Fran Hauser — who spent more than a decade at Time Inc., including overseeing the digital businesses of top-selling magazines such as People, Entertainment Weekly, and InStyle — has a new job, reports Re/code. Last month, she joined Rothenberg Ventures, an 18-month-old early-stage venture firm founded by Mike Rothenberg, who’d previously cofounded a residential real estate investment firm with his brother in Austin, Texas. The two met via a mutual investment, says Hauser. She later became an LP in Rothenberg Ventures and was eventually asked by Rothenberg to join him as a partner. “We complement each other,” she told Recode from her home in Bedford, N.Y. “I’m an operator. I’ve built businesses, I’ve run businesses. I bring experience.”
    Thomas Weisel, the famed investment banker who personally bankrolled cyclist
    Lance Armstrong in his seven Tour de France wins, sat down with the San Francisco Chronicle to discuss life these days and Armstrong. Said Weisel, who was not named in the United States Anti-Doping Agency report that torpedoed Armstrong’s career: “I knew nothing about what (Armstrong) was doing, and I’m extremely disappointed in him and everyone involved . . .But I’ve been disappointed with a lot of people in life. I liked Lance. His training regimen was off the charts. I thought he was a gentleman of the utmost character, and he looked like a champion. It’s just one more thing that you don’t control, and you couldn’t control. Life throws you curveballs.”
    Venture capitalist Fred Wilson added his two cents to a piece published by TechCrunch over the weekend about the suddenly precarious position of both Square and Box, given that both companies have high burn rates and the IPO market has turned rocky. “[Y]ou can push valuations when you have investors knocking down your door,” writes Wilson. “But unless you are cash flow positive and expect to remain so for the foreseeable future, you do that at your own risk . . . I have lived it, felt it, and suffered from it. It is a real issue.”
    —–
    Happenings
    TechCrunch Disrupt started up today in New York. You can watch a live stream of the happenings here.
    This Thursday, 500 Startups hosts its newest Demo Day if you’d like to get a glimpse of its newest batch of startups.
    Next Thursday, May 15, the 15th annual Founder Showcase in Mountain View Ca. gets underway with featured speakers Mitch Kapor and Mike Maples, among others. (Click on the ad above for a 20 percent discount.)
    —–
    Job Listings
    The Business Development Bank of Canada (BDC) is looking for an associate director to help vet and monitor its energy and clean tech investments. The job is in Vancouver.
    —–
    Essential Reads
    It’s starting to dawn on marketers that the online video ad system has a few booby traps.
    Volvo‘s first self-driving cars are now being test live on public roads in Sweden.

    Scientists at UC San Francisco School of Medicine have been building cancer-killing nanorobots, and they appear to work.

    —–
    Detours
    You could subsist on Soylent. But would it be a good idea?
    “Mad Men” enters the future, and possibly the Peggy Olson era.
    The 17 meanest jokes from Saturday night’s the White House Correspondents’ Dinner. (One of our favorites: “Between Rob Ford, Justin Bieber and Ted Cruz, you just want to tell Canada, “Hey, hey, relax – we already have a Florida.”)
    —–
    Retail Therapy
    A pretty neat place for books.
    We like this overall concept of a “connected” bike, too.

    Connie

  • Trusted Insight, the Social Network For LPs, Looks to Next Round

    Trusted Insight LogoTrusted Insight is a four-year-old, New York-based platform that has made itself valuable to institutional investors – 100,000 of them and counting – by giving them a place to research one another, scout out new deals and trends, and connect on due diligence — all with the help of advanced algorithms and semantic analysis.

    Now the 16-person company is gearing up for its next phase, suggests cofounder Alex Bangash, who previously founded Rumson Group, an advisory firm that specialized in private equity and venture investments.

    Most notably, the company will be unleashing some financial products of its own, though Bangash won’t be more specific than that today, citing competitors that are copying Trusted Insight down to “features we want to throw away.” He merely says to “think of us as the Netflix of investment management. Netflix can create ‘House of Cards.’ We can [create our own offerings] in this business, too.”

    Trusted Insight is also preparing to open its doors a bit wider to “different tribes,” says Bangash, who cites fund managers, companies, and “high net worths” who are accredited but don’t necessarily have a billion dollars behind them. (The platform will “still retain its exclusivity,” he insists.)

    Trusted Insight also has numerous new features up its sleeve, including “certifications” that help to highlight who is truly expert in what, regardless of their academic credentials.

    As for how it achieves what’s on its road map, Bangash says the company has three options, including organic growth. To wit, Bangash says Trusted Insight is poised to double or even triple its user base in the next year, as well as to increase the data it’s managing by five times. Considering that a “small but meaningful portion” of its 100,000 members already pay for one of Trusted Insight’s varying tiers of service, which range in price from $99 to $499 per month, the platform could “be a very large business on [its software-as-a-service fees] alone,” he says.

    A second option includes partnering with another outfit (Bangash says Trusted Insight is “talking with two or three players”) or raising a big fat round of funding, which seems like the most likely scenario. Already, Data Collective, Founders Fund, RRE Ventures, Morado Ventures, Real Ventures, and 500 Startups are among those that have invested an undisclosed amount of money in Trusted Insight. And Bangash says he’s been receiving “inbound interest from prestigious investors” anew.

    Either way, Bangash sounds confident in the network effects that Trusted Insight now enjoys, noting that “someone could develop a nicer LinkedIn, too, but people probably wouldn’t use it.” The trick going forward is turning Trusted Insight from a “transformational company,” as he calls it, into a transactional one.

    Sign up for our morning missive, StrictlyVC, featuring all the venture-related news you need to start you day.

    Connie

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  • StrictlyVC: May 2, 2014

    It’s Friday! We’ll see you back here next week, when we have some great interviews lined up. In the meantime, hope you have a fabulous weekend, everyone.

    —–

    Top News in the A.M.

    Major U.S. technology companies are done quietly complying with federal investigators’ demands for e-mail records and other online data, they say.

    Activists are now suing the city of San Francisco over those Google buses. More here.

    —–

    Ted Driscoll on VC Bias in Healthcare Investing

    Ted Driscoll of Claremont Creek Ventures has been embroiled in the world of digital healthcare a lot longer than most of his industry peers. Before becoming a VC nine years ago, Driscoll, who has a PhD in digital imaging from Stanford, spent decades as a founder and executive at five diagnostics and imaging companies. Maybe it’s no wonder then that Driscoll has strong opinions about where investors who are newer to the digital health scene should be focusing their attention.

    You’ve written about confirmation bias and how “humans are good at ignoring stuff they don’t agree with.” Does that apply to healthcare investing, too, in your view?

    I think it’s one of the curses of venture capital. VCs come in with preconceived notions and it causes them to not necessarily look at the world in the future but to look at the past.

    Meaning what, more specifically?We’re in the midst of a revolution in medicine and we don’t see it. It’s becoming all digital — not just electronic records being captured and stored but diagnostic decisions that are being based on much larger data sets than doctors can fit in their heads. They need tools that find information in the data and that’s a new thing for doctors. In my memory, the guys who went to med school weren’t the computer science types, but now they need computer familiarity to cope with the huge datasets that confront them.And you think VCs aren’t funding enough of those tools?

    My personal opinion is that the most value is created by technologies that can change a doctor’s decision-making. I’m not so interested in things that tell me how many paces I took yesterday; I am interested in the wearable that monitors someone with congestive heart failure and alerts him when he needs to go to hospital. I’m interested in the cheek swab that’s going to tell a doctor that a depressed patient is going to respond to Prozac and not Celexa, so the doctor can make an informed decision rather than rely on trial and error.

    No doubt I’ll miss a Facebook along the way but I’m not seeing healthcare applications for consumers that work that well. Frankly, the many acquaintances of mine with Fitbits or Fuelbands stopped wearing them after three months.

    You note that doctors loath to adopt new technologies. How, or when, do we get past that hurdle?

    Doctors are quite aware of malpractice issues, so they tend to not want to change until they know something is going to work and not have unexpected side effects. Another issue is the way reimbursement works. Certain tests might be valuable, but because a doctor knows he or she won’t be reimbursed until the following year [they might hesitate to use that test] or else exaggerate the patient’s condition to ensure they’re reimbursed for the treatment [more quickly]. Our reimbursement system is total anarchy, with different practices across every state. Is there a reimbursement code for this? Does Medicare reimburse that? Worse, it changes from year to year.

    The good news: as the medical community begins to understand this whole world of information under the surface that can help them, and lots of tests are getting approved [by the FDA], that information is getting back to reimbursers, and they’re coming around. Five years ago, I wouldn’t have invested in a genetic test. Now, I have.

    cpc2
    New Fundings

    Augment, a 2.5-year-old, Paris-based company whose mobile app allows users to visualize products in augmented reality, has received $1.5 million in funding from individual investors. The company has raised $1.8 million to date.

     

    CertiVox, a six-year-old, London-based security company that sells information security infrastructure-as-a-service, has raised $8 million in Series B funding from NTT Docomo Ventures. Earlier investor Octopus Investments also participated in the round, which brings the company’s total funding to $17 million.

    Data Elite, a months-old, San Francisco-based incubator for data science startups, introduced its first class of seven companies yesterday, each of which has raised $150,000. Learn more about them here. Data Elite was founded by Tasso Argyros, co-founder of data-analytics company Aster Data Systems, and Stamos Venios, an M&A veteran, and is backed by Andreessen Horowitz, Formation8, Social + Capital Partnership and investor Ron Conway, among others.

    EnergySavvy, a 4.5-year-old, Seattle-based company whose online tools help utilities operate energy-efficiency programs, has raised $7 million in new funding led byPrelude Ventures, which was joined by earlier investors, including Pivotal Investments. The company has raised $12.9 million altogether, shows Crunchbase.

    Enterome Bioscience, a two-year-old Paris-based company that’s developing biomarkers for medical conditions relating to metabolic and bowel diseases, has raised $16.8 million in Series B funding led by its existing investorsSeventure, Lundbeckfond Ventures, and Omnes Capital.

    Halo Neuroscience, a 1.5-year-old, New York-based company whose wearable headband device purports to “boost brain function,” has raised $1.5 million in seed funding led by Marc Andreessen of Andreessen Horowitz and Jeff Clavier of SoftTech VC. More here.

    Intent HQ, a nearly four-year-old, London-based company whose software creates a so-called interest profile of every Website visitor based on both his or her social profile, along with what that person reads and clicks on, has raised $8 million in funding led by Oxford Capital. Earlier investor Edge Performance VCT also participated.

    Kamcord, a 2.5-year-old, San Francisco-based company whose application allows users to record and share mobile games they’ve played via Facebook, Twitter, YouTube, and email providers, has raised $7.1 million led by TransLink Capital. Other participants in the round included new investors SV Angel, DeNA, KLab and M&Y Growth Partners, and earlier investors Innovation Works, XG Ventures and Mark Williamson. Kamcord has raised $9.6 million to date, shows Crunchbase.

    Lecorpio, a 7.5-year-old, Fremont, Ca.-based maker of cloud-based intellectual property management and analytics software, has raised $10 million in Series B funding led by the family office M2O Inc.

    MakeSpace, a year-old, New York-based full-service storage company, has raised $8 million in Series A funding led by Upfront Ventures, with participation from Founders Fund and O’Reilly AlphaTech Ventures. Earlier investors Lowercase Capital, High Peaks Venture Partners and Collaborative Fund  also participated in the round, which brings the company’s total funding to $10.1 million.

    MediaREDEF, a years-old, New York-based daily email, site, and soon-to-be app, has raised $2.25 million in seed funding led by Bloomberg Beta. Other participants in the round include The Chernin Group, Greycroft Partners, and high profile individual investors like Jeffrey Katzenberg, Mark Cuban, Troy Carter and James Murdoch. Re/code has more here.

    Pubmark, a two-year-old, Cambridge, Ma.-based startup that helps publishers and authors sell their books online and is better known as BookBub, has raised $3.8 million in Series A funding led by NextView Ventures and Founder Collective. Other participants in the round included Avalon Ventures and Bloomberg Beta.

    PunchTab, a three-year-old, Palo Alto, Ca.-based company that sells customer-engagement technology, has raised $6.25 million in new funding led by earlier investorMohr Davidow Ventures. The company has now raised $11.5 million to date, shows Crunchbase.

    Shop.Ca, a three-year-old, Toronto-based online shopping website, has raised $31 million in Series B funding led by Shaw Ventures and other, undisclosed financial institutions. Earlier investors, including Torstar and Difference Capital, also participated in the funding.

    Tresorit, a three-year-old, Budapest, Hungary-based maker of cloud-based, secure file synchronizing and collaboration software that enables business users to share confidential data, has raised $3 million in Series A funding led by Euroventures, as well as earlier backers, including individual investors Andreas Kemi and Marton Szoke. The company has raised $5 million to date.

    Waggl, a months-old,San Francisco-based startup that makes polling software, has raised $1.1 million in seed financing from numerous individual investors, including Robert Hohman, the former president of Hotwire and founder of Glassdoor.

    —–

    New Funds

    Highway1,     a year-old San Francisco-based incubator for hardware startups, announced yesterday that its fall 2014 program is now open to new applicants. It also announced that companies that pass through the program will now receive $50,000 each, up from $20,000. StrictlyVC had profiled Highway1 last month.
    —–
    IPOs
    ProteinSimple, a 10-year-old, Santa Clara, Ca.-based company whose tools analyze proteins that can be used as drugs or biomarkers, is looking to raise $86 million in an IPO,  shows paperwork it filed yesterday for an IPO. ProteinSImple, which changed its name from Cell Biosciences in 2011, is principally owned by Domain Associates, which owns 11.6 percent of the company; Essex Woodlands Health Ventures, which owns 14.6 percent; LVP Life Science Ventures, which owns 8.1 percent; Novo A/S, which owns 12.1 percent; and Wellcome Trust Investments, which owns 19.6 percent.
    —-

    Exits

    Awe.sm, a four-year-old, San Francisco-based company whose software helps measures the performance of social marketing campaigns, has been acquired by Unified, a New York-based cloud technology company. No terms were disclosed. Awe.sm had raised $5.3 million from investors, including Upfront Ventures, Neu Venture Capital, and Foundry Group.

    CrowdStream, a three-year-old, New York company that had developed an “at-event engagement platform,” was acquired yesterday by RadioIO, a publicly traded company. Terms of the deal weren’t announced.

    SpaceClaim, a nine-year-old, Concord, Ma.-based direct modeling software company, has been acquired by Ansys, a publicly traded developer of advanced simulation software for engineers for $85 million in cash. SpaceClaim had raised $50 million over the years, including from Needham Capital Partners, Borealis Ventures, North Bridge Venture Partners, and Kodiak Venture Partners.

    —–

    People

    Venture capitalist Vinod Khosla is reportedly refusing to come to court to testify about blocking public access to a popular surf spot. Vinod Khosla is being sued by the Surfrider Foundation over the closing of Martin’s Beach, just south of Half Moon Bay, where Khosla acquired land in 2008.

    John Melas-Kyriazi is the newest associate of Spark Capital in Boston. The Boston-native was formerly the CFO of the Palo Alto, Calif-based startup StartX, a venture capital fundformed out of a partnership between Stanford University and the Stanford Hospital & Clinics. It’s worth noting that Spark Capital is among those firms that believe strongly in the apprenticeship model. General Partner Mo Koyfman had joined the firm as a principal in the latter half of 2008. (He was promoted in 2012.)  More recently, Spark promoted Andrew Parker to the role of general partner. Parker has been with Spark since 2010, joining the firm as an associate; he was promoted to principal less than a year later and made a GP last October.

    —–

    Esssential Reads

    Foursquare has split itself in two.

    Amazon‘s smartphone revealed . . . to look a lot like every other smartphone.

    Don’t cry, Twitter. The Atlantic has predicted certain doom for many before you.

    Founders with kids.

    —–

    Detours

    Foursquare has split itself in two.

    Amazon‘s smartphone revealed . . . to look a lot like every other smartphone.

    Don’t cry, Twitter. The Atlantic has predicted certain doom for many before you.

    Founders with kids.

    —–

    Retail Therapy

    Go zero to 60 miles per hour in 3.7 seconds and look fine doing it.

    An entire collection of gear inspired by the carpet from The Shining’s Overlook Hotel.

    Tony Stark’s house is for sale, people.

    —–

    To sign up for StrictlyVC, click here.

    Connie

  • Ted Driscoll on VC Bias in Healthcare Investing

    Ted_Driscoll-200x300pswebTed Driscoll of Claremont Creek Ventures has been embroiled in the world of digital healthcare a lot longer than most of his industry peers. Before becoming a VC nine years ago, Driscoll, who has a PhD in digital imaging from Stanford, spent decades as a founder and executive at five diagnostics and imaging companies. Maybe it’s no wonder then that Driscoll has strong opinions about where investors who are newer to the digital health scene should be focusing their attention.

    You’ve written about confirmation bias and how “humans are good at ignoring stuff they don’t agree with.” Does that apply to healthcare investing, too, in your view?

    I think it’s one of the curses of venture capital. VCs come in with preconceived notions and it causes them to not necessarily look at the world in the future but to look at the past.

    Meaning what, more specifically?

    We’re in the midst of a revolution in medicine and we don’t see it. It’s becoming all digital — not just electronic records being captured and stored but diagnostic decisions that are being based on much larger data sets than doctors can fit in their heads. They need tools that find information in the data and that’s a new thing for doctors. In my memory, the guys who went to med school weren’t the computer science types, but now they need computer familiarity to cope with the huge datasets that confront them.

    And you think VCs aren’t funding enough of those tools?

    My personal opinion is that the most value is created by technologies that can change a doctor’s decision-making. I’m not so interested in things that tell me how many paces I took yesterday; I am interested in the wearable that monitors someone with congestive heart failure and alerts him when he needs to go to hospital. I’m interested in the cheek swab that’s going to tell a doctor that a depressed patient is going to respond to Prozac and not Celexa, so the doctor can make an informed decision rather than rely on trial and error.

    No doubt I’ll miss a Facebook along the way but I’m not seeing healthcare applications for consumers that work that well. Frankly, the many acquaintances of mine with Fitbits or Fuelbands stopped wearing them after three months.

    You note that doctors loath to adopt new technologies. How, or when, do we get past that hurdle?

    Doctors are quite aware of malpractice issues, so they tend to not want to change until they know something is going to work and not have unexpected side effects. Another issue is the way reimbursement works. Certain tests might be valuable, but because a doctor knows he or she won’t be reimbursed until the following year [they might hesitate to use that test] or else exaggerate the patient’s condition to ensure they’re reimbursed for the treatment [more quickly]. Our reimbursement system is total anarchy, with different practices across every state. Is there a reimbursement code for this? Does Medicare reimburse that? Worse, it changes from year to year.

    The good news: as the medical community begins to understand this whole world of information under the surface that can help them, and lots of tests are getting approved [by the FDA], that information is getting back to reimbursers, and they’re coming around. Five years ago, I wouldn’t have invested in a genetic test. Now, I have.

    Sign up for our morning missive, StrictlyVC, featuring all the venture-related news you need to start you day.

    Connie

    ,

  • StrictlyVC: May 1, 2014

    Hello and happy Thursday morning, everyone. StrictlyVC is trying out a new email service provider, so you may notice some changes. Hopefully, one of them will be that you have, in fact, received your issue of the newsletter today! [Please, she thinks, hands clasped.]

    You might also notice that there’s no column today. Apologies — with the switchover, we ran out of time yesterday. We hope you find some useful intel in the tidbits below, and we’ll see you back here tomorrow.

    —–
    Top News in the A.M.
    Alibaba, the Chinese Internet giant that’s about to go public in the U.S, is trying to regain a stake in its Alipay payment affiliate. No deal is imminent, but it would be a big deal to Alibaba’s future shareholders, argues Dealbook.
    cpc2
    New Fundings
    Ambri, a four-year-old, Cambridge, Ma.-based maker of liquid-metal battery technology, has raised $35 million in Series C funding to build a commercial-scale factory. New investors in Ambri’s round include the Swiss insurance companyBuilding Insurance Bern, and KLP Enterprises (the family office of Karen Pritzker and her husband, Michael Vlock). Earlier investors Bill Gates and Vinod Khosla also participated in the round, which brings the amount of equity Ambri has raised to date to $50 million. GigaOm has much more here.

    Ayla Networks, a 3.5-year-old, Sunnyvale, Ca.-based company whose cloud connectivity software helps manufacturers turn appliances and more into intelligent devices, has raised $14.5 million in Series B funding from Cisco Investments andSAIF Partners. Other participants in the round included the International Finance Corporation, a member of the World Bank Group; Linear Venture; SJF Ventures;Crosslink Capital; and Voyager Capital.

    CloudGenix, a year-old, Santa Clara, Ca.-based networking company that helps companies manage multiple types of apps over multiple types of devices and connections, has raised $9 million in Series A funding from Charles River Venturesand Mayfield Fund.
    Edgewater Networks, a 12-year-old, San Jose, Ca.-based company that makes enterprise session border controllers to connect, optimize, and secure IP-based communications, has raised $5 million in debt financing from Eastward Capital. The company has raised at least $12 million in debt and equity in recent years, shows Crunchbase.

    Evrything, a three-year-old, London-based software company whose applications help companies connect their devices to the Web, has raised $7 million in Series A funding from Atomico, Dawn Capital, BHLP, and Cisco Systems. The company had raised an undisclosed amount of seed capital led by Atomico in 2011.

    Flipps Media, a three-year-old, Uniondale, N.Y.-based company whose app enables users to stream media to televisions without additional devices, has raised $2.4 million from Earlybird Venture Capital and earlier investors, including investor Tim Draper.

    LeadiD, a three-year-old, Ambler, Pa.-based software company that makes tools for buyers and sellers of online customer leads, has raised $7 million in Series A funding from Comcast Ventures and Tribeca Venture Partners. Genacast Ventures, which had led LeadiD’s seed funding, also participated in the round. LeadiD has raised $9.7 million altogether.

    Liquid Data Intelligence, a months-old, Lisbon, Portugal-based software analytics service that promises to help mobile app developers and marketers optimize conversion rates by personalizing their apps for individual users in real-time, has closed a $1 million seed round from Faber Ventures and Portugal Ventures.

    Moveline, a 2.5-year-old, Las Vegas-based company whose users video their belongings and are then given quotes from moving companies, has raised $3 million in Series A funding led by ff Venture Capital, with participation from Vegas Tech Fund and Quotidien Ventures, along with earlier investors.

    OGSystems, a 10-year-old, Chantilly, Va.-based company that specializes in agile software development and systems engineering for the Department of Defense, the intelligence community, and commercial markets, has raised an undisclosed amount of funding from General Catalyst Partners.

    Otonomy, a 5.5-year-old, San Diego-based company that’s developing and commercializing treatments for diseases of the inner and middle ear, has raised $49 million from a line list of investors. Its new backers included Jennison Associates,Perceptive Advisors, the Federated Kaufmann Funds, Ally Bridge Group, certain private funds advised by Clough Capital Partners, and other unnamed institutional investors. Earlier investors also participated, including OrbiMed Advisors, Novo Ventures, TPG Biotech, Avalon Ventures, Domain Associates, RiverVest Venture Partners, Aperture Venture Partners, and Osage University Partners. The company has raised  $144 million to date.

    The RealReal, a three-year-old, San Francisco-based, online high-end consignment shop, is raising a big new round, according to an SEC filing that shows the company has raised $20.3 million as part of a $31 million round. The company had previously raised $21.5 million from investors, including Novel TMT Ventures, Canaan Partners,Greycroft Partners, Panarea Capital, InterWest Partners, Sukhinder Singh Cassidy, Suzy Welch, and e.ventures.

    Trippy, a three-year-old, Manhattan Beach, Ca.-based online question-and-answer platform that connects travelers, disclosed yesterday that it has raised $3.5 million in Series A funding in a round that closed last year. The funding was led by eVentures, which was joined by True Ventures and Sequoia Capital. TechCrunch has more here.

    Vhoto, a two-year-old, Seattle, Wa.-based company whose app uses algorithms, computer vision and machine learning to allow iPhone users to pull still shots from video, has also announced a $2.4 million dollar seed round from Atlas Venture, Polaris Partners, and the company’s cofounder and chairman, Hugh Crean. (Crean, by the way, worked previously as an EIR at General Catalyst Partners and was earlier the CEO of Farecast.com. Vhoto’s CEO, Noah Heller, was most recently an EIR at Atlas.)

    ZeroFox, a year-old, Baltimore-based security startup that helps companies identify, manage and mitigate social media-based cyber threats, has raised $10.3 million in Series A funding led by New Enterprise Associates. Other participants in the round included Genacast Ventures, Core Capital, and numerous angel investors from the security industry, including former Symantec CEO Enrique Salem.

    —–

    New Funds

    Benhamou Global Ventures, a Silicon Valley based early-stage venture capital firm founded by former 3Com CEO Eric Benhamou, is announcing the first close of its newest fund, BGV II LP, a vehicle that will be investing just less than $100 million in seed and early-stage companies that focus on everything from enterprise technology —  including security, cloud-based services, Web scale infrastructure, mobility — to Internet-connected devices. The firm has already made one investment from the new fund in Qubell, a two-year-old, Menlo Park, Ca.-based “platform as a service” company. (GigaOm had written about Quebell here.)

    Cisco Investments, the corporate venture capital arm of Cisco, announced yesterday that it will pour a fresh $150 million into funding early-stage companies, especially those focused on big data and analytics; the Internet of Things; connected mobility; storage; silicon; the content technology ecosystem; and India innovation. The new capital folllow’s Cisco’s previously announced $100 million commitment to startups focused on the Internet of things. The venture arm currently has stakes in more than 80 companies and 35 funds as part of a $2 billion portfolio.

    Not new but a new development: Industry Ventures, the 14-year-old, San Francisco-based secondary shop, is assuming the daily management of Square 1 Venture 1, L.P., a 2008-vintage venture capital fund-of-funds. Square 1 is a Durham, N.C.-based specialty bank that provides loans and other services to venture firms and their portfolio companies. Square 1 suggested it was selling its portfolio to focus exclusively on that banking business.

    Lerer Ventures looks to be raising a fourth, $50 million fund, judging by a new SEC filing. Interestingly, the fund is titled Lerer Hippeau Ventures IV, possibly signaling a branding change three years after Eric Hippeau, the former CEO of Huffington Post, joined the firm. (Before Huffington Post, which sold to AOL in 2011, Hippeau was a well-known venture capitalist with Softbank Capital.) Lerer closed its third fund with $36 million in 2012.

    Lightstone Ventures, a two-year-old, early-stage life sciences firm launched by health-care investors from Morgenthaler and Advanced Technology Ventures, has closed its debut fund at $172 million, it’s announcing this morning. The team consists of Mike Carusi and Jean George of ATV (which won’t raise another fund), and Hank Plain and Chris Christofferson of Morgenthaler. Lightstone invests in early-stage biotechs and medical device makers, and has already backed three companies, including Catabasis, the Cambridge-based startup developing triglyceride-lowering and anti-inflammatory drugs. Lightstone has offices in Palo Alto, Boston, and Boulder. Xconomy has much more here.

    Passport Capital of San Francisco looks to be raising some new capital, judging by an SEC filing that does not list a target. Passport is a multistrategy hedge fund that was founded by John Burbank in 2000 and invests in agriculture, basic materials, energy, financial services, health care, capital markets and the Internet, among other things. In March, for example, Passport and Blackrock led a $100 million round for the big data company Hortonworks at a valuation of more than $1 billion. Last month, Passport’s filed its first Form D of 2014, showing that the company recently raised $27.2 million from investors.
    —–

    IPOs

    Box, the Los Altos, Ca.-based online storage company, may delay its eagerly awaited IPO until late May, according to Quartz’s sources, who cite market volatility as the driver. The offering is expected to raise as much as $250 million in the public markets. (Tweeted Box’s famously funny CEO Aaron Levie last night, in apparent frustration over the report: “‘Quiet periods are so much fun,’ said no one ever.”)
    —–

    Exits

    Check, a 6.5-year-old, Palo Alto, Ca.-based whose app that helps users pay bills and monitor bank accounts and credit cards, is in talks with Intuit about being acquired for more than $350 million, according to WSJ sources. The outlet says the discussions are early and that a final agreement might not be reached for another week or two. Check has raised $47 million from investors, including Menlo Ventures, Morgenthaler Ventures, and Pitango Venture Capital.

    PlayFirst, a nearly 10-year-old, San Francisco-based mobile game developer, has been acquired by the 13-year-old, publicly traded game maker Glu Mobile for roughly $12 million in stock. PlayFirst had raised $37.7 million over the years, including from Trinity Ventures, Rustic Canyon Partners, DCM, and Mayfield Fund.
    —–

    People

    Fortune takes a look at 10 founding teams and the valuations of their pre-IPO companies — which have now reached into the multiple billions of dollars.

     
    Lee Fixel, a 34-year-old Florida native who co-heads Tiger Global’s investments in closely held companies, is making more bets on early-stage companies, signaling to many that valuations of later-stage Silicon Valley companies have gotten too frothy even for Tiger. In fact, reports Bloomberg, Fixel may “may turn to investing more internationally,” say its sources,  who “asked not to be identified because the information is private.” (Shhhhh.) All told, Tiger Global has made 84 investments in 70 privately held companies since 2006, the year Fixel joined the firm, says Bloomberg. 
     
    Yahoo CEO Marissa Mayer appears to be grossly overpaid thanks to Yahoo’s lucrative stake in Alibaba. But here’s something: Since Mayer’s appointment in 2012, outbound applications by Yahoo employees to smaller tech startups have dropped by 44 percent, according to data from recruiting software provider Jobvite. 
     

    Boris Wertz, a Vancouver-based VC who runs the early-stage fund Version One Ventures, will be working more closely with Andreessen Horowitz in a official capacity as a “board partner.” Wertz, says the firm in a blog post, will “continue doing what he does best, scouting out great people and companies for his own fund, but when it makes sense he’ll also bring a16z into the equation, as well as representing a16z on the boards of select startups.”
    —–

    Happenings

    Coming up in New York on June 4, the LDV Vision Summit, (which could be a good place to look at some new imaging and video startups). You can see the agenda and speakers here.

    Coming up even sooner in New York: TechCrunch Disrupt, which kicks off on Monday. Details are here.

    And a quick reminder that the NVCA’s VentureScape conference takes place in San Francisco May 13 and 14. Click here for more details.
    —–

    Jobs< Cambridge Associates is looking for a research associate in the Bay Area.

    Codeacademy, the buzzed-about online educational startup, is looking for a junior business development person to add to its team in New York.
    —–

    Essential Reads

    At Facebook’s F8 conference yesterday, Facebook came off a lot like a middle-aged man, notes Valleywag.

    Google Glass currently carries a $1,500 price tag, but the components packed tightly inside the device may cost the Internet giant less than $80, the WSJ reports.

    Snapchat is adding emphemeral texting and video chats to its product, reports the Verge.

    Wired on one startup’s struggle to survive in the Silicon Valley gold rush. “Nick was making ends meet by Air­bnb-ing out his apartment a couple of blocks from their office and commuting an hour each way from his girlfriend’s place in Petaluma. Chris was leaning hard on his indefatigable wife. For this they had upended pleasant lives, and they could no longer quite remember why.”
    —–

    Detours

    “Without urgent action, we are heading for a post-antibiotic era, in which common infections and minor injuries can once again kill,” says a new report from the World Health Organization.

    America’s 10 richest universities, and the countries whose GDPs they match.

    Gawker columnist A Dog reviews Thomas Piketty’s “Capital in the Twenty-First Century.”

    Tiny hamsters eating burritos.

    —–

    Retail Therapy

    We are amazed. A 3D printing pen that will let you draw in the air.

    Cool trailer.

    Eat your heart out, Roman Abramovich. Your yacht looks like a trailer park dumpster next to this baby.
    ——-

    To sign up for StrictlyVC, click here.

    Connie

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