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Top News in the A.M.
Apple had a gazillion announcements yesterday. TechCrunch has the lowdown here.
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VC Ed Sim on Seed Stage, East Coast, Enterprise Investing
Back in December 2012, Fred Wilson of Union Square Ventures told entrepreneurs who crowded into the New York law offices of Cooley that they more should focus on enterprise technologies – and not simple analytics masquerading as such.
A lot has changed since then, says Ed Sim, cofounder of the seed-stage fund Boldstart Ventures in New York, who suggests that when it comes to even pure enterprise tech – beyond enterprise applications – New York is catching up to the Bay Area. We talked last week about what he’s seeing and how his firm is funding what it’s finding. Our conversation has been edited for length.
You raised a $1.5 million proof-of-concept fund in 2011, then another $17 million last year. So things must have gone well with that first fund.
We sold companies to Salesforce (GoInstant), LinkedIn (Rapportive), Google (Divide), Akamai (Blaze.io), and Telenav (ThinkNear), so that beta test is proving fruitful.
What size checks are you writing today?
Between $250,000 and $350,000, with half [the fund] reserved for follow-on rounds. Our upper bound is $1.5 million. We shoot for an ownership stake of anywhere from 3 to 8 percent, depending on how early we get in.
How do you differentiate Boldstart from other firms?
It’s a leveraged model. We put together an advisory board of 12 folks — people we’ve funded over the years, many of whom have had successful exits – and they’re very helpful from a deal flow and diligence perspective.
Also, [firm cofounder] Eliot [Durbin] and I kind of figure out one or two things the entrepreneur needs to get a Series A done, whether it’s to refine the products, or introduce the founder to a few customers. Then we’ll co-invest with a few other micro VCs to share the load in what we do. It’s been working thus far. Our portfolio companies have gone on to raise more than $250 million in follow-on financing.
Which firms do you tend to work with?
We’re probably one of few teams in New York with a big focus on enterprise at the micro VC level. Other investors elsewhere, including in Boston, do more. So for example, we’ve co-invested with Atlas Venture in two companies.
Why aren’t more seed-stage investors focused on the enterprise in New York? Are there fewer angels and micro-VCs in New York with enterprise investing experience?
Enterprise is where the money is and plenty is happening in New York, including a number of Israeli technology [companies relocating here] because of customer traction.
There’s a lot of talent around, too. One of our portfolio companies, Divide, was started by a team that was building software products at Morgan Stanley. [Divide, whose software helps corporations manage their employees’ personal smartphones, was acquired last month by Google for undisclosed financial terms.] Security Scorecard, which is still operating in stealth mode, was founded by guys who were heading up the security division of Gilt Groupe. A third [portfolio company], Yhat, was founded by people who spun out of the analytics and data warehousing group of OnDeck Capital.
For us, this whole angel scene is tied to the vagaries of the stock market. When it’s doing well, more are out [writing checks]. Now, people are in wait-and-see mode because no one is sure which way the market is going, so that’s more opportunity for us.
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New Fundings
Commerce Guys, a six-year-old, Ann Arbor, Mi.-based e-commerce services company behind Drupal Commerce, an open-source framework that sites use for their online stores, has raised $7.3 million in Series B funding. Hi Inov, a family office, led the round, joined by earlier investors Isai, a France-based entrepreneurs’ fund; Alven Capital, a venture firm in Paris; and Open Ocean Capital of Finland. The company has now raised $12.3 million altogether, shows Crunchbase.
DefiniGen, a two-year-old, Cambridge, England-based stem cell technology company, has raised $1.6 million in Series A funding led by Cambridge Enterprise and 24 Haymarket. Other new investors to participate in the round included LBA, Wren Capital, and Ranworth Capital; they joined earlier investors who also participated, including Providence Investment Company and Cambridge Capital Group. DefiniGen has raised $3.83 million altogether, it says.
Fishidy, a 2.5-year-old, Madison, Wi.-based map-based social and mobile platform that provides fishing information to anglers, has raised $1.5 million in Series A funding led by Hyde Park Investors. Fifteen other investment groups filled out the round, says the company.
GoDog Fetch, a year-old, San Diego, Ca.-based developer of cloud-based technology that claims to work as a Siri-like personal digital assistant for all the devices people use throughout the day, has raised an undisclosed amount of seed funding, including from Analytics Ventures.
Grabit, a 2.5-year-old, Santa Clara, Ca.-based company that makes electro adhesion-based materials and which spun out of the nonprofit research institute SRI International, has raised an undisclosed amount of new funding from Flextronics Lab IX and Draper Nexus. The round follows a Series A funding raised last October. That earlier round was led by Formation 8, which was joined by Nike and ABB Technology Ventures.
Houzz, a five-year-old, Palo Alto, Ca.-based home-remodelling and design site Houzz is raising a Series D round of $150 million at a post-money valuation of more than $2.3 billion, according to TechCrunch and VCExperts. The fresh funding would bring total funding for Houzz to roughly $200 million. Previous investors include Comcast Ventures, Kleiner Perkins Caufield & Byers, Sequoia Capital, GGV Capital, New Enterprise Associates, and numerous high-profile individual investors, including Yammer founder David Sacks.
Offerpop, a five-year-old, New York-based digital marketing platform that tries to help brands turn marketing channels into social experiences, has raised $15 million in new funding led by Edison Ventures, which was joined by Hearst Ventures and Salesforce.com. Earlier investors Windcrest Partners, CommonAngels and Mesco also participated in the round, which brings the company’s total funding to date to $24.5 million, shows Crunchbase.
Proteus Digital Health, a 13-year-old, Redwood City, Ca.-based company whose digital health feedback system, which involves ingestible sensors that helps patients to better manage their health and collaborate with caregivers and clinicians, has raised $120 million from unidentified investors. The San Francisco Business Times has much more about the company, which has now raised roughly $320 million altogether, here.
Sente, a seven-year-old, Encinitas, Ca.-based specialty aesthetics company that develops skin creams, has raised $5 million in Series C funding led by PharmaBio Investments, a Durham, N.C.-based life science investor. Earlier investors also participated in the round.
Zenefits, a 17-month-old, San Francisco-based company that makes it easy for companies to manage their human resources paperwork online, has raised a $66.5 million Series B round led by Andreessen Horowitz, with participation from Institutional Venture Partners. The company has now raised $84 million altogether, including from Y Combinator, Venrock, Maverick Capital and individuals David Rusenko, Charlie Cheever, and Aaron Levie. Re/code has much more here.
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Exits
Cozi, a nine-year-old, Seattle-based company behind a family scheduling app designed to help organize activities, has been acquired by Time Inc.for an undisclosed amount. Cozi, cofounded by former Microsoft manager Robbie Cape, had raised $5.8 million from investors, including Benaroya Capital, Gannett Co., and Hercules Technology Growth Capital.
Perfect Audience, a two-year-old, San Francisco-based retargeting platform, has been acquired by the Online advertising management company Marin Software for $22.8 million. Perfect Audience is a Y Combinator alum that raised $1.1 million in funding altogether, including from SV Angel, Pritzker Group Venture Capital, and Paul Buchheit.
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People
Rob Coneybeer of Shasta Ventures sits down with Inc. to share some thoughts, including about what types of companies most interest right now. Among his picks: Transportation companies and companies that will provide financing for self-driving cars. “So it’s likely when you went in to buy [a] car, and you started at the high end, the salesperson might say, ‘We have a Drive You Home Drunk package and that costs $14,000, but over time it is not too much,’ [and] when it comes to the cost of a DUI, you might think about it.”
Maker Studios, the multichannel network recently acquired by Walt Disney Co, is planning to lay off roughly 10 percent of its 380 employees as early as this week, according to Variety’s sources. More here.
Edward Snowden, NSA whistleblower, is about to get the Oliver Stone treatment. More here.
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Happenings
Subscribed, a conference dedicated to the subscription economy, is happening in San Francisco through tomorrow. (Plan ahead if you’re coming into the city. The city’s Muni drivers are still “out sick.”)
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Job Listings
Levensohn Venture Partners is recruiting a senior associate to assist two general partners making early stage investments. The job is in San Francisco.
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Data
“So far this year, 55 companies backed by venture-capital firms have gone public on U.S. exchanges, raising $7.5 billion, according to data provider Dealogic. That easily exceeds the 19 venture-capital-backed IPOs that raised $1.9 billion on U.S. exchanges last year and is the highest level of activity since 2000.” The WSJ takes a quick look.
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Essential Reads
We told you in late April about a Supreme Court ruling that make it easier for companies to recoup legal fees in cases brought against them by patent holders. That ruling just helped a Santa Barbara startup pummel a patent troll, reports Ars Technica.
Wow, a new chip is bringing holograms to smart phones.
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Detours
The get-rich-quick dreams are gone, replaced by one, giant fracking hangover.
Residents of Old Westbury, New York, aren’t enthusiastic about a 33-foot sculpture that one real estate titan has installed on his front lawn.
In honor of HBO’s “Silicon Valley,” Betabeat has compiled the five most bizarre tech conference mishaps of all time.
Someone is definitely getting fired.
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Retail Therapy
A bracelet that lets you surreptitiously call your own phone to escape a conversation. “Oh, really. That’s interesting. So you’re saying that if you were me, you would have finished law school after all.” [Calls self.] “Hang on, Mom, I’ve got to take this.”
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