StrictlyVC: June 23, 2014

Hi, everyone! We realize we’re a little late today — we’re still catching up after a busy weekend.

If you missed StrictlyVC on Friday (a couple of readers let us know it landed in their spam folders), it’s here.


Top News in the A.M.

Oracle is buying Micros Systems, which makes software for restaurants and hospitality providers, in its biggest deal since acquiring Sun Microsystems five years ago.


Julie Wainwright on Lessons in E-Commerce

Julie Wainwright is an e-commerce pioneer. In the late ‘90s, she was the chief executive of Berkeley Systems, a maker of popular games and computer screen savers;, which was one of the first companies to sell videos online; and the short-lived retailer company (best remembered for its legendary sock puppet marketing campaign).

She’s still at it, leading the RealReal, a fast-growing online consignment business she began building in 2011 and that StrictlyVC visited last week for a profile. As part of that sit-down, we asked Wainwright to share some of what she has learned through her online selling adventures. Our chat has been edited for length.

The RealReal has raised $43 million from investors. Do you think your personal brand made a difference early on?

I don’t know about that. To the people who already knew me, absolutely. But coming into new VCs, I’m not like them in any way. I’m a woman, and I’m an older woman. One even said [whispering], “A lot has changed.” And I was like, “Really? Basic business has changed? I don’t think so. Tactics change, but not business fundamentals.”

Very broadly, what are the advantages and disadvantages of being a veteran of this industry?

Youth has so many advantages, because you don’t know what you don’t know, and you take risks and put yourself in situations that, if you had a broader perspective or more learning, you wouldn’t. And great breakthroughs can come through when you don’t have fear. But every business goes through a trial period, and that’s where you need a playbook and that’s where I’d say you really enjoy the beauty of experience. I have a playbook, and I’ve hired people with deep playbooks, so early on, we were already a business with great potential. raised your profile for better or worse. What are some things you learned from that experience?

The key lesson I learned there is that strategic investors’ interests and your company’s interests are not always aligned.

I already knew that anything relating to commodities, Amazon was going to do better and cheaper, even back in 1997. I’d been watching them. I’d been to their warehouse. I’d seen their infrastructure. They were so far ahead. So when I was brought in to lead, I said the only way I’ll do it is if Amazon is a strategic investor in the business. And Amazon put in $60 million. And I thought that because they put in so much money that we had a safe harbor and that they’d just end up buying this company; I thought we’d create this category, which was huge, and then just merge with them. thought the same thing.

And they copied both of you instead.

Maybe they just ran the numbers and decided it was cheaper than buying. They did the same thing with [the daily deals business] LivingSocial. Now Amazon is doing their own daily deals.

The market turned on you at What happens if that happens again now?

We have a very capital-efficient business here. I don’t have the same issues that any other e-commerce-built business that I know of does. Because our goods come from our seller and buyer base, and we have a huge repeat rate, we’d be okay even if we couldn’t get more financing. We’d just have slower growth.

What do you think other e-commerce companies, including Fab and One Kings Lane, are doing wrong?

First, I think both are doing a lot right. As a consumer, I love One Kings Lane. I’d say, looking at things from a very superficial level, that Fab overextended its growth by moving too quickly. It also has a lower average price point, and to make money at a lower price point, you have to be phenomenally efficient. For example, the average selling price point of Zulilly [the daily deals site for mothers and children] is $50, and Zulilly is making money. I bet Fab’s [average selling price point] is close and it’s not. The difference is Fab was really interested in expanding internationally and bought all these companies and had to merge them all and it didn’t have its own manufacturing facilities, then switched to its own pick, pack, and ship [model] . . . It’s just done so much in three years, whereas Zulilly has always focused on its products and how to get cost-efficient.

You think it’s too late for Fab?

My guess is that Fab can do it. It has to get really focused, though.


New Fundings

AnyPerk, a two-year-old, San Francisco-based company that helps its customers create and distribute employee perks and incentives, has raised $3 million in seed funding, reports Venture Capital DispatchVegas Tech FundFundersClub and Vayner/RSE led the round, joined by more than ten other investors. The company is a Y Combinator alum.

Benvenue Medical, a 10-year-old, Santa Clara, Ca.-based spine tech startup, has raised $40 million in Series E funding, plus $24 million in debt financing, InterWest Partners led the equity round, with DeNovo VenturesDomain AssociatesTechnology Partners and Versant Ventures participating. Silicon Valley Bank was the sole debt provider. MedCity News has more here.

Box, the nine-year-old, Los Altos, Ca.-based online-storage company, is in talks to raise a round of funding from private-equity firm TPG, three months after filing for IPO. Box is unprofitable because it spends heavily on salespeople, marketing and expansion into more countries, notes the WSJ, which raised the specter on Friday that “though still very unlikely,” without a cash infusion, “Box could run out of money” some time next year. Box has raised a total of more than $400 million from roughly a dozen venture firms, including Draper Fisher JurvetsonGeneral AtlanticBessemer Venture Partners and Emergence Capital Partners.

Dimension Therapeutics, a 1.5-year-old, Cambridge, Ma.-based gene therapy company focused on developing novel treatments for rare diseases, has raised $30 million in funding from new investor OrbiMed, along with earlier investor Fidelity Biosciences. The company has now raised $35 million altogether.

Dual Therapeutics, a year-old biotechnology startup that spun out of University Hospitals of Cleveland last year, is raising $7.5 million, according to an SEC filingAccording to MedCity News, the company is currently operating out of Harlem Biospace, a life science incubator that opened in New York last year. It’s developing therapeutics for prostate cancer, lung cancer and acute lymphoblastic leukemia.

Dynamic Yield, a three-year-old, Tel Aviv, Israel-based developer of a real-time website optimization and personalization platform, has raised $12 million in Series B funding led by Marker, with participation from existing investors Bessemer Venture PartnersProSiebenSat.1 Media AGInnovation Endeavors, and the New York Times Co. The company has raised $14.2 million to date, shows Crunchbase.

Inpria, a seven-year-old, Corvallis, Or.-based developer of high-resolution photoresists, has raised $1.45 million led by the Oregon Angel Fund. The capital comes on the heels of a separate, $7.3 million round of funding the company announced in February, led by Samsung Ventures, with participation from Intel Capital and Applied Ventures.

ProjectManager, a six-year-old, Auckland, New Zealand-based maker of online project management software has raised $3.5 million in Series A funding led by New Zealand’s Zeus Management.

Proterra, a 10-year-old, Greenville, S.C.-based maker of zero-emission-battery electric buses, has raised $30 million in Series D round led by earlier investors Kleiner Perkins Caufield & Byers and GM Ventures. The company had closed the second round of its $34 million Series C funding in January, led by new backer Tao Invest (the family firm of Nick and Joby Pritzker). The company has now raised $150 million to date, including from Edison EnergyConstellation VenturesMitsui & Co.,Vision Ridge PartnersHennessey Capital and 88 Green Ventures.

Scivantage, a 14-year-old, Jersey City, N.J.-based company that sells Web-based front and middle-office technologies to the financial services industry, has raised $20 million from earlier investors Brown Brothers Harriman Capital Partners and Edison Ventures. The round also included debt financing provided by Comerica Bank and ORIX Ventures.

Skyhigh Networks, a two-year-old, Cupertino, Ca.-based company whose cloud-based security software helps companies monitor employees’ use of cloud computing services, has raised $40 million in Series C funding from earlier investors Greylock Partners and Sequoia Capital, which were joined by Salesforce. The company has now raised $66.5 million altogether. Dealbook has more here.

Tanium, a 6.5-year-old, Berkeley, Ca.-based enterprise management startup that helps companies manage and secure the devices on their network via a Web brower, has raised $90 million from Andreessen Horowitz. It’s the company’s first venture investment, Re/code reports, citing a tweet by Marc Andreessen about the deal. In a separate tweet, Andreessen called Tanium’s technology a “breakthrough like we’ve never seen.” Orion Hindawi, who founded Tanium with his father, tells the WSJ that Tanium offers a near-instant snapshot of potentially malicious software in corporate-computing networks, then lets employees wipe out the unwanted software remotely.

VocalIQ, a three-year-old, Cambridge, England-based company whose software aims to improve dialogue interactions in voice-activated systems, has raised $1.27 million in seed funding. The round was led by Amadeus Capital Partners, with participation from Cambridge Enterprise. The company is a spin-out of the University of Cambridge’s Dialogue Systems Group.

Webydo, a four-year-old, Tel Aviv-based software as a service startup whose technology helps professional graphic designers to create sites on fly, without manual coding, has raised $7 million in Series B funding led by the crowdfunding platform OurCrowd, along with Magna Capital Partners and unnamed strategic investors. Webydo has raised $9.7 million to date. TechCrunch has more here.

Yooli, a 1.5-year-old, Beijing-based person-to-person lending platform, has raised “tens of millions of dollars” in Series B financing led by Morningside Venturesreports TechNode. The company reportedly raised $10 million in Series A funding from Softbank China Venture Capital last year.


New Funds

On Friday, Cisco Canada announced the Cisco Canada Innovation Program, a strategy to invest $150 million in Canadian dollars to accelerate innovation in Canada. The company said it plans to invest across a mix of technologies, businesses, and investment stages over the next 10 years, and that it will “actively engage with investment partners and start-ups to mentor and develop new leaders and innovators.”

Khosla Ventures, the 10-year-old, Sand Hill Road firm, is raising a fifth fund, according to an SEC filing that lists the fund’s target as $1 billion and states that, as of Friday, the first sale has yet to occur.



Atara Biotherapeutics, a two-year-old, Brisbane, Ca.-based company that’s developing therapies for muscle wasting conditions, kidney disease and cancer, has filed to go public. Among the company’s biggest shareholders, Kleiner Perkins Caufield & Byers owns 18.6 percent of the company; Domain Associates owns 13.2 percent; DAG Ventures owns 13.2 percent; Baupost Group owns 11.8 percent; Inmobiliaria Carso S.A. de C.V. (the family trust of billionaire Carlos Slim) owns 9.3 percent; Celgene Corporation owns 8.7 percent; and Amgen owns 8.6 percent.

GoPro, the 11-year-old, San Mateo, Ca.-based maker of those wearable cameras that are so popular with athletes, is set to price almost 18 million shares of stock in a range of $21 to $24 on Wednesday, with the company’s stock hitting the market Thursday. GoPro is looking at raising about $400 million, which could value the company at $2.8 billion.

Ocular Therapeutix, an eight-year-old, Bedford, Ma.-based biopharmaceutical company that’s developing therapies for diseases and conditions of the eye, including a gel to treat glaucoma, has filed to go public. Its biggest shareholders include Versant Ventures, which owns 19 percent of the company; Polaris Partners, which owns 16.2 percent; SV Life Sciences, which owns 15.1 percent; CHV II, which owns 12.5; and Baxter Healthcare, which owns 5.3 percent.



Baarzo, a year-old, Palo Alto-based video discovery technology that claims to help users find specific moments in a video, is in talks to be acquired by Googlereports TechCrunch. Baarzo was part of StartX, the non-profit acclerator for Stanford alums.

Dropcam, the popular, San Francisco-based home monitoring camera startup, is being snapped up by Google-owned Nest Labs, maker of smart thermostats and smoke detectors in a $555 cash deal. Dropcam will be folded into Nest’s brand and its employees will head to Nest’s headquarters in Palo Alto, Re/code had reported on Friday. Venture capitalist Trae Vassallo — who led Kleiner Perkins Caufield & Byers into Dropcam’s $30 million Series C last summer and joined its board — tells StrictlyVC of the deal: “It’s always bittersweet to sell a company that’s growing so fast, but the combined vision is extraordinary.” Dropcam had raised roughly $48 million altogether, including from Mitch KaporBen NarasinDavid CowanBradley HorowitzFelicis VenturesBay PartnersAccel PartnersMenlo Ventures, and Institutional Venture Partners.

LiveLook, a seven-year-old, Matawan, N.J.-based company that creates co-browsing and screen sharing technologies primarily for customer service interactions, is being acquired by Oracle for an undisclosed amount. According to VentureWireRose Tech VenturesNew Vantage GroupNew York Angels, and the state of New Jersey’s Edison Innovation Fund were among LiveLook’s investors.

TalkTo, a 3.5-year-old, Cambridge, Ma.-based smartphone app that helps its users correspond with local businesses via text messages, has been acquired by the still-private, San Francisco-based social media company Path for undisclosed terms. TalkTo had raised $3 million in 2012 led by Matrix Partners.



Businessweek politely asks: Is Marc Andreessen overdoing it with his torrents of tweets, streams that are “mostly rabid celebrations of technology”? Does he risk “turning his firm into a primary target” of those who already think Silicon Valley is tone deaf? Eh, says Andreessen to the outlet; he’s not worried about it. “This is running 1,000 to 1 in favor of what we are doing,” he says.

Oliver Samwer of Rocket Internet, the German venture capital company behind dozens of online start-ups, told those gathered at a retail industry conference last week that e-commerce means certain doom for those who don’t get with the program.  “You only have stores because there was no Internet, but that does not mean there is a right to have a store,” he said, reportedly adding: “It will all move online, you will have 10 percent left that will not move online.”


Job Listings

Fidelity Growth Partners Asia is looking for an associate to work out of both Beijing and Shanghai.

Also, Fenox Venture Capital and True Ventures are looking for summer interns in San Jose, and Palo Alto, respectively. Meanwhile,Zelkova Ventures is looking for an intern in New York.



Google‘s annual two-day I/O technology conference takes kicks Wednesday at the Moscone Center in San Francisco. You can find more details here.


Essential Reads

Surprise: Snapchat‘s most popular feature isn’t snaps anymore.



I was a digital bestseller!

A World Cup viewing guide for stay-at-home dads.

The 10 “snobbiest” mid-size cities in America, per a ranking based on home prices, the number of private schools per capital, and so on.

The best, and worst, paid jobs in America.


Retail Therapy

Grovemade desk collection, when you like things matchy-matchy. (It’s okay. We won’t judge you.)

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