StrictlyVC: July 2, 2014

Happy Wednesday morning!

We are officially outtie 5000 for the long weekend. Hoping you have a very happy, restful July 4th.


Top News in the A.M.

Amazon is defending its stance against Hachette.

The Russian government has moved one step closer towards a “China-like” approach towards Internet services, reports TechCrunch. Last night, the Russian State Duma passed the first bill requiring that the personal data of all Russians be stored inside the country.


For Razor’s Edge, Ties to Intelligence Community are Key

To do business with the government, you could do worse than partner with Razor’s Edge Ventures, a no-frills, Herndon, Va.-based venture firm that’s investing a $55 million fund and whose managing directors include several executives from the defense contractor Blackbird Technologies; a former director of technology assessment at the C.I.A.-backed venture firm In-Q-Tel; and a longtime Cooley attorney who used to focus on M&A.

The firm has especially close ties to the classified community, says the former attorney, Mark Spoto, who happens to be the only managing director that Razor’s Edge lists by name at its site. (The others prefer operating below the radar owing to their “other business interests,” he says.)

That kind of — yes — intel, is a big advantage, Spoto says. National security officials “don’t just let people knock on the door and show off their stuff. You have to have clearances and longer relationships and to show people that you’ve vetted the technologies. Otherwise, they’d be buried in business plans.”

So far, Razor’s Edge has made seven investments, writing initial checks of between $2 million and $5 million. Its most recent bet is CounterTack, a three-year-old, Waltham, Ma.-based firm that makes threat detection and response software. The company held a final close on its Series B financing last month.

Razor’s Edge doesn’t focus on security startups alone, though. While a company “has to have some kind of innovative technology that has important national security applications,” says Spoto, “we’re looking for companies that have the ability to take their technologies out to other markets as well,” such as the oil and gas, financial services, and healthcare industries.

The firm’s ties to the government also inform what it won’t invest in. For example, while Razor’s Edge is interested in autonomous vehicles, including drones, its partners think it’s too soon to make a bet. “The marketplace is being driven by an FAA regulatory scheme that’s still being developed,” says Spoto. “Investors who think the market will break free of that process in 2015 are being optimistic.” (Indeed, a new audit report notes that the FAA is “significantly behind schedule” in its attempt to meet Congress’ September 2015 deadline for integrating commercial drones into U.S. airspace.)

Razor’s Edge doesn’t have any exits to show for its efforts just yet, but Spoto says its portfolio companies are healthy and growing. He points to two-year-old 908 Devices, a Boston-based company that manufactures battery-operated, hand-held chemical detection tools. “When we invested, it was pre-revenue. We helped them finish their product development and now the company is doing amazingly well.” (Razor’s Edge first backed the company in a Series A round in the fall of 2012. It went on to raise Series B funding last summer.)

In fact, Spoto talks enthusiastically about all of the firm’s startups, as well as his transition from attorney to venture capitalist, a move he made after being approached by his current partners, who were previously his clients.

“I had some sense of what it was going to be like before I came in,” he says. But he likes it even more than he imagined he would. “I learn new stuff every day, I see different ideas, I get to interact with people and solve problems. I wouldn’t go back to the practice of law if you paid me all the money in the world.”


New Fundings

Akosha, a four-year-old, Delhi, India-based online consumer complaint forum, has raised $5.2 million in Series A funding from Sequoia Capital, which had provided the company with $200,000 in seed funding in 2011. Deal Curry has more here.

BlaBlaCar, a 10-year-old, Paris-based ride-sharing that matches people needing a ride with people traveling in the same direction and willing to share their car, has raised $100 million in Series C funding led by Index VenturesAccel PartnersISAI and Lead Edge Capital also participated in the round, which is four times what the company was initially seeking, its CEO tells Re/code. It has now raised $110 million altogether.

CTERA Networks, a six-year-old, Tel Aviv, Israel-based company whose in-cloud storage technology makes it possible for its corporate customers to provide their own employees and customers with cloud-based storage (versus rely on the products of Dropbox and other big-name storage providers), has raised $25 millionBessemer Venture Partners led the round, joined by earlier investors CiscoBenchmark, and Venrock. The company has raised $45 million altogether.

DC Devices, a five-year-old, Andover, Ma.-based company that’s developing a transcatheter device for diastolic heart failure, has raised $34 million in Series D funding led by Accelmed. A new, undisclosed strategic investor also joined the round, along with earlier investors Third Rock VenturesGeneral Catalyst Partners, and Lumira Capital. To date, the company has raised $44.7 million, shows Crunchbase.

ElectroCore, a nine-year-old, Morris Plains, N.J.-based company that develops non-invasive and non-pharmacologic therapies that treat or prevent symptoms of serious headache conditions among other things, has closed a multi-tranched Series A round of $50 million. The company’s investors include Merck Global Healthcare Innovation FundEaston Capital and Core Ventures Group.

EnergySavvy, a 4.5-year-old, Seattle-based company whose online tools help utilities operate energy-efficiency programs, has added two new investors that are bringing its most recent round, closed in early May, to $8.25 million, up from $7 million. Its new investors are EnerTech Capital and El Dorado Investment Company. Earlier investors in the round included Prelude Ventures and Pivotal Investments. The company has now raised $14.2 million altogether.

Hinge, a three-year-old, New York-based mobile app that helps people meet dates through friends on Facebook, has raised $4.5 million in funding from Founders FundLowercase CapitalCAA VenturesLumia CapitalMiddleland Capital, and Great Oaks Venture Capital. The round brings the company’s total funding to $8.6 million.

HzO, a three-year-old, Draper, Ut.-based company that manufactures a thin-film nano-coating to protect electronic devices from water, humidity and other liquid damages, has raised $20 million in Series B funding led by Iron Gate Capital, which was joined by Translink Capital and Delta Electronics. Earlier investors Harris & Harris GroupPrudence Holdings and VY Capital also participated in the round, which brings the company’s total funding to $33.6 million, shows Crunchbase.

InSightec, a 15-year-old, Tirat Carmel, Israel-based maker of an ultrasound therapy for the non-invasive treatment of tumors, is raising a $50 million Series D round led by York Capital Management. According to the company, there’s still time for “other investors to invest in the current round either by taking part of the $50 million or expanding the investment to $62.5 million.” In 2012, InSightec raised roughly $30 million led by GE Healthcare, shows Crunchbase.

Involta, a seven-year-old, Cedar Rapids, Ia.-based data center operator, has raised $50 million in funding led by M/C Partners, with participation from Morgan Stanley Alternative Investment Partners. The company has raised at least $59.4 million to date, shows Crunchbase.

Keen IO, a 2.5-year-old, San Francisco-based company that helps developers build their own analytics products, has raised $11.3 million in Series A funding led by Sequoia Capital. Earlier investors Pelion Venture PartnersAmplify Partners, and Rincon Venture PartnersCloud Power Capital, and Morris Wheeler also participated in the new funding, which brings the company’s total funding to $14.5 million, shows Crunchbase.

Lattice Power, an eight-year-old, Nanchang, China-based company that produces what it says is a cheaper light-emitting diode technology, has raised $80 million in new funding, the company tells VentureWire. The company had previously raised at least $115 million, shows Crunchbase. Its backers include AsiaVest PartnersGSR VenturesKleiner Perkins Caufield & ByersKeytone Ventures, and Mayfield Fund.

Liquid Environmental Solutions, a 12-year-old, Irving, Tx.-based company that contracts with restaurants, laundromats, car washes and other businesses to clean up their wastewater, has raised $31.6 million in Series C funding led by ABS Capital Partners. Several non-employee members of the company’s board of directors also participated in the round. The company has raised at least $51.6 million to date, shows Crunchbase.

Meitu, a six-year-old, Xiamen, China-based mobile app maker that enables its users to create customized images, typically for uploading to social media networks, has raised $10 million in Series C funding led by earlier investor Qiming Ventures. Other participants in the round were not identified. China Money Network has more here.

Moven, a three-year-old, New York-based startup whose mobile banking app provides users with money management tools and real-time updates on their purchases, has raised $8 million in Series A funding, led by SBT Venture CapitalAnthemis GroupRoute 66 VenturesStandard BankNew York Angels and other angel investors also participated in the round. The company has raised $12.4 million altogether, shows Crunchbase.

OOTU, a new, San Francisco-based semantic discovery company, has raised $325,000 in seed funding, including from the company’s CEO and cofounder, Michael Knapp, individual investors Robert Nelsen and Clinton Bybee, and McKenna Ventures.

Partnered, a two-year-old, San Francisco-based company that aims to help brands and agencies needing the help of startups (and vice versa) find each other, has raised $850,000 in new seed funding from Rothenberg VenturesStructure CapitalKima VenturesSlow VenturesSherpa Ventures, and Gary Vaynerchuk. The company, a Y Combinator alum, has raised $1.6 million altogether.

Rotation Medical, a five-year-old, Plymouth, Mn.-based medical device company whose implant, which helps heal the shoulder’s rotator cuff, recently received FDA clearance, has raised $27.2 million in Series B funding co-led by new investor Life Science Partners and earlier investor New Enterprise AssociatesPappas Ventures and other undisclosed investors also participated. The company had previously raised $19.4 million in equity and debt.

Seal Innovation, a four-year-old, Raleigh, N.C.-based wearable technology startup that’s commercializing a swim safety monitor, has raised $2 million in Series B funding from undisclosed investors. More on the company here.

Simply Hired, a 10-year-old, Sunnyvale, Ca.-based company that operates job search engines in dozens of countries, has raised a new round of $12 million in equity and debt from previous investors Foundation Capital and IDG Ventures, along with City National Bank. The company has now raised at least $34.3 million to date, shows Crunchbase.

Streetline, a nine-year-old, San Francisco-based company that’s building a network of sensors to detect and collect data on parked cars, has raised $10 million from CitibankFontinalis PartnersRockPort Capital PartnersSutter Hill VenturesTrue Ventures and Qualcomm Ventures, all of which had previously invested in the company. Streetline has now raised $50 million altogether, shows Crunchbase.

Tuul, a new, Santa Cruz, Ca.-based still-stealth company that’s promising to simplify the interaction between businesses and consumers via their mobile devices, has $1.7 million in seed funding led by Greycroft PartnersRaine GroupStreamlined Ventures and other, unnamed individual investors, also participated in the round. Tuul was founded by Toby Corey and Wayne Tsuchitani, who previously cofounded the Internet marketing company USWeb.



The NYSE said it plans to hold a test run of Alibaba Group‘s eagerly awaited market debut, reflecting the securities industry’s intense interest in avoiding another debacle as happened the morning of Facebook’s May 2012 IPO.

Four days into life as a public company, and GoPro is killing it, in the parlance of the extreme sports lovers who use its cameras. Shares in the company gained 20 percent yesterday to close at $48.80, double their IPO price.

Europe’s largest online fashion retailer, Zalando, is considering reducing the size of its stock market listing, sources tell Reuters. More here.



Predictive Edge, a 3.5-year-old, Mountain View, Ca.-based startup that offered e-commerce personalization as a service to marketers, has been acquired by Dropbox for an undisclosed amount. The company, the 17th that Dropbox has acquired, says Techcrunch, will be shut down and the founders put to work on a yet-undisclosed part of Dropbox’s business.

Songza, a 6.5-year-old, Long Island City, N.Y.-based music curation and streaming service with a reported 5.5 million active users, has officially been acquired by Google, roughly one month after rumors of an acquisition began to surface in the media. Terms of the deal aren’t being disclosed, but a source tells the New York Times it paid more than $39 million. Songza had raised at least $6.7 million from investors, shows Crunchbase. They include Gary VaynerchukScooter BraunTroy CarterMetamorphic VenturesNicole JunkermannGeoff Judge,Deep Fork CapitalLerer VenturesAmazonWilliam Morris Endeavor, and AFSquare.



Bessemer Venture Partners has two new vice presidents: Amit Karp and Sunil James. Karp joined the firm as a senior associate in 2012; he was previously a senior associate at McKinsey & Company. James comes directly from Google, where he spent the greater part of the last three years as a product manager. James was previously a senior product manager at Amazon.

Venture capitalist Tim Draper was the winning bidder of all 30,000 bitcoins auctioned off by the U.S. Marshals Service following its seizure from an underground online marketplace called Silk Road. He plans to sell all or most of the bitcoin through Vaurum, a startup he has backed and which is launching trading platforms in emerging markets. More here.

Derek Gottfrid, characterized by Business Insider as “Tumblr’s Sheryl Sandberg,” is out of the microblogging platform, pushed through the door, seemingly, by Tumblr founder David Karp, who’d hired Gottfrid away from the New York Times in 2010. More here.

Things might not be so bad for Mike Gupta, who was replaced yesterday as Twitter‘s CFO by former Goldman Sachs banker Anthony Noto. As the WSJ smartly notes, buried under all the chatter about shifts at the top of Twitter was the fact Gupta is now leading a new strategic investments group at the company. Read: Twitter now has a corporate venture arm.

Google Ventures is opening an office in London soon. Here is the team that will reportedly be running it.

Lux Capital has promoted three of its investing pros: Zack Schildhorn and Shahin Farshchi are now partners, and Adam Goulburn is a principal. Schildhorn had joined the firm in 2007 as an associate; the firm says he “pioneered Lux’s landscaping of the 3D printing market and sourced the firm’s investment in [the 3D printing marketplace] Shapeways,” among other things. Farshchi, who has a PhD in electrical engineering and who joined the firm as a principal in 2006, has sourced many of Lux’s investments in hardware and devices. Goulburn joined Lux as an intern in 2011. A postdoctoral fellow of neuroscience at Weill Cornell Medical College at the time, Goulburn was promoted to associate later the same year.

Zoltan Szabadi, a former Amazon Web Services manager, is being sued by the e-commerce giant, which says Szabadi’s new job at Google Cloud Platform violates the terms of a noncompete agreement he’d signed when joining Amazon.


Job Listings

Bloomberg Ventures, the venture arm of Bloomberg L.P., is looking for either an analyst or an associate. The job is in New York.


Essential Reads

Don’t worry. Facebook still has no idea how you feel.



Rafa Nadal may have been eliminated at Wimbledon yesterday, but he can still juggle a ball 400 times on the side of his racket.

Cracks in facade visible as teen enters third day vacationing with friend’s family.

Notes to thieving a__holes.


Retail Therapy

Tents for misanthropes.

Rubiks Cube coasters.

Handsome black Filson bags.

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