StrictlyVC: July 24, 2014

It’s Thursday! Whoo-hah! Hope you have a great one, everyone. Here’s an email version of today’s newsletter in case you missed it in your inbox.


Top News in the A.M.

HP will reportedly announce a strategic partnership today under which it will invest $50 million in Hortonworks, the Hadoop startup that spun out of Yahoo in 2011. Recode has the story here.


A Nifty Product Launch, with Poor Disclosure

James Proud, a former Thiel Fellow who sold his first company, is back with a new company and sleep-tracking product called Sense that’s “part-Nest thermostat, part-Fitbit,” as Forbes describes it.

In a story about Sense’s launch yesterday, Forbes portrays the company as bootstrapped, too, writing that Proud “seeded the company with earnings from selling his first startup,” and that the company’s “unmanufactured product” is now “subject to the whims of backers on Kickstarter,” where it launched a campaign yesterday morning. Forbes added that Sense “will be available later this winter contingent on” the success of that effort.

Turns out Proud needn’t worry. He set a fundraising goal of $100,000 for his new product on Kickstarter and has effortlessly blown past it, raising nearly $400,000 as of this morning, with 28 days left to raise more.

Forbes’s characterizations struck me as odd for a separate reason, though: Earlier this year, Hello, the parent company of Sense, had raised at least $10.5 million as part of an $18 million round. So shows an SEC filing I’d stumbled across in May.

Forbes wasn’t the only outlet that didn’t report on Hello’s backing. The Verge, Buzzfeed, The Next Web, Ubergizmo and others to write about its Kickstarter campaign didn’t mention anything about it, either. Meanwhile, TechCrunch reported that Proud “didn’t disclose external venture funding, but you could assume there’s probably some significant round given that they’ve been working secretly on the product for about a year.”

Proud didn’t immediately respond to a request for comment about why Hello’s funding hadn’t come up in reports about the company. But last night, on Twitter, Proud wrote me that “[A]lways when asked about funding, [we] simply said we’re not talking about it right now, but acknowledged we had raised money.” He added, “[T]oo many companies launch with a focus that isn’t product. I did not want that to be the case for us.”

I see Proud’s point, but it’s hard to think of any truly great products that have been overshadowed by their backers, no matter who they are or how much money is involved. Disclosing its funding might also have undermined the organic appeal that has made Kickstarter such a success with consumers. (In the end, I sent a link of Hello’s fund filing to Forbes, which updated its story, including to add that “Proud did not discuss Hello’s previous fundraising and was only willing to talk about Kickstarter.” TechCrunch also updated its piece to reflect the details of the fundraising round.)

For what it’s worth, I think it’s smart for venture-backed startups to test out their products on Kickstarter and other crowd-funding platforms. For Sense, which enters new territory with its sleek sleep management device, it seems like an especially canny approach. But companies that turn to the public for support should be up front about their financial picture, both with reporters and with the people who might contribute to their campaigns.

Kickstarter may not care much whether companies on its platform are venture-backed or publicly traded or what they choose to share with the public. (The company tells me it doesn’t require either to tell potential donors anything about their financials.)

I, on the other hand, do care. Maybe it isn’t sporting of me, but if a company is going to go to such great lengths to tell me its creation story, why leave out something so significant?


New Fundings

Activehours, a two-year-old, Palo Alto, Ca.-based company that looks to pay hourly workers in as little as one day’s time, has raised $4.1 million in seed funding from Ribbit Capital and Felicis Ventures.

Augmenix, a six-year-old, Waltham, Ma.-based company that’s developing minimally invasive hydrogel products to improve outcomes following cancer radiotherapy, has raised $10.8 million in Series D funding. Participants in the round included new investor Excelestar Ventures and unnamed individuals. Existing investors CHV IICatalyst Health Ventures and Sparta Group also joined the round.

Intelomed, a nine-year-old, Pittsburgh, Pa.-based developer of noninvasive medical devices and technology for monitoring cardiovascular stability, has raised $3.8 million in new funding, shows an SEC filing. The company has now raised around $10.6 million altogether, shows Crunchbase

Kumo, a year-old New York-based startup that reportedly hopes to provide a la carte television content to users, is raising a $50 million round of funding, reports TechCrunch. Kumo’s founder and CEO, Neil Davis, previously spent a year as the head of strategic development at Rhapsody International, and another five years as the head of corporate and digital development at DISH Digital.

LifeNexus, a San Francisco-based consumer health company whose iChip product puts personalized health information on a card, has raised $12.7 million in new funding, according to a new SEC filing. The company’s investors include Camden PartnersFrazier Healthcare,Cambia Health Solutions, and Mosaic Health Solutions.

Quandoo, a 1.5-year-old, Berlin-based online reservation platform, has raised $25 million in Series C funding led by Pilton Capital. Earlier investors DN CapitalHoltzbrinck Ventures and the Sixt family, along with new investor Texas Atlantic Capital, also participated in the round, which brings the company’s funding to roughly $40 million.

QuarterSpot, a 2.5-year-old, Wayne, N.J.-based online lending platform that offers small businesses working capital, has been trying to stockpile some fresh capital, judging by recent SEC filings. As of May, the company had raised $21.3 million in debt; a filing shows it was targeting $100 million. Yesterday, another filing processed by the SEC shows that the company has separately raised $3.8 million in equity.

PumpUp, a two-year-old, San Francisco-based company whose popular social network app combines photo sharing, fitness tracking, and community for members focused on healthy and active lifestyle, has raised $2.4 million in seed funding led by General Catalyst PartnersAzure Capital PartnersRelay VenturesFreycinet Investments, and numerous other angel investors also participated in the round. The company had previously raised roughly $230,000 in seed funding, shows Crunchbase.

Synapsify, a two-year-old, Bethesda, Md.-based company that produces text analytics software, has raised $850,000 in seed funding, including $145,000 from the Maryland Venture Fund. Also participating in the round were ICG VenturesMiddleland CapitalStandup Capital and unnamed angel investors. The company previously raised $600,000 in seed funding,reports the Washington Business Journal.

Trello, a new, New York-based project management tools company whose digital representation of a whiteboard aims to make it easier for groups to work together, has raised $10.3 million in Series A funding led by Index Ventures and Spark Capital. The company is the second spin-out of 14-year-old Fog Creek Software. Venture Capital Dispatch has much more here.

VenueBook, a four-year-old, New York-based event management and booking platform, has raised more than $2 million in seed funding, including from earlier investor Joanne Wilson and new investors Cayuga Venture FundI2BF Global VenturesKindler CapitalMI Ventures and Victoria Grace.


New Funds

Palo Alto Venture Science, a new firm trying to raise a $200 million “quantitative” venture capital fund, is using SecondMarket for its general solicitation effort, says managing director Matt Oguz. If you’re an accredited investor, you can ask for more information here. (You can also learn more about Oguz from this Forbes piece published last month.)

New venture firm PointGuard Ventures of Menlo Park, Ca., has closed on $50 million of what it expects to be a $150 million debut fund, reports VentureWire. PointGuard, founded by ATA Ventures co-founder Pete Thomas, reportedly began its fundraising back in January. According to VentureWire, it’s looking to fund startups that have been recapped, along with companies seeking Series B funding. Among its three portfolio companies so far is Movius Interactive, a 15-year-old, Duluth, Ga.-based mobile software firm focused on converged communications like voicemail, video mail, visual voicemail, and unified messaging. Movius closed its newest round of funding last month.

Sofinnova Ventures has raised $500 million for its latest biotechnology fund, pool, Sofinnova Venture Partners IX LP, says the firm. Venture Capital Dispatch notes that the new pool is one of the largest health-care funds raised of late. Others include a $735 million fund that OrbiMed Advisors closed last year and a $516 million fund closed recently by Third Rock Ventures.



Admeta, a two-year-old, Gothenburg, Sweden -based digital programmatic sell-side platform, has been acquired by the advertising management software company WideOrbit. The deal marks WideOrbit’s third acquisition in recent months. Terms of the deal were not disclosed. Admeta had raised at least $5 million in funding, shows Crunchbase, which doesn’t list Admeta’s backers. WideOrbit has meanwhile raised at least $35 million in its 15-year history. Its investors include Khosla VenturesMayfield FundGreycroft Partners, and Hearst Ventures.

Fullscreen, a YouTube network, is about to sell a majority stake to Otter Media, a joint venture between AT&T and The Chernin Groupreports Recode. The deal that will reportedly value Fullscreen at between $200 million and $300 million. The Chernin Group knows Fullscreen fairly well; a year ago, it was part of a syndicate that, along with WPP Digital and Comcast Ventures, invested $30 million investment in the company.

Together Games, a year-old, Orlando, Fla.-based company that provides developers with tools to simplify cross-platform game development, has been acquired by seven-year-old, San Francisco-based GameSalad, which also makes game development tools. Together Games doesn’t appear to have raised funding; GameSalad has raised at least $7 million, including from Greycroft Partners and Steamboat Ventures, shows Crunchbase.



Yves Béhar, founder and CEO of design firm fuseproject, is closing a deal to sell up to 75 percent ownership of the business to China’s fastest-growing marketing group, BlueFocus Communication Group. Fast Company has much more here.

Benchmark has brought on a new general partner, Eric Vishria, the firm announced yesterday. Vishria is a “smartypants” who graduated from Stanford at age 19, notes Recode. He then joined enterprise software company Loudcloud (later renamed Opsware) as its VP of Marketing and more recently cofounded the social media Web browser Rockmelt, acquired by Yahoo last August for $70 million. Given Vishria’s ties to Ben Horowitz and Marc Andreessen, who co-founded Loudcloud and bet heavily on Rockmelt, you might think Vishria would eventually land instead at their venture firm, Andreessen Horowitz. But he tells Fortune of the kind of services model that Andreessen Horowitz and Google Ventures operate: “When I spoke to entrepreneurs about what they wanted from a VC, not a single on of them said services. That doesn’t mean that it doesn’t work for others, but building a company is super hard. The highs are high and the lows are low. What entrepreneurs want most is to be able to tap into the partners, the decision-makers.”


Job Listings

Electronic Arts is looking for a director of corporate development and strategy. The job is in Redwood City, Ca.

San Francisco-based Zynga is also in the market for a corporate development manager.


Essential Reads

Apple executives have discussed launching a mobile “wallet” as soon as this fall for people to use their iPhones to pay for goods in physical stores, reports The Information.

Facebook reported its second-quarter earnings, trouncing expectations. Much more here.

In news you already knew deep down, Twitter is mostly white (72 percent) and mostly male (79 percent). Venturebeat has more here.



The New Yorker profiles Vice President Joe Biden, whose “smile has been rejuvenated to such a gleam that it inspired a popular tweet during the last campaign: ‘Biden’s teeth are so white they’re voting for Romney.’”

It’s finally summer in the office!


Retail Therapy

Plan ahead for your next off-site.

The Chillsner, for people who drink beer very s-l-o-w-l-y.


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