StrictlyVC: September 16, 2014

Hi, everyone, good morning! (Pst, web visitors, here’s an easier-to-read version of this morning’s email, below, right here.)


Top News in the A.M.

PayPal just attacked Apple Pay in a full-page New York Times ad that reads: “We the people want our money safer than our selfies. PayPal, protecting the people economy.” Well. This should be interesting!


DataFox Aims to Disrupt Company Intelligence, Upset Michael Bloomberg

Bloomberg and Thomson Reuters had better watch their backs – or else get out their checkbooks. The financial information giants suddenly face a spate of startups ready to take a big bite of their businesses, with DataFox, a year-old, nine-person team in Palo Alto, Ca., among the newest.

So far the company, run by Stanford alums, has raised $1.78 million in seed funding from Google Ventures Ventures, Sherpalo Ventures, and Green Visor Capital, among others, for its subscription-based deal intelligence platform. The idea: replace expensive and sometimes far-flung analysts with algorithms that can turn structured and unstructured data into real-time, competitive insights about companies.

DataFox, which has three subscription tiers — $49 per month, $399 per month, and “call us,” essentially — says it isn’t ready for another round of funding just yet. At the moment, at least, it’s more focused on launching its beta product, after testing out its service for the past year with more than 2,000 trial users. Still, cofounder and CEO Bastiaan Janmaat says paying customers, including Box, Twitter and Bloomberg Beta, think the company is on the right path. In fact, he says of his company (only half-kiddingly): “This probably isn’t what ex-Mayor Bloomberg is looking for upon his return as CEO.” He shared more with us yesterday.

DataFox mines all kinds of public information to do its job. Does it create new data, too, or might it?

We do create new data, but we do it automatically. One example is competitors lists. Other databases suck at this. Human analysts at [the business data and analytics company] Dun & Bradstreet update their list just once a year. Our algorithms look at things such as co-mentions in news articles and similar press releases to automatically generate a list of similar companies, updated in real-time. The same is true of sector classifications. We invented our own sector taxonomy of more than 70,000 keywords . . . so now a company like Box is classified as “file sharing, web hosting, cloud computing, ftp replacement” plus 20 other terms, instead of just “file storage.”

You “push” out information that you deem relevant to your customers, like a headcount mention deep in a news article. How is that information delivered?

People get one weekly email. We’ll soon allow for opt-in daily alerts. Meanwhile, people login to DataFox for the real-time feed.

A lot of your customers are interested primarily in private company information, but you also track public companies, correct?

Yes, which is why our business is such a radical departure from the status quo, meaning CapIQ, Thomson Reuters, Bloomberg, and so forth. We’re building entity-agnostic algorithms that, over time, we can apply to any company, person or theme. We have around 7,000 public companies in our database currently. Whenever a customer requests that a company to be added, all we need is the URL, and we’ll auto-generate a one-pager in a matter of hours.

What’s on your roadmap? What else will DataFox offer customers next year?

Collaborative and team features. Expanded company coverage. We’re currently at 450,000, but I expect to cover more sectors within a year and more international companies. We’ll also be tracking more types of events. We have the pipes and parsers built, so we’ll continue to write more rules to identify more structured data points beyond the headcount, revenue, and valuation data we currently collect — like new major customers and new offices.

You say you aren’t raising money again until some time next year. What milestones do you plan to reach before talking again with investors?

We’re a subscription business, so we’re looking to continue growing revenues, but the one metric we care about most is engagement, meaning the frequency of logins and alert email opens, as well as the number of companies that [customers currently] follow, which is 35 per user. If we can continue to get daily engagement from analysts at Intuit, Bloomberg Beta, Google, Goldman Sachs, and the like, we’ll bolster our prognosis that we’re disrupting the large incumbents, and that data can’t be “pull” anymore. It needs to be predictive.

Why are you so convinced that “push” is the way to go?

The volume of communication and data is exploding, there are too many streams to pull from, so mathematically it’s necessarily becoming less likely that you are able to pull the right data point at the right time. Specifically for our customers, companies’ online footprints are expanding, so there’s more information out there, but they don’t have time to monitor a company’s employees on LinkedIn, their Twitter account, their Delaware filings, and the regional papers that cover them. Hence the need for push. I train my delivery pipe to understand my interests, schedule, and priorities. The pipe decides what’s important and surfaces that for me.


New Fundings

Carta Worldwide, a seven-year-old, Ontario-based company behind a digital transaction processing platform, has raised $7 million in Series D funding led by Toronto-based merchant bank Difference Capital and DC Thomson in the U.K. The round represents the first tranche of what is expected to be a $12 million round. To date, the company has raised roughly $50 million altogether, reports the outlet Cantech.

DHgate, a 10-year-old, Beijing-based business-to-business e-commerce platform that connects small and medium-size businesses with buyers overseas, has raised $16.3 million in Series D funding from China Growth Capital and TDF Capital, according to China Money Network. According to the report, the company had raised previously north of $30 million from investors, including Jafco, Warburg Pincus, and Kleiner Perkins Caufield & Byers.

DipJar, a six-year-old, New York-based company that makes a jar containing a standard credit card reader (so people can tip their barista, even when cashless), has raised $420,000 in seed funding to fuel further software development of its product, reports TechCrunch. The round was led by Project 11, a new fund created by Brightcove founder Bob Mason, and numerous other angel investors.

Docker, a four-year-old, San Francisco-based open platform for distributed applications for developers, has raised $40 million in Series C funding led by Sequoia Capital, with participation from earlier investors Benchmark Capital, Greylock Partners, Insight Ventures, Trinity Ventures and Jerry Yang. The company had previously raised $25.8 million. Venture Capital Dispatch has more here.

Kateeva, a six-year-old, Menlo Park, Ca.-based maker of flat panel OLED displays, has raised $38 million in Series D funding from Samsung Ventures, Sigma Partners, Spark Capital, Madrone Capital PartnersDBL Investors, New Science Ventures and VEECO Instruments. The company has now raised more than $110 million altogether.

Molecular Templates, a five-year-old, Georgetown, Tx.-based company that develops antibody-drug conjugates, has added $3.5 million to its $8.5 million C round, with the new funding coming from AJU IB Investment, a new investor. The company has now raised about $33.5 million to date, shows Crunchbase. Its previous backers include Excel Venture Management and Santé Ventures.

NeoSystems, a 14-year-old, Tysons Corner, Va.-based company that that performs strategic back office services for government contractors, nonprofit organizations, and commercial entities, has raised $15 million in funding led by OFS Capital. The company has raised at least $20 million to date, including from Salem Halifax Capital Partners, shows Crunchbase.

Palantir Technologies, the 10-year-old, Palo Alto, Ca.-based data analysis company, has raised a round of equity, options, warrants and rights amounting to $444.2 million, according to an amended SEC filing flagged by VentureWire. The company has now raised at least $950 million from investors, shows Crunchbase.

Power2SME, a 2.5-year-old, Gurgaon, India-based online buying hub for small and medium enterprises, has raised roughly $6.9 million in Series C funding from earlier investors Accel Partners, Kalaari Capital and Inventus Capital. VCCircle has more here.

QuanTemplate, a three-year-old, London-based company behind what it promises is a secure, web-based platform for finance and insurance business transactions, has raised an undisclosed amount of seed funding from Anthemis Group and existing investors. The company had previously raised a little more than $2 million from investors, including Techstars and Burlington Capital.

RJMetrics, a six-year-old, Philadelphia, Pa.-based analytics platform for online businesses, has raised $16.5 million in Series B funding from August Capital and earlier investors Trinity Ventures and SoftTech VC. RJMetrics has now raised a total of $22 Million.

Sidecar, the four-year-old, San Francisco-based ridesharing startup, has raised $15 million in fresh funding from earlier investors Avalon Ventures and Union Square Ventures, which were joined in the round by Virgin founder Sir Richard Branson. Sidecar has now raised $35 million altogether. GeekWire has more here. Fred Wilson of Union Square explains why his firm “doubled down” on the company despite stiff competition from Uber and Lyft here.

WebTeb, a three-year-old, Ramallah, Palestine-based health and lifestyle portal aimed at Arabic-speaking users, has raised $3.2 million in Series C funding led by Sadara Ventures. Earlier investors, including Siraj Palestine Fund, also participated in the round.

WorkPop, a seven-month-old, L.A.-based online job board, has raised $7 million in Series A funding led by Trinity Ventures. The company had previously raised $900,000 in seed funding, including from SV Angel, Box Group, Obvious Ventures, Cornerstone OnDemand, Slow VenturesIronfire Capital, Plus Capital and individuals investors. Venture Capital Dispatch has much more here.

Yongche, a four-year-old, Beijing-based car rental service company, has raised as much as $100 million in Series D funding led by the Singaporean sovereign wealth fund GIC Private Limited, says China Money Network, which adds that several unnamed investors also participated in the round. Yongche had previously raised at least $80 million from investors, according to the report. Its earlier investors include Ctrip, DCMMorningside Ventures, Qualcomm Ventures, CBC Capital, and Zhen Fund. The company also runs a taxi calling mobile app Dache Xiaomi.


New Funds

A group of Dartmouth alums is forming a small, early-stage venture fund to help startups with ties to the school, reports Venture Capital DispatchGreen D Founders Fund, which Boston-based Launch Angels will advise, is targeting $1 million to $2 million; Dartmouth has no direct involvement in the the fund.

The University of California is planning a $250 million venture fund to finance startups formed around research conducted by its faculty and students, it announced yesterday. Assuming it’s approved by the UC Regents, who will vote on it this Thursday, the fund will be one of the largest of its kind. The University of California has 10 campuses, 233,000 students, 190,000 faculty and staff, five medical centers and three affiliated national laboratories — in addition to more than 20 incubators and accelerators, notes the San Francisco Business Times.



Euvision Technologies, a four-year-old, Amsterdam-based specialist in image recognition applications powered by artificial intelligence, has been acquired by Qualcomm for undisclosed terms, reports TechCrunch.

FolioDynamix, a seven-year-old, New York-based cloud-based investment and wealth management technology platform, is being acquired by Actua Corp., a Radnor, Pa.-based cloud computing business that specializes in the public sector, chemical compliance and insurance markets. Actua is paying $199 million in cash.

GrabCAD, a five-year-old, Cambridge, Ma.-based online community that has been described as the “Github for mechanical engineers,” is being acquired by 3D printing giant Stratasys for around $100 million in all cash,reports TechCrunch. GrabCad has raised at least $13.6 million from investors, shows Crunchbase. Its backers include David Sacks, CRVNextView Ventures, Atlas Venture, and Matrix Partners.

Make Believe Labs, a year-old, Santa Monica, Ca.-based company, has been acquired by JibJab Bros. Studios in the latter’s first major purchase in its 15-year history, reports TechCrunch. Make Believe Labs hadn’t raised outside funding before its acquisition, says the the report. Terms of the all-cash deal were not disclosed.

TriZetto, an Englewood, Co.-based company that serves about 350 health-care plans and supplies software to almost 245,000 doctors and other care providers, is being acquired by publicly traded Cognizant, an IT, consulting, and business process outsourcing company, for $2.7 billion in cash and stock. TriZetto, once a publicly traded company, was acquired by Apax, the London-based private-equity firm, for $1.19 billion in 2008. BlueCross BlueShield of Tennessee and Cambia Health Solutions are minority shareholders.



Adams Street Partners, the Chicago-based private equity firm, announced a raft or organizational changes yesterday, including the promotion of Jeff Diehl, a partner on its venture capital and growth equity team, to the Head of Investments. Much more here.

After only two years, Salesforce CEO Marc Benioff has decided to leave Cisco’s board of directors, according to documents filed with the SEC. Business Insider has the story here.

“Real estate is one of the few industries in the world that’s bigger than transportation,” writes former Facebook exec Sam Lessin in The Information. “But in the coming decades, companies like Uber and Lyft—eventually super-charged by self-driving cars—are likely to change living patterns and upend property markets in ways that we’ve only begun to understand.”

Sean Parker of Napster and Facebook fame, is expecting a son with his wife Alexandra, the couple tell People magazine. The baby will be the couple’s second child. The pair, who famously married last year in an expensive and controversial ceremony in Big Sur, are also parents to 20-month-old Winter Victoria, who reportedly “can’t wait to be a big sister.”

Michael Tseytlin, an executive who’d been working on Google’s efforts to deliver Internet service via satellite, has taken a similar role at Facebookreports the WSJ. An expert in satellite design, Tseytlin had been working on Google’s satellite efforts with satellite entrepreneur Greg Wyler, who also recently left Google.


Job Listings

LinkedIn is looking for candidates for its two-year business leadership program, comprised of four six-month rotations across the company’s finance, strategy, corporate development and sales operations groups. The program is in Mountain View, Ca.



Applications for Y Combinator‘s winter batch are due in roughly one month, and it sounds like the incubator is still looking for teams to apply.



With companies taking ever longer to exit, the number of still-private companies to raise more than $100 million from investors has ballooned.Mattermark looks at which VCs have funded the most of these “potential unicorns, or heavily funded duds.


Essential Reads

Tony Fadell hatches a connected home. In Fast Company.

Despite raising $49 million from top investors, online recruiting company BranchOut — which once flourished on Facebook’s platform — is now in discussions with several acquirers about selling itself off. TechCrunch hasmore here. (We wish we’d been wrong, but we sort of called this one in 2011.)



Facing customers who weren’t thrilled to discover U2’s newest album on their phones as a gift from Apple, the company has posted instructions on how to wrest “Songs of Innocence” out of one’s iTunes library.


Retail Therapy

The Unpocket. It lets you block all cell, WiFi, GPS and RFID signals. Perfect for drug dealers, contract killers and anyone else concerned about privacy. (Europeans, we’re talking to you.)

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