StrictlyVC: September 25, 2014

It is Thursday! Hope you have a wonderful morning, everyone, and if you’re celebrating Rosh Hashanah right now, Shana Tova.

For web visitors interested in a more readable version of today’s newsletter, click here.


Top News in the A.M.

Software giant Adobe is closing down its China-based R&D facility, as tensions between China and a growing number of Western tech companies grow.

Apple is sorry and embarrassed about what it did to your phones yesterday. A fix is coming in the next few days.

A new security bug, Bash, is reportedly worse than the Heartbleed bug that surfaced last spring.


A Young VC Resurfaces with His Year-Old Startup: Spruce

Every month, a few startups that enable patients to consult with doctors without visiting their offices seem to emerge from nowhere. It’s no wonder. According to the research firm IHS, revenue from these so-called telemedicine companies could hit $1.9 billion in 2018, up from $240 million last year. That shift owes largely to the Affordable Care Act, which is pressuring doctors to help drive down costs, but it’s also easy to imagine that a growing number of doctors likes the prospect of practicing medicine from anywhere, at any time.

Some companies, like Teladoc — which just raised $100 million from investors — have begun partnering with insurance companies like Aetna and Blue Shield of California to offer subscribers telemedicine services as an added benefit in their coverage. Others like venture-backed HealthTap and Doctor on Demand, which offer live videoconferences with doctors, are going straight to consumers.

A year-old company, Spruce — founded by former Kleiner Perkins Caufield & Byers partner Ray Bradford and launching publicly today — has a slight twist on the latter model. The 11-person, San Francisco-based company is debuting a mobile app that enables patients to pay $40 to consult with doctor but doesn’t give them instant care. Instead, users log on to the app, provide details about their specific condition, and receive a response from a board-certified physician within a day. (If a prescription is required, that information gets forwarded on to the pharmacy of the user’s choice.)

It doesn’t sound terribly revolutionary, but as Bradford explains it, the market opportunity makes up for a lot. “The majority of healthcare will be tech enabled and delivered via mobile devices. If you think about size of market and volume of doctors, you start to appreciate what a massive shift this will be, and we think the trend is just getting started.”

Earlier this week, we chatted briefly about Spruce, which is first targeting patients with acne problems but plans to expand into other ailments once it nails down its act.

Why acne first?

Fifty million Americans have acne. It’s not just a teenage problem. Most doctors visits are by adults. Meanwhile, the average wait time to see a dermatologist in the U.S. is 30 days, so the majority of people settle for over-the-counter solutions.

Why not employ videoconferencing, as are many other telemedicine startups?

It’s more convenient. Both the patient and doctor are doing things on their own time. If you’re on the clock with a doctor [Doctor on Demand customers pay $40 for 10 minutes or so with a physician, for example], maybe I can’t share everything I want to share. Likewise, the [offline] doctor is answering my questions, rather than going through the motions of collecting information in a rote way.

You left Kleiner to start this company in August of 2013. How much have you raised and will you be in the market again soon?

We raised $2 million in seed funding from Kleiner, with participation from Baseline Ventures and Cowboy Ventures. We raised it later last year [so we’re not raising again just yet].

You spent a couple of years with Kleiner and you worked previously in product development at Amazon Web Services. How do those experiences inform what you’re doing now?

The biggest way is seeing the importance of picking a big market, and you don’t get a much bigger market than healthcare.


New Fundings

Adaptimmune, a six-year-old, University of Oxford spin-out that focuses on the white blood cells called T-cells to treat several types of cancer, has raised $104 million in funding led by New Enterprise Associates. Other new investors in the round include OrbiMed Advisors, Wellington Management Company, and Fidelity Biosciences. Dealbook has morehere.

Apptentive, a three-year-old, Seattle-based company whose software acts as a communication layer between mobile app users and developers, has raised $5.3 million in Series A funding led by the online-survey company SurveyMonkey and Origin Ventures. Earlier investors Founders Co-op and Golden Venture Partners also participated in the round.

Array Health, an eight-year-old, Seattle-based company that builds software that health insurers like Blue Cross and Blue Shield use to offer a private health exchange, has raised a first institutional funding round of $13 million led by Noro-Moseley Partners, with participation from Vocap Investment Partners. GeekWire has more here.

Catawiki, a six-year-old, Netherlands-based online auction house that sells rare items, has raised $12.7 million in Series B funding led by Accel Partners. The Berlin-based investor and company builder Project A Ventures,’s former CMO Arthur Kosten, and Dutch media and Internet entrepreneur Willem Sijthoff, who was an earlier investor, also participated. TechCrunch has more here.

Centage Corp., a 12-year-old, Natick, Ma.-based company that makes budgeting and forecasting software for small and mid-size businesses, has raised $9.5 million in Series A funding led by TVC Capital, with Northgate Capital joining the round., a seven-year-old, Bangalore, India-based online real estate and apartment management portal owned by MaxHeap Technologies, has raised $30 million in Series E funding from earlier investor Tiger Global Management. Early this year, CommonFloor had raises Rs 64 crore ($10.4 million) in Series D round of funding from Tiger Global and Accel Partners. VCCircle has more here.

E la Carte, a six-year-old, Palo Alto, Ca.-based startup whose technology lets restaurant-goers order food and pay their bills from the table using a tablet and cloud-based software, has raised $35 million in new venture capital and debt financing. Investors included Intel Capital, Romulus Capital, TriplePoint Capital and individual angel investors including Y Combinator president Sam Altman. The company has raised $52.5 million altogether.

Favor, a two-year-old, Austin, Texas-based delivery service for local stores and restaurants, has raised $2 million in seed funding from backers like Silverton Partners and Tim Draper.

FiveStars, a three-year-old, San Francisco-based “consumer identity platform” whose technology helps small businesses offer loyalty rewards to their customers, has raised $26 million in Series B funding led by Menlo Ventures. Earlier backers Lightspeed Venture Partners, DCM and Rogers Communications also joined the round, which brings the company’s total funding to $42.7 million.

InstaMed, a 10-year-old, Philadelphia-based heathcare payments network, has raised $15 million funding of new capital from new and existing (and unnamed) investors. The round brings the company’s total funding to $77.2 million.

Lodgeo, a 1.5-year-old, London-based price comparison and booking app for hotel stays, has raised $2.5 million in funding from Javest Investment Fund, along with numerous, unnamed angel investors. TechCrunch hasmore here.

Magnitude Software Corp., a new, Austin-based company that was created by the merger of companies Noetix and Kalido Co. and that produces enterprise information management software, has raised $100 million in funding, including from Audax Group. Austin Business Journal has more here.

Massdrop, a two-year-old, San Francisco-based company whose platform invites customers to join together to purchase a product from manufacturers at a discount, has raised $6.5 million in Series A funding led by Mayfield Fund. Earlier backers Kleiner Perkins Caufield & ByersFirst Round Capital, and Cowboy Ventures, also participated in the round, which brings the company’s total funding to $8 million.

MasteryConnect, a five-year-old, Sandy, Ut.-based maker of evaluation software that helps teachers assess their students’ performances, has raised $15.2 million in Series B funding led by Trinity Ventures, with participation from Pelion Ventures and Catamount Ventures. The funding brings the company’s total capital raised to about $24 million

Numerify, a two-year-old, Cupertino, Calif.-based cloud-based business IT analytics company, has raised $15 million in Series B funding led by Sequoia Capital, with earlier investor Lightspeed Venture Partners participating. The company has raised $23 million to date, shows Crunchbase.

POW, a 12-year-old, Seattle-based company that makes winter sports apparel that it sells in more than 35 countries, has raised $2.5 million from Columbia Pacific Advisors. It appears to be the company’s first institutional round., a 1.5-year-old, Seattle-based company whose pricing engine promises to estimate the cost of any home project in real time, has raised $14 million in Series A funding co-led by Maveron and Madrona Venture Group, with participation from earlier investors. The company has now raised $17.5 million altogether, including from Andreessen HorowitzRedpoint Ventures, Bezos Expeditions, Two Sigma Ventures and Sherpa Ventures.

Qzzr, a five-month-old, Lehi, Ut.-based company whose software allows anyone to create their own viral quizzes and embed in their own site, has raised $2 million in seed funding led by Kickstart Seed Fund, with participation from Pelion Venture Partners, Peterson Partners, RPM Ventures and various angel investors. TechCrunch has the story here.

Rithmio, a one-year-old, Champaign, Il.-based maker of gesture recognition software, has raised $650,000 in seed funding led by Marcin Kleczynski, CEO of Malwarebytes. Illinois Ventures, Techra Investments, Hyde Park Venture Partners, Serra VenturesBonaVentura, Fox Ventures, and numerous angel investors also participated in the round.

WaterHealth, a 19-year-old, Irvine, Ca.-based company whose water purification facilities offer sustainable, decentralized access to clean and affordable drinking water in underserved communities, has raised $10 million in funding from Vital Capital Fund, a vehicle that invests primarily in sub-Saharan Africa.

Wedding Spot, a 1.5-year-old, San Francisco–based online marketplace for booking wedding venues, has raised $3 million in seed funding co-led by Atlas Venture and KEC Ventures. Earlier investors Great Oaks Venture Capital, Maiden Lane, Canyon Creek Capital, and individual angels also joined the round. Crunchbase shows the company had previously raised $225,000 in seed funding, including from Eric Liaw and Erik Blachford.

WiserTogether, a six-year-old, Washington, D.C.-based company that makes healthcare treatment comparison software, has raised $9 million in Series B funding co-led by Martin Ventures and Merck Global Health Innovation Fund. Earlier investors Grotech Ventures, Harbert Venture Partners, 7Wire Ventures and Blue Heron Capital also joined the round, which brings the company’s total funding to $19.5 million.


New Funds

Two executives with network experience in next-generation media and social TV have formed BRaVe Ventures, a New York-based outfit that will advise on and invest in companies and invest in digital technologies, reports Broacasting & Cable. David Beck, former senior VP and general manager of social media at Univision, and Jesse Redniss, who had been senior VP of digital for USA Network, are teaming with Vayner Media CEO and seed capital investor Gary Vaynerchuk in the new venture.

Commonfund Capital, the 26-year-old, Wilton, Ct.-based fund of funds firm, is looking to raise up to $500 million for its 11th vehicle, shows an SEC filing first flagged by VentureWire. The first sale has yet to occur.



The stock of CyberArk Software, a 15-year-old, Newton, Ma.-based cybersecurity software company, soared 87 percent yesterday, its first day of trading. CyberArk sold 5.36 million shares at a price of $16 per share.

Evernote — the six-year-old, Redwood City, Ca.-based company known for its note-taking apps — is considering an IPO in the next few years, its CEO, Phil Libin, tells the WSJ, adding: “We’ve been approached by lots of companies as an acquisition target and I would never rule anything out.” Evernote has raised more than $250 million from investors, including Sequoia Capital, Morgenthaler Ventures, Valiant Capital Partners and T. Rowe Price.

Shares of camera maker GoPro hit an all time high yesterday, notes the WSJ. At above $78, the stock has more than tripled from its initial public offering price of $24 in late June, likely on rumors that GoPro will release a new camera in mid October.

Vitae Pharmaceuticals, a 13-year-old, Fort Washington, Pa.-based clinical stage biotechnology company with multiple product candidates to treat various autoimmune diseases, saw its shares drop nearly 5 percent on its IPO debut yesterday. The company had priced its 6.9 million shares at $8, down from earlier plans to sell five million shares at $11 to $13 apiece.



Civitas Therapeutics, a five-year-old, Chelsea, Ma.-based biopharmaceutical company that’s developing an inhaled formulation of an existing drug for Parkinson’s Disease, is being acquired by Acorda Therapeutics, a commercial-stage biopharmaceutical company, for $525 million in cash. Civitas had confidentially filed to go public in May; its plans were made public last month and the company was expected to go public yesterday. Its biggest shareholders include Longitude Capital Partners, which owns 19.9 percent of the company; Canaan Partners, which owns 18.9 percent; Fountain Healthcare Partners, which owns 10.2 percent;Bay City Capital, which owns 10.5 percent; and Alkermes, which owns 7 percent.

Covario, an eight-year-old, San Diego-based digital marketing agency, is being acquired by Dentsu Aegis Network of London for an undisclosed price. Covario raised $21 million in venture capital, including from Dubilier & Co., FTV Capital and Voyager Capital. The San Diego Union-Tribune has more here.



Bill Carr, Amazon‘s head of digital music and video, is leaving at the end of the year, he announced internally yesterday. Carr, who joined Amazon in 1999, has been “instrumental in Amazon’s push to compete with Netflix and Hulu in streaming online video, including reaching deals with Viacom and others for exclusive content,” says the WSJ. Carr also oversaw the creation of original programming. No word yet on his next career steps. Amazon tells the WSJ that Carr’s immediate plans involve spending more time with his family and traveling.

Oracle cofounder Larry Ellison owns the Hawaiian island of Lanai, and as the New York Times Magazine reports, he views it “less like an investment than like a classic car, up on blocks in the middle of the Pacific . . . He wants to transform it into a premier tourist destination and what he has called ‘the first economically viable, 100 percent green community’: an innovative, self-sufficient dreamscape of renewable energy, electric cars and sustainable agriculture.”

After years of legal fees and unflattering press, venture capitalist Vinod Khosla has lost his battle to prevent the public from accessing Martins Beach, a cove that runs alongside his property, through an access rode that he blocked in 2010. Reports Forbes, San Mateo County Superior Court Judge Barbara Mallach “specifically ruled that Khosla’s blocking of the beach was done illegally because he did not obtain a coastal development permit first. Her ruling is not final, but it’s unlikely to change before she issues a final ruling in a month.”

Sarah and Elizabeth Turner, who were Stanford students in 2011 along with Evan Spiegel, are now suing Spiegel, the cofounder and CEO  of Snapchat. The sisters say they allowed Spiegel to photograph them for use in marketing materials for Snapchat’s predecessor app, Picaboo, but that those photos are now tarnishing their reputations for reasons they couldn’t have foreseen. More here.


Job Listings

In late August, we told you of some openings at Samsung in Mountain View, Ca. Now Samsung is looking for an investment associate for its Open Innovation Center in New York.



Corporate VCs put $4 billion to work across 187 deals in the second quarter of this year, says CB Insights. That’s more than double the amount of $1.73 billion in capital they invested during the same year-ago period. More here.


Essential Reads

Amazon is definitely going long on hardware. According to a Reuters report yesterday, Amazon is spending $55 million and increasing head count by at least 27 percent at its low-flying Silicon Valley-based hardware unit as it tests “smart” home gadgets.

Fifty percent of Yahoo shares have changed hands over the past four days, reports Business Insider, which has some theories as to why.



New York City Mayor Bill de Blasio has been implicated in the death of a Staten Island groundhog named Charlotte.

Michael Wolff writes of the “ever-downward glide” of Forbes Media in Town & Country.

We do love the Kloons.


Retail Therapy

Maple bacon deluxe smoked coffee. We doubt Juan Valdez would approve.

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