• Investing Internationally? You Might ‘Friend’ Nazar Yasin

    Nazar YasinInvestor Nazar Yasin has been traveling the world since he was a child. Born in Greece to a real estate and tech investor who moved his family to Cyprus, then London, then Los Gatos, Ca., it isn’t surprising that Yasin’s interest in global tech investing was kindled early on.

    After nabbing an engineering degree, then dual JD/MBA, his first jobs were short-lived analyst and consulting gigs. In 2006, it was on to Goldman Sachs, where he eventually co-headed the firm’s European Internet coverage. Yasin then left in 2009 to become CEO of Forticom, a Latvia-based social networking business. “Everyone thought I was crazy,” he laughs. But Forticom was soon acquired by Russia’s Mail.ru, and Yasin was recruited by Tiger Global Management, where he led numerous deals, including in YY, a Chinese video-based social network that now has a $5.3 billion market cap.

    Today, Yasin is still at it, except these days, he’s running his own investment firm, Rise Capital, which scouts out Series B-stage Internet deals in emerging markets and held a first close of $100 million on its debut fund in March. Last week, I met Yasin at his offices in San Francisco’s Ferry Building to learn more. Our conversation has been edited for length.

    You had a plum job at Tiger. Why leave?

    Over time, we’d raised a lot of money on the private side and started making later-stage investments. I wanted to stay in the same [earlier-stage spot where we’d started], so I left to start Rise.

    Rise is writing checks of between $3 million and $7 million to startups in eight distinct emerging markets. Why base your operations in San Francisco? Are you interested in bringing your portfolio companies to the U.S.?

    No, we have zero interest in that. Being a good tech investor often just boils down to being on the right side of change. And if there’s one place where change is happening faster than other places, it’s here. Just having friends, LPs, and colleagues out here who are working with some of the great tech firms helps us understand what the future is going to look like.

    Alibaba represents the opportunity you’re chasing. Can you elaborate?

    Once Alibaba goes public in a couple off weeks, there will have been half a trillion dollars of publicly traded market cap created by Internet companies in emerging markets. I’m not talking about private market valuations. I’m talking about stock that you and I can buy on exchanges like the NYSE. That’s half a trillion dollars of value that’s come out of thin air in the last five years, created by Internet companies located in emerging markets whose businesses cater to consumers in those markets. Most of Alibaba’s business is focused on Chinese consumers buying stuff in China. There’s so much opportunity for startups in India or Indonesia or Mexico or Brazil or Russia [to do the same].

    Rise has invested in five startups, though it has disclosed just two: the Chilean insurance comparison site ComparaOnline and iROKO Partners, a Nigeria-based entertainment media distribution company. How do they fit into your thesis?

    Alibaba accounts for 7.5 percent of retail — offline or online — in China. That’s the same market share as Walmart, though it’s taken Walmart 50 years and took Alibaba a decade. The reason is that in China and these other emerging markets, there isn’t as much offline retail. There aren’t as many things that look like Walmart or Target or Best Buy. There aren’t things like HBO. There aren’t as many banks. But whereas people’s ways to shop offline are limited, [online is a different story].

    Of the markets you’re targeting, which are the most attractive and which are the least attractive right now?

    India is happening in a very big way right now. Lot of young companies are seeing a lot of traction right now. The same is true of startups in Brazil, Mexico, Indonesia, Nigeria and the broader Middle East. I’d say Russia and China are low priority.

    China is lower priority primarily for valuation reasons. Valuations have grown very punchy over the last two years. In other markets we invest in, it isn’t uncommon to see companies doing $20 million in revenue that you can invest in at a sub $50 million valuation. In China, that company would be worth hundreds of millions of dollars.

    Russia is a challenging market because its economy is dependent on oil and so more volatile than other emerging market economies. Its demographics aren’t as appealing as other emerging markets, either; you don’t have that tremendous combination of population growth and GDP per capita growth. In fact, it’s shrinking. And that’s important because there’s a lack of foreign strategics with an interest in Russia as a result, and if you’re an investor in a privately held company, you’re going to realize your investment through an IPO or M&A.

    What would you consider to be significant scale for an emerging market company?

    At $5 million in revenue, an emerging market startup is processing a lot of widgets. It has a lot of consumers. It’s typically in a market-leading position.

    That’s when you try and step in.

    Between the Series A — where you might see some local angel investors and VCs — and Series D rounds, where everybody and their mother knows about a company and the competition becomes quite fierce, there just isn’t a lot of capital. The companies aren’t quite as visible; it’s harder to identify the winners from the losers, and that’s where we feel like we have an edge. We’ve got a lot of relationships and a lot of data on these markets that we can leverage.

    Sign up for our morning missive, StrictlyVC, featuring all the venture-related news you need to start you day.

    Connie

    , ,

  • StrictlyVC: September 5, 2014

    Well, hello handsome! (We’re talking to you, Friday.) Have a great weekend, everyone. Also, web visitors, here is an easier-to-read version of this, today’s email.

    —–

    Top News in the A.M.

    Apple CEO Tim Cook says Apple will be adding security alerts for iCloud users.

    New York police officers will begin wearing body cameras in a pilot program. (Some of the components are coming from Seattle-based Vievu.)

    —–

    Ariel Poler: I Don’t Want to Become a Professional Investor

    For 15 years, Ariel Poler did the entrepreneur slog, founding I/PRO, an early web analytics company; Topica, an email community; and the mobile marketing startup TextMarks. Then, in 2010, Poler decided to turn his attention entirely to angel investing, a pastime in which he’d long dabbled and that has also proved lucrative for him thanks to numerous hits, including AdMob (acquired by Google) and StumbleUpon (acquiredby eBay and taken private again).

    Poler’s investing career took shape in the late ’90s when he began helping out the boards of several startups, including Kana Software andLinkExchange, in exchange for equity. He still doesn’t think of himself as an “investor,” though, or plan to raise a fund. “It’s just not what I want to do for a living.” He explained during a recent chat.

    How many startups do you invest in per year and what size checks do you write?

    I don’t have a target but it’s worked out to be between three and five per year. In terms of the size of check, the average is probably $50,000.

    You’re involved with a lot of “hot” companies, including the cycling and running app company Strava. Why not raise a fund like everyone else in your position?

    I don’t think of myself as an investor. I won’t invest in an entrepreneur who I won’t have over for dinner. I don’t want to have to optimize for financial return. To become a professional investor, it just not what I want to do for a living. It’s not why I do it.

    You want to like the people you’re backing. How do you decide if it’s a good fit?

    It’s becoming harder. Because the speed at which startups get built and funded has accelerated significantly in recent years, there’s generally less time for people to understand if there’s a good fit. On rare occasions, I think [something] will be a good fit, then discover it isn’t. But that’s another benefit of [not being obligated to outside investors]. When that happens, I hold on to my shares, but I won’t proactively spend my time with the startup.

    What I try to do is interact a little bit in a way that’s proactive for entrepreneurs [like via] working meetings. I recently met with some founders who needed to pick a vertical for their product and needed help prioritizing, and I said, “Let’s pretend I’m a member of the team,” and we spent an hour and a half [on the issue], and I enjoyed it and they enjoyed it. That’s how it starts. Because everything is moving so quickly right now, you might not have the luxury of [spending a few weeks or more with a team], but I still try.

    You were on the board of Odeo, a platform for podcasters out of which Twitter was eventually spun, and you let founder Evan Williams buy back your shares. Was there a lesson in that experience?

    Everybody got their money back. It wasn’t an option. It wasn’t like some said, “Give me my money,” and others didn’t. Evan wanted to own 100 percent of Odeo and he bought everyone out. Then months later, he did a financing for Twitter and a small group of those who’d been investors in Odeo participated in the Twitter round. For me, when I was deciding, I thought Twitter had potential; I did feel pretty good about it. But there were other reasons I decided not to invest and they’re reasons that were pretty valid and go with my investment philosophy.

    That was the worst professional decision of my career, no question about that. [Laughs.] But if you look at most of the very successful companies, it’s very hard to predict [their rise]. When Evan came to the board and said, “I don’t want to do this anymore,” Twitter was already part of Odeo. We [the board] said, “The founder doesn’t want to do it. We don’t have any traction. We should try to sell it.” It was my job as a board member to find an investment bank, and I did. I was thinking Twitter could help MySpace compete against Facebook. But no one would take it for free — not for a dollar. That’s when Evan said, “I’ll do an incubator [and restart].”

    Many investors seem to think it makes sense to just back an entrepreneur like Williams an infinite number of times.

    That’s a common takeaway. But sometimes they try again and it works, and sometimes they try and it doesn’t. We all thought Twitter could be great but it wasn’t a slam dunk.

    —–

    New Fundings

    Beddit, an eight-year-old, Espoo, Finland-based company that makes an ultra-thin sleep monitoring sensor, has raised an undisclosed amount of funding led by Inventure, a Nordic early-stage venture capital firm. The company has now raised $8 million to date, it says.

    Bridj, a nearly three-year-old, Cambridge-based pop-up bus service, has raised $4 million led by Atlas Ventures, NextView Ventures, Suffolk Equity and Freshtracks Capital. Angel investors Jill Preotle, Andy Ross and Peter Aldrich also participated in the round. BostInno has much morehere.

    Cignifi, a four-year-old, Cambridge, Ma.-based company whose analytics platform produces credit and marketing scores using mobile phone behavioral data, has raised an undisclosed amount of Series B venture funding led by earlier investor Omidyar Network. American Express Ventures and other, unnamed earlier investors, also participated in the round.

    Cord, a months-old, Brooklyn, Ny.-based voice communication app that makes it easy to send a quick voice message, has raised $1.8 million in seed funding led by Metamorphic Ventures, along with Google Ventures, Slow Ventures, Gary Vaynerchuk, Lerer Hippeau Ventures,Greycroft, Melo7 Tech Partners, Ricky Van Veen, and Xavier Niel.

    DataStax, a four-year-old, Santa Clara, Ca.-based database management company, has raised $106 million in Series E funding led by Kleiner Perkins Caufield & Byers. Other participants in the round included ClearBridge Investments, Cross Creek Advisors, Wasatch Funds,Comcast Ventures and PremjiInvest, the family office of Wipro founder Azim Premji. The company has now raised $190 million altogether. Venture Wire Dispatch has much more here.

    Delta ID, a three-year-old, Newark, Ca.-based maker of biometric authentication software for mass-market computing devices, has raised $5 million in Series A funding from Intel Capital and other, unnamed investors. The company has now raised $6.1 million to date.

    GetSet, a two-year-old, Chicago-based social productivity tool meant to help college students build peer mentoring networks, has raised $2.5 million in seed funding from Chicago Ventures, KGC Capital, The Social+Capital Partnership, G2T3V, and individual investors. EdSurge has more here.

    KnCMiner, a year-old, Stockholm, Sweden-based maker of bitcoin mining hardware, has raised $14 million in Series A funding led by Creandum. TechCrunch has more here.

    LiveAction, a seven-year-old, Palo Alto, Ca.-based network and application performance management company, has raised $5.35 million in Series A funding led by AITV, with participation from Cisco and Enerdigm Ventures.

    MetricStream, a 15-year-old, Palo Alto, Ca.-based maker of risk and compliance software, has raised $60 million in Series D funding led by Sageview Capital. Earlier investors Goldman Sachs and Kaiser Permanente Ventures also participated in the round, which brings the company’s total funding to $160 million.

    Narrative, a 2.5-year-old, Linköping, Sweden-based company whose small, clip-on camera allows people to capture images and “lifelog,” has raised $8 million in Series A funding led by Khosla Ventures. Earlier investors Passion Capital and True Ventures also participated in the round, which brings the company’s total funding to $12.2 million.

    Propeller Health, a four-year-old, Madison, Wi.-based digital health company focused on chronic respiratory disease, has raised $14.5 million in Series B funding led by Safeguard Scientifics, with earlier investor The Social+Capital Partnership participating. The company has raised $28.4 million to date.

    Tapdaq, a two-year-old, London-based community-driven mobile ad exchange, has raised a $1.4 millon seed round led by Balderton Capital. TechCrunch has more details here.

    Symphony Commerce, a four-year-old, San Francisco-based company that delivers commerce as a service, handling wholesale and retail business functions like logistics, has raised a $21.5 million in Series B funding led by CRV, with participation from earlier investors Bain Capital and FirstMark Capital. The company has now raised $39 million to date, shows Crunchbase.

    Whale Path, a 1.5-year-old, San Francisco-based on-demand business-research platform, has raised $1.1 million in seed funding from TMT Investments, Kima Ventures, 500 Startups, Altair Capital, FundersClub, Wefunder, and individual investors.

    —–

    IPOs

    Upland Software, a four-year-old, Austin, Tx.-based maker of cloud-based enterprise work management software, has filed to go public, revealing plans to raise up to $50 million. The company has raised at least $31.4 million from investors over the years, shows Crunchbase. Its biggest backers include Austin Ventures, which owns 19.9 percent of the company; Activant Capital, which owns 7 percent; and ESW Capital, which owns 24.5 percent.

    —–

    Exits

    Allegro Diagnostics, an eight-year-old, Maynard, Ma.-based genomic test maker, has been acquired by the publicly traded diagnostics company Veracyte for $21 million. Allegro had raised $5.4 million from Catalyst Health & Technology Partners and Kodiak Venture Partners, shows Crunchbase.

    Twitpic, the photo-sharing site, will be shutting down September 25th because of a trademark dispute with Twitter, the company announced on its blog yesterday. Users will be able to export all their photos and videos in the next few days.

    —–

    People

    Carmelo Anthony, the NBA star who recently cofounded the investment firm Melo7 Tech Partners, says he runs potential investments past VCs Marc Andreessen and Ben Horowitz, whom he calls mentors. “We’ve built a great rapport,” says Anthony.

    Ali Partovi, a well-known Silicon Valley investor and entrepreneur, is joining the food startup Hampton Creek as its chief strategy officer. The New York Times has more here.

    Bre Pettis is stepping down as CEO of the consumer 3D printing company MakerBot in order to head up a new “innovation workshop” at Stratasys, which acquired MakerBot in a $400 million deal last year.

    Nathan Sanders is the newest GP at Technology Crossover Ventures. Before joining the firm, Sanders spent eight years at Bain Capital, as part of both its private equity investment team and its investor relations team.

    Emmett Shear, founder and CEO of Twitch, talks with Bloomberg about why the company chose to sell to Amazon rather than Google. (One words that comes up a lot: “independence.”)

    The White House made it official yesterday: Megan Smith, the longtime Google executive, is the country’s new CTO. Alexander Macgillivray, a former Twitter lawyer, was also officially named as deputy U.S. CTO.

    Ariel Tseitlin has been promoted from venture partner to partner at Scale Venture Partners. Tseitlin was previously a director of cloud solutions at Neflix. The firm has also promoted Cack Wilhem, a summer associate, to principal. Wilhem previously worked in sales at Cloudera and Oracle and spent a year as an analyst at the investment bank Montgomery & Company.

    —–

    Job Listings

    Route 66 Ventures, an early-stage venture firm in Alexandria, Va., is looking for a financial analyst.

    —–

    Happenings

    The TechCrunch Disrupt conference kicks off on Monday in San Francisco. You can check out the full agenda here.

    The Launch Scale conference is coming up, too, October 23rd and 24th in San Francisco. Learn more here.

    —–

    Data

    Tech companies are grabbing up as much cash as they can pre-IPO. Meanwhile, venture-backed healthcare companies are moving in the opposite direction, says CB Insights.

    —–

    Essential Reads

    The New York Times on Apple’s forthcoming smartwatch: “The company put an enormous amount of time and money in the wearable device’s sensors so that they would track movements and vital signs, like heart rate and footsteps, much more accurately than existing fitness devices, two employees said. It has a flexible display panel that is protected by a cover composed of sapphire, a type of tougher glass, they said. The device’s circuit board, which includes its sensors and chips, was described as tiny, about the size of a postage stamp.”

    —–

    Detours

    Not to be a bummer, but a new analysis of air traffic patterns shows that there’s up to an 18 percent chance the Ebola virus will reach us in the next few weeks.

    Shorts are considered ridiculous and unwearable outside the U.S. Is it time for American men to ditch them, too?

    Oh, to be a dog.

    —–

    Retail Therapy

    And you said there was no such thing as a beautiful vacuum.

    Connie

  • Ariel Poler: I Don’t Want to Become a Professional Investor

    arielpolerheadshotFor 15 years, Ariel Poler did the entrepreneur slog, founding I/PRO, an early web analytics company; Topica, an email community; and the mobile marketing startup TextMarks. Then, in 2010, Poler decided to turn his attention entirely to angel investing, a pastime in which he’d long dabbled and that has also proved lucrative for him thanks to numerous hits, including AdMob (acquired by Google) and StumbleUpon (acquired by eBay and taken private again).

    Poler’s investing career took shape in the late ’90s when he began helping out the boards of several startups, including Kana Software and LinkExchange, in exchange for equity. He still doesn’t think of himself as an “investor,” though, or plan to raise a fund. “It’s just not what I want to do for a living.” He explained during a recent chat.

    How many startups do you invest in per year and what size checks do you write?

    I don’t have a target but it’s worked out to be between three and five per year. In terms of the size of check, the average is probably $50,000.

    You’re involved with a lot of “hot” companies, including the cycling and running app company Strava. Why not raise a fund like everyone else in your position?

    I don’t think of myself as an investor. I won’t invest in an entrepreneur who I won’t have over for dinner. I don’t want to have to optimize for financial return. To become a professional investor, it’s just not what I want to do for a living. It’s not why I do it.

    You want to like the people you’re backing. How do you decide if it’s a good fit?

    It’s becoming harder. Because the speed at which startups get built and funded has accelerated significantly in recent years, there’s generally less time for people to understand if there’s a good fit. On rare occasions, I think [something] will be a good fit, then discover it isn’t. But that’s another benefit of [not being obligated to outside investors]. When that happens, I hold on to my shares, but I won’t proactively spend my time with the startup.

    What I try to do is interact a little bit in a way that’s proactive for entrepreneurs [like via] working meetings. I recently met with some founders who needed to pick a vertical for their product and needed help prioritizing, and I said, “Let’s pretend I’m a member of the team,” and we spent an hour and a half [on the issue], and I enjoyed it and they enjoyed it. That’s how it starts. Because everything is moving so quickly right now, you might not have the luxury of [spending a few weeks or more with a team], but I still try.

    You were on the board of Odeo, a platform for podcasters out of which Twitter was eventually spun, and you let founder Evan Williams buy back your shares. Was there a lesson in that experience?

    Everybody got their money back. It wasn’t an option. It wasn’t like some said, “Give me my money,” and others didn’t. Evan wanted to own 100 percent of Odeo and he bought everyone out. Then months later, he did a financing for Twitter and a small group of those who’d been investors in Odeo participated in the Twitter round. For me, when I was deciding, I thought Twitter had potential; I did feel pretty good about it. But there were other reasons I decided not to invest and they’re reasons that were pretty valid and go with my investment philosophy.

    That was the worst professional decision of my career, no question about that. [Laughs.] But if you look at most of the very successful companies, it’s very hard to predict [their rise]. When Evan came to the board and said, “I don’t want to do this anymore,” Twitter was already part of Odeo. We [the board] said, “The founder doesn’t want to do it. We don’t have any traction. We should try to sell it.” It was my job as a board member to find an investment bank, and I did. I was thinking Twitter could help MySpace compete against Facebook. But no one would take it for free — not for a dollar. That’s when Evan said, “I’ll do an incubator [and restart].”

    Many investors seem to think it makes sense to just back an entrepreneur like Williams an infinite number of times.

    That’s a common takeaway. But sometimes they try again and it works, and sometimes they try and it doesn’t. We all thought Twitter could be great but it wasn’t a slam dunk.

    Sign up for our morning missive, StrictlyVC, featuring all the venture-related news you need to start you day.

    Connie

    , , ,

  • StrictlyVC: September 4, 2014

    Good morning, dear readers, and happy Thursday! (Web visitors, here’s an easier-to-read version of today’s e-mail newsletter. To sign up for StrictlyVC, click here.)

    —–

    Top News in the A.M.

    New data gathered “from the cybercrime underground” suggests that the apparent credit and debit card breach at Home Depot involves nearly all of the company’s stores in the U.S., reports security expert Brian Krebs.

    —–

    Mithril Leads $40 Million Diabetes Deal

    Mithril Capital Management prides itself on funding unique “growth companies regardless of sector or geography,” says Ajay Royan, who founded the San Francisco-based venture firm with investor Peter Thiel in 2012. Last month, for example, it backed a Berlin-based, publicly traded company with an approved treatment for brain cancer.

    Fractyl, a company aiming to better control type 2 diabetes, also fits the bill. In fact, Mithril — which has just led a $40 million financing for the three-year-old, Waltham, Ma., company – thinks Fractyl might become the “single most impactful company in our portfolio,” says Royan.

    Certainly, the market opportunity Fractyl is chasing is enormous. More than 350 million people around the world suffer from type 2 diabetes, and as many as one in three U.S. adults could have diabetes by 2050 if current trends continue, according to the Centers for Disease Control and Prevention.

    While the disease is usually managed through exercise regimens, oral medications, and insulin shots, in more extreme cases, bariatric (weight loss) surgery is recommended, and it’s here where things get interesting.

    Bariatric surgery has been shown to return a person’s blood sugar levels to normal roughly six months after the procedure. Traditionally, it was believed the surgery is effective because the size of the stomach is reduced, but researchers and doctors have begun to believe it owes to a change in gut metabolism.

    “The [first section of the small intestine] contains cells that function as chemical sensors,” explains Royan. “As you eat food, a portion of your small intestine anticipates the food’s composition and signals a hormonal response to start preparing insulin or whatever is appropriate for that food.” In diabetics, that portion of the gut is scarred, so the body’s response is off.

    The big idea of Fractyl cofounder and CEO Harith Rajagopalan — a cardiologist and medical device entrepreneur — was to address the issue by altering the physiology of the gut. Specifically, Fractyl has created a device that’s inserted into the small intestine using an endoscope; after expanding and smoothing out the targeted part of the tract, it applies heat via a catheter balloon filled with hot water that kills the surrounding layer of skin. If all goes correctly, the old cells slough off and new cells with hormone receptors are generated in their place.

    So far, the idea is looking spot on. Thirty-five patients have participated in trials, with the results validating the company’s approach. Still, it’s early days. The trials began just eight months ago, meaning no one yet knows how effective the treatment will be over a longer period of time.

    There’s also competition to consider. Though Fractyl has some deep-pocketed venture firms, including earlier investors General Catalyst Partners, Bessemer Venture Partners and Domain Associates, the kind of skin ablation done by Fractyl’s device isn’t unique, even if no one is doing it precisely the same way.

    Royan says he isn’t concerned about potential copycats, pointing to Fractyl’s “significant IP filings.” More, he insists, Fractyl’s design will be very hard to beat. Asks Royan,“Were there cell phones before and after the iPhone? Yes.” But the iPhone’s design has kept it at the fore. For his money, so will Fractyl’s specific approach to fighting diabetes.

    —–

    New Fundings

    Breather, a two-year-old, Montreal-based platform that provides on-demand work spaces in large urban areas, has raised $6 million in Series A funding led by RRE Ventures, with Vayner/RSE, SOS Ventures and earlier backer Real Ventures participating. The company has raised $7.5 million to date.

    Delivery Hero, a four-year-old, Berlin-based food delivery service, has raised roughly $350 million in new funding from the Swedish investment firm Vostok Nafta along with earlier investors, including Insight Venture Partners and Kite Ventures. The company has now raised $635 million altogether. TechCrunch has more here.

    Frank & Oak, a 2.5-year-old, Montreal-based online menswear retailer, has raised $15 million in Series B funding led by Goodwater Capital, the new firm of Chi-Hua Chen, long of Kleiner Perkins Caufield & Byers. Others in the round included new investors Greenoaks Capital, Investissement Quebec, and Lululemon Athletica CFO John Currie, as well as earlier investors Rho Canada Ventures, Real Ventures, Version One Ventures, Lightbank and Bertelsmann Digital Media Investments. Venture Capital Dispatch delves into the funding here.

    Grid Ant Technologies, a two-year-old, Mumbai, India-based distributed computing company whose operating system, Cubeit, allows users to collaborate across multiple devices, has received just less than $3 million in seed funding from Accel Partners and Helion Venture Partners, reports Techcircle.in.

    Immunophotonics, a six-year-old, St. Louis, Mo.-based company that’s developing a metastatic cancer treatment, has raised $1.8 million in Series A funding from Billiken Angels, BioGenerator, Cultivation Capital, theMissouri Technology Corp ., St. Louis Arch Angels and individual investors. The St. Louis Business Journal has more here.

    iSpecimen, a five-year-old, Lexington, Ma.-based company that supplies human clinical specimens to the research, therapeutic, and diagnostic industries, has raised $8 million in Series B funding. The company, which raised $2 million in funding in 2012, didn’t disclose its backers.

    ItsOn, a six-year-old, Redwood City, Calif.-based company behind a cloud-based smart services platform for mobile device OEMs, device OS developers, service providers and others, has raised an undisclosed amount of Series C funding from Cisco Systems. The company has previously raised at least $40 million from investors, shows Crunchbase. Its investors include Silver Lake Partners, SV Angel, and Andreessen Horowitz.

    Legend3D, a 13-year-old, Carlsbad, California-based 3D visual effects and conversion company, has raised $10 million in Series C funding led by earlier investors Northwater Capital Management and Augustus Ventures Limited. The company has raised $47.8 million altogether, shows Crunchbase.

    One, Inc., a nine-year-old, Sacramento, Ca.-based cloud software company that caters to the property and casualty insurance markets, has raised $16.7 million in Series A funding led by H&Q Asia Pacific. Camp One Ventures and AGI Partners also participated in the round.

    Sgrouples, a three-year-old, Mountain View, Ca.-based privacy-centric social networking service, has raised $1.2 million in seed funding from individual investors. The company has now raised $1.8 million altogether.

    Vice Media, the nearly eight-year-old, Brooklyn, N.Y.-based news and entertainment company, has raised $250 million from Technology Crossover Ventures, on the heels of raising $250 million in funding from A&E Networks. The company has now raised $580 million altogether. Dealbook has much more here.

    xAd, a five-year-old, New York-based mobile real-time bidding ad platform, has raised $50 million in equity and debt funding, including from investors Institutional Venture Partners, Emergence Capital, Softbank Capital, and Silicon Valley Bank. The company has now raised $74 million altogether, shows Crunchbase.

    —–

    New Funds

    Frontline Ventures, a year-old, Dublin- and London-based venture capital firm that invests in software only, has closed its debut fund with €40m ($52.5 million). Frontline is run by partners Shay Garvey, formerly of Delta Partners; Will Prendergast, formerly of NCB Venture Capital; and Will McQuillan, who previously founded a short-lived e-commerce company called Osmoda. The firm, whose investments range in size from €250K to €2M, has already invested in eight startups from its new fund, includingCurrencyFair, an online peer-to-peer currency exchange, and Boxever, a big data platform for airlines and travel companies. The Irish Times has much more here.

    —–

    IPOs

    According to a newly published report from Renaissance Capital, the number of IPOs anticipated this fall look to make 2014 the biggest year for IPOs since 2000.

    Before the IPO, an interactive guide to Alibaba.

    Tokai Pharmaceuticals, a 10-year-old, Cambridge, Ma.-based biotech company that makes a daily oral treatment for prostate cancer, announced terms for its IPO on Tuesday, revealing plans to raise $76 million by offering 5.4 million shares at a price range of $13 to $15. At $14 per share, the company would be valued at $310 million.

    Viking Therapeutics, a two-year-old, San Diego-based biotech that’s developing treatments for diabetes and other metabolic and endocrine disorders, revealed plans yesterday to raise $55 million in its IPO by offering 5 million shares at a price range of $10 to $12.

    —–

    Exits

    Baseline, a 33-year-old, L.A.-based online database of film and television information, has been acquired by competitor Gracenote in a deal worth $50 million.

    Moovel, a unit of Daimler AG, said yesterday that it will acquire two companies: three-year-old, Washington, D.C.-based RideScout, whose smartphone apps help people search and compare ground transportation options on demand and in real time; and Germany’s Intelligent Apps, which operates mytaxi, an app that connects users to taxi drivers. Terms for both deals were not disclosed.

    ShopIgniter, a five-year-old, Portland, Or.-based marketing startup, has been acquired by the Seattle-based video advertising firm Mixpo. Terms of the deal were not disclosed. Both businesses are backed by Madrona Venture Group. Oregon Live has more here.

    —–

    People

    Billionaire entrepreneur Patrick Soon-Shiong is urging Culver City, Ca. officials to install fiber Internet at five business districts, including one where his company is located, reports L.A. Weekly. Culver City is emerging as a tech hot spot, notes the outlet, thanks in part to residents like Maker Studios, recently acquired by Disney, and Beats, sold to Apple. Soon-Shiong is arguing that a publicly sponsored fiber network could also make Culver City more competitive for tech startups with Santa Monica, which already has its own fiber network. Soon-Shiong’s newest company is Nantworks.

    —–

    Job Listings

    Lynda.com, a San Francisco-based company that produces online video tutorials (and, ahem, raised a $103 million round last year), is looking for a VP of business development.

    —–

    Essential Reads

    Microsoft’s new Lumia 830 raises eyebrows in Berlin.

    Etsy CEO to businesses: If net neutrality perishes, we will, too.

    —–

    Detours

    According to a new study out of NYU, tall men get the short end of the stick when it comes to marriage.

    The simple technology that accidentally destroyed baseball.

    A very short interview with Bob Odenkirk about his collection of writings, A Load of Hooey.

    —–

    Retail Therapy

    “What are you wearing, darling?” “Why Intel, bien sûr.”

    Connie

  • Mithril Capital Bets Big on Diabetes

    Diabetes wordcloudMithril Capital Management prides itself on funding unique “growth companies regardless of sector or geography,” says Ajay Royan, who founded the San Francisco-based venture firm with investor Peter Thiel in 2012. Last month, for example, it backed a Berlin-based, publicly traded company with an approved treatment for brain cancer.

    Fractyl, a company aiming to better control type 2 diabetes, also fits the bill. In fact, Mithril — which has just led a $40 million financing for the three-year-old, Waltham, Ma., company – thinks Fractyl might become the “single most impactful company in our portfolio,” says Royan.

    Certainly, the market opportunity Fractyl is chasing is enormous. More than 350 million people around the world suffer from type 2 diabetes, and as many as one in three U.S. adults could have diabetes by 2050 if current trends continue, according to the Centers for Disease Control and Prevention.

    While the disease is usually managed through exercise regimens, oral medications, and insulin shots, in more extreme cases, bariatric (weight loss) surgery is recommended, and it’s here where things get interesting.

    Bariatric surgery has been shown to return a person’s blood sugar levels to normal roughly six months after the procedure. Traditionally, it was believed the surgery is effective because the size of the stomach is reduced, but researchers and doctors have begun to believe it owes to a change in gut metabolism.

    “The [first section of the small intestine] contains cells that function as chemical sensors,” explains Royan. “As you eat food, a portion of your small intestine anticipates the food’s composition and signals a hormonal response to start preparing insulin or whatever is appropriate for that food.” In diabetics, that portion of the gut is scarred, so the body’s response is off.

    The big idea of Fractyl cofounder and CEO Harith Rajagopalan — a cardiologist and medical device entrepreneur — was to address the issue by altering the physiology of the gut. Specifically, Fractyl has created a device that’s inserted into the small intestine using an endoscope; after expanding and smoothing out the targeted part of the tract, it applies heat via a catheter balloon filled with hot water that kills the surrounding layer of skin. If all goes correctly, the old cells slough off and new cells with hormone receptors are generated in their place.

    So far, the idea is looking spot on. Thirty-five patients have participated in trials, with the results validating the company’s approach. Still, it’s early days. The trials began just eight months ago, meaning no one yet knows how effective the treatment will be over a longer period of time.

    There’s also competition to consider. Though Fractyl has some deep-pocketed venture firms, including earlier investors General Catalyst Partners, Bessemer Venture Partners and Domain Associates, the kind of skin ablation done by Fractyl’s device isn’t unique, even if no one is doing it precisely the same way.

    Royan says he isn’t concerned about potential copycats, pointing to Fractyl’s “significant IP filings.” More, he insists, Fractyl’s design will be very hard to beat. Asks Royan,“Were there cell phones before and after the iPhone? Yes.” But the iPhone’s design has kept it at the fore. For his money, so will Fractyl’s specific approach to fighting diabetes.

    Sign up for our morning missive, StrictlyVC, featuring all the venture-related news you need to start you day.

    Connie

    , , , ,

  • StrictlyVC: September 3, 2014

    Good morning! StrictlyVC ran out of time to write a column today (you can kind of see why below), but we do have a lot of good stuff coming your way.

    Have a great Wednesday, everyone.

    —–

    Top News in the A.M.

    Comcast has been boasting that fully 70 mayors support its proposed $45 billion takeover of Time Warner Cable, including Chicago’s Rahm Emanuel, who recently wrote the FCC in support of the deal. The International Business Times thinks it’s also worth noting that Emanuel and the political committees he controls have received more than $100,000 from Comcast and its employees.

    A federal appeals court has cleared Yelp of claims that it extorted businesses into advertising by fabricating bad reviews about them, reports PC World.

    —–

    New Fundings

    3D Hubs, a 1.5-year-old, Amsterdam-based platform that gives users access to a global network of individually run 3D printers, has raised $4.5 million in Series A funding led by Balderton Capital. TechCrunch has more here.

    ActivityHero, a three-year-old, Sunnyvale, Ca.-based startup that makes it easy for parents to find and book after-school activities and summer camps, has raised $2.2 million in Series A funding led by Inventus Capital Partners, reports VentureWire.

    AirSig, a months-old, Taiwanese startup that makes authentication products for mobile devices, has raised $2 million in seed funding from Foxconn Technology Group. More here.

    Axial Healthcare, a two-year-old, Nashville, Tn.-based company whose cloud-based data and analytics platform aims to help manage the cost and quality of patient care, has raised $1.75 million in Series A funding from BlueCross BlueShield Venture Partners and Sandbox Industries.

    Black Duck Software, a 12-year-old, Burlington, Ma.-based company that helps its customers deploy and manage open-source software, has raised $20 million from insiders, reports VentureWire, which says the round was led by General Catalyst Partners. The company has now raised at least $66 million over the years, shows Crunchbase. More here.

    Core2 Group, a two-year-old, Mclean, Va.-based company that culls and analyzes digital-activity data from website, email and machine-to-machine traffic, has raised $4.3 million in Series A funding led by Blue Chip Venture Company of Cincinnati, Oh.

    Culture Machine, a 15-month-old, Mumbai, India-based digital video entertainment startup cofounded by former Disney executive Sameer Pitalwalla and former YouTube executive Venkat Prasad, has raised between $3.5 million and $4 million in Series A funding from Zodius Capital, reports the Economic Times.

    Emprego Ligado, a two-year-old, São Paulo-based mobile-based recruiting platform that targets blue-collar workers, has raised $7 million in Series A funding from investors, including Monashees Capital, Grupo RBS e.Bricks and Qualcomm Ventures. The company had earlier raised an undisclosed amount of seed funding from 500 Startups, Initial Capital, and Fortify Ventures. TechCrunch has more here.

    FanDuel, a five-year-old, New York-based real-money fantasy sports site, has raised $70 million in Series D funding led by Shamrock Capital Advisors, reports Venture Capital Dispatch. Other participants in the round included NBC Sports Ventures and private equity firm Kohlberg Kravis Roberts. Earlier investors Bullpen Capital, Pentech Ventures and Comcast Ventures also participated. FanDuel has now raised $86.2 million, shows Crunchbase.

    Feidee, a four-year-old, Shenzhen, China-based personal finance mobile platform, has raised “tens of millions” of dollars in Series B funding led byFosun International, reports China Money Network. Earlier investor Sequoia Capital, which had reportedly provided Feidee with $15 million in Series A funding in 2012, also participated in the round.

    Hobo Labs, a new, San Francisco-based stealth mobile gaming company, has raised $4 million from investors, including Shasta Ventures, reports Vator News. Hobo Labs was cofounded by Lyle Fong, who founded Lithium Technologies, a pre-IPO company, in 2001.

    IEX, a year-old, New York-based upstart stock-trading platform, has raised $75 million funding from Spark Capital, Bain Capital Ventures, Massachusetts Mutual Life Insurance, Franklin Templeton, Netscape co-founder James Clark, and casino magnate Steve Wynn. Dealbook has a look at how the deal came together here.

    IndoorAtlas, a two-year-old, Mountain View, Ca.-based company whose indoor mapping technology can reportedly determine locations inside a structure to within six feet, has raised $10 million in funding from China’s top search company, Baidu. The two companies also announced that they have signed an agreement that will make Baidu the only user of IndoorAtlas’ technology in China. The funding comes just three months after IndoorAtlas raised $4.5 million in a round led by Mobility Ventures and the Finnish seed fund KoppiCatch. TechCrunch has more here.

    ItzCash Card, an eight-year-old Mumbai, India-based company that sells multi-purpose pre-paid cash cards, has raised just less than $15 million in funding from a group of unnamed strategic Asian investors, sources tell VCCircle. ItzCash had previously raised $20.6 million in funding across two rounds. Its earlier investors include Matrix Partners, Intel Capital and Lightspeed Venture Partners.

    Lehigh Technologies, an 11-year-old, Tucker, Ga.-based specialty materials company that recycles rubber tires into new materials, has raised $8 million in venture funding led by synthetic rubber maker JSR Corp. of Japan. Earlier investors Leaf Clean Energy, Kleiner Perkins Caufield and Byers, Index Ventures and Florida Gulfshore Capital, also participated in the round, which brings the company’s total funding to roughly $70 million, shows Crunchbase.

    Measurabl, a 1.5-year-old, San Diego-based maker of cloud-based sustainability reporting software, has raised $2 million in seed funding led by CrossCut Ventures.

    Memorado, a year-old, Berlin-based brain training and cognitive science startup, has raised $1.3 million in funding from Sunstone Capital and numerous Berlin-based angel investors, including the founders of Zalando and Wimdu. TechCrunch has more here.

    Red Dot Payment, a three-year-old, Singapore-based online payment processing company with a focus on Southeast Asia, has raised an undisclosed amount of Series A funding from GMO Global Payment Fund and Wavemaker Pacific. Tech in Asia has more here.

    Sobrr, an eight-month-old, Emeryville, Ca.-based mobile social app that promises that the content its users post will expire in 24 hours, has raised $1.1 million in seed funding from IDG Ventures. VentureWire has more here.

    Uzabase, a six-year-old, Tokyo-based company that competes with the Bloomberg Terminal computer system, has raised $4.5 million in Series C funding from nine investors, reports Tech in Asia. The round included Itochu Technology Ventures, YJ Capital, Kodansha, SMBC Venture Capital, Mitsubishi UFJ Capital, and Shinsei Bank. Existing investors Globis Capital Partners, GMO Venture Partners, and Monex Ventures also participated.

    Wizeline, a year-old, San Francisco-based company whose data service helps companies prioritize decision-making, has raised $6.7 million in funding from A Capital Partners, XG Ventures, Core Ventures Group,Bowery Capital, Sierra Ventures and SV Angel.

    —–

    New Funds

    Chiesi Ventures, a new venture capital fund that will have offices in Parma, Italy; Boston, Ma.; and Research Triangle Park, N.C, launched yesterday as part of a strategic collaboration between the Italian pharmaceutical company Chiesi Group and life sciences investor A.M. Pappas & Associates. The targeted fund will focus on early-stage rare and orphan disease investments in the U.S and Europe. More here.

    As part of another strategic partnership, Reliance Industries, India’s largest private company with interests in petroleum, retail and telecom, is partnering with Microsoft to incubate startups and provide them with seed funding. The program will be operated via Gennext Ventures, an early-stage corporate VC arm that Reliance established in 2010. The Economic Times has much more here.

    Prime Ventures, a 15-year-old, Amsterdam-based venture capital firm focused on growth-stage European Internet, software, and other high-tech startups, has raised $170.7 million for its newest fund. The firm says it intends to invest between EUR5 million ($6.6 million) and EUR20 million ($26.3 million) per company.

    TenOneTen Ventures, a year-old, L.A. based firm cofounded by enterpreneurs Gil Elbaz and David Waxman, are raising a debut fund of up to $25 million, according to an SEC filing first flagged by Venture Capital Dispatch. The outlet spoke with Elbaz, who previously cofounded Applied Semantics; he said that while his new fund’s name pays homage to the 10 and 110 freeways bisecting Los Angeles, he and Waxman, who previously co-founded SpotRunner, aren’t limiting themselves to startups in their backyard. “We aspire to be great investors in L.A., not great L.A. investors,” he said.

    —–

    IPOs

    E-retailer Zalando has confirmed that it’s going public this year on the Frankfurt Stock Exchange, and it says it plans to offer between 10 and 11 percent of its shares.

    —–

    Exits

    BackupAgent, a 10-year-old, Netherlands-based cloud backup company, has been acquired by Acronis, a 12-year-old, Singapore-based company helps corporate customers migrate, protect and recover data no matter its location. Terms of the deal weren’t disclosed. BackUpAgent had raised at least $2 million from Runa Capital and Solid Ventures, shows Crunchbase. Acronis has raised at least $11 million from investors, including Insight Venture Partners and OpenView Venture Partners.

    BeyondTrust, a 29-year-old, Phoenix-based security company, has been acquired for $310 million by Veritas Capital, the New York-based private-equity firm that targets companies providing government services, reports Bloomberg. BeyondTrust is owned in part by Insight Venture Partners.

    Branderati, a nearly two-year-old, New York-based social-media tools maker, has been acquired by the social media platform Sprinklr for an undisclosed amount. Branderati doesn’t appear to have reported outside funding. Sprinklr has raised at least $77.5 million from investors, including Intel Capital and Battery Ventures, shows Crunchbase.

    DocuSphere, a 21-year-old, Perrysburg, Oh.-based company that sells automated accounts-payable services, has been acquired by the electronic trading network Tungsten Network for undisclosed terms. According to VentureWire, investors in DocuSphere include Plymouth Ventures and Rocket Ventures.

    Location Labs, a 13-year-old, Emeryville, Ca.-based mobile security company, is being acquired by online security firm AVG in a deal worth up to $220 million. According to Crunchbase, Location Labs had raised roughly $25 million, including from DFJ, BlueRun Ventures, Second Avenue Partners, Qualcomm Ventures, Saturn Partners, and British Telecom, among others. TechCrunch has more here.

    Ouya, the two-year-old, L.A.-based startup that makes an inexpensive TV game console based on Google’s Android software, is being shopped in the U.S. and abroad after receiving inbound interest from Chinese technology firms, according to The Information. Ouya has raised roughly $23 million from investors, including Shasta Ventures, Mayfield Fund, Kleiner Perkins Caufield & Byers, Occam Capital, and Nvidia.

    XRS Corp., a 29-year-old, Eden Prairie, Mn.-based fleet-management software company that trades publicly, is being acquired by the privately held, San Diego-based fleet-management software company Omnitracs, a former Qualcomm unit.

    —–

    People

    Ray Bradford appears to have left Kleiner Perkins Caufield & Byers, where he has served as a partner since 2011. (Bradford has not yet responded to press request.) Bradford came to Kleiner from Amazon, where, as a product manager, he helped grow the company’s cloud infrastructure business. Before joining Amazon, Bradford interned at both Twitter and Linden Labs. At Kleiner, Bradford has been focused on big data services.

    The National Venture Capital Association yesterday announced the appointment of Justin Field as its VP of federal policy. Field comes to NVCA from the office of Senator Robert Menendez (D-NJ), where he was a legislative assistant responsible for tax issues.

    Tim Kopp, the former CMO of marketing software company ExactTarget, has joined Hyde Park Venture Partners in Chicago as an advisor and venture partner. ExactTarget was acquired by Salesforce for $2.5 billion last year. Kopp has also worked in marketing for both Coca-Cola and Proctor & Gamble.

    Susan Lyne, CEO of AOL’s brand group since early last year, is stepping down to run a venture fund inside AOL that’s aimed at early-stage women-led, consumer Internet companies, reports Recode. The fund’s name for now is Build Fund and it will initially have between $10 million to $12 million to invest.

    It’s official(ish).The White House has selected Google executive Megan Smith to be the nation’s next chief technology officer and will announce her appointment once she’s fully vetted, reports Fortune.

    That didn’t last long. Greg Wyler, founder of satellite-communications startup O3b Networks, who recently joined Google as part of its effort to build a constellation of Internet-beaming satellites, has left the company, says The Information. Neither The Information, nor the WSJ, which published a follow-up piece, were able to discern what went wrong, but the Journal reports that Wyler is now “spending a lot of time at the office of SpaceX, the space-transport company” founded by Elon Musk. At Google, Wyler had reported to Craig Barratt, Google’s senior vice president in charge “Access and Energy.” Barratt joined Google last year, having been CEO of Wi-Fi chip maker Atheros Communications, which sold to Qualcomm in 2011 for $3.1 billion.

    —–

    Job Listings

    Fenox Venture Capital is looking for a full-time analyst. Applicants must be fluent in at least one Southeast Asian language. The job is in San Jose, Ca.

    —–

    Happenings

    Samsung‘s Unpacked event is happening today in Berlin. The Verge is taking notes and has embedded a live feed.

    —–

    Essential Reads

    The tool that people use to steal pictures from Apple’s iCloud.

    —–

    Detours

    Inside the most expensive home for sale in Silicon Valley enclave Woodside, Ca.

    Losing Louisiana.

    Fun with pie charts.

    —–

    Retail Therapy

    Glamorous evening wear, inspired by “American Psycho.”

    Eggbots. (We love these.)

    Connie

  • StrictlyVC: September 2, 2014

    Hi and welcome back, everyone! Web visitors, here‘s an easier-to-read version of today’s email newsletter. To have StrictlyVC delivered straight to your inbox, click here.

    —–

    Top News in the A.M.

    People are likely better acquainting themselves with Apple’s two-factor authentication system, after explicit photos of more than 100 celebrities were leaked over the weekend — stolen, seemingly, from their iCloud accounts. (Actress Kirsten Dunst, one of the victims, had some choice words for the cloud-storage service yesterday.)

    Uber is now banned across Germany.

    —–

    With Kleiner’s Snapchat Deal, There Isn’t Much to See

    About a week ago, the WSJ reported that Kleiner Perkins Caufield & Byers is investing up to $20 million in Snapchat at a $10 billion valuation as part of a larger round that the messaging app is assembling. The piece noted that just months earlier, DST Global had also quietly committed capital — at a $7 billion valuation.

    The news generated a lot of chatter, with one piece in particular suggesting that Kleiner is part of a broader pump-and-dump scheme to keep valuations frothy until retail market investors are convinced to buy companies like Snapchat on the public market. (If Snapchat is eventually sold for top dollar to a publicly traded acquirer like Facebook and Google, that’s apparently just as pernicious as they, too, are partly owned by retail investors.)

    It’s not the first time tech investors have been accused of looking to sell their shares to a greater fool. When it comes to Kleiner’s investment, though, the argument misses the mark. Kleiner’s motivations look simpler to me.

    First and foremost, despite a recent string of exits for the firm, including Dropcam’s sale to Google, Kleiner is still seen as slightly out of touch compared with some of its Sand Hill Road peers. It nearly missed Facebook and Twitter. It bet heavily on Zynga. And it has parted ways with many of its younger partners, through attrition, downsizing, and a lawsuit, which probably doesn’t make it any cooler to young entrepreneurs (or younger LPs, for that matter). Some say that institutional investors are no longer swayed by the logos in a venture firm’s portfolio, but LPs don’t swoon over Kleiner like they once did. In this case, maybe Kleiner is hoping the logo makes an impression.

    Another motivating factor might be Kleiner’s desire to acquire information rights to Snapchat. What direction is Snapchat moving toward? What new technologies is it developing that will change the face of mobile apps? Who is it partnering with and which startups might it acquire? While it might seem like general information, it puts Kleiner in the know and could help its portfolio companies, at least tangentially.

    There’s also IRR to consider. Kleiner’s Snapchat investment might not generate a good cash-on-cash return for the firm, but it could turn into a high IRR deal if Snapchat sells soon, which seems as likely as any scenario given that it has virtually no revenue at this point. Even if an acquisition doesn’t do much for Kleiner’s overall fund, it’s always nice to have some flashy numbers to produce for potential investors.

    It may be convenient to use Snapchat as an example of a bubble in Silicon Valley. But pointing to Kleiner’s role in Snapchat’s soaring valuation is giving Kleiner a bit too much credit. The reality is more mundane, as far as I can tell. Kleiner wanted to be associated with a high-profile deal and it was willing to get in at any cost. And it succeeded.

    —–

    New Fundings

    Clearside Biomedical, a three-year-old, Alpharetta, Ga.-based biopharmaceutical company that’s developing drug therapies to treat blinding diseases of the eye, has raised $16 million in Series B financing from new investor RusnanoMedInvest, along with earlier investors Hatteras Venture Partners, Santen Pharmaceuticals Co., Mountain Group Capital, and Georgia Research Alliance Venture Fund. The company has now raised $33.9 million altogether, shows Crunchbase.

    eNeura Therapeutics, a 14-year-old, Sunnyvale, Ca.-based medical technology company whose stimulation devices treat migraines, has raised $5.8 million in new funding, shows new SEC paperwork. Previous filings show the company has now raised roughly $14.6 million in equity and debt over the last two years alone. Terry Lierman, the founder of Summit Global Ventures, is among those directors listed on the filing.

    FreeCharge, a four-year-old, Mumbai, India-based online platform that lets user earn coupons when they add money to their prepaid mobile phone plans or pay utility bills online, has raised a $33 million in Series B funding from Sequoia Capital, Sofina, and RuNet. The company has also added several new board members, including Gokul Rajaram, a well-known Silicon Valley operator who is currently head of online payments at Square. TechCrunch has the story here.

    GC-Rise Pharmaceutical, a six-year-old, Beijing-based pharmaceutical company that specializes in women and children’s healthcare, has raised $15 million in Series B round funding from OrbiMed. GC-Rise makes a wide array of products, including to address anti-aging, reproductive health, autoimmune diseases and central nervous system disorders.

    MindMixer, a 4.5-year-old, Kansas City, Mo.-based online platform that allows local governments and school districts to connect with their communities, has raised $17 million in Series C funding led by the Omaha-based firm Dundee Venture Capital, with Govtech Fund and another, unnamed strategic investor participating. The company has now raised $23.2 million altogether, it says.

    Nabysys, a 10-year-old, Providence, R.I.-based life sciences company that makes semiconductor tools for DNA analysis, has raised $25 million in new funding, shows a new SEC filing that shows a $32 million target. The company had previously raised at least $58 million, shows Crunchbase. Its investors include Stata Venture Partners, Bay City Capital, and Point Judith Capital.

    Purposely, a 1.5-year-old, Phoenix, Az.-based company whose online platform helps optimize college students’ employment preparation, has raised $2.4 million in new funding, shows an SEC filing. An earlier filing shows the company had previously raised $2 million from investors.

    Ting Ting Group (“DXY”), a 14-year-old, China-based social media platform focused on healthcare services, has received $70 million in strategic funding from Tencent in exchange for a minority stake in its business. Reportedly, the company had previously raised two rounds of funding from DCM and Shunwei China Internet Fund. TechNode has the story here.

    Whill, a two-year-old, San Carlos, Ca.-based company that creates high-performance wheelchairs, has raised $11 million in Series A funding from Innovation Network Corp., 500 Startups, NTT DoCoMo Ventures, Jochu Technology Co. and Sun Microsystems co-founder Scott McNealy, reports the WSJ. (If this deal sounds familiar, it’s because we reported on this round in July after spotting a related SEC filing.) The company had earlier raised $1.9 million in seed funding, including from Bridge Global Ventures, 500 Startups, Itochu Technology Ventures, KAMIA, MUFJ Capital, and VegasTechFund. It also ran a small, successful campaign on Kickstarter, which you can still see here.

    —–

    New Funds

    DN Capital, a 14-year-old, London-based Pan-European early-stage venture firm, has raised $200 million for its third fund, reports TechCrunch. The firm, whose latest effort is three times the size of its predecessor, has now raised $320 million altogether. Among its newest bets is the real estate agency PurpleBricks, which raised a $13.4 million Series A round last month, and the online reservation platform Quandoo, which raised $25 million in Series C funding in July. (DN Capital also participated in Quandoo’s $8 million Series B round, closed last last year.)

    Floodgate, the eight-year-old, Palo Alto, Ca.-based early-stage firm, has closed its fifth fund with $75.8 million, the third fund in a row that has closed at roughly the same size, says the firm.

    Sequoia Capital is raising a fifth China fund, shows an SEC filing that doesn’t list a target and says the first sale has yet to occur.

    Surgical Frontiers, a Utah-based incubator and investor in new medical technologies, has closed its inaugural fund with $7 million, reports VentureWire.

    —–

    IPOs

    The highly anticipated public offering of e-commerce giant Alibaba is coming — fast. According to Bloomberg, the company “tentatively” looks to price its offering on September 18.

    —–

    People

    Business Insider remembers the kings of the dot.com bubble, and catches us up on where they are now.

    Google‘s Sergey Brin Is “totally obsessed” with high-adrenaline exercise, says Business Insider in a sensational (but fun) read.

    Eric Cantor, the recently defeated House majority leader, has joined the boutique investment bank Moelis & Co.; he’ll open a new office for the firm in Washington, reports the WSJ.

    Steve Case, the former chief executive of AOL and founder of Revolution, is planning an 1,800-mile bus tour next month to draw attention to entrepreneurial communities in Madison, Wi.; Minneapolis, Mn.; Des Moines, Ia.; and Kansas City, Mo. Each stop will include a pitch competition whose winner will receive a $100,000 investment from Case.

    Brian O’Malley, a general partner at Accel Partners, has some harsh words about Twitter CEO Dick Costolo, squarely blaming him for much of the company’s C-suite departures in 2014. “If someone’s gotten divorced once, you really don’t know who’s to blame,” O’Malley tells BusinessWeek. “But if someone’s gotten divorced five times, there may be a pattern there.” (O’Malley is a straight shooter. When StrictlyVC sat down with him last winter, just before Accel poached him from Battery Ventures, he also noted that “investors are fundamentally lazy.”)

    You might take a second (or third) look at Y Combinator’s most recent graduates. Investor-entrepreneur Keith Rabois calls the 75 teams “almost surely the best batch as a whole that has ever existed at YC.”

    Lindsay Sharma has joined Industry Ventures as a vice president, working with the firm’s secondary investment team. Sharma was most recently a principal in corporate strategy and development at Intuit.

    Y Combinator is launching a recruiting drive to get more black entrepreneurs into its incubator program, including by adding black colleges to its recruiting tour this fall.

    —–

    Job Listings

    Oyster, the e-reading startup, is hiring a VP of business development. The job is in New York.

    Online retailer Zulily is looking for a director of business development. The job is in Seattle.

    —–

    Happenings

    BoxWorks gets underway in San Francisco today. Keynote speakers include Box CEO Aaron Levie, author Jim Collins, DreamWorks Animation CEO Jeffrey Katzenberg, and LinkedIn CEO Jeff Weiner.

    —–

    Data

    Women venture capitalists underperform their male counterparts by some 15 percent, according to a new Harvard University study of old data. The study further suggests that difference narrow over time and at firms that employ more than one female VC.

    Most accelerators aren’t worth much, according to Silk.

    —–

    Essential Reads

    Startups are accruing funding in case of leaner times, they tell the New York Times.

    The top 10 reasons that Apple rejects apps.

    —–

    Detours

    Even Ikea can’t be bothered to assemble its furniture.

    The “sweet rides” of tech’s millionaires and billionaires.

    We’ve definitely been peeling apples the wrong way.

    —–

    Retail Therapy

    Futuristic helmets.

    Coffee cups for geeks.

    If you’re in the market for a spider-shape, blow-up home that could be highly useful in a refugee situation and also a party-pad situation at Burning Man, billionaire Bob Pittman has you covered.

    Connie

  • With Kleiner’s Snapchat Deal, There Isn’t Much to See

    nothing to see hereA week ago, the WSJ reported that Kleiner Perkins Caufield & Byers is investing up to $20 million in Snapchat at a $10 billion valuation as part of a larger round that the messaging app is assembling. The piece noted that just months earlier, DST Global had also quietly committed capital — at a $7 billion valuation.

    The news generated a lot of chatter, with one piece in particular suggesting that Kleiner is part of a broader pump-and-dump scheme to keep valuations frothy until retail market investors are convinced to buy companies like Snapchat on the public market. (If Snapchat is eventually sold for top dollar to a publicly traded acquirer like Facebook and Google, that’s apparently just as pernicious as they, too, are partly owned by retail investors.)

    It’s not the first time tech investors have been accused of looking to sell their shares to a greater fool. When it comes to Kleiner’s investment, though, the argument misses the mark. Kleiner’s motivations look simpler to me.

    First and foremost, despite a recent string of exits for the firm, including Dropcam’s sale to Google, Kleiner is still seen as slightly out of touch compared with some of its Sand Hill Road peers. It nearly missed Facebook and Twitter. It bet heavily on Zynga. And it has parted ways with many of its younger partners, through attrition, downsizing, and a lawsuit, which probably doesn’t make it any cooler to young entrepreneurs (or younger LPs, for that matter). Some say that institutional investors are no longer swayed by the logos in a venture firm’s portfolio, but LPs don’t swoon over Kleiner like they once did. In this case, maybe Kleiner is hoping the logo makes an impression.

    Another motivating factor might be Kleiner’s desire to acquire information rights to Snapchat. What direction is Snapchat moving toward? What new technologies is it developing that will change the face of mobile apps? Who is it partnering with and which startups might it acquire? While it might seem like general information, it puts Kleiner in the know and could help its portfolio companies, at least tangentially.

    There’s also IRR to consider. Kleiner’s Snapchat investment might not generate a good cash-on-cash return for the firm, but it could turn into a high IRR deal if Snapchat sells soon, which seems as likely as any scenario given that it has virtually no revenue at this point. Even if an acquisition doesn’t do much for Kleiner’s overall fund, it’s always nice to have some flashy numbers to produce for potential investors.

    It may be convenient to use Snapchat as an example of a bubble in Silicon Valley. But pointing to Kleiner’s role in Snapchat’s soaring valuation is giving Kleiner a bit too much credit. The reality is more mundane, as far as I can tell. Kleiner wanted to be associated with a high-profile deal and it was willing to get in at any cost. And it succeeded.

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