StrictlyVC: October 1, 2014

Hi, everyone, happy first day of October! StrictlyVC is juggling a little more than usual this week, so no column today, but stay tuned.

Also, if you’ve missed any recent editions of StrictlyVC, here is Monday’s issue; Tuesday’s newsletter is here. (You can also find an easier-to-read version of today’s issue here.)


Top News in the A.M.

PayPal was in the running to be a prominent partner in Apple‘s rollout of Apple Pay, but talks reportedly soured after PayPal’s parent company,eBay, forced PayPal to strike a similar deal with Samsung. The pact didn’t just torpedo relations between PayPal and Apple; it prompted PayPal’s then-president David Marcus to hightail it for Facebook, says the report.


New Fundings

Acutus Medical, a three-year-old, San Diego-based company whose 3-D imaging system for the heart helps in treating complex cardiac arrhythmias, has added $26.2 million to its Series B funding from unnamed investors. According to Crunchbase, the capital brings the company’s total funding to $63.2 million. Its investors include GE Ventures, Index Ventures, Advent Venture Partners, and OrbiMed Advisors.

Allakos, a two-year-old, San Francisco-based biotech company developing antibody-based therapeutics to treat various allergies and diseases, has raised $10 million in fresh funding from current investors, including Novo Ventures, Alta Partners, RiverVest Venture Partners and the Roche Venture Fund. The round brings the company’s total funding to $44.5 million, shows Crunchbase.

Aquion Energy, a six-year-old, Pittsburgh, Pa.-based company that makes sodium ion batteries, has raised $25 million from undisclosed investors. Earlier, the company — spun out of research at Carnegie Mellon University — had secured $20 million in venture debt from Trinity Capital Investment and CapX Partners. It had separately raised about $94 million in equity, including from Kleiner Perkins Caufield & ByersFoundation Capital, Advanced Technology Ventures, Bright Capital, Microsoft cofounder Bill Gates, and Gentry Venture Partners.

Birds Eye Systems, a four-year-old, Mumbai, India-based company behind an traffic information app called Traffline, has raised an undisclosed amount of Series B funding from Qualcomm Ventures. The company reportedly raised an earlier round of funding from Matrix Partners India.

BRD Motorcycles, a five-year-old, San Francisco-based maker of all-electric racing motorcycles, has raised $4.5 million in Series A funding led by Modara Technologies. Other participants in the round includedCedarville Investments, Tesla Motors founders Martin Eberhard andMarc Tarpenning, and the chief executive of Baluarte Real Estate in Spain, Pedro Zapata Gil. The funding brings BRD’s total funding to $8.2 million. Venture Capital Dispatch has the story here.

Consensus Orthopedics, a 22-year-old, El Dorado Hills, Ca.-based company that makes artificial hip and knee replacements, has raised $8 million from Breakwater Investment Funds, an L.A.-based growth capital firm. MedCity News has more here.

Food52, a five-year-old, New York-based crowdsourced cooking and commerce site, has raised $6 million in Series A-1 funding led by investorAlex Zubillaga, with participation from Scripps Network InteractiveWalden Venture Capital, BDMI, Vocap Investment Partners, Thomas Lehrman, Robin Klein, Joanne Wilson, Gary Vaynerchuk and other individual investors. The company has raised $9 million altogether thus far. TechCrunch has more here.

Good Technology, the 18-year-old, Sunnyvale, Ca.-based mobile-device security company, which has already raised money from every investor in Silicon Valley (and beyond) and had finally filed for an IPO back in May, has raised yet another $80 million from unnamed investors. The company says it still plans to go public.

Heliatek, a eight-year-old, Dresden, German-based maker of organic solar films, has raised $22.7 million in Series C funding led by the family office of entrepreneur Stefan Quandt, with participation from earlier investors, including Bosch, BASF, Innogy Venture Capital, and Wellington Partners. The company has raised roughly $58 million to date.

Netuitive, a 12-year-old, Reston, Va.-based company that sells self-learning performance management software, has raised $6.5 million in new funding led by MK Capital and Rembrandt Venture Partners, with participation from Cross Creek Advisors and Columbia Capital. The company has raised at least $29.5 million to date, shows Crunchbase.

Oncoceutics, a five-year-old, Hummelstown, Pa.-based drug developer that’s focused on cancer treatments, has received an undisclosed amount of funding in a “substantially oversubscribed” round led by Spring Mountain Capital.

Pica8, a 2.5-year-old, Palo Alto, Ca.-based startup that specializes in software defined networking, has raised $12.5 million in Series B funding from VantagePoint Capital Partners, Cross Head and Pacific Venture Partners, among others. The company has now raised more than $20 million altogether.

Reddit, the nine-year-old, San Francisco-based social news startup, has raised $50 million in Series B funding at a $500 million valuation led by Y Combinator President Sam Altman, with participation from Alfred Lin of Sequoia Capital and Marc Andreessen of Andreessen Horowitz. Other investors in the round include Peter Thiel, Ron Conway, Paul Buchheit,Jared Leto, Jessica Livingston, Kevin and Julia Hartz, Mariam Naficy,Josh Kushner, Snoop Dogg (yes), and Reddit CEO Yishan Wong. In an unusual twist, investors in the round have proposed giving 10 percent of their shares to the Reddit community for helping to build the site — and possibly increasing that amount over time. Venture Capital Dispatch has more here.

Remerge, a six-month-old, Berlin-based adtech startup, has raised $1 million in seed funding led by Point Nine Capital. TechCrunch has more here.

Sharethrough, a six-year-old, San Francisco-based ad tech company, has raised $5 million from British Sky Broadcasting Group as part of a $10 million round that includes Elevation Partners, Floodgate, North Bridge Venture Partners and Silver Creek Ventures. The company has raised $38 million to date, shows Crunchbase.

StackEngine, a months-old, Austin, Tx.-based maker of application management software, has raised $1 million in seed funding fromSilverton Partners and LiveOak Venture Partners.

Tile, a nearly two-year-old, San Mateo, Ca.-based maker of tiny wearables that can be placed on things to keep track of them (like keys), has raised $9.5 million in Series A funding led by GGV Capital, with participation from Tencent, Tandem Capital, Go Pro founder Nick Woodman, Rothenberg Ventures, Jerry Yang’s AME Cloud Ventures, Slow Ventures, Guitar Hero cofounder Charles Huang and others. The company had previously raised $3.5 million in seed funding led by Tencent.


New Funds

Health Enterprise Partners, an eight-year-old New York-based growth equity firm focused on health care, has raised a $148.5 million fund from investors, including Cigna Corp., reports VentureWire.



EndoStim, a five-year-old, St. Louis, Mo.-based medical device company whose neurostimulation system was created to treat severe gastroesophageal reflux disease, said yesterday that it plans to sell 3.2 million shares at $10 to $12 each in its IPO. (It filed a couple of weeks ago.) The company has raised at least $42.5 million from private investors, shows Crunchbase. The company’s biggest shareholders include Santé Health Ventures, which holds a 35.4 percent stake; Prolog Capital, which owns a 5.7 stake; and 1998 Co-Investing LLC, which owns a 5.8 percent stake.



Alios BioPharma, a 7.5-year-old, South San Francisco-based company at work on a treatment for respiratory syncytial virus, a top cause of brochiolitis, is being acquired by Johnson & Johnson in a $1.75 billion deal that represents the largest acquisition of a venture-backed drug company on record, according to VentureSource. The company had raised $73 million in funding from investors, including Novo Ventures, SR OneRoche Venture Fund and Novartis Ventures.

MedSynergies, an 18-year-old, Irving, Tx.-based company that makes practice-management software for physician clinics, is being acquired for undisclosed terms by UnitedHealth Group’s data services division, Optum. MedSynergies had raised at least $90 million over the years from undisclosed investors, shows Crunchbase.



The most beloved CEOs in tech (chart).

Sameer Dholakia has been named CEO of SendGrid, the email platform. He was formerly group VP and general manager of the Cloud Platforms Group at Citrix Systems.

Things in Las Vegas appear to be collapsing around Zappos CEO Tony Hsieh, the founder of Downtown Project, a costly development project in the city that Hsieh has been funding single-handedly. A few weeks ago, Hsieh stepped down as leader of the project, according to Recode. Yesterday, Hsieh also laid off about 30 percent of Downtown Project’s staff, or 30 people, which excludes entrepreneurs who’ve been funded by the project. Downtown Project has been hugely ambitious from the start, with Hsieh trying to transform 1.5 miles of desolate downtown Las Vegas into a bustling entrepreneurial center, using up to $350 million of his own money. As we noted during a trip to meet with Hsieh in 2012, Hsieh had also installed relatively inexperienced people at the helm of Downtown Project’s various intiatives, including Hsieh’s cousin and her husband, who’ve been handling Hsieh’s education and small business initiatives for Downtown Project. (Both previously worked at Citigroup in New York.) It’s too early to know if the layoffs mean more than a major calibration right now. In a statement to the media yesterday, Downtown Project wrote: “We remain focused on the long-term plan and the evolution of the downtown area. As such, we have restructured our support team. This change has affected approximately 30 positions, the majority of which were based in our corporate office. We continue to directly employ more than 300 people across our various operations in downtown Las Vegas.”

Jony Ive, Apple‘s senior vice president of design at Apple, talks with Vogue about feeling a bit like an outsider in life, like his former boss, Steve Jobs. “When you feel that the way you interpret the world is fairly idiosyncratic, you can feel somewhat ostracized and lonely and I think that we both perceived the world in the same way.”

Norwest Venture Partners has promoted Robert Mittendorff to principal,Sumer Juneja to principal, and Lisa Wu to vice president. MIttendorff joined Norwest as a vice president in 2012 from Hansen Medical, where he was a vice president. Juneja had joined NVP India in 2009 as a vice president; he was previously an analyst at Goldman Sachs. Wu, who joined Norwest in 2012, worked previously as an investor at Bessemer Venture Partners and Comcast Ventures, and in corporate development at Amazon.

Zynga founder Mark Pincus is reportedly selling his Pacific Heights home in San Francisco for $18 million. Pincus and wife Ali, co-founder of the home décor company One Kings Lane, purchased the home in 2012 for $16 million, and it sits on one of the toniest blocks in the city. In fact, a year ago, Vanity Fair wrote a breathless piece about the two-and-a-half-block “showcase of freestanding, stately mansions designed by such iconic 20th-century architects as Willis Polk and William Wursters” where the Pincuses’ home sits a stone’s throw from the homes of Yelp CEO Jeremy Stoppelman, Benchmark partner Matt Cohler, and Michael and Xochi Birch of Bebo.

Mark Zuckerberg, plantation owner? It may be the case, judging by a new report in the Pacific Business News that suggests the Facebook CEO just spent $66 million on the 357-acre, beachfront plantation Kahuaina on the northeast corner of the Hawaiian island of Kauai.



Chicago Ideas Week, an annual week long event founded by Groupon and Lightbank co-founder Brad Keywell, is coming up the week after next in Chicago, reports Forbes. With 30,000 engineers, technologists, inventors, scientists, economists, artists, and other professionals expected to attend, the event’s mission is to stimulate new collaborations.



Twenty-three venture-backed IPOs raised $2.6 billion during the third quarter, marking the sixth consecutive quarter to see 20 or more venture-backed IPOs, according to a new report out by Thomson Reuters and the National Venture Capital Association. More here.

This video is shown to all Google Ventures portfolio companies to educate them about unconscious biases against women at work. (H/T: Mike Butcher)


Essential Reads

Huh. Jawbone looks to be getting out of the hardware business.



The only footage of Mark Twain, in digitally restored films shot by Thomas Edison.

Enhance your lighting.”


Retail Therapy

Oh, the indignities that dogs are made to suffer.

Also, Lapkins.

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