StrictlyVC: January 8, 2015

Good morning, everyone, and thanks to the many of you who signed up yesterday for our first event, coming up February 12! Thanks also to our generous sponsors, including 12-year-old Ballou PR, which works with European startups and VCs — along with U.S. outfits that are looking to make a splash abroad.

As promised, today, we’re running the second part of Semil Shah’s recent interview with Olympic rower-turned-investor Tyler Winklevoss, who talks candidly about “The Social Network” and more.


Top News in the A.M.

The number of videos that Facebook users post has shot up to 75 percent globally and 94 percent in the U.S., the company announced late yesterday.

Google‘s dominance of the U.S. Internet search market slipped last month in the biggest drop since 2009 while Yahoo posted its largest share gain. Bloomberg has more here.

The FTC has “raised concerns about the complexity and privacy risks posed by the rise of an Internet of Things,” reports TechCrunch. More here.


Tyler Winklevoss on the Positive Impact of “The Social Network”

Cameron and Tyler Winklevoss, the twins who remain best known for their legal fight with Facebook CEO Mark Zuckerberg — and the ensuing depiction of that battle in “The Social Network” — have moved on from those days. Still, speaking for both men, Tyler Winklevoss recently agreed to share some thoughts about life in the public spotlight and how it has impacted the brothers.

Many people in tech and startups know your name but may have an impression of you based on movies and press stories. What’s one thing you wish people knew about you that you feel is misunderstood?

I think most people in tech and startups today actually know us through the investments we’ve made, the projects we’re working on, or their own first-hand experience in meeting or working with us. Over the past two years we’ve met with hundreds of entrepreneurs, attended many demo days, and keynoted at TechCrunch Disrupt, the Bitcoin 2013 Conference, and Money20/20, to name a few. We’ve co-invested with many top valley investors, built what we believe to be a strong portfolio, and have worked very hard to bring value beyond capital to entrepreneurs we’ve partnered with. Chances are, if you are a part of the tech ecosystem in either Silicon Valley, Los Angeles or New York, you know us or know someone who really does knows us, and this informs your impression of us, not a Hollywood movie.

That being said, “The Social Network” was a fantastic film and it was a lot of fun to watch its success. It was certainly an interesting time back then, but we never got too caught up in it. We couldn’t. Our focus was on training for the Olympics. Today, we’ve traded athletics for Bitcoin and angel investing. The fact that we were portrayed in a film that won some Oscars and almost won for Best Picture is a cool piece of history, but it’s not really relevant to our daily lives. I feel the same way about graduating from Harvard and Oxford and competing in the Olympic Games. I’m proud of these accomplishments, but I don’t spend a lot of time thinking about them. They’re in the past and just not directly related to what I’m trying to accomplish these days.

As for what the crowd understands or misunderstands, your guess is as good as mine. At the end of the day, impressions drawn from a movie or a movie portrayal, either right or wrong, live in a parallel universe of pop-culture. This is not a universe that I live in so I don’t spend much time analyzing it.

What was your largest takeaway from the whole experience?

My largest takeaway is just how powerful films can be. When we graduated from Harvard in 2004, computer science was the least popular major. When we went back to Harvard to speak to students in 2012, computer science was the tied for the most popular major on campus and it seemed like every student was involved in some sort of startup or had plans to be down the road. “The Social Network” has driven a lot of this cultural interest and shift towards technology and entrepreneurship and has had a profoundly positive impact on young people around the world. I’m very happy for this.

As you grow as investors, do you see yourselves moving into traditional VC, or being more entrepreneurial and taking investing in a new direction?

Right now, we’re really enjoying the freedom and agility that comes with running our own book, and this freedom has turned out to be a great asset so far. If we were operating a traditional VC fund, there’s a good chance we never would have been able to buy Bitcoin back in 2012, because Bitcoin is not a C-corp, and VC funds are, by and large, restricted to investing in corporations. I can only imagine what the conversations might have been like trying to explain what Bitcoin was to our LPs, let alone defend a direct investment in the asset itself. Being a fiduciary to outside parties also makes it a lot more complicated to put on the entrepreneur hat, which we have done with the Bitcoin ETF and the WinkDex bitcoin price index.

Bitcoin aside, we’ve been able to place bets in a wide-range of sectors that I think has been crucial to our overall learning. While focus is important, there’s a lot of promising deals in our portfolio that wouldn’t be living side-by-side if we had a stricter mandate.

Have you totally ruled out a traditional venture fund?

We haven’t, but we’ve never really been traditional guys in that sense, and traditions don’t necessarily last forever. I do believe that venture crowdfunding will replace a significant portion of the venture capital stack in the future. This just has to be the case. Right now we see the majority of syndicate activity at the seed level, but it’s conceivable that later rounds could be filled out by syndicates down the road. By increasing liquidity, access and flexibility on both sides of the ledger, the crowdfunding model has the potential to greatly improve the power of the venture capital marketplace.

We’re more interested in exploring this new path before walking down the existing one.

Semil Shah is a guest contributor to StrictlyVC. Shah is currently a venture advisor to Bullpen Capital and GGV Capital.


New Fundings

Accion Systems, a 2.5-year-old, Cambridge, Ma.-based company that spun out of M.I.T. and is working on more affordable and reliable satellite propulsions systems, has raised $2 million in seed funding led byFounders Fund. Other participants in the round include RRE Ventures,SDF Ventures, Founder Collective, Galvanize Ventures, and Slow Ventures. The Boston Business Journal has more here.

Aduro Biotech, a 14-year-old, Berkeley, Ca.-based company that’s developing drugs that aim to teach the body’s immune system to fight cancer, has raised a $51.4 million in Series D from OrbiMed, Janus Capital Management, funds managed by Franklin Advisers, andForesite Capital Management. The company has now raised $130 million to date. The San Francisco Business Times has more here.

Apervita, a 3.5-year-old, Chicago-based health analytics marketplace, has raised $18 million in Series A funding co-led by GE Ventures and Baird Capital, with participation from Pritzker Group Venture Capital, Math Ventures and returning seed investors. The Chicago Tribune has more here.

Caremerge, a four-year-old, Chicago-based care coordination platform, has raised $4 million in funding led by Cambia Health Solutions, with participation from Generator Ventures, GE Ventures, Arsenal Venture Partners and Ziegler-LinkAge Longevity Fund. The company has raised $6.1 million to date, shows Crunchbase., a seven-year-old, Bangalore, India-based online real estate and apartment management portal that raised $30 million from Tiger Global Management in September, has just raised another, undisclosed, amount of funding from Google Capital. (The deal marks Google Capital’s third investment in Asia investment, notes TechCrunch.) Not including Google’s new investment, CommonFloor has raised $47.9 million from investors, including Accel Partners.

Dato, a 1.5-year-old, Seattle-based platform for using scalable machine learning to build predictive apps (it was formerly called GraphLab), has raised $18.5 million in Series B funding from Vulcan Capital and Opus Capital. Earlier backers New Enterprise Associates and Madrona Venture Group also participated in the round, which brings the company’s total funding to $25.3 million.

Genkyotex, a 8.5-year-old, Geneva, Switzerland-based drug development company that’s focused right now on stalling the progression of kidney damage, has raised $21 million in Series D funding led by NeoMed Management, VI Partners and BioMedInvest, with participation from earlier backers Edmond de Rothschild Investment PartnersEclosion2, and Vesalius Biocapital Partners. The company has now raised $72.8 million to date, shows Crunchbase.

Par8o, a four-year-old, Cambridge, Ma.-based cloud-based “healthcare operating system” that aims to create a common point of contact for coordinating care delivery and plan design, has raised a $10.5 million in Series A funding from Atlas Venture, Founder Collective, CHV Capital and Allscripts. BostInno has more here.

Pivot Freight, a 1.5-year-old, Austin, Tx.-based online comparison engine that helps companies ship freight, has raised $2 million in seed funding led by Silverton Partners, with participation from Techstars’s Bullet Time Ventures, Capital Factory, Hurt Family Investments and angel investors.

Privateer, a 3.5-year-old, Seattle-based operating company focused on cannibas-related companies, has raised $75 million in Series B funding, including from Founders Fund. So far, the company, which has now raised $99 million altogether, has acquired a cannabis review site called Leafly, launched a Canadian marijuana-by-mail company called Tilray, and announced a venture with Bob Marley’s family to create cannabis strains and related products. Recode has more here.

Purplle, a 3.5-year-old, Mumbai, India-based beauty and grooming e-commerce platform, has raised more than $5 million in Series A funding from IvyCap Ventures. The company had received an earlier, undisclosed, amount of backing from Blume Ventures, Mumbai Angels and The Chennai Angels. More here.

Scratch, a five-month-old, Boston-based startup that works with personal shoppers to help users select gifts and other items, has raised $600,000 in seed funding from Bessemer Venture Partners. The Boston Globe has more here.

Soylent, the 1.5-year-old, San Francisco-based maker of a buzzed-about nutritional supplement of the same name, is raising just over $10 million at a pre-money valuation of $100 million led by Andreessen Horowitz, reports Recode. More here.

Stem, a 3.5-year-old, Millbrae, Ca.-based startup that offers battery storage for use on the electric grid (it stores power during non-peak hours), has raised $27 million in Series B funding, including fromConstellation Technology Ventures and Total Energy Ventures. The company has now raised roughly $40 million altogether, including fromGeneral Electric, Iberdrola SA, and Angeleno Group.

VHX, a 3.5-year-old, Brooklyn-based online digital distribution platform, is raising a $5 million round led by Comcast Ventures, reports Recode. Earlier backers, including Union Square Ventures, Lerer Hippeau Ventures, and Reddit Chairman Alexis Ohanian, are also participating. The round will bring the company’s total funding to $9.5 million.

VocalZoom, a five-year-old, Yokneam, Israel-based developer of sensors for speech enhancement, has raised an undisclosed amount of funding from Motorola Solutions. The company had previously raised $650,000 in seed funding, shows Crunchbase.

Vtesse, a new, Gaithersburg, Md.-based startup spun out of the orphan-drug accelerator Cydan Development, has raised $25 million in Series A funding to develop a treatment for Niemann-Pick disease type C. The funding comes from Alexandria Venture Investments, Bay City CapitalLundbeckfond Ventures, Pfizer Venture Investments, and New Enterprise Associates.

WeLab, a two-year-old, Sheung Wan, China-based Internet finance company, has raised $20 million from DST Global founder Yuri Milner,ICONIQ Capital, and Ule, along with previous investors Sequoia Capital and TOM Group. Tech in Asia has more here.

Xeris Pharmaceuticals, a nine-year-old, Austin, Tx.-based company that’s developing injectable treatments for diabetes, epilepsy and other diseases, has raised $17.9 million in Series B funding from undisclosed investors. The company has raised at least $21.7 million to date, shows Crunchbase.


New Funds

Spruce Capital Partners of San Francisco and Xeraya Capital of Kuala Lumpur, Malaysia, have raised $150 million for their newest fund, MLS Capital Fund II. The fund is a successor to the $162 million Malaysian Life Sciences Capital Fund, which is also co-managed by Spruce Capital Partners and Xeraya Capital. The firms plan to invest the capital in a “biogreentech” companies at all stages of development.



Hike, a messaging app based in India, has purchased Zip Phone, a year-old, Y Combinator-backed startup, for an undisclosed amount. This is Hike’s first acquisition. Hike has raised $86 million from Tiger Global Management and BSB. TechCrunch has more details here.



Deutsche Bank has appointed two new tech IPO heads. Kristin DeClarkwill now lead technology equity capital markets on the West Coast. DeClark was previously a managing director at Credit Suisse. Chris Cormier was also named Deutsche Bank’s head of technology equity capital markets. He joined the bank a decade ago.

Evernote, the seven-year-old, Redwood City, Ca.-based company whose note-taking app is used by more than 100 million people, has laid off about 20 employees in offices around the globe, reports the Verge. More here.

Doug Gilstrap has joined Technology Crossover Ventures as a venture partner in the firm’s New York office. Gilstrap was previously chief strategy officer for Ericsson in Stockholm and New York.

Abie Katz, who spent the last 2.5 years as an associate at Crunchfund, has left the outfit to join August Capital as an associate. Katz attracted some attention for leaving college to pursue a career in venture capital several years ago, beginning with Merus Capital, where he spent six months.

Groupon cofounder and CEO Eric Lefkofsky is reportedly the “mystery buyer” of a historic $19.5 million 15,800-square-foot mansion in Glencoe, Illinois that was purchased last summer and boasts a swimming pool and tennis courts, among other amenities. Business Insider has more here.


Job Listings

Glassdoor, the jobs site, is looking for a director of business development. The job is in Mill Valley, Ca.

Sapphire Ventures is looking for a director of business development. The job is in Palo Alto, Ca.



In 2014, a total of 504 venture capital financing deals were announced in the Greater China region, up 15 percent from a year earlier. Total transaction value reached $12.8 billion, up 212 percent compared to 2013, according to data tracker Preqin. China Money Network has more here.

Sequoia Capital, SAIF Partners and Accel Partners emerged as the most active venture backers of India-based tech companies last year, according to the research firms TOI and Tracxn. Times of India has more here.


Essential Reads

Challenged by upstarts, lenders try a new tack — cooperation.

Jeff Bezos bought Marc Lore’s company; now Lore is coming for him.



The big kahunas of surfboard design.


Retail Therapy

Perforated sneaks.



Yesterday, we also sent you to a creepy picture of famed director John Waters instead of a business analyst position at HarbourVest in Boston. Here’s the correct link.

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