StrictlyVC: February 3, 2015

Happy Tuesday, everyone! Looks like we have a big, fat fight on our hands (see below); grab your popcorn.


Top News in the A.M.

Google is preparing to offer its own ride-hailing service, reports Bloomberg. This is a Very Big Deal for numerous reasons, as many readers will know. First, Google Ventures is among the biggest investors in the popular ride-hailing service Uber, with Google’s chief legal officer, David Drummond, even sitting on Uber’s board. (Drummond wouldn’t be the first fox in the henhouse. Many are already drawing comparisons to Google chair Eric Schmidt sitting on the board of Apple — right up to the point when Google launched Apple’s biggest competitor, Android.)

Putting aside what the development means for Google Ventures (and its reputation with entrepreneurs), it looks to put Uber in a serious bind technologically. As Bloomberg notes, Uber’s smartphone app for drivers and riders is “based on Google Maps, which gives Google a fire hose of data about transportation patterns within cities. Uber would be crippled if it lost access to the industry-leading mapping application, and alternatives . . . are widely seen as inferior.”

Uber’s product chief, Jeff Holden, tells the WSJ that Uber has been working on its own mapping technology “for some time” and is now accelerating development.

A “person familiar with the matter” further tells the WSJ that the “news that Google is developing an app to rival Uber has been blown out of proportion,” that “a Google engineer has been testing an internal app that helps Google employees carpool to work,” and that the app “isn’t associated with the company’s driverless cars program.”

Just in case, Uber has quietly begun building a robotics research lab in Pittsburgh, Pa., home to Carnegie Mellon University’s Robotics Institute, which Uber has “cleaned out,” says TechCrunch. To wit, Uber has reportedly hired more than 50 senior scientists from the university’s affiliated research entity and the university itself to spin up its own autonomous taxi fleet. Uber’s seeming message to Google, which is famously developing self-driving cars: Two can play this game.


Bolt Heads West, with $25 Million to Spend on Hardware

Move over Bay Area hardware outfits. There’s a shiny new player in town called Bolt, and it has some creative ideas about how to win over hardware entrepreneurs and co-investors alike.

A new, $20 million machine shop on a pier along San Francisco’s eastern waterfront should help. So should a $25 million new venture fund, care of some powerful limited partners, including Cisco, Logitech, Autodesk, and the robotics-focused venture firm Grishin Robotics.

It’s a big step up from its start in Boston, where Bolt was founded two years ago with just $4 million — money it has stretched across 18 companies. Each has received an initial check of around $100,000, engineering and business help, and unfettered access to Bolt’s 10,000-square-foot downtown digs, replete with metal-working, plastics, electronics, wood-working and 3D printing equipment. In exchange, Bolt has taken stakes in the companies ranging from 8 to 15 percent in common stock.

Now, the firm is super-sizing the operation. For one thing, founder Ben Einstein – an amiable design engineer who’d previously run a design consultancy — says Bolt will begin writing initial checks in the neighborhood of $500,000.

Bolt, which is co-managed by former Atlas Venture partner Axel Bichara, is also hiring a team of 10 full-time engineers in San Francisco to work with the startups it funds. “In our [new] machine shop, you’ll find mechanical, electrical, embedded, prototyping, manufacturing – all types of engineers whose sole job is to help our portfolio companies,” says Einstein. “Bolt is a little like if IDEO [the industrial design company] and a venture firm had a baby,” he adds.

A third “special partner,” Scott Miller, who founded and runs Dragon Innovation, a Cambridge, Ma.-based manufacturing services firm, makes Bolt’s proposition all the more compelling. Dragon is the manufacturing partner of many young hardware companies, and any company that Bolt invests in receives automatic access to those same, well-oiled services.

Given so many bells and whistles, it’s easy to imagine why top co-investors might see Bolt as a useful syndicate partner. Now, the young firm just needs to build its track record.

It’ll happen through connected devices and, more specifically, the subscription businesses that come with them, says Einstein. Petnet, among Bolt’s portfolio companies, is a prime example of how. Though Petnet makes a pricey “intelligent dog feeder” that alerts pet owners when their pet has eaten, it also sends those customers fresh dog food via a monthly service plan.

Occasionally, companies create breakout brands without a subscription business, Einstein notes, but “those are incredibly rare, and you can typically only dominate a category for a year or 18 months.”

After that, he says, “companies with deeper pockets start to manufacture it faster, cheaper and better than you. Then you’re in trouble.”


New Fundings

AnyPerk, a 2.5-year-old, San Francisco-based company that provides employee perks like discounts on fitness, entertainment, and travel, has raised $8.5 million in Series A funding led by DCM Ventures, with participation from earlier backer Digital Garage. The company has now raised roughly $13 million altogether, it says.

CampusQuad, a two-year-old, San Carlos, Ca.-based mobile engagement platform designed to connect collect students with extracurricular activities and university services, has raised $5 million in Series A funding led by ICG Ventures. The company has raised $6.9 million to date, shows Crunchbase., a 4.5-year-old, Pune, India-based online shopping store offering a range of baby care products and toys, has raised $26 million in Series D funding led by Valiant Capital Partners, with earlier backers IDG Ventures India, Vertex Venture Holdings, and SAIF Partnersparticipating. The company has raised $55 million altogether, shows Crunchbase.

FiscalNote, a two-year-old, Washington, D.C.-based company that uses artificial intelligence to predict the outcome of legislation, has raised $10 million in new funding led by the Chinese social network Renren. The funding comes just four months after the company announced $7 million in funding led by Visionnaire Ventures, with AME Cloud Ventures, New Enterprise Associates, Winklevoss Capital, Enspire Capital, Green Visor Capital, Middleland Capital and individual investors participating. The company has raised now raised $18.2 million to date.

Guardant Health, a two-year-old, Redwood City, Ca.-based company that makes a biopsy-free blood cancer screening test, has raised $50 million in Series C funding led by Lightspeed Venture Partners, with participation from Formation 8 and earlier backers Khosla Ventures and Sequoia Capital. The company has now raised roughly $90 million altogether, including from investor Bobby Yazdani and Pejman Mar Ventures.

KnCMiner, a 1.5-year-old, Stockholm-based bitcoin mining company that’s being sued by some of its customers, has raised $15 million in Series B funding led by Accel Partners, with participation from CGP Bullhound, angel investor Martin Wattin, and earlier backer Creandum. The company has now raised $29 million altogether. Venture Capital Dispatch has much more here.

Pley, a two-year-old, San Jose, Ca., that rents Legos via monthly subscriptions (it then cleans the pieces between rentals), has raised $10 million in new funding led by Sozo Ventures. Earlier backers FloodgateCorrelation Ventures, Maven Ventures and Allegro Venture Partners also joined the round, which brings the company’s funding to $16.8 million.

Revinate, a 6.5-year-old, San Francisco-based company whose software-as-a-service platform helps hotels engage with guests and collect their feedback, has raised $15.3 million in Series B funding from new investors Industry Ventures, Northgate Capital, and Tenaya Capital, along with earlier backers Benchmark, Formation 8, Tao Capital Partners, and others. The company has now raised $30.5 million altogether, shows Crunchbase.

Wave Life Sciences, a two-year-old, Boston-based company that develops nucleic acid therapeutics, has raised $18 million Series A funding led by RA Capital Management and Kagoshima Shinsangyo Sosei Investment, with participation from earlier investor SNBL Ltd. Xconomy has more here.

Yumist, a three-month-old Gurgaon, India-based online food delivery startup, has raised an undisclosed amount of seed funding from Orios Venture Partners. The company was founded by Alok Jain, former CMO at Zomato. The Economic Times has more here.

Zhaosuliao, an eight-month-old, Guangzhou, China-based online platform that matches buyers and sellers of plastic, has raised $20 million in Series A funding from co-led by IDG Capital Partners and QiMing Venture Partners, with participation from Matrix Partners China and angel investor Li Zhujie. China Money Network has more here.


New Funds

The streaming video company Netflix is planning to offer $1 billion in senior notes, proceeds from which it plans to use for “general corporate purposes” that may include content acquisitions. TechCrunch has more here.

OrbiMed Advisors, the 25-year-old, New York-based investment firm, has raised $924 million for a fund devoted to health-care royalty and credit investments, up from the $600 million the firm raised for its first royalties vehicle in 2011. The firm had raised a separate, $325 million, fund last fall to back health care companies in Asian nations. (That, too, was significantly bigger than its predecessor. OribMed’s debut Asia fund closed in 2008 with $182 million.)



Invitae, a 4.5-year-old, San Francisco-based genetic diagnostics company that registered to go public last month, has estimated it will sell 5.35 million shares at between $13 and $15 per share, raising roughly $75 million. At the midpoint of the estimated range, the company would be valued at about $417 million. Invitae has raised roughly $200 million from private investors. According to its S-1, its biggest institutional shareholders include Baker Brothers Life Sciences, which owns 20.6 percent of the company; BlackRock, which 17 percent; Thomas, McNerney & Partners, which owns 15.2 percent; and Genomic Health, which owns 9 percent.



DataStax, the five-year-old, Santa Clara, Ca.-based commercial face of the open source Apache Cassandra database, has acquired the open source graph database company Aurelius for undisclosed terms. DataStax has raised roughly $190 million from investors, including Lightspeed Venture Partners, Crosslink Capital, Next World Capital and investor Salil Deshpande, among others. Aurelius, launched in Oakland, Ca., last year, appears to have been bootstrapped.



Jeff Diehl, head of investments at Adams Street Partners, has been promoted. Effective July 1, Diehl becomes the firm’s managing partner, with longtime CEO Bon French shifting into the role of company chairman. Diehl joined Adams Street in 2000. He’d previously worked as a principal at the Parthenon Group.

Harry Heymann, Foursquare‘s original chief technical officer has left the company after more than five years, reports The Verge. Heymann — who formerly worked with Foursquare founder Dennis Crowley at his last company, Dodgeball — joined Foursquare in 2009. He’s the latest in a string of top Foursquare executives to leave the company as it pivots from a location-based social network into a Yelp-like local search engine, notes The Verge.

Yoky Matsuoka, formerly Nest Labs’s VP of technology , announced yesterday in her very first tweet that she’s joining the “flock” at Twitter as its VP of technology and analytics. Matsuoka was long a professor (assistant, then adjunct) at Carnegie Mellon University. She also spent one year as Google’s Head of Innovation.

Ellen Pao, a former partner at Kleiner Perkins Caufield & Byers who is suing the venture capital firm for gender discrimination and retaliation, has asked for $16 million in damages, it emerged in a related hearing yesterday. Now Kleiner is trying to learn how much Pao stands to make from Reddit, her employer of the last two years, and whether that amount should offset any potential damages. Reddit has said it’s willing to provide Kleiner with Reddit’s private valuation but not the details of Pao’s pay package. Venture Capital Dispatch has the story here.

Yesterday, Pao’s camp was also granted permission to question former colleague Aileen Lee about a dinner at former Vice President Al Gore’s apartment that only male members of Kleiner attended. They’ve also been granted permission to ask about an instance in which Pao’s attorney claims Lee was not offered a partnership in one of the firm’s funds in 2012. Lee left the firm that same summer to found her own firm, Cowboy Ventures. Kleiner quickly signed on as an LP.

Alec Saunders has joined Microsoft Ventures as principal technical evangelist to work with startups in Canada. He was formerly VP of developer relations at BlackBerry.


Essential Reads

Twitter is rolling out plans for a new revenue stream: Twitter ads that don’t appear on Twitter.



A free diver rides an underwater ocean current.

Matt Malone, professional dumpster diver.


Retail Therapy

Bluewire, to record conversations from your phone or apps like Skype.

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