StrictlyVC: February 24, 2015

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Top News in the A.M.

Apple is now more than double the size of Exxon — and everyone else.


A Team Player Strikes Out on His Own

Like many venture capitalists, Ashmeet Sidana watched his firm, Foundation Capital, grow smaller during his nearly nine-year tenure, narrowing from a $750 million fund closed in 2008 to a $282 million fund closed in 2013.

In some ways, its downsizing was inevitable. As the costs of starting both consumer-facing and enterprise startups has shrunk, the industry has largely become split among very small funds that can nurture these efficiently run startups, and very large funds that can help get the survivors either sold or taken public.

It left Sidana, who parted ways with Foundation in 2013, thinking about a big opportunity that he could chase with fewer dollars. Specifically, he began obsessing about the huge gulf between the best data centers — built by the likes of Amazon and Google, where one system administrator can manage 10,000 servers — and traditional enterprise data centers, where one administrator still sometimes manages just 25 to 50 servers.

Because those traditional enterprise data centers will never go away entirely, owing to privacy and security and latency concerns, and “because you have this radical efficiency on the other side,” entirely new companies will be created between the two, says Sidana.

It’s that belief that has driven a number of Sidana’s angel investments over the last half year, including in startups Signal Fuse and Menlo Security (both of which remain in stealth mode).

That thesis, along with Sidana’s track record – his past board seats include FreeWheel, acquired by Comcast for $350 million and Altor Networks, acquired by Juniper for $95 million – has also attracted the attention of institutional investors.

Indeed, this morning, Sidana is officially taking the wraps off his new firm, Engineering Capital, as well as its debut, $32 million fund, whose LPs include Foundation Capital founder Kathyrn Gould, investor-academic Steve Blank, and the fund of funds firm Cendana Capital. (We made brief mention of the fund in yesterday’s newsletter.)

Sidana hasn’t made any investments out of the fund yet, but he says that Engineering Capital plans to build a concentrated portfolio of between 12 to 15 companies across such sectors as storage, networking, management, and security. “Any company leveraging this trend in IT” is fair game, he says.

Sidana will also be the first, anchor investor in them all if he has his way. “I’ll lead the round, price it, and take a board seat, which is different from a lot of other enterprise funds that are making small investments,” he says, calling his a“ rifle shot versus a shotgun approach.”

Asked how he settled on his new brand, Sidana — who once ran product management for one of VMWare’s flagship products, and who plans to run his firm single-handedly for now — says Engineering Capital aims to represent “venture capital for engineers.”

He adds with a laugh, “My joke is to ‘engineer’ the capital for them.”


New Fundings

Chewse, a four-year-old, L.A.-based platform that makes it easier for offices to order meals from certain restaurants at pre-determined times, has raised $1.7 million in seed funding, including from Telegraph HillInnoSpring, 500 Startups, Chris Sacca, Ben Ling, Richard Chen and other angel investors. TechCrunch has more here.

GuideSpark, a seven-year-old, Menlo Park, Ca.-based company that provides employers with customizable video templates for conveying human resources information in a more digestible way, has raised $22.2 million in Series C funding led by Meritech Capital Partners, with participation from earlier backers IDG Ventures, New Enterprise Associates and Storm Ventures. The company has now raised $42.4 million to date, shows Crunchbase.

HomeLane, a seven-month-old, Bangalore, India-based company that boasts of integrated interior design and manufacturing capabilities that allow its customers to customize their homes, has raised $4.5 million in Series A funding led by Sequoia Capital, with participation from Aarin Capital. YourStory has more here.

Knowmail, a year-old, Tel Aviv, Israel-based developer of email-management software for businesses, has raised $1.2 million in seed financing from Plus Ventures, 2B Angels, AfterDox and INE Ventures.

LocoMotive Labs, a 2.5-year-old, Berkeley, Ca.-based developer of play-based educational apps for children with special needs, has raised $4 million in Series A funding co-led by SoftBank Ventures Korea and TAL Education Group. Earlier backers, including D3Jubilee, K9 VenturesKapor Capital, and NewSchools Venture Fund, also participated in the round. The company has now raised $4.6 million altogether, shows Crunchbase.

Mack Weldon, a four-year-old, New York-based company that makes “high-tech” socks, underwear, and undershirts, has raised $4 million in Series A funding from RiverPark Ventures, Bridge Investments and Lyrical Partners. The company has now raised $5.9 million altogether.

Metamarkets Group, a nearly five-year-old, San Francisco-based analytics platform for buyers and sellers of programmatic advertising, has raised $15 million in Series C funding from City National Bank, Data Collective, IA Ventures, Khosla Ventures, True Ventures, Village Ventures and individual investors. The company has now raised $43.5 million altogether, shows Crunchbase.

Prexton Therapeutics, a three-year-old, Geneva, Switzerland-based company that’s developing therapeutic compounds to treat central nervous system conditions including Parkinson’s disease, has raised 8.7 million euros ($9.8 million) in Series A funding from Sunstone Capital and Ysios Capital, with participation from earlier investor MS Ventures.

Roadster Online, a year-old, San Francisco-based company that promises to find great prices on new cars for customers, then deliver the car to their doors, has raised $1.8 million in seed funding from undisclosed sources, reports VentureWire.

Sikka Software, an 11-year-old, Milpitas, Ca.-based software-as-a-service company with a practice-management platform for dentists, optometrists, veterinarians and the like, has raised $5.5 million in Series B funding led by new investor Sierra Ventures, with participation from earlier backer ATA Ventures.

Space Time Insight, an eight-year-old, San Mateo, Ca.-based company whose analytics software aims to help companies in asset-intensive industries (like utility companies) make faster, better decisions, has raised $8 million in funding from the energy supplier E.ON SE and NEC Corp. The company has now raised $50 million altogether, including from EnerTech Capital, Novus Energy Partners, and Zouk Capital, shows Crunchbase.

Vigilant Biosciences, a four-year-old, Miami, Fl.-based company whose point-of-care and lab-based products help healthcare practitioners to more easily assess the risk of oral cancer, has raised $5.5 million in Series B funding from White Owl Capital Partners, venVelo, the Florida Institute for the Commercialization of Public Research, and earlier, unnamed investors. The company has now raised $7.8 million to date.



MaxPoint Interactive, a nine-year-old, Morrisville, N.C.-based SaaS platform that runs targeted digital marketing campaigns to drive in-store sales, yesterday announced plans to raise $75 million in an IPO by offering 6.5 million shares at between $10.50 and $12.50 per share. The company, backed by $11 million from Trinity Ventures and Madrona Venture Group, will be entering a public market that’s hasn’t been kind to ad tech since early last year.



Authy, a three-year-old, San Francisco-based startup with a two-factor authentication app, has been acquired by the cloud software service Twilio for undisclosed terms. The app will continue as a standalone service, but its capabilities will be added to Twilio’s API, reports Recode. Authy had raised $3.8 million from investors, including Y CombinatorCorazon Capital, Salesforce Ventures, StartCaps Ventures, and Data Collective.

Camel Audio, a 15-year-old, London-based company known for its range of plug-ins, synthesizers, effects, and sound libraries, appears to have been quietly acquired by Apple. MacRumors has the story here.

Heptares Therapeutics, an eight-year-old, Welwyn Garden, England-based clinical-stage biotechnology company that’s been developing treatments for Alzheimer’s and other diseases, has been acquired by Sosei Group, a Japanese biopharmaceutical company, for up to $400 million, if certain milestones are met. Heptares had raised at least $21 million from investors, including Takeda Ventures and Clarus Ventures, shows Crunchbase.

Kindermint, a two-year-old, Tampa, Fl.-based online resale store that specializes in gently used kids’ clothing, has been acquired by the six-year-old, San Francisco-based used-clothing retailer ThredUp for undisclosed terms. Kindermint appears to have raised a tiny seed round from an undisclosed source; ThredUp has meanwhile raised roughly $50 million from investors, including Upfront Ventures, Highland Capital Partners, Trinity Ventures, and Redpoint Ventures.



The rapper (and, more recently, startup investor) Chamillionaire is the newest entrepreneur-in-residence at L.A.-based Upfront Ventures. Partner Mark Suster explains why here.

The high-profile showdown between Kleiner Perkins Caufield & Byers and former Ellen Pao — who is suing the firm for $16 million for gender discrimination and retaliation — kicks off at PST this morning in San Francisco Superior Court. The San Jose Mercury News is promising readers a play-by-play here. Meanwhile, Fortune has posted both sides’ pre-trial briefs here.

James Proud, a 23-year-old entrepreneur with a new sleep tracking device called Sense, receives high praise in Wired, even if it’s “too soon to say whether Proud’s sleep monitor will develop into a credible success story.”

Troubled payday lender Wonga has just laid off 325 employees, sold off a unit of its business, and lost its chairman. More here.


Job Listings

IDG Ventures is looking to hire an associate. The job is in San Francisco’s Presidio park.



A typical billionaire has $3.1 billion. Here’s where most of them live.


Essential Reads

Digital natives still love books. “I can’t imagine reading Tocqueville or understanding him electronically,” says a junior at American University. “That would just be awful.”

Pebble thinks it can hold off the tech giants by going back to its Kickstarter roots with its new watch, called Time.



Ranked: The salary bump you can expect from a graduate degree, by major.

Mad Magazine’s best spoof ads.

The Googlifier.


Retail Therapy

AdVenture Capitalist.

Backpacks for photojournalists. (H/T: InsideHook)

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