StrictlyVC: March 6, 2015

Happy Friday, everyone! Hope you have a most wonderful weekend and we’ll see you back here in a few days.:) (Psst, web visitors, here’s an easier-to-read version of this morning’s newsletter.)


Top News in the A.M.

The Dow Jones Industrial average is about to welcome Apple, and to say good-bye to AT&T.

A host of the biggest companies in the world, including Amazon, Apple, Facebook and Google, have filed an amicus brief in the U.S. Supreme Court stating that all couples should share the right to marry.

Do not forget: Today, it’s Take Your Action Figure to Work Day, according to someone named Randall Ham.


Ben Thompson on What Xiaomi Gets Just Right

Ben Thompson, a Taipei, Taiwan-based writer with a sharp understanding of consumer tech, has attracted a loyal and growing base of readers to his one-man media company, Stratechery. Thompson has also become something of a thought leader in Silicon Valley over the last year, largely because of the perspective he enjoys from his perch halfway across the world.

Last night, at a San Francisco dinner hosted by the venture firm GGV Capital, Thompson — who’s in the U.S. for an Apple event this Monday — shared some of his thoughts with investors and entrepreneurs as they sipped wine and enjoyed a series of carefully prepared Cantonese dishes.

Among the topics raised was five-year-old Xiaomi, the fast-rising Chinese company that became the top player in China’s competitive smartphone market last summer, and the world’s third-largest phone maker. Thompson didn’t address the long-term prospects for Xiaomi, which raised $1.1 billion in funding at a stunning $45 billion valuation in December. But he did talk at some length about why he thinks it shouldn’t be underestimated. From his comments last night, edited lightly for clarity:

“Whether [I’m ‘long Xiaomi’] is a separate question from why I think the company is interesting.

Xiaomi is very highly valued right now, but they’re a company that a lot needs to go right for them to succeed. Then again, in 2012, if you said a lot would need to go right for them to get to X by 2015 — well, a lot did go right. They’ve executed very impressively to date.

Why they’re interesting as a company is that tech companies get so caught up in scale, and the efficiencies that come with them, that they tend to treat entire markets the same. Not Apple, which has demonstrated that you can definitely segment markets, [and not Xiaomi, which has done the same].

If you view the whole world as one market, you have this view that on one end, you have people who really love technology and will spend a lot on their phone, and you give them the highest-end sort of thing. And [you think that at the other end of the spectrum], you have someone who just doesn’t care, who walks into the AT&T store and buys whatever they’re told to buy and they get some crappy knock-off phone or whatever it might be.

But too many tech companies treat that [latter] person the same as the person in the developing country who is also buying a cheap phone. Yet they’re exactly the opposite. If you’re a young person and you’re interested in technology but you don’t have much money, you’re very different from someone who will just walk into a store [with no agenda]. What Xiaomi did was treat that person [like a sophisticated buyer]. ‘You want something that’s super customizable that you can dig into, and we’re going to meet you at a price point that’s approachable for you.’

It’s no wonder they just obliterated these other phone companies that are offering a knock-off of last year’s model at a low price. Like, which would you rather buy? A phone from a company that’s giving you what you want, or last year’s Samsung?

The low-income market is different, but it’s the same in that there are also geeks there who want something interesting and there are people who don’t care there.

I kind of feel like tech in general is too much in love with scale when often what’s interesting is at the margins — identifying a niche and serving it and figuring out how to scale it later. Too many companies think about scale from day one, and they end up making a mediocre product that tries to serve everyone and does it very poorly.”

Ballou PR

New Fundings

Evidation Health, a new, Menlo Park, Ca.-based data and analytics company that aims to quantify and validate the savings created by digital health tools, has raised $6.2 million in Series A funding led by GE Ventures, with participation from Asset Management Ventures and Rock Health. Xconomy has more here.

Namely, a three-year-old, New York-based HR software company, has raised $11 million in funding led by Matrix Partners, with participation from earlier backers True Ventures, Lerer Hippeau Ventures, Greenspring Global Partners, and Vayner/RSE. The company has now raised $32.8 million altogether.

Nexus eWater, a 15-year-old, Canberra, Australia-based developer of a home water recycler, has raised $2.1 million in Series A funding led by Thomas Reeves Hitchner, a former GP with QuestMark Partners. Other participants in the round include ANU Connect Ventures, Sydney Angels, and the Sydney SideCar Fund.

Studypool, a year-old, Mountain View, Ca.-based online marketplace that connects students with tutors on a per question basis, has raised $1.2 million in seed funding led by Lerer Hippeau Ventures, with participation from 500 Startups, Great Oaks Venture Capital, and numerous individual investors, including Fabrice Grinda. TechCrunch has more here.

Swiftype, a three-year-old, San Francisco-based company that builds customizable search software for websites and apps, has raised $13 million in Series B funding led by earlier investor New Enterprise Associates. The company has now raised $22.2 million to date, including from Data Collective, Kleiner Perkins Caufield & Byers, Ignition Partners and Y Combinator program.

Trucker Path, a 1.5-year-old, San Jose, Ca.-based startup whose mobile platform helps shippers find available spaces on trucks, has raised $1.5 million in early-stage funding from Renren, the Chinese social-networking company. The company has raised $3 million to date.

Visually, a four-year-old, San Jose, Ca.-based startup whose platform for data visualization and infographics connects designers with clients to create content, has raised $3.3 million in new funding led by Crosslink Ventures, with participation from 500 Startups, Mitch Kapor Foundation, and SoftTech VC. All were previous investors. The company has now raised $15.7 million altogether.


New Funds

G20 Ventures, a new Boston-based venture firm founded by former Advanced Technology Ventures veterans Bob Hower and Bill Wiberg, has closed its debut fund with $63.3 million. Boston Business Journal has more here.

Sandwich Video, Silicon Valley’s favorite corporate video maker, has launched a new venture called Sandwich Fund. Created in concert with Detroit-based Ludlow Ventures, the idea is to front the full costs of a Sandwich Video, which typically costs $100,000, in exchange for $100,000 in equity. “It’s certainly not going to be every client that we do a video for — maybe 10 per year if everything goes well,” Sandwich founder Adam Lisagor tells Forbes. “But there’s going to be 10 companies where it’s a slam dunk.”

Speedinvest, a four-year-old, Austria-based venture firm focused on early-stage European startups, has held a first close on its second fund with 58 million euros ($63 million). Partner Marcel van der Heijden tells StrictlyVC the firm expects the fund to eventually close with more than $100 million — a pretty substantial step up from its 10 million euro debut fund. Among the firm’s four exits to date is Wikidocs, acquired by Atlassian last fall. Speedinvest has two partners in Silicon Valley: van der Heijden and Erik Bovee.



There have been 26 IPOs priced so far this year, a -38 percent change from last year.



AltSchool, a budding network of schools backed by Andreessen Horowitz and others, has announced a slew of high-profile hires, including CTO Bharat Mediratta, who was previously Google’s Distinguished Engineer in charge of the Google homepage and search results experience; Michael Ginty, previously head of global security at Uber, who has been hired as AltSchool’s head of safety; Susan Yoon, who joins the company as its VP of finance from the ad tech company Rocket Fuel, where she was VP of corporate development; and Rajiv Bhatia, a former studio GM at Zynga who is now AltSchool’s VP of product. StrictlyVC talked with AltSchool founder (and former Googler) Max Ventilla in January about ballooning demand for AltSchool’s personalized learning approach.

Some key players in the gender discrimination case against Kleiner Perkins Caufield & Byers were cast in an unflattering light yesterday during testimony from an outside lawyer who was hired as an investigator by the firm. More here.


Job Listings

The Omidyar Network is looking to fill a senior position to help with its impact investing. The job is in Washington, D.C.

Twitter is looking to add a manager to its newly formed “business insights” unit. The job is in San Francisco.



Dropbox’s most recent, reported valuation of $10 billion is irrational, argues CB Insights. Here’s its case against it.

Meanwhile, TechCrunch looks at the “trillion-dollar gold mine” that is alternative lending.


Essential Reads

In a lab shut off from communication with the outside world, Apple has given some companies special early access to Apple Watch. More here.

“Shazam is already a verb. We want to expand the universe of what you can Shazam.”

In an Uber, as with a cab, it’s not always the driver who’s the threat.



It’s true. This is a good ad.

Fifteen stunning entries from Smithsonian Magazine’s annual photo contest.

A dozen real-life places that may or may not be supervillian lairs.


Retail Therapy

Design your dream Apple Watch.


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