StrictlyVC: March 18, 2015

Hi, everyone. Before we jump into the news, we want to take a moment to thank the many of you who’ve bought tickets to our May event in San Francisco! We’re so excited, we wish it were sooner. Apparently, so does one mystery attendee, who we’re told turned up last Friday night, thinking the program was March 13 and not May 13. (Don’t feel bad. We once showed up at the airport the wrong weekend.)

In fact, because of interest in the event, we’ve moved it to a new, larger home, courtesy of the very fine folks at Galvanize, an airy, modern work space in downtown San Francisco. (You can check out lots of photos here.)

If you have already purchased a ticket, expect a separate email about the venue change. (It’s just four blocks from the gallery where we’d originally planned to host things.) If you have not purchased a ticket, we hope you’ll get one soon. It’s going to be fun. Our speaker lineup, if you’ve missed it, is right here.


Top News in the A.M.

French police reportedly raided Uber’s offices on Monday as part of an investigation into the company’s low-cost UberPop carpooling service. They grabbed documents, emails, and smartphones on their way out, too. The Verge has more here.


For Jeff Clavier of SoftTech VC, a New Partner, and Some Déjà Vu

Beginning next month, the Bay Area venture firm SoftTech VC will undergo a management change, with partner Charles Hudson beginning a transition out of the firm to start his own fund, and a new venture partner, Andy McLoughlin, who cofounded the enterprise collaboration startup Huddle, joining full time to focus on business-to-business opportunities.

For SoftTech founder Jeff Clavier, it must feel like a bit of déjà vu. It was 11 years ago, working for the venture arm of Reuters, that Clavier decided to gamble on himself and strike out on his own. SoftTech has since grown from a one-man operation into a well-regarded early-stage investment firm with more than 160 investments to its name and four funds, including an $85 million pool that it closed on last year.

As the firm has evolved, so has its mandate. “Something like 500 companies now ping us ever quarter, and we invest in four or five,” Clavier says of the firm, whose average check size today is $750,000. Not only does SoftTech “have the luxury of trying to get the right level of signals before we invest,” he adds, but the firm’s LPs expect it.

That evolution has made it harder for Hudson to chase the nascent ideas about which he’s most passionate, acknowledges Clavier, who recruited Hudson into SoftTech as a venture partner in 2010 and promoted him to partner in 2013. In fact, says Clavier, Hudson decided several months ago to raise his own, “pre-seed” fund, an effort that Clavier says he fully supports. (Owing to SEC rules, Hudson can’t talk yet about that fund, but we’ve learned that its brand, for now at least, is Precursor VC.)

It will be a gradual move out of SoftTech for Hudson, who is expected to manage his startups through the end of the current fund’s investing period, in the summer of 2016.

In the meantime, notes Clavier, McLoughlin brings SoftTech far more expertise in enterprise startups as it looks to shift more of its capital from business-to-consumer startups to businesses catering to other businesses.

Not only has McLoughlin been scaling his own enterprise business first-hand at Huddle (which remains privately held), but he has made more than 35 investments as an angel investor over the last five years, many of them on exactly the types of companies that SoftTech has grown more interested in funding. Among those bets is Apiary, a San Francisco-based company whose tools help companies build, test, monitor, and document web APIs; and PipeDrive, a maker of sales pipeline software that’s based in Menlo Park, Ca.

“Charles and I had in mind to bring in a new investment professional [who], on the one side is a SaaS cofounder who has seen different levels [of growth] over many years, and [on the other], is someone who can help set up sales, marketing, and customer success [for our startups],” says Clavier.

“From that standpoint — and many others — Andy is a score.”


New Fundings

Advanced Catheter Therapies, a 6.5-year-old, Chattanooga, Tn.-based medical device company with a portfolio of catheter technologies, has raised $4.5 million in Series B funding from TAM Ventures, the venture arm of Toray Industries, a chemical company in Tokyo. The company has raised at least $9.9 million to date, shows Crunchbase.

BBOXX, a five-year-old, London-based company that designs and constructs solar kiosks in rural communities throughout Africa, has raised $3 million in Series B funding from Bamboo Finance and the DOEN Foundation. The company has now raised $4.9 million altogether, shows Crunchbase, including from Khosla Ventures.

Clearpath Robotics, a 5.5-year-old, Kitchener, Ontario-based startup offering light industrial bots, has raised $11.2 million in funding led by RRE Ventures, with participation from iNovia Capital. Venture Capital Dispatch has more here.

Clue, a two-year-old, Berlin-based fertility cycle tracking app, has raised $2 million in new funding, including from LVMH Moët Hennessy – Louis Vuitton and numerous angel investors. The company has raised $3 million to date.

Collective Health, a 1.5-year-old, San Mateo, Ca.-based company that automates self-insurance for small businesses, has raised $38 million in Series B funding led by Founders Fund and New Enterprise Associates, with participation from Formation 8, Redpoint VenturesRRE Ventures, Subtraction Capital and Rock Health. The company previously raised two undisclosed amounts of funding.

Darktrace, a two-year-old, U.K.-based cyber security startup backed by Autonomy founder Mike Lynch’s Invoke Capital, has raised $18 million in new funding at a valuation of $80 million from Invoke, Talis CapitalHoxton Ventures and unnamed private individuals. TechCrunch has the story here.

DoorDash, a two-year-old, Palo Alto, Ca.-based on-demand delivery service for local restaurants, has raised around $35 million in new funding at a valuation of nearly $600 million led by Kleiner Perkins Caufield & Byers, reports Fortune. The company has now raised $54.7 million altogether, including from Sequoia Capital, CRV, Khosla VenturesPejman Mar Ventures and Ted Zagat.

Drivestream, a 13-year-old, Sterling, Va.-based company that helps businesses integrate cloud applications, has raised $5 million in funding from the new venture arm of India-based enterprise company Wipro.

FiftyThree, a four-year-old, New York-based company that makes mobile tools like Paper — an app that enables users to sketch, write, draw, outline and color on the iPad — has raised $30 million in new funding led by New Enterprise Associates. The company has now raised $45.1 million altogether, including from Thrive Capital and entrepreneur Jack Dorsey. Xconomy has more here.

Health Catalyst, a seven-year-old, Salt Lake City, Ut.-based company focused around healthcare data warehousing services, has raised $70 million in new funding led by earlier investor Norwest Venture Partners, with participation from other insiders, including Sequoia Capital, Kaiser Permanente Ventures, Sorenson Capital, CHV Capital and Partners HealthCare. New investors Sands Capital Ventures, Tenaya CapitalEpic Ventures and Leavitt Equity Partners also participated. The company has now raised $170 million altogether.

Help Scout, a four-year-old, Boston-based maker of customer support software, has raised $6 million in Series A funding led by Foundry Group, with participation from CommonAngels Ventures. The company had previously raised about $1.2 million in seed funding.

Honest Dollar, a five-month-old, Austin, Tx.-based financial services startup that aims to make it easier for small businesses to offer retirement benefits to their employees, has raised $3 million in seed financing led by Expansive Ventures, with Core Innovation Capital and Formation 8 also participating. TechCrunch has more here.

Initiafy, a three-year-old, Dublin, Ireland-based job training platform specifically designed for contractors and short-term workers, has raised $1.5 million in seed funding, including from Delta Partners Group, ACT Venture Capital, and angel investor Leslie Buckley. The company has raised two seed rounds previously. More here., an 11-year-old, Provo, Utah-based cloud-based sales acceleration platform, has raised $60 million in funding led by Salesforce Ventures, with participation from Microsoft and earlier backers Polaris Partners, Kleiner Perkins Caufield & Byers, Hummer Winblad Venture Partners, U.S. Venture Partners, and Zetta Venture Partners. The company has now raised $143 million, shows Crunchbase.

nCino, a three-year-old, Wilmington, N.C.-based company whose web-based operating technology serves banks and financial-services companies, has added an undisclosed amount of funding to its Series B round from Salesforce Ventures. Last month, the company had closed its Series B with $29 million led by Insight Venture Partners, with participation from earlier backers Wellington Management, former Morgan Stanley chairman and CEO John Mack and Promontory Financial Group founder and CEO Gene Ludwig. Forbes wrote about the company last month.

Playbuzz, a 2.5-year-old, New York-based company behind a free authoring platform that enables any editor or contributor to author a new item on their topic of choice, then embed the item on their site, has raised $16 million in Series B financing led by 83North, with additional investment from Saban Capital and earlier backers Carmel Ventures and FirstTime Ventures. The company, founded in Tel Aviv, had previously raised $3.8 million from investors.

Red Rock Biofuels, a 3.5-year-old, Fort Collins, Co.-based renewable biofuels company, has raised an undisclosed amount of new funding from Flagship Ventures. Xconomy has more here.

Uxin, a four-year-old, Beijing, China-based online auction platform for used cars in China, has raised $170 million from a syndicate of investors, including the search engine company Baidu, the private equity group KKR, and Coatue Management. Dealbook has more here.



Sean Cook, who announced last week he was leaving Twitter after five years, is planning to join messaging startup Layer as head of product, reports Recode.

Apple CEO Tim Cook talks with Fast Company about the company and his friendship with Steve Jobs, whose office has apparently been left untouched since his death in 2011. “I haven’t decided about what we’ll do there. But I wanted to keep his office exactly like it was. I was in there with Laurene [Powell Jobs, Steve’s wife] the other day because there are still drawings on the board from the kids.”

General partner Randy Komisar of Kleiner Perkins Caufield & Byers took the stand yesterday in the Ellen Pao trial, denying that he ever made romantic gestures toward Pao and testifying that Pao had a tendency to “politic behind my back.” Komisar also called Pao’s behind-the-scenes complaints about Komisar’s seat on the board of the now-public company, RPX (a company Pao has said she convinced Kleiner to fund), a “betrayal” and “unforgivable.” Venture Capital Dispatch has more here.

Yesterday, to the surprise of his many customers, Tesla co-founder and CEO Elon Musk said at a conference that when true driverless technology hits the road, society will need to “outlaw driving cars” because error-prone humans will be deemed too dangerous. Hours later, Musk tweeted: “Tesla is strongly in favor of people being allowed to drive their cars and always will be. Hopefully, that is obvious. However, when self-driving cars become safer than human-driven cars, the public may outlaw the latter. Hopefully not.”

Oke Okaro, Bloomberg’s head of mobile, has left the company to pursue a new venture, though no one knows yet exactly what that is. Business Insider has the story here.



Google Capital, the growth equity unit of the search giant, is looking to hire an associate. The job is in Mountain View, Ca.



Pitchbook has run some numbers, and says that of the 32 funds that closed funds in the range of $250 million and $500 million in 2007, the best performing of the bunch — based on net IRR — are ARCH Venture Fund VII, Shasta Ventures II, The Column Group Fund I, and Third Rock Ventures Fund I. The 32 funds have distributed, on average, $143.31 million.

A growing discrepancy between public and private valuations of enterprise software companies is exposing late-stage investors to greater risks, suggests new research from Barclays. Venture Capital Dispatch has more here.

Y Combinator says it has now funded 842 companies to date, and those startups have raised upwards of $3 billion in investment and have a collective market cap of more than $30 billion. TechCrunch has the rundown here.


Essential Reads

You can now send money on Facebook. Here’s what’s in it for Mark Zuckerberg & Co.

Why the pricing strategy for the Apple Watch is “insanely smart.”

A bill introduced recently by a California state senator could end the University of California‘s ability to keep private how its individual venture investments are doing.



Here’s everything that’s hiding in your cup of coffee.

Welcome to Seoul, the world capital of plastic surgery.


Retail Therapy

Rethinking the Land Rover Defender.

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