StrictlyVC: March 27, 2016

Oh, how we love Fridays! Have a great weekend, everyone. See you Monday morning.

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Top News in the A.M.

Last week, French police reportedly raided Uber‘s offices in Paris. Yesterday, it was Dutch authorities barreling their way into the Amsterdam offices of the mobile car-booking company. More here.

BlackBerry just reported a surprise profit for the fourth quarter, but its revenue continues to crater.

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A Startup Takes on Rakuten

Industry watchers are well-aware that Rakuten, the Japanese e-commerce giant, has made a wave of investments in U.S. startups in recent years as it looks to enhance its portfolio of technologies, acquiring Buy.com, Slice and eBates and making big bets on Pinterest and Lyft, among other companies.

According to Ryan Koonce, the founder and CEO of San Francisco-based Superpoints, Rakuten is also making a name for itself as a company that willfully disregards trademarks and intellectual property. Koonce’s bootstrapped, six-year-old online loyalty rewards company filed a lawsuit yesterday against the $23 billion conglomerate, accusing it of trademark infringement, unfair competition, and unfair business practices.

At issue, says Koonce, is Rakuten’s use of “Super Points” in the marketing of its own, newer loyalty rewards program, despite a ruling by the U.S. Patent and Trademark Office that denied Rakuten’s attempts to trademark the language on the grounds that there was likely to be confusion with Superpoints’s trademark. Koonce only learned of the undertaking after being served documents that Rakuten was trying to have Superpoints’s registration canceled.

Koonce says he reached out to Rakuten numerous times afterward, including providing someone in Rakuten’s marketing department with Superpoints’s deck to show that Superpoints would be willing to work with Rakuten. “We wanted to see if there was interest in talking about how we could turn lemons into lemonade,” he says.

The New York-based representative said the deck would be sent to Japan, says Koonce, adding, “We never heard back.”

Rakuten did not respond to a request for comment yesterday.

For Koonce, his dispute with Rakuten isn’t a trivial matter. Koonce says he has spent “many long nights and time away from my wife and kids trying to build the best site I can. I also have a significant percentage of my net worth tied up in the company.”

Competing with a web giant over his trademark was something that never occurred to Koonce, who has founded a number of startups over the years, including the social media marketing company Popular Media, which was funded by Sequoia Capital and acquired in 2010.

That’s partly because it doesn’t happen very often in Silicon Valley, where people tend to play nice to preserve their relationships. But a trademark attorney at one of Silicon Valley’s largest and most-respected law firms also calls it “unusual for a big, sophisticated company to take on a little guy” because it doesn’t make good business sense. “The likelihood of confusion would be a deterrent for most honorable companies, because you don’t want to expose your shareholders to a liability.”

Adds the attorney, who asked not to be named but doesn’t know or represent Koonce: “This sounds like an exceptional situation to me . . . Even though [Koonce] may just be one guy, he has legal rights, and he can [sue] a second comer who takes [his brand].”

If there’s a silver lining for Koonce, it’s that he looks well-positioned to win his case — or at least a settlement. Because he has been using his brand since 2009 and further received trademark approval for it back in 2011, he should “have a presumption of national rights” in the U.S., says the attorney. (Though generally, trademark rights are territorial, meaning companies in different countries can have the same trademark, those national borders mean less in the Internet age, he says.)

Companies of all sizes generally have an incentive to negotiate a resolution sooner than later, too. “Even a company with trillions of dollars has budgets and has to rationalize economic decisions,” says the attorney. “No one wants to throw money and time and resources into litigation.”

In the meantime, Koonce is thinking about crowd-funding his legal fees if it becomes necessary. “The thought of fighting with a $20 billion conglomerate like Rakuten is not something I’d wish on my worst enemy. But I have no choice,” he writes in an email.

“It wears on you,” he adds. “The only way to make it is through sheer grit and tenacity.”

Fortunately, he says, “I have that in spades.”

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New Fundings

Amplience, a seven-year-old, New York-based content marketing startup, has raised $10.5 million in Series B funding led by earlier backer Octopus Investments, with participation from Northstar Ventures and Silicon Valley Bank.

Artsy, a six-year-old, New York-based online resource for art collecting and education, has raised $25 million in Series C funding led by the private equity firm Catterton, with participation from earlier backers Thrive Capital, IDG Capital Partners and the Rockefeller family. The company has raised roughly $51 million to date.

Aryaka, a 6.5-year-old, Milpitas, Ca.-based company that sells its cloud-based WAN optimization and application-acceleration platform as a service, has raised $16 million in funding led by Nexus Venture Partners, with participation from earlier backers, including InterWest PartnersMohr Davidow Ventures, Presidio Ventures and Trinity Ventures. The company has now raised roughly $100 million altogether, shows Crunchbase. Venture Capital Dispatch has more here.

ChowNow, a three-year-old, Venice, Ca.-based food ordering startup that provides restaurants with custom online ordering tools and white label restaurant apps, has raised $10 million in new funding led by Upfront Ventures, with participation from Steadfast Venture Capital, Daher Capital, and Karlin Ventures. The company has raised $17.7 million altogether, shows Crunchbase.

Dream Payments, a year-old, Toronto, Ontario-based mobile-payments startup, has raised $6 million in funding from Blue Sky Capital, Real Ventures and Rouge River Capital.

Gelesis, an eight-year-old, Boston-based company that’s developing orally administered capsules that expand in the stomach when taken with water to induce weight loss, has raised $22 million financing from unnamed new and previous investors. The company has now raised $56.2 million altogether, shows Crunchbase.

Magic, a month-old, Mountain View, Ca.-based delivery service, is raising $12 million in Series A funding at a $40 million pre-money valuation led by Sequoia Capital, reports TechCrunch. Magic lets users text a single number to have things delivered on demand; it operates atop other delivery services, such as Postmates and Instacart.

NGM Biopharmaceuticals, an eight-year-old, South San Francisco-based drug discovery company developing biotherapeutics for the gastrointestinal endocrine system, has raised $57.5 million in Series D funding led by new and earlier backers, including The Column GroupProspect Ventures, Tichenor Ventures and Topspin Partners.

PhishMe, a four-year-old, Leesburg, Va.-based anti-phishing startup, has raised $13 million in new funding led by earlier backer Paladin Capital Group, with participation from new investor Aldrich Capital Partners. The company has now raised just north of $15 million, it says.

Pleek, a months-old, Paris-based picture messaging app that allows users to communicate via images, has raised $600,000 in seed funding led by Partech Ventures, with participation from angel investors, including rap star Sean Combs (“Diddy”). TechCrunch has more here.

Quickplay Media, a 12-year-old, Toronto, Ontario-based online video services company, has raised $45.7 million in growth funding from Madison Dearborn Partners, Difference Capital Financial, and Orix Ventures.

Slack, the San Francisco-based real-time messaging company, is raising $160 million in new funding that values the company at $2.76 billion, reports the Wall Street Journal. The round, which will include new investors Institutional Venture Partners, Horizons Ventures, Index Ventures and DST Global, is expected to close in the next few weeks, says the report. Slack had previously raised $180 million from investors, including Accel Partners, Andreessen Horowitz, Google VenturesKleiner Perkins Caufield & Byers and Social+Capital Partnership.

View, an eight-year-old, Milpitas, Ca.-based maker of electronically tinting window glass, is raising as much as $100 million in new funding at “about $750 million pre-money” valuation, reports Venture Capital Dispatch.

Waygum, a two-year-old, Dublin, Ca.-based end-to-end mobile app platform for industrial connected devices, has raised $1.5 million from Navitas Capital and the corporate venture arm of Tyco International.

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New Funds

AKT IP Ventures, a months-old, Washington, D.C.-based incubator, said it has launched a fund to turn patents into businesses and it’s targeting $20 million for the effort. More here.

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Exits

DoublePositive, an 11-year-old, Tempe, Az.-based online marketing company, has been acquired by the billing outsourcing and customer-communications company Output Services Group for undisclosed terms. According to Crunchbase, DoublePositive had raised $7.3 million from investors over the years, including Hamilton Investment PartnersSouthern Capitol Ventures, Outcome Capital, and The Grosvenor Funds.

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People

Salesforce CEO Marc Benioff has canceled all his company’s events in Indiana after its governor signed into law a bill that makes it legal for individuals to use religious grounds as a defense when they are sued by people who are lesbian, gay, bisexual or transgender. Recode has the story here.

Apple CEO Tim Cook says he plans to donate his estimated $785 million fortune to charity – after paying for his 10-year-old nephew’s college education. More here.

Google plans to pay its new CFO, Ruth Porat, more than $70 million in the next two years through a combination of restricted stock units and a biennial grant. The company hired Porat from Morgan Stanley earlier this week. Recode has more here.

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Jobs

The three-year-old Harvard Innovation Lab (i-lab) is looking to hire a new director of programming. The job is in Cambridge, Ma.

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Essential Reads

Facebook said yesterday that it plans to test a version of its solar-powered drone this summer, as part of its efforts to beam Internet access to billions of people without it today.

Zynga must face a lawsuit that accuses it of defrauding shareholders about its prospects before and after its December 2011 IPO. More here.

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Detours

Over the last year or so, auto racing has become Silicon Valley’s “it” hobby.

Why what your food “sounds” like affects how good it tastes.

New trailers: Entourage, Mission: Impossible, Silicon Valley, and more.

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Retail Therapy

Poor Blackberry. (At least it’s trying.)


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