StrictlyVC: April 7, 2015

Hi, and happy Tuesday, everyone!


Top News in the A.M.

Consumer and child advocacy groups are today asking the FCC to investigate Google’s new YouTube Kids application, arguing that the company is unfairly and deceptively targeting toddlers with advertising on tablets and smartphones. More here.


A VC Adds a Thesis: “Wrist First”

Peter Relan, a veteran of Hewlett-Packard and Oracle, has spent the last decade nurturing young companies at his YouWeb incubator in Mountain View, Ca. At first, he focused on mobile social gaming companies, investing $2 million across a variety of startups and enjoying at least one big hit when OpenFeint, a social gaming network, was acquired in 2011 by the Japan-based Internet media company Gree for $104 million.

In 2013, Relan raised a separate $10 million from wealthy individuals for a sub-brand of YouWeb called 9+, an incubator and accelerator that focuses on marketplaces, wearables, and so-called Internet of Things technologies.

A number of highly promising companies are again emerging from the outfit, insists Relan, including the online video gaming company Hammer & Chisel, launched by OpenFeint founder Jason Citron. (It has raised $12 million in funding from 9+, IDG Ventures, Accel Partners, Benchmark, and Tencent.)

Relan also points to GotIt, a seed-funded photo-based on-demand marketplace that’s begun talking with investors about a Series A, and the “connected kitchen” startup Camellia Labs, founded by former Salesforce senior engineering manager Guarav Chawla. (“Everybody in Silicon Valley who’s in the design business is stumbling over themselves, trying to be the product design shop for [Chawla],” says Relan.)

Still, what’s capturing much of Relan’s attention these days, he says, are “wrist-first” technologies — apps developed expressly for smartwatches, which he expects will represent a huge opportunity over the next couple of years as the Apple Watch streams into the marketplace.

One of his bets, for example, is on a nascent company called Awear, whose app enables users to send and receive SMS messages with a couple of clicks. It doesn’t sound terribly revolutionary, but it represents a “10x” leap in terms of speed, says Relan, who notes that it’s a lot easier to tap a watch than “fish a phone out of your pocket or handbag, then unlock it, open the right app, and respond.” (Awear first launched on the Pebble smartwatch and 10 percent of Pebble customers have downloaded the app, says Relan.)

Relan thinks the possibilities extend far beyond communications, too. “Think of games that are easy to play in one or two clicks. Or the B2B app that notifies an executive that he received 400 orders during an important meeting. Or an app that can deliver an EKG to your doctor with the tap of a button.”

Smartwatches may have low computing power, he notes, but smartwatches combined with the power of the cloud begin to look pretty compelling.

More, says Relan, he has seen this movie before.

“When the iPhone was just being introduced [and we began focusing on mobile social gaming], the hard-core gamers laughed at us. They said, ‘[The phone] is tiny. It has no keyboard, no controls.’ But I said it would be 10 times more convenient to play, and now mobile social gaming is multibillion-dollar industry.”

“Whenever a new platform succeeds, it’s because it improves [on the status quo] by at least a factor of 10,” Relan continues. The Apple Watch might not be 10 times better than the smartphone, but he fully expects it to let users do things 10 times faster — and that’s enough to get him excited about what’s next.


New Fundings

AssetAvenue, a 1.5-year-old, L.A.-based online peer-to-peer platform focused on the commercial real estate market, has raised $11 million in Series A funding led by DCM, with participation from earlier backers Matrix Partners, NetEase, and Prosper Marketplace CEO Ron Suber. The company has now raised at least $15 million to date, shows Crunchbase.

CoreOS, a two-year-old, San Francisco-based company that builds a lightweight version of the operating system Linux, helping reduce the amount of hardware needed to run applications in big data centers, has raised $12 million in funding led by Google Ventures, with participation by Kleiner Perkins Caufield & Byers, Fuel Capital and Accel Partners. The company has now raised $20 million altogether. TechCrunch hasmore here.

Custora, a four-year-old, New York-based predictive analytics company that helps brands anticipate and influence their customers’ spending, has raised $6.5 million in fresh funding led by Foundation Capital, with participation from Greycroft Partners and Valhalla Partners. The company, a Y Combinator alum, had earlier raised $1 million in seed funding. Venture Capital Dispatch has the story here.

D3O, a 14-year-old, U.K.-based developer of shock-absorbing smart materials that are used in products across the motorcycle, sport, footwear, electronics, military and work-wear sectors, has raised $19 million in funding led by Beringea, with participation from Entrepreneurs Fund.

Livongo Health, a year-old, Chicago-based digital health company whose cloud-enabled glucose meter helps people (and their family, friends, and physicians) manage their diabetes, has raised $20 million in funding from Kleiner Perkins Caufield & Byers, DFJ, and earlier backer General Catalyst Partners. The company had previously raised $10 million, including from Slow Ventures.

Natera, an 11-year-old, San Carlos, Ca.-based company whose technology diagnoses genetic diseases with a noninvasive DNA test, has raised $55.5 million led by new investor Sofinnova Ventures, with participation from Capital Research and Management, Franklin Templeton Investments, Jennison Associates, RA Capital Management, HealthCor Partners, and OrbiMed Advisors. The company has now raised $154.1 million, according to Crunchbase.

OYO Rooms, a two-year-old, Bangalore, India-based platform for low-cost, standardized hospitality bookings throughout SouthEast Asia, has raised $25 million in funding from Lightspeed Venture Partners, Sequoia Capital and Greenoaks Capital Management. More here.

Placester, a five-year-old, Boston-based marketing-automation platform that gives real-estate agents and brokers tools to build websites and mobile sites for $10 per month, has raised $15 million in new funding led by New Enterprise Associates, with participation from previous investor Romulus Capital. The company has now raised $22 million altogether.

Quikr, a seven-year-old, Mumbai, India-based classified ads site that helps people find and sell products and services, has raised $150 million in new funding from Steadview Capital, as well as earlier investors Tiger Global Management and Investment AB Kinnevik. The company has now raised $350 million altogether. TechCrunch has more here.

RebelMouse, a three-year-old, New York-based content publishing platform, has raised $16 million in Series B funding from previous investors Softbank Capital and Oak Investment Partners, with additional participation from Buddy Media cofounder Mike Lazerow. The round quietly closed earlier this year, TechCrunch reported yesterday. The company has now raised $18.8 million altogether.

RedSeal, an 11-year-old, Sunnyvale, Ca.-based cybersecurity company, has raised $17 million in Series C funding from Tyco International, MATH Venture Partners, DRW Venture Partners, and Pallasite Ventures, along with earlier backers Icon Ventures, Leapfrog, Olympic VenturesSutter Hill Ventures and Venrock. Ray Rothrock, a former Venrock partner and former chair of the National Venture Capital Association, came out of retirement last year to relaunch the then-troubled company. Silicon Valley Business Journal has more here.

True North Therapeutics, a two-year-old, South San Francisco, Ca.-based biotechnology company that’s developing therapies for rare hematologic, renal, and neurological diseases, has raised $35 million in Series B funding led by OrbiMed, with the participation of earlier investors Kleiner Perkins Caufield & Byers, MPM Capital, SR One, and Baxter Ventures.

WaterSmart Software, a six-year-old, San Francisco-based software company that helps utilities better understand and use the information they glean from millions of water meters, has raised $7 million in Series B funding from an unnamed family office, with participation from earlier backers Apsara Capital, DFJ, Physic Ventures and The Westly Group. The company has now raised $13.9 million altogether. Venture Capital Dispatch has more here.


New Funds

Google’s former Android boss, Andy Rubin, has launched a new firm called Playground Global that plans to help hardware entrepreneurs with “distribution, manufacturing, financing and ways to integrate their devices with remote computing resources” in exchange for equity in their companies, reports the WSJ. (It will not make direct investments.) The outfit has raised $48 million from investors, including Google, Hewlett-Packard, Hon Hai Precision Industry, Tencent Holdings, Seagate Technology, and Redpoint Ventures, a venture-capital firm where Rubin will also be spending one day a week as a venture partner. The WSJ has much more here.



Cidara Therapeutics, a three-year-old, San Diego-based company that’s developing therapies for fungal infections, announced terms for its IPO yesterday, revealing plans to raise $60 million by offering 4 million shares at a price range of $14 to $16.



Boundless, a four-year-old, Boston-based online textbook publishing startup, has been acquired by online education company Valore for undisclosed terms. Boundless had raised roughly $10 million in funding from Venrock, NextView Ventures, Kepha Partners, Founder Collective and SV Angel. Boston Business Journal has more here.

OttoCat, an Oakland, Ca.-based startup that was founded in 2012 to organize the App Store into lots of categories and make finding good apps easier, was quietly acquired by Apple “some time ago,” reports TechCrunch. In fact, adds its report, the company might have been acquired as long ago as 2013. (It’s still something, right?)



Institutional Venture Partners has made a couple of hires that we’d forgotten to mention yesterday: Roseanne Wincek joins the late-stage growth firm as a VP from Canaan Partners, where she was a principal. The firm has also hired Alexander Lim, who joins as an associate; Lim previously worked in the tech investment banking group at Credit Suisse.

Matt Murphy, a general partner at Kleiner Perkins Caufield & Byers who recently became known as the person who gave Ellen Pao her walking papers, is leaving the venture firm after 16 years to pursue a new opportunity, he says. Murphy — who was moved from Kleiner’s early-stage group to its growth investing team in 2013 — tells the WSJ that he’s taking his inspiration from several friends and former colleagues who’ve launched their own “smaller, more focused funds” in recent years, including Chi-Hua Chien, who recently cofounded Goodwater Capital, and Aileen Lee, who founded Cowboy Ventures in 2013. More here.


Job Listings

Capital One Ventures is looking to hire an associate in New York.


Essential Reads

Microsoft is working on its own Apple Pay.



Ray Rice’s redemption campaign.

Planes without pilots.

Child spa.

How to supercharge your iPhone in only five minutes.


Retail Therapy

It’s a flashlight. It’s a flask. It’s, erm, the flasklight!

A smart stove knob from Pinterest’s former head of engineering. (We’d use one of these.)

Filed Under:

Don’t Miss Out!

Sign up today to receive a free daily email with everything you need to start your day. Plus, keep track of the companies and personalities that will shape the industry in the months and years to come. Let StrictlyVC be your very own venture capital concierge.

StrictlyVC on Twitter