StrictlyVC: April 8, 2015

Hi, good morning, everyone! Thanks to those of you bought tickets yesterday for our fast-approaching event next month in San Francisco. We’re looking forwarding to seeing you soon.:) Thanks again, too, to our top sponsors Personal Capital and Amazon Web Services.

(For East Coast readers who might be wondering: We’re back to figuring out Boston in June. We’ll let you know more as we do.)


Top News in the A.M.

Russian hackers accessed sensitive White House information last year, including real-time (non-classified) details of president’s schedule. More here.

Google appears to be developing a teleconferencing tool called GMeet.

Twitter is experimenting with more search filtering options.


First Data Waves Its Flag in Silicon Valley

Soon after Frank Bisignano joined the payment processing giant First Data as CEO two years ago, Bisignano — who was formerly co-chief operating officer of JPMorgan Chase — set his sights on beefing up the company’s corporate venture firm. Among his first steps: appointing Pete Donat, a longtime VP at First Data (and a VP at both Visa and MasterCard before that), to lead a four-person team that now assesses startups and alerts different unit heads within the 23,000-person company to technologies that might benefit them.

“Frank really wanted to put extra emphasis on innovation in Silicon Valley,” says Donat, “so we hired a team out here, and we’ve been increasingly active over the last year.”

“Active” is somewhat subjective. The team saw 300 companies last year and invested in six – not exactly the blistering pace one might expect from the company, which has been owned by KKR since 2007.

Then again, First Data — which has struggled to find new areas of growth in recent years — is in the middle of a turnaround that involved a $3.5 billion private placement in the company last year, including more capital from KKR.

Some of the capital freed by that investment is now streaming into startups that the company hopes will help it develop more products. Among them is Booker, a four-year-old, New York-based online booking platform that helps small businesses sell their services online. “It’s a really cool company with lots of great potential and synergies that fit with First Data and our merchant clients,” says Donat.(First Data participated in Booker’s $35 million Series C round last month.)

That private placement should also help First Data when it comes to acquisitions, which are clearly of interest to the company. Over the last two-and-a-half years, First Data has acquired three startups: the cloud-based payment software developer Clover Network; Perka, a digital rewards-program designer; and the mobile-gift-card company Gyft. It also created Insightics, a business unit it developed with the analytics company Palantir Technologies to glean more insights into customer spending from its merchant customers’ credit-card records.

As for startups looking to get on First Data’s radar, approaching as a partner seems to be the best course. Donat says his team finds most of its investment opportunities from people who “knock on our door and say, ‘I need one of your capabilities.’” When the team does “go outbound,” he continues, “we go out with a short shopping list and the likelihood of a us doing a deal goes up.”

Asked if his group might adjust its pace to invest more actively, Donat says 2015 might see “slightly” more deals from the group, but that he doesn’t expect things to “change dramatically. Once we [back] a deal, we want to ensure that we’re supporting that company. We probably overinvest in the amount of time we spend, helping [founders use First Data] to grow their revenue.”

Either way, Donat notes, First Data is “very committed” to its venture arm and “very committed to growing its presence in the Bay Area.”

Indeed, he says that when he opened First Data’s office in Palo Alto in early 2013, there were three people in the office. Today, he says, between Gyft, Clover, Insightics, and a separate digital commerce unit, the office is home to more than 100 employees.


New Fundings

IIX, a four-year-old, Palo Alto, Ca.-based Internet infrastructure company, has raised $20 million in fresh funding from TriplePoint Capital. The company also acquired smaller rival IX Reach for undisclosed terms. According to Crunchbase, IIX has raised roughly $36 million altogether, including from New Enterprise Associates.

Alzheon, a two-year-old, Framingham, Ma.-based clinical-stage biopharmaceutical company focused on brain health, memory and aging, has raised $10 million in Series A funding led by Ally Bridge Group, with participation from other (unnamed) new and earlier investors.

DealStruck, a two-year-old, Carlsbad, Ca.-based online lending platform that caters to small businesses, has raised $58.3 million — $8.3 million in venture funding from Trinity Ventures, and a $50 million credit facility from Brevet Capital. The company had previously raised an undisclosed amount of seed funding from Peterson Ventures and Blackbird Ventures.

Euclises Pharmaceuticals, a four-year-old, St. Louis, Mo.-based company that’s developing pain and cancer medications, has added $700,000 to its Series A round, bringing its total haul to $2 million. Investors include BioGenerator, Cultivation Capital and St. Louis Arch Angels.

FirstFuel Software, a 3.5-year-old, Lexington, Ma.-based company whose software helps electric utilities manage energy use and businesses reduce energy bills, has raised $23 million in Series C funding led by Next World Capital, with participation from Electranova Capital, and earlier investors Battery Ventures, Rockport Capital, Nth Power and E. ON. The company has now raised roughly $44 million altogether, shows Crunchbase.

Folloze, a 1.5-year-old, Palo Alto, Ca.-based prospect engagement platform for B2B sales and marketing, has raised $3.3 million in seed funding led by New Enterprise Associates, Cervin Ventures and TriplePoint Ventures, with participation from unnamed angel investors.

FreeAgent, an eight-year-old, Edinburgh, Scotland-based online accounting and money management tool for freelancers and small businesses, has raised $5 million in debt financing from SaaS Capital. The company had previously raised an undisclosed amount of money from investors, including Lightbank, The Accelerator Group, and IRIS Software Group in the U.K.

Haystack TV, a two-year-old, Redwood City, Ca.-based personalized video news service, has raised $1.7 million in seed funding, including from Endeavor Global founder Peter Kellner, Flycast Networks cofounder Larry Braitman, and Stanford’s StartX Fund. TechCrunch has more here.

Kyriba, a 15-year-old, San Diego, Ca-based company whose software helps treasury departments plan for market volatility, regulation and more, has raised $21 million in Series C funding from HSBC, with the participation of earlier backers BRED Banque Populaire, Daher CapitalIris Capital, and Upfront Ventures.

MobiKwik, a 5.5-year-old, Gurgaon, India-based mobile wallet company, has raised $25 million in new funding from the hedge fund Tree Line Asia Master Fund, Cisco Investments, American Express Ventures, and Sequoia Capital. Forbes has more here.

NSONE, a two-year-old, New York-based DNS and traffic management company, has raised $5.35 million in Series A funding co-led by Flybridge Capital Partners and Sigma Prime Ventures, with participation from Founder Collective and Center Electric.

Palerra, a two-year-old, Santa Clara, Ca.-based cloud-security company, has raised $17 million in Series B funding led by new investor August Capital, with participation from earlier backers Engineering CapitalNorwest Venture Partners and Wing Venture Capital. The company has now raised $25 million to date.

Patch of Land, a two-year-old, L.A.-based crowdfunding platform for real-estate financing, has raised $23.6 million in Series A funding led by SF Capital Group, with participation from individual investors. According to Crunchbase, the company had raised $1.2 million in seed funding in 2013., a two-year-old, Boston and Philadelphia-based company whose software platform aims to get mainstream enterprises into the API economy quickly and cheaply, has raised $4 million in Series B funding from unnamed strategic customers, Philadelphia “institutions,” and high net worth individuals. The company, which has now raised about $6.3 million altogether, has no traditional institutional investors, it says.

RealtyShares, a two-year-old, San Francisco-based online marketplace for real estate investing, has raised $10 million in Series A funding led by Menlo Ventures, with participation from earlier backer General Catalyst Partners. The company previously raised two rounds of seed funding, including a $1.9 million round last year.

RefME, a months-old, London-based book-barcode scanning app that speeds up the task of creating, formatting and managing citations, references lists and bibliographies, has raised $5 million in funding led by GEMS Global, a subsidiary of the education company Varkey Group. TechCrunch has more here.

Sharecare, a 5.5-year-old, Atlanta, Ga.-based company whose Q&A platform allows people to ask and learn about health and wellness issues, has raised $20 million in funding from Wellington Management. The company has now raised $160 million altogether, including from Heritage Group, TomorrowVentures, Galen Partners, and New Evolution Ventures.

Soha Systems, a two-year-old, Sunnyvale, Calif.-based cloud security startup, has raised $9.8 million in funding from Andreessen HorowitzCervin Ventures, Menlo Ventures and Moment Ventures. More here.

Temando, a nearly six-year-old, Brisbane, Australia-based supply chain startup, has raised $50 million in Series B funding from Neopost S.A. The company had earlier raised $6 million in funding, including from Ellerston Capital.

TriPlay, a 10-year-old, New York-based developer of cloud services that enable people to consume music and other media across different devices, has raised $11 million from funds managed by Fortress Investment Group, as well as earlier backer Kenges Rakishev. The company has raised $16 million altogether, according to Crunchbase.

Vidme, a 16-month-old, L.A.-based online video sharing platform that has emerged as the go-to video platform on Reddit, has raised $3.2 million in new funding from Upfront Ventures, First Round Capital, Initialized (a fund from Reddit cofounder Alexis Ohanian), SV Angel, Lowercase Capital, Mucker Capital, and Launchpad Capital. Variety has more here.

Yeloha, a new, Boston-based peer-to-peer solar-sharing network created by the Israeli company Generaytor, has raised $3.5 million in Series A funding led by Carmel Ventures. Venture Capital Dispatch has more here.



Informatica said yesterday that it will go private in a deal valued at about $5.3 billion. The enterprise data integration vendor is being acquired by the private equity firm Permira, and the Canadian Pension Plan Investment Board, for $48.75 a share. (The development is very good for venture-backed MuleSoft, argues Business Insider.)

Reserve, the San Francisco-based restaurant reservation company that launched this past fall, has acquired two fellow startups in the dining space: Zurvu, a New York-based startup that also manages online restaurant reservations; and HAIL, an L.A.-based startup whose app helps diners split the check. TechCrunch has more here.

Singapore Telecommunications is acquiring Trustwave, a Chicago-based managed-security services specialist, in a deal valued at $810 million. Morningstar has more here.

Sprinklr, the social media management firm, has acquired GetSatisfaction, an online community platform used to connect customers and companies. Terms of the deal aren’t being disclosed. GetSatisfaction had raised nearly $21 million from investors, shows Crunchbase. Its backers include InterWest Partners, Azure Capital Partners, O’Reilly AlphaTech Ventures, and First Round CapitalMore here.



“I’m going to end up with a lot more money than I feel like I’m entitled to given how hard I work,” Slack founder and CEO Stewart Butterfield tells Inc. in a candid interview. More here.

Billionaire investor Mark Cuban on why he’s betting on specific ed tech startups: “There are going to be a lot of universities that go out of business. I’m not talking about the Apollos and the University of Phoenix, but [traditional, brick-and-mortar] schools.” More here.

Orrick Herrington & Sutcliffe partner Lynn Hermle shares whether she thinks the Ellen Pao case — which she argued for Kleiner Perkins — will have the outsize impact on Silicon Valley that many expect: “It’s not going to happen. Cases don’t change industries. That’s not what they’re about; that’s not what they do.”


Job Listings

Microsoft is hiring a senior tech evangelist who will work within its Microsoft Ventures group and engage with “thought leaders” in the venture industry. The job is in Redmond, Wa.


Essential Reads

Uber now accounts for nearly half of all ground transportation business expenses at many companies in North America.

Ride, a two-year-old, New York-based service for organizing co-workers at the same company into carpooling groups, opened to U.S. businesses yesterday and launched a new app for Apple devices. The WSJ has the story about the company — which is majority owned by TPG Growth and employs Uber’s first technology chief, Oscar Salazarhere.

“Let’s just get this out of the way: the Apple Watch, as I reviewed it for the past week and a half, is kind of slow. There’s no getting around it . . .”



Rolls-Royce takes the first step in building . . . an SUV.

Seth Myers brings Jon Snow to a dinner party.

What is a species, really?


Retail Therapy

Icon Trucks. [Heart flutter.] More here.

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