StrictlyVC: May 11, 2014

Hi, everyone, hope you had a terrific weekend!

Top News in the A.M.

Everyone in China who wants a smartphone already has one, according to a new survey. “China is now a replacement market,” an analyst tells the WSJ.

SoftBank just unveiled a management reshuffle, appointing its investments head, Nikesh Arora, as president and naming him as a potential successor to CEO Masayoshi Son. More here.

The New Yorker published a sweeping profile of Marc Andreessen this morning that’s a must-read. Among many juicy nuggets about Andreessen Horowitz and the current venture landscape, there’s this: “A16z was designed not merely to succeed but also to deliver payback: It would right the wrongs that Andreessen and Horowitz had suffered as entrepreneurs. Most of those, in their telling, came from Benchmark Capital . . . Of Benchmark’s Bill Gurley, in particular, Andreessen tells the New Yorker: “I can’t stand him. If you’ve seen ‘Seinfeld,’ Bill Gurley is my Newman.”


Quick Chat with Kevin Talbot of Relay Ventures

In recent years, Relay Ventures, a nine-year-old, early-stage venture firm that once operated as BlackBerry Partners Fund, has been organizing one of the more thought-provoking events for investors: a half-day, invite-only affair in Mountain View, Ca., called Strictly Mobile.

The event, like Relay Ventures itself, focuses solely on mobile software and services, and though we couldn’t make it this year, we caught up with firm cofounder Kevin Talbot recently to talk about what we missed. Invariably, we also talked about what Relay is looking to fund these days. Here’s some of that chat, edited for length.

You dropped everything but mobile back in 2008. That seems pretty prescient now, though presumably it’s also less of a differentiator.

People kind of laughed at us and said, ‘It’s a category.’ Now, I’d be surprised if any VC firm hasn’t figured out that mobile is real, although if you look across the board, you’ll still see just one or two partners at each firm who focuses on it, which surprises me.

Given that “mobile” is now so ubiquitous, how do you narrow your areas of focus?

We’ve been focusing on four verticals: healthcare, education, commerce and the consumer. If you pick any one, you see a huge amount of disruption, whether in the form of payments, in commerce; or the digitization of education – which is really the democratization of education; or the consumerization of healthcare, with all these new sensors and tools that are altering whole healthcare systems and turning doctors into white collar workers.

We remember your early investment in Scanadu [a four-year-old company whose first medical device for home use measures temperature, blood pressure and oxygen].

We’re big supporters of Scanadu, whose [Series B, which closed last month] was oversubscribed. The company has really been at the forefront of citizen-driven healthcare. It also ushered in a whole new model of, how do you embrace the FDA rather than run away from it. That deal was also led by Tencent, which speaks to the strategy of more American startups that don’t look at marketing as something to be done sequentially, where you launch in the U.S. first, but rather as something that should be done in parallel.

Have you backed any fitness-related mobile tech?

We’re not all that interested in another tracker of a relatively unverifiable metric like step counting. We don’t think that’s changing the world.

What are one of your newer ed tech investments? 

We’re excited about Galxyz, an iPad app that invites kids to solve puzzles and put the world back together while teaching them scientific content; it sees educators and game designers working side by side and was founded by Osman Rashid, who also founded [the publicly traded textbook rental service] Chegg and [the e-learning startup] Kno [which was acquired by Intel in 2013].

You also mentioned the consumer. Are you focused on the so-called Internet of Things? 

We think the Internet of Things is in an exciting phase that’s a bit like the Wild West. It’s all very fun and interesting, like the Oral B toothbrush that connects to your smartphone. We’re less sure how you’re going to make money on a lot of these things. We’re more interested in the meta layers that will make the market useful and frictionless.

What’s an example of a related company you’ve backed? 

We haven’t yet found it, but that’s what we’re looking for.

Before you go, we have to ask: Thumbs up or down for the Apple Watch?

I think there will be very point-specific solutions that work. But also, as I stare [at my own Apple Watch], I’m reminded of the bottom drawer of my desk, which is a graveyard of tech. There’s just about every fitness tracker in there; there’s Google Glass. There’s a lot of money sitting there. I still don’t know yet if the Apple Watch will stay on my wrist or [ultimately land] in the drawer.

Are startups starting to pitch you on Apple Watch-related apps?

No, but they are showing us the watch along with the smartphone app they’re pitching. Much of it won’t work on the wrist, but everyone has figured out that you have to have the watch picture beside the phone.


New Fundings

aCommerce, a 2.5-year-old, Bangkok, Thailand-based logistics and commerce fulfillment firm that serves Southeast Asia, has raised $5 million as part of a Series B round that’s expected to exceed $30 million, reports TechCrunch. The funding comes from earlier backers Ardent Capital, the Indonesian conglomerate Sinarmas, and Inspire Ventures. The company had previously raised $13.8 million across two rounds,  including from NTT DoCoMo.

Ameritas Technologies, a four-year-old, Baton Rouge, La.-based IT outsourcing business, has raised an undisclosed amount of funding from Moneta Ventures, a Sacramento, Ca.-based venture firm.

Bulu Box, a three-year-old, Lincoln, Ne.-based e-commerce platform that allows consumers to sample vitamins and supplements and provides survey data to their brands, has raised $1.5 million in funding led by Flyover Capital, with participation from Dundee Venture Capital and Triompf.

Ceterix Orthopaedics, a five-year-old, Menlo Park, Ca.-based company that develops surgical tools, including a so-called suture passer called the NovoStitch that enables surgeons to treat complex knee, hip, and shoulder injuries, has secured a structured debt deal of up to $35 million from the healthcare investment firm CRG.

CodersClan, a two-year-old, Palo Alto, Ca.-based marketplace that matches coders with people seeking to have certain tasks done, has raised $820,000 in seed funding from CrunchFund, Entrée Capital, Kima Ventures, and additional angels. More here.

CrediFi, a year-old, New York-based company that provides data and analytics to the commercial real estate finance sector, has raised $8 million in funding led by Battery Ventures, with participation from Carmel Ventures and the crowdfunding platform OurCrowd. More here.

Diono, a 16-year-old, Seattle, Wa.-based company that makes kids’ gear like booster seats, car seats, strollers and travel accessories, has raised an undisclosed amount of strategic funding from Winona Capital, which now has a controlling stake in the company. More here.

Eve, a five-month-old, London-based startup that, like Casper, makes mattresses and sells them exclusively online, has raised £225,000 ($374,000) in seed funding from Octopus Investments, an extension of an earlier £375,000 seed round led by DN Capital. More here.

Joule, an eight-year-old, Bedford, Ma.-based company that makes liquid fuels from recycled CO2, has raised $40 million in private equity and venture debt led by the company’s earlier backer, Flagship Ventures. (Joule’s cofounder, Noubar Afeya, is also a senior managing director at Flagship.) Joule has now raised $200 million altogether, it says.

Incrediblue, a London and Volos, Greece-based online marketplace for booking yachting holidays, has raised $1.8 million in funding led by Connect Ventures, with participation from Seedcamp, Howzat Ventures, Firestartr, and earlier backer Openfund. More here.

itBit, a three-year-old, New York and Singapore-based global bitcoin exchange, has raised $25 million in Series A funding from Raptor Capital Management chairman James Pallotta, along with earlier backers RRE Ventures, Liberty City Ventures and Jay Jordan.

Mode, a year-old, San Mateo, Ca.-based company whose cloud platform helps devices connect to mobile apps, has raised $775,000 in seed funding from Metamorphic Ventures, Kleiner Perkins Caufield & Byers and unnamed angel investors. Mode was founded by Gaku Ueda, who previously spent more than two years as Twitter’s director of engineering. More here.

OmniEarth, a 16-month-old, Arlington, Va.-based company that produces environmental analytics for a range of companies, including agriculture, oil and gas discovery, and water and resource management businesses, has raised $5 million in Series A funding, including from Space Angels Network. Washington Business Journal has more here.

Pinterest, the six-year-old, San Francisco-based social bookmarking site, has completed the rest of its Series G funding, raising an additional $186 million to close the round with $553 million. According to Recode, the newest funding came from Wellington Management Company and Goldman Sachs. Other investors in the round include earlier backers Andreessen HorowitzBessemer Venture Partners, FirstMark Capital, SV Angel, Valiant Capital Management and Fidelity Investments. (The company has also announced plans to stage a new secondary offering for employees. More on that in “People.”)

Precision BioSciences, a nine-year-old, Durham, N.C.-based genome editing company, has raised $25.6 million in Series A funding led by venBio, with participation from Fidelity Biosciences, Amgen Ventures, Baxter VenturesOsage University Partners, the Longevity Fund, and two unnamed public market investors.

Sky-Futures, a six-year-old, London-based company that uses drones to help monitor and inspect oil and gas facilities, has raised $3.8 million in funding led by MMC Ventures. Business Insider has more here.

Transpose, a months-old, Seattle-based company that offers enterprise-level service for capturing, storing and retrieving data, has raised $1.4 million from investors, including Alliance of Angels, Gramercy Fund and Founders’ Co-op. Geekwire has more here.

Uber, the six-year-old, ride-sharing company, is raising yet another giant round of funding — between $1.5 billion and $2 billion at a $50 billion or higher valuation, the WSJ reported Friday. The story notes that at that valuation, Uber may now be worth more than 120 times its trailing revenue. Uber has already raised more than $4 billion from investors.

Zesty, a two-year-old, London-based healthcare appointment booking platform, has raised $7.2 million in Series A funding led by Innovation Capital, with participation from Qualcomm VenturesMaya Capital and earlier backers Mangrove Capital Partners, TA Venture, and ABRT Fund. The company has now raised $9.2 million altogether, shows Crunchbase.

Zulily, the five-year-old, Seattle-based, publicly traded retailer, is now owned in large part by Alibaba Group following a shopping spree that began last Wednesday, reports the Seattle Times.  Through an investment subsidiary, Alibaba bought 4.8 million Zulily Class A shares for about $56 million, making it the owner of roughly one-sixth of the company’s Class A shares and about 9.3 percent of Zulily’s total shares.

Zuman, a three-year-old, Pleasanton, Ca.-based company that makes software for human resources, payroll, and benefits administration, has raised $4 million in Series A funding from (unnamed) new and existing investors.



Zoosk, a 7.5-year-old, San Francisco-based online dating service, has canceled its plans to stage a $100 million IPO, citing “unfavorable market conditions” more than a year after filing with regulators. The company has raised roughly $62 million from investors, shows Crunchbase. Its backers include Crosslink Capital, Canaan Partners, Bessemer Venture Partners, BDCA VentureATA Ventures and Amidzad Partners, among others.



Priceline Group plans to acquire the three-year-old, Paris-based hotel-data company PriceMatch, which has raised $10.4 million from Tekton Ventures and Partech Ventures. Terms of the deal aren’t being disclosed. More here.



Apple CEO Tim Cook joined Weibo, the Chinese microblogging service similar to Twitter, this morning.  The move, notes TechCrunch, highlights the importance of the Chinese market to Apple.

Cecile Lal, a former senior director of product management at Yahoo, is being sued by the company over claims that she “brazenly” divulged confidential information about the company to Business Insider’s Nicholas Carson, who published a book about Yahoo CEO Marissa Mayer last year titled “Marissa Mayer and the Fight to Save Yahoo.” According to Yahoo, much of what Lal conveyed to Carson came during all-hands, Friday-afternoon meetings that Mayer instituted almost immediately after joining the outfit in 2012. Carson later reported that the meetings were designed to bring “radical transparency” to Yahoo.

Zander Lurie, the senior VP of media at GoPro, will serve as executive chairman of SurveyMonkey for three months while the company works to hire a new CEO. Lurie, a former Guggenheim Digital Media and CBS executive (he also spent time at CNET and JPMorgan), joined SurveyMonkey’s board in 2009. SurveyMonkey CEO Dave Goldberg passed away suddenly 11 days ago. Recode has more here.

Ellen Pao, the interim CEO of Reddit who sued her former employer, Kleiner Perkins Caufield & Byers, over gender discrimination and lost her case against it, is pushing back against paying the firm’s expenses, which her attorneys describe as “grossly excessive and unreasonable.” The WSJ has the story here.

Pinterest said on Friday it is allowing employees to sell a portion of their stock. It’s the second time the San Francisco-based company will be doing a secondary offering for employees, having also allowed a secondary offering in October 2012. The WSJ has the story here. (In reaction to the news, David Ulevitch, founder and CEO of OpenDNS –another fast-growing San Francisco-based company — tweeted: “Employees at Pinterest. Do this. Say yes. Whatever the maximum is.”)



Liberty Mutual is looking for a senior manager to add to its M&A and venture investments team. The job is in Boston.



The research firm CB Insights has created a handy, real-time “unicorn tracker,” featuring (currently) 102 companies. Silk, a company that produces data visualizations, has created some interesting ways to display that data here.


Essential Reads

The short life and speedy death of Russia’s Silicon Valley.

Goodbye SaaS, hello containers-as-a-service.

NASDAQ is planning to pilot a new transaction-tracking system that makes use of blockchain technology.

Zynga spent $100 million to build its own data centers in a bet it could operate them more cheaply than paying for Amazon’s cloud services. It was apparently wrong.



Tell-tale signs of the modern-day Yuppie.

Calculating the life expectancy of Don Draper.

Hemingway, or My Mother’s Email?


Retail Therapy

A beautiful longbow. It’s wholly irrational, but we kind of want one.

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