StrictlyVC: May 13, 2015

Happy Wednesday, everyone! Looking forward to seeing some of you tonight!


Top News in the A.M.

A security research firm is warning that a new bug could allow a hacker to take over vast portions of a datacenter — from within.

Apple and A123 are about to settle their lawsuit over poached battery engineers.


The Muse Raises $10 Million (and Turns Away $10 Million)

The Muse, a 3.5-year-old New York-based career site that offers job opportunities, advice, skill-building courses, and video profiles meant to show what it’s like to work at different companies, has just raised $10 million in Series A funding from Aspect Ventures, DBL Partners and QED Investors.

Co-founder and CEO Kathryn Minshew says the platform, which is largely used by millennials – 65 percent of them women and more than 50 percent nonwhite — could easily have raised $20 million.

We talked yesterday about the fast-growing, 33-person company — and what happened out on the fundraising trail. Our chat has been edited for length.

You founded the Muse with two other women, Alex Cavoulacos and Melissa McCreery. How did you come together?<

We met while working at McKinsey, during my first first week on the job in the fall of 2008. Lehman had just fallen. There was a lot of upheaval. Even though McKinsey was a great educational experience, I realized I didn’t want to be a consultant. The three of us kept talking about what it would be like if you could get advice on your career and see inside companies before applying and we finally thought: maybe we should just start [our own career site].

You say it’s taken off like gangbusters.

It started off as a very basic content career site in September 2011, but we’d attracted 70,000 people to it in the third month. It wasn’t impressive looking, but based on that user growth, Y Combinator accepted us into its winter program and by the following summer, we had 100,000 people on the site each month. Now, 3.5 million people are visiting each month.

Most are millennials. Our average user is 29, compared with LinkedIn, whose average user is 47. Sixty-five percent of our users are female, compared with LinkedIn, whose users are 55 percent male.

Why is that?

We think it’s partly because LinkedIn is more of a transactional networking tool; it isn’t a place where users feel like someone is looking out for their career.

How is The Muse making money?

The vast majority comes from recruiting; we now 300 companies listing jobs and corporate profiles on the site. Generally, companies are measuring their ROI by how may hires they’re making, how aware people are of their brands, and how many people engage with their materials, which we put together in part by sending a videographer into every company’s offices. We want users to see authentic, quality materials about what these workplaces are like. [Companies] just pay to sign up, and we take care of everything.

What about content?

We have a small amount of revenue that comes through content marketing. Our users are generally very willing to take our recommendations around career-related products and services, but we want to make sure anything sponsored is noted and that we don’t work with partners that we don’t think are relevant or up to our standards. Trust is an important part of our brand.

What are some ways that you’re using all the data you’re collecting?

We can tell that people who are interested in certain companies will probably like other types of companies that wouldn’t be obvious from the [mandate] and size of those companies. We can pull out when someone is open to looking for a job because what they’re clicking on and reading starts to change [and we can personalize the experience for them].

The data is useful for employers, too. They want to be able to compare their recruiting efforts to other companies, so if they say, “We didn’t see as many applications for this role as we wanted to,” we can tell them, “We can see 1,000 people clicked on that role and 40 people applied. That conversion is substantially lower than your close competitor; maybe there’s something in the job description that isn’t communicating what you want it to.”

How many markets is The Muse operating in currently?

We’re actively serving jobs in eight markets right now, including New York, San Francisco, L.A., Chicago, D.C., and Boston.  But we’re launching soon in Atlanta, Austin, and Houston, and we get nice – and angry – requests from Portland, Raleigh-Durham and other places asking why we aren’t there yet, so we’re investing heavily in expanding the number of cities we serve.

How was fundraising?

Even though the market is very good right now, you never know how it’s going to receive your particular company. But it was fun – even a bit crazy. The market is a little insane. People were aggressively pushing us to do things that didn’t make sense. I had to go to a lot of people who I really like and who would probably be very valuable and useful and say, “We’re not going to raise $20 million.”

New Fundings

Atia Medical, a months-old, Campbell, Ca.-based stealth-mode company launched by the year-old medical technology incubator Shifamed, has raised $3 million in the first tranche of a $5 million Series B financing. The investment was made solely by Medvance Incubator Partners, an early-stage medtech venture fund formed by Shifamed and Delos Capital.

Blue Apron, a three-year-old, New York-based startup that ships boxes of premeasured ingredients to home cooks, is talking with investors about a new round of more than $100 million that would value the company at roughly $2 billion, according to a WSJ report. The company has raised $58 million to date, including from First Round CapitalBessemer Venture Partners, and BoxGroup.

Buyapowa, a four-year-old, London-based social commerces sales platform that aims to turn fans into shopper advocates, has raised $3 million in Series A funding led by Juno Capital, with participation from Bright Station Ventures and several other European investors. The company has now raised $7.6 million to date, shows Crunchbase.

Cryex, a two-year-old, Stockholm, Sweden-based bitcoin exchange, has raised $10 million in funding from numerous investors, including Northzone and White Star Capital. Coindesk has more here.

DocPlanner, a three-year-old, Warsaw, Poland-based online booking platform for healthcare appointments, has raised $10 million in Series B financing led by the European Bank for Reconstruction and Development. Other participants in the round include earlier backers Point Nine Capital, Piton Capital and RTAventures, as well as individual investors, including Fabrice Grinda. To date, the company has raised $14 million, reports TechCrunch.

eduK, a two-year-old, São Paulo, Brazil-based online education platform that teaches professional skills and is considered to be Brazil’s largest education startup, has raised $10 million in Series B funding led by Accel Partners, with participation from earlier investors Monashees Capital and Felicis Ventures. TechCrunch has more here.

Flexport, a two-year-old, San Francisco-based global trade platform whose online dashboard lets companies check freight prices, book shipments, route cargo, manage inventory, and get notified of exceptions, has raised $6.6 million in seed funding from First Round Capital, Google Ventures, and Bloomberg Beta, among others. Bloomberg has more here.

Instart Logic, a 4.5-year-old, Palo Alto, Ca.-based service that helps businesses speed up the delivery of their cloud applications, has raised $43 million in new funding led by Four Rivers Group and Hermes Growth Partners, with participation from earlier backers Andreessen HorowitzKleiner Perkins Caufield & Byers, and Tenaya Capital. The company has now raised $95 million to date.

MathCrunch, a year-old, San Francisco-based mobile app that provides on-demand tutoring for students, has raised $3.5 million in seed funding from undisclosed investors. TechCrunch has more here.

Smarking, a two-year-old, San Francisco startup that helps parking providers make sure their spaces are filled, has raised $3 million in seed funding led by Khosla Ventures, with participation from Slow Ventures, Procyon Ventures, SVS Ventures, FinSight Ventures, Fairstead Capital,CheerLand Investment, Pre-Angel, DN Capital and other angel investors. Venture Capital Dispatch has more here.

VictorOps, a three-year-old, Boulder, Co.-based company whose technology helps software-as-a-service companies manage and remediate software system alerts and outages in real time, has raised $2.6 million in funding as part of a Series B round that remains open. Earlier backers Costanoa Venture Capital and Foundry Group are among other participants in the round. More here.

Wallflower, a 1.5-year-old, Charleston, Ma.-based company that’s creating connected home technology that helps consumers prevent and reduce risks related to accidental fires caused by ranges, stoves and ovens, has raised $1.5 million in seed funding from Microsoft and other, undisclosed backers. More here.

Winnow, a two-year-old, London-based company aiming to cut down on food waste in the hospitality industry through smart meters that let kitchen staff easily log what food is thrown away, has raised $900,000 in seed funding led by Mustard Seed, with participation from numerous other investors. More here.

New Funds

Michael Dearing, a former eBay executive who founded the seed-stage fund Harrison Metal Capital in 2006, announced on Twitter in the wee hours of this morning that he has just closed his fourth fund, Harrison Metal Capital IV, with $68 million in capital.

Eucalyptus Growth Capital, a Tel Aviv, Israel-based firm that intends to invest in late-stage Israeli tech companies, is looking to raise $300 million for its debut fund, reports The Globes. Eucalyptus was founded by Dadi Perlmutter, Rami Hadar and Eldad Tamir. Perlmutter was formerly an EVP and general manager of the Intel Architecture Group (IAG), and chief product officer at Intel. Hadar is the former CEO of publicly traded Allot Communications. Tamir is the founder & CEO of the Tamir Fishman Group.



According to a new book about Elon Musk, the serial entrepreneur is close to Google CEO Larry Page and the two sometimes meet to talk about technology, transportation, and more in a secret apartment owned by Page in downtown Palo Alto. More here.

Venkat Panchapakesan, a Google VP who led engineering for YouTube, died Monday night, reports Recode. He was battling cancer. Panchapakesan spent over a decade at Yahoo, leaving in 2009. He joined Google the following year.



Medtronic is looking for a senior program director, venture capital. The job can be in Boston or Minneapolis.



Fully 90 percent of the rounds closed in the first quarter were up rounds —  a level not seen in more than six years, according to a new trends report published by Cooley. Its data also points to a decrease in median pre-money valuations in Series A and C transactions and, conversely, median pre-money valuations increasing in both Series B and D and later deals. More here.


Essential Reads

Facebook has just launched a new “Instant Articles” platform for nine publishers (to start). The move has those partners celebrating, while other media properties nervously wait and watch the experiment from afar.

Google is moving its corporate applications to the Internet.

AOL CEO Tim Armstrong denied yesterday that AOL is spinning off Huffington Post entirely, reports Business Insider. Yesterday, Recode reported that the media outlet might be sold as part of Verizon’s acquisition of AOL. But in an interview with HuffPo yesterday, Armstrong said AOL will always be an owner — if not the sole owner — of HuffPo.


Six charts that put the wealth of some tech execs into unique perspective.

The 10 most expensive movie sets ever built.

The other side of Cannes: Debauchery, danger and the dirty secrets aboard the super-rich’s superyachts.


Retail Therapy

Design your own duffel, with Hudson Sutler. (By the way, this is a seed-funded startup that’ll be looking for more funding next year.)

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