• StrictlyVC: May 12, 2015

    Happy Tuesday, everyone. We’re so looking forward to seeing a couple hundred of you tomorrow night at Galvanize in San Francisco!

    Quick reminder: check-in begins at 5 and the program starts around 6. You must have a ticket to get in, meaning you purchased a ticket at Eventbrite and are now on our guest list. (Sorry to be Scrooge-y; it’s largely for security reasons.)

    No column today — StrictlyC was a little overwhelmed with funding news this morning. We’ll be back with more good stuff tomorrow.:)

    —–

    Top News in the A.M.

    Verizon Communications, the largest mobile phone company in the U.S., is acquiring AOL for $4.4 billion, or $50 a share, a 17 percent premium over AOL’s closing share price of $42.59 yesterday. AOL’s “advertising platform provides a key tool for us to develop future revenue streams,” said Verizon CEO Lowell McAdam in a statement this morning. Said AOL CEO Tim Armstrong in a letter to employees:”The deal will give our content businesses more distribution and it will give our advertisers more distribution and mobile-first features. The deal will add scale and it will add a mobile lens to everything we do inside of our content, video, and ads strategy.”

    That may not be all, however. As Recode notes in a report about the deal, AOL owns Web properties like Huffington Post and TechCrunch, but it’s been more actively investing in services that help it and other publishers automate their ad sales, a high-growth but low-margin business. It’s possible, as a result, that Verizon will spin out some or all of its content operations with a third partner — “perhaps German publisher Axel Springer,” reports Recode. Indeed, in an interview with Re/code about the Verizon deal, Armstrong seemed to leave the door open. “We’ve spoken to partners about content and scaling . . . Obviously we’ve seen a lot of interest in the content brands we have. So over the course of the summer, stay tuned.”

    —–

    New Fundings

    Autonomic Technologies, an eight-year-old, Redwood City, Ca.-based company whose microstimulator technology treats severe headaches, has raised $38 million in Series D funding led By Edmond de Rothschild Investment Partners, with partipation from Forbion Capital Partners and earlier backers Kleiner Perkins Caufield & Byers, Interwest Partners, Novartis Venture Fund, Aberdare Ventures, and the Cleveland Clinic. According to Crunchbase, the company has now raised $93 million altogether.

    Bit Stew Systems, a 10-year-old, Burnaby, British Columbia-based company whose software platform provides real-time analytics, dynamic event management and a way to integrate into both IT and operational systems and applications, has raised $17.2 million in Series B funding led by GE Ventures, with participation from earlier backers Cisco and Yaletown Venture Partners. The company has now raised at least $25.7 million to date, shows Crunchbase.

    Blue Danube Systems, a nine-year-old, Menlo Park, Ca.-based company whose hardware and software product aims to increase average user data rates for wireless communication systems, has raised raised $16 million in Series B funding from AT&T, Northgate Capital and earlier backer Sequoia Capital. The company has now raised $33.7 million altogether, shows Crunchbase.

    Cartiva, a four-year-old, Alpharetta, Ga.-based company whose products are designed to treat cartilage injuries and osteoarthritis, has raised $8.5 million in Series D funding led by earlier investor New Enterprise Associates, with participation from new backer Windham Ventures Partners.

    Cleeng, a four-year-old, Amsterdam, Netherlands-based specialist in video e-commerce for sports and entertainment companies, has raised €1.1 million in Series A funding led by earlier backer Pascal Cagni, a former Apple VP. The company has now raised  €1.5 million ($1.7 million) to date, it says. More here.

    Credit Sesame, a five-year-old, Palo Alto, Ca.-based personal finance company that helps users manage their money and investments, has raised an additional $16 million in an oversubscribed Series D, with plans to raise as much as $20 million in the near future, reports TechCrunch. The new round was led by Syncora Alternative Investments, with participation from earlier investorsMenlo Ventures, IA Capital, Globespan Capital Partners, Inventus Capital, and numerous angel investors. The company has now raised more than $35 million altogether, says TechCrunch.

    Diagnostic BioSystems, a 21-year-old, Pleasanton, Ca-based FDA-registered medical device company that develops specialty immunohistochemistry reagents, has raised an undisclosed amount of growth capital from BroadOak Capital Partners, a life sciences-focused merchant bank.

    DocuSign, a 12-year-old, San Francisco-based e-signatures specialist, has raised a fresh $233 million in funding at reported $3 billion valuation led by Brookside Capital and Bain Capital Ventures. The company has now raised $440 million together. The WSJ has more here.

    Electronic Warfare Associates, a 38-year-old,  Herndon, Va.-based company that sells electronic warfare, cyber security and advanced commercial test tool systems to the U.S. and allied-nation government agencies (as well as commercial customers), has raised $21.5 million in debt led by American Capital.

    FST Biometrics, a 7.5-year-old, Rishon Lezion, Israel-based company whose biometric identification applications combine facial recognition and behavioral analytics, has raised $15 million in funding led by GMF Capital. According to Crunchbase, the company had previously raised at least $5 million.

    Hungryroot, an eight-month-old, New York-based company that’s promising pre-packaged “farm fresh” seven-minute meals that last in the refrigerator for up to 14 days, has raised $2 million in seed funding led by Brooklyn Bridge Ventures, with participation from Lerer Hippeau Ventures, Crosslink Capital, and KarpReilly. More here.

    IEX, a 1.5-year-old, New York-based upstart stock trading platform, has raised an undisclosed amount of funding from Sapphire Ventures. The company had hired Claudia Crowley, a former regulatory chief of the Big Board, as its chief regulatory officer back in March. Last fall, IEX raised $75 million  from investors, including Spark Capital and Franklin Templeton Investments.

    Immediately, a two-year-old, San Francisco-based company that’s building mobile tools for salespeople, has raised $2 million in seed funding, including from Maiden Lane Ventures, Streamlined Ventures, Galvanize Ventures, QueensBridge Venture Partners and numerous individual investors, including Naval Ravikant and Haroon Mokhtarzada.

    JHL Biotech, a three-year-old, Hsinchu, China-based biopharmaceutical company that’s aiming to develop and commercialize affordable biologic medicines, has raised $45.6 million in Series C funding from Sungent BioVenture, Liwick Investment Management, and an unnamed “global crossover fund,” along with earlier backer Milestone Capital. The company has now raised $135 million altogether.

    Juventas Therapeutics, an 8.5-year-old, Cleveland, Oh.-based clinical-stage biotechnology company focused on developing non-viral gene therapies to treat advanced cardiovascular diseases, has raised $13.5 million in new funding. Green Cross Holdings and POSCO Capital led a $7.5 million Series B-2 round in the company that included participation from other new and earlier investors; Juventas also secured $6 million in debt financing from Oxford Finance. More here.

    Knod, a two-year-old, Salt Lake City, Ut.-based online experience-based employment and learning program, has raised $6.2 million from investors, including Epic Ventures and Impact Investment Leaders. More here.

    NerdWallet, a 6.5-year-old, San Francisco-based personal finance site, has raised $64 million in new funding led by Institutional Venture Partners, with participation from RRE Ventures, iGlobe Partners and angel investors. The company has now raised $100 million altogether, shows Crunchbase.

    StrongDM, a three-year-old, New York-based company whose monitoring service provides automated real-time data error detection for businesses, has raised $800,000 in seed funding led by Bloomberg Beta, with participation from Data Collective, SocialStarts and venture investor Jerry Neumann, among others. More here.

    Synoste Oy, a three-year-old, Espoo, Finland-based medical device company that’s developing implants for the correction of skeletal deformations, has raised €2.2 million ($2.5 million) in Series A funding from Metsola Ventures and former Nokia executive Petri Pöyhönen, along with earlier backers High-Tech Gründerfonds, Finnvera, Lifeline Ventures, Mectalent Oy and unnamed angel investors. The company has also just received a € 1.0M European Eurostars grant.

    Talkspace, a three-year-old, New York-based startup that provides users access to professional and licensed therapists on their mobile devices (or via the web), has raised $9.5 million in Series A round led by earlier investor Spark Capital, with participation from earlier backer SoftBank. Previously, Talkspace had raised $3.5 million, including from Metamorphic Ventures.

    Vested Finance, a months-old, Austin, Tex.-based fintech startup focused on student financing, has raised $5 million in seed funding led by Sandleigh Ventures. More here.

    Wave Accounting, a 4.5-year-old, Toronto-based company that makes a suite of online small business software products, has raised $10 million in Series C funding from CRV, OMERS Ventures, The Social+Capital Partnership and an undisclosed strategic investor. The company has now raised $34.6 million, according to Crunchbase.

    Zapstitch, a two-year-old, Bangalore, India-based cloud data integration platform, has raised $2 million in pre-series A funding from Helion Ventures and earlier backer Orios Venture Partners. More here.

    —–

    New Funds

    Mission Bay Capital, a San Francisco, Ca.-based seed-stage venture firm that invests in life science companies to emerge from the University of California and the San Francisco Bay Area ecosystem more broadly, has closed its second fund with $25 million. Its limited partners include include Brook Byers of Kleiner Perkins Caufield & Byers; the UCSF Foundation; the William K. Bowes, Jr. Foundation; Sobrato Capital; and Capital Pacific, among others.

    Rocketship.vc, a two-year-old, Palo Alto, Ca.-based early-stage venture that invests in startups using data science models, is targeting $25 million for its debut firm, shows an SEC filing that sales the first sale has yet to occur. More here.

    Seed Equity Capital Partners, a new, Salt Lake City, Ut.-based seed fund — a spin-off of the investment bank Seed Equity Ventures — is hoping to raise a $10 million debut fund, shows an SEC filing that states the first sale has yet to occur. More here.

    SherpaVentures is raising a new $175 million fund, according to an SEC filing that was flagged by TechCrunch. This is the firm’s second early-stage fund; its first fund closed with $150 million. SherpaVentures has separately raised a $250 million fund called SherpaEverest that’s designed to support growth-stage companies.

    —–

    Exits

    WunWun, a three-year-old, New York-based on-demand delivery service, is closing its doors and some of its assets are being scooped up by Alfred, a 1.5-year-old startup that manages home-related on-demand orders. WunWun had raised $17.5 million from investors, including Resolute.vc. Alfred has raised $12.5 million from investors, including Spark Capital, SV Angel, CrunchFund, SherpaVentures, and New Enterprise Associates. TechCrunch has the story here.

    —–

    People

    Art Coviello, formerly executive chairman of RSA, has joined the Menlo Park, Ca.-based venture firm Rally Ventures as a venture partner.

    The 22 most memorable quotes from the new Elon Musk book, ranked.

    Entrepreneur Kevin Ryan — who has cofounded Gilt Groupe, Business Insider, MongoDB, and the wedding registry startup Zola — is taking the wraps off yet another new company: a visual search and discovery platform for workplace design called Kontor. TechCrunch has more here.

    Jawbone, a San Francisco-based company that makes activity trackers, wireless speakers and other products, has hired  as its new president. Samat is currently VP of shopping and travel products at Google, but starts at the company this month, reporting to Jawbone’s CEO and cofounder Hosain Rahman. Recode has the story here.

    Kevin Thau has joined Spark Capital as general partner in its San Francisco office. Thau was Twitter’s business development head for five years before becoming COO of Jelly, a (seemingly flagging) question-and-answer platform cofounded by Twitter cofounder Biz Stone. More here.

    —–

    Essential Reads

    Why the ruling against the NSA’s phone records program could have huge implications.

    In case you were curious: Twitter spent more than $86 million to acquire livestreaming app Periscope and social media talent agency Niche earlier this year. Recode has the news here.

    —–

    Detours

    Five hacks to get faster streaming video.

    A supercut of the many times Owen Wilson has said “wow” in a movie.

    A custom-built electric racer for one of the more surreal (and deadliest) road races in the world, happening next month on the Isle of Man.

    —–

    Retail Therapy

    Lotus Belle luxury tents. When you’re not so into “roughing it” in the great outdoors. (Hey, we’re with you.)

    Connie

  • 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 Horowitz, Bessemer 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 Ventures, Osage 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 Ventures, Maya 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.

    —–

    IPOs

    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 Venture, ATA Ventures and Amidzad Partners, among others.

    —–

    Exits

    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.

    —–

    People

    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.”)

    —–

    Jobs

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

    —–

    Data

    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.

    —–

    Detours

    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.

    Connie

  • Quick Chat with Kevin Talbot of Relay Ventures

    Kevin TalbotIn 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.

    Connie

    , , , , ,

  • StrictlyVC: May 8, 2015

    It is Friday! Woot!

    Before we let you go, a quick scheduling note about our next INSIDER event, coming up Wednesday: Zenefits CEO Parker Conrad has canceled, owing to a change in his travel schedule. The great news: Tom Fallows, Director of Global Expansion Products at Uber — and creator of the Google Express same-day delivery service — has joined the program. (Recode covered his poaching here). We are very excited to have him.

    Thanks to those of you who are coming. Thanks very much, too, to our generous sponsors and partners in the evening, Amazon Web Services, Galvanize, and Personal Capital.

    No column today, but we hope you have a wonderful weekend — especially you, supermoms!

    —–

    Top News in the A.M.

    Uber has submitted a bid of up to $3 billion for the Nokia subsidiary Here, the main competitor to Google Maps, reports the New York Times. Its bid is reportedly competing with a consortium of German automakers that are are teaming up with the Chinese search engine Baidu on their own offer. Nokia is expected to announce the unit’s sale by May’s end, says the report.

    According to the WSJ, the publicly traded, online reviews site Yelp is looking to sell itself. A couple of investment banking analysts have identified eight potential buyers.

    —–

    New Fundings

    Big Data Partnership, a three-year-old, London-based company that provides big data consulting, training and support for numerous industries, has raised £3.1 million ($3.5 million) in Series B funding from earlier backer Beringea, which had previously invested £1.25m in the company. More here.

    Delvv, a two-year-old, Palo Alto, Ca.-based company whose app promise users a personalized news feed to help them find the best events, apps, and articles, has raised $3.5 million in seed funding from undisclosed backers.

    Dida Pinche, a year-old, Beijing, China-based carpooling app, has raised $100 million in Series C funding led by China Renaissance Capital Investment, with TBP Capital and earlier backers IDG Capital and Beijing-based auto information and marketing site Bitauto joining the round. The company had previously raised $30 million across its first two rounds, reports China Money Network. (This deal is interesting, given that Didi Dache and Kuaidi Dache, which merged back in February, control something like 99 percent of China’s market. But Dida Pinche has reportedly talked with Uber about some kind of tie-up.)

    GaN Systems, a seven-year-old, Ottawa, Canada-based company that produces gallium nitride power switching semiconductors, has raised $20 million in new funding led by Cycle Capital Management, with participation from BDC Capital and Beijing-based Tsing Capital, as well as earlier backers Chrysalix Energy Venture Capital and RockPort Capital. The company has raised funding across at least two prior rounds, though according to Crunchbase, it hasn’t disclosed how much it raised in those financings.

    Iwjw, a 14-month-old, Shanghai, China-based company that helps people buy or rent apartments via its site and apps, has raised $120 million in Series D funding led by GGV Capital and Morningside Ventures, with participation from Shunwei Capital and Banyan Capital. The round values the young company at $1 billion, according to China Money Network.

    Kymab, a six-year-old, Cambridge, England-based company that uses its antibody technology to form corporate partnerships and to develop its own drugs, has tacked on $50 million in new funding to its Series B round, bringing its total to $90 million. Its backers include Malin Corp. and Woodford Patient Capital Trust.

    Lucid, an 11-year-old, Oakland, Ca.-based company whose cloud operating system connects a building’s hardware and software technologies with a single platform (and will soon focus on similarly connecting disparate buildings), has added capital to its Series B financing from GE Ventures. The round, which now amounts to $14.2 million, also includes participation from Formation 8, Zetta Venture Partners, and Autodesk.

    The Odyssey, a nearly six-year-old, New York-based millennial-targeted content platform, has raised $3 million in funding from ExactTarget cofounder Scott Dorsey; former ExactTarget CMO Tim Kopp; and Traci Dolan, ExactTarget’s chief administration officer.

    Twistlock, a Herzliya, Israel-based company whose security suite aims to give enterprises the visibility and control they need over their container-based applications and data, has raised $2.5 million in seed funding led by YL Ventures.

    Vedantu, a six-month-old Bangalore, India-based online tutoring platform, has raised $5 million in Series A funding from Accel Partners and Tiger Global Management. TechCrunch has more here.

    Wag, a five-month-old, L.A.-based app that connects dog owners with access to pre-screened, insured and bonded dog walkers, has raised $2.5 million in seed funding led by Freestyle Capital, with participation from Greylock Partners, Crunchfund, Slow Ventures, Social Leverage, and RRE Ventures.

    Webydo, a five-year-old, Tel Aviv, Israel-based SaaS platform that enables designers to create and manage code-free websites for their clients, has raised $5 million in Series C funding led by Singulariteam, a venture fund headed by entrepreneur Moshe Hogeg of Mobli and Yo fame. The company has now raised $13.4 million altogether, including from OurCrowd and Magna Capital Partners.

    Wish, a 3.5-year-old, San Francisco-based mobile shopping application, is looking to — or has — raised more than $500 million, according to filings obtained by VC Experts and shared with Forbes, whose sources say investors value the company at roughly $3 billion following its latest round. The WSJ reported that Wish was worth $400 million following a $50 million round led by Founders Fund last year. Wish’s other investors include Jerry Yang, GGV Capital, Khosla Ventures partner Keith Rabois, actor Jared Leto andFormation 8. Forbes’s story is here.

    —–

    IPOs

    Fitbit, the eight-year-old, San Francisco-based maker of activity trackers — roughly 20 million of which it has sold over the years — filed yesterday to become a publicly traded company, as a growing number of competitors crowds into the fitness tracking business. According to an SEC filing, the company is offering up to $100 million in common stock. Fitbit has raised at least $83 million in funding from investors, including Foundry Group, True Ventures, SoftBank Capital, Sapphire Ventures, Qualcomm Ventures, and Felicis Ventures. Foundry is the biggest shareholder, with a 28.9 percent stake; True is the second-biggest shareholder, with 22.4 percent ownership. The WSJ has more here.

    —–

    Exits

    The publicly traded meal delivery company Just Eat is acquiring Menulog, a nine-year-old, Sydney, Australia-based online food ordering service, for roughly $687 million. Three months ago, Menulog merged with rival EatNow. TechCrunch has the story here.

    The Boston-area manufacturing software company PTC is paying $112 million to acquire ThingWorx, a six-year-old, Downington, Pa.-based company whose software platform allows developers to build and run machine-to-machine and “Internet of Things” applications. ThingWorx had raised at least $13 million in funding, including from Safeguard Scientifics. More here.

    Tesla Motors has spent an undisclosed amount to acquire Riviera Tool, a Michigan-based company that specializes in constructing the type of machinery that stamps large sheets of metal into auto parts. Ironically, notes TechCrunch, Tesla still can’t sell cars in Michigan. Its governor signed legislation last fall that bans Tesla and any other carmaker from selling direct to consumers in the state.

    Yahoo acquired an unnamed company for $23 million during the first three months of this year, according to a newly filed SEC form that was flagged yesterday by Business Insider. The filing provides few details about the transaction.

    —–

    People

    As Zappos switches to a self-governing management system called Holacracy (StrictlyVC talked with the consultant who dreamed it up here), 14 percent of its employees have opted instead to accept three-month severance packages. More here.

    Are New York real estate prices peaking? Mexican telecom mogul Carlos Slim Helú seems to think so. He’s selling a red-brick Beaux Arts style mansion at 1009 Fifth Ave. that he bought as an investment five years ago for $80 million. He paid $44 million for the property. Says his son-in-law to Forbes: “Back then it was a good time to buy, as we also believe it is a good time to sell now.”

    —–

    Jobs

    Samsung Electronics is looking to add a senior director to its Global Innovation Center in New York. More here.

    —–

    Essential Reads

    A cybersecurity company, Tiversa, faked hacks and extorted clients to buy its services, according to an ex-employee. Its board includes the retired four-star U.S. Army General Wesley Clark.

    —–

    Detours

    The problem(s) with electric bicycles.

    Walk in Shanghai.

    Why CEOs are four times more likely to be psychopaths. (We’re not talking about you, of course. Hah, hah. Gulp.)

    —–

    Retail Therapy

    Pretty, though good luck determining what time it is.

    Connie

  • StrictlyVC: May 7, 2015

    Good morning, dear readers!

    —–

    Top News in the A.M.

    Alibaba, the Chinese e-commerce giant, is replacing CEO Jonathan Lu with the company’s COO, Daniel Zhang. Lu took over as chief executive from Alibaba’s founder and executive chairman Jack Ma two years ago.  The New York Times has more here.

    —–

    The Venture Math Behind These Giant Financings

    To better understand unicorn valuations, the law firm Fenwick & West recently analyzed the financing terms of 37 U.S.-based venture backed companies that raised money at valuations of $1 billion or more in the 12-month period ending March 31.

    Among the firm’s findings about these financings is that only a quarter were led by “traditional” VCs and the rest were led by mutual funds, hedge funds, sovereign wealth funds and corporate investors. The investors also received significant downside protection in case the companies’ values decline. Not last — and not surprisingly — many of these later-stage investors are looking at far less upside than these companies’ earlier investors, which may create issues for some down the road regarding if and when to sell to an acquirer, as well as when to go public.

    We talked earlier this week with Barry Kramer, a partner at Fenwick and the author of the firm’s new report, to learn more about the numbers. What follows is a bit of that chat, edited for length.

    Were you at all surprised that a full 75 percent of the money that poured into these so-called unicorns came from nontraditional investors?

    That’s what I expected. These are the mutual groups and hedge funds that used to invest in IPOs, but IPOs are getting delayed so much that these companies now have the same [risk profile] at the late-stage [as newly public companies].

    Also, VCs don’t typically invest at these really high valuations.

    Yet traditional VCs, including many early-stage investors, are keeping their board seats at these privately held companies. Did your research touch on the impact of those seats not necessarily turning over? A public offering usually results in some fresh blood on the board.

    That’s an interesting point that we didn’t examine, though I think two things could be happening. Because IPOs are being delayed and VCs are serving on these boards longer, it might be impacting their ability to [spend more time] with more junior companies. The other thing I see is that because these [earlier-stage VCs] have, say, 10 to 15 percent of the company, they’re very engaged and attentive because of that economic interest, whereas with public companies, that’s [not always the case].

    In your report, you say that roughly 22 percent of the unicorn companies you studied have dual-class common stock structures — which provide founders and management and, in some cases, other shareholders with super voting rights. Was there any type of pattern? For example, were the companies with dual stock structures more often founded by serial entrepreneurs with track records of success?

    We’re definitely seeing this much more than 10 years ago, though it’s really all over the map. If you’re two kids out of school without a track record and you get your first venture round, people might look at you funny if you want a dual track structure. You can still do it later, once you have some leverage [because your company is performing well], but it’s often a negotiation. Other times, yes, people are more understanding of founders who have a track record if they ask to [implement a dual stock structure] at an early stage because the founders have proven they know how to run a company.

    Your report talks at length about how much downside protection investors are getting in these deals, though you say they have more protections in an acquisition scenario than with an IPO. Can you explain?

    In many of these cases, company valuations could fall 80 percent in value, and investors would still get their money back [because of their liquidation preferences]. The typical company will have, let’s say, a $10 billion valuation. And lets say that early-stage investors put in $200 million and later-stage investors invested $800 million [for a total of $1 billion invested]. If the company’s value falls to $2 billion [the price an acquirer is willing to offer for it], all those investors will [be repaid]. But let’s say the company goes public, and you’re a later-stage investor who has acquired preferred shares at $30 per share. If it goes out at $25 a share, you’ll have lost $5 a share.

    Of course, companies that go public are typically doing well, so these later-stage investors are investing with the idea that even if they lose a bit at the IPO, the stock will pop up over time.

    That’s their only protection?

    There are other types of IPO protections. In one common type, the investor puts in a provision that says: If you go public at less than $30, you give me more stock, so I’m effectively paying the [IPO] price. In another scenario, the investor insists that the company can’t go public at less than the price it paid for its shares unless the company gets the investor’s approval first. So there are mechanisms, but [there are less of them appearing in these deals].

    For Kramer’s full report, which is very much worth reading, click here.

    —–

    New Fundings

    908 Devices, a Boston, Ma.-based company that makes battery-operated, hand-held chemical detection tools used in mass spectrometry, has raised $11.6 million in Series C funding led by Saudi Aramco Energy Ventures (SAEV), with participation from earlier backers ARCH Venture Partners, Razor’s Edge Ventures, University of Tokyo Edge Capital and Schlumberger, along with individual investors. The company has now raised $29.3 million altogether, shows Crunchbase.

    Adaptive Biotechnologies, a six-year-old, Seattle, Wa.-based company that provides research and diagnostic tools to scientists and clinicians involved in genomic immunology, has raised $195 million in Series F funding led by Matrix Capital Management, with participation from Senator Investment Group,Tiger Global Management, Rock Springs Capital and an unnamed healthcare investor, along with earlier backers Viking Global, Casdin Capital and Alexandria Real Estate Equities. Forbes has more here.

    Aiwujiwu, a Shanghai, China-based rental and home listing portal and transaction platform, has raised $120 million in Series D funding from GGV Capital, Morningside Ventures, Shunwei Capital, and Banyan Capital. Tech in Asia has more here.

    Banjo, a four-year-old, Redwood City, Ca.-based social discovery app, has raised $100 million in new funding from the Japanese tech giant SoftBank. The round pushes Banjo’s total funding to more than $120 million. Others of its investors include Balderton Capital, BlueRun Ventures and VegasTechFund. Venture Capital Dispatch has much more here.

    Blitsy, a 3.5-year-old, Chicago-based arts and crafts e-commerce site, has raised $3.6 million in Series A funding led by Greycroft Partners, with participation from Data Point Capital and earlier backers Chicago Ventures, FireStarter Fund, and Lakewest Venture Partners. The company had previously raised around $2 million in equity and debt financing, shows Crunchbase.

    Chartbeat, a six-year-old, New York company that helps Web publishers measure reader engagement, has raised $15.5 million in Series C funding led by Harmony Partners, with participation from Digital Garage and earlier backers Index Ventures, DFJ, Jason Calacanis and Jeff Clavier.

    Closeup.FM, a 1.5-year-old, Knoxville, Tn.-based company whose software facilitates pop-up events powered by fans, has raised an undisclosed amount of seed funding from Angel Capital Group.

    Cursive Labs, a 10-month-old, San Diego-based venture studio, has raised $2.2 million in Series A funding, including from Crescent Ridge Partners Ventures, Wavemaker Partners, Keshif Ventures, Bootstrap Incubation, and Howard Lindzon, among others.

    Cybereason, a three-year-old, Cambridge, Ma.-based company whose endpoint detection and response platform reveals and investigates cyber-attacks in real time, has raised $25 million in Series B funding led by Spark Capital, with participation from earlier backer CRV and strategic investor Lockheed Martin. The company has now raised at lesat $29.6 million altogether, shows Crunchbase.

    Doblet, a 1.5-year-old, San Francisco-based company that provides an on-demand phone charging service at a growing number of venues, has raised $1.3 million in seed funding led by SoftTech VC.

    Eboox, a two-year-old, Milan, Italy-based company that builds online stores for its customers, has raised $1.1 million in funding, including from Programma 101 and Club Digitale.

    eDaijia, a four-year-old, Beijing-based company whose app lets anyone with a car sign up to be a designated driver, has raised $100 million in Series D funding led Warburg Pincus, with participation from earlier backers Matrix Partners and Lightspeed Venture Partners. More here.

    e-Kare, a two-year-old, Fairfax, Va.-based digital health company that speeds the assessment and monitoring of chronic wounds from a mobile device, has raised an undisclosed amount of funding from the Center for Innovative Technology‘s CIT GAP Funds. More here.

    Govini, a four-year-old, Washington, D.C.-based intelligence startup to companies that sell goods and services to the public sector, has raised $20 million in Series C funding from new and existing investors, including Accel Partners, Salesforce Ventures, and Symphony Technology Group. More here.

    Itineris, a 12-year-old, Deurle, Belgium-based company that provides operational software and services to the utilities industry, has raised $10 million in funding led by GIMV, with participation from return backers PMV and company founder Edgard Vermeersch. The company has so far raised $20.9 million altogether, shows Crunchbase.

    Jetbay, a 2.5-year-old, Mountain View, Ca.-based online platform for foreign travelers to research and book their trips to China, has raised $1.6 million in seed funding led by ChinaRock Capital Management. TechCrunch has more here.

    KFit, a months-old, Singapore-based company that, like ClassPass in the U.S., enables users to get into a variety of fitness studios with just one monthly membership, has reportedly raised a “seven-figure” round, including from 500 Startups, SXE Ventures, Founders Global and numerous individual investors.

    Microf, a five-year-old, Albany, Ga.-based consumer finance company that provides rent-to-own solutions for the residential HVAC industry, has raised $12.3 million in funding from Rotunda Capital Partners.

    Moximed, a nine-year-old, Hayward, Ca.-based company that makes knee implants for pre-arthoplasty patients, has raised $33 million in funding from Vertex Venture Holdings, with participation from earlier backers New Enterprise Associates, Gilde Helathcare Partners, Morgenthaler Ventures, and GBS Venture Partners. The company has raised at least $80.6 million to date, shows Crunchbase.

    NurturMe, a 5.5-year-old, Austin, Tex.-based company that makes organic dried baby food and toddler snacks, has raised $1.5 million in funding, including from EcoEnterprises Fund.

    Robinhood, a 2.5-year-old, San Francisco-based zero-fee stock trading app, has raised $50 million in new funding led by New Enterprise Associates, with participation from Vaizra Investments and earlier backers Index Ventures and Ribbit Capital, among others.The company has now raised $66 million altogether, it says.

    Spyryx Biosciences, a 2.5-year-old, Chapel Hill, N.C.-based company that’s making therapeutics for respiratory diseases, has raised $18 million in Series A funding from Canaan Partners, Hatteras Venture Partners and 5AM Ventures.

    Symbiomix Therapeutics, a three-year-old, Newark, N.J.-based biopharmaceutical company that’s developing medicines for serious women’s health infections, has closed the third and final tranche of its $41 million Series A funding, with backing from OrbiMed, Fidelity BioSciences, HBM Partners, and Square 1 Bank.

    Toppr, a two-year-old, Mumbai, India-based startup that helps students prepare for entrance exams, has raised $10 million from Fidelity Growth Partners India, SAIF Partners, and Helion Ventures. TechCrunch has more here.

    Trizic, a 2.5-year-old, San Francisco, Ca.-based digital wealth advisory firm, has raised $2 million in seed funding, including from Operative Capital.

    Zanbato, a five-year-old, Mountain View, Ca.-based platform that connects institutional investors with alternative investment opportunities, has raised $8 million in Series B funding led by AITV (Accelerate-IT Ventures), with participation from earlier backer Formation 8 and other unnamed investors. The company has now raised at least $15.8 million, shows Crunchbase.

    —–

    New Funds

    Point Reyes Management, a seven-year-old, Sausalito, Ca.-based investment firm, has launched a super angel fund focused on early stage startups called the e.fund. It’s writing checks of between $50,000 and $250,000 and has already backed 10 startups. More here.

    Storm Ventures, a 15-year-old, Menlo Park, Ca.-based venture firm that focuses primarily on enterprise technologies, has closed its fifth fund with $180 million, reports Fortune. The fund is being managed by three general partners: Tae Hea Nahm, Jason Lemkin, and Ryan Floyd, with cofounders Sanjay Subhedar and Alex Mendez moving into advisory roles, says Fortune. StrictlyVC has talked in the last year with Nahm, about what U.S. investors can learn from Korea, and with Lemkin, about why enterprise startups are growing much faster than even two years ago.

    —–

    Exits

    PlayHaven, a San Francisco-based mobile ad network, has been acquired for undisclosed terms by RockYou, a San Francisco-based gaming and in-game advertising company. PlayHaven was previously sold to the L.A.-based startup studio Science Inc. last fall for undisclosed terms. TechCrunch has more here.

    —–

    People

    Goldman Sachs said yesterday that 51-year-old Stuart Bernstein, head of its clean technology and renewables and the venture capital coverage groups, is retiring from the firm after 24 years. Bloomberg has more here.

    So far this year, 17 percent of Intel‘s senior hires have been historically underrepresented minorities — double the rate of last year, says the company. Intel has also doubled its senior hiring among women to 33 percent, CEO Brian Krzanich said yesterday. CIO has the story here.

    Speaking at a conference in Stockholm yesterday, Martin Lorentzon, chairman of the streaming service Spotify, was asked about competitive threats, including Tidal, the company acquired by entertainer Jay Z in March for $56 million. His cheeky response: “I’ve got 99 problems – and Jay Z ain’t one.”

    Games maker Zynga said yesterday that as part of a $100 million cost reduction program, it’s laying off 364 people, which is 18 percent of its total headcount. Recode has more here.

    —–

    Essential Reads

    A 3-D printed gun lawsuit has launched a new war between arms control and free speech.

    —–

    Detours

    Wages are growing faster at larger companies.

    Whole Foods is opening a cheaper line of stores.

    At Harvard, engineering a better brisket.

    —–

    Retail Therapy

    “The Surge” exhibition. (Its opening reception is tonight.)

    Connie

    , ,

  • The Venture Math Behind All These Giant Financings

    MathTo better understand unicorn valuations, the law firm Fenwick & West recently analyzed the financing terms of 37 U.S.-based venture backed companies that raised money at valuations of $1 billion or more in the 12-month period ending March 31.

    Among the firm’s findings about these financings is that only a quarter were led by “traditional” VCs and the rest were led by mutual funds, hedge funds, sovereign wealth funds and corporate investors. The investors also received significant downside protection in case the companies’ value declines. Not last — and not surprisingly — many of these later-stage investors are looking at far less upside than the companies’ earlier investors, which may create issues for some down the road regarding if and when to sell to an acquirer, as well as when to go public.

    We talked earlier this week with Barry Kramer, a partner at Fenwick and the author of the firm’s new report, to learn more about the numbers. What follows is a bit of that chat, edited for length.

    Were you at all surprised that a full 75 percent of the money that poured into these so-called unicorns came from nontraditional investors?

    That’s what I expected. These are the mutual groups and hedge funds that used to invest in IPOs, but IPOs are getting delayed so much that these companies now have the same [risk profile] at the late-stage [as newly public companies].

    Also, VCs don’t typically invest at these really high valuations.

    Yet traditional VCs, including many early-stage investors, are keeping their board seats at these privately held companies. Did your research touch on the impact of those seats not necessarily turning over? A public offering usually results in some fresh blood on the board.

    That’s an interesting point that we didn’t examine, though I think two things could be happening. Because IPOs are being delayed and VCs are serving on these boards longer, it might be impacting their ability to [spend more time] with more junior companies. The other thing I see is that because these [earlier-stage VCs] have, say, 10 to 15 percent of the company, they’re very engaged and attentive because of that economic interest, whereas with public companies, that’s [not always the case].

    In your report, you say that roughly 22 percent of the unicorn companies you studied have dual-class common stock structures — which provide founders and management and, in some cases, other shareholders with super voting rights. Was there any type of pattern? For example, were the companies with dual stock structures more often founded by serial entrepreneurs with track records of success?

    We’re definitely seeing this much more than 10 years ago, though it’s really all over the map. If you’re two kids out of school without a track record and you get your first venture round, people might look at you funny if you want a dual track structure. You can still do it later, once you have some leverage [because your company is performing well], but it’s often a negotiation. Other times, yes, people are more understanding of founders who have a track record if they ask to [implement a dual stock structure] at an early stage because the founders have proven they know how to run a company.

    Your report talks at length about how much downside protection investors are getting in these deals, though you say they have more protections in an acquisition scenario than with an IPO. Can you explain?

    In many of these cases, company valuations could fall 80 percent in value, and investors would still get their money back [because of their liquidation preferences]. The typical company will have, let’s say, a $10 billion valuation. And lets say that early-stage investors put in $200 million and later-stage investors invested $800 million [for a total of $1 billion invested]. If the company’s value falls to $2 billion [the price an acquirer is willing to offer for it], all those investors will [be repaid]. But let’s say the company goes public, and you’re a later-stage investor who has acquired preferred shares at $30 per share. If it goes out at $25 a share, you’ll have lost $5 a share.

    Of course, companies that go public are typically doing well, so these later-stage investors are investing with the idea that even if they lose a bit at the IPO, the stock will pop up over time.

    That’s their only protection?

    There are other types of IPO protections. In one common type, the investor puts in a provision that says: If you go public at less than $30, you give me more stock, so I’m effectively paying the [IPO] price. In another scenario, the investor insists that the company can’t go public at less than the price it paid for its shares unless the company gets the investor’s approval first. So there are mechanisms, but [there are less of them appearing in these deals].

    For Kramer’s full report, which is very much worth reading, click here.

    Connie

    ,
    , ,

  • Bill Maris Addresses Sensational Headlines at Disrupt

    Bill Maris at DisruptBill Maris of Google Ventures gave a thoughtful performance yesterday at the TechCrunch Disrupt conference in New York. Interviewed by the outlet’s co-editor, Alexia Tsotsis, the two covered a range of high-profile stories that have been published in the last year and relate either to Google Ventures’s portfolio companies or to controversial – even seemingly strange — statements that Maris has made to reporters.

    Earlier this year, for example, in a Bloomberg profile, Maris was quoted as saying: “If you ask me today, is it possible to live to be 500? The answer is yes.”

    The Bloomberg piece actually provides readers with a fairly rich picture of what Maris is trying to achieve at Google Ventures. But Maris’s very specific prediction has stuck to him like chewed gum and Tsotsis gave him the chance to address it yesterday — an opportunity he seized, suggesting the “science fiction headline” belies the truth.

    The reality, he said is that “for generations, physicians and researchers have worked really hard to diagnose, treat and prevent disease. And so I’m interested in the people that are doing that. And if that adds five years to people’s lifespans, if it adds 10 years . . . I think it’s a worthy pursuit.”

    At the beginning of the last century, he noted, the lifespan in the U.S. “was about 40 years; now it’s about 77.”  There’s “a ton of work that has to be done” to address the question of whether humans can live 500 years, Maris continued. But he said he thinks things are moving in the right direction. “I think it’s possible within a generation or two, at the most, to cure cancer.” Maris also noted that the “first human genome was sequenced in 2004. It took about 15 years and $2.7 billion, and now you can sequence a genome on a machine that can sit [on a small side table] for under $1,000 in a couple of hours.”

    Maris was also asked about the reputation of Uber — heralded as Google Ventures’s largest deal ever when Google backed it in 2013 —  as “ethically challenged.” Calling Uber the “fastest-growing company we’ve ever seen,” he offered that any outfit growing so fast is invariably going to “bump into challenges.” Maris also shared some color about one of his first meetings with Uber CEO Travis Kalanick about a potential tie-up.

    “When we invested in the first round of Uber, my partner, David Krane, and I went to see Travis and talk about the round,” said Maris. “I told Travis the same thing I told Matt Rogers and Tony Fadell when we invested in Nest [Labs] . . . which was: ‘What does it take to take it off the table? We don’t want to get into an auction. We’re not looking to save money on valuation, and hopefully you’re not looking to crank it as much as possible.’ And Travis said, ‘Here’s what it’s going to take. Here’s the price and what I want the round to look like. Are you on board with that?’”

    After Maris said Google Ventures was, and they “shook on it,” that’s “exactly the deal that we did, and Travis was as good as his word,” said Maris, offering that Kalanick could “easily” have asked for “15 to 20 percent more.”

    Tsotsis next moved on to Google Glass — which Maris says is alive and well, despite reports suggesting otherwise. We’d hoped she might ask Maris about another, Uber-related headline this year: the news that Google plans to develop its own Uber competitor.

    As you may recall, Bloomberg had reported back in February that Google was “preparing to offer its own ride-hailing service, most likely in conjunction with its long-in-development driverless car project.” At the time, Bloomberg said that David Drummond, Google’s chief legal officer and senior vice president of corporate development (as well as an Uber board member), had “informed Uber’s board of this possibility, according to a person close to the Uber board.” Bloomberg further reported that “Uber executives have seen screenshots of what appears to be a Google ride-sharing app that is currently being used by Google employees.”

    Shortly after the piece was published, a “person familiar with the matter” told the Wall Street Journal that the “news that Google is developing an app to rival Uber has been blown out of proportion.” Reported the Journal: “The person said a Google engineer has been testing an internal app that helps Google employees carpool to work, and the app isn’t associated with the company’s driverless cars program.”

    That seemed to settle the matter. Given the size of the opportunity Uber is chasing — and Google’s slowing growth — we’re not certain why.

    (By the way, in case you’re curious: Unlike Maris’s colleague Ray Kurzweil – who reportedly takes 150 supplements each day to extend his life — Maris doesn’t take any, he said yesterday.)

    Connie

    ,
    , , , , ,

  • StrictlyVC: May 5, 2015

    Hi, everyone. No column today but lots of intel. Hope you have a great Tuesday.:) (Psst, web visitors, here’s a more scannable version of today’s email.)

    —–

    Top News in the A.M.

    Alibaba shares fell to an all-time low of $77.8 per share this morning. More here. 

    Oof. Comcast spent $336 million over the past year-plus on its failed attempt to acquire Time Warner Cable. Meanwhile, Time Warner Cable reportedly shelled out more than $200 million in merger-related costs. More here.

    —–

    New Fundings

    Applicate, a year-old, Bangalore, India-based workforce management platform, has raised $550,000 in seed funding from individual investors, including Flipkart VP Rishi Vasudev. Tech-Portal has more here.

    Canva, a three-year-old, Sydney, Australia-based online design platform, has raised $6 million in funding from AirTree Ventures, as well as earlier backers, including Matrix Partners, Shasta Ventures and Blackbird Ventures. According to Crunchbase, the company has raised at least $13 million to date. TechCrunch has more here.

    CloudGenix, a two-year-old, Santa Clara, Ca.-based wide-area-networking startup, just raised $25 million in Series B funding led by Bain Capital Ventures, with participation from CRV and Mayfield Fund. The company has now raised $34 million altogether, it says. VentureBeat has more here.

    Cytena, a year-old, Freiburg, Germany-based company whose laboratory device, called cy-Clone, separates single cells, has raised €1.1 million ($1.2 million) in seed funding from High-Tech Gründerfonds and a private investor.

    Dasheroo, a year-old, San Francisco, Ca.-based company whose collaborative business dashboard app helps companies analyze how they’re performing across all the apps they use, has raised $3.25 million in Series A funding led by the venture firm Cloud Apps Capital Partners.

    EnShape, a year-old, Jena, Germany-based maker of 3D-sensors for industrial applications, has raised an undisclosed amount of funding from High-Tech Gründerfonds.

    Fazua, a four-year-old, Munich, Germany-based company that makes an e-bike drive system (replete with engine, gearbox, battery, and other electronics), has raised a “seven figure euro” Series A round, including from earlier backers High-Tech Gründerfonds, Bayern Kapital and a private investor.

    FileChat, a 1.5-year-old, New York-based company whose application allows users to chat about and share documents insidered their preferred cloud storage platforms, has raised $3 million from unnamed private investors.

    GAMURS, a months-old, Sydney, Australia-based social media platform for gamers, has raised $500,000 in seed funding, after graduating from the National Roads and Motorists’ Association (NRMA) Slingshot Jumpstart accelerator program. The company was founded by 19-year-old Riad Chikhani, who tells the Australian Financial Review: “Users were spending about six minutes on the site, but now we’re seeing numbers of 13 to 14 minutes.”

    Incentive, a seven-year-old, Venice, Ca.-based company that has developed a social collaboration platform for the enterprise, just raised $1.7 million in seed funding from an undisclosed group of institutional and private investors. The company has now raised $3.5 million in seed funding altogether, it says.

    MeeDoc, a three-year-old, Helsinki, Finland-based telemedicine platform, has raised €3.5 million ($3.9 million) in funding, including from XLHealth, a German venture firm. The company has now raised $5.3 million altogether, shows Crunchbase.

    NatureBox, a three-year-old, San Carlos, Ca.-based subscription commerce startup that sells snacks direct to online consumers, has raised $30 million in Series C funding led by Global Founders Capital, the venture arm of Rocket Internet. Other participants in the round — which appears to bring the company’s total funding to $58.5 million — include Neuberger Berman Equity Funds, Kensington Capital Holdings, Valley Oak Investment Partners, individual investors and earlier investors General Catalyst Partners, Canaan Partners and Softbank Capital. The WSJ has much more here.

    Outreach, a two-year-old, Seattle, Wa.-based company that creates workflow tools for sales teams, has raised $2.3 million in seed funding from MHS Capital, Floodgate, Version One Ventures, and individual investors, including Sarah Imbach, a former chief revenue officer at LinkedIn.

    Panshi, an 11-year-old, Hangzhou, China-based online and mobile advertising firm, has raised $200 million in Series B funding led by the Shanghai-based investment firm NewMargin Ventures, says China Money Network. Other participants in the round include WI Harper Group, JD Capital, Fang Fund Partners, and Shanghai Lefeng.

    Parkifi, a year-old, Denver, Co.-based company whose sensor technology provides real-time data to parking lot operators, cities, and mobile applications to let them know where open and available parking spots exist, has raised $2 million from Galvanize Ventures, Foundry Group Angels and Access Ventures, among others.

    PureWow, a 4.5-year-old, New York-based digital media company specializing in women’s lifestyle content (with localized and interest-specific content), has raised $2.5 million in seed funding led by Bob Pittman’s Pilot Group, with participation by VaynerRSE, Lerer Hippeau Ventures, Pritzker Group Venture Capital, Melo7Tech, Great Oaks Venture Capital, Galvanize Ventures, and individuals, including Bonobos CEO Andy Dunn.

    SMS Assist, a 20-year-old, Chicago-based company that makes cloud-based facilities management software, has raised $45 million in Series C funding from Insight Venture Partners. According to Crunchbase, the company has now raised $105 million altogether, including from Pritzker Group Venture Capital and Jumpstart Ventures.

    Travefy, a three-year-old, Lincoln, Ne.-based online and mobile group travel planner, has raised $1.8 million in funding from strategic investor Travel and Transport, the Nebraska Global Investment Company, Nelnet, Columbia University, Linseed Capital, the Invest Nebraska Corporation, and a variety of angels.

    Twilio, the seven-year-old, San Francisco-based company whose application programming interface lets developers add call, voice, text and picture messaging to their apps with just a few lines of code, has quietly raised a $100 million round of funding, reports Forbes. A Forbes source with knowledge of the funding says the raise pushes the company past the billion-dollar valuation mark. Twilio has previously raised $104 million from investors, including Bessemer Venture Partners, Redpoint Ventures and Union Square Ventures. It was valued at roughly $500 million during its last funding round in July 2013.

    UHoo, a year-old, Hong Kong-based company whose device monitors air pollution levels inside users’ homes, has raised an undisclosed amount of seed funding from East Ventures. Tech in Asia has more here.

    Wonder Workshop, a 2.5-year-old, San Mateo, Ca.-based company that teaches children to code through smart robots that children can program using mobile devices, has raised $6.9 million in funding from WI Harper Group, with participation from earlier backers Madrona Venture Group, CRV, Maven Ventures, Bright Success Capital and numerous angel investors. The company has now raised $15.9 million altogether.

    —–

    IPOs

    Berlin-based e-commerce investor Rocket Internet‘s giant push into the food delivery business has largely contributed to a 77 percent rise in its loan portfolio value since its IPO last October, reports Reuters. The company says the value of its top dozen investments has risen by a stunning $2.22 billion bolstered by stakes in “proven winners,” including its portfolio companies Foodpanda and Delivery Hero, which have been gobbling up other competitors left and right.

    —–

    Exits

    Speaking of which: Delivery Hero, the four-year-old, Berlin-based based takeout food service backed by Rocket Internet, is acquiring Yemeksepeti, a Turkey-based competitor, for $589 million, in a cash and stock deal. Yemeksepeti had raised $44 million in Series A funding led by General Atlantic, shows Crunchbase; it later raised an undisclosed amount of funding from MENA Venture Investments. According to Delivery Hero, it’s the largest acquisition yet in the food-order sector. TechCrunch has the story here.

    Fullscreen, a joint venture of AT&T and the Chernin Group, has acquired a six-year-old, L.A-based social media content creator called McBeard, the companies announced yesterday. The Wrap has the story here.

    Google is spending an undisclosed amount to acquire Timeful, whose app for Apple’s iOS uses machine learning, data analysis, and behavioral economic theory to customize people’s digital calendars. According to Crunchbase, Timeful had raised $7 million in Series A funding a year ago from A-Grade Investments, Pitango Venture Capital, Khosla Ventures, Kleiner Perkins Caufield & Byers, Greylock Partners and Data Collective.

    Weight loss company Weight Watchers has acqired Hot5, a 2.5-year-old, San Francisco-based company that produces a wide range of five-minute-long workout videos that users can access from the company’s app. More here.

    Rakesh Agrawal, PayPal‘s former director of strategy, is suing the company for defamation, saying the company implied he was fired after he quit. The dispute centers on a day in May of last year when, on Twitter, Agrawal raged against the company and a communications executive in particular, calling her a “piece of sh_t” and a “useless middle manager.” Agrawal claims he intended for the tweets to be private but mistakenly blasted them out to all of his followers. Shortly afterward, PayPal tweeted that “Rakesh Agrawal is no longer with the company. Treat everyone with respect. No excuses. PayPal has zero tolerance.” Agrawal — who says he resigned before taking to Twitter that day — is seeking punitive damages, claiming PayPal’s tweet caused him to lose out on income. Agrawal worked for PayPal for about two months, notes The Recorder, which has the story here.

    Though she was only an Apple employee for about half of last year, Apple senior VP of retail and online stores Angela Ahrendts took home the biggest paycheck of any female executive last year: $82.6 million, according to the Bloomberg Pay Index. More here.

    Speaking at the TechCrunch Disrupt conference in New York this morning, investor Chris Dixon of Andreessen Horowitz predicted that New York would be home to ten $1 billion companies in the next three to five years. More here.

    Thomas Loverro has joined Institutional Venture Partners, the Sand Hill Road firm, as a vice president. Loverro joins the firm from New York-based RRE, which he joined as an analyst and leaves as a principal. Before joining RRE, Loverro worked as an analyst at Goldman Sachs.

    Last night marked one of the biggest fashion events of the year: the Met Gala.Yahoo CEO Marissa Mayer, a co-chair of the event, was there; so were the Winklevoss twins and Instagram CEO Kevin Systom. (You can check out all the “red carpet arrivals” here if you’re curious.)

    —–

    Jobs

    Excel Venture Management, a life science technologies investor, is looking to replace an associate who’s off to Harvard Business School this fall. The job is in Boston.

    —–

    Essential Reads

    Snapchat is making QR codes cool again. More here.

    —–

    Detours

    The strange-but-true story behind a famous 1965 photograph from a football game between bitter high school rivals.

    How the languages in “Game of Thrones,” “Defiance,” and “Thor” were created.

    Welcome to Business Town!
    —-

    Retail Therapy

    It’s a trash can. It’s a vacuum! It’s a vacrashcuuman, though the company calls it, simply, “Bruno.”

    Fantasy Jocks. (Smart idea.)

    Connie

  • StrictlyVC: May 4, 2015

    Hi, everyone, happy Monday! (Web visitors, click here to read this email in a slightly easier-to-scan layout.)

    —–

    Top News in the A.M.

    Silicon Valley executive and SurveyMonkey CEO Dave Goldberg passed away suddenly Friday night at age 47. Goldberg, beloved by friends and the many fellow entrepreneurs, investors, and former employees who knew him, was married to Facebook COO Sheryl Sandberg in 2004 when both were executives elsewhere; the couple has two children. In recent years, Goldberg had become renowned for being a highly supportive husband, as described by Sandberg in her best-selling book, Lean In. In fact, notes a New York Times article published yesterday, Goldberg was a lifelong advocate for women. (Business Insider also ran a nice piece about Goldberg over the weekend that you can find here.)

    —–

    Accel Partners’s Fred Destin on What’s Changing (Fast) in Europe

    Almost exactly a year ago, Belgian-born venture capitalist Fred Destin decided to leave his longtime post with Atlas Venture in Boston for Accel Partners in London. Last week, over a charcuterie board at a French cafe in San Francisco, Destin talked with StrictlyVC about the move, what the Accel team in London shares in common with their U.S. peers (and what they don’t), and the newest trend in European startup funding. Some of that chat, edited for length, follows.

    Accel London has been around since 2000 and closed a $475 million fund in 2013. 

    Yes, and started investing it in April of last year. The fund was raised with maybe a little bit of anticipation. Also, sometimes you meet no entrepreneurs you want to back, then you meet five at the same time, so our pace is always a little inconsistent.

    How big is the team?

    We have six partners, one VP, one principal, three associates. We have a habit of promoting from within. I’m a rare external hire.

    How closely tied are you to the team here in the U.S.?

    We run separate funds, but it’s the same brand and we have a fair amount of overlap [in terms of LPs], and I believe we have 18 coinvestments that come in a variety of flavors. Both funds had been looking at SaaS accounting for small businesses, and in the end, [New Zealand-based] Xero is the only company you want to back in this field – we think it can kill Intuit – so we [collectively] made a $100 million investment in the company. We’ve also co-invested in [the newly public online marketplace] Etsy and [the Australia-based collaboration software company] Atlassian. Sometimes, it’s European-born companies, too. When we backed World Remit, a remittance business, half of its $40 million Series A came from the U.S. and the other half came from London.

    What if you wanted more than 50 percent? Do you ever compete with the U.S. team? 

    I can’t really think of a case where we’ve  been competitive. They’re a really disciplined team on investments, and so are we. If we find something that we think is really great, we’ll say, hey, we can syndicate with Index [Ventures] or we can try to move all the money through the Accel partnership. [The U.S. firm] looks at [the deals] independently. But there are definite benefits [to partnering], as when we find a little gem like Showroomprive (a Paris-based online shopping giant that sells discounted clothes, cosmetics and household items). It was bootstrapped and had got to quite a large size, and [my London colleague] Harry [Nelis] went to meet them and said, “We can write a single check. I’ll bring Palo Alto into it so you have one investor and one board member.” So we put in [roughly $47 million] in a single shot, with both funds contributing.

    Can you see a future where you won’t be Accel London but something else? DFJ and Benchmark obviously decided to reign in their brands at different points.

    You learn from what happens in the past. I’m not sure you can scale venture very well. Having general partners in London who effectively decide on what happens to the firm makes decision-making really simple.

    We’re also in close cooperation with Palo Alto to make sure we represent the brand in the same way.

    How institutionalized are your communications?

    The important decisions, like when to hold an annual LP meeting or when to fundraise, are discussed extensively between the groups, but the rest of our discussions are very organic and multithreaded. You don’t want to fight the natural order of things. We’re very careful about not sharing too much information about the companies we look at, but we definitely share expertise and views and kind of help each other be better.

    It helps when you have funds that are performing well and teams that are high quality. If one part of the organization was doing well and the other wasn’t, it might become more tense, but that’s not the case.

    For more from our sit-down with Destin, including his insights into how hedge funds and Rocket Internet specifically are changing Europe’s startup scene, continue reading here.
    —–

    New Fundings

    Aegea Medical, an eight-year-old, Redwood City, Ca.-based medical device company whose water vapor treatment system is designed to treat abnormal uterine bleeding, just raised $36 million in Series C funding from BioMed Ventures, Solas Bioventures, and earlier backers Alloy Ventures, Delphi Ventures, and Covidien/Medtronic. The company has now raised at least $55.4 million in equity and debt, shows Crunchbase.

    AltSchool, a 2.5-year-old, San Francisco-based network of new schools with a tech-heavy, personalized learning approach, has raised $75 million in new equity funding and $25 million in venture debt to grow its enrollment and add to the four schools it currently operates. Earlier backers Andreessen Horowitz and Founders Fund led the new round, reports the WSJ, with participation from Mark Zuckerberg and Priscilla Chan’s donor-advised fund; Emerson Collective; First Round Capital; Learn Capital; the foundation of venture capitalist John Doerr; Harrison Metal; Jonathan Sackler; Omidyar Network; Adrian Aoun; and other individual investors. AltSchool had previously raised $33 million in equity and $11 million in debt from Silicon Valley Bank. StrictlyVC talked in January with founder Max Ventilla about ballooning demand for the school.

    Artivest, a 2.5-year-old, New York-based company that pools the assets of individual investors into single purpose vehicles that invest in both private equity and hedge funds, has raised $15 million in Series A funding led by KKR. Other participants in the round include earlier backers Peter Thiel, Nyca Partners, Anthemis Group, and FinTech Collective. KKR, which has close to $100 billion in assets under management, tells TechCrunch that early-stage investments, of which the firm now has a few, will probably never be a “significant portion” of the firm’s balance sheet but that it could reach into the “hundreds of millions of dollars.” Artivest was co-founded by James Waldinger, who previously worked for Thiel’s hedge fund, Clarium Capital Management. (Thiel is known for working with and otherwise continuing to support previous employees.)

    BlueLine Grid, a two-year-old, New York-based mobile messaging platform that’s based on verified identity (it connects local, state, and federal agencies with one another), has raised an undisclosed amount of funding from In-Q-Tel.

    CareCloud, a six-year-old, Miami, Fla.-based company that sells practice-management and electronic health-record software to physician practices, has raised $15 million from unnamed earlier backers. The company has now collected roughly $96 million from investors altogether, shows Crunchbase. Its known backers include Adams Street Partners, Hercules Technology Growth Capital, Intel Capital, Norwest Venture Partners, and Tenaya Capital.

    Culinary Agents, a nine-month-old, New York-based job matching site for people in the hospitality industry, has raised $3 million in funding led by strategic investor Metro AG, a global retailer based in Germany that operates supermarkets, consumer electronics stores, department stores, theme stores and more. According to Crunchbase, Culinary Agents had previously raised $1.7 million in seed funding from Mesa Ventures, RRE Ventures, Correlation Ventures, and On Grid Ventures.

    Forte Research Systems, a 15-year-old, Madison, Wi.-based company that makes specialized clinical research management software, has raised an undisclosed amount of funding from Primus Capital. More here.

    Gameit, a 10-month-old, Salt Lake City, Ut.-based free mobile trivia app that builds trivia games around branded videos and offers users chances to win featured products, has raised $1.6 million in seed funding from DAK Capital and individual investors. More here.

    Kano Computing, a two-year-old, London-based company that makes computer and coding kits for people of all ages, has raised $15 million in Series A funding led by Breyer Capital, with participation from Collaborative Fund and Jim O’Neill, a former chairman of Goldman Sachs Asset Management. The company had previously raised $1.4 million on Kickstarter.

    NeuroVigil, an eight-year-old, La Jolla, Ca.-based neurotechnology company whose portable monitor reads brain wave data and is used by the pharmaceutical industry in chemical trials, has raised a second (undisclosed) amount of financing that it claims more than doubles the post-money valuation it received when it raised an (undisclosed) amount of seed funding in 2011. Investors include First Round Capital cofounder Howard Morgan, entrepreneur Elon Musk, investor Tim Draper, and venture firms DFJ andZone Ventures.

    Nutiva, a 16-year-old, Richmond, Ca.-based brand of all-organic coconut oil, chia seeds, hemp foods, and red palm oil, has secured a $21 million senior credit facility from MB Business Capital.

    Real Matters, an 11-year-old, Toronto, Ontario-based platform that provides property valuation, collateral risk management and data analytic services to the real estate lending and insurance markets, has raised $60 million in new funding co-led by earlier investor Whitecap Venture Partners. Other investors in the round were not disclosed. Real Matters has now raised at least $127 million to date, shows Crunchbase.

    Retale, a 1.5-year-old, Chicago-based company whose mobile app allows users to browse store circulars from their smartphones, has raised $12 million in funding from earlier backers, including the European media giant Axel Springer. TechCrunch has more here.

    Tradelab, a three-year-old, Bangalore, India-based startup that’s developed an online trading platform for both brokers as well as casual traders, has raised $390,000 in seed funding from Rainmatter, a fin-tech startup incubator.

    Wahanda, a seven-year-old, London-based hair and beauty marketplace, has raised $46 million in new funding from earlier backer Recruit Holdings, which now owns 80 percent of the business. To build its stake, Recruit acquired the shares of earlier investors such as Fidelity, 14W, Lepe Partners and ASI. The Telegraph has more here.
    —–

    People

    After 20 years at the helm of Cisco, John Chambers is stepping down to become executive chairman. His replacement as CEO: Chuck Robbins, the company’s senior vice president of worldwide field operations, who joined Cisco in 1997 and assumes his new position in July. Fortune has more here.

    Former Hewlett-Packard CEO Carly Fiorina just announced that she’s running for U.S. president, but she apparently forgot to register her domain names beforehand. As Gizmodo notes, somebody has already grabbed CarlyFiorina.org, and it’s “definitely not her PAC.”

    Business Insider interviews Don Harrison, the Google VP “responsible for Google’s billion-dollar acquisitions.”

    There’s a fight brewing in San Francisco over a new arena for the Golden State Warriors NBA team. Tech heavyweights like investor Ron Conway and Salesforce CEO Marc Benioff are pushing to have it built, but a newly formed nonprofit, whose apparently well-heeled backers include local political consultant Jack Davis, wants to save the land for the future expansion of a nearby medical center. To give you some sense of how things are going, Davis wasn’t above calling Conway a “bag of crap” in an interview with the San Francisco Business Times last week. More here.
    —–

    Jobs

    SK Telecom Ventures is looking to hire an analyst. The job is in Sunnyvale, Ca.
    —–

    Data

    India outpaced China in the number of deals struck by venture capital funds in the first quarter of 2015, with 69 deals compared with China’s 66, according to a report by CB Insights. China was still ahead of India in terms of deal value at roughly $3 billion compared with $1.35 billion in India, but deal value in India still represented a 225 percent jump from the first quarter of 2014. The Times of India has more here.

    By the way, here’s a recent, related report on the India’s rising online grocery delivery industry that you might want to check out.
    —–

    Essential Reads

    Apple is reportedly pushing music labels to kill free Spotify streaming ahead of its Beats relaunch, and the Department of Justice has noticed.

    Google is this morning announcing that it’s backing an alternative to Docker, cloud computing’s next big thing.

    The media companies with “the most exciting video outfits aren’t Condé Nast, or the Times, or even CNN or MTV. They are upstarts making content that looks nothing like the footage you’d see on television,” reports Fortune. More on the big battle for the small screen here.
    —–

    Detours

    An Argentine company has designed tooth implants for the country’s rugby players who have lost teeth in games. And hey, good news, they also function as bottle openers.

    The 2016 U.S. presidential race: A cheat sheet.

    —–

    Retail Therapy

    The Volkswagon e-Golf, when you want to drive an electric car without screaming, “I drive an electric car!”

    Connie

  • Fred Destin of Accel Partners on What’s Changing (Fast) in Europe

    ©2013 Jon Chomitz Photography 3 Prescott street, Somerville, MA 02143 www.chomitz.com jon@chomitz.com 617.625.6789

    Almost exactly a year ago, Belgian-born venture capitalist Fred Destin left his longtime post with Atlas Venture in Boston and joined Accel Partners in London. Last week, over a charcuterie board at a French cafe in San Francisco, Destin talked with StrictlyVC about the move, what the Accel team in London shares in common with their U.S. peers (and what they don’t), and the newest trend in European startup funding. Some of that chat, edited for length, follows.

    Accel London has been around since 2000 and closed a $475 million fund in 2013. 

    Yes, and started investing it in April of last year. The fund was raised with maybe a little bit of anticipation. Also, sometimes you meet no entrepreneurs you want to back, then you meet five at the same time, so our pace is always a little inconsistent.

    How big is the team?

    We have six seven partners, one VP, one principal, three associates. We have a habit of promoting from within. I’m a rare external hire.

    How closely tied are you to the team here in the U.S.?

    We run separate funds, but it’s the same brand and we have a fair amount of overlap [in terms of LPs], and I believe we have 18 coinvestments that come in a variety of flavors. Both funds had been looking at SaaS accounting for small businesses, and in the end, [New Zealand-based] Xero is the only company you want to back in this field – we think it can kill Intuit – so we [collectively] made a $100 million investment in the company. We’ve also co-invested in [the newly public online marketplace] Etsy and [the Australia-based collaboration software company] Atlassian. Sometimes, it’s European-born companies, too. When we backed World Remit, a remittance business, half of its $40 million Series A came from the U.S. and the other half came from London.

    What if you wanted more than 50 percent? Do you ever compete with the U.S. team? 

    I can’t really think of a case where we’ve  been competitive. They’re a really disciplined team on investments, and so are we. If we find something that we think is really great, we’ll say, hey, we can syndicate with Index [Ventures] or we can try to move all the money through the Accel partnership. [The U.S. firm] looks at [the deals] independently. But there are definite benefits [to partnering], as when we find a little gem like Showroomprive [a Paris-based online shopping giant that sells discounted clothes, cosmetics and household items]. It was bootstrapped and had got to quite a large size, and [my London colleague] Harry [Nelis] went to meet them and said, “We can write a single check. I’ll bring Palo Alto into it so you have one investor and one board member.” So we put in [roughly $47 million] in a single shot, with both funds contributing.

    Can you see a future where you won’t be Accel London but something else? DFJ and Benchmark obviously decided to reign in their brands at different points.

    You learn from what happens in the past. I’m not sure you can scale venture very well. Having general partners in London who effectively decide on what happens to the firm makes decision-making really simple.

    We’re also in close cooperation with Palo Alto to make sure we represent the brand in the same way.

    How institutionalized are your communications?

    The important decisions, like when to hold an annual LP meeting or when to fundraise, are discussed extensively between the groups, but the rest of our discussions are very organic and multithreaded. You don’t want to fight the natural order of things. We’re very careful about not sharing too much information about the companies we look at, but we definitely share expertise and views and kind of help each other be better.

    It helps when you have funds that are performing well and teams that are high quality. If one part of the organization was doing well and the other wasn’t, it might become more tense, but that’s not the case.

    There’ve been lots of reports out this year about Europe falling behind.

    I’m just back in Europe, and I’m amazed by the number of large successes being built. There were seven or eight billion-dollar-plus exits last year, including [the British property site] Zoopla [which went public last June] and [the online restaurant delivery company] JustEat [which went public in April 2014]. Our third fund has three [billion-dollar-plus] companies, including [streaming music service] Spotify, and guys like [ridesharing company] BlaBlaCar, World Remit, and [the online lending marketplace] Funding Circle are growing super fast.

    I used to be quite negative about the market,  but now we’re seeing companies achieving hyperscale and building value really quickly, and in the case of [our portfolio company, the online marketplace and Craigslist competitor] Wallapop, it’s even bringing the fight to the local guys [in the U.S.].

    But European entrepreneurs are often quick to note that their funding options remains fairly limited.

    The VC landscape remains quite weak. You have Index and Accel as the sort of leaders. You have Balderton [Capital], which has enjoyed a great reinvention-slash-turnaround [since parting ways with Benchmark]. Then you have some new managers, including Mosaic [Ventures] and Frederic Court [a longtime investor at Advent Venture Partners who is raising a new fund under the brand Felix Capital], and a bunch of micros VCs like Hoxton [Ventures]. But there are a bunch of funds that have exited or stopped fundraising — names that everybody knows aren’t going to make it.

    What’s happening, though, is that U.S firms and the “Tiger Cubs” are smelling blood, so we’re seeing Insight [Venture Partners], DST [Global], TCV, and some of these tech hedge funds all suddenly coming into Europe on a regular basis, and anything that scales they want to fund. It’s a huge factor right now. They’re hunting aggressively, writing big checks, and moving fast.

    And that’s purely good news? As you know, there’s a little angst here about the impact all their money is having on companies and their burn rates.

    In general, we love it because we finally have scaling capital. We just invested in Deliveroo, which is the European version of DoorDash. It’s growing like a weed, but a few years ago, we’d have had to scale organically or raise a small Series B. Now people are knocking at the door of companies that are scaling and saying: “Can we write a big check?” We’re like, finally, we’ll be able to build billion-dollar companies in less than 10 years – maybe in three to five years.

    The other big factor in Europe is Rocket Internet, which used to clone companies but they had no balance sheet. Since its IPO [last October], they have a balance sheet. And while I don’t know exactly how much cash they have, it’s probably a billion-plus [dollars] that they can use to invest, replicate and whatever else they do, and they’re the biggest VC in Europe. They force people to raise their game, because if you want to compete against Rocket, you have to know what they’re doing.

    Connie

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