StrictlyVC: June 8, 2015

Happy Monday, everyone. Did you catch last night’s NBA Finals game? What an incredible series this is! (Go Cavs!)


Top News in the A.M.

According to a new report from The Information, Facebook has just ditched its plans to spend as much as $1 billion to build and launch a satellite to provide Internet service on continents such as Africa. Facebook’s decision follows a pull-back by Google regarding a big investment in satellites. More here. (Subscription required.)

Apple‘s eagerly anticipated Worldwide Developers Conference kicks off at 10 a.m. PST. Among other things, Apple is expected to finally reveal its new streaming music service and to introduce tools that provide app developers with deeper access to the Apple Watch. The Verge already has a live blog up and running here.


The Opportunity: Servicing the On-Demand Service Worker

While consumers wade through the ever-ballooning list of brands wanting to wash their clothes, clean their homes, park their cars and deliver them dinner, a newer crop of startups has begun catering to the needs of those contract workers who make the on-demand economy possible.

They’re smart to be zeroing in these independent contractors. On-demand employees represent a huge and growing wave of people who now operate as free agents, with the freedom and flexibility — and often instability — that’s part of life without a corporate parent. In fact, Intuit has somewhat famously predicted that fully 40 percent of U.S. workers will be “contingent” workers by 2020.

Patricia Nakache, a general partner at Trinity Ventures who has led deals in on-demand companies, including Eat Club, calls 1099, or contract, workers  part of a generational shift. “Millennials are much less receptive to the monolithic education or work-experience notion that, ‘I’m going to have this job with a single company for 10 or 12 years or take all my classes from one-four year institution,’” she says. “They’re really beginning to question the boundaries of those experiences.”

And VCs have begun meeting with companies that cater to them.

For example, Homebrew cofounder Satya Patel points to several companies that hope to serve the most immediate needs of contract workers — which, in most cases, is frequent and steady work. Peers, for one, a San Francisco-based, still-in-beta startup launched by RelayRides founder Shelby Clark, wants to make it easier for people to find, compare and manage on-demand work opportunities. (It also points them to tax, financial and legal resources.) Kung Fu, an eight-month-old San Francisco-based company, is similarly building a platform to help people earn income based on their location and skills.

“I definitely think there is a major opportunity” here, says Patel.

Nakache is meanwhile seeing more startups approach contract workers from specific service angles. One such group are applicant tracking systems startups that — unlike predecessors catering to larger companies — are designed for batch processing. OnBoardIQ, an eight-month-old, San Francisco-based outfit, is among the newest startups trying to streamline the process hiring hundreds of people quickly. Playbook HR, a 10-month-old, San Francisco-based company, also began life as an applicant tracking system (though, sorry investors, Intuit acquired it in March).

According to Nakache, WorkPop, a year-old, L.A.-based company that’s been building a marketplace for hourly workers to find food and retail jobs (and which Trinity has backed), is beginning to eye the category, too.

A separate group of companies has sprung up around background checks. One of them is year-old, San Francisco-based CheckR; another is three-year-old, London-based Onfido. While background checks are nothing new, the industry hasn’t traditionally needed to act quickly or process large numbers of people at once; meanwhile, newer companies are only too happy to do both, even if their predecessors aren’t readily ceding the territory. (Uber, the ride-hailing company, uses Hirease, a 13-year-old, Southern Pines, N.C.-based company, to vet its drivers. Competitor Lyft similarly uses a more established company, 40-year-old, New York-based SterlingBackcheck.)

Yet there are other types of companies catering to the specific needs of contract workers.

Don’t be surprised to see more shift-planning startups like five-year-old, San Francisco-based ShiftPlanning and four-year-old When I Work in St. Paul, Mn.

Payroll startups that make for contractors to get paid are also springing up, from four-year-old ZenPayroll in San Francisco, to 1.5-year-old Tiempo in Sunnyvale, Ca.

Of course, healthcare — which most contract workers don’t receive from their employers — may represent the biggest opportunity of all. Among the startups beginning to eye the space: two-year-old, San Francisco-based Stride Health, a health insurance recommendation engine that’s targeting the needs of small businesses and sees 1099 workers as a potential source of business.

There are so many startups beginning to target 1099 workers, in fact, that Nakache says Trinity has yet to pull the trigger on a related investment. She doesn’t expect it will be long, though.

“We haven’t found quite the right fit for the stage at which we invest,” she says. “But it’s safe to say that we’re actively looking and actively engaged in the sector. We have a lot of companies on our radar screen.”


New Fundings

AmnioLife, a two-year-old, Gainesville, Fla.-based research and development organization focused around “placental-derived technologies,” has raised $833,000 in Series A funding led by Fountainhead Investment PartnersMore here.Colabo, a five-year-old, San Carlos, Ca.-based company whose software platform provides marketers with self-service analytics, has raised $7 million in new funding led by Marker LLC, with participation by Kaedan Capital and earlier backers Paul Maritz, Ray Rothrock, and The Hive. The company has now raised $10.5 million altogether, shows Crunchbase. VentureBeat has more here.

Delivery Hero, the four-year-old, Berlin-based takeout food ordering service, has raised $110 million from two unnamed, U.S.-based “public market” investors at a post-money valuation of more $3.1 billion, says the company. That’s roughly triple the nearly $1 billion in equity that Delivery hero has raised so far — $600 million of it in 2015 alone — including from Insight Venture Partners, General Atlantic, Point Nine Capital, Holtzbrinck VenturesKite Ventures, and Rocket Internet. TechCrunch has the story here.

Jimdo, an eight-year-old, Hamburg, Germany-based company that helps users create sites on their computers, smartphones, or tablets, has raised €25 million (roughly $28 million) from the growth equity firm Spectrum Equity. The company, which also has offices in Tokyo and San Francisco, had previously raised just €500,000 in outside capital. More here.

Luxury Retreats, a 16-year-old, Montréal, Quebec-based marketplace for people to list and find high-end homes for short-term rentals, has raised $11 million in Series B funding led by earlier investor iNovia Capital. The company has now raised $16 million altogether. TechCrunch has more on the company (and the broader trend of high-end home rentals) here.

Menlo Security, a two-year-old, Menlo Park, Ca.-based security company that isolates all web and email content in the cloud before it reaches an endpoint to eliminate the threat of advanced malware, has raised $25 million in Series B funding led by Sutter Hill Ventures, with participation from General Catalyst Partners, Osage University Partners and Engineering Capital. The company has now raised $35.5 million altogether. More here.

Skeleton Technologies, a six-year-old Estonia and Germany-based company that makes high-performance ultracapacitors for transportation, industrial and grid applications, has raised €9.8m ($10.7 million) in Series B, including from Harju Elekter Group, which owns electrical equipment manufacturing plants in the Nordic-Baltic markets, and UP Invest, one of largest investment firms in the Baltic region. The company has now raised $18.9 million to date, shows Crunchbase.

Spero Therapeutics, a year-old, Cambridge, Ma.-based company that’s developing drugs to combat drug-resistant bacteria, has raised $30 million in Series A funding from Lundbeckfond Ventures, Kraft Group, Merck Research Ventures Fund, Atlas Venture, Partners Innovation Fund and SR One.

SQream Technologies, a nearly five-year-old, Tel Aviv, Israel-based company that says its technology enables customers to load and analyze as many as 100 terabytes of raw data on a single computing node in near real-time, has raised $7 million in Series B funding led by Blumberg Capital. Venture Capital Dispatch has more here.

Springbot, a three-year-old, Atlanta, Ga.-based ecommerce marketing platform designed for small to mid-sized online businesses, has raised $6 million in new funding led by TTV Capital, with participation from earlier investors TechOperators and Silicon Valley Bank. The company has now raised $10 million altogether, shows Crunchbase.

TaskUs, a seven-year-old, Santa Monica, Ca.-based company that provides outsourced business process tasks to other startups, has raised $15 million in new funding from the Philippines-based private equity firm Navegar. The outlet Inc. has much more on the company here.

Vinli, a year-old, Dallas, Tex.-based connected car platform, has raised $6.5 million in Series A funding led by Samsung Venture Investment Corp., with participation from Cox Automotive, Continental ITS and the Westly Group. TechCrunch has more here.


New Funds

Cradle Seed Ventures, a months-old, Malaysia-based seed-stage group, has announced plans to invest between $270,000 and $800,000 in promising Malaysia-based startups. The outlet e27 has more here.

Fuel Capital, a two-year-old, San Francisco-based, early-stage venture firm founded by Christopher Howard (as a longtime principal with Ignition Partners previously, he’d launched the firm’s seed-stage investment program), is looking to raise $35 million for its second fund, shows an SEC filing. The firm’s bets so far include Homejoy (reportedly in talks to be acquired by competitor Handy); recently shuttered Secret; and Layer, which closed on $14.5 million in Series A funding last month.

Tribeca Venture Partners, a four-year-old, New York-based venture firm that primarily backs early-stage startups in New York, is raising its second fund with a $100 million target and $125 million hard cap, according to Fortune’s Dan Primack. The firm had closed its debut fund with $65 million. StrictlyVC talked with firm founder Brian Hirsch last year about Tribeca and New York more broadly.



Joanne Bradford, who joined Pinterest as its head of partnerships in December 2013, is leaving the company, Recode reported on Friday. The move comes as Tim Kendall, the company’s head of monetization and Bradford’s boss, decided to take on some of Bradford’s responsibilities. Bradford had joined Pinterest from the San Francisco Chronicle, where she was briefly president. She has also held executive roles at Demand Media, Yahoo, and Microsoft.

Google has hired Sissie Hsiao away from Microsoft to take over as director for all mobile ads, including AdMob, the mobile exchange. Recode has the news here. She is replacing her current boss, Jonathan Alferness, who is heading over to lead commerce, a role that was vacated last month when Sameer Samat left to join Jawbone as president.

India’s tech boom is luring many of India’s brightest back home from the U.S., reports Bloomberg Businessweek. India “is like the late 1990s in the U.S.,” says Kunal Bahl, Snapdeal‘s CEO, who attended the University of Pennsylvania and founded his company — now among the most highly valued in India — after his application for a U.S. visa was rejected.



Andreessen Horowitz is looking to hire a corporate development associate. The job is in Menlo Park, Ca.


Essential Reads

From St. Petersburg, Russia, an army of well-paid “trolls” has tried to wreak havoc all around the Internet — and in real-life American communities.

Hyperloop Transportation Technologies, a company formed specifically to turn Elon Musk’s hyperloop idea into reality, says it has secured the agreements needed to break ground on a five-mile test track near the town of Quay Valley, California.



John Oliver toasts FIFA President Sepp Blatter’s demise by chugging a Bud Light.

Housing through the centuries.


Retail Therapy

The 10 best Nerf dart blasters you can buy right now. (It’s nearly summer, after all!)

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