StrictlyVC: October 2, 2015

Happy Friday, dear readers! Hope you’re in for a terrific weekend.


Top News in the A.M.

In a anti-competitive move that may irk its customers, Amazon said yesterday that it will no longer allow the sales of some competing media players, including Apple TV and Chromecast.

Credit reporting agency Experian says a data breach at one of its business units may have compromised the personal records of about 15 million people, including customers of T-Mobile. The information accessed included names, addresses, Social Security numbers, dates of birth, driver’s license numbers, and passport IDs.

And, in more good news: Crowdfunding site Patreon revealed earlier this week that it had recently been hacked, compromising the email addresses, usernames, and shipping addresses of its users. Now, hackers have dumped the data online, revealing the personal information of about 2.3 million users in the process.


Aspiration, a “Merrill Lynch with a Conscience,” Gains Traction

As consumers, we can probably agree that bank profits are, well, gross. In the second quarter of this year alone, U.S. lenders wrung a record $43 billion from their customers.

It’s the kind of stat that a small but growing two-year-old, L.A.-based investment company called Aspiration is increasingly using to gain new customers. In the words of cofounder and CEO Andrei Cherny, Aspiration aims to be a “Merrill Lynch with a conscience.”

So far, the company is walking the walk. After toiling quietly for a couple of years to receive the necessary approvals, Aspiration now has its own low-risk mutual fund (managed by Emerald Asset Management on the East Coast) that its clients can begin funding with just $500.

Users don’t have to pay any management fees, either – zero – though they can opt to pay up to 2 percent of their assets under management if they so choose.

Aspiration also offers completely free checking and free ATM transactions, though again, customers are invited to pay for the service – up to $6 per month — if they see fit.

It’s a pretty good deal. Not only do customers enjoy being freed from onerous transaction fees but Aspiration pays 1 percent interest on checking accounts, while most traditional banks are currently paying out between .20 percent and .80 percent interest.

As if that weren’t enough, Aspiration is also donating 10 percent of its revenue to Accion, the larges nonprofit microloan provider, so that more low-income Americans can start businesses.

How it will all work to create a profitable business for Aspiration — freshly backed by $15.5 million — is the big question.

More here.


New Fundings

Dome9 Security, a five-year-old, Menlo Park, Ca.based cloud security SaaS company, has raised $8.3 million in Series B funding led by ORR Partners, with participation from JAL Ventures, Pinnacle, Lazarus Israel Opportunity Fund and Opus Capital Ventures. More here.

Euroscreen, a 21-year-old, Belgium-based drug development company focused on women’s health, has raised 16 million euros ($17.8 million) in Series B funding co-led by SFPI-FPIM and Fund+ , with participation from Capricorn Health-Tech Fund and earlier backers Vesalius Biocapital II PartnersSRIW SA, and BNP Paribas Fortis Private Equity. More here.

HonkMobile, a two-year-old, Toronto-based app that helps users find and pay for parking, has raised $3 million in seed funding led by Impression Ventures, with participation from angel investors. More here.

Parola, a new, Israel-based collaborative music app, has raised $2 million in seed funding from angel investors, including Michael Cohen, a partner at Capital International; Yanki Margalit, founder of Innodo; and Miki Tunis, senior vice president of The Orchard (a Sony Music Entertainment company). has more here.

Pioneer Square Labs, a new, Seattle-based startup studio, has raised $12.5 million from 13 venture capital firms and over 50 angel investors to create and launch startups. Venture capitalist and founder Greg Gottesman; super angel Geoff Entress; aQuantive co-founder Mike Galgon; and Madrona Venture Labs co-founder Ben Gilbert founded the company. Foundry Group led its new financing round, with participation from Bezos ExpeditionsGreycroft Partners, Madrona Venture Group, Maveron, Menlo VenturesMHS Capital, True Ventures, Voyager Capital and Vulcan Capital, among others. TechCrunch has more here.

ZeeMee, a 1.5-year-old, Mountain View, Ca.-based platform that wants to help students bring their college applications to life, has raised $5.8 million in Series A funding led by BlueRun Ventures. TechCrunch has more here.


New Funds

AARP and J.P. Morgan Asset Management have just teamed up to form a $40 million AARP Innovation Fund to back startups that “are improving the lives of people 50-plus.” Fortune has more here.

Trident Capital, the 22-year-old, Palo Alto, Ca.-based growth capital firm, is raising $200 million for a new fund, shows an SEC filing that states the first sale has yet to occur.



A Santa Clara County judge sent a contract suit against Facebook founder Mark Zuckerberg toward trial yesterday, ruling that emails from Zuckerberg, his assistant and his financial advisor raise the question of whether the billionaire reneged on promises he allegedly made in connection with a 2012 real estate purchase. “We are trying to ‘wow’ these schmucks so they will accept an offer for the home that is reasonable,” Zuckerberg’s financial advisor, Divesh Makan, wrote to the CEO’s assistant in late 2012. “The plan is to have [Zuckerberg] spend 15 [minutes] with them, make them feel special etc. Perhaps you can prepare [two] goodie bags as well.” In an email leading up to the first meeting with the property owner, Zuckerberg wrote, “Feel free to use meeting me as a negotiating carrot with them. That likely has real soft value to them and may make them more likely to want to give us a good deal.” The judge wrote the evidence “presents a triable issue of material fact as to whether Zuckerberg made the alleged promises without a then-present intent to perform.” The Recorder has the story here (subscribers only).

Russell Fleischer, previously a partner at Battery Ventures, has been promoted to general partner. Fleischer, who works out of the firm’s Boston office, focuses on later-stage and private-equity software deals; he joined Battery last year from HighJump Software, where he was CEO. Morad Elhafed, also based in Boston, has also been promoted at Battery, from principal to partner (the level below GP). Elhafed was previously an analyst with RBC Capital Markets.


Essential Reads

Two of Dropbox’s largest mutual fund investors have marked down the value of their holdings in the company by more than 20 percent in recent months, possibly reflecting faltering confidence in the company, valued at $10 billion at its last fundraising early last year. The Information has the story here (subscribers only).

A Florida state agency that had earlier ruled that an ex-Uber driver was an employee has reversed its decision after Uber appealed the case.

The New York Times tested out those controversial ad blockers that Apple began supporting with its iPhone operating system a couple of weeks ago. The results? For sites that contained mobile ads with a lot of data, load times “accelerated enormously” with the ad blockers turned on. The iPhone’s battery life also improved, but less dramatically. More here.



What a life. R.I.P., Joseph Coffey.

A new study tracks some interesting differences between web and mobile tweeting.

Fifteen things you might not know about “Young Frankenstein.”


Retail Therapy

“The Martian.” It opens today. Hip, hip!

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