StrictlyVC: December 17, 2015

Woot, we’re almost there! Happy Thursday, everyone.


Top News in the A.M.

The Federal Reserve raised short-term interest rates by a quarter point yesterday. The WSJ argues the move could exacerbate crumbling valuations at Silicon Valley startups.


New Relic’s CEO on the Joys of Not Being a “Unicorn”

Lew Cirne, founder and CEO of the seven-year-old software analytics company New Relic, has a lot for which to be thankful. Near the very top of his list? The fact that New Relic went public a year ago, after raising roughly $214 million from investors. (Its market cap is currently $1.78 billion.)

We talked yesterday about what’s keeping so many other companies from doing the same. Our chat has been edited for length.

You’re a big believer in going public. At the same time, you sold your first company, Wily Technology, for $375 million in 2006 to CA Technologies.

A big part of why Wily didn’t have the characteristics to endure as a public company was that we were able to land big deals, but there was a high degree of variability to it.

That’s not true at New Relic?

The founding idea of New Relic was about building something that could endure as a public company, that would do well in hot and cold markets. We wanted to be geared toward making good decisions even under the obligation of reporting financials every 90 days. So I wanted a 100-percent subscription business. I was focused on high gross margins; ours are 80 percent. We also focused on establishing a broad customer base of both small and big customers, so no one customer would have disproportionate sway [over our financial health].

Most traditional enterprise companies, the way they do financials depends on huge deals that almost always close in last five days of quarter, and there’s a lot of risk in them, so in order to succeed in a predictable way, they wind up prioritizing the big deal over product integrity and strategic direction.

Is New Relic profitable or has it ever been?

We’re not yet profitable, but have a very good handle on our growth versus profitability. You can invest more for growth or dial back for profitability, and we feel like we’ve always had good control over that dial.

Presumably, your public shareholders understand that story.

The shareholders I talk with understand that we’re a growth company. For example, the average New Relic customer spends 38 percent more than the average customer spent a year ago because we’ve invested in new products that they’re buying more of.

Shareholders obviously ask how we think about growth versus profitability, but we don’t see pushback [because] we think it makes more sense to invest in new growth than to slow down and be a more profitable, smaller company.

How much of your time is spent with shareholders? An oft-cited excuse for remaining private is that they’re a huge distraction.

More here.


New Fundings

Atheer, a four-year-old, Mountain View, Ca.-based developer of augmented-reality glasses for the enterprise market, has raised $14 million in Series B funding co-led by Signatures Capital and Streamlined Ventures, with participation from Fang Group, FundersClub, RONA Holdings and Shanda Group. More here.

Janrain, a 10-year-old, Portland, Ore.-based maker of customer identity management products, has secured $27 million in Series D funding led by HighBar Partners. Earlier backers Millennium Technology Value PartnersSplit Rock Partners, Epic Ventures, Emergence Capital Partners, RPM Ventures and DFJ Frontier also participated. CMSWire has more here.

Signavio, a 6.5-year-old, Berlin, Germany-based company that makes business process and decision management software, has raised €31 million ($33.6 million) from Summit Partners in exchange for a minority stake in its business. More here.

Songkick, an eight-year-old, London-based concert discovery app and ticketing company, has raised $10 million in fresh funding from previous backer Access Industries. It follows a $16 million Series C from Access, Sequoia Capital, and Index Ventures that was announced in June. TechCrunch has more here.

Springboard, a six-year-old, Cambridge, Ma.-based online learning platform that pairs individual mentors with students in weekly catch-up sessions, has raised $1.7 million in seed funding from a long list of individual investors, including LinkedIn founder Allen Blue. TechCrunch has more here.

Tastemade, a three-year-old, L.A.-based maker of food and lifestyle videos, has raised $40 million in Series D funding led by Goldman Sachs. Other participants include Redpoint Ventures, Comcast Ventures, Liberty Media and Scripps Networks. TechCrunch has more here.

Technology Will Save Us, a three-year-old, London-based startup that makes do-it-yourself electronics and gadget kits and activities, has raised $1.8 million in seed funding led by SaatchInvest, with participation from the European seed-stage venture fund Backed and an (as yet unnamed) “substantial retail investor.” TechCrunch has more here.


New Funds

Idinvest Partners, an 18-year-old, Paris, France-based seed- and early-stage investment firm, says it has held a final close on its second digital fund of 155 million euros ($169.5 million) thanks in part to backing from the corporate venture arm of Cisco.



Purch, a well-financed digital content company, has acquired ShopSavvy, a mobile shopping startup backed by Facebook co-founder Eduardo Saverin. Purch was formerly known as TechMediaNetwork and operates sites including Tom’s Guide and AnandTech. The company recently raised a $135 million funding round and has been on an acquisition spree. ShopSavvy had meanwhile raised around $10 million. TechCrunch has more here.

Salesforce is in talks to buy software firm SteelBrick for as much as $600 million, mostly in stock, according to The Information. (Subscribers only.) SteelBrick makes quote-to-cash software applications built on the Salesforce1 platform; it raised $48 million in October led by Institutional Venture Partners and has raised roughly $78 million altogether.



strong>First Round Capital’s annual holiday video has dropped, yo. You can see it here.

In an interview on Tuesday, entrepreneur Elon Musk argued that if we covered just a corner of Utah or Nevada with solar panels, we could power the entire U.S., and that doing the same with a corner of Spain could power all of Europe.Here’s how it would work.

Martin Shkreli, the 32-year-old pharmaceutical executive who infamously jacked up the price of a life-saving pill from $13.50 to $750, was arrested by federal agents at his New York home this morning on securities fraud related to a firm he founded. (And the world cheered.)

Apple today named Senior Vice President Jeff Williams its COO, filling a role that’s been vacant since CEO Tim Cook assumed his post in 2011.



Wedbush Securities is hiring an investment banking analyst. The job is in San Francisco.



The five tech startups most likely to go public next year, according to data from CB Insights.

The venture firms with the most startups on the path to going public, according to CB Insights.

Aaaaand, the richest person “by decade,” care of Wealth-X, the wealth research firm.


Essential Reads

California has issued preliminary rules concerning the operation of self-driving cars on its roadways. They prohibit the use of fully autonomous driverless cars that don’t have a steering wheel or a brake pedal; more, a licensed operator must be present and capable of taking control at all times if the technology fails or there’s another emergency.

JPMorgan will be “aggressively” investing in next-generation technologies like blockchain and robotics as one of its “major priorities” in 2016. Business Insider has more here.



A Google exec on how to organize your work week.

The five most expensive Airbnb rentals booked for New Year’s Eve.

The Comments Below “More Than a Feeling” on YouTube.


Retail Therapy

The Finex  cast iron skillet. Not so glamorous. Highly useful, though.

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