StrictlyVC: December 18, 2015


Have a great weekend, everyone, and we’ll see you back here Monday morning. (We’ll be publishing through Wednesday of next week, then taking a little time off en famille.)


Top News in the A.M.

Facebook has been accused of threatening a security researcher who uncovered a vulnerability that allowed him to access Instagram servers that hold the photos of its 400 million users. The company is denying the accusation.

Target is reportedly developing its own wallet.


Randy Glein of DFJ Growth on Today’s Crazy Late-Stage Market

DFJ, the renowned Sand Hill Road Firm, is celebrating its 30th anniversary this year. At the same time, its low-flying, later-stage offshoot, DFJ Growth, is turning 10.

This week, we caught up with DFJ Growth cofounder Randy Glein to understand how closely related or not the two remain, how the firm is feeling about the shaky late-stage market, and whether his team of five general partners is ready to raise their own, third, fund from investors. Our chat has been edited for length.

Quickly, what are you looking for when you’re writing checks? How mature does a company need to be?

We pick up where venture funds leave off. We’re invest in the scaling phase of businesses, so we’re looking for that inflection point where the company has found its product market fit and customers who are paying for its products. We come in when companies are generating low tens of millions of dollars in annual bookings, growing more than 100 percent a year, and playing in a market that’s big enough to support a large company. That can be $1 billion to $100 billion dollars, depending on the market opportunity.

Can you invest in a company regardless of whether or not DFJ’s venture team has made an earlier investment in it?

Many companies we’ve co-invested in with DFJ and not followed. It just depends on the stage of the business. Also, as we’ve raised bigger funds – our first fund closed with $290 million in 2007 and our second closed with $470 million in 2013 — there’s been less overlap. I’d say 25 to 30 percent of our first fund was invested in companies backed by DFJ; in the second fund, it’s less than 10 percent. Our charter is to invest in the most exciting growth-stage companies on the planet, and to go anywhere to find them.

Do you share the same investors?

Again, there was more overlap in first fund; with the second fund, less than half the capital is coming from [DFJ’s same investors]. Some LPs want to invest in venture. Some want to invest in growth stage companies because they have a different risk tolerance profile or need to take a different size bite. Some want both and see us as sister funds.

Are you raising another fund in 2016?

More here.


New Fundings

Depositphotos, a six-year-old, New York-based stock photo platform, has raised $5 million in funding led by the European Bank for Reconstruction and Development. Previous investor TMT Investments also participated. More here.

Farmobile, a two-year-old, Overland, Ks.-based company specializing in farm data, has raised $5.5 million in Series A funding led by Anterra Capital. More here.

Juesheng, a four-year-old, Beijing, China-based online education platform, has raised $31 million in Series C funding from the Shenzhen-listed children’s book publisher Tangel Publishing, the NASDAQ-listed IT training firm Tarena International, and unnamed individual investors. China Money Network has more here.

Lily, a two-year-old, San Francisco-based robotics company that makes flying cameras that can take photos or videos of users on the go, has raised $15 million in funding led by Spark Capital. Other investors in the round include SV Angel, Stanford-StartX Fund and individual investors, including musician Steve Aoki and retired NFL star Joe Montana. (Yesterday, the company also told customers their preordered devices would arrive next summer rather than in February as previously promised.) TechCrunch has more here.

Omadi, a four-year-old, Provo, Ut.-based all-in-one web-based towing and security management system, has raised $5 million in Series A funding led by Pelion Venture Partners, with participation from Peak Ventures, Kickstart Seed Fund, Tall Wave Capital, Service Provider Capital, and others. More here.

Rivigo, a 1.5-year-old, Gurgaon, India-based startup that wants to build a more reliable and safer logistics network, has raised a $30 million in Series B funding led by SAIF Partners. The funding includes equity and debt financing. TechCrunch has more here.

Soft Robotics, a 2.5-year-old, Cambridge, Ma.-based startup focused on robotic manipulation and material handling, has closed the first tranche of a $5 million Series A round led by Material Impact Fund, an early-stage venture capital firm. Other participants include Haiyin Capital and Taylor VenturesMore here.

WellDoc, a 10.5-year-old, Baltimore, Md.-based company whose app helps patients self-manage their diabetes through motivational, behavioral and educational coaching, has raised $22 million in Series B funding co-led by Samsung Ventures and earlier investor Merck Global Health Innovation Fund. Other participants in the round include Adage Capital ManagementExcel Venture Management, Alexandria Venture Investments and Hudson River Capital Partners. More here.



Pharma executive Martin Shkreli may have hung up on an FBI agent live on video hours before his arrest yesteday on securities fraud charges. Business Insider has more here.

Relatedly, Shkreli plans to step down as CEO of Turing Pharmaceuticals following his arrest. Bloomberg has more here.

This Sunday on “60 Minutes,” TV interviewer Charlie Rose will take viewers inside Apple’s store of the future, with retail chief Angela Ahrendts acting as tour guide. Recode has the story here.


Essential Reads

Another delay for an upstart stock exchange.

Uber is “probably” IPO bound, but don’t hold your breath, says the company.



An unbelievable new image of the Earth rising over the Moon.

Accidental Renaissance photos.

Are you a “defensive pessimist” or a “strategic optimist?” Take a five-question quiz to find out!


Retail Therapy

How about a bed that turns into a steel survival crate during an earthquake? Now it can be yours.

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