StrictlyVC: April 13, 2016

Happy Wednesday, everyone!

Many of you know we’re Cavs fans (still), but we’ll admit to being very excited about tonight. With a win against the Memphis Grizzlies later, the Warriors will own the NBA record for victories in a single season, breaking their tie with the 1995-96 Chicago Bulls. Hot dog. Go Warriors!!


Top News in the A.M.

Here’s everything that was announced at Facebook‘s F8 conference yesterday.

Turns out the FBI cracked that San Bernardino terrorist’s phone with the help of professional hackers who discovered a previously unknown software flaw and brought to the bureau. The Washington Post has the story here.


Chris Dixon on Competing with Internet Giants for AI and VR Talent

VC Chris Dixon of Andreessen Horowitz thinks it’s a lot harder to predict financial cycles than it is to see a new computing platform coming down the pike. As he noted in a recent post, new cycles tend to begin every 10 to 15 years; assuming the 2007 introduction of the iPhone kicked off the last wave, we’re fast heading toward the Next New Thing.

Or things, technically, according to Dixon, who we caught up with yesterday. Among the trends that Dixon is watching closely, he says, are virtual reality, augmented reality, IoT, wearables, drones and cars. (Missing from the list: bitcoin, which has long held Dixon’s fascination but that he refers to as a “long-term project.”)

Not that it’ll be easy to make money off these newer technologies. In fact, Dixon suggests it could be ridiculously challenging, given how quickly Facebook, Google, and Amazon are bringing aboard related talent. Here’s more from yesterday’s interview, edited for length:

People think of you as the person at Andreessen Horowitz who invests in weird stuff. 

We obviously invest in a wide range of things. My own area of interest has been in drones and VR and AI and maybe more speculative categories. Some startups, the question is more about ‘Will this startup win versus other solutions,’ where, in speculative categories, the question is whether it’s going to work at all.

You can kind of jokingly call it weird, but if you look at where Amazon, Facebook, and Google are investing — I think Google’s VR team is significantly bigger than Facebook’s; Microsoft has 1,500 people working on HoloLens; and from what I can tell from its hiring and acquisitions, Apple is [investing a lot of money] — probably the biggest area [of interest and investment] is AI. Large tech companies are investing very heavily in this stuff [whereas] there’s much less investment by VCs.

Because VCs don’t understand the tech or else the opportunity?

No, because it’s hard to figure out where the start-up opportunities are and because [some of this tech] requires so much money. With virtual reality, you have to build a complex platform then line up content partners. Or self-driving cars — I’d assume that Google has spent many billions of dollars on it already, including mapping. The venture world isn’t set up for that. It works around the model of seed rounds, A rounds, $20 million B rounds, not for massive projects. It’s kind of a puzzle if you’re in VC how to make those investments.

You’ve remarked  before how quickly teams are getting snapped up, which must compound the issue. [a Y Combinator startup that built voice-activated interfaces] that Facebook bought and now powers its Messenger platform was only [in our portfolio] for a few months when Facebook bought it.  It sounds paradoxical, but our model depends on companies staying independent for a period of time, and because large companies have been so aggressive, it’s harder for us.

When it comes to machine learning, you’re competing with offers from Facebook and Google and Amazon and [their offers] are considerably higher in terms of cash compensation. They pay a lot for people with that expertise, and startups will never [be able to match it]. So you have to really convince people that what you’re building is important.

VCs can’t wait out this next computing cycle obviously. So how do they nurture lower-capital models?

More here.


New Fundings

Affirm, the four-year-old, San Francisco-based online lending company founded by PayPal cofounder Max Levchin, has raised a $100 million in Series D funding led by Founders Fund. Earlier investors also participated, including Lightspeed Venture Partners, Spark Capital, Khosla VenturesAndreessen Horowitz, and Jefferies. According to Crunchbase, the company has now raised $420 million altogether in a combination of debt and equity funding. TechCrunch has more here.

EdCast, a nearly three-year-old, Mountain View, Ca-based social learning platform, has raised $16 million led by GE Asset Management, with participation from SoftBank Capital, Cervin Ventures, Stanford-StartX Fund, and Penta Global. More here.

EnsoData, a year-old, Madison, Wi.-based healthcare data science company sells its machine-learning-enabled software­ as­ a­ service to create clinical insights from wearables, medical devices, and clinicians’s data, has raised $550,000 in seed funding led by HealthX Ventures, a new Madison-­based venture capital fund focused on digital health. More here.

Impraise, a two-year-old, Los Altos, Ca.-based startup whose software aims to replace the annual performance review with actionable, real-time feedback from colleagues, has raised $1.6 million in seed funding led by the Amsterdam-based venture capital firm HenQ. More here.

Lucid VR, a two-year-old Sunnyvale, Ca.-based maker of a portable VR camera, has raised $2.1 million in seed funding from Wistron, S2 CapitalLab360, TEEC Angel Fund, 17 Miles Technology, and unnamed angel investors. More here.

NAUTO, a year-old, Palo Alto, Ca.-based driverless car technology company that enables older cars to enjoy “true autonomy,” has raised $12 million in funding led by Playground Global, with participation from Draper Nexus. TechCrunch has more here.

NodeSource, a 1.5-year-old, San Francisco-based startup whose tools and software target the needs of running server-side JavaScript at scale, has raised $10 million in Series A funding led by RRE Ventures, with participation from earlier backers Crosslink Capital and More here.

PicMix, a four-year-old, Indonesia-based photo-sharing app, has raised $3 million in Series A funding, including from Gobi Partners and an undisclosed strategic investor. TechCrunch has more here.

Poshmark, a five-year-old, Menlo Park, Ca.-based site for buying and selling women’s fashion, has raised $25 million in new funding led by GGV Capital, with participation from earlier investors Menlo Ventures, SoftTech VC andAngelList. The company has now raised more than $70 million altogether. TechCrunch has more here.


New Funds

Forbion Capital Partners, a nine-year-old, Munich and Naarden, the Netherlands-based venture firm that invests in both U.S. and European life sciences companies, has raised $208 million for a third fund. One of its biggest hits in recent years was Dezima Pharma, a developer of a dyslipidemia treatment that was acquired by Amgen last year for $1.55 billion in cash and milestones. More here.

GREE, the Japanese internet company, has announced a new, $12 miillion fund aimed at backing virtual reality companies. TechCrunch has more here.

Grishin Robotics has raised $100 million for its second fund, reports Bloomberg. Many more details here.

Kansas City just launched a $10 million co-investment fund for its startup community. has more here.



Business analytics company Domo is working with Morgan Stanley and Credit Suisse to prepare for a potential IPO, according to Bloomberg.



Logitech is acquiring 10-year-old, Salt Lake City-based Jaybird, which makes Bluetooth headphones and activity trackers, for a reported $50 million in cash and up to another $45 million in additional earn-outs. Jaybird appears to have been bootstrapped. More here.

OpenGov, which works with government organizations to collate, analyse and publicly present financial and other data, has made its first acquisition. It has purchased Ontodia, a developer of Open Data solutions based on CKAN, an open-source data portal used by governments and other public organizations globally. Terms of the deal aren’t being disclosed. OpenGov has raised just less than $50 million from investors, including Andreessen Horowitz. Ontodia had raised a modest amount of angel funding. TechCrunch has more here.



Salesforce CEO Marc Benioff is seeing his (substantial) amount of pay curbed slightly. According to a new proxy statement, the business software giant made “significant” changes to his pay package for the upcoming year, including reducing Benioff’s total compensation by 16 percent from $33.4 million this year and tying more than half to performance-based, restricted stock grants. Fortune has more here.

Billionaire tech entrepreneur Sean Parker has announced plans to give away $250 million through his foundation to launch the Parker Institute for Cancer Immunotherapy, a collaboration between some of the nation’s top cancer research institutes that aims to accelerate the development of breakthrough immune therapies. TechCrunch has more here.

Aleph Venture Capital, a three-year-old venture fund that’s largely focused on Israeli entrepreneurs and was founded by Eden Shochat and Michael Eisenberg, has brought aboard a third “equal” partner: 26-year-old Aaron Rosenson. He joins from an associate role at Insight Venture Partners where, according to Aleph, he was responsible for identifying Docker, HelloFresh, Moat, Gainsight, Illuminate Education and the Israeli company WalkMe, among other companies. More here.



Research firm SuperData Research predicts in a new report that global sales of virtual reality hardware and software will reach $2.86 billion this year, down 22 percent from its forecast in early March. A big factor: shipping delays by Oculus over a component shortage. More here.


Essential Reads

Lazada, the Rocket Internet-backed e-commerce firm in Southeast Asia, is breathing a huge sigh of relief. According to TechCrunch, the four-year-old company, which is “far from financially healthy,” nearly ran out of money right before Alibaba swooped in this week with a majority investment. More here.

BlackRock, Vanguard and other big institutional investors own roughly 70 percent of the public stock market, according to some reports. People are starting to ask whether this allows companies — now having the same owners — to compete less and raise prices. Dealbook has more here.



The amazing, transformable microflat.

Step away from the hand dryer.

How much is a dog worth? (Interesting case.)


Retail Therapy

Neat: a Tesla-like EV motor for boats.

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