StrictlyVC: June 3, 2016

It is Friday, and not a moment too soon! Hope you have a terrific weekend, everyone; see you Monday.:)


Top News in the A.M.

Walmart and Sam’s Club will begin testing last-mile grocery delivery that uses services including Uber, Lyft and Deliv, to bring customers’ orders to their homes. More here.


Talking Brazil with Accel’s Kevin Efrusy

As you might have noticed, things aren’t going so well in Brazil. Its economy shrank 5.4 percent in the first quarter, according to government figures released Wednesday. Its president, Dilma Rousseff, was temporarily suspended by a congressional impeachment vote. Brazil is also home to much of the outbreak of the dreaded Zika virus, which has a growing number of people wondering whether it’s worth attending — as well as competing in — the Summer Olympics in Rio de Janeiro. (A U.S. cyclist withdrew yesterday, out of concern for his pregnant wife.)

We couldn’t help but wonder what kind of impact Brazil’s endlessly troubling developments are having on the country’s startups, which seem to fall in and out of fashion with the season. To get some sense of what’s happening, we caught up with Kevin Efrusy, a partner at Accel Partners who once lived temporarily in Rio to help steer the firm into the right investments and who still commutes to the country regularly. Our chat has been edited for length and clarity.

Accel has been investing in Brazil for several years, along with Kaszek Ventures and Redpoint e.Ventures and Monashees Capital and Atomico. Is there a nervousness right now among you given all of the macro stuff going on in Brazil?

The companies down there are doing remarkably well. Our portfolio companies are growing between 70 and 200 percent annually. I know it sounds strange, but the tech and macroeconomic cycles are pretty uncoupled. Adoption of smart phones, digitization of the economy, adoption of the cloud — they’re all in their early stages in Brazil and have a long way to go there. So as bad as the economy is, no one is saying, “Hey, let’s go back to banking on our laptops instead of our phones.” These [trends] don’t decline in a recession.

For years, investors and you in particular have said that VCs have to play the long game to win in Brazil. How many years behind the U.S. do you think the country is right now in terms of tech adoption?

Seven to nine years, which is why these companies are growing so well.

But certainly, they aren’t immune to what’s happening around them.

The macro does affect them in several ways. One is fundraising. It definitely scares foreign or less sophisticated investors, which makes it hard for startups to raise follow-on financing. And the valuations they command [is] lower. The third and most important factor is currency [the Brazilian real]. From the peak of the boom to the trough about five or six months ago, the currency went from 2 [reais] to the dollar to 4.2 [reais], so these companies were doing well and enjoying phenomenal growth, but in U.S. dollars, [their revenue] felt anemic. The currency is now trading at 3.6 [reais per each dollar], so it has strengthened. But when your currency in weakening, growth appears less dramatic.

On the flip slide, when things get better, it’s like a rocket boost.

What do you think outsiders misunderstand the most about Brazil?

The important thing is knowing this [macro] stuff happens. If anyone thought they’d go to Brazil or any emerging market and rifle shot a great company as an investment strategy, they were sorely mistaken.

More here.


New Fundings

DemandJump, a year-old, Indianapolis, In.-based startup that makes predictive intelligence marketing software, has raised $1.8 million in seed funding from 4G Ventures, Hyde Park Venture Partners, along with numerous individual investors. The Indianpolis Business Journal has more here.

Glassdoor, a nine-year-old, Mill Valley, Ca.-based site that helps people look for jobs and research companies that interest them, has raised $40 million in Series H funding. The financing values the company at around $1 billion, according to CEO Robert Hohman, and it was led by T. Rowe Price, with participation from previous investors Battery Ventures, Google CapitalSutter Hill Ventures and Tiger Global Management. TechCrunch has more here.

InFlectis BioScience, a three-year-old, Nantes, France-based drug discovery company, has raised €6 million ($6.8 million) in Series A Funding co-led by CM-CIC Innovation and Remiges Ventures, with participation from earlier backers Go Capital and Participations Besancon. More here.

Nomadd, a two-year-old, Thuwal, Saudi Arabia-based startup developing a smart and ecological desert solar panel cleaning system, has raised $1 million in Series A funding from The Kaust (King Abdullah University of Science and Technology) Innovation Fund. FinSMEs has more here.

Qumulo, a four-year-old, Seattle, Wa.-based company that’s developing enterprise data storage systems, has raised $32.5 million in Series C funding  from new investors Allen & Company, Top Tier Capital Partners, and Tyche Partners. Earlier backers Kleiner Perkins Caufield & Byers,Madrona Venture Group, Highland Capital Partners, and Valhalla Partners also joined the round. The company has now raised $100 million altogether. GeekWire has more here.

Udemy, a six-year-old,San Francisco, Ca.-based marketplace for learning and teaching online, has raised $60 million in fresh funding from Naspers Ventures. TechCrunch has more here.

Vyze, an eight-year-old, Austin, Tex.-based company whose software enables retailers and manufacturers to offer their customers real-time financing options at the point of sale, has raised $13 million in Series B funding led by Austin Ventures and StarVest Partners, two firms that had previously invested $15 million in the company. AustinInno has more here.


New Funds

Greenspring Associates, a 16-year-old, Owings Mills, Md.-based investment firm, has closed its second secondary fund with $200 million. Greenspring Secondaries Fund II, L.P., is expected to invest in venture capital funds as well as in growth-stage companies, on a secondary basis. Baltimore Business Journal has more here.

Moneta Ventures, a two-year-old, Folsom, Ca.-based micro VC fund that focuses largely on nascent tech startups in and around Sacramento, has raised $25 million for its second fund, which is targeting $30 million. The firm closed its debut fund with $25 million early last year. TechCrunch has more here.



Blue Coat, the cybersecurity company acquired by Bain Capital from Thoma Bravo just over a year ago, filed for IPO yesterday. Fortune has more here.

Impinj, a 16-year-old. Seattle-based RFID tech company, has also filed for an IPO. This is the company’s second attempt to go public. The Seattle Times has more here.

NantHealth, a biomolecular medicine company that bets on big data in the growing field of personalized health care, started trading on Nasdaq yesterday, and things are going pretty well so far. The shares opened at $14; they’re trading right now at $18.46.



Snapchat has acquired 3D photo app maker Seene (also known as Obvious Engineering) a couple of months ago, says TechCrunch. Seene lets users capture 3D models from their phone with a simple smartphone camera. Snapchat could use Seene’s format for a brand new category of selfie lenses, a new 3D photo format, and potentially for future virtual reality projects, says TechCrunch. According to AngelList, Seene had raised $600,000 from Knight Foundation, Kima Ventures, EC1 Capital, OREFA, and numerous individual investors. More here.



B Capital Group’s Eduardo Saverin (who you may remember for cofounding Facebook) says there are still plenty of opportunities for venture-capital investment in Southeast Asia, despite a financing boom to the region. [Video.]

Speaking of Facebook, its board has proposed removing Mark Zuckerberg’s majority voting control in the event that he decides to exit management at some point in future. Fortune has the story.

The other figure who’s trying to kill Gawker Media.


Essential Reads

Another online subscription e-tailer looks to brick-and-mortar stores to fuel its growth. This time it’s Birchbox.



Cavs meet the new boss, same as the old boss.

Interior Monologue for the Twenty-Four Minutes My Phone Was Dead on the Bus Ride Home.


Retail Therapy

We wanted flying cars. Instead behold the Foldimate.

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