StrictlyVC: August 29, 2016

Monday! (That came fast.) Hope yours is off to a great start.:)


Top News in the A.M.

As of today, it’s finally legal to fly drones commercially.

Snapchat is planning to introduce behavioral targeting for advertisers.


AngelList Deals Will Soon Be Private (and Other Updates You’ll Want to Know)

Earlier this week, we sat down with Naval Ravikant, cofounder of five-year-old AngelList, a popular platform that matches startups with early-stage investors. Three million people, including 50,000 accredited investors, have created profiles on AngelList since its founding, and AngelList now uses that information to pair startups with capital, pair startup employees with employers and, more newly, pair startups with customers.

It’s become a big business, as well as a confusing one, Ravikant readily admits. And while we can’t report on one interesting new, performance-related wrinkle that’s coming soon, he walked us through many other stats and initiatives. Our chat has been edited for length and clarity.

TC: A few years ago, AngelList introduced Syndicates, essentially pop-up funds that allow angel investors to syndicate their investments in exchange for some upside. It was fairly transparent at the outset, but that’s been changing. Why?

NR: Seventy-five percent of the deals are now private, up from 45 percent a year ago. It’ll be default private soon because a lot of the hot deals tend to be private. Also, that public-private dichotomy is always really hard for entrepreneurs [in fundraising mode] to figure out, so they start associating our brand [with a place to share information publicly to accredited investors], which is a negative, so they don’t want to go on here. We might take a hit on liquidity by making the default private, but at the end of the day, it’s all about getting the high-quality companies.

TC: An investor, Gil Penchina, has built a big business on the platform. Are more leads starting to see a kind of of network effect?

NR: Gil is a unique case. He’s the one who’s always breaking the system. We’re more catering to operator-angels, meaning people who have operating jobs, or VPs at big companies or who’ve started their own startups. It’s people who aren’t professional VCs but who do four to six deals a year, investing in alumni and people they know.

TC: How many of them close a deal each month? And are the investors on the platform mostly based in Silicon Valley?

NR: We had 55 deals led by 41 leads close in June; we had 44 deals led by 38 leads close in July. The average for most leads on the platform is a couple of deals per year. As for demographics, I’d say over half [the people who lead deals on the platform] are in Silicon Valley.

TC: You’d said publicly somewhere that you were getting into special purpose vehicles, which come together quickly to invest in a single, later-stage company. Why would someone create an SPV on the platform?

More here.


New Fundings

BlueTalon, a three-year-old, Redwood City, Ca.-based company that aims to help companies enforce consistent data access controls on increasingly complex data infrastructures, has raised $16 million in Series A financing led byMaverick Ventures, with participation from Arsenal Venture Partners and earlier investors Signia Venture Partners, Data Collective, Divergent Ventures, Bloomberg Beta, and Stanford-StartX Fund. More here.

DogHero, a two-year-old, Brazil-based pet-sitting service a la American companies and DogVacay, has raised $3.1 million in funding led by Monashees Capital, with participation from earlier backer Kaszek Ventures. TechCrunch has more here.

Eight Days, a Suzhou, China-based online grocery delivery company that targets university students, has raised an undisclosed amount of Series C funding led by the Chinese retailer Suning. TechNode has more here.

GOAT, a six-year-old, Culver City, Ca.-based mobile-only marketplace for used and collectible sneakers, has raised $5 million in funding led by Matrix Partners, with participation from earlier backers Upfront Ventures and Webb Investment Network. TechCrunch has more here.

HappyFresh, an 18-month-old, on-demand grocery service that operates in Southeast Asia, has raised an undisclosed amount of Series B funding led by Samena Capital, a Dubai-based private equity firm, along with previous backers Vertex Ventures and Sinar Mas Digital Ventures. TechCrunch hasmore here.

Helix Sleep, a 1.5-year-old, New York-based company that sells made-to-order mattresses, has raised $7.4 million in Series A funding, including from Double J Capital, Simon Venture Group, Western Technology Investments, Great Oaks VC and individual investors. TechCrunch has more here.

LivSpace, a four-year-old, Bangalore, India-based site where people can design interiors and buy furniture, has raised $15 million in Series B funding led by Bessemer Venture Partners, with participation from Jungle Ventures and Helion Ventures. Tech in Asia has more here., an 11-year-old, U.K.-based curated online marketplace where users can browse a variety of individual sellers and purchase items, has raised £21 million ($27.5 million) in Series E funding led by the media company Hubert Burda Media, with participation from earlier backers Index Ventures, Industry Ventures, and Eight Roads Ventures. More here.

Paytm, a six-year-old, Noida, India-based digital payments and e-commerce startup, is raising $300 million led by Taiwan’s MediaTek and other investors, in a round that will more than double its valuation to $5 billion, says Bloomberg.More here.

Plowz & Mowz, a two-year-old, Syracuse, New York-based marketplace for landscaping, snow plowing, and other home care and repair services, has raised $1.5 million from the startup studio Science, along with undisclosed angel investors. TechCrunch has more here.

Rheo, a year-old, San Francisco-based personal video channel for Apple TV, has raised $2.3 million in seed funding led by Accomplice, with participation from Pathbreaker Ventures, Social Capital, SocialStarts, and Google Maps creator Lars Rasmussen. TechCrunch has more here.

StudySoup, a four-year-old, San Francisco-based marketplace that works as an online study group for students looking to sell or purchase class notes and study guides, has raised $1.7 million in seed funding from 1776, Canyon Creek Capital, 500 Startups and numerous angel investors. TechCrunch has more here.

Testin, a five-year-old, Hong Kong-based cloud testing service for mobile app developers, has raised $30 million in Series C funding from undisclosed sources. DealStreet Asia has more here.



Nutanix, a San Jose, Ca.-based company that combines server, storage, and virtualization into a single “converged” piece of data center gear (and which is expected to go public soon), said it is in the process of buying PernixData and has completed an acquisition of PernixData, also based in San Jose, makes software that aggregates all the flash-based storage that comes with servers into one sharable pool., based in India, offers online “devops” software that automates software deployment. Fortune has more here. According to CrunchBase, PernixData had raised $62 million from investors, and raised just $4 million.



“I got scammed…” A story of things gone pretty wrong in Silicon Valley.

Former HP employees say Meg Whitman encouraged ageist hiring. More here.

Facebook CEO Mark Zuckerberg met Pope Francis at the Vatican this morning and presented him with . . . a drone.

Apple, Facebook, IBM, and Microsoft just promised to pay women as much as men.


Essential Reads

Silicon Valley start-ups were set to face a great reckoning in 2016. Yet the crash hasn’t happened, notes the New York Times.

Wall Street is redoubling its fight to manage $100 billion at endowments, says Bloomberg.

Recode looks at why the Google X moonshot factory is struggling to get products out the door.



What just happened at the Video Music Awards?

In a new book on white collar crime, Bernie Madoff, Andrew Fastow, and Dennis Koslowski address the giant frauds they perpetrated, and why.

The weird connection between smiling and racism.


Retail Therapy

Shipboard Girl (1965) by Roy Lichtenstein. Price: $59,000

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