StrictlyVC: December 21, 2016

Hi, guys, happy Wednesday! We’re going to trying to keep things short and sweet today so we can do, you know, holiday stuff. We’re guessing you’re with us on this. More tomorrow.:)

Top News in the A.M.

The House Judiciary Committee’s Encryption Working Group has released its year-end report, and it concludes that law enforcement backdoors pose a threat to security.

Things Get Down and Dirty in the World of Cloud Security

Symantec, one of the world’s largest cybersecurity companies, closed its giant acquisition of Blue Coat Systems in August, ushering in a new regime under incoming CEO Greg Clark.

Clark hasn’t wasted much time in disparaging upstarts in the market, either, including the well-funded, venture-backed companies Cylance, Tanium and Carbon Black.

Now, lawsuits may be next. To wit, Symantec last week filed a lawsuit against one of its partners, Zscaler, saying the cloud security vendor has infringed on seven of its patents, including around web security and threat prevention.

Symantec didn’t inform Zscaler about the suit in advance of going public with it, evidently. In a statement last week to the outlet CRN, Zscaler’s chief legal officer said Zscaler “learned of Symantec’s lawsuit from their press release issued earlier this afternoon and [we] are in the very early stages of assessing their claims. While we are unable to comment on the merits of their claims at this time, we defend ourselves vigorously against lawsuits of this nature.”

Zscaler has since begun reaching out individually to customers to tell them the suit is little more than a bullying tactic that won’t impact its business, shows a letter authored by Zcaler CEO Jay Chaudhry and obtained by this editor earlier today. The nine-year-old company declined to comment on the letter or when, exactly, it was authored, but it reads:

Dear Robert,

You may have heard about the lawsuit recently filed by Symantec against Zscaler. Zscaler will defend itself vigorously against these claims.

Zscaler was founded to transform the old world of IT to a cloud-enabled enterprise, from the world of on-premise security appliances to cloud-based multi-tenant Internet gateways. When our customers and partners think of Zscaler, the first thing that comes to their mind is technology innovation. Our innovations are protected by a large growing portfolio of 98 issued and pending patents focused on cloud security.

It is unfortunate that many large incumbent companies will resort to litigation when they can no longer innovate. They attempt to use it to hinder rapid growth and customer adoption of unique technologies offered by younger, vibrant companies like Zscaler. In certain situations, as is the case here, the incumbent companies make such claims without any advance notice.

More here.

New Fundings

Azur Drones, a four-year-old, Paris-based company that offers drone inspection and surveying services, has raised €3.5 million ($3.6 million) from an undisclosed investor. has more here.

Ditto Labs, a four-year-old, Cambridge, Ma.-based company that’s developing image recognition technology, has raised an undisclosed amount of Series C funding led by Red Fort Capital. More here.
FlatFrog, a nine-year-old, Lund, Sweden-based multi-touch screen provider, has raised €6.1 million ($6.3 million) funding from Finvus Invest and Sunstone Capital. has more here.
HelloFresh, a four-year-old, Berlin-based meal delivery company that was created by Rocket Internet, has raised €85 million ($88.7 million) from a new, unnamed investor, along with previous investor Baillie Gifford, in a deal that reportedly values the company at $2 billion. has more here.

IguanaFix, a three-year-old, Buenos Aires-based home-services start-up, has raised $16 million from Temasek Holdings and Qualcomm Ventures. Dealbook has more here.

Lefit, a year-old, Hangzhou, China-based fitness startup that, like ClassPass in the U.S., invites users to pay one membership fee to access 130 fitness centers across five major cities, has raised $14 million in Series B funding. Toutoushidao Capital and Huasheng Capital co-led the round. Other participants included IDG Capital and Puhua Capital. DealStreetAsia has more here.

Optoro, a Lanham, Md.-based logistics company that helps retailers and manufacturers recover and resell returned merchandise, has raised $30 million in Series D funding from UPS, Revolution Growth, Kleiner Perkins Caufield & Byers, Generation Investment Management, Tenfore Holdings, SWaN and Legend Venture Partners and the Maryland Venture Fund. DCInno has more here.

Price f(x), a five-year-old, Munich, Germany-based startup offering pricing optimization software-as-a-service, has raised €4 million ($4.1 million) in Series A funding led by Credo Ventures, with participation from Talis Capital. TechCrunch has more here.

Revolution Medicines, a year-old, Redwood City, Ca.-based developer of cancer drugs, has raised $25 million in Series A extension funding from The Column Group and earlier backer Third Rock Ventures, which funded the company last year with $45 million. BioSpace has more here.

Ygrene Energy Fund, a seven-year-old, Santa Rosa, Ca.-based company that finances projects like energy efficiency, renewables, water conservation, and, in certain areas, hurricane protection, electric vehicle charging stations and seismic upgrades, has raised $95 million in new funding from the private equity firm Lightyear Capital. The company also announced yesterday that it has changed its CEO. Rocco Fabiano, who joined Ygrene as president in October, will assume the position, while current CEO Stacey Lawson becomes executive vice chairman. More here.

Zipari, a New York City-based tech healthcare insurance startup that’s focused on the payer customer experience, has raised $7 million in Series A funding led by earlier backer Vertical Venture Partners. MedCity News has more here.

New Funds

Greenspring Associates, a 14-year-old, Owings Mills, Md.-based outfit that funds secondary investments in venture capital funds and expansion stage venture-backed companies, raised $325 million for Greenspring Opportunities IV, according to an SEC filing. More here.


A startup called Plumgrid has sold its technology and intellectual property to VMware and is shutting down, co-founder Pere Monclus announced in a blog post yesterday. The five-year-old company had raised roughly $45 million from investors, including HWVP, USVP, and Qualcomm Ventures. Business Insider has the story here.


Twitter CTO of the last three years, Adam Messinger, announced yesterday that he’s leaving the company; the departure comes just weeks after COO Adam Bain resigned. Bloomberg has more here.

Josh McFarland, who sold is adtech company, TellApart, to Twitter, then stayed on as VP of Product, is also leaving Twitter. He’s joining Greylock Partners as a partner next year. TechCrunch has more here.


The state of Alaska is looking to hire a senior associate to help it identify investment managers and teams it should be funding. The job is in Juneau. (Whether you see this as good news or bad, you’d be the first person to apply as of this writing.)

Essential Reads

Why Verizon can’t quit Yahoo.


How one huge American retailer ignored the internet and won.

Saunas help your brain, says a new and deeply Finnish study.

For actor Alec Baldwin, it’s personal.

Retail Therapy

“Inception” dish drain/desk organizer. (Hah.)

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