StrictlyVC: March 2, 2017

Snap co-founders Evan Speigel and Bobby Murphy rang the opening bell of the New York Stock Exchange this morning, marking the stock market debut of their six-year-old company. We’d guess they’ve been periodically high-fiving since — along with the company’s other biggest shareholders. As of this writing, the company, which opened at $24 per share (roughly 50 percent more than its original share price of $17), has reached a valuation of $30 billion. More here.

Top News Today

It’s Snap all day, babies. Here’s what startup it might decide to buy with all that cake. Here’s why two firms have already initiated a sell rating on its shares. Here’s why some of Snap’s most influential users are hightailing it for other platforms. And here’s a reminder that shareholders get no say in how the company is run.

Millennial Lender Upstart Just Raised $32.5 Million; Here’s Why

Upstart, a nearly five-year-old online lending company that prides itself on quickly identifying people who are less likely to default on money leant them, has raised $32.5 million in fresh funding that brings its total funding to date to around $85 million. Partly, the company plans to use the capital to further fuel its current growth trajectory. In fact, according to CEO (and former president of Google Enterprise) Dave Girouard, Upstart expects to turn profitable this year.

But the company also sees a huge opportunity in licensing its technology to banks, credit unions, and even retailers that are eager to make low-risk — and profitable — loans to to their own customers.

Rakuten is certainly buying into its vision. The Japan-based internet services giant just co-led Upstart’s newest round with an undisclosed U.S.-based asset manager. Earlier backers Third Point Ventures, Khosla Ventures, and First Round Capital also joined the financing.

We talked yesterday to Girouard to learn more about Upstart’s new software-as-a service offering, online lending’s perception problem, and how the Trump administration is likely to impact his 100-person company. Our chat has been edited for length and clarity.

Congrats on the funding. Is Upstart turning into a SaaS company?

No, we still have and continue to grow our direct lending business. It’s how we learn and grow.  This [SaaS arm] will grow alongside it.

What’s its “value proposition” to potential customers?

It’s very similar in nature to any SaaS business; it’s the whole idea of people saying, “We’re not going to try to build something ourselves.” We’re strongly on the tech and data science end of the spectrum. We don’t come from financial services, as do a lot of other [lending] companies. We apply very modern data science to the question of who gets a loan and at what price; that’s the heart of what we’re known for.

You’re targeting existing lenders, as well as hoping to help retailers and others get into the lending business. Is that right? And what you will be charging them?

Yes, and we’ll charge a monthly fee, then a smaller fee per loan that captures the cost of originating a particular loan.

You started your direct lending business by targeting millennials. Is that still your target market?

It’s still our sweet spot, young adults. Our average borrower is 28. The most common use of [our loans] is to pay credit card debt, though it’s really a personal loan that you can use for anything.

How do you market to this demographic?

Our approach is predominately digital. Our borrow is typically online, so [we advertise on] Facebook and Google; we have high marks on the [personal finance platform] Credit Karma. We still do some some offline direct mail; our industry is dominated by it. But we don’t do nearly as much as others.

What are your default rates? Do you share those publicly?

More here.

(Other) New Fundings

Amper, a 2.5-year-old, New York-based startup that offers AI-powered music composition, has raised $4 million in funding led by Two Sigma Ventures, with participation from Foundry Group, Kiwi Venture Partners and Advancit Capital. Amper previously raised funding from Brooklyn Bridge Ventures. TechCrunch has more here.

Booksy, a four-year-old, Wilmington, De.-based app that enables businesses like beauty salons to handle online booking and operate other aspects of their business, has raised $4.2 million in Series A funding led by OpenOcean, with participation from Australian company builder and early-stage investor Investible, Poland’s Nomad Fund, and numerous angel investors. TechCrunch has more here.

ChargePoint, a 10-year-old, Campbell, Ca.-based electric vehicle charging network, has raised $82 million in Series G funding led by new investor Daimler. Others to participate in the round include BMW i Ventures, Linse Capital, Rho Capital Partners, Braemar Energy Ventures, and all of ChargePoint’s previous investors. VentureBeat has more here.

Clark, a 10-month-old, New York-based virtual assistant app for tutors, has raised $1 million in pre-seed funding from Human Ventures, Winklevoss Capital, and numerous individual investors. TechCrunch has more here.

HowGood, a nine-year-old, Brooklyn-based company that specializes in rating food, personal care, and other household products, has raised $4.2 million in Series A funding led by FirstMark Capital. Other participants in the round include Contour Ventures, the labor rights advocacy foundation Humanity United, Serious Change, Great Oaks Venture Capital, High Line Venture Partners and individual angels that include Joanne Wilson. TechCrunch has more here.

Klook, a 2.5-year-old, Hong Kong-based service for finding and booking travel activities, has raised $30 million in Series B funding led by Sequoia China. Earlier backers Matrix Partners and Welight Capital, a firm founded by former Tencent executives, also joined the round, which brings Klook’s total funding to $36.5 million. TechCrunch has more here.

Lyft, the nearly five-year-old, San Francisco-based ride-hailing company that’s widely considered Uber’s biggest rival in the U.S., is reportedly pitching investors on a new, $500 milion round of funding that would value the company at between $6 billion and $7 billion. Lyft was valued at $5.5 billion at the close of its last round, one year ago. The WSJ has the story here.

Nimble, an eight-year-old, Santa Monica, Ca.-based SaaS platform providing small businesses with CRM systems that combine social media, has raised $9 million in Series A funding led by Imagen Capital Partners. Other participants include Mark Cuban’s Radical Investments, GV, Indicator Ventures and individual investors that include Jason Calacanis, Howard Lindzon, and Don Dodge. The company has now raised $12.5 million altogether. More here.

Sensibill, a 3.5-year-old, Toronto, Ontario-based digital receipt data service for banks, has raised $17.3 million in Series A funding led by Information Venture Partners and OpenText Enterprise Apps Fund, with participation from Operative Capital, Mistral Venture Partners, and earlier backer Impression Ventures. More here.

Urjanet, an eight-year-old, Atlanta, Ga.-based company that collects, reconciles, and analyzes energy and carbon-related data from many different sources to help its customers reduce their energy costs, has raised $20 million in funding led by Oak HC/FT. Earlier backers Grotech Ventures, Correlation Ventures, Imlay Investments, and the Georgia Research Alliance also joined the round. TechCrunch has more here.

VeloCloud, a five-year-old, Mountain View, Ca.-based cloud networking services company, has raised $35 million in Series D funding led by Hermes Growth Partners. Other investors include Telstra Ventures, Khazanah Nasional Berhad (the strategic investment fund of the Government of Malaysia), and earlier backers New Enterprise Associates, Venrock, March Capital Partners, and Cisco Investments. More here.

ZoneFox, a four-year-old, Edinburgh, Scotland-based cybersecurity company, has raised £3.6 million ($3.8 million) in Series A funding led by Archangels, with participation from The Scottish Investment Bank and TriCap. has more here.

New Funds

Floodgate, an 11-year-old, Palo Alto, Ca.-based early stage venture capital firm, has raised $131 million for its sixth fund, according to an SEC filing that shows the firm turned to just eight investors for the capital commitments. Though small by today’s fundraising standards, the new fund reflects a bit of a departure for the firm, whose fifth fund closed with $76 million in 2014.  (Its fourth fund similarly closed with $75 million and its third closed with $73.5 million.) More here.


Former Uber employee Susan Fowler Rigetti, who recently authored a widely read post detailing her experiences of sexual harassment and discriminatory behavior at the ride-hailing company, said today on Twitter that she has hired California employment attorneys Baker, Curtis & Schwartz. She said the move is a reaction to Uber’s decision to reference her by name in emails to customers looking to delete their account, and efforts she says that Uber has undertaken to investigate her personally. This investigation is unrelated to the efforts of former attorney general Eric Holder, who has been hired by Uber to investigate its HR practices, she says. TechCrunch has much more here.


BlackRock is looking to hire a corporate development VP. The job is in New York.

Essential Reads

Oscar, the startup trying to reinvent medical insurance with its Obamacare-focused plans, lost more than $200 million on the products in 2016 as it heads into a year that may see the undoing of the health law. Bloomberg has more here.

Some poor engineer who is probably (definitely?) out of job at Amazon is being cited as the reason AWS went down in part on Monday. TechCrunch has more here.


The case for eating weed at work. (What?! It’s in Bloomberg!)

Antarctica reached a record 63.5 degrees Fahrenheit yesterday. Pack your shorts! (Note: It would raise water levels by 200 feet if it were all to melt.)

Retail Therapy

In the doghouse? Try this.

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