StrictlyVC: April 6, 2017

Hi, hope you’re having a great Thursday, everyone. We’re a little short on time today, so you might notice a missing section or two. More tomorrow!

Top News in the A.M.

Car-hailing company (and Uber nemesis) Lyft has raised $500 million in new funding that pegs its value at roughly $7.5 billion, up from its previous valuation of $5.5 billion early last year, says the WSJ. No one seems to know yet who its newest backers are. The company’s previous investors include Alibaba, General Motors, Founders Fund, and Andreessen Horowitz, which previously sold part of its stake to Saudi Arabia’s Prince al-Waleed bin Talal and his Kingdom Holding Co.

Renaud Laplanche is Back with $60 Million to Take on Lending Club

Renaud Laplanche had a terrible no good very bad 2016. But the founder and longtime CEO of Lending Club is back with a new lending startup called Upgrade, along with the support of investors who’ve provided the company with $60 million in funding.

It’s a comeback that’s been roughly one year in the making.

It was in May of last year that Laplanche, who founded Lending Club in 2006 and took it public in late 2014, was forced to resign from his role as CEO. According to reports at the time, the company’s board lost faith in Laplanche after it was informed that $3 million in Lending Club’s loans had been sold to the bank Jefferies with falsified dates, and that Laplanche himself had undisclosed conflicts of interest.

Specifically, reporters were told, Laplanche owned a stake in a fund called Cirrix Capital in which Lending Club later bought an interest at Laplanche’s urging — unaware that he was already a shareholder.

The board later retracted that accusation, acknowledging that some, but “not all members” of the risk committee were aware of Laplanche’s investment.

Laplanche’s role in an approved stock buyback was also reportedly under investigation by the SEC at one point.

Laplanche said he wasn’t available to answer questions for this story, but in a Dealbook interview, he said disagreed with the board’s characterization of the problems at Lending Club last year and declined to discuss the issue further.

A source close to Laplanche further says he doesn’t think that Laplanche was ever “personally being investigated” by the SEC.

Either way, Laplanche wasted little time in launching a rival to Lending Club. By August of last year, Laplanche and several Lending Club veterans – including Jeff Bogan, who was among a group of senior managers who also stepped down or were dismissed when Laplanche resigned – rented offices in downtown San Francisco and began reaching out to financial institutions about their vision.

They also started phoning investors.

Those calls seem to have born fruit. Upgrade is reveaing today that it has raised $48 million in equity and $12 million convertible notes from Union Square Ventures, Credit Ease, FirstMark Capital, Noah Holdings, Ribbit Capital, Sands Capital Ventures, Silicon Valley Bank, Uprising, Vy Capital and Apoletto, which is the low-flying, early-stage venture vehicle of billionaire investor Yuri Milner.

A source close to the company says the investors assigned Upgrade with a pre-money valuation of $120 million, suggesting they own a third of the company.

More here.

New Fundings

Crunchbase, a 10-year-old, San Francisco-based database company spun out from TechCrunch in 2015, has raised $18 million in Series B funding led by Mayfield, with participation from earlier backers Emergence Capital and AOL. TechCrunch has more here.

DrChrono, an eight-year-old, Mountain View, Ca.-based backend billing and scheduling and medical records platform for small medical practices, has raised $12 million in fresh funding. Runa Capital led the round, along with participation from Maxfield Capital, Quicken CEO Eric Dunn, and FundersClub. The company has now raise $19 million altogether. More here.

Flow, a 1.5-year-old, Hoboken, N.J.-based platform that helps merchants configure their cross-border supply-chain requirements and fulfill their overseas demand, has raised $16 million in Series A funding led by Bain Capital Ventures. Other investors in the round include Forerunner Ventures, Fung Capital, and numerous individual investors, including The Honest Company’s Brian Lee, and Zola founder and CEO Shan-Lyn Ma. TechCrunch has more here.

Mobvoi, a five-year-old, Beijing-based company that specializes in voice recognition and natural language processing, has raised $180 million from Volkswagen, though rather than a traditional capital raise, the money will be used for a joint venture intended to “develop and apply AI technologies to automotive industry.” TechCrunch has more here., a five-year-old, Hangzhou, China-based used car transaction platform, has raised $180 million in Series D funding led by Warburg Pincus, marking the firm’s second investment in China’s used car space so far this year. Other participants in the round include ClearVue Partners, Morningside Venture Capital, CreditEase New Financial Industrial Fund, Haitong International Securities Group and other, unnamed investors. China Money Network has more here.

Trov, a five-year-old, Danville, Ca.-based provider of on-demand insurance for individual items, has raised $45 million from Munich Re HSB Ventures and Japan’s second largest insurer, Sompo. Previous backers Oak HC/FT, Suncorp Group, Guidewire, and Anthemis Group also joined the round, which brings the company’s total funding to roughly $90 million.

Yumi, a two-year-old, L.A.-based organic baby food company that operates on a subscription model and was co-founded by former New York Times and Wall Street Journal reporter Evelyn Rusli, has raised several million dollars, reports Fortune. Backers include investor Ali Partovi, Automattic founder Matt Mullenweg, and Philip Krim, co-founder of mattress company Casper. More here.


Elevate Credit‘s shares have been bouncing around on their first day of trading. The company priced its IPO at $6.50 per share — roughly half the expected range of $12 to $14 per share in apparent reaction to investor skepticism about online lending models and Elevate specifically. Currently, the shares are trading at around $8. CNBC has more here.

Spotify is finally readying an IPO . . . that’s not an IPO. The WSJ explains here.


Amazon founder Jeff Bezos says he plans to sell $1 billion of his stock each year to fund his rocket venture, Blue Origin.

Roger Chen has joined Silverton Partners as a principal. Roger was most recently an investor with Genacast Ventures.

It’s official. Venture capitalist J.B. Pritzker has joined the Illinois governor’s race.


The Financial Solutions Lab of the Center for Financial Services Innovation is looking to bring aboard a senior manager to help identify fintech startups that can improve the financial health of Americans. The job is in San Francisco.

Essential Reads

Uber has responded to an earlier New York Times piece about how the company psychologically manipulates its drivers.

A new self-driving car startup just spun out of Udacity to challenge Uber with its own autonomous taxi service.

Twitter has rolled out a “lite” service for emerging markets. More here.


RIP, Don Rickles.

Here’s the biggest study yet on the differences between male and female brains.

Excerpts From Books I Wrote, for Which I Did Zero Research.

Retail Therapy

You could use a ranch in Montana, right?

Filed Under:

Don’t Miss Out!

Sign up today to receive a free daily email with everything you need to start your day. Plus, keep track of the companies and personalities that will shape the industry in the months and years to come. Let StrictlyVC be your very own venture capital concierge.

StrictlyVC on Twitter