StrictlyVC: November 16, 2017

November 16, 2017


Hello! Happy Thursday, everyone.:)



Top News


Twitter now says it will remove verification badges from accounts that violate its rules.


FCC chief Ajit Pai is set to unveil plans next week for a final vote to reverse a landmark 2015 net neutrality order barring the blocking or slowing of web content.



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Veteran VCs Trae Vassallo and Neil Sequeira Lock Down $151M for Their New Firm, Defy Partners


They’re back.


After staying heads down for the past year, Trae Vassallo and Neil Sequeira, two longtime venture capitalists whose individual brands are well-known to Bay Area startup founders, are finally taking the wraps off their new venture firm, Defy Partners. As part of the big reveal, they say they’ve closed their debut fund with $151 million in capital commitments, including from endowments,​ ​family​ ​offices,​ ​foundations​ ​and​ ​non-profits. They’re also sharing the firm’s overarching thesis: that the best place to invest right now is in Series A deals.


It isn’t a surprising conclusion, considering what’s happening at the other ends of the investing spectrum. Seed investing remains crowded. Meanwhile, although the IPO market looks healthier than it has in a long time, later-stage investors have to contend with another threat to their business: Softbank’s nearly $100 billion Vision Fund, which is routinely outspending rivals for prized stakes in promising companies.


In fact, Vassallo and Sequeria were thinking much the same thing about the Series A opportunity — but independent of one another — when a quintessential Silicon Valley encounter took place.


Vassallo’s husband, Steve, who is a venture capitalist with Foundation Capital, was at a Warrior’s game with Sequeria. As the basketball game progressed, Sequeria, long an investor with General Catalyst Partners who’d left the firm in late 2015, shared his plans to start his own, much smaller outfit. He had in mind a firm whose funds would never grow so large that he’d have to say no to fairly nascent startups, and never so big that producing meaningful returns to his investors became nearly impossible. He had in mind a kind of Benchmark, which — with one exception during the bubble — has kept its fund sizes in the range of $425 million.


As it happens, Trae Vassallo, who’d left her investing role with Kleiner Perkins in 2014, was already forming a fund around the same idea. Her husband told Sequeria. Sequeria and Vassallo met soon after for coffee, and the rest is history.


History in the making, anyway. Defy has made just three investments to date, including one deal that Vassallo and Sequeria originally funded with their own money but moved into the fund. While each remains in so-called stealth mode, one is in the logistics space and was bootstrapped until Defy led its Series A, says Sequeria. Another is a “connected consumer” play founded by an entrepreneur who Vassallo says she has known for 20 years.


Asked about their focus, both suggest it will be broad.


More here.



New Fundings


Arterys, a six-year-old, San Francisco-based medical imaging company, has raised $30 million in Series B funding led by Temasek, with participation from Northwell Health VenturesNew York-PresbyterianVarian Medical SystemsGE VenturesFosunDNA CapitalEmergent Medical Partners and ORI Capital.More here.


Atomist, a two-year-old, San Francisco-based company that provides developers with a development automation platform to create, ship, and ostensibly improve their software faster, has raised $22 million in Series A funding, including fromAccel Partners and Matrix PartnersMore here.


CY Vision, a 1.5-year-old, San Jose, Ca.-based vision systems and applications company focused on developing a new platform for AR and VR, has raised $7 million in Series A funding led by Vestel Ventures, with participation from Intel Capital, among others. More here.


Diamond Orthopedic, a Charlotte, N.C.-based medical device company that makes a faceted threadform technology for orthopedic applications, has raised $3.5 million in seed funding led by MagnaSci FundMore here.


Inboard Technology, a three-year-old, Santa Cruz, Ca.-based whose electric skateboard comes with a swappable battery, has raised $8 million in Series A funding led by Upfront VenturesMore here.


Less, a new, Paris-based ride-sharing startup started by the founder of ad tech company Criteo, has raised $19 million in funding from Index Ventures andDaphni. TechCrunch has more here.


Maoyan, a China-based online ticketing platform that was recently created out of the merger of two competing ticket platforms, has raised $150 million in funding from earlier backer Tencent Holdings in a deal that values the company at $3 billion. Reuters has more here.


Oros Apparel, a two-year-old, Cincinnati, Oh.-based company that uses NASA insulation technology, aerogel, in its outerwear, has raised $2 million in seed funding from undisclosed investors. More here.


PayStand, a four-year-old, Scotts Valley, Ca.-based payments-as-a-service platform, has raised $6 million in Series A funding led by BlueRun Ventures, with participation from Cervin Ventures, Serra Ventures, TiE and Capital for Founders. More here.


RDD Pharma, a nine-year-old, New York- and Tel Aviv, Israel-based developer of treatments for lower gastro-intestinal disorders, has raised $9.5 million in Series B funding, including from Pharmascience, an unnamed international life science fund, as well as earlier investors OrbiMed and Capital PointMore here.


X4 Pharmaceuticals, a three-year-old, Cambridge, Ma.-based clinical stage biotechnology company that’s developing drugs to improve immune cell trafficking to treat cancer and rare diseases, has raised $27 million in Series B financing led byCormorant Asset ManagementMore here.



(Other) New Funds


Aster, a Paris-based, early-stage venture firm, has closed on €240 million ($283 million) in capital commitments to invest in next-generation energy and mobility companies. The partners will be focused on companies both in Europe and the U.S. has more here.


Engineering Capital, founded in 2015 by longtime VC Ashmeet Sidana, has raised $47.5 million for its second seed fund, shows an SEC filing. Sidana had closed his debut fund with $32 million.


Rachel Lam, who retired from her role as head of investments at Time Warner’s venture-capital arm, where she worked from 2003 to 2016, has teamed up withRichard Parsons, former Time Warner CEO, to launch a new venture-capital firm called Imagination Capital. The two will be investing their own money to start —  reportedly $500,000 or less in seed rounds. Wired has more here.


Kairos, an organization for young entrepreneurs founded in 2008 as Kairos Society, has closed its debut fund with $25 million. TechCrunch has more on its mission here.





Stitch Fix is about to go public, and some question whether it will reach its target valuation in the IPO.





Accomable, a two-year-old site that connects disabled travelers with suitable accommodations around the world, has been acquired by Airbnb. As part of deal, Accomable will be wound down. TechCrunch has more here.


Bluegogo, a China-based bike-sharing company, is closing down after raising roughly $90 million from investors, including Black Hole CapitalSinovation Ventures, and Elex Technology. TechCrunch has more here.


Native Deodorant, a two-year-old, San Francisco-based natural deodorant brand, that had raised just $500,000 from Azure Capital Partners, just sold to Procter & Gamble for $100 million in cash, says TechCrunch.


TechShop, a Menlo Park, Ca.-based membership-based do-it-yourself workshop and fabrication studio, is shutting down all U.S. locations and declaring bankruptcy after raising $4.7 million in venture funding. TechCrunch has more here.


Time Inc. is reportedly in talks to sell itself to the Meredith Corporation, in a deal backed by the billionaire Koch brothers, who are known for supporting conservative causes. According to the New York Times, the Kochs have tentatively agreed to back Meredith’s offer with more than $500 million, and both sides hope to announce a deal by Thanksgiving.





Dyson is suing former CEO Max Conze for allegedly revealing confidential information, including on the company’s plan to expand into the electric car market.


Aaron Jacobson has been promoted to partner at New Enterprise Associates. Jacobson joined the firm as a principal in 2011. He’d formerly spent two years as an analyst with the investment bank and advisory firm Qatalyst Partners.


Oracle‘s shareholders just rejected the software maker’s executive compensation plan for a sixth straight year after it awarded the top three bosses pay packages worth more than $100 million each in fiscal 2018.


Snap CEO Evan Spiegel is expecting his first child with wife Miranda Kerr.



Essential Reads


Amazon’s cashierless store is almost ready for prime time.


The more tech in your job, the more money you make.





Sixteen spiked hot chocolate recipes.



Retail Therapy


Noise-masking sleepbuds, by Bose. (Buying.)

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