StrictlyVC: November 8, 2017

November 8, 2017

Hi, and happy Wednesday, everyone. We’re on a plane tomorrow so SVC might be coming to you from the Newark airport again. (We’re praying for WiFi but not counting on it.)

We’ll have more for you from Web Summit in Lisbon in the meantime, including over at TechCrunch.:)



Top News


Twitter‘s character limit has now officially doubled for all of its Roman-alphabet users. (@realDonaldTrump does not appear to have gotten the memo yet, so zip it.)


An estimated $280 million worth of the cryptocurrency ethereum is currently locked up today thanks to one person’s mistake.



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Famed VC Jim Breyer on Finding the Next Mark Zuckerberg (and Much More)


Yesterday, at the Web Summit conference in Lisbon, we caught up with Jim Breyer, renowned in Silicon Valley thanks to a decades-long track record of smart bets, most notably in Facebook. Breyer was the managing partner at Accel Partners, which invested $12.7 million in Facebook in 2005 when the company was priced around $100 million; that bet proved to be among the most lucrative in the history of the venture business, returning many billions of dollars to Accel’s investors after the company went public in 2012.


In 2013, Breyer segued out of the firm, opening up his own family office, called Breyer Capital, where he has continued to make bold bets. Breyer has also partnered over the years with the Chinese firm IDG Capital Partners, which formerly collaborated with Accel Partners and where Breyer Capital has since become an anchor investor in a series of funds that now manage more than $4 billion.


Breyer will be taking the stage today in Portugal, but he also sat down with us behind the scenes yesterday to talk about Facebook, Softbank, and ICOs, among other factors playing an outsize role in the startup ecosystem. You can find much of that conversation below, edited for length.


You’ve just come to Lisbon from China. How much time do you spend there?


I’m there four times a year. I probably have 100 partners who are part of IDG China, where Breyer Capital is a sponsor and I’m a general partner on the investment committee and we cover 10 cities in China.


Meanwhile, you’re also overseeing Breyer Capital, your family office. How active is that, and is its focus exclusively on U.S. companies?


We make six to 10 new investments a year, investing in artificial intelligence and deep learning mostly, and how it applies to finance, healthcare, publishing, and other large verticals, and yes, [the investments are stateside].


Before sitting down today, I’d seen a recent CNBC interview you’d given, where you said you expect to see a number of big companies focused around artificial intelligence that are even bigger, much bigger, than Facebook and its ilk today. I think of Google and Facebook and Amazon and Apple as having an insurmountable lead, given the monopoly they have on these huge data sets. Why are you so sure that’s not the case?


Mark Zuckerberg, Tim Cook, [Alibaba founder] Jack Ma, [Tencent founder] Pony Ma, [Baidu founder] Robin Li — these are phenomenal founder-driven companies and I expect the Apples, Facebooks, Amazons, Alphabets, and Baidus will only get stronger in many ways. But the [opportunity] to apply deep learning and true artificial intelligence to large verticals [is immense]. For example, doctor recommendations around cancer research — both in the U.S. and China, where we can pull together data from hospitals, analyze that data in ways that have never been possible before, and provide better potential advice to doctors and nurses — those are just great opportunities for startups.


I’m still confused as to how nascent AI teams get very far. It seems that most are either getting pulled into these bigger companies before their companies can really prove themselves, or else they’re having to focus on very small verticals — like assessing the health of cabbages — and building a data set around them. Can AI teams still build big defensible businesses?


I’m no longer on the board of Facebook, but I have these conversations with Mark Zuckerberg and Sheryl Sandberg all the time, and it’s interesting. Facebook continues to grow dramatically but they’re also optimistic about startups and building new companies than ever before. Yes, there are strong founder-driven companies, but I don’t think it’s about fringe opportunities.


You think we’ll see giant AI companies. Do you think you’ve met the next Mark Zuckerberg yet?


I don’t think I’ll ever find a Mark Zuckerberg. And the combination of Mark Zuckerberg and Sheryl Sandberg, who I helped Mark hire in 2008 – I don’t think I’ll ever find a team like that again. Sheryl’s opportunities to make Mark better, Mark’s opportunities to make Sheryl better – that combination is the best single leadership combination in the world. In fact, they’re two of the key references on so many of the new deals that I do.


You’re getting their advice on potential investments?


Absolutely — and reference checks on people who might be from Google or Apple or Amazon. Not a day goes by when I’m not in contact with Facebook executives about a potential new deal or recruiting. They’ve been a wonderful source of both references on new deals in AI, specifically, or in talent management and referrals of executives who I meet who are potentially future founders or future executives of these AI companies.


More here.



New Fundings


Compass, a five-year-old, New York-based tech-enabled real estate company, has raised $100 million in fresh funding led by Fidelity Investments, with participation from earlier backers IVP and Wellington Management. TechCrunch has more here.


Fisdom, a two-year-old, Bangalore, India-based personal finance management startup, has raised $4 million in Series B funding led by Accion Frontier Inclusion Fund, with participation from existing investor Saama CapitalMore here.


Hostmaker, a three-year-old, London-based Airbnb management service, has raised $15 million in Series B funding led by Sansiri, one of Thailand’s largest premium real estate developers, and Gaw Capital, a Hong Kong-based global hospitality real estate investor. Earlier backers DN CapitalVentech, and DSGCPalso joined the round. TechCrunch has more here.


Leanplum, a five-year-old, San Francisco-based mobile market platform that tries to help brands improve engagement, has raised $47 million in Series D funding led by Norwest Venture Partners, with participation from earlier investors Canaan PartnersKleiner Perkins Caufield & Byers, and Shasta VenturesMore here.


MetricStream, an 18-year-old, Palo Alto, Ca.-based maker of governance, risk and compliance software, has raised $65 million in growth equity funding led byClearlake Capital Group, with participation from EDBI and return backersGoldman Sachs and Sageview CapitalMore here.


Monzo, a two-year-old, London-based digital, mobile-only bank, has raised £71 million ($92.9 million) in fresh funding led by Goodwater Capital at a £280 million ($366 million) post-money valuation. Other new investors joining the round are payments company Stripe and Michael Moritz, who is investing personally through his charitable investment vehicles. Previous backers Passion CapitalThrive Capital and Orange Digital Ventures also joined the round. TechCrunch has more here.


MyMusicTaste, a nearly four-year-old, Seoul-headquartered service that lets fans campaign to bring their favorite artists to their city, has raised $11 million in Series C. funding led by KTB Network, with participation from StonebridgeYellow Dog, and previous investors Softbank Ventures KoreaSamsung Ventures,Formation 8Bokwang Investment and Golden Gate Ventures. The company has now raised $22.3 million altogether. TechCrunch has more here.


Opendorse, a five-year-old, Lincoln, Neb.-based marketing platform that helps sports brands share their marketing content on social channels, has raised $3.5 million in Series A funding led by Serra Ventures, with participation from Flyover Capital and numerous pro athletes. The Lincoln Journal Star has more here.


Panorama Education, a five-year-old, Boston, Ma.-based edtech company that tries to help parents and educators understand the social-emotional needs of children, has raised $16 million in Series B funding led by Emerson Collective, with participation from Spark CapitalOwl VenturesSoftTech VC, and the Chan Zuckerberg Initiative. EdSurge has more here.


ShopBack, a three-year-old, Singapore-based cash-back-focused e-commerce startup, has raised $25 million in funding led by Credit Saison, with participation from Blue SkyAppWorksIntouch, Aetius Capital33 Capital and return backers SoftBank Ventures KoreaSingtel Innov8Qualgro and East Ventures. TechCrunch has more here.


Smartkarma, a three-year-old, Singapore-based online marketplace for investment research on Asian companies, has raised $13.5 million in Series B funding led bySequoia India, with participation from earlier backers Wavemaker Partners,Jungle Ventures and Spring Seeds. Bloomberg has more here.


Sourceress, a two-year-old, San Francisco-based AI-driven HR recruiter, has raised $3.5 million in new funding from Lightspeed Venture PartnersOpenAI researchersY Combinator, Dropbox founders Drew Houston and Arash Ferdowsi, as well as other individual investors. TechCrunch has more here.


Vidrovr, a 1.5-year-old, New York-based startup that develops multimodal computer vision and machine learning systems to index, tag, and understand video, has raised  $1.25 million in seed funding led by Samsung NEXT, with participation from Verizon VenturesR/GA VenturesSocial Starts and individual investors. TechCrunch has more here.


WeLab, a four-year-old, Hong Kong-based mobile lending company, has raised $220 million in new Series B funding, including from Alibaba Hong Kong Entrepreneurs FundInternational Finance Corp. and Credit Suisse. Bloomberg has more here.


Yotpo, a six-year-old, New York-based platform that lets companies gather content from their customers in the form of reviews, Q&As, photos and videos to use mostly in marketing, has raised $51 million in Series D funding. The round was led byAccess Industries, with participation from Vertex Ventures and earlier backersBessemer Venture PartnersMarkerVintage PartnersBlumberg Capital,Rhodium, and 2B Angels. The company has now raised $101 million altogether. TechCrunch has more here.




New Funds


Blue Bear Ventures, a year-old outfit that expects to make early-stage investments in startups coming out of the University of California system, is looking to raise up to $20 million for its debut fund, shows an SEC filingMore here.


According to Axios’s Dan Primack, Sequoia Capital is raising up to $180 million for a new fund that will focus exclusively on seed-stage opportunities. Sequoia already manages a pair of “scout” funds, the report notes: the new vehicle will be viewed as the third in that series.





Tencent’s China Literature, an Amazon-like e-book business, has enjoyed an impressive debut as public company, with its share price doubling on the Hong Kong Stock Exchange today. The listing follows Southeast Asia-based Sea (formerly Garena), also backed by Tencent, which raised $880 million in a NYSE IPO last month, and is just ahead of gaming firm Razer, which plans to raise $550 million on the Hong Kong Stock Exchange this month. TechCrunch has the story here.





We missed this one, but Tesla said on Monday that it has acquired a Minnesota-based factory automation company called Perbix Machine Company for undisclosed terms. Business Insider has more on the company here.


Zynga, the publicly traded gaming company, is acquiring the mobile card game studio of six-year-old, Turkey-based Peak Games for $100 million in cash. Peak Games had raised $18 million shows Crunchbase. Its backers include Earlybird Venture CapitalEndeavor Global and Hummingbird Ventures. VentureBeat has more here.





Founder turned investor Hayley Barna is now a general partner with the early-stage venture firm First Round Capital. The appointment comes roughly one-and-a-half years after Barna — who cofounded the seven-year-old Birchbox, a start-up that mails monthly packages of beauty samples to subscribers —  joined First Round as a venture partner. TechCrunch has more here.


Two luxury-car-loving founders behind a crypto currency startup called Centra have left the company. (Very notably, two weeks ago, it raised $32 million through an ICO.) Business Insider has more here.


Former Yahoo CEO Marissa Mayer has been subpoenaed to testify to the Senate Commerce Committee about the massive cyber hack that compromised 3 billion accounts. The U.S. has charged four alleged Russian spies with the breach; it’s now being investigated by the government for insight into Russia’s cyber espionage activities. Fortune has more here.


Snap’s vice president of engineering Tim Sehn is stepping down from the company four years after joining it to head up its engineering team. His departure is expected to be announced today when the company files details of its quarterly results with securities regulators, says The Information. More here.


SoftTech VC has rebranded as Uncork Capital. The team wants to help startups “uncork” their potential, says firm founder Jeff Clavier. More here.





Adoption of voice-powered smart speakers is taking off. According to a new report from Juniper Research out this morning, smart devices like the Amazon Echo, Google Home and Sonos One will be installed in 55 percent of U.S. households by the year 2022. TechCrunch has more here.


Uber hasn’t recovered its business in San Francisco and New York since #deleteUber, according to new report by credit card analytics company Second Measure.



Essential Reads


Apple soft-launched direct, person-to-person payments in an iMessage yesterday with the Apple Pay Cash beta. The feature, announced earlier this year, allows users to send and receive cash inside the Messages app on iPhones.


Snap was destroyed by Wall Street yesterday, after announcing Q3 earnings well short of expectations. To get things going in the right direction, Snapchat is redesigning the app to be easier for older people to use, and it will begin sorting its Stories feed algorithmically, instead of running Stories in reverse-chronological order as now. More here.


China’s Tencent has meanwhile taken a 10 percent stake in Snap, it was revealed yesterday, a much-needed vote of confidence. (Tencent had also invested in the company before it went public.)


Wired takes a look inside one of venture capital’s messiest breakups, the implosion of Xfund.





Want to stay safe while traveling? Wear a Rolex (apparently).


Why canceling plans is so strangely satisfying.


How Facebook figures out everyone you’ve ever met.



Retail Therapy


Arcade coffee table. Our kids would not hate this.


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