• Mike Volpi: If You Don’t Own Bitcoin Yet, Buy It

    VolpiLast Thursday, I sat down with Mike Volpi, a general partner at Index Ventures in San Francisco, and later mentioned to you that I’d feature his thoughts on Bitcoin. Here, now, is that part of our conversation, lightly edited for length.

    If you were to start your own company in 2014, what would it be?

    If I were to do something [on my own], I’d definitely do something with Bitcoin.

    Has Index made any bets on the currency yet, directly or through a startup?

    I’ve heard a number of VC firms have bought Bitcoin as part of their portfolio. But we don’t have an investment in Bitcoin yet. We’re looking at a lot of different things and trying to break it down a little. It’s very early so it’s kind of hard to tell, but we do love the international component of it, so one of the angles we’re exploring is what does it mean from an international perspective, rather than merely a domestic speculation perspective.

    Do you think we talk too much about Bitcoin in the context of the U.S.?

    Much of the coverage here tries to think of it in the context of an American phenomenon, and where I think it [has received too little coverage] is its global importance. We all have bank accounts and credit cards and all that good stuff, but if you think of some person in South Africa or Ecuador or Argentina or Malaysia, it has a whole different meaning to that world, where currencies are volatile and you don’t have access to dollars and just 10 percent of people have credit.

    I often hear that, but how or when will it become useful to people in developing countries, given its volatility and soaring value?

    Currency is a multidimensional thing. First, it has stored value, like gold. You don’t really use it every day, but you have it there for safekeeping and it increases in value over time. Another aspect of currency is what we use for transactions: You buy a product from me and I give you money. The last aspect is the transactional plumbing – not that we exchanged value but that there’s a pipe underneath it all that allowed us to do that. Bitcoin is all of that smashed into one.

    Because it’s so volatile, people treat it like stored value. You’d be crazy to use it right now – or, at least, it would be very unusual –particularly if you can use other currencies to buy stuff. But you have to think past the point of all that volatility. No one knows what it’s worth, but at some point, people will figure it out, more or less.

    What then?

    Then, if you’re using your favorite Argentine currency and yesterday it was worth this and today it’s worth half that because your government had a coup d’état or something crazy like that, would you rather be transacting in a Bitcoin currency, which will eventually get more stable because of its global nature, or your currency, which is far less [stable]? Or, if you want to buy products and you don’t have access to dollars because your government decided that it needed to keep all the dollars — that’s where it starts mattering more.

    How long until we get there?

    I think it will take five years – maybe even 10 years — to stabilize.

    In the meantime, are you personally buying Bitcoin?

    I have a few personally. I think the best strategy is to own them right now, and if you don’t, I would recommend it!

    Sign up for our morning missive, StrictlyVC, featuring all the venture-related news you need to start you day.

    Related articles

    Connie

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  • StrictlyVC: January 15, 2014

    110611_2084620_176987_imageGood Wednesday morning! We have some good stuff coming up later this week so stay tuned. Also, a quick reminder that you can reach out anytime; I’m at connie@strictlyvc.com or @cookie.

    —–

    Top News in the A.M.

    About 60,000 Silicon Valley workers have won court clearance to pursue a lawsuit that accuses Apple, Google, and other tech giants of conspiring to drive down pay by not poaching each other’s staff.

    —–

    For This Startup, The Hunt Is On

    The hunt for new funding is on for community-driven shopping startup The Hunt, whose users seek out items like clothing with the help of other users.

    The concept was inspired by the personal experience of founder and CEO Tim Weingarten, a former venture capitalist with Worldview Technology Partners. As Weingarten tells it, a few years ago, while surfing around Tumblr, he “happened to see pictures of a bunch of guys at a wedding wearing a really slick tux with a narrow cut and peaked lapels. I wanted one, but if you start looking for a tux, a billion options come up. It struck me that there was no good way to solve this problem.”

    Investors apparently agreed it was a pain point in the market. In November, the now 17-person company closed on $5.5 million in funding from Javelin Partners, along with Ashton Kutcher, Tyra Banks, and other celebrity investors. Now, as Weingarten resumes talks with VCs — he says the company has “plenty of cash,” citing its “momentum” as a reason to reengage with investors – the question is whether The Hunt is growing fast enough.

    Weingarten says that one million people have registered since the service launched last January and that 300,000 of them – 90 percent of them women between the ages of 15 and 30—actively use it.

    Unlike platforms such as Pinterest, users’ “hunts” also demonstrate a stronger intent to purchase, says Weingarten, who compares the conversion rates to those of Google’s search results. “We don’t have to worry about proxies or guessing your intent based on what pages you’ve visited; we know what you want to buy, which puts us in a strong position.”

    Indeed, Weingarten says the startup has already been approached by a number of brands looking to pay for greater visibility, with some, including clothiers Lulu’s and 22Singer.com, already actively jumping in to answer users’ searches. (Says Weingarten, “We encourage brands to solve hunts, though I let them know not to spam our users. I don’t want them posting 10 products in response to a user who’s looking for a certain kind of dress with stripes.”)

    Naturally, the Hunt has plenty of challenges, including competition from other question-and-answer platforms. Just last week, Twitter cofounder Biz Stone launched a social search app called Jelly that invites users to ask their friends for help in finding information. The Hunt’s young demographic, while attractive to brands and advertisers, also tends to be fickle.

    Perhaps most importantly, it still hasn’t established the kind of critical mass that is, in itself, a kind of defensibility.

    Still, attempting from the outset to build a bridge between photo sharing and e-commerce is likely refreshing to some VCs. Knowing that a former investor is at the helm may also hold special appeal.

    I ask Weingarten whether The Hunt is spending on marketing, for example, and he tells me that it’s “much more interesting to have less growth and for that growth to be purely organic. As an investor,” he adds, “if I thought that a startup was buying a bunch of ads, I’d look at it differently.”

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    New Fundings

    BankBazaar.com, a five-year-old, Chennai, India-based loan processing and information platform, has raised more than $13 million (Rs 80 crore) in a Series B round led by Sequoia Capital, reports theTimes of India. Previous investor Walden International, which provided the company with $6 million in early 2011, also participated in the funding.

    Eyefreight, a six-year-old, Netherlands-based company that makes transportation management software, has raised €9 million (US$11.8 million) in a funding round led by existing investors De Hoge Dennen Capital and Global Cleantech Capital.

    FarmLogs, a two-year-old, Ann Arbor, Mi.-based startup that helps farmers digitally manage their farm to increase yield and profitability, has raised $4 million in Series A funding led by Drive Capital. Existing investors, who’d earlier given the company $1 million in seed funding, also participated in the round, including Huron River Ventures, Hyde Park Venture Partners and Hyde Park Angels.

    First Opinion, a year-old, San Francisco-based startup whose app makes it easy to text doctors, as well as track milestones and health concerns, has raised $1.2 million in funding from Greylock Partners,Yuri Milner, Felicis Ventures, and 500 Startups. TechCrunch hasmore here.

    GetOne Rewards, a three-year-old, Atlanta, Ga.-based company that automates the marketing, relationship, and management programs of its enterprise customers, has raised more than $2.5 million in Series B funding. The round was co-led by Fulcrum Growth Fund andMilestone Venture Partners, with participation from Atlanta Technology Angels and other investors. Silicon Valley Bankmeanwhile provided the company with a growth capital term loan.

    Juno Therapeutics, a new Seattle-based startup that’s trying to eliminate cancer from the human body and last month closed on $120 million in Series A funding, has added $25 million to the round from two prominent investors, reports GeekWire. Bezos Expeditions, the investment arm of Amazon founder Jeff Bezos is now a backer, as is Venrock.

    Main Street Hub, a three-year-old, Austin, Tex.-based company manages social media communications for small to medium-sized businesses in the U.S., Canada, U.K., Ireland and Hong Kong, has raised $14 million led by Bessemer Venture Partners, with previous investors, including Harrison Metal Capital, participating in the round. The company has raised $20 million to date.

    Media Gobbler, a three-year-old, L.A.-based company that backs up, transfers and organizes high-bandwidth media files like music, videos and photos, has raised $3.3 million as part of a $5 million fundraise, according to an SEC filing. The company had previously raised just north of $3 million. Its investors include ff Venture Capital, Black Ocean Group, and a long line of prominent individual investors, including Sky Dayton, Aber Whitcomb, Dan Rose, Jeremy Wenokur,Mike Jones and Matt Coffin.

    Nextbit, a new, San Francisco-based startup operating in stealth mode, has raised $18 million in funding from Accel Partners and Google Ventures, reports TechCrunch. The startup’s founders were both formerly entrepreneurs-in-residence at Accel; one sold his last company to Motorola Mobility, later acquired by Google. You can learn more about the team here.

    OpenSesame, a 2.5-year-old, Portland, Ore.-based online training company that’s trying to simplify the process of buying and selling eLearning content, has raised $8 million led by Partech Ventures. The company has raised $10 million to date.

    Quench, a King of Prussia, Pa.-based outfit that’s among the country’s largest bottleless, filtered drinking water companies, has raised $38.5 million in equity and debt financing from new investor T. Rowe Priceand previous investors Element Partners, Virgin Green Fund, Douglas Brown, ORIX Ventures, Advent-Morro Equity Partners, Potomac Energy Fund and The Pohlad Companies. Quench has raised roughly $108 million to date, according to Crunchbase.

    SiteMinder, an eight-year-old, Sydney, Australia-based company that helps major hotel chains book and record guest stays, has raised $30 million from Technology Crossover Ventures. The company, whose customers include Marriott, Hyatt, and Best Western, had previously raised $5 million in Series A funding in May 2012, reports the outlet Tnooz.

    SuVolta, a seven-year-old, Los Gatos, Calif.-based semiconductor company focused on producing low-power chips, has raised $10.6 million in Series F funding from Fujitsu Semiconductor Ltd., Kleiner Perkins Caufield & Byers, August Capital, New Enterprise Associates, Northgate Capital and DAG Ventures. SuVolta has raised about $73 million to date, shows Crunchbase.

    Visual.ly, a three-year-old, San Francisco-based infographic platform company, has raised $8.1 million in Series A financing. Crosslink Ventures led the round with participation from Correlation Ventures,SoftTechVC, 500 Startups, Giza Ventures, Quest Ventures andKapor Capital.

    WP Engine, a three-year-old, Austin, Tex.-based hosting company that specializes in running WordPress sites, has raised $15 million in funding from North Bridge Growth Equity. The company’s CEO, Heather Brunner, tells TechCrunch that the round brings the company’s total funding to $18.2 million. (Silverton Partners and a long line of individuals, including Eric Ries, are among is earlier investors.)

    —–

    New Funds

    Mayfield Fund has raised $86 million for its second Indian fund, Mayfield India II, according to a new SEC filing. The Sand Hill Road firm began marketing the fund one year ago. It closed its first India-focused fund, a $111 million pool called Mayfield India I, in 2008. Four partners are listed on the regulatory filing: James Beck, Navin Chaddha,Couldiplall Lala, and Zoubeir Khatib. Last month, StrictlyVC interviewed Nikhil Khattau, a venture partner who cofounded Mayfield India in Mumbai, about where the firm is seeing the most opportunity.

    —–

    People

    Venture capitalist Vinod Khosla sends a scathing letter to the producers of “60 Minutes” in the wake of its grim report on cleantech, which featured Khosla along with one of his struggling portfolio companies. Writes Khosla, “The pontificators at 60 Minutes, with their agenda-driven bastardization of news reporting, failed to do the most elementary fact checking and source qualification, as was the case with your Benghazi reporting. No wonder one major media outlet wrote that you have been ‘widely criticized for leaving out crucial information about the state of the clean tech sector.’ Is this the new CBS standard?”

    New York magazine has dinner with Ken and Ben Lerer in the West Village, where father and son share how they came to run their increasingly high-profile venture firm together. Says the elder Lerer: “I was at the Huffington Post, and I was doing investment for the family. Then Foursquare raised money. I called Benjamin, and I was like, ‘This sucks, I wish I had known about this.’ He said, ‘You’re an idiot, I know those guys, why didn’t you call me?’”

    Summit Partners announced a heap of promotions late last week that we’d missed. In case you did, too: Leonard Ferrington, who joined Summit’s West Coast office in 2006 as an associate, has just been promoted from principal to managing director. Meanwhile, Andrew Collins, Matthew Hamilton and Jay Pauley were promoted to principal. Collins joined Summit’s West Coast office as an associate in 2008, and became a VP in 2011; Pauley was joined Summit’s Boston office in 2010 as a VP and moved to Menlo Park last year; Hamilton joined Summit’s Boston office in 2005 as an associate and had served as a VP since 2009.

    —–

    IPOs

    The re-opening of China’s mainland IPO market is off to a bad start, with five Chinese companies announcing they will halt their IPOs in the wake of an unexpected announcement from the China Securities Regulatory Commission on Sunday. THE CSRC had promised a more hands-off approach to IPOs after resuming them earlier this month; it has since announced it will make random inspections on the procedures of book-building and roadshows.

    —–

    Exits

    MyEdu, a four-year-old, Austin, Tex.-based company whose online platform helps students to create a personalized graduation plan, as well as find job and internship opportunities, has been acquired by the education software giant Blackboard. Terms of the deal were not disclosed. MyEdu had raised $18.7 million, including from Bain Capital Ventures and the Baylor Angel Network.

    —–

    Jobs

    Apple is looking for a corporate development analyst to join its corp dev group in Santa Clara, Calif., a team that’s responsible for evaluating and executing Apple’s acquisitions, as well as for conducting other complex financial analysis. To apply, you’ll need at least two years of experience in investment banking, venture capital or management consulting.

    —–

    Data

    Venture funding in the healthcare IT sector almost doubled in 2013, growing to $2.2 billion across 571 deals, from $1.2 billion across 163 deals in 2012, says the research and consultancy Mercom Capital Group.

    Israeli venture capital funds raised 28 percent less capital in 2013 than in 2012, says a new report from the IVC Research Center and KPMG Somekh Chaiken Israel. Specifically, 13 funds raising $526 million in 2013, compared with the $725 million raised by 14 funds in 2012. IVC attributes the drop to the creation of more micro VC funds, noting that only two funds last year raised more than $100 million. You can learn more here.

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    Essential Reads

    Some ideas about what we should do about net neutrality, now that a federal appeals court has rejected equal access rules for Internet providers.

    Quartz on why Nest will be even bigger for Google than Android.

    As the world turns: Fast-growing Practice Fusion is taking over San Francisco office space from fast-shrinking Zynga, reports Xconomy.

    —–

    Detours

    A pair of Stanford students has developed an attractive, functional, and affordable brace that can help cure club foot for $20.

    From the New Yorker: “There is, I think, a trace of shame in the veryenterprise of tweeting, a certain low-level ignominy to asking a question that receives no response, to offering up a witticism that fails to make its way in the world, that never receives the blessing of being retweeted or favorited.”

    Living the dream: Ah, the life of a senior search engine marketing specialist.

    —-

    Retail Therapy

    The Dark Motorcycle Helmet, made for the “not-quite-average guy.” (Shark-Repellent Bat Spray and grappling gun sold separately.)

    No. Sorry. Nope.

    —–

    Sign up for our morning missive, StrictlyVC, featuring all the venture-related news you need to start you day.

    Connie

  • For This Startup, the Hunt Is On

    The HuntThe hunt for new funding is on for community-driven shopping startup The Hunt, whose users seek out items like clothing with the help of other users.

    The concept was inspired by the personal experience of founder and CEO Tim Weingarten, a former venture capitalist with Worldview Technology Partners. As Weingarten tells it, a few years ago, while surfing around Tumblr, he “happened to see pictures of a bunch of guys at a wedding wearing a really slick tux with a narrow cut and peaked lapels. I wanted one, but if you start looking for a tux, a billion options come up. It struck me that there was no good way to solve this problem.”

    Investors apparently agreed it was a pain point in the market. In November, the now 17-person company closed on $5.5 million in funding from Javelin Partners, along with Ashton Kutcher, Tyra Banks, and other celebrity investors. Now, as Weingarten resumes talks with VCs — he says the company has “plenty of cash,” citing its “momentum” as a reason to reengage with investors – the question is whether The Hunt is growing fast enough.

    Weingarten says that one million people have registered since the service launched last January and that 300,000 of them – 90 percent of them women between the ages of 15 and 30—actively use it.

    Unlike platforms such as Pinterest, users’ “hunts” also demonstrate a stronger intent to purchase, says Weingarten, who compares the conversion rates to those of Google’s search results. “We don’t have to worry about proxies or guessing your intent based on what pages you’ve visited; we know what you want to buy, which puts us in a strong position.”

    Indeed, Weingarten says the startup has already been approached by a number of brands looking to pay for greater visibility, with some, including clothiers Lulu’s and 22Singer.com, already actively jumping in to answer users’ searches. (Says Weingarten, “We encourage brands to solve hunts, though I let them know not to spam our users. I don’t want them posting 10 products in response to a user who’s looking for a certain kind of dress with stripes.”)

    Naturally, the Hunt has plenty of challenges, including competition from other question-and-answer platforms. Just last week, Twitter cofounder Biz Stone launched a social search app called Jelly that invites users to ask their friends for help in finding information. The Hunt’s young demographic, while attractive to brands and advertisers, also tends to be fickle.

    Perhaps most importantly, it still hasn’t established the kind of critical mass that is, in itself, a kind of defensibility.

    Still, attempting from the outset to build a bridge between photo sharing and e-commerce is very likely refreshing to some VCs. Knowing that a former investor is at the helm may also hold special appeal.

    I ask Weingarten whether The Hunt is spending on marketing, for example, and he tells me that it’s “much more interesting to have less growth and for that growth to be purely organic. As an investor,” he adds, “if I thought that a startup was buying a bunch of ads, I’d look at it differently.”

    Sign up for our morning missive, StrictlyVC, featuring all the venture-related news you need to start you day.

    Connie

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  • StrictlyVC: January 14, 2014

    110611_2084620_176987_imageHappy Tuesday!

    —–

    Top News in the A.M.

    Shooting for the moon: A quick look at just a handful of Google’s recent acquisitions and what they mean.

    —–

    For Nest Investor Shasta Ventures, Persistence Pays

    Google’s plans to acquire the smart home appliance maker Nest Labs for $3.2 billion in cash should translate into a tidy return for the half dozen firms that invested $80 million in the three-year-old company. Kleiner Perkins may have the most reason to kick up its heels, having led Nest’s $4 million Series A round in early 2011. (The deal, rumored to give Kleiner a 20x gross return, might well convince its limited partners that Kleiner has recovered its mojo.)

    But the deal is also a personal victory for venture capitalist Rob Coneybeer of 10-year-old Shasta Ventures, who was introduced to Nest founder Tony Fadell eight years ago by fellow VC Stewart Alsop. (“He thought we’d like each other,” explains Coneybeer, who is a mechanical engineer by training and shares Fadell’s love of gadgets.)

    Once acquainted with Fadell, Coneybeer spent as much time with him as he could in the hope that one day they could work together. Last night, I talked with a clearly elated Coneybeer about his relationship with Fadell and his subsequent investment in Nest; what follows is a lightly edited transcript.

    Where does your story with Fadell start?

    I’ve been interested in mobile and hardware and investing in the Internet of things for a while, and when Tony left Apple, I kept in touch with him as he was investigating different ideas, including devices that use batteries to get recharged and what happens to those devices if you connect them to the Internet. So he’d been thinking about things, and we’d get together every two to four weeks to talk.

    When did it turn into more than that?

    Tony had gotten to know myself and some of my partners, and he’d developed relationships with a couple of different firms … When Tony became difficult to reach, I realized he might be starting something, and I basically pursued him and said, “I’d love to find out what you’re up to,” and I offered to sign an NDA. And he said, “You’d do that?” And I said, “Yeah, I never sign NDAs, but to learn what you’re up to, I would, absolutely.” A week or two later, he walked me through what he was up to, and I met the core team he’d pulled together.

    He went with us and with Kleiner [for Nest’s A round]. He’d known [Kleiner partner] Randy [Komisar] for a long time, and Randy has great experience in bringing consumer electronics to market [including as a founding director at Tivo].

    What was Shasta’s value-add to the company?

    It was a good personal fit. And having built [Shasta] around consumer and expertise around hardware companies, we were able to make great introductions, including to Best Buy and Lowe’s and other channel partners. We also helped with recruiting, in closing key candidates. Beyond that, it’s hard to provide a laundry list; Nest has such an accomplished team.

    Kleiner led the Series A round, but you say Shasta was a “significant participant.” Can you talk about what kind of return you’ll see from Nest’s sale? TechCrunch sources say it will return “almost all” of your second, $250 million fund, closed in 2008.

    I can only tell you that [the return will be] very, very, significant. I’m sorry I can’t be more specific, but you can write “very” three times.

    Is Nest your biggest exit personally? I recall that before Shasta, as a partner at New Enterprise Associates, you led an investment in the fiber optic switching company Xros, acquired by Nortel.

    That was $3.25 billion, so this is my second three-billion-dollar outcome. It does feel really good to build something from scratch [Shasta] and work really hard for 10 years to build a brand and to [be a part of] a product and outcome that people are really excited about. It feels like things are finally coming together.

    Are you even a teeny bit disappointed? I know you thought Nest could become a formidable standalone hardware business.

    I’ll just say that Google is acquiring the best hardware team on the planet. In terms of designing high-quality, durable, consumer hardware, you can’t name a better team.

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    New Fundings

    Certain, a 20-year-old, San Francisco-based maker of event management software, has raised $17.8 million in funding, according to an SEC filing. The company previously raised $11 million, in 2011, says VentureBeat.

    ChargeBee, a three-year-old, Chennai, India-based startup that helps companies manage their subscription billings, has raised roughly $800,000 in a Series A funding from Accel Partners. The company has raised $1.17 million altogether, including a $ 370,000 seed round closed in 2012.

    Chrome River Technologies, a six-year-old, L.A.-based company that makes expense management and supplier invoice processing software, has raised $17 million in Series C funding. The round was led by Bain Capital Ventures and included existing investors First Analysis and Argentum. The company has now raised $20 million to date.

    Elastifile, a young, Herzliya, Israel-based solid-stage storage company, has raised $8 million in Series A funding from Battery Ventures and Lightspeed Venture Partners. (GigaOm notes that Elastifile’s cofounder Shahar Frank was cofounder of XtremIO, a solid-state storage player purchased by EMC in 2012 for $430 million.)

    Evaneos, a four-year-old, Paris-based online platform that helps design their travel and book their trips, has closed $6 million in funding led by XAnge Private Equity, with participation from ISAI. The company had previous raised $1 million in funding from ISAI.

    Iceotope, a two-year-old, Yorkshire, England-based IT cooling specialist, has raised more than $10 million in Series A financing, the company disclosed yesterday. Aster Capital, a venture capital firm specializing in clean tech, led the round, along with the high-tech investment firm Ombu Group in the U.K.

    Invoca, a six-year-old, Santa Barbara, Calif.-based call marketing company formerly known as RingRevenue, has raised $20 million in Series C funding from Accel Partners, Upfront Ventures and Rincon Venture Partners. The company has now raised more than $30 million.

    Ivantis, a six-year-old, Irvine, Calif.-base maker of stents that are used to lower eye pressure for glaucoma patients, has added $14 million to its Series B round, which now totals $46.5 million. Investors include Vertex Ventures, GBS Ventures, Ascension Ventures,EDBI, MemorialCare Innovation Fund, New Enterprise Associates and Delphi Ventures. The company has raised more than $63 million to date, according to Crunchbase.

    Kontagent, a six-year-old, San Francisco-based mobile analytics firm that caters to game developers, has raised a fresh $4.8 million in funding, shows an SEC filing. The company has now raised roughly $17 million to date, including from Maverick Capital, Battery Ventures, and Altos Ventures.

    Madison Vaccines, a 1.5-year-old, Madison, Wisconsin-based clinical stage biopharmaceutical company focused on treating prostate cancer, has raised $8 million in Series A financing from Madison-based Venture Investors, Wisconsin Alumni Research Foundation, the State of Wisconsin Investment Board, Madison-based Venture Management and others.

    Nutanix, a four-year-old, San Jose, Calif.-based converged infrastructure market player, has raised $101 million in financing co-led by Riverwood Capital and SAP Ventures. Morgan Stanley Expansion Capital and Greenspring Associates also participated in the round, alongside existing investors Lightspeed Venture Partners,Khosla Ventures and Battery Ventures. The company has now raised a total of $172.2 million.

    Oyster, a two-year-old, New York-based company that provides customers access to more than 100,000 books for $10 a month, has raised $14 million in a new round of financing led by Highland Capital Partners. Existing investor Founders Fund also participated in the financing, which brings Oyster’s total funding to $17 million. The New York Times has more on the company here.

    Sonian, a six-year-old, Newton, Mass.-based that manages a hosted information archive program, has raised $8 million in Series C funding from existing investors OpenView Venture Partners, Summerhill Venture Partners and Prism Venture Partners. The round brings Sonian’s total funding to $21.6 million.

    Turn, a 10-year-old, San Francisco-based advertising platform company, has raised $80 million in Series E funding led byBlackRock and Fidelity Investments, reports TechCrunch. Other investors in the deal included new backers ClearBridge Investments,Firsthand Technology Value Fund, Northport Investments, andPine River Capital Management and previous investors Norwest Venture Partners, Trident Capital, Shasta Ventures, and Focus Ventures. The company has raised a grand total of more than $135 million.

    uTest, a six-year-old, Framingham, Mass.-based mobile app testing service, has raised $43 million in Series E round of funding led by Goldman Sachs. Previous investors also participated, includingQuestMark Partners, Scale Venture Partners, Longworth Venture Partners, Mass Ventures, Egan-Managed Capital and Mesco Ltd. The company has now raised 80 million to date.

    Volusion, a 14-year-old, Austin, Tex.-based company that helps merchants create e-commerce stores online, has raised $35 million in debt financing from Silicon Valley Bank, says TechCrunch. It’s the company’s first outside funding.

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    New Funds

    In October, the five-year-old, New York-based venture firm ff Venture Capital became the first to embrace the SEC’s new general solicitation rules, announcing, quite publicly, that it planned to raise between $50 million and $70 million for its third fund, ff Rose Venture Capital Fund. Today, the firm is announcing it has closed the fund with $52 million, including from New York State’s Empire State Development (Innovate NY Fund), Goldman Sachs, and the New Jersey Economic Development Authority. The firm’s last fund, a $27 million vehicle called ff Silver, closed in 2010.

    Spur Capital, a 13-year-old, Bartletsville, Ok.-based fund of funds, is in the process of raising its fourth, venture-focused fund, shows anSEC filing. The outfit, which began fundraising in 2012, has so far raised $31 million; it is targeting as much as $150 million, shows the filing.

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    People

    Matt Mullenweg, founder of venture-backed Automattic (WordPress’s parent company) announced yesterday that he is taking up the CEO reigns, two days after turning the ripe old age of 30. Writes Mullenweg on his own blog, “[I]t’s obvious that no one in their twenties should run a company. They think they know everything…”

    Yesterday, Facebook CEO (and early adopter) Mark Zuckerberg found a terrifying spider in his bathroom and turned to the new photo app Jelly for help.

    —–

    IPOs

    With 91 percent of the last three months’ IPOs posting positive returns, we probably shouldn’t be surprised that 13 companies submitted initial IPO filings last week.

    —–

    Exits

    Branch, a 2.5-year-old, New York-based link-sharing service, is being acquired by Facebook for roughly $15 million, says The Verge. Branch’s nine-person will reportedly remain in New York and will form a new team at Facebook company called “Conversations,” whose goal will be to help users “connect around their interests.” Branch had raised $2 million in seed funding in 2012, including from SV Angel,Lerer Ventures, Obvious Corporation, betaworks, BoxGroup and numerous individuals, including David Tisch.

    ideeli, a six-year-old, New York-based online retail site that features limited-time sale events, was acquired yesterday by Groupon for $43 million in cash. ideeli had raised roughly $107 million over the years, including from betaworks, Next World Capital, Constellation Ventures, Kodiak Venture Partners, Cue Ball, Credit Suisse andStarVest Partners.

    The Winamp media player and Shoutcast, an Internet radio service, have been sold to the digital audio business Radionomy by AOL, in a cash and stock deal worth $5 million to $10 million, reports TechCrunch. AOL has taken a 12 percent stake in Radionomy in the process. AOL paid roughly $80 million in 1999 for Nullsoft, owner of AOL.

    —–

    Happenings

    Woodside Capital is hosting its M&A Silicon Valley Gathering tomorrow and Thursday, an event in which it brings together “150 of the smartest, most creative people we know from software and internet services.” Learn more about the Los Altos Hills, Calif.-event here.

    —–

    Job Listings

    Triangle Peak Partners is looking for a venture capital analyst to join its Palo Alto, Calif.-based office, though be warned: the firm says this is an “internship for current Stanford students or very recent graduates and is for a specific project. Please do not apply if you have several years work experience or are looking for a role as a venture capitalist.” Qualifications include familiarity with financial statements, capitalization tables and venture funding processes.

    —–

    Data

    In the fourth quarter of last year, venture capital firms raised $4.9 billion, up 12 percent over the third quarter of 2013. For the year, VC firms raised a total of $16.6 billion.

    —–

    Essential Reads

    Four reasons Google just bought a thermostat company.

    Ever wonder where filmmakers get the fake code that flashes across the movie screen during features like “Iron Man”? A British programmer is on it.

    —–

    Detours

    A fluffy, cuddly baby polar bear takes his first steps. (C’mon, you have time for this.)

    Looking for a place in L.A.? After failing to sell his Bel Air abode for $7.5 million, then $6.9 million, digital media mogul Jay Penske has re-listed it, this time for $7.3 million.

    The New York Times peeks into The Battery, San Francisco’s newish members-only social club. “While the noise level suggested a nightclub, the crowd did not. There was as much gray hair as blond, iron-coaxed curls; the occasional stiletto heel clacked alongside silent New Balance sneakers and practical flat boots. ‘A lot of the people here look like they should be in bed by 10 p.m.,’” said one guest of the club to the outlet.

    —–

    Retail Therapy

    What looks like a Nest but sounds a speaker? We’ll give you one guess.

    Hagerty Insurance just released a list of the top 10 cars they expect to be owned by “collectors” down the road. (StrictlyVC would like to collect the M5.)

    Thanks to meaningful advances in the retail industry, you can now slip on a Snuggie, curl up on in your Fombag, and call it a day. Hallelujah!

    —–

    Correction: Yesterday, in Retail Therapy, StrictlyVC featured the Hypermach Sonicstar, a supersonic jet concept that might not come to pass. (We’d found and posted an old story about it, thinking it was new.) We apologize, especially to those readers who may own a Gulf V, which we cruelly derided.

    —–

    Please feel free to send us any and all story suggestions (anonymous or otherwise) by clicking here. If you’re interested in advertising in our email newsletter, please click here. To sign up for this newsletter, please click here.

    Connie

  • For Nest Investor Shasta Ventures, Persistence Pays

    coneybeerGoogle’s plans to acquire the smart home appliance maker Nest Labs for $3.2 billion in cash should translate into a tidy return for the half dozen firms that invested $80 million in the three-year-old company. Kleiner Perkins may have the most reason to kick up its heels, having led Nest’s Series A round in early 2011. (The deal, rumored to give Kleiner a 20x gross return, might well convince its limited partners that Kleiner has recovered its mojo.)

    But the deal is also a personal victory for venture capitalist Rob Coneybeer of 10-year-old Shasta Ventures, who was introduced to Nest founder Tony Fadell eight years ago by fellow VC Stewart Alsop. (“He thought we’d like each other,” explains Coneybeer, who is a mechanical engineer by training and shares Fadell’s love of gadgets.)

    Once acquainted with Fadell, Coneybeer spent as much time with him as he could in the hope that one day they could work together. Last night, I talked with a clearly elated Coneybeer about his relationship with Fadell and his subsequent investment in Nest; what follows is a lightly edited transcript.

    Where does your story with Fadell start?

    I’ve been interested in mobile and hardware and investing in the Internet of things for a while, and when Tony left Apple, I kept in touch with him as he was investigating different ideas, including devices that use batteries to get recharged and what happens to those devices if you connect them to the Internet. So he’d been thinking about things, and we’d get together every two to four weeks to talk.

    When did it turn into more than that?

    Tony had gotten to know myself and some of my partners, and he’d developed relationships with a couple of different firms … When Tony became difficult to reach, I realized he might be starting something, and I basically pursued him and said, “I’d love to find out what you’re up to,” and I offered to sign an NDA. And he said, “You’d do that?” And I said, “Yeah, I never sign NDAs, but to learn what you’re up to, I would, absolutely.” A week or two later, he walked me through what he was up to, and I met the core team he’d pulled together.

    He went with us and with Kleiner [for Nest’s A round]. He’d known [Kleiner partner] Randy [Komisar] for a long time, and Randy has great experience in bringing consumer electronics to market [including as a founding director at Tivo].

    What was Shasta’s value-add to the company?

    It was a good personal fit. And having built [Shasta] around consumer and expertise around hardware companies, we were able to make great introductions, including to Best Buy and Lowe’s and other channel partners. We also helped with recruiting, in closing key candidates. Beyond that, it’s hard to provide a laundry list; Nest has such an accomplished team.

    Kleiner led the Series A round, but you say Shasta was a “significant participant.” Can you talk about what kind of return you’ll see from Nest’s sale? TechCrunch sources say it will return “almost all” of your second, $250 million fund, closed in 2008.

    I can only tell you that [the return will be] very, very, significant. I’m sorry I can’t be more specific, but you can write “very” three times.

    Is Nest your biggest exit personally? I recall that before Shasta, as a partner at New Enterprise Associates, you led an investment in the fiber optic switching company Xros, acquired by Nortel.

    That was $3.25 billion, so this is my second three-billion-dollar outcome. It does feel really good to build something from scratch [Shasta] and work really hard for 10 years to build a brand and to [be a part of] a product and outcome that people are really excited about. It feels like things are finally coming together.

    Are you even a teeny bit disappointed? I know you thought Nest could become a formidable standalone hardware business.

    I’ll just say that Google is acquiring the best hardware team on the planet. In terms of designing high-quality, durable, consumer hardware, you can’t name a better team.

    Sign up for our morning missive, StrictlyVC, featuring all the venture-related news you need to start you day.

    Connie

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  • StrictlyVC: January 13, 2014

    Good morning, hope you had a fun weekend! To sign up for the newsletter, click here.

    —–

    Top News in the A.M.

    Taxi drivers, up in arms over the Uber car service, have grown violent in Paris, with Uber confirming at least a dozen incidents in Paris and Lyon this morning, including “flat tires, eggs, broken windows.” As Rude Baguette reports, one of the first victims today was Eventbrite CTO Renaud Visage, who was being driven from the Paris airport. The Uber in which he was riding was “attacked by multiple assailants, who allegedly, after smashing one window and slashing two tires[…]as well as defacing one side of the car with glue, attempted to enter the vehicle.” Visage’s companion in the car told the outlet that their Uber driver maneuvered the two out of the situation, then dropped them on the shoulder of the freeway.

    —–

    Why It’s ‘Eyes on the Enterprise’ at Index Ventures

    In a sit-down with general partner Mike Volpi of Index Ventures late last week, Volpi shared how 18-year-old Index approaches venture marketing — and why it worries about competing with its founders for attention.

    Volpi – long a top Cisco executive before joining Index – also explained why he’s confident that investors, who largely shifted their focus to enterprise deals in 2013, will keep it there this year. Our conversation has been lightly edited for length.

    You’ve been investing more in enterprise deals as a percentage of your overall fund than you have historically. Why?

    In part because we opened this U.S. office, and there’s more [related dealflow] in the U.S, and I think that’s an effect of more entrepreneurs getting into the space.

    Getting into the space from where, the consumer side of things?

    At the margin, there is some switching going on, like David Sacks, who [created] an enterprise company like Yammer. Or you might look at Dropbox [Index led its $250 million Series B round], which really started as a consumer company but is seeing bigger portions of its business in the enterprise. So you see a crossover effect.

    You’re also seeing people who’ve been on the sidelines in recent years getting back in the game. We have an investment in Pure Storage, and if you look at that team, it’s a lot of the folks who were at [the data storage company] Veritas [acquired by security software giant Symantec for $13.5 billion in 2004]. There are people who’ve been going to work every day at these larger corporations, but now they’re coming out of them and restarting things.

    How steep is the learning curve for those crossing over from consumer startups?

    There is a learning curve. Like it or not, enterprises require sales, whereas with consumers, you can find a great service and, through virality, consumers discover it. So the business processes of selling — find the lead, nurture the lead, educate the customer on the value proposition of what you do, then close them – that along with the tools required and the people you hire are different. When Dropbox decided to launch its “Dropbox For Business” products, it had to learn about things like compliance and corporate directories, which aren’t natural vocabulary words for consumer entrepreneurs.

    You say three trends will make 2014 another big year for enterprise. What are they?

    First, enterprise budgets tend to be economic-cycle driven; when the economy is doing well [as now], they’re spending money.

    A much newer theme is that the pocket of money that startups went after is distributed now, which is a really good thing. Historically, the one customer in the enterprise was the CIO, and he or she was a technical user who decided, “I’m going to use Microsoft for this, and Oracle for that and Cisco for this.” Now, because you don’t need to buy the hardware anymore – you can go to Saleforce or Workday or Zuora – the decision-maker for that technology is no longer the CIO. It’s the VP of sales, it’s the CMO, it’s the CFO; it’s 10 different people at the company. Imagine that you’re the head of public relations at Twitter and want to do sentiment analysis. You don’t call the CIO. You look up “sentiment analysis technology” on Google. Something comes up and you call the sale rep of the company and they say, “Just send us your link and we’ll have some analyses for you.” Well, you just spent money on technology. You’re an enterprise customer.

    Last, enterprises have consumer envy. Consumers have cool devices. They have Evernote, with beautiful graphics. Meanwhile, [the enterprise folks] are sitting there looking at [Microsoft] SharePoint or Word. They want some of that cool stuff – including more storage and networking stuff and cooler middleware — so that’s where the money is being, and will continue to be, spent.

    cpc-300x250

    New Fundings

    Atara Biotherapeutics, a two-year-old, Thousand Oaks, Calif.-based company, has added $13.5 million to its Series B funding. Last month, the drug development company announced it has raised $38.5 million from the venture arm of Amgen, Celgene Corp., and the hedge fundEcoR1, along with earlier investors Alexandria Venture Investments, DAG Ventures, Domain Associates and Kleiner Perkins Caufield & Byers. Last week, the Baupost Group joined the round, bringing the company’s raise to $52 million. Altogether, Altara has raised $72 million. (You can learn more about the company here.)

    Delivery Hero, a three-year-old, Berlin-based network of food ordering marketplaces, has raised $88 million from Insight Venture Partners, says Tech.eu. Delivery Hero raised $30 million fromPhenomen Ventures and prior investors Team Europe, Kite Ventures, Ru-net, Tengelmann Ventures, Holtzbrinck Venturesand Point Nine Capital just seven months ago. It has raised $222 million to date, according to Crunchbase.

    Path, the three-year-old, San Francisco-based private social network, has raised $25 million in Series C financing, reports Re/code. Its backers include new investor Bakrie Global Group of Indonesia and existing investors Greylock Partners, Kleiner Perkins Caufield & Byers, Index Ventures, Insight Venture Partners, Redpoint Venture Partners and First Round Capital. Founder and CEO Dave Morin told Re/code the Series C was an up round. Path was valued at $250 million when it raised its B round in 2012.

    Peak, a seven-year-old, Denver-based company that offers cloud computing to an ecosystem of value-added resellers, distributors, agents and service providers that white-label the service as their own, has raised $4 million in financing from previous investors Meritage Funds and Sweetwater Capital. The company has raised about $13 million in equity to date and another $3 million in debt, according to Crunchbase.

    PlanSource, an 11-year-old, Orlando, Fla.-based cloud-based company that offers administration, insurance, and payroll services to employers, has raised $12 million in Series B funding from existing investors Lemhi Ventures and Timucuan Asset Management. It has raised roughly $24 million to date.

    Rebellion Photonics, a four-year-old, Houston-based company whose main product is a hyperspectral imaging camera for the oil and gas industry, has raised $10.4 million in Series A funding from the New York investment firm Tinicum and private investment partnerships advised by Tinicum.

    Suneva Medical, a four-year-old, San Diego-based company that’s developing aesthetic products for the dermatology, plastic and cosmetic surgery markets, has raised $35 million in debt and equity capital. Polaris Partners led the Series B round; HealthCare Royalty Partners participated in the financing, as well as provided a growth capital loan. Other, unnamed existing investors also participated in the funding.

    Trustpilot, a six-year-old, Copenhagen-based company that powers a large and growing online consumer review platform, has raised $25 million led by DFJ Esprit. Previous investors SEED Capital, Index Ventures, and Northzone also participated in the round, which brings Trustpilot’s total funding to just north of $40 million.

    —–

    New Funds

    Plymouth Ventures, an Ann Arbor, Mi.-based venture firm, is hoping to raise up to $80 million for its third fund, shows an SEC filing that states the firm has raised $31.6 million so far. Plymouth looks to back growth-stage companies, particularly in Michigan and Ohio, a niche that’s underserved according to the firm. Here’s a bit more about its criteria.

    Technology Crossover Ventures has just closed on a bundle, according to numerous SEC filings processed on Friday. One shows the Palo Alto, Calif.-based firm has raised a $1.47 billion fund since it began fundraising in 2012. TCV has also raised a separate pool of$69.2 million, and a third pool of $328 million, for a total of $1.86 million. TCV makes late-stage investments in privately held Internet, financial services, infrastructure, communications and software companies, as well as public companies. The firm, which writes checks of up to $200 million, last raised $3 billion, in 2007. According to a 2012 Bloomberg report, TCV VIII was originally targeting $2.5 billion.

    Top Tier Capital Partners, the San Francisco-based fund of funds, has raised roughly $400 million across two new funds, SEC filings show. One fund, which was first registered in May of 2012, has closed on $240 million. A second vehicle that the firm began raising in 2012 has raised $156 million; it shows a target of $200 million. Top Tier, founded in 2006, invests in mid market buyout funds and smaller venture capital funds, making both primary commitments and acquiring interests through the secondary market.

    —–

    People

    Yesterday, a 21-year-old programmer tweeted that it’s “really, really difficult to find the real story of events in the past which involved winners and losers.” When he went on to reference the Mosaic browser and Marc Andreessen in particular, Andreessen gave him a history lesson.

    Billionaire philanthropist Bill Gates is picking up the pace of his venture investments, says TechCrunch. It reports that Gates was involved in at least six new and follow-on investments in venture-backed companies last year, up from four new and follow-on commitments in 2012, and three in 2011.

    Benchmark’s Bill Gurley is on the hunt for interesting healthcare startups. As he tweeted on Friday: “Spending time studying where the Internet intersects with healthcare. If you have ideas and want to chat, contact me: health@benchmark.com.” He added: “100% convinced US healthcare market is really messed up & that means opportunity, 17% of GDP.”

    Business Insider gives Uber CEO Travis Kalanick, “Silicon Valley’s newest star,” the long-form treatment, saying of those interviewed for the story: “Acquaintances seem to be of two minds about him: On the one hand, many agreed he is a phenomenon. ‘Travis is smart,’ says Kalanick’s former investor Mark Cuban. “Busts his ass and is a true entrepreneur. Can’t be much more complimentary than that.’ Equally common was the view of Kalanick as — in a word that came up again and again in interviews, ‘an #%&hole.’”

    Xue Manzi, a well-known Chinese-American venture capitalist, appears to be living in a Beijing detention center, reports the South China Morning Post. Manzi — an outspoken liberal who has criticized the Chinese government on the microblogging platform Weibo, where Manzi has more than 12 million followers — was detained by police in mid-September for allegedly hiring prostitutes. Soon after, Manzi, confessed on Chinese state television that his “irresponsibility in spreading information online was a way of venting my bad mood, and neglectful of the social mainstream.” It was Manzi’s last public appearance. The SCMP reports that Chinese police “shall not hold a suspect for more than two months without pressing charges, according to Chinese laws. But they are allowed to apply for an extension of up to two months in ‘complicated’ cases that may take longer to investigate.”

    —–

    Exits

    PeopleAnswers, a 13-year-old, Dallas-based maker of “assessment software” to help companies more effectively select and retain employees, has been acquired by Infor, an enterprise software firm based in New York. Terms of the deal were not disclosed.

    —–

    Happenings

    J.P. Morgan‘s 32nd annual healthcare conference kicks off today in San Francisco. Click here for more information about the invitation-only, three-day-long event.

    The National Retail Federation‘s two-day Big Show conference in New York is also underway right now. For scheduling information (including when you can catch a keynote by Square’s Jack Dorsey), click here.

    —–

    Jobs Listings

    eBay is in the market for a director of business development who will help decide on potential investments and acquisitions and build strong industry and venture capital relationships to make it easier for eBay to find M&A and investment opportunities. Applicants need an MBA and more than 10 years of experience, including at a top strategy consulting firm, investment bank, or tech-focused investment firm.

    —–

    Data

    Last year, more venture firms closed on new funds than in 2012, with 205 versus 185 the year before, reports the Wall Street Journal. Notably, the increase came at the early-stage level, with 151 firms closing on capital, compared with 118 in 2012. They didn’t collect all that much, though, not by at least one measure. While roughly as many early-stage funds closed in 2013 as in 2001, when 199 early-stage funds were raised, last year’s firms raised a collective $9.37 billion; in 2001, they raised $22.47 billion.

    Noting that corporate venture arms have been investing in more seed stage deals than ever before, CB Insights observes that 34 different corporate venture arms participated in at least one U.S. seed VC round last year, and that the number of corporate VCs now participating at the seed stage is up 240 percent from 2010. CB Insights also reports that Google Ventures has been “far and away the most prolific” investor of the bunch. For more information, including on the most active corporate VCs, click here.

    —–

    Essential Reads

    “Envision that every one of your professional endeavors was meticulously tracked and measured in points, that there were levels to complete and you were given prizes for excellence. That every workplace action provided a tangible sensation of winning or losing as part of a system engineered to keep you addicted, thrilled to come back every morning.” It’s here, it’s spreading, and that’s worrisome, writes Farhad Manjoo of the WSJ.

    —–

    Detours

    Friends come and go, but the number of close friends you have may remain surprisingly constant.

    Ninety-two-year-old diamond cutter Max Fuchs “works quietly at a cutting bench cluttered with blocky metal tools, his hands worn from years of shaping rough stones into modern cuts….’You can take a diamond that’s, let’s say, a broken diamond, and you bring it back into shape. … It’s a masterpiece—like Picasso.’”

    The Flying Tomato would prefer you not call him that anymore. Writes Elizabeth Weil of snowboarder Shaun White, he “approaches his entrepreneurialism the way he does his snowboarding. ‘The whole strategizing thing is what does it for me,’ he says. ‘That’s what I do on the hill. I’m always thinking: Well, if this could happen, then that could happen. It’ll leave me in this position, it’ll create these opportunities.’”

    Retail Therapy

    Well. This is the last thing you need.

    —–

    Please feel free to send us any and all story suggestions (anonymous or otherwise) by clicking here. If you’re interested in advertising in our email newsletter, please click here. To sign up for this newsletter, please click here.

     

     

     

    Connie

  • Why It’s “Eyes on the Enterprise” at Index Ventures

    index-logo1In a sit-down with general partner Mike Volpi of Index Ventures late last week, Volpi shared how 18-year-old Index approaches venture marketing — and why it worries about competing with its founders for attention.

    Volpi – long a top Cisco executive before joining Index – also explained why he’s confident that investors, who largely shifted their focus to enterprise deals in 2013, will keep it there this year. Our conversation has been lightly edited for length.

    You’ve been investing more in enterprise deals as a percentage of your overall fund than you have historically. Why?

    In part because we opened this U.S. office, and there’s more [related dealflow] in the U.S, and I think that’s an effect of more entrepreneurs getting into the space.

    Getting into the space from where, the consumer side of things?

    At the margin, there is some switching going on, like David Sacks, who [created] an enterprise company like Yammer. Or you might look at Dropbox [Index led its $250 million Series B round], which really started as a consumer company but is seeing bigger portions of its business in the enterprise. So you see a crossover effect.

    You’re also seeing people who’ve been on the sidelines in recent years getting back in the game. We have an investment in Pure Storage, and if you look at that team, it’s a lot of the folks who were at [the data storage company] Veritas [acquired by security software giant Symantec for $13.5 billion in 2004]. There are people who’ve been going to work every day at these larger corporations, but now they’re coming out of them and restarting things.

    How steep is the learning curve for those crossing over from consumer startups?

    There is a learning curve. Like it or not, enterprises require sales, whereas with consumers, you can find a great service and, through virality, consumers discover it. So the business processes of selling — find the lead, nurture the lead, educate the customer on the value proposition of what you do, then close them – that along with the tools required and the people you hire are different. When Dropbox decided to launch its “Dropbox For Business” products, it had to learn about things like compliance and corporate directories, which aren’t natural vocabulary words for consumer entrepreneurs.

    You say three trends will make 2014 another big year for enterprise. What are they?

    First, enterprise budgets tend to be economic-cycle driven; when the economy is doing well [as now], they’re spending money.

    A much newer theme is that the pocket of money that startups went after is distributed now, which is a really good thing. Historically, the one customer in the enterprise was the CIO, and he or she was a technical user who decided, “I’m going to use Microsoft for this, and Oracle for that and Cisco for this.” Now, because you don’t need to buy the hardware anymore – you can go to Saleforce or Workday or Zuora – the decision-maker for that technology is no longer the CIO. It’s the VP of sales, it’s the CMO, it’s the CFO; it’s 10 different people at the company. Imagine that you’re the head of public relations at Twitter and want to do sentiment analysis. You don’t call the CIO. You look up “sentiment analysis technology” on Google. Something comes up and you call the sale rep of the company and they say, “Just send us your link and we’ll have some analyses for you.” Well, you just spent money on technology. You’re an enterprise customer.

    Last, enterprises have consumer envy. Consumers have cool devices. They have Evernote, with beautiful graphics. Meanwhile, [the enterprise folks] are sitting there looking at [Microsoft] SharePoint or Word. They want some of that cool stuff – including more storage and networking stuff and cooler middleware — so that’s where the money is being, and will continue to be, spent.

    Sign up for our morning missive, StrictlyVC, featuring all the venture-related news you need to start you day.

    Connie

    , ,

  • The Origins of Netscape, as Tweeted by Marc Andreessen

    marc-andreessenAs everyone now knows, Marc Andreessen apparently made it a New Year’s resolution to begin tweeting, just as some of the platform’s most prolific users are deciding to dial it down. That’s good news for the roughly 42,000 of us who are following him, given that he usually has plenty of interesting observations to make.

    Sunday afternoon, for example, Andreessen entered into a Twitter conversation with 21-year-old Marcos Villacampa, a self-described “startup addict” in Spain, who tweeted, “It is really, really difficult to find the *real* story of events in the past which involved winners and losers.” Villacampa then tweeted of Andreessen specifically that Mosaic “wasn’t exactly a one-man job…”

    Here’s the history lesson that Andreessen offered Villacampa in turn. (We feel vaguely trollish publishing it, but because it’s useful background, and conversations are so quickly lost on Twitter, we thought we should seize the opportunity to capture the exchange.)

     

     

     

     

     

     

     

     

     

     

     

    Connie

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  • StrictlyVC: January 10, 2014

    110611_2084620_176987_imageHello, Friday! Have a great weekend, everyone. See you back here next week with some good stuff, including more with Index Ventures’ Mike Volpi (below), who shares how decisions are made at Index, whether the firm believes in price “sensitivity,” and what he makes of Bitcoin mania.

    —–

    Top News in the A.M.

    Remember when Target let us know that up to 40 million customers’ personal information might have been stolen? Scratch that; the company now believes as many as 70 million customers were impacted by the data breach.

    —–

    Index Ventures’ Mike Volpi on the Pitfalls of VC Marketing

    Index Ventures is widely perceived to be amid the best venture firms by other VCs. Among its active investments are Sonos, the wireless music system company; Dropbox, the popular online storage service; and Hortonworks, a commercial vendor of Apache Hadoop.

    The goal for Index now is to raise its profile with U.S. entrepreneurs, many of whom still consider the firm — which launched in Geneva in 1996 and opened a London office in 2001 — to be a European venture fund.

    Step one involved opening an office in San Francisco in late 2011, where general partners Danny Rimer and Mike Volpi have been sewing up deals left and right. The second part of Index’s evolution involves giving the press a (slightly) better look into its thought processes. Indeed, I sat down with Volpi at Index’s sunny offices yesterday morning, where we talked about how the historically quiet firm plans to more visibly plant its flag in the U.S. and the Bay Area in particular.

    We’ve been sitting here talking about the professionalization of venture marketing. What is Index’s philosophy when it comes to selling itself?

    Venture capital is changing. It’s different. And being good at marketing is an important asset today, when it just wasn’t 10 years ago.

    Index certainly isn’t as ‘out there’ as some firms. Will that change?

    There’s an inherent conflict that exists in doing a lot of marketing for one’s own firm, because in one dimension, being out there helps attract people to you. In theory, saying, “So and so is backed by X Venture Capital” helps the company.

    But one of our key cultural tenets is that we’re supporting the entrepreneur and we want the entrepreneur to be the story, not us. So we’re not trying to take the light away from the entrepreneur. Inherently, we see a little bit of a cultural conflict. Who is in front of the parade? Is it the VC or the entrepreneur? I think if the VC firm gets too far ahead of the parade, the smart entrepreneurs might get uncomfortable with that, so we try to strike a balance.”

    How exactly?

    Presumably, over time, [things will take their] natural course if we do our job properly But we don’t want to put steroids on [our marketing strategy]; we don’t want to bang on every journalist’s door, saying, “Pay attention to us.”

    If you’re an entrepreneur, you want your own signature on the project you’re working on and you don’t want to be overshadowed. If you don’t have a signature to speak of, then you rely on somebody else’s. It’s a gray zone for sure, but I think it’s an important line to draw.

    cpc-300x250

    New Fundings

    Aethon, a 13-year-old, Pittsburgh, Pa.-based maker of autonomous mobile robots for hospitals and health systems, has raised $3 million from Mitsui & Co., which had invested a separate, $4 million round in Aethon in April 2012. Aethon has raised more than $20 million altogether, according to SEC filings.

    Atara Biotherapeutics, a 1.5-year-old, Brisbane, Calif.-based drug development company focused on treating end-stage renal disease among others, has raised $52 million in Series B financing. Investors included Alexandria Venture Investments, Amgen Ventures, The Baupost Group, Celgene Corp., DAG Ventures, Domain Associates, EcoR1 Capital and Kleiner Perkins Caufield & Byers.

    CAN Capital, a 16-year-old, New York-based, non-bank alternative capital provider to small businesses in the U.S. and Latin America, has raised $33 million in funding led by Meritech Capital Partners. Previous investor Accel Partners also participated in the round, along with new investors Ribbit Capital and QED Investors. CAN has now raised roughly $63 million to date, according to Crunchbase.

    Clementia Pharmaceuticals, a three-year-old, Quebec-based company that’s developing a drug for a genetic condition called fibrodysplasia ossificans progressiva, has raised a $22.5 million in Series A financing led by OrbiMed Advisors, with participation by existing investor BDC Venture Capital.

    FIRE1, a new, Dublin, Ireland-based company, has raised an undisclosed amount of Series A funding from Covidien, Lightstone Ventures, and New Enterprise Associates. FIRE1 was launched byThe Foundry, a Dublin-based medical device incubator; the company will be focusing on developing novel therapeutic devices.

    Glooko, a three-year-old, Palo Alto, Calif.-based company that enables smartphone users to easily collect and view the information needed to control their blood glucose levels, has raised $7 million in Series A-1 funding from Samsung Ventures and Lifeforce Ventures. Previous investors Social + Capital Partnership and individual investors also participated. Glooko has raised $11.5 million to date, according to Crunchbase.

    MN&C Supply Links Retail, a 1.5-year-old, Mumbai-based company that operates an online supermarket called LocalBanya.com, has raised an undisclosed amount in Series A funding from Karmvir Avant Group, a real estate developer in Mumbai.

    Proterra, a 10-year-old, Greenville, S.C.-based maker of zero-emission-battery electric buses, has closed the second round of its Series C funding, raising more than $10 million, which brings the total round to rougly $34 million. The funding was led by new backer Tao Invest (the family firm of Nick and Joby Pritzker). Previous investorsEdison Energy, Constellation, Kleiner Perkins Caufield & Byers,GM Ventures, Mitsui & Co., Vision Ridge Partners, Hennessey Capital and 88 Green Ventures also participated. Proterra has raised more than $120 million to date.

    Radius Intelligence, a young San Francisco-based firm, has raised $13 million in funding from Formation8 Partners, says VentureWire. Radius collects and analyzes information on small businesses in an effort to compete with incumbents like the small business information provider Dun & Bradstreet.

    Volta Industries, a four-year-old, Toronto-based maker of advertising-supported electronic vehicle charging stations, has raised an undisclosed amount of seed funding from EPIC Ventures and existing investor Blue Startups. Volta has raised $1.9 million to date, including from 500 Startups.

    —–

    New Funds

    Fadi Ghandour, one of the Middle East’s most renowned angel investors and entrepreneurs, is launching a new, early-stage venture capital fund under his existing company, Wamda Capital. It will fund startups in the Middle East and North Africa, reports the Wall Street Journal.

    Ghandour is partnering with the International Finance Corporation, which will invest between $10 million and $15 million in the fund.

    Ghandour founded the pan-Arab logistics company Aramex and has since invested in numerous successful startups, including the e-commerce company Souq.com. He expects the fund to close with $75 million in commitments by April.

    —–

    People

    Yves Béhar, designer of the Jawbone headset, the Up fitness band and many other products that are “sexier, curvier, and more human” is given a flattering profile by reporter Kara Swisher in the newest issue of Vanity Fair. Swisher says of Béhar’s newest effort, August, a home-entry system in the “form of a perfectly round device that replaces the dead-bolt part of a lock,” that it “has the potential to change the way people have treated home security since the invention of the lock and key in ancient Mesopotamia.”

    Longtime Techcrunch co-editor Eric Eldon is leaving the outlet. He isdeclining to say for now what his next move is, but another fixture of Silicon Valley, journalist Owen Thomas, expects Eldon to “spend some time wandering the forests of Oregon.”

    Jordan Hudson has been promoted to principal at the L.A.-based venture firm Upfront Ventures. Hudson joined Upfront two years ago, after spending a couple of years in strategy and business development at Fox. Hudson also worked previously in investment banking at GCA Savvian in San Francisco.

    Peter Kim, formerly top dog at Merck Research Laboratories, has joined the Menlo Park, Calif.-based outfit 5AM Ventures as a venture partner. Kim spent a dozen years at Merck. He is also joining the faculty of the Stanford University of Medicine next month.

    —–

    IPOs

    Regulators in Singapore are planning to propose tighter rules for companies looking to go public in the city-state, following a penny stock scandal.

    Meanwhile, the two Chinese companies that will kick off a new season of IPOs in China — Guangdong Xinbao Electrical Appliances andZhejiang Wolwo Bio-Pharmaceutical –are set to attract strong investor interest, reports Reuters, which calls it a “good omen for dozens of others lined up to tap stock markets in January after a year-long hiatus.”

    —–

    Exits

    Easel, a 1.5-year-old, San Francisco-based maker of development tools for the Web, has been acquired by the online code repository Github. Easel passed through Y Combinator in the summer of 2012, and never reported any follow-on funding. Terms of the deal aren’t being disclosed.

    Klockwork, 13-year-old, Burlington, Ma.-based company focused on source code analysis, has been acquired for an undisclosed amount by the 14-year-old, Boulder, Co.-based company Rogue Wave Software. Rogue Wave’s tools and components are designed to increase the productivity of developers building applications.

    —–

    Amazon is looking to hire a corporate development manager in Seattle. This position is responsible for “generating, managing and executing Amazon’s mergers and acquisitions, minority investments, and strategic partnership activities” and will be “highly visible at the most senior levels of Amazon, including frequent interaction with Amazon’s CEO and CFO.” Basic qualifications include experience in creating and managing M&A processes for a variety of transactions. Preferred qualifications include an MBA.

    —–

    Essential Reads

    The Bitcoin mining arms race heats up. Writes BusinessWeek: “One of the first things that [Joel Flickinger] he does in the morning is check the temperature of his mining rigs. Processing chips calculate faster when they’re hot, but not too hot—the optimal temperature is around 73.5C (164.3F). If it goes much higher, the machine can overheat and malfunction, but Flickinger likes to push the limit. Occasionally, he says, he stuffs the air holes of his machines with paper to bring up the temperature. ‘There is serious money in this,’ he says, noting that he’s earned 100 Bitcoins over the past few months from mining and other transactions.”

    —–

    Detours

    A surgical implant to treat obstructive sleep apnea can reduce major symptoms of the disorder by nearly 70 percent, says a study published yesterday in the New England Journal of Medicine.

    The market for luxury homes in Washington D.C. is heating up. Take a look at the most expensive homes sold in the region in 2013.

    Go, Austin Hatch, go!

    —–

    Retail Therapy

    Here are 16 books you might consider reading/buying before they hit theaters this year.

    Furniture that looks, amazingly, like scribbles.

    Whoa, Frito Lay, what did we ever do to deserve this atrocity?

    —–

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    Connie

  • Index Ventures’ Mike Volpi on the Pitfalls of VC Marketing

    Mike VolpiIndex Ventures is widely perceived by other VCs to be a top-tier firm. Among its active investments are Sonos, the wireless music system company; Dropbox, the popular online storage service; and Hortonworks, a commercial vendor of Apache Hadoop.

    The goal for Index now is to raise its profile with U.S. entrepreneurs, many of whom still consider the firm — which launched in Geneva in 1996 and opened a London office in 2001 — to be a European venture fund.

    Step one involved opening an office in San Francisco in late 2011, where general partners Danny Rimer and Mike Volpi have been sewing up deals left and right. The second part of Index’s evolution involves giving the press a (slightly) better look into its thought processes. Indeed, I sat down with Volpi at Index’s sunny offices yesterday morning, where we talked about how the historically quiet firm plans to more visibly plant its flag in the U.S. and the Bay Area in particular.

    We’ve been sitting here, talking about the professionalization of venture marketing. What is Index’s philosophy when it comes to selling itself?

    Venture capital is changing. It’s different. And being good at marketing is an important asset today, when it just wasn’t 10 years ago.

    Index certainly isn’t as “out there” as some firms. Will that change?

    There’s an inherent conflict that exists in doing a lot of marketing for one’s own firm, because in one dimension, being out there helps attract people to you. In theory, saying, “So and so is backed by X Venture Capital” helps the company.

    But one of our key cultural tenets is that we’re supporting the entrepreneur and we want the entrepreneur to be the story, not us. So we’re not trying to take the light away from the entrepreneur. Inherently, we see a little bit of a cultural conflict. Who is in front of the parade? Is it the VC or the entrepreneur? I think if the VC firm gets too far ahead of the parade, the smart entrepreneurs might get uncomfortable with that, so we try to strike a balance.

    How exactly?

    Presumably, over time, [things will take their] natural course if we do our job properly. But we don’t want to put steroids on [our marketing strategy]; we don’t want to bang on every journalist’s door, saying, “Pay attention to us.”

    If you’re an entrepreneur, you want your own signature on the project you’re working on and you don’t want to be overshadowed. If you don’t have a signature to speak of, then you rely on somebody else’s. It’s a gray zone for sure, but I think it’s an important line to draw.

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