• StrictlyVC: December 5, 2013

    110611_2084620_176987_imageIs it really Thursday already?! Hope you’re in for a fabulous day. Also, a quick reminder that you can reach out any time with tips, complaints, broken links, etc., at connie@strictlyvc.com or @cookie.

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    At long last, Twitter has its female board member, announcing the appointment of Marjorie Scardino, former CEO of the media company Pearson, in a filing today. The appointment is effective immediately.

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    Meet the VC Who Single-Handedly Raised $150 Million from Investors 

    In all likelihood, you’ve never heard of Rami Elkhatib. He isn’t Twitter-famous. He seldom speaks with reporters. He hasn’t worked at a brand-name firm. Before launching Acero Capital on Sand Hill Road in 2010, Elkhatib quietly represented the Raleigh, N.C.-based venture firm Southeast Technology Funds, where he worked as a West Coast-based general partner for roughly eight years.

    But while Elkhatib may be a stranger to you, enough institutional investors know him — and apparently think quite highly of him – that they committed $150 million to his debut fund in 2010, where he was (and remains) the sole general partner. 

    Earlier this week, I caught up with Elkhatib, whose hits include the 2006 sale of Pixel Magic to Dai Nippon and the 2007 sale of the managed storage solution company Arsenal Digital to IBM. Our conversation has been edited for length.

    You’ve been investing this fund since 2010. What are you shopping for, and how many startups have you backed?

    The fund closed in 2010, but it’s still pretty early. We’ve made six investments, and the plan is to make 20 or so. As for focus, it’s on Enterprise IT broadly. We’ll probably invest in up to 18 [related] companies, along with a couple outside that space. Within Enterprise IT, the approach is to look at what enterprises are interested in, and for us, right now, that focus translates into analytics, mobility, infrastructure, and virtualization.

    How big are the bets that you’re making?

    We tend to be pretty agnostic: we’re focused more on the opportunity and the management team, but the investments we’ve made so far have been A or B rounds in the $4 million to $6 million range, with reserves set aside [for follow-on fundings].

    What themes are interesting to you right now?

    Enterprise mobility is an area I’m really interested in. There’s still a lot of room for innovation; I’m personally focused on finding mobility middleware – the equivalent of systems management companies from the traditional IT space.

    We’re also very interested in real-time data, meaning true real-time. When people talk about real-time in big data, they’re talking about minutes, but I think we’re moving to a world where real-time insights come in milliseconds, where data that’s going through the network hasn’t even been stored yet.

    You say “we.” Explain to readers how Acero works. You rely on “venture consultants,” which seems like a new twist on things.

    Well, I’m the sole GP, but I’m not the only person. We [including an associate and venture partner] have a corporate, enterprise-focused sourcing strategy, meaning that for every subsector, our approach is to cultivate very strong relationships with large public platform companies in that sector, and we use those relationships to decide [what themes to pursue]. Toward that end, we have venture consultants with us who happen to be senior VPs in product management at platform companies [who we] talk with about their needs or, if we are interested in, say, the storage space, we make it our job to talk with them about where they see the market headed.

    It’s not a casual effort. It’s the cornerstone of how we’ve been sourcing deals.

    Have you modeled these scouts after another firm?

    I’ve modeled it more on my own experience within Toyota and Procter & Gamble, where I spent the first third of my career as a software engineer focused on database design – an early ’90s version of big data. If anyone back then had wanted to talk about how you collect information about every [stock-keeping unit] in every store in the United States, and how you do trend analysis on that, there was probably no one better to talk with than my team.

    Are these consultants compensated?

    They are, though I’d rather not get into specifics. Ultimately, I hope that it will become a recruiting strategy. There are three to five people who have worked for us in that capacity, and I’m sure our next partner will be one of those people. It’s very challenging to add someone new to a team; I think [our way of interacting with these individuals] is a good way to get to know them.

    I’ve never heard of a single-GP firm managing so much money. Will you hire another GP shortly?

    We’ll be adding a principal and an associate … but I think it will take more time to add a GP. I don’t have it calendared. Partly, that’s because we just made our sixth investment [leading the $11 million Series B round of Gridstore, a startup that makes low-cost storage devices] the same week we sold one portfolio company [Bitzer Mobile, a company that makes mobile applications management software and that Oracle acquired in the middle of last month for undisclosed terms; Acero had led its lone, $4.83 round in 2011, joined by Chevron Technology Ventures]. So net net, my board commitments didn’t increase.

    If you start a fund with one or two or three GPs, it almost always takes a long time. Whoever starts the fund needs to establish its personality and approach and strategy. After that, you can add GPs.

    JamBase

    New Fundings

    3D Robotics, the four-year-old, San Diego-based unmanned aerial vehicle company headed by former Wired editor Chris Anderson, has raised $6 million in new funding from Mayfield. The money is reportedly part of a $30 million round that was announced in September and that also includes True Ventures, Foundry Group, and O’Reilly AlphaTech Ventures. The company has raised $35 million to date.

    Clarity Health, a six-year-old, Seattle-based, software-as-a service company focused on helping doctors, hospitals, and other parties coordinate the care of patients, has raised $6.6 million in funding. Columbia Pacific Advisors’ Opportunity Fund, which invested $3 million into the company in 2011, led the round.

    ClearDATA Networks,a 14-year-old, Phoenix, Az-based healthcare cloud computing platform and services company, has raised $14 million in Series B funding. Merck Global Health Innovation Fund, Excel Venture Management and Norwest Venture Partners participated in the round. (ClearDATA previously had a first, $7 million, closing of its Series B round in August; it just held a second closing for Merck.)

    Juno Therapeutics, a brand-new, Seattle-based, clinical-stage biotechnology company focused on developing immunotherapies for cancer, has raised $120 million from investors, including ARCH Venture Partners and the Alaska Permanent Fund. Juno is a spin-out of the Fred Hutchinson Cancer Research Center, Memorial Sloan-Kettering Cancer Center and Seattle Children’s Research Institute. According to Geekwire, it plans to launch clinical trials for prostate, lung, breast and pancreatic cancer as soon as next year.

    Misfit Wearables, a two-year-old, Redwood City, Calif.-company that makes a wearable activity tracker called Shine, has raised $15.2 million in Series B funding led by Horizon Ventures. Previous investors, including Founders Fund, Khosla Ventures, Norwest Venture Partners, O’Reilly AlphaTech Ventures, and serial entrepreneur Max Levchin, also participated in the round. To date, Misfit has raised $23 million.

    OrderWithMe.com, a 2.5-year-old, Las Vegas-based company that lands discounts for small businesses by aggregating their orders with other small business, has raised $6 million in Series B funding from Vegas TechFund, BaseVC, and other local Las Vegas investors. Previous investors Infinity Venture Partners, SOS Ventures and Silicon Valley Bank also participated in the round, which brings the company’s total funding to date to $9 million.

    Playnery, a two-year-old, Korea-based game development studio, has raised $2.8 million in Series B financing led by JAFCO Asia. The company has raised $6.5 million altogether to date, including from Softbank Ventures, Qualcomm Ventures, and Stonebridge Capital.

    Shareable Ink, a four-year-old, Nashville, Tenn.-based company that makes a digital pen and other software designed to easily document and organize patient visits, has closed a $10.7 million Series C funding round. Previous investor Lemhi Ventures led the round.

    Snapsheet, a three-year-old, Chicago-based company whose mobile app promises to settle auto insurance claims by photo, has raised $10 million in Series B funding. No investors were named in an announcement about the round, though previous investors in the company, which has raised just north of $11 million altogether, include the Chicago-based firms Pritzker Group Venture Capital, Lightbank, and OCA Ventures.

    Sweetgreen, a six-year-old, Washington, D.C.-based chain of farm-to-table eateries, has raised $22 million in new funding from Revolution Growth, an injection that brings the company’s total funding to $39 million. Revolution cofounder Steve Case had backed the company previously with his personal capital and decided to supercharge its growth after watching it expand, says the WSJ.

    Ticketland, a Moscow-based event ticketing company, has raised $10 million in funding from the Russia-based investment firm iTech Capital. TechCrunch has much more on the company here.

    Yetu AG, a Berlin-based startup at work on a smart home platform that will enable consumers to monitor and adjust their heat, energy and Internet usage from a single point of contact, has raised $8 million in Series A capital from Bilfinger Venture Capital and KfW, reports TechCrunch.

    Zalora, an 18-month-old, Berlin-based online fashion start-up that sells roughly 500 different brands across Southeast Asia, has raised $112 million in new capital from billionaire Leonard Blavatnik’s Access Industries and U.S. asset management firm Scopia Capital Management. Zalora was incubated by Berlin-based Rocket Internet. Reuters has more here.

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    New Funds

    5AM Ventures, an 11-year-old early-stage, life sciences-focused venture firm with offices in Menlo Park, Calif., and Waltham, Mass., has closed its fourth fund with $250 million. The firm says the capital came from existing and new institutional investors, including endowments, family offices, foundations, funds-of-funds and pension funds.

    Hoxton Ventures, a new, London-based early-stage venture firm, has raised a $40m (£24m) fund that it plans to invest in startups across Europe. The firm’s founders include Hussein Kanji, who spent more than two years as an associate with Accel Partners in London prior, and several years with Microsoft before that; and Rob Kniaz, who spent more than four years as a product manager at Google, as well as worked as a venture capitalist at Fidelity Ventures for more than a year. Wired.co.uk has much more on Hoxton and its strategy.

    Persistent Systems, a four-year-old, Pune, India-based software products and technology services company, has launched a seed-stage venture fund that will focus on “supporting innovation in social, mobile, analytics and cloud computing technologies.” Its first investment, says the company, is Ustyme, a Sausalito, Calif.-based company that makes a free video call app for the iPad. Persistent hasn’t disclosed how much it plans to invest in startups; Ustyme raised $2 million in seed funding in September, according to the outlet FinSMEs.

    Volition Capital — the Boston-based growth equity firm previously known as Fidelity Ventures before spinning off on its own in 2010 — has closed on a new, $170 million, fund. In a release yesterday, the firm said the it was originally targeting $150 million but it raised more to accommodate investor interest. Volition focuses on software and technology-enabled services businesses with at least $5 million in revenue and between 30 percent and 100 percent top-line growth.

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    People

    Snapchat‘s Evan Spiegel is still living with his father (for now), but his cofounder, Bobby Murphy, has just acquired a very nice, glass-lined home/box not far from the startup’s new Venice Beach, Calif., headquarters.

    John Maeda, a former MIT professor turned president of the Rhode Island School of Design has accepted a role as “design partner” at Kleiner Perkins Caufield & Byers, a job he’ll assume in January. Maeda will also spend a small portion of his time at eBay, as chair of eBay’s new Design Advisory Board. AllThingsD has more here.

    Brian O’Malley, long a general partner at Battery Ventures, has joined Accel Partners as a partner on its early-stage team. (StrictlyVC recent sat down O’Malley for this piece  and this piece.)

    Six months after entrepreneur Dave Morin‘s interview about his bespoke phone app with Vanity Fair, Kevin Rose of Google Ventures dares to share with VF how he uses his own phone.

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    IPOs

    Biotech IPOs: from hot to cold like that.

    Soon, Twitter will settle into a ranking as the fourth biggest IPO of 2013. Can you name the top three?

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    Exits

    Health Guru Media, a six-year-old, New York-based online video company focused on health content, has been acquired by the privately held digital media company Kitara Media Corp. Terms of the deal weren’t disclosed, though Health Guru’s stockholders will receive a collective 18 million shares of Kitara’s stock. Health Guru had raised just less than $10 million, according to Crunchase. Its backers include Village Ventures, Castile Ventures, and Long River Ventures.

    Nearbuy Systems, a 3.5-year-old, San Mateo, Calif.-based company that offers shopping customers opt-in WiFi in exchange for allowing retailers to track them, has been acquired. The buyer: in-store analytics company RetailNext. Terms of the all-stock deal were not disclosed. Nearbuy Systems had raised a little more than $3 million over the years, including from Innovation Endeavors and Metamorphic Ventures.

    Stayz Group, a subsidiary of Fairfax Media, has been acquired by HomeAway, the Austin, Tex.-based online marketplace for vacation rentals. Venture-backed HomeAway, which went public in 2011, paid $198 million in cash.

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    Job Listings

    LinkedIn is looking for a business operations associate/senior associate to focus on predictive business planning and strategic initiatives for its mobile team. Applicants should have two to four years of experience at a management consulting, investment banking, private equity or venture capital firm, along with experience working with large datasets. An undergrad degree in a technical major is preferred.

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    Data

    “Civic tech” companies — which help people better interact with the government and their neighbors — are gaining steam, reports Inc. Picking up on a study released yesterday by the Knight Foundation, the outlet reports that between January 2011 and May 2013 alone, individuals, venture firms, and philanthropic organizations poured $431 million into 102 related start-ups.

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    Essential Reads

    The Journal looks at Beijing’s Zhongguancun district, calling it “China’s answer to Silicon Valley.”

    The Economist notes that while European venture capital has had a bad rep since the dotcom bubble’s implosion, things are turning around, with at least six new European venture firms to emerge recently on the scene.

    Valleywag confirms your suspicions: Uber really is minting money.

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    Detours

    Bloomberg Business week looks at Politico’s newest ambition in “expanding beyond the Beltway [and] heading for a destination almost as obsessed with itself as Washington and with just as many self-appointed know-it-alls: New York.”

    In news that will bolster the perception that Harvard grades “more softly than some of its rivals in the Ivy League,” the college just disclosed that its most commonly awarded grade is an A.

    Urban Outfitters has been cast into the cold by Goldman Sachs over one lousy bear coat (well, and a rogues’ gallery of other terrible items).

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    Retail Therapy

    Nike’s tricked-out Lunarendor QS snowboard boots are (almost) ready for purchase for the extreme snowboarder in your life. Cost: $500.

    Ah, yes, of course, Ron Burgundy Blended Scotch Whiskey, for those times when nothing will do like good old-fashioned scotchy, scotch scotch, down into your belly.

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    Correction: Yesterday, StrictlyVC flagged a Form D reflecting that Industry Ventures had raised $100 million for a special opportunities fund, but the firm has collectively raised much more than that: Yesterday, it said it has closed on a $425 million secondary fund – Industry Ventures Secondary VII –  to buy up founder and employee stakes. It also announced that it has closed a $200 million Special Opportunities Fund that it plans to use to invest in larger transactions. Apologies for any confusion.

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    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 the newsletter, visit strictlyvc.com.

     

     

    Connie

  • Meet the VC Who Single-Handedly Raised $150 Million from Investors

    Rami's photoIn all likelihood, you’ve never heard of Rami Elkhatib. He isn’t Twitter-famous. He seldom speaks with reporters. He hasn’t worked at a brand-name firm. Before launching Acero Capital on Sand Hill Road in 2010, Elkhatib quietly represented the Raleigh, N.C.-based venture firm Southeast Technology Funds, where he worked as a West Coast-based general partner for roughly eight years.

    But while Elkhatib may be a stranger to you, enough institutional investors know him — and apparently think quite highly of him – that they committed $150 million to his debut fund in 2010, where he was (and remains) the sole general partner. 

    Earlier this week, I caught up with Elkhatib, whose hits include the 2006 sale of Pixel Magic to Dai Nippon and the 2007 sale of the managed storage solution company Arsenal Digital to IBM. Our conversation has been edited for length.

    You’ve been investing this fund since 2010. What are you shopping for, and how many startups have you backed?

    The fund closed in 2010, but it’s still pretty early. We’ve made six investments, and the plan is to make 20 or so. As for focus, it’s on Enterprise IT broadly. We’ll probably invest in up to 18 [related] companies, along with a couple outside that space. Within Enterprise IT, the approach is to look at what enterprises are interested in, and for us, right now, that focus translates into analytics, mobility, infrastructure, and virtualization.

    How big are the bets that you’re making?

    We tend to be pretty agnostic: we’re focused more on the opportunity and the management team, but the investments we’ve made so far have been A or B rounds in the $4 million to $6 million range, with reserves set aside [for follow-on fundings].

    What themes are interesting to you right now?

    Enterprise mobility is an area I’m really interested in. There’s still a lot of room for innovation; I’m personally focused on finding mobility middleware – the equivalent of systems management companies from the traditional IT space.

    We’re also very interested in real-time data, meaning true real-time. When people talk about real-time in big data, they’re talking about minutes, but I think we’re moving to a world where real-time insights come in milliseconds, where data that’s going through the network hasn’t even been stored yet.

    You say “we.” Explain to readers how Acero works. You rely on “venture consultants,” which seems like a new twist on things.

    Well, I’m the sole GP, but I’m not the only person. We [including an associate and venture partner] have a corporate, enterprise-focused sourcing strategy, meaning that for every subsector, our approach is to cultivate very strong relationships with large public platform companies in that sector, and we use those relationships to decide [what themes to pursue]. Toward that end, we have venture consultants with us who happen to be senior VPs in product management at platform companies [who we] talk with about their needs or, if we are interested in, say, the storage space, we make it our job to talk with them about where they see the market headed.

    It’s not a casual effort. It’s the cornerstone of how we’ve been sourcing deals.

    Have you modeled these scouts after another firm?

    I’ve modeled it more on my own experience within Toyota and Procter & Gamble, where I spent the first third of my career as a software engineer focused on database design – an early ’90s version of big data. If anyone back then had wanted to talk about how you collect information about every [stock-keeping unit] in every store in the United States, and how you do trend analysis on that, there was probably no one better to talk with than my team.

    Are these consultants compensated?

    They are, though I’d rather not get into specifics. Ultimately, I hope that it will become a recruiting strategy. There are three to five people who have worked for us in that capacity, and I’m sure our next partner will be one of those people. It’s very challenging to add someone new to a team; I think [our way of interacting with these individuals] is a good way to get to know them.

    I’ve never heard of a single-GP firm managing so much money. Will you hire another GP shortly?

    We’ll be adding a principal and an associate … but I think it will take more time to add a GP. I don’t have it calendared. Partly, that’s because we just made our sixth investment [leading the $11 million Series B round of Gridstore, a startup that makes low-cost storage devices] the same week we sold one portfolio company [Bitzer Mobile, a company that makes mobile applications management software and that Oracle acquired in the middle of last month for undisclosed terms; Acero had led its lone, $4.83 round in 2011, joined by Chevron Technology Ventures]. So net net, my board commitments didn’t increase.

    If you start a fund with one or two or three GPs, it almost always takes a long time. Whoever starts the fund needs to establish its personality and approach and strategy. After that, you can add GPs.

    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: December 4, 2013

    110611_2084620_176987_imageGood morning!

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    Top News in the A.M.

    A federal judge has approved an antitrust suit against the patent advisory firm RPX. (The company, originally backed by Kleiner Perkins, Charles River and Index Ventures, went public in 2011.) The case will test the business model of defensive patent consortiums that allow member-companies to pay to use their vast portfolios.

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    In Talk of Amazon and UPS Delivery Drones, a VC Sees Dollar Signs

    Amazon and UPS made big news this week, disclosing that they are experimenting with flying parcel carriers, respectively.

    But the companies’ eventual use of drones isn’t what’s interesting to VCs like Bilal Zuberi, an investor with Lux Capital who has been studying the drone space for several years. The real story, as far as he’s concerned, is that two major commercial deployment opportunities have come into view, validating the market for unmanned aerial vehicles (UAVs) — and creating exit opportunities for them.

    The development is of particular interest to Zuberi, whose firm owns a piece of CyPhy Works. CyPhy builds UAV hardware and software and could ultimately be involved in delivering your Amazon loot.

    Jeff Bezos hasn’t invested in the company, but CyPhy was founded by iRobot cofounder Helen Greiner, and Zuberi tells me that Bezos is “close to the iRobot family.” (Bezos has invested in Rethink Robotics, a manufacturing robot company started by iRobots cofounder Rodney Brooks.)

    Even if Amazon — which acquired the robotics company Kiva System last year, paying $775 million for the company and putting its robotics warehouse workers to use — doesn’t buy CyPhy, Zuberi suggests that Amazon’s embrace of delivery robots could encourage other potential acquirers from Walmart to FedEx to enter the market.

    “People always ask me, ‘If you’re successful, who would buy you guys?’ Well, Amazon [has bought a robotics company]. Why would UPS or FedEx not buy one of these [UAV] companies?”

    Of course, that’s all years down the road. UAVs, currently used in military applications, can’t access U.S. national airspace until the beginning of 2015. And initially, only limited drone activity will be permitted so that the Federal Aviation Administration can adjust its policies if need be.

    Even then, observes Zuberi, companies like Amazon and UPS will likely stick to demo deployments for a while, as they figure out a raft of likely issues that extend well beyond picking up and delivering boxes to the right location. Among numerous other considerations, the companies will need to determine how to tightly integrate the technology into their supply chains and ensure the drones’ sensors can operate safely in crowded neighborhoods.

    Zuberi thinks that by the time drones are flying paper towels to consumers, the technology will work as it should.

    “I love where you have military and government use cases involved,” he says, “because they test and they test for resiliency and redundancy. These guys can’t have failures. Everything has to be perfect.”

    JamBase

    New Fundings

    Blaze Bioscience, a three-year-old, Seattle-based biotech company, has raised $9 million in Series B funding from unnamed backers. The company is developing what it calls Tumor Paint. According to a recent NPR segment that featured the technology, one part is a protein that can enter the bloodstream and find a cancerous tumor; the other part is a fluorescent dye that glows when a light is shone on it. (The hope is the “paint” will help doctors more easily distinguish a malignancy from healthy tissue.)

    DataSift, a three-year-old, San Francisco-based social analytics platform, has raised $42 million in Series C financing. Insight Venture Partners led the round with participation from previous investors Scale Venture Partners, Upfront Ventures, IA Ventures, Northgate Capital, Daher Capital and Cendana Capital. The new funding brings the total capital raised by the company to roughly $72 million.

    Gridstore, a four-year-old, Mountain View, Calif.-based company that makes low-cost storage devices with their own CPU and memory resources, has raised $11 million in Series B funding. Acero Capital led the round. The company’s previous investors, including GGV Capital, Investec Ventures Ireland Limited, ONSET Ventures and some of the original angel investors, also participated in the financing. Altogether, Gridstore has raised roughly $26 million to date.

    MOVE Guides, a two-year-old, London-based startup whose software-as-a-service platform aims to help companies more easily relocate employees, has raised $1.8 million in seed funding from Notion Capital and New Enterprise Associates, which were joined by numerous angel investors. The round brings the company’s total funding to date to $2.4 million.

    Rumr, a months-old, L.A.-based company behind a new, still-stealth messaging app, has raised $800,000 according to a new SEC filing. PandoDaily recently reported that numerous prominent investors participated in the round, including Khosla Ventures, Google Ventures, Greycroft Partners, and angel investor Paige Craig. The outlet also revealed that the teen-focused app will enable senders to hide their identity from recipients.

    SitterCity, the 12-year-old, Chicago-based online resource for in-home care, has secured a $4.5 million credit facility from Square 1 Bank. Just last month, the company closed on $13 million in new funding from investors Point Judith Capital, Apex Venture Partners, Baird Venture Partners, New World Ventures and Bright Horizons Family Solutions, a round that brought its total equity funding to date to roughly $43 million.

    Trufa, a brand-new, Heidelberg, Germany-based company that develops predictive analytics applications, has raised $4.5 million in Series A funding led by Accel Partners. Trufa was just spun out of this company.

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    New Funds

    Biomark Capital has spun off of Burrill Capital, a San Francisco-based venture capital firm focused on drugs, diagnostics, medical devices, healthcare delivery, wellness and digital health. Burrill Capital had announced that it had raised $505 million in “aggregate capital commitments” roughly one year ago, but it had actually raised closer to $200 million. “Partly as a result of the size difference, the team responsible for investing the cash has split off from Burrill into a new venture firm,” says Xconomy, which has the full story, including which partners have joined Biomark and which haven’t.

    Industry Ventures, the 13-year-old, San Francisco-based, venture-capital-focused investment firm, has closed on a $425 million secondary fund — Industry Ventures Secondary VII —  to buy up founder and employee stakes, as well as a $200 million Special Opportunities Fund that Industry plans to use to invest in larger transactions. The new funds bring the firm’s total capital under management to more than $1.7 billion, it says.

    According to the WSJ, the Bloomberg administration is working with large pharmaceutical companies and venture capitalists to create a $100 million fund to invest in fledgling life sciences companies in New York. The city will invest $10 million in the fund, along with $40 million from pharmaceutical companies Celgene Corporation, Eli Lilly, and GE Ventures. The Economic Development Corp. is seeking a venture-capital firm to manage the fund and invest at least $50 million.

    —–

    People

    Floodgate cofounder Ann Miura-Ko and Google Ventures’ Bill Maris are part of a new “40 Under 40” list that Silicon Valley Business Journal has just published.

    Emily White, the director of business operations at Facebook’s Instagram photo-sharing unit, is leaving the company to become COO of Snapchat, reports AllThingsD. The hot messaging app company has been searching for someone to help lead the business, says the outlet; more, the hiring signals to the world that Snapchat plans to remain independent for now.

    Venture capitalist Fred Wilson made a “grandmaster move” in pledging $10,000 to help every member of a Brooklyn school’s championship chess team head to the National Championship this year, reports the New York Daily News. Wilson, who has also blogged about teaching chess to children, has made “all the difference in the world,” said Steven Colding, the team’s coach. “We raised $6,000 in [additional funding in] four days, just because he said something.”

    —–

    IPOs

    An IPO is the only way to go for Seattle-based DocuSign, CEO Mike Dinsdale tells the WSJ. “It would be close to impossible for anyone to pay us what we are valued at because we cross more than one vertical,” said Dinsdale, who added: “We won’t be acquired. An IPO is logical at some point.”

    Twitter‘s IPO is sparking lots of investor interest in other so-called social startups.

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    Exits

    Crunchyroll, a five-year-old, San Francisco-based video service for Japanese Anime and Asian media, has sold a majority interest to The Chernin Group, former News Corp president Peter Chernin’s holding company. Terms of the acquisition weren’t disclosed, but sources have told numerous outlets that the price tag was close to $100 million. Crunchyroll had raised a reported $4.8 million, including from Venrock.

    Rhythm NewMedia, an eight-year-old, Mountain View, Calif.-based mobile video advertising platform focused exclusively on smartphones and tablets, has been acquired by the publicly traded video search tool company blinkx for $65 million in cash and stock. Rhythm had raised nearly $29 million from investors, including Lightspeed Venture Partners, Rembrandt Venture Partners, and Morgenthaler Ventures.

    —–

    Job Listings

    Pinnacle Ventures, a Menlo Park, Calif.-based venture firm that provides both debt and equity financing to startups, is looking for an associate. The job is a two-year commitment “with possibility for growth if the candidate performs well.” Applicants should ideally have between one and three years of experience working in investment banking, venture capital, private equity, or an operating role.

    Data

    Pitchbook has scanned some data on the West Coast’s largest venture financings of the year (a good reminder of how massive some of them have been). In descending order, the top five are solar power installation company SunRun ($630 million), the private car service app Uber ($258 million), the social network Pinterest ($225 million), the short-term rentals platform Airbnb ($200 million), and, yes, again, Pinterest ($200 million).

    —–

    Essential Reads

    Listen up: Software Americans living in San Francisco are tired of being called “techies.” Says one complainant to the San Francisco Chronicle, “If you use the word ‘techie,’ we know you’re not in tech. A lot of negative terms like that – yuppie, hipster – are outsider terms. We don’t call each other techies – at all, ever.”

    Thanks to a patent that the USPTO has just awarded Apple, our iPhones may someday unlock, as well as hide messages, using facial recognition technology.

    Over the last half-year, Google has quietly acquired seven startups to create a new generation of robots, and Andy Rubin, the engineer who built Google’s Android software, is spearheading the effort.

    —–

    Detours

    Couples that drink together stay together, says a, hiccup, new study.

    —–

    Retail Therapy

    If this Jaguar isn’t the most beautiful car in the world, it surely comes close.

    And this, dear friends, is what overdoing it on every level looks like.

    —–

    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 the newsletter, visit strictlyvc.com.

    ———-

    Related articles

    Connie

  • In Talk of Amazon and UPS Delivery Drones, a VC Sees Dollar Signs

    cyphy_works_uavAmazon and UPS made big news this week, disclosing that they are experimenting with flying parcel carriers, respectively.

    But the companies’ eventual use of drones isn’t what’s interesting to VCs like Bilal Zuberi, an investor with Lux Capital who has been studying the drone space for several years. The real story, as far as he’s concerned, is that two major commercial deployment opportunities have come into view, validating the market for unmanned aerial vehicles (UAVs) — and creating exit opportunities for them.

    The development is of particular interest to Zuberi, whose firm owns a piece of CyPhy Works. CyPhy builds UAV hardware and software and could ultimately be involved in delivering your Amazon loot.

    Jeff Bezos hasn’t invested in the company, but CyPhy was founded by iRobot cofounder Helen Greiner, and Zuberi tells me that Bezos is “close to the iRobot family.” (Bezos has invested in Rethink Robotics, a manufacturing robot company started by iRobots cofounder Rodney Brooks.)

    Even if Amazon — which acquired the robotics company Kiva System last year, paying $775 million for the company and putting its robotics warehouse workers to use — doesn’t buy CyPhy, Zuberi suggests that Amazon’s embrace of delivery robots could encourage other potential acquirers from Walmart to FedEx to enter the market.

    “People always ask me, ‘If you’re successful, who would buy you guys?’ Well, Amazon [has bought a robotics company]. Why would UPS or FedEx not buy one of these [UAV] companies?”

    Of course, that’s all years down the road. UAVs, currently used in military applications, can’t access U.S. national airspace until the beginning of 2015. And initially, only limited drone activity will be permitted so that the Federal Aviation Administration can adjust its policies if need be.

    Even then, observes Zuberi, companies like Amazon and UPS will likely stick to demo deployments for a while, as they figure out a raft of likely issues that extend well beyond picking up and delivering boxes to the right location. Among numerous other considerations, the companies will need to determine how to tightly integrate the technology into their supply chains and ensure the drones’ sensors can operate safely in crowded neighborhoods.

    Zuberi thinks that by the time drones are flying paper towels to consumers, the technology will work as it should.

    “I love where you have military and government use cases involved,” he says, “because they test and they test for resiliency and redundancy. These guys can’t have failures. Everything has to be perfect.”

    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: December 3, 2013

    110611_2084620_176987_imageHappy Tuesday! StrictlyVC is feeling a little sickly this a.m, so please excuse any craziness below. Also, just a quick reminder that if you haven’t signed up for the newsletter yet, you can do that right over here.

    —–

    Top News in the A.M.

    The results are in. When it comes to American schools versus the rest of the world, our institutions are expensive, unequal, and pretty lousy at math.

    —–

    With Little Notice, Seed-Stage Valuations Begin Falling

    A widely held belief in Silicon Valley is that valuations are still on a one-way trajectory toward the sky, with founders firmly in the driver’s seat.

    But the reality for seed-stage companies may be a bit more dire than that — and getting worse by the month.

    According to the research firm CB Insights, both average and median seed-stage valuations have fallen since last year, with the average valuation dropping from $2.2 million to $1.7 million and median valuation falling even more precipitously, from $1.7 million to just .6 million.

    Data from AngelList, a matchmaking service for investors and seed-stage entrepreneurs, also shows declining valuations. According to AngelList, which tracks thousands of startups in its system, the average seed-funded company’s valuation dropped from $3.9 million in the third quarter of 2012 to $3.6 million in the third quarter of this year. That isn’t a massive dip, but AngelList founder Naval Ravikant tells me that “by the time [a shift in one direction] shows up in the averages, it’s pretty pronounced.”

    A recent quarterly venture capital report out of Pitchbook, which operates a subscription-only database of private equity and VC deals paints a rosier picture. Pitchbook found that median pre-money valuations for seed-stage, VC-funded companies have nearly doubled over the last three years — from $3.2 million in 2010 to $5.2 million through the first three quarters of 2013.

    Still, this same report observed that lofty valuations are only making it harder for companies to raise Series A rounds. Pitchbook further noted that the rise of valuations can’t go on endlessly, suggesting there will likely be more flat and down rounds in coming years.

    Ravikant — noting that “everyone’s dataset is incomplete” — suggests the future is now. Though he can’t pinpoint exactly when things began trending downward, he thinks valuations “kind of peaked around the Facebook IPO, when it turned out to be less than people thought it would be.”

    According to Ravikant, there “hasn’t been a mass exodus out” out of the seed-stage investing market, mainly because “people still believe some percentage of your portfolio should be early-stage. But there’s increased recognition” that it’s a tough racket, with many angels suffering from investor fatigue and suddenly becoming more realistic about the chances of their portfolio companies receiving follow-on investments.

    There will always be a market for the most promising seed-stage startups, in other words. But evidence from CB Insights and AngelList suggests that for entrepreneurs just setting out, the road ahead looks bumpy.

    JamBase

    New Fundings

    Biodesix, an eight-year-old, Boulder, Colo.-based molecular diagnostics company, has raised $8.3 million in funding. New funds accounted for $4.3 million of the financing round, while the remaining $4 million came from the conversion of a convertible note, the company said in a release yesterday. Existing shareholders provided all of the capital. (The company, which has raised more than $65 million over the years, has never disclosed its investors.)

    Catalyze, a months-old, Madison, Wi.-based company that’s building healthcare apps, has raised roughly $2 million in Series A financing, led by Arthur Ventures, Baird Venture Partners, and Chicago Ventures.

    Green Biologics, a 10-year-old, Oxford, England-based industrial biotechnology company that’s largely focused on breaking down agricultural waste to create butanol fuel, has raised $23.3 million. Sofinnova Partners led the Series B round, joined by previous investors, including Swire Pacific, Capricorn Venture Partners, Oxford Capital Partners, and Morningside Ventures.

    Grokker, a nascent, San Francisco-based video network that pairs consumers with experts in a variety of verticals, from yoga to Pilates to French cooking, has raised $5.5 million, reports AllThingsD. Khosla Ventures, First Round Capital founder Josh Kopelman, and angel investor Ron Conway, are among Grokker’s investors, says the outlet.

    Payoff.com, a three-year-old, Long Beach, Calif.-based company that aims to make personal finance social and “fun” through rewards and goal setting, has closed on $7 million in new funding, according to an SEC filing. Investors including FirstMark Capital and Great Oaks Venture Capital have previously provided the company with roughly $5.8 million, according to Crunchbase.

    Portea Medical, a two-year-old, Bangalore-based provider of in-home healthcare and emergency medical services in India, has secured Rs 48 crore ($8 million) from Accel Partners and Ventureast. Reportedly, the company already employs 150 people, who provide services in Bangalore, Delhi, Chennai and Mumbai. The outfit is now looking to expand into Hyderabad and Pune, among other spots.

    Quest Inspar, an 18-month-old, Kent, Washington-based company that robotically rehabilitates energy, water supply and other pipelines, has raised $4.2 million from Five Elms Capital.

    Restorsea Holdings, a two-year-old, New York-based company behind a new skin care line, has raised $24.9 million as part of a $28 million round, according to an SEC filing. It isn’t clear from the Form D who the lead investor is, though Restorsea’s chairman, Muneer Satter, is listed. (Satter is credited with building the world’s largest family of mezzanine funds at Goldman Sachs before leaving the bank last year after a 24-year career.) Also included on the filing is Corinne Nevinny, who cofounded the L.A.-based, early-stage venture capital firm LMN Ventures in 2010.

    Stem, a four-year-old, Millbrae, Calif.-based company that’s selling “intelligent” energy storage, has raised $15 million in Series B financing. The international utility Iberdrola and GE Ventures led the round, joined by previous investor Angeleno Group. In September 2011, Angeleno Group and Greener Capital provided Stem with $10.2 million in Series A funding.

    Vertical Brands Media, the five-year-old, San Francisco-based parent company to ApartmentList.com, a site that aggregates rental listings from numerous sources, has raised $14.9 million in new funding, according to an SEC filing that shows a target of $19.9 million. The filing doesn’t disclose the startup’s investors.

    Visterra, a six-year-old, Cambridge, Mass.-based company building a pipeline of medicines to combat infectious diseases, has raised $8.1 million as the final tranche of a $34.2 million Series A round that the company began raising last year. Previous investors Polaris Partners, Flagship Ventures, Lux Capital, the Bill & Melinda Gates Foundation, and Omega Funds provided the newest funding, along with Visterra insiders.

    Xagenic, a three-year-old, Toronto-based molecular diagnostics company, has raised $20 million in Series B financing led by Domain Associates. Previous investors CTI Life Sciences Fund and the Ontario Emerging Technologies Fund also participated in the found. Xagenic is developing a “lab-free” diagnostic platform that produces results within 20 minutes.

    Xlumena, a five-year-old, Mountain View, Calif.-based company that makes a stent and medicine delivery system, has closed a $25 million Series C financing.  The round was led Third Point, and included existing investors Prism VentureWorks, Charter Life Sciences, Ascent Biomedical Ventures and Aperture Venture Partners. The company had reported a $4.8 million round earlier this year, and another, $7 million round, in 2011.

    —–

    People

    Willis Ware, an electrical engineer helped build a machine that would become a blueprint for computer design in the 20th century, died last week at age 93. The New York Times elaborates on the important role Ware played in the computer industry.

    —–

    IPOs

    Inogen, a 12-year-old, Goleta, Calif.-based maker of portable oxygen equipment, filed to go public late last week, with plans to raised up to $86.25 million. Inogen’s principal shareholders include Novo A/S (it owns 42.2 percent of the company), Versant Ventures (26.1 percent), Arboretum Ventures (15.1 percent), Avalon Ventures (6.5 percent), and AMV Partners (5.95 percent).

    Kindred Biosciences, a two-year-old, Burlingame, Calif.-based veterinary drug developer plans to raise less during its IPO than originally planned, according to its amended S-1, which shows it hopes to raise $46 million, down from as much as $57.5 million. Kindred has raised $6.3 million in venture backing, according to Crunchbase. Though its filings don’t disclose how much investors own, they show the company’s biggest outside shareholders include Adage Capital Partners and EcoR1 Capital 1 Fund.

    Nimble Storage, a five-year-old, San Jose, Calif.-based hybrid data storage company, amended its S-1 yesterday to reflect its plans to raise up to $165.6 million in an offering. The company has raised around $82 million over the years, according to Crunchbase. Its biggest VC shareholders are Sequoia Capital and Accel Partners (each owns 20.9 percent) and Lightspeed Venture Partners (which owns 15.8 percent).

    Twitter is getting mixed reviews by its IPO underwriters. Reuters has more here.

    —–

    Exits

    Chalkable, a 3.5-year-old, New York-based ed-tech startup, has been acquired by STI, a private equity-backed data management company serving K-12 schools, reports PandoDaily. The deal value was not disclosed. Chalkable had raised $1.3 million in seed funding from 500 Startups, Expansion Venture Capital and Prolific Venture Capital.

    Prolexic Technologies, a 10-year-old, Hollywood, Fla.-based Distributed Denial of Service (DDoS) mitigation company, is being acquired by publicly traded Akamai Technologies, says the WSJ. Akamai agreed to pay about $370 million in cash for Prolexic, which was reportedly talking with bankers about going public. Prolexic had raised roughly $52 million in recent years, including from Kennet Partners, Trident Capital, and Camden Partners.

    SkyPhrase, a two-year-old, New York-based company that’s been building Natural Language Processing (NLP) technology, is now part of Yahoo, the companies announced yesterday. No financial terms were disclosed. SkyPhrase had raised just $250,000 in seed funding, including from the Thiel Foundation.

    Topsy Labs, a six-year-old, San Francisco-based company whose tools analyze tweets to track news along with consumer sentiment, has been acquired by Apple for more than $200 million, according to WSJ sources. The company is one of a handful of Twitter’s partners that have access to the full stream of all tweets posted to the service. Topsy had raised north of $30 million, according to Crunchbase, which lists its earliest investor as IronPort Systems cofounder Scott Banister. Others of its investors include BlueRun Ventures, Founders Fund, and Ignition Partners.

    —–

    Happenings

    The 17th annual Credit Suisse Technology Conference rolls into day two in Scottsdale, Arizona. You can check out the agenda here. If you don’t happen to be on hand, you can check out some of the companies’ presentations here.

    —–

    Job Listings

    SAP Ventures is forming a new biz dev group to act as a liaison between SAP, the SAP ecosystem, and any other relevant business network, and it’s looking to add a director-level person to its ranks by January. Candidates need five to eight years of experience in business development, sales, or marketing. You can learn more here.

    —–

    Essential Reads

    Yesterday, a federal judge tossed an antitrust class action accusing Apple of illegally driving up the price of applications sold for use on iPhones.

    GigaOm looks at how Netflix is balancing its streaming traffic.

    —–

    Detours

    Why our brains love lists.

    “For most people, software programming’s social cachet falls somewhere between that of tax preparation and autism. But it’s catching fire among forward-thinking New York parents.”

    While at a bar, “Don’t whistle, snap, yell, or wave money. Unless you want people to think you work at Morgan Stanley.” — The unofficial Goldman Sachs guide to bar etiquette.

    FunnyorDie has created an hilariously funny “trailer” about legendary Deadline Hollywood founder Nikki Finke, who was recently pushed out of the company by its owner, Jay Penske. (Here’s some backstory, though you don’t need it to enjoy the clip.)

    —–

    Retail Therapy

    This handsome jetpack will set you back more than $100,000, but listen, you can use it to fly up to 800 feet and you can travel at nearly 50 miles per hour for up to 30 minutes. More to the point, you’ll be the only person you know with a jetpack.

    The Venus of Cupertino iPad docking station. How can you not buy it for someone you know?

    —–

    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 the newsletter, visit strictlyvc.com.

     

     

    Connie

  • With Little Notice, Seed-Stage Valuations Begin Falling

    mo moneyA widely held belief in Silicon Valley is that valuations are still on a one-way trajectory toward the sky, with founders firmly in the driver’s seat.

    But the reality for seed-stage companies may be a bit more dire than that — and getting worse by the month.

    According to the research firm CB Insights, both average and median seed-stage valuations have fallen since last year, with the average valuation dropping from $2.2 million to $1.7 million and median valuation falling even more precipitously, from $1.7 million to just .6 million.

    Data from AngelList, a matchmaking service for investors and seed-stage entrepreneurs, also shows declining valuations. According to AngelList, which tracks thousands of startups in its system, the average seed-funded company’s valuation dropped from $3.9 million in the third quarter of 2012 to $3.6 million in the third quarter of this year. That isn’t a massive dip, but AngelList founder Naval Ravikant tells me that “by the time [a shift in one direction] shows up in the averages, it’s pretty pronounced.”

    A recent quarterly venture capital report out of Pitchbook, which operates a subscription-only database of private equity and VC deals paints a rosier picture. Pitchbook found that median pre-money valuations for seed-stage, VC-funded companies have nearly doubled over the last three years — from $3.2 million in 2010 to $5.2 million through the first three quarters of 2013.

    Still, this same report observed that lofty valuations are only making it harder for companies to raise Series A rounds. Pitchbook further noted that the rise of valuations can’t go on endlessly, suggesting there will likely be more flat and down rounds in coming years.

    Ravikant — noting that “everyone’s dataset is incomplete” — suggests the future is now. Though he can’t pinpoint exactly when things began trending downward, he thinks valuations “kind of peaked around the Facebook IPO, when it turned out to be less than people thought it would be.”

    According to Ravikant, there “hasn’t been a mass exodus out” out of the seed-stage investing market, mainly because “people still believe some percentage of your portfolio should be early-stage. But there’s increased recognition” that it’s a tough racket, with many angels suffering from investor fatigue and suddenly becoming more realistic about the chances of their portfolio companies receiving follow-on investments.

    There will always be a market for the most promising seed-stage startups, in other words. But evidence from CB Insights and AngelList suggests that for entrepreneurs just setting out, the road ahead looks bumpy.

    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: December 2, 2013

    110611_2084620_176987_imageGood morning and welcome back! Hope your break was as relaxing as ours (and less filling).

    —–

    Top News in the A.M.

    You want access to your phone’s data while in flight. But watch what you wish for. “We understand that many passengers would prefer that voice calls not be made on airplanes. I feel that way myself,” F.C.C Chairman Tom Wheeler tells the New York Times. “Ultimately, if the F.C.C. adopts the proposal in the coming months, it will be airlines’ decisions, in consultation with their customers, as to whether to permit voice calls while airborne.”

    —–

    A Venture Firm Focused on — Wait — Youth Tournaments? 

    We’ve heard about startups backing professional sports athletes, including Fantex, which sells stocks designed to track athletes’ economic performance.

    Now, Capital Sports Ventures, an eight-month-old, Washington, D.C.-based venture firm, is targeting what it argues is a much bigger market: non-professional athletes. Specifically, the firm is targeting all manner of minor league and participatory sports opportunities, from youth tournaments to startups that enable people to track their performance during sports events.

    It may be far afield from the typical venture investment, but it’s a world that Capital Sports Ventures knows well. Firm founder Greg Bibb was previously EVP of business operations for the Washington Wizards NBA team and COO for the Washington Mystics WNBA team. Meanwhile, Bibb’s joint partner in the endeavor is SWaN & Legend Venture Partners, whose managing director, Fred Schaufeld, is also a partner in Monumental Sports and Entertainment, owner of the Washington Wizards; the Washington Mystics; the Washington Capitals NHL team; and the Verizon Center sports arena. 

    I talked with Bibb and Schaufeld recently to learn more about their plans. Our conversation has been edited for length.

    What’s so interesting to you about youth tournaments?

    FS: There are 10,000 professional athletes in the U.S, but hundreds of millions of sports fans out there and it’s a disjointed market.

    GB: That’s right; it’s a much bigger marketplace when you look at participatory sports. There are a lot of organizations that could be very successful, that are built on the relationships and expertise of folks who’ve spent the majority of their careers in that space. But while they’ve built these tournament businesses, perhaps they don’t have the expertise that professional sports teams enjoy including around sponsorships, licensing, ancillary event creation, and so forth. We’d make an investment, keep the operator in place, let them what they do best, and we’d bring capital and expertise to the equation.

    Are you disclosing how much money you’ll put to work? Have you raised a pool of capital, or will you be investing on a deal-by-deal basis?

    GB: SWaN & Legend is a $70 million fund and they are our anchor tenant, however they have multiple investments in addition to [us]. The precise amount that’ll ultimately be invested into [Capital Sports] from all sources is unclear and will be based on the opportunities we find.

    We have about 30 LPs altogether, most of whom are CEOs of companies [who add value to the firm]. Essentially, we’re looking for opportunities where our background can accelerate the ventures as much as money can. We run the gamut in terms of sports and entertainment experience. Ticket sales, branding, social media, event creation – there’s not an aspect of the sports entertainment space that we can’t speak to.

    Have you made any investments yet?

    GB: We haven’t but we’ve been close on a couple. It takes a while to go through the due diligence process. One particular case required a partnership to be created around certain regional entities around the country, but unless they could work out their partnership issues, we didn’t think we could bring the sport to the Nikes [and other major sponsors] of the world.

    FS: Getting to scale takes a while. I’m personally in the ownership of four pro sports team and these things take a while. But we’re patient. And Greg is very “trend right”; he knows what’s coming up next.

    What’s is coming up next, when it comes to youth sports?

    GB: LaCrosse right now seems to be a sport that’s on a significant rise; you’re really starting to see it spread west across the country. Another is girls’ volleyball, which is now one of the fastest-growing and lucrative sports in the country and is played more and more at the high school and middle school level, driven by club teams. Then, of course, soccer is the old “new.”  The sport was long ago established at the youth level, but it’s starting to [become popular with older kids], too, and it just expands as a generation of kids who had to educate their parents on the sport are now grown and beginning to educate their own children.

    What’s the exit strategy with these types of investments, and what’s your timeline?

    FS: We’ll see where the opportunities take us, but with professional leagues, some have sold to Providence Equity and people like that. Between myself and my partners, we’ve been involved with every kind of exit you can have — multiple times — and we feel comfortable letting the underlying businesses dictate [what happens].

    JamBase

    New Fundings

    Addwish, a five-month-old, Copenhagen, Denmark-based company that provides “wish list services” to users (type a desired item into a field, and you’re shown similar products from its retail partners), has raised $1.8 million in seed funding. The capital comes from Sunstone Capital Technology Ventures, also based in Copehagen.

    Aujas, a five-year-old, Bangalore-based information risk management service, has raised 31 crore ($4.97 million) from new investors IvyCap Ventures and Rajasthan Venture Capital Fund. IDG Ventures India — which incubated Aujas as part of its entrepreneur-in-residence program and provided it with its initial, $3 million, round — also participated in the funding, reports the Economic Times.

    CoinJar, a nine-month-old, Melbourne, Australia-based bitcoin exchange and online wallet service, has raised the equivalent of $455,000, led by the Australian venture capital firm Blackbird Ventures. CoinJar is one of numerous companies to emerge from the Australian startup incubator AngelCube, a company that offers teams $20,000 in startup capital, along with mentorship and networking opportunities. The outlet CoinDesk has more here.

    Ekso Bionics, an eight-year-old, Richmond, Calif.-based company that makes mechanical exoskeletons for people with spinal cord injuries, has raised $5 million in a combination of debt and other securities, according to an SEC filing. The company, previously called Berkeley Bionics, raised $9 million last year from undisclosed sources and, according to the San Francisco Business Times, received separate funding in 2010 from IronPort cofounder Scott Banister, who sits on the company’s board. Ekso also reportedly received a $10 million grant from the Department of Defense in 2008.

    Girnar Software, a six-year-old, Jaipur, India-based company behind an online automotive marketplace (Cardekho.com), a bike-buying marketplace (Bikedekho.com), and a comparison shopping platform (Pricedekho.com), has raised $15 million in Series A funding from Sequoia Capital.

    MetaPack, a 14-year-old, London-based, e-commerce delivery management platform, has received £20 million ($33 million) in funding from Index Ventures. TechCrunch has much more on the company — and its efforts to take on Amazon — here.

    Money Dashboard, a five-year-old, Edinburgh, Scotland-based online money management platform, has received £2.7 million ($4.09 million) in Series A funding. The round was led by Calculus Capital, a 14-year-old, London-based investment firm.

    PingTune, a months-old, London-based, iPhone messaging app that invites users to share music with friends, has raised $1.6 million. According to TechCrunch, the funds come from Rupert Hambro, the chairman of J O Hambro Capital Management, and Dominic Perks, a former investment banker who has founded several small companies and actively invests in startups.

    Seriously, a months-old, Pacific Palisades, Calif.-based mobile gaming firm, has raised $2.35 million, shows an SEC filing. The company was founded by Andrew Stalbow, who was previously Rovio Entertainment’s General Manager of North America, where he worked on growing the “Angry Birds” franchise. The filing doesn’t list any of the company’s backers, but Seriously’s Southern California headquarters are reportedly home to its business operations, while its games are being developed in Finland.

    Trice Orthopedics, a two-year-old, King of Prussia, Pa.-based company that makes camera-enabled needles with miniaturized opto-electronics that are used in diagnostic procedures, has raised $3 million in financing. BioStar Ventures led the round with participation from Millennium Life Sciences. Previous investors and unnamed private investors also contributed to the funding.

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    New Funds

    Alpha Venture Partners, the new, early-stage venture firm of New York-based venture capitalist Steve Brotman, has raised $5.33 million for Alpha Venture Partners Fund, according to an SEC filing that lists the total offering amount as “indefinite.” Brotman was formerly a managing director and founder of Silicon Alley Venture Partners, where he spent 15 years; Brotman also spent more than two years advising New World Ventures (recently renamed Pritzker Group Venture Capital). According to his LinkedIn profile, he focuses on financial services, media, publishing, pharma, and enterprise IT infrastructure.

    FTV Capital, a 15-year-old, San Francisco-based investment firm that typically follows venture capitalists into later-stage rounds, has raised $365.9 million for its fourth fund, according to an SEC filing. The Form D shows the firm began raising the fund one year ago, and that its target is $500 million. Three members of the firm are listed on the filing: Richard Garman, David Haynes, and Brad Bernstein. The firm, which mostly looks for investments in business services and financial services, typically invests somewhere between $10 million and $75 million in its portfolio companies.

    Gilde Healthcare Partners, a 31-year-old, Netherlands-based healthcare investment firm, has closed its third fund with €145 million ($197 million) of capital commitments, reports Pitchbook, which says the firm has been raising the fund since 2010. Gilde’s previous fund, closed in 2007, was a similar-sized €150 million ($204 million) pool.

    —–

    People

    The Verge profiles Fab cofounder Jason Goldberg, who raised loads of venture capital for his last startup, too — and it later sold for pennies on the dollar. Says veteran tech reporter John Cook, who has tracked Goldberg’s career for years and was interviewed for the article: “You would think having burned through so much money and then hitting the wall, [Goldberg] would have learned a thing or two. But watching Fab these days I just feel like, I’ve seen this movie before.”

    Michael Rubin may be the richest tech founder you don’t know. Entrepreneur writes the rags-to-riches story of the man behind GSI Commerce (acquired by eBay for $2.4 billion in 2011) and Kynetic, the holding company behind the online sports gear site Fanatics, the Internet fashion flash sale site Rue La La, and the two-day shipping membership site Shop Runner. (“Relaxing is not a core strength of mine,” says the 41-year-old, whose net worth is estimated at $2.7 billion.)

    Snapchat‘s cofounder Evan Spiegel handily manipulated his well-heeled parents during their divorce, suggests a new CNET feature on Spiegel that’s rich with details (and fun to read). Of the period when Spiegel’s parents were splitting up and Spiegel, then 17, was living with his father, CNET’s Jennifer Van Grove writes: “His father’s exceptional generosity was put to the test after 17-year-old Spiegel repeatedly overdrafted his bank account and begged for the BMW 535i, a $75,000 car…At the time, Spiegel Sr. was giving Spiegel Jr. an allowance of $250 a week. Along with the new car, the younger Spiegel made a strong case for why he should get $1,992 a month for car, food, entertainment, and clothing expenses. He also wanted a $2,000 ’emergency fund’ because his ‘life is full of unforeseen expenses,’ as he wrote in the note to his father.” (Grove reports that Spiegel’s father said no to the car; soon after, his mother leased it for him.)

    —–

    IPOs

    China’s securities regulator said on Saturday that China will likely streamline its IPO approvals process by January; the commission also predicted that “around 50 companies may be able to complete their registration procedures” for public offerings by January’s end.

    —–

    Happenings

    The International Conference on Connected Vehicles and Expo kicks off today in Las Vegas, if you happen to be in Sin City. Here are some of the details.

    —–

    Data

    So far in 2013, Kleiner Perkins Caufield & Byers is leading the venture pack when it comes to the number of portfolio companies to go public; as peHUB’s Mark Boslet reports, the firm had seven IPOs under its belt as of Nov. 18, including Twitter, Epizyme, Chegg and Veracyte.

    —–

    Job Listings

    5AM Ventures, an early-stage venture firm focused on life sciences, is looking to hire an associate in its Menlo Park, Calif., office to participate in all of its investing activities, from sourcing new, early-stage investments to helping manage the firm’s existing portfolio. To apply, you need an MD and/or PhD. Also, some “exposure” to venture capital, investment banking or business consulting is preferred. According to a filing registered with the SEC in mid-October, the 12-year-old firm is currently raising a fourth, $240 million fund.

    —–

    Essential Reads

    Amazon CEO Jeff Bezos revealed an experimental drone-based delivery service in a “60 Minutes” segment last night. Bezos said the service, dubbed Amazon Prime Air, could be ready for customer use in “four or five years.”

    —–

    Detours

    How happiness boosts the immune system.

    The graffiti artist Banksy moves on to Paris.

    A father colors his children’s drawings during his business trips. (What he comes up with is magical.)

    He prayed. He won. And then he disappeared. Will we ever see Tim Tebow in the NFL again?

    —–

    Retail Therapy

    We like this idea of a beanie with wireless bluetooth headphones built in, though we’d be really impressed if it were a cowboy hat.

    This holiday season, you can shower your dog with bones and chew toys, but nothing says, “I love you, Caractacus,” like a $200 fireproof, shockproof earthquake preparedness suit.

    —–

    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 the newsletter, visit strictlyvc.com.

    Connie

  • A Venture Firm Focused on — Wait — Youth Tournaments?

    thumb_csvWe’ve heard about startups backing professional sports athletes, including Fantex, which sells stocks designed to track athletes’ economic performance.

    Now, Capital Sports Ventures, an eight-month-old, Washington, D.C.-based venture firm, is targeting what it argues is a much bigger market: non-professional athletes. Specifically, the firm is targeting all manner of minor league and participatory sports opportunities, from youth tournaments to startups that enable people to track their performance during sports events.

    It may be far afield from the typical venture investment, but it’s a world that Capital Sports Ventures knows well. Firm founder Greg Bibb was previously EVP of business operations for the Washington Wizards NBA team and COO for the Washington Mystics WNBA team. Meanwhile, Bibb’s joint partner in the endeavor is SWaN & Legend Venture Partners, whose managing director, Fred Schaufeld, is also a partner in Monumental Sports and Entertainment, owner of the Washington Wizards; the Washington Mystics; the Washington Capitals NHL team; and the Verizon Center sports arena. 

    I talked with Bibb and Schaufeld recently to learn more about their plans. Our conversation has been edited for length.

    What’s so interesting to you about youth tournaments?

    FS: There are 10,000 professional athletes in the U.S, but hundreds of millions of sports fans out there and it’s a disjointed market.

    GB: That’s right; it’s a much bigger marketplace when you look at participatory sports. There are a lot of organizations that could be very successful, that are built on the relationships and expertise of folks who’ve spent the majority of their careers in that space. But while they’ve built these tournament businesses, perhaps they don’t have the expertise that professional sports teams enjoy including around sponsorships, licensing, ancillary event creation, and so forth. We’d make an investment, keep the operator in place, let them what they do best, and we’d bring capital and expertise to the equation.

    Are you disclosing how much money you’ll put to work? Have you raised a pool of capital, or will you be investing on a deal-by-deal basis?

    GB: SWaN & Legend is a $70 million fund and they are our anchor tenant, however they have multiple investments in addition to [us]. The precise amount that’ll ultimately be invested into [Capital Sports] from all sources is unclear and will be based on the opportunities we find.

    We have about 30 LPs altogether, most of whom are CEOs of companies [who add value to the firm]. Essentially, we’re looking for opportunities where our background can accelerate the ventures as much as money can. We run the gamut in terms of sports and entertainment experience. Ticket sales, branding, social media, event creation – there’s not an aspect of the sports entertainment space that we can’t speak to.

    Have you made any investments yet?

    GB: We haven’t but we’ve been close on a couple. It takes a while to go through the due diligence process. One particular case required a partnership to be created around certain regional entities around the country, but unless they could work out their partnership issues, we didn’t think we could bring the sport to the Nikes [and other major sponsors] of the world.

    FS: Getting to scale takes a while. I’m personally in the ownership of four pro sports team and these things take a while. But we’re patient. And Greg is very “trend right”; he knows what’s coming up next.

    What’s is coming up next, when it comes to youth sports?

    GB: LaCrosse right now seems to be a sport that’s on a significant rise; you’re really starting to see it spread west across the country. Another is girls’ volleyball, which is now one of the fastest-growing and lucrative sports in the country and is played more and more at the high school and middle school level, driven by club teams. Then, of course, soccer is the old “new.”  The sport was long ago established at the youth level, but it’s starting to [become popular with older kids], too, and it just expands as a generation of kids who had to educate their parents on the sport are now grown and beginning to educate their own children.

    What’s the exit strategy with these types of investments, and what’s your timeline?

    FS: We’ll see where the opportunities take us, but with professional leagues, some have sold to Providence Equity and people like that. Between myself and my partners, we’ve been involved with every kind of exit you can have — multiple times — and we feel comfortable letting the underlying businesses dictate [what happens].

    Related articles

    Connie

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  • StrictlyVC: November 27, 2013

    110611_2084620_176987_imageIt’s Wednesday! Happy Thanksgiving, U.S. readers! Hope you have a wonderful break. StrictlyVC won’t be publishing over the next two days but we have some great things lined up for next week, so stay tuned and we’ll see you then!

    —–

    Top News in the A.M.

    Be warned: East Coast airports are already experiencing delays, with heavy precipitation, combined with the crush of passengers, gumming up the works.

    —–

    FirstMark Capital: Health Care Investor? 

    FirstMark Capital, the early-stage, New York-based venture firm, is best-known for its consumer investments, including Pinterest, the mega-successful online bulletin-board network whose newest, $225 round of funding valued the company at $3.8 billion. (FirstMark participated in its $500,000 seed fund in early 2010.)

    Lesser known is FirstMark’s newer, self-imposed mandate to fund more healthcare IT companies, which its partners view as a giant opportunity that happens to be highly complementary to the firm’s existing skill set.

    Not only is the health care IT market “gigantic” and the “cost curves unsustainable,” as managing director Amish Jani recently noted to me, but thanks to numerous trends — like cloud platforms that connect practitioners and patients in new ways — it has also become accessible to investors who might not have PhDs but who know their way around platform technologies.

    For example, FirstMark has backed Gravie, a consumer marketplace for healthcare insurance; Greenphire, a company that makes Web-based payment software that’s marketed to the clinical trial industry; and Superior Access Insurance Services, an online insurance exchange that’s used to connect carriers with insurance agents.

    Its investment in BioDigital is another example of a health care company that FirstMark seems well-suited to help. The 11-year-old medical visualization firm already develops 3D animations of the human anatomy for drug makers and medical device makers; with the help of FirstMark — which led a $4 million Series A round for the company in September — BioDigital is working toward new, freemium models, too, including with consumer Web companies that want to augment their content with its technology.

    Still, not everyone thinks the strategy of FirstMark — or other Internet investors like Social+Capital Partnership that are suddenly focusing more on healthcare IT — makes sense. Bijan Salehizadeh, for one, a longtime PhD and managing director at NaviMed Capital in Washington, D.C., recently wrote a thoughtful piece about how easy it is to underestimate the complexities of healthcare investing, not least because healthcare is a “slow-to-evolve industry with powerful and durable relationships.”

    Domain expertise matters, Salehizadeh had argued.

    Maybe so. Then again, the right health care investment could reframe the way that FirstMark is viewed by entrepreneurs and investors alike. As Pinterest illustrates, sometimes it takes just one savvy bet to change everything.

    dropcam_300x250_learn

    New Fundings

    Athos, an 18-month old, Redwood City, Calif.-based wearable technology company, has raised $3.5 million in seed funding from Social+Capital Partnership. Athos’s technology can track muscle groups, heart rate, and breathing levels, among other things. TechCrunch has an overview of the company and its background story here.

    Beyond the Rack, a four-year-old, Montreal-based private online shopping club that features steeply discounted designer fashions and accessories, has raised a $25 million round led by Investissement Québec, Iris Capital and Tandem Expansion Fund. Previous investors Highland Capital Partners, Panorama Capital, BDC Venture Capital IT Fund and iNovia Capital also contributed to the funding, which brings the company’s total capital raised to just more than $70 million.

    DraftKings, a nearly two-year-old, Boston-based daily fantasy sports operator, has raised $24 million in Series B funding. Redpoint Ventures led the round, with participation by GGV Capital, Atlas Venture, and BDS Ventures. The company has reportedly raised $34.5 million so far.

    Extreme Reality, an eight-year-old, Herzelia, Israel- based company whose software enables full-body, 3D motion control on any device via a standard 2D camera, has raised a new, $10 million round of funding. The money comes from previous investor Marker and another source that the company is declining to name. Extreme Reality has raised at least $24 million to date, according to Crunchbase.

    Gridco, a three-year-old, Woburn, Mass.-based company, has raised a fresh $10 million in funding led by Kleiner Perkins Caufield & Byers, judging by a new SEC filing. Previous investors North Bridge Venture Partners, Lux Capital, and General Catalyst Partners also appear on the filing. Gridco, founded by Sycamore Network founder Naimish Patel, is working on smart grid power management technologies.

    Lock8, an 18-month-old, “smart” bike lock maker with offices in London in Berlin, has raised an undisclosed amount of “seven-figure” funding from Horizons Ventures and Otto Capital.

    Mouth Foods, a three-year-old, Brooklyn, N.Y-based online platform that helps makers of “artisan” foods sell to customers, has raised $1.5 million in Series A funding led by Vocap Ventures. Other participants in the funding included VegasTechFund and angel investors Joanne Wilson and Jason Calacanis. (“It’s about the art of the food,” Mouth founder Craig Kanarick told the WSJ yesterday. “We don’t sell things like carrots and milk.”)

    New Seasons Market, a 14-year-old chain of privately owned grocery stores operating in Oregon and Washington, has raised $17.6 million in equity, according to a new SEC filing. Among the non-executive directors listed on the filing is Caryn Ellison, a former CFO of Crocs Inc.; Theresa Marquez, long the chief marketing exec at Organic Valley foods; and Stan Amy of New Villages Group, a Portland-based investment firm that targets “sustainable investments and communities.”

    Supersolid, a nearly two-year-old, London-based mobile games studio, has raised an undisclosed amount of funding from Index Ventures and Intel Capital. The company’s first game, “Super Penguins,” has been downloaded by more than 10 million people, according to the company.

    Wire Labs, a 10-month-old, Seattle-based company behind a new mobile messaging application, has raised $1.8 million in seed funding from numerous angel investors. Among them: Zillow CEO Spencer Rascoff; Paul Allen of Vulcan Capital, former Expedia CEO Erik Blachford; and former Facebook executive Owen Van Natta. Earlier this year, the company, founded by a former pair of Amazon engineers, had announced a separate round of $150,000 in seed funding.

    —–

    New Funds

    Artis Ventures, a 12-year-old, San Francisco-based hedge fund, is raising a new $15 million venture-focused fund titled Artis Ventures II, L.P., according to a new SEC filing that lists only firm cofounder Stuart Peterson. Artis has a wide-ranging portfolio, from the well-funded electronic medical record platform Practice Fusion, to the cloud and storage startup Nimble Storage (which filed to go public last month), to the smart grid concern Silver Spring Networks. (Silver Spring went public in March. Its shares were offered at $17; today, they’re trading at $20.)

    Blade, a new, Boston-based “startup foundry” has raised almost $20 million from undisclosed funding sources, according to Bloomberg. Paul English, the co-founder and chief technology officer of Kayak Software (sold to Priceline.com in May for roughly $1.8 billion) is managing the fund. English plans to invest an average of $2 million across 10 startups to help them get off the ground and, eventually, to “make an obscene amount of money for investors.”

    —–

    People

    Venture capitalist Brad Feld astutely observes that: “Sometimes you have to stop doing things to make more progress.”

    Malaysian billionaire Vincent Tan is looking to take his 14-year-old online payments company, MOL Global Pte, public in a dual listing on Kuala Lumpur’s stock exchange and either Hong Kong or Singapore, reports Bloomberg. In 2009, MOL Global acquired the social networking site Friendster.

    —–

    Exits

    dLoop, a two-year-old, Bay Area startup whose content management system promises better analysis and data classification, has been acquired by the online data storage company Box. Terms of the deal were not disclosed, though dLoop doesn’t appear to have raised outside funding. Techcrunch analyzes the deal here.

    Seesaw, a year-old, San Francisco-based mobile developer that had been formed by the founders of CoTweet, has been acquired by the San Francisco-based startup Byliner, a digital publisher. Seesaw never disclosed how much seed funding it had raised though it had backing from Freestyle Capital, Baseline Ventures, First Round Capital and Betaworks. The financial terms of its acquisition aren’t being disclosed, either.

    —–

    Job Listings

    Morgan Stanley‘s two-year-old, late-stage-investing arm, Expansion Capital, is looking for an analyst  to help it evaluate opportunities to invest in healthcare, digital media, and consumer companies that are mostly based in North America. The unit invests between $5 million and $15 million per transaction, which can be a first institutional financing, a follow-on financing, a carve-out, or a secondary transaction. To apply for the San Francisco-based job, you’ll need a stellar academic record and at least one year of experience at a leading investment bank.

    —–

    Essential Reads

    Target (yes, that Target) is planning to open an accelerator in Bangalore to compete with Amazon and Walmart, which are themselves busily trying to twist their flag poles in the ground.

    Lost in the Game: What is it that has made the first-person shooter such a success?

    French conglomerate Vivendi is spinning off its mobile and Internet unit as early as next year.

    —–

    Detours

    New York Magazine has a fantastic piece on Jordan Belfort, who ran the penny-stock boiler room Stratton Oakmont on Long Island until he was arrested by the FBI in 1998. (Leonardo DiCaprio is starring as Belfort in the upcoming film, “The Wolf of Wall Street.”) Belfort, now 51, tells the magazine of his two years and four months in prison: “I was shocked. Everyone’s playing tennis and basketball. The Latins have their music blasting. I was like, Wow, this isn’t so bad.”

    During the Cold War, Berlin was one of the most spy-ridden cities in the world. Now it’s the place to go to escape government surveillance.

    At your slurvice: Where to drink in London this holiday season.

    Examining the perfect joke.

    —–

    Retail Therapy

    Win-win: Buy one of these indestructible One World Futbols and a child in a disadvantaged community will receive one, too.

    These Kano do-it-yourself computer kits are super smart. (The company was co-founded by Index Ventures partner Saul Klein.) Unfortunately, if you haven’t ordered one yet for the budding geek in your family, you’re a little late for the holidays; new kits won’t be available to ship until June.

    Beer-flavored cigars. To smoke with your beer. Because that wouldn’t be overdoing things at all.

    —–

    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 the newsletter, visit strictlyvc.com.

    Related articles

    Connie

  • FirstMark Capital: Health Care Investor?

    stethoscope1FirstMark Capital, the early-stage, New York-based venture firm, is best-known for its consumer investments, including Pinterest, the mega-successful online bulletin-board network whose newest, $225 round of funding valued the company at $3.8 billion. (FirstMark participated in its $500,000 seed fund in early 2010.)

    Lesser known is FirstMark’s newer, self-imposed mandate to fund more healthcare IT companies, which its partners view as a giant opportunity that happens to be highly complementary to the firm’s existing skill set.

    Not only is the health care IT market “gigantic” and the “cost curves unsustainable,” as managing director Amish Jani recently noted to me, but thanks to numerous trends — like cloud platforms that connect practitioners and patients in new ways — it has also become accessible to investors who might not have PhDs but who know their way around platform technologies.

    For example, FirstMark has backed Gravie, a consumer marketplace for healthcare insurance; Greenphire, a company that makes Web-based payment software that’s marketed to the clinical trial industry; and Superior Access Insurance Services, an online insurance exchange that’s used to connect carriers with insurance agents.

    Its investment in BioDigital is another example of a health care company that FirstMark seems well-suited to help. The 11-year-old medical visualization firm already develops 3D animations of the human anatomy for drug makers and medical device makers; with the help of FirstMark — which led a $4 million Series A round for the company in September — BioDigital is working toward new, freemium models, too, including with consumer Web companies that want to augment their content with its technology.

    Still, not everyone thinks the strategy of FirstMark — or other Internet investors like Social+Capital Partnership that are suddenly focusing more on healthcare IT — makes sense. Bijan Salehizadeh, for one, a longtime PhD and managing director at NaviMed Capital in Washington, D.C., recently wrote a thoughtful piece about how easy it is to underestimate the complexities of healthcare investing, not least because healthcare is a “slow-to-evolve industry with powerful and durable relationships.”

    Domain expertise matters, Salehizadeh had argued.

    Maybe so. Then again, the right health care investment could reframe the way that FirstMark is viewed by entrepreneurs and investors alike. As Pinterest illustrates, sometimes it takes just one savvy bet to change everything.

    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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