• StrictlyVC: October 21, 2014

    Hi, happy Tuesday, everyone! (Web visitors, you can click here for an easier-to-read version of today’s email newsletter.)

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    Top News in the A.M.

    Apple reported blow-out fourth-quarter results yesterday.

    Verizon, meanwhile, posted its third-quarter results, narrowly missing earnings expectations but showing strong customer growth.

    Yahoo is set to reports its third-quarter results today.

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    Oh No You Didn’t, Facebook

    Yesterday, Facebook sued DLA Piper along with three other firms and nine lawyers who represented Paul Ceglia, a New York man who emerged in 2010 with claims that he was entitled to at least 50 percent of Facebook.

    Given that it’s nearly 2015, Facebook’s move comes as something of a surprise. Ceglia’s suit against Facebook was dismissed back in March by a federal judge amid clear evidence that his claims to Facebook were based on a “recently created fabrication.” More, two years ago, Ceglia was arrested and charged with mail and wire fraud for allegedly falsifying the contract and creating bogus emails to support his case. (His criminal trial is now scheduled for May.)

    Facebook’s festering ire at the firms that represented Ceglia is understandable to a point. Ceglia’s lawsuit and the questions it raised were a huge distraction before Facebook went public in 2012.

    Industry observers are probably cheering on Facebook, too, partly in hopes that law firms will think harder about bringing frivolous lawsuits.

    Still, Facebook’s rationale for pursuing these firms at this late date sounds a little vengeful. “We said from the beginning that Paul Ceglia’s claim was a fraud and that we would seek to hold those responsible accountable,” Facebook General Counsel Colin Stretch said in a statement given to reporters yesterday. “DLA Piper and the other named law firms knew the case was based on forged documents, yet they pursued it anyway, and they should be held to account.”

    Stretch might just as well have said, “DLA Piper and the other named law firms deserve an atomic wedgie, and we’re going to give them one to remember.”

    DLA Piper sent StrictlyVC a comment about the suit today. Written by Peter Pantaleo, DLA Piper’s general counsel, the firm calls the lawsuit “entirely baseless” and “filed as a tactic to intimidate lawyers from bringing litigation against Facebook. DLA Piper, which was not part of this case at its outset or its conclusion, was involved for 78 days. Facebook and Mr. Zuckerberg claim that they were damaged in those 78 days, yet a mere 10 months after DLA Piper withdrew from the case and while the litigation was still pending, Facebook went to market with an initial public offering that valued the company at $100 billion. Today, Facebook is worth $200 billion and Mr. Zuckerberg is among the richest people in the world. We will defend this meritless litigation aggressively and we will prevail.”

    Either way, a 2011 conversation we had with a corporate litigation attorney about Ceglia suggests that Facebook’s case against DLA Piper and the others probably isn’t a slam dunk.

    Generally speaking, this attorney explained, lawyers have to “ensure that there’s a good faith basis for the claims that they file on behalf of their clients. That doesn’t mean that they have to think that they necessarily will prevail, but there has to be some kind of factual basis, in their view, to provide some support for the allegations.”

    Presumably, DLA Piper didn’t know when it took the case that Ceglia fabricated the evidence to support his claims.

    We’re also guessing it will be hard to argue that Ceglia’s lawyers used uniquely reckless judgment in taking on the Ceglia case. In 2010, for example, DLA Piper decided to represent CNet founder Halsey Minor in a Chapter 11 proceeding despite Minor’s long history of stiffing service providers.

    DLA Piper subsequently dropped Minor eight months after engaging with him, but you see the point: if it were so easy to sue a law firm over its ne’er-do-well customers, we wouldn’t have lawyers.

    Facebook says its lawsuit is a matter of principle. We think it sounds heavy-handed. It also seems very much like another distraction that the company doesn’t need.

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    New Fundings

    Bitnet Technologies, a 10-month-old, San Francisco-based digital commerce platform provider for bitcoin payments, has raised $14.5 million in Series A funding led by Highland Capital Partners. Other investors include Rakuten, Webb Investment Network, Bitcoin Opportunity Corp., Stephens Investment Management, Commerce Ventures and Buchanan Capital Management. Bitnet’s team is largely from the payment gateway company CyberSource and from Visa, which acquired CyberSource in 2010 for $2 billion.

    Bowery, a year-old, New York-based enterprise startup focused on simplifying the process of setting up, managing, and sharing development environments, has raised $1.5 million in seed funding from Google Ventures, Bloomberg Beta, RRE Ventures, Homebrew, Betaworks, SV Angel, BOLDstart Ventures, Magnet Agency, Deep Fork Capital, and angel investors Naveen Selvadurai and Ryan Holmes. The company had earlier raised an undisclosed amount of seed funding from General Catalyst Partners and First Round Capital.

    CAA, the 39-year-old, L.A.-based sports and talent agency, has agreed to a deal with the private equity firm TPG that sees the latter’s stake in CAA grow from 35 percent to 53 percent in exchange for roughly $225 million. Deadline Hollywood has more here.

    CloudCannon, a two-year-old, San Francisco-based company behind an easy-to-use content management system designed to help web designers and their clients work together more easily, has raised $500,000 in seed funding from individual investors. TechCrunch has more here.

    GoCatch, a three-year-old, Sydney, Australia-based taxi booking and payments app, has raised roughly $4 million (in U.S. dollars), from investors that include Square Peg, a venture firm backed by billionaire James Packer, along with numerous wealthy Australian families such as the Kahlbetzers, the Liberman family, and the Millner family. The Australian outlet BRW has more here.

    GrabTaxi, a two-year-old, Malaysia-based mobile application that assigns available cabs to nearby commuters using mapping and location-sharing technology, has raised $65 million in new funding — its third round of 2014.Tiger Global Management led the round, with participation from new investor Hillhouse Capital and previous investors Vertex Ventures, GGV Capital, and the Chinese travel giant Qunar. The company has now raised “approximately $90 million,” says TechCrunch. (Here’s a Bloomberg piece from June that profiles GrabTaxi’s founder, former HBS student Anthony Tan.)

    Intel Capital, the 23-year-old, Santa Clara, Ca.-based global corporate venture arm of Intel, announced last night that it has invested $28 million across five Chinese companies, including makers of wearables and Internet of things devices and components. They are: EyeSmart Technology, LeWa Technology, Shenzhen Fibocom Industrial Development, Shanghai Ailiao Information Technology, andGuangdong Appscomm Digital Technology. The outlet peHUB has more here.

    La Belle Assiette, a 1.5-year-old, Paris-based online marketplace for customers seeking out private chefs, has raised $1.7 million in seed funding, including from BlaBlaCar cofounder Nicolas Brusson; three founders of l’Atelier des Chefs (Europe’s largest cooking classes company); and Kima Ventures. The company had previously raised $500,000 in seed funding.

    Magic Leap, a three-year-old, Hollywood, Fla.-based still-stealth company that says its hardware and software will deliver “cinematic reality,” has officially closed on $542 million in Series B funding. (Recode had reportedlast week that the company was zeroing in on a $500 million round.) Investors include Google, Kleiner Perkins Caufield & Byers,Andreessen Horowitz, Obvious Ventures, Qualcomm and Legendary Entertainment.

    Mirantis, a four-year-old, Mountain View, Ca.-based OpenStack cloud vendor, has raised $100 million in Series B funding led by Insight Venture Partners, with participation from August Capital and earlier investors Intel, WestSummit Capital, Ericsson and SAP. The company has now raised $120 million altogether. GigaOm has more here.

    NuCurrent, a five-year-old, Chicago-based company that makes high-efficiency antennas for wireless power applications, has raised $3.48 million in Series A funding from Independence Equity, Hyde Park Angels, Harvard Business School Angels, and undisclosed corporate investor and earlier backers.

    Sequenta, a six-year-old, San Francisco-based biotech company whose technology detects minimal residual diseases, has raised an undisclosed amount of funding from Celgene Corp. and other, undisclosed strategic investors. The company had previously raised at least $41.5 million, including from Index Ventures, Mohr Davidow Ventures, and Foresite Capital, shows Crunchbase.

    Snowflake Computing, a two-year-old, San Mateo, Ca.-based cloud-based data warehousing company, has raised $26 million in Series B funding led by Redpoint Ventures, with participation from Wing Ventures and earlier investor Sutter Hill Ventures. The company has now raised roughly $50 million altogether. GigaOm has more here.

    STAQ, a two-year-old, New York-based ad tech firm that sells a collection, reporting, and integrations system that helps users view their campaigns, inventory, and audience data, has raised $2.5 million in Series A funding led by Genacast Ventures and Core Capital, with participation from earlier investors Kinetic Ventures, Revel Partners and The Hive. The company had previously raised $1.1 million in seed funding.

    StackIQ, an eight-year-old, La Jolla-based supplier of IT-automation technology to large businesses, has raised $6 million in Series B funding from new investors Grayhawk Capital, Keshif Ventures, DLA Piper and OurCrowd, along with earlier investors Anthem Venture Partners andAvalon Ventures. The company has raised at least $7.8 million to date, shows Crunchbase.

    Vomaris Innovations, a 10-year-old, Tempe, Az.-based regenerative medical device company that develops a microcurrent field generating wound dressing, has raised $5 million in new funding, shows an SEC filing. The company had previously raised $5 million in equity and $200,000 in debt, show earlier filings.

    WeGoLook, a four-year-old, Oklahoma City-based company that dispatches in-person “lookers” to verify claims made by Internet sellers about their products (including cars), has raised $1.75 million in Series A funding led by i2E, which was joined by Seedstep Angels; the company’s founders; and other, undisclosed investors.

    ZipLine Medical, a nearly eight-year-old, Campbell, Ca.-based medical device company that’s developing noninvasive surgical skin closure devices, has added $5.7 million to its Series C round, which initially closed in January of this year. China Materialia, a Shanghai-based venture firm, led the newest funding. The company’s earlier Series C investors includedRA Capital Management, XSeed Capital and Claremont Creek Ventures. The company has now raised $16 million to date, shows Crunchbase.

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    New Funds

    Google Ventures has upped the size of its inaugural European fund from $100 million to $125 million, its managing partner, Bill Maris, said yesterday. More here.

    OneVentures, a 7.5-year-old, Sydney, Australia-based firm that makes early-stage bets on technology companies based in Australia, has raised more than $60 million for a $100 million fund it began raising back in March. The firm’s focus is wide-ranging, including healthcare, education, mobile, media, cloud computing and data, sensors and robotics, and “food security.” It looks for companies that are already making $5 million to $15 million in annual revenue.

    PureTech, a 10-year-old, Boston-based operating company that specializes in seed and early-stage investment in novel therapeutics, medical devices, and research technologies, has raised $55 million in new funding led by the U.K. investment manager Invesco Perpetual. FierceBiotech has more here.

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    IPOs

    Connecture, a 15-year-old, Brookfield, Wi.-based company whose enterprise software is used to build health-insurance exchanges, has filedto raise up to $86.3 million in a public offering. Some of its biggest outside shareholders include Chrysalis Ventures, which owns 28.5 percent of the company; SSM Partners, which owns 20.2 percent; and LiveOak Equity Partners, which owns 10.6 percent.

    Workiva, a six-year-old, Ames, Ia.-based cloud-based data analytics company that helps companies collect, manage, report and analyze critical business data in real time, has filed to go public. One of its biggest outside investors is Bluestem, a Midwest private equity firm.

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    Exits

    Crunchbase, the AOL-owned database of tech companies and people, could very well be spun off into its own standalone company, said AOL CEO Tim Armstrong yesterday at a TechCrunch conference, adding that while AOL would remain a majority stakeholder in the business, AOL would consider either funding a spin-off itself or taking outside capital.More here.

    BrightRoll, the 8.5-year-old, San Francisco-based cross-platform digital video advertising service, is in talks to be acquired by Yahoo, reports TechCrunch, which says that “term sheets have been signed” and that the price will likely be in the neighborhood of $700 million. Brightroll has raised $40.2 million over the years, including from Adams Street Partners, Scale Venture Partners, Comerica Bank, True Ventures, Trident Capital, KPG Ventures, Michael Tanne, Fabrice Grinda, Auren Hoffman and Jeff Clavier.

    Videoplaza, a London-based video supply-side platform, is being acquired or an undisclosed sum by the video distribution and analytics platform Ooyala (itself now owned by Australian telco Telstra). More here.

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    People

    At the London-based TechCrunch Disrupt conference yesterday, AOL CEO Tim Armstrong squelched recent rumors suggesting that Yahoo and AOL might merge, saying that of a 30- to 40-page presentation he’d just prepared for his board about AOL’s 2015 plans, “I don’t think Yahoo is mentioned once in that deck.”

    Venture capitalist Jim Breyer says startup founders should raise money right now if they can, given the volatility of the public markets. As he tells Bloomberg: “I encourage our best companies, which believe they don’t need to raise cash, to do so opportunistically.” Breyer points to the media company Legendary Entertainment — which raised $250 million at a multibillion-dollar valuation this month led by SoftBank, Fidelity Investments, and Morgan Stanley — as one portfolio company that agreed with his thinking, adding: “A company is better off with 18 months of cash in the bank.”

    Oracle billionaire Larry Ellison owns a $300 million Hawaiian paradise, and Business Insider takes readers on a tour of it.

    Maha Ibrahim, a general partner at Canaan Partners, tells the Silicon Valley Business Journal she spent a decade trying to ignore the topic of gender in venture capital, but no longer. “At Canaan, we have two female general partners. We have six female investor professionals (including GPs), and the great thing is that 20 percent of the companies that we’ve invested in . . . were founded by females. So diversity is really important to us, and we believe that it starts by leading by example. We might as well start doing it ourselves.”

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    Happenings

    The Post.Seed Conference is coming up in San Francisco on December 2, and it will feature an impressive line-up of investors to speak on a wide range of early-stage financing issues, including Chris Dixon, Paul Martino, Keith Rabois, Naval Ravikant, Ryan Sarver, Semil Shah, Hunter Walk, Brandon Zeuner, and many others. (I’ll be there, too, moderating a panel.) You can sign up here.

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    Essential Reads

    Humanity’s last great hope is venture capitalists, argues the WSJ.

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    Detours

    Dating versus married: How text messages change over time.

    Hoverboards? We’re not there yet.

    A somewhat surprising look into a social network for doctors, where one popular post is “guess the diagnosis.” (Doctors: They’re funny and awful, just like us!)

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    Retail Therapy

    James Bond’s Lotus Esprit Submarine. Elon Musk owns one. Now you can, too.

    Connie

    ,

  • StrictlyVC: October 20, 2014

    Good morning, everyone! Hope your Monday is off to a brilliant start. (Web visitors, here’s an easier-to-read version of today’s newsletter.)

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    Top News in the A.M.

    Yahoo CEO Marissa Mayer will detail her plans to turn around the company tomorrow when it shares its third-quarter earnings, says the WSJ.

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    David Pottruck on His New Book, His Bets, and Bitcoin

    The first time I met David Pottruck, it was 1999 and he was co-CEO of the high-flying discount brokerage Charles Schwab, a title he’d share for five years with founder Charles Schwab before becoming the sole CEO of the company in January 2003.

    Eighteen months later, the company — which Pottruck had pushed into the Internet age and that struggled after the dot com crash — ousted him in a decision that still stings, though Pottruck will tell you the company made the right decision.

    A new book by Pottruck captures much of that experience. It also features interviews with a dozen others who’ve led organizations through periods of dramatic change, including Intel President Renée James; eBay CEO John Donahoe; JetBlue CEO David Barger; and San Francisco Giants CEO Larry Baer. I caught up with Pottruck last week to learn more about the book (which hits bookstores today), and where he’s focusing his energy now.

    You spend a lot of time in New York these days. Have you moved there?

    I’m still in San Francisco, but I have an apartment in New York and I’ve been spending more and more time there for personal and business reasons.

    Tell us about your business interests. After leaving Schwab, you formed an investment firm called Red Eagle Ventures. How would you describe its mission?

    After I left Schwab, I decided the smartest thing to do was work for myself and invest in early-stage companies and see if I could add value as a mentor, as a coach to CEOs.

    Financial services CEOs?

    For a long time, I stayed away from financial services. I wanted to do other things, learn about new industries. So I spent a couple of years working on a startup airline called Eos Airlines that ultimately didn’t make it. The idea was to fly [a high-end service] from New York to London, but while people loved it, the economics were challenging and when oil spiked to $150 per barrel for a few months [it killed the business].

    Are you still interested in disrupting the airline industry?

    No, I’d never invest in another airline. It’s a terrible industry. It’s like Warren Buffett says, if you want a small fortune, start with a large fortune and invest in an airline.

    Where are you investing then?

    I realized I should look for something that I knew about and would enjoy, and I became a founding investor in and chairman of Hightower, a fast-growing, very profitable, seven-year-old wealth management firm. It now has 30 different locations around the U.S., around 300 employees, and almost $100 million in revenue. I’m also the chairman and a large investor in CorpU, a leadership development business that launched a few years ago and whose revenue is getting into double digit millions now.

    So you like making concentrated bets. Are you ever tempted to pick up the pace of your investing?

    No, negotiating term sheets, trying to dig into whether or not a business is something to get involved with or not – I hate every aspect of it. I’m an operator. Strategic, tactical, and leadership issues are what fascinate me. That’s what I like to think and write about.

    Your new book focuses on breakthrough change. How interested are you in the many changes happening in financial services? What do you make of bitcoin specifically?

    If you look at it, it’s like gold, whose value is in the eye of the beholder. Gold has very little real tangible value. It’s a shiny metal. But it goes up and down because it’s considered a store of value. Bitcoins are like that that. They’re simply digits, and if the public believes them to be a store of value, then I think they are. But in my mind, it’s an extremely risky currency, if you even want to call it that.

    People like the whole idea of a currency that’s not backed by a government, but governments play a key role in ensuring that currencies have a stable value. It doesn’t always work out that way, but bitcoin doesn’t have anybody doing that. I mean, who is accountable? The answer is nobody. Nobody has raised their hand to say, “I’m behind this.” I think it’s nuts.

    You spent 20 years at Schwab. Are you still in touch with Charles Schwab?

    I had an amazing career because Charles Schwab the man gave me that opportunity. He supported me and promoted me and got behind me when I made idiotic, adolescent mistakes. I wish my last days had ended differently, but the company needed different leadership at the time, and Chuck and I continue to have a very nice relationship.

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    New Fundings

    Atavist, a four-year-old, Brooklyn-based digital startup and multiplatform book publishing company, has raised $2 million in debt, shows an SEC filing. The company had previously raised roughly $3.4 million in equity, show earlier filings.

    Cazena, a months-old, Acton, Ma.-based big data company founded by former Netezza executives, has raised $8 million in funding from Andreessen Horowitz and Northbridge Venture Partners. TechCrunch has more here.

    CinePapaya, a two-year-old, Lima, Peru-based movie ticketing company, has raised $2 million in funding from the Brazilian Internet conglomerate Movile. The company has raised at least $2.7 million to date, shows Crunchbase, which lists 500 Startups as one of its earlier investors. TechCrunch has more here.

    MediaHound, a three-year-old, Culver City, Ca.-based online platform that helps users discover, compare, and share film and TV content, has raised $4.5 million in Series A funding from undisclosed investors.

    Metail, a six-year-old, London-based online garment-fit visualization company, has raised $12 million in funding led by the garment manufacturer TAL Group. The company has raised $19.5 million altogether, shows Crunchbase, which lists New World Private Equity as an earlier backer.

    Nousdecor, a two-year-old, San Mateo, Ca.-based home decorating startup, has raised $2.1 million in seed funding led by Kathy Clark, daughter of legendary entrepreneur-investor Jim Clark and former wife of YouTube cofounder Chad Hurley. Recode has more here.

    Recurly, a four-year-old, San Francisco-based pay-as-you-go subscription billing platform, has raised $12 million in Series B funding led byDevonshire Investors (the private investment firm affiliated with Fidelity Investments), with participation from Greycroft Partners and earlier investors Polaris Partners and e.ventures. The company has now raised $19.6 million altogether.

    Urgent.ly, a year-old, Sterling, Va.-based company behind a roadside assistance app and service, has raised $1.2 million in seed funding led by Select Venture Partners, with earlier investors Blu Ventures and CIT Gap Funds participating. The company has raised $1.8 million to date. TECH Cocktail DC has more here.

    Viableware, a four-year-old, Kirkland, Wa.-based company that makes software and hardware, including a digital bill folder that accepts credit or debit cards at diners’ tables, has raised $2 million in equity and debt in a round that’s targeting $10 million, shows an SEC filing. The company had previously raised $7.5 million, shows Crunchbase.

    Xplenty, a 3.5-year-old, Tel Aviv, Israel-based big data cloud platform that promises to make data processing easier for a broader array of business professionals, has raised $3 million in Series A funding from Magma Ventures and the Russian venture capital firm Waarde Capital.

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    IPOs

    Neothetics, a seven-year-old, San Diego-based specialty pharmaceutical company, has filed to raise up to $63.3 million in an IPO. Its biggest outside shareholders include Alta Partners, Domain Associates, and RMI Investments.

    Zayo Group Holdings, a seven-year-old, Denver-based dark fiber company, saw its shares, priced at $19 apiece, rise nearly 16 percent in their stock market debut Friday.

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    People

    Investor Marc Andreessen announced on Twitter this morning that he’s stepping off the board of eBay in advance of its split from PayPal. Writes Andreessen: “After 6 years of service + completed decision to split, I’ve decided now is a good time to step off the eBay Board of Directors. It’s been an absolute privilege to serve with [CEO] John [Donahoe], [fellow board member] Pierre [Omidyar], and team, and I could not be more proud of what we’ve accomplished.”

    In other Marc Andreessen news, New York magazine has just published a must-read interview with him, in which he’s asked his perspective on everything from diversity in Silicon Valley to global income inequality to whether, given his growing power, anyone ever dares tell him his ideas are dumb. Andreessen’s response: “Every morning, I wake up and several dozen people have explained to me in detail how I’m an idiot on Twitter, which is actually fairly helpful.”

    Michael Arrington, Ron Conway, Ron Palmeri, Brian Pokorny, California’s Lieutenant Governor Gavin Newsom, and star quarterback-turned investor Joe Montana were among those spotted at a Bruno Mars concert last week to benefit UCSF Benioff Children’s Hospitals. You can check out some photos here, care of society photographer Drew Alitzer.

    Last week, Stephen Colbert complained on his show that Google has his height wrong, telling CEO Larry Page, “Fix it, or I will fix you, Page.” Google was up for the challenge.

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    Jobs

    North Atlantic Capital, a venture firm focused on later-stage deals, is looking for an associate. The job is in Portland, Me.

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    Essential Reads

    Inside Pinterest: The coming ad colossus that could dwarf Twitter and Facebook.

    Is Google starting to wield too much power in Washington?

    The first two industrial revolutions ultimately benefited everyone. The digital one may prove far more divisive, argues the Economist.

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    Detours

    The fight over the Bahia 180,000-carat emerald.

    Scientific evidence that self-promoters underestimate how annoying they can be.

    Your definitive argument for a pet-friendly office.

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    Retail Therapy

    A real light meter, for your iPhone photos.

    Laplock, the app that alerts you when someone unplugs your power cord.

    Connie

  • StrictlyVC: October 17, 2014

    Hi, everyone, no column today — busy Thursday — but we hope you have a terrific weekend! See you back here Monday. (Web visitors, for an easier-to-read version of today’s email, click here.)

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    Top News in the A.M.

    Apple introduced the newest version of its flagship tablet yesterday, and with a Touch ID fingerprint sensor and a dramatically thinner form factor, it looks like a winner, reports the Verge.

    Yesterday, CBS announced its own, immediately available Hulu-like streaming video service, just one day after Time Warner’s HBO announced it would start selling a version of HBO via the Internet next year. Showtime, a CBS property, isn’t part of the package yet, but it’s coming, says the company.

    Google reported its third-quarter earnings yesterday, revealing a 20 percent jump in revenue to $16.5 billion. Still, analysts worry that its search advertising business is starting to slow and that it has yet to nail its mobile ad strategy.

    Users of the anonymous social media app Whisper might not be so anonymous after all. According to explosive allegations against the company in the Guardian yesterday, Whisper can and sometimes does track the location of users via GPS or their smartphone IP addresses, even when they’ve opted out of the service’s geolocation feature. Says the report: “When Guardian reporters visited Whisper last month, [Whisper’s editor in chief, Neetzan] Zimmerman and another executive said that when they wanted to establish the location of individual users who are among the 20 percent who have opted out of geolocation services, they simply asked their technical staff to obtain the ‘latitude and longitude’ of the phones they had used.” The Guardian also reports that Whisper’s “threshold” for turning over users’ identities to law enforcement officials is lower than at other tech companies. Zimmerman has called the report “a pack of vicious lies.” But the Guardian has published a second piece this morning reiterating that the “evidence is clear.”

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    New Fundings

    Arago, a 19-year-old, Frankfurt, Germany-based company that develops artificial intelligence software to replace information-technology workers, has raised $55 million from KKR in exchange for a minority stake in its business. The WSJ has more here.

    Idibon, a two-year-old, San Francisco-based company whose software helps enterprises analyze natural language in emails and less structured data, has raised $5.5 million in Series A funding, including from Altpoint Ventures, Morningside Ventures, Samsung Corp., Inventec Corp., and earlier investor Khosla Ventures. The company has raised $6.9 million to date, shows Crunchbase.

    Limelight Health, a months-old, Redwood City, Ca.-based company that provides a mobile-based quote service for health insurance agents, has raised an undisclosed amount of seed funding from the accelerator program Launchpad Digital Health.

    Mailcloud, a year-old, London-based service that promises to organize users’ existing email accounts into easily digestible folders and timelines, has raised $1.8 million in seed funding led by Octopus Investments, with Bessemer Venture Partners, Kima Ventures, Seedcamp, and a long list of angel backers participating. The company has now raised $2.8 million altogether.

    MedAvail Technologies, an eight-year-old, Toronto-based startup that makes automated, drug-dispensing kiosks that can release medication with a pharmacist’s approval, has raised $30 million in Series C funding led by Pura Vida Investments, Deerfield Management Company andAdage Capital Management, with participation from earlier backers Redmile Group, Walgreens, and Alliance Boots. The company has now raised at least $37.1 million to date, shows Crunchbase.

    OneEnergy Renewables, a five-year-old, Seattle-based maker of distributed, utility-scale solar photovoltaic projects, has raised $5 million in Series B funding led by Ecosystem Integrity Fund, with participation from earlier investors, including members of the Seattle-based cleantech angel group, Element 8.

    Paintzen, a 1.5-year-old, New York-based on-demand painting services platform for homeowners and businesses, has raised $1.81 million in seed funding from Lerer Hippeau Ventures, Nextview Ventures, Quotidian Ventures, Angelpad and Barbara Corcoran. The company passed through the AngelPad accelerator program last spring.

    Technisys, an 18-year-old, Miami-based startup that powers Latin American banks delivering services to people via mobile, ATMs, and online, has raised $13 million in Series B funding from Intel Capital, Alta Venture, KaSZeK Ventures, Endeavor Catalyst and existing investor Holdinvest, which had previously invested $1 million in the company. Venture Capital Dispatch has the story here.

    Waterline Data Science, a 10-month-old, Mountain View, Ca.-based company that automates some of the work of finding data in Hadoop, has raised $7 million in funding from Menlo Ventures, which incubated the company, and Sigma West. Other investors include James Markarian, currently an entrepreneur in residence at Khosla Ventures; Anthony McCusker, a partner at Goodwin Proctor; and Deep Nishar, senior vice president of products and user experience at LinkedIn. Venture Capital Dispatch has more here.

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    New Funds

    Canaan Partners, the 27-year-old, Menlo Park, Ca.-based venture firm, made it official yesterday, announcing that it has closed on $675 million for its 10th fund, beating its $600 million target — the same amount it raised for its ninth fund in 2012 — by a wide margin.

    Shenzhen Co-Win Venture Capital Investments, a 14-year-old, Shenzhen, China-based firm, has held a $75 million first close for its first U.S. dollar fund, according to China Money Network. The fund, whose LPs include Singapore’s Oversea-Chinese Banking Corp., is targeting a final close in the neighborhood of $150 million. The company manages nine other funds, mostly denominated in RMB.

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    IPOs

    Atara Biotherapeutics, a two-year-old, Brisbane, Ca.-based company that’s developing therapies for muscle wasting conditions, kidney disease and cancer, made its debut on the Nasdaq yesterday and it wasn’t great but it wasn’t a disaster, either. After pricing the stock at $11 per share — below the $14 to $16 range that the company had initially estimated — Atara, which made $55 million from the IPO, saw its shares close at $10.65.

    Zayo Group Holdings, a seven-year-old, Denver-based dark fiber company, priced its IPO last night at $19 a share, below its expected $21 to $24 price range. It begins trading today. The WSJ has much more here about its prospects.

    You’ve already read that Box and Good Technology are likely delaying their public market debuts until next year because of current market conditions. Now others, including the online-dating site Zoosk and the Internet domain marketplace GoDaddy, are also contemplating pushing their deals into 2015, reports Bloomberg.

    —–

    People

    Yahoo’s new head of sales, Kevin Gentzel, is seen as an important hire for the company, and everyone is already gossiping about whether or not he’ll fit in.

    Bill Wafford has left Walgreen Co., where he led the company’s in-house venture capital and growth equity investment business, says Fortune. Wafford had joined the organization in 2009. Earlier in his career, he was a consultant at Archstone Consulting.

    —–

    Job Listings

    Yesterday, we told you that Google Capital is looking for an associate. Google’s Energy & Sustainability team is also looking for help, in the form of an electricity market specialist.

    —–

    Essential Reads

    Apple has built a SIM card that let’s users switch between AT&T, Sprint, and T-Mobile.

    Tagged, a social-networking site that has struggled to attract users and boost revenue since its founding a decade ago, is changing its name and trying a new approach, reports the WSJ. The company, now called if(we), plans to develop a variety of new mobile and social apps.

    —–

    Detours

    Can enough exercise make up for junk food?

    Threats to Americans, ranked by actual threat instead of media hype.

    Mountaintop cube lodge.

    An artist puts a Sharpie to good use.

    —–

    Retail Therapy

    The Ninja Suit. It “won’t make you better at karate. It won’t make you invisible at night. It doesn’t even come with any specially designed pockets for ninja vanish pyrotechnics.” But it will keep you warm and toasty. (Also, it comes in four colors.)

     

     

    Connie

  • StrictlyVC: October 16, 2014

    Good Thursday morning, everyone! (Btw, an easier-to-read version is here.)

    —–

    Top News in the A.M.

    Facebook has just rolled out a new emergency check-in feature for natural disasters.

    Apple is hosting its iPad and iMac event today, which you can check out live.

    —–

    One Company Where Data Breaches are Welcome News

    When it comes to data breaches, the headlines this year have become a blur, with the vulnerabilities of one corporate giant after another – American Express, eBay, Home Depot, JPMorgan Chase, Target – put on full display for the world. The pace of breaches has been accelerating, too, with roughly 600 data breaches in 2013 and what experts expect will be800 breaches by the end of this year.

    The trend is lousy for consumers, but it’s exceedingly positive for TeleSign, a 10-year-old, L.A.-based company that handles new account verification and two-factor authentication services for hundreds of huge properties, including nine of the 10 biggest U.S.-based web companies.Yesterday, StrictlyVC caught up with TeleSign CEO Steve Jillings to learn more about his business – and whether TeleSign, which closed on roughly $50 millionin funding in July, might ever raise another round from private investors. Our chat has been lightly edited for length.

    You handle crucial authentication services for some of the biggest, savviest tech companies in the world. Why is this something they’re outsourcing?

    We’re in a business that’s easy to do badly and incredibly hard to do well. A lot of the big tech companies have users in every corner of the world. We’re localized in 87 different languages and deliver authentication events into more than 200 countries and territories – places I’ve never heard of. And our 250 employees — roughly half of whom are in engineering – are focused on authentication 24/7. It’s like asking, “Why aren’t you generating your own power?” Because you can flip a switch and it just works.

    Who are your most direct competitors?

    Our biggest competitive set are companies that do try doing it themselves. A lot of messaging companies that offer up cheap messaging feeds tell their clients that it’s easy to make work and here’s how you do it. We get lots of customers who eventually give up and outsource the entire thing to us. With 20 or 30 people, you just can’t get on top of it. Making this stuff work globally, using messaging as a delivery platform, the complexities are difficult.

    You’re talking about delivering PIN codes as part of the two-factor authentication process. I sign in to Twitter, it asks me for my password, then shoots a code to my phone to ensure that I’m who I say I am.

    Exactly. We deliver access PIN codes, and we deliver the bulk of them through SMS or in a voicemail, and now we’re starting to deliver them through mobile authentication apps.

    People think when you send an SMS, it simply, magically arrives at the other end, but there are many things that can go wrong using the telco layer. And if a customer is waiting on a PIN code that doesn’t arrive, you have a pretty unhappy customer.

    Apple and others are starting to do more with biometrics to authenticate users. Could biometrics put you out of business?

    Face recognition and voice stuff is cool, but that’s about as far as it goes. Biometrics has been around for years, but you probably can’t name one biometric company that’s been successful or gotten to any degree of scale. Voice has too much latency. Facial [biometrics] is getting better, but it’s nowhere near prime time. We think behavioral biometrics is interesting, but that’s also super early. We’re integrating some aspects of biometrics in our stack as incremental data points, but to say it can replace what we do would be a stretch.

    How do you make two-factor authentication easier, so that more people take advantage of it?

    Well, a lot of our clients are now looking at it and saying they’re going to make it mandatory, meaning it will become an opt-out feature rather than opt-in. But we’re also very focused on reducing user friction. It won’t be long before the user experience will be simpler, so that when someone who has registered an account comes back [to use it], we’ll be able to authenticate them based on information that they know, what we know about their device, and their behavior.

    You’ve said in other interviews that your revenue is doubling every year, that it was $24 million in 2012, $50 million last year, and that it’s on track to double again this year. So what’s next? Are you thinking about an IPO? Might you raise more private capital?

    We’ve raised $78 million, including $50 million this summer, and most of that’s still in the bank. The only scenario where we’d raise more now is if we had the opportunity to acquire a company that we couldn’t absorb [with our current resources]. There are a lot of interesting technology companies out there that will struggle to get to scale but that have technology that could be additive to the things we’re doing, and we can get technology in front of the biggest companies in the world in no time at all.

    In the meantime, our goal is to be IPO ready by the end of 2015. We’ll financially be at the scale that we could go public. We think five quarters away is good timing for us. But right now, it’s more of a discipline thing than a hard-and-fast thing.

    —–

    New Fundings

    AdNear, a two-year-old, Singapore-based company whose location intelligence platform caters to advertisers, has raised $19 million in Series B funding from new investors Telstra and Global Brain (a Japanese venture firm), along with earlier investors Sequoia Capital and Canaan Partners. The company has raised $44.5 million altogether, shows Crunchbase. Tech in Asia has more here.

    Blue Box, an 11-year-old, Seattle-based managed cloud hosting provider, has raised $10 million in Series B funding led by an undisclosed strategic investor, with participation from earlier backers Founder Collective,Voyager Capital and the company’s executive team. The company has now raised at least $19.1 million, shows Crunchbase.

    Fresvii, a two-year-old, Redwood City, Ca.-based mobile cloud platform designed for smartphone game developers, has raised $1.8 million in funding from Japanese venture capital firm Nissay Capital. VentureBeat has more here.

    Indicative, a year-old, New York-based service that helps marketers and product managers analyze data from websites and apps, has raised $2 million in seed funding, including from Acadia Woods Partners, Rose Tech Ventures, and Bertelsmann Digital Media Investments, along with numerous individual investors. TechCrunch has more here.

    Osmo, a nearly two-year-old, Palo Alto, Ca.-based hardware games device for kids that connects to any iPad, has raised $12 million in Series A funding led by Accel Partners, with participation from Upfront Ventures and earlier backer K9 Ventures.

    Portal Instruments, a two-year-old, Cambridge, Ma.-based medical device company that’s developing needle-free drug-delivery systems, has raised $11 million in Series A funding led by Sanofi AS, PBJ Capital and an undisclosed U.S. medical-device company.

    Quantopian, a three-year-old, Boston-based company behind a browser-based algorithmic trading platform, has raised $15 million in Series B funding to create its own hedge fund. Bessemer Venture Partners led the round, with participation from Wicklow Capital and earlier backers Khosla Ventures and Spark Capital. The company has now raised $23.8 million to date, shows Crunchbase.

    Razer, a 16-year-old, Carlsbad, Ca.-based company that sells high-end precision-gaming hardware, including tablets and a “smartband” device called Nabu, has raised an undisclosed amount of funding led by Intel Capital at a valuation of more than $1 billion, reports TechCrunch.

    Sapience Analytics, a five-year-old, Pune, India-based company that makes employee productivity software, has raised around $7.4 million in Series B funding from Orios Venture Partners. TechCircle has more here.

    Tongal, a five-year-old, Santa Monica, Ca.-based social media platform that connects creative professionals with brands and causes that need their work, has raised $5 million in Series C funding from earlier investor Insight Venture Partners. The company has raised $21.5 million altogether.

    Viewics, a nearly six-year-old, Sunnyvale, Ca.-based healthcare analytics and data platform company, has raised $8 million in funding led by Canvas Venture Fund. VentureBeat has more here.

    Welltok, a five-year-old, Denver-based health optimization company, has raised $25 million in new funding from Bessemer Venture Partners. The company has now raised $73 million altogether.

    Wilshire Axon Sports, a 1.5-year-old, L.A.-based online fan engagement platform, has raised $2 million in Series A funding led by Mosaik Partners, with participation from an outfit called Albrekca and earlier backer KGC Capital.

    Wirkn, a three-month-old, Toronto, Ontario-based mobile platform whose first app promises users the ability to create a video profile that “shows their personality” to potential employers, has received $400,000 in seed funding led by Kinetic Companies and numerous, unnamed angel investors.

    Wit.ai, a year-old, Palo Alto, Ca.-based natural language startup, has raised $3 million in a seed funding led by Andreessen Horowitz, with participation from Ignition Partners, New Enterprise Associates, A-Grade Investments, SV Angel, Eric Hahn, Alven Capital, and TenOneTen. The Rude Baguette has more here.

    —–

    New Funds

    Causeway Media Partners, a 1.5-year-old, Boston-based growth equity firm that focused on sports-related media and tech opportunities, has officially disclosed in an SEC filing that it closed on $125.6 million for its debut fund. (We talked about that $125 million fund and more with the firm in early July.)

    SAP Ventures, which spun out of SAP four years ago as an independent venture arm, is changing its name to Sapphire Ventures. The firm currently manages $1.4 billion from SAP, including more than $900 million on which it closed last year (a $405 million fund of funds and a $650 million pool that’s being invested in growth-stage companies). It has so far used that capital to invest in roughly 125 companies, including Gild, which makes hiring software and Ping Identity, which makes cloud-based identity management software; it has also backed several venture funds, including Amplify Partners and Data Collective. But when Sapphire raises its next fund in two or three years, it will be talking with investors outside of SAP, too, says a spokeswoman.

    —–

    IPOs

    Bank of America Merrill Lynch researchers observed in a note this morning that the S&P 500 index peaked right after Alibaba‘s September 19th IPO — eight minutes after its IPO, to be exact. “Since then US and global stocks have fallen 10 percent and cyclical sectors such as energy, materials and industrials have been decimated,” they added.

    —–

    Exits

    Anametrix, a four-year-old, San Diego-based company whose cloud-based software presents a holistic view of the effectiveness of paid, owned and earned media, has been acquired by Ensighten, whose software helps companies manage the code on their websites that controls digital marketing functions. Terms of the acquisition weren’t disclosed.

    —–

    People

    Actor Christian Bale is reportedly in talks to play Steve Jobs in the Sony biopic “Jobs” that’s being written Aaron Sorkin, who is dividing the film into three long scenes, each taking place backstage before one of Apple’s famous product launches. Variety has the story.

    Stephen Blyth, the new head of Harvard’s endowment, will have his work cut out for him, reports Harvard Magazine. More here.

    TV personality Stephen Colbert is threatening to sue Google for getting his height wrong, listing it as 5’10” rather than 5’11”. “Seriously, 5’10?,” said Colbert on his show yesterday. “Those are Matt Damon numbers. That’s down there in the stale air Johnny Depp is sucking.”

    George Lucas, the creator of “Star Wars,” on why so many Hollywood tycoons and directors were in attendance at Vanity Fair’s New Establishment Summit in San Francisco last week: “Do you smell that?” Lucas said to the New York Times. “It’s the smell of money.”

    —–

    Jobs

    Google Capital, the growth equity fund backed by Google, is looking for an associate. The job is in Mountain View, Ca.

    —–

    Essential Reads

    Apple will stop selling Fitbit devices at its retail stores as it makes room for its own Apple Watch.

    LinkedIn‘s advertising business has “become the fastest growing business in LinkedIn’s history,” CEO Jeff Weiner tells Ad Age, adding, “I don’t mean the fastest growing marketing-solutions business. I mean the fastest growing business, period.”

    HBO has finally decided to offer a standalone broadband version of its service beginning next year, but it’s likely to come at a cost to parent Time Warner.

    —–

    Detours

    The ump who blew the ’85 World Series wants a rematch.

    Some perfume commercial.

    As hourly wages for entry level work fall, more parents extend the deadline for their kids’ financial independence.

    —–

    Retail Therapy

    An upscale portable brew kit, for the urbanite who likes to hike.

    Is it us or does this have disaster written all over it?

    Connie

  • One Company Where Data Breaches are Welcome News

    steve jilllingsWhen it comes to data breaches, the headlines this year have become a blur, with the vulnerabilities of one corporate giant after another – American Express, eBay, Home Depot, JPMorgan Chase, Target – put on full display for the world. The pace of breaches has been accelerating, too, with roughly 600 data breaches in 2013 and what experts expect will be 800 breaches by the end of this year.

    The trend is lousy for consumers, but it’s exceedingly positive for TeleSign, a 10-year-old, L.A.-based company that handles new account verification and two-factor authentication services for hundreds of huge properties, including nine of the 10 biggest U.S.-based web companies.Yesterday, StrictlyVC caught up with TeleSign CEO Steve Jillings to learn more about his business – and whether TeleSign, which closed on roughly $50 million in funding in July, might ever raise another round from private investors. Our chat has been lightly edited for length.

    You handle crucial authentication services for some of the biggest, savviest tech companies in the world. Why is this something they’re outsourcing?

    We’re in a business that’s easy to do badly and incredibly hard to do well. A lot of the big tech companies have users in every corner of the world. We’re localized in 87 different languages and deliver authentication events into more than 200 countries and territories – places I’ve never heard of. And our 250 employees — roughly half of whom are in engineering – are focused on authentication 24/7. It’s like asking, “Why aren’t you generating your own power?” Because you can flip a switch and it just works.

    Who are your most direct competitors?

    Our biggest competitive set are companies that do try doing it themselves. A lot of messaging companies that offer up cheap messaging feeds tell their clients that it’s easy to make work and here’s how you do it. We get lots of customers who eventually give up and outsource the entire thing to us. With 20 or 30 people, you just can’t get on top of it. Making this stuff work globally, using messaging as a delivery platform, the complexities are difficult.

    You’re talking about delivering PIN codes as part of the two-factor authentication process. I sign in to Twitter, it asks me for my password, then shoots a code to my phone to ensure that I’m who I say I am.

    Exactly. We deliver access PIN codes, and we deliver the bulk of them through SMS or in a voicemail, and now we’re starting to deliver them through mobile authentication apps.

    People think when you send an SMS, it simply, magically arrives at the other end, but there are many things that can go wrong using the telco layer. And if a customer is waiting on a PIN code that doesn’t arrive, you have a pretty unhappy customer.

    Apple and others are starting to do more with biometrics to authenticate users. Could biometrics put you out of business?

    Face recognition and voice stuff is cool, but that’s about as far as it goes. Biometrics has been around for years, but you probably can’t name one biometric company that’s been successful or gotten to any degree of scale. Voice has too much latency. Facial [biometrics] is getting better, but it’s nowhere near prime time. We think behavioral biometrics is interesting, but that’s also super early. We’re integrating some aspects of biometrics in our stack as incremental data points, but to say it can replace what we do would be a stretch.

    How do you make two-factor authentication easier, so that more people take advantage of it?

    Well, a lot of our clients are now looking at it and saying they’re going to make it mandatory, meaning it will become an opt-out feature rather than opt-in. But we’re also very focused on reducing user friction. It won’t be long before the user experience will be simpler, so that when someone who has registered an account comes back [to use it], we’ll be able to authenticate them based on information that they know, what we know about their device, and their behavior.

    You’ve said in other interviews that your revenue is doubling every year, that it was $24 million in 2012, $50 million last year, and that it’s on track to double again this year. So what’s next? Are you thinking about an IPO? Might you raise more private capital?

    We’ve raised $78 million, including $50 million this summer, and most of that’s still in the bank. The only scenario where we’d raise more now is if we had the opportunity to acquire a company that we couldn’t absorb [with our current resources]. There are a lot of interesting technology companies out there that will struggle to get to scale but that have technology that could be additive to the things we’re doing, and we can get technology in front of the biggest companies in the world in no time at all.

    In the meantime, our goal is to be IPO ready by the end of 2015. We’ll financially be at the scale that we could go public. We think five quarters away is good timing for us. But right now, it’s more of a discipline thing than a hard-and-fast thing.

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

    Related articles

    Connie

    , , , , ,

  • StrictlyVC: October 15, 2014

    Good Wednesday morning, everyone! (Web visitors, here’s an easier-to-read version of today’s email.)

    —–

    Top News in the A.M.

    There’s a new security vulnerability called Poodle that looks to have bite, reports Wired.

    If Republicans win back the Senate come Election Day, that power shift could shake up tech policy in a handful of ways, reports the Washington Post.

    Fitbit fans, rejoice. The company is about to introduce two new activity trackers, says Gizmodo.

    —–

    Saying Goodbye to Age-Driven Lists

    Last week, Fortune released its annual “40 under 40” list, and, as is always the case, writes its assistant managing editor, there was blowback about who was featured. One complaint about this year’s list is that there are just 15 women, which, she acknowledges, is “not parity – far from it.” However, she still defends Fortune’s reasoning, saying the business achievements of women under age 40 don’t match men of the same age group.

    The silver lining, continues the editor, is that “when you look at women between 40 and 44, the universe of powerful women explodes in number — and their roles are much bigger. The sweet spot for women in business, I would argue, is ages 40 to 44.”

    Maybe we’re supposed to slow clap here. Instead, we’d like to propose to Fortune and other outlets that they stop ranking businesspeople by age. Age lists are absurd on almost ever conceivable level.

    If you’re still in your twenties, you might not appreciate how weird it is that leading business publications celebrate professionals based on the year in which they were born. But it’s a fairly ghoulish obsession and worse, it feeds into society’s growing disregard for everyone over the age of 40.

    That’s a whole lot of people. According to U.S. Census Bureau figures from 2010, 30.6 million Americans, or roughly 10 percent of the population fell between the ages of 18 and 24 years, while 82.1 million or 26.6 percent fell between 25 and 44 years of age and roughly the same amount of people were between the ages of 45 and 64 years old.

    It isn’t fashionable to care about age diversity. Google didn’t disclose its employees’ ages in its diversity report. Neither did Facebook, Yahoo, LinkedIn or Pinterest, and there wasn’t much of an uproar about the subject. Everyone was too focused on how white and male-dominated each company appears to be.

    And, people like lists; they drive traffic and ad revenue. We get it.

    But the relentless focus of Silicon Valley and the broader business press on wunderkinds is discrimination, pure and simple. It’s also terrible for business given the skills of older employees and entrepreneurs.

    In Fortune’s postmortem about its “40 under 40” list, its editor proposes numerous reasons for the “long list of incredibly powerful women in their early 40s,” pointing to women’s busy early childcare years, as well as the comparatively thin numbers of female entrepreneurs as compared with men. She closes by saying it’s her hope that “one day the 40 under 40 [list] will reach parity.”

    Our hope is that Fortune spends a little less time worrying about business leaders’ birthdays when celebrating business leaders. That’s the real problem. And it’s remarkably easy to avoid.

    —–

    New Fundings

    Bicycle Therapeutics, a five-year-old, Cambridge, England-based developer of peptides for use in fighting cancer and other diseases, has raised $31.9 million in new funding from return backers Atlas Venture, Novartis Venture Fund, SR One, SV Life Sciences and Astellas Venture Management. The company has now raised around $38 million altogether.

    Brainly, a five-year-old, Krakow, Poland-based social learning network designed to help students help each other with schoolwork, has raised $9.4 million in Series A funding led by General Catalyst Partners, with earlier investors Point Nine Capital and Runa Capital participating. Brainly is planning to use part of its fresh capital to open an office in New York City.

    Columbia Green Technologies, a Portland, Or.-based maker of so-called green roofs, has closed a combined debt and equity financing round led by Yaletown Venture Partners, along with several existing investors. The size of the round is undisclosed.

    Cratejoy, a nearly two-year-old, Austin, Tx.-based company that’s trying to “democratize” subscription business technology, has raised $4 million in Series A funding to launch its platform that companies can use to start their own e-commerce subscription services. CRV led the funding round, which brings the company’s total funding to $6.2 million. Others of its investors include ACE Venture Fund, Andreessen Horowitz, Capital Factory, Maverick Capital, Start Fund, SV Angel and Y Combinator.

    DNAtrix, a nine-year-old, San Diego-based oncolytic immunotherapy company, has raised $20 million in Series B funding led by Morningside Ventures, with participation from earlier backers Mercury Fund and Targeted Technology Fund. The company has now raised roughly $40 million, shows Crunchbase.

    Drop, a two-year-old, New York-based company whose interactive recipe platform works with a free app and connected kitchen scale, has raised $2 million in seed funding co-led by Frontline Ventures and Innovation Works, with additional investors including PCH, VegasTechFund and WI Harper Group.

    EverTrue, a four-year-old, Boston-based social donor management platform (it helps hundreds of organizations identify alumni and other donors), has raised $8 million in Series B funding led by Bain Capital Ventures, with participation from Silicon Valley Bank. The funding brings the company’s total financing to $14.5 million.

    Geofeedia, a three-year-old, Chicago-based company whose software helps organizations filter and analyze geo-tagged social media content in real-time across multiple sources, has raised $3.5 million in Series A funding led by Hyde Park Venture Partners, with Blue Vista Ventures, Glade Brook Capital, and numerous individual investors like former ExactTarget CMO Tim Kopp, participating.

    Guahao, a four-year-old, Weiji, China-based online medical services platform, has raised more than $100 million led by Tencent Holdings. TechNode has much more here.

    Hello Doctor, a nearly two-year-old, Tel Aviv-based mobile application that addresses specific needs of people in complex medical conditions, has raised $700,000 in seed funding from unidentified investors said to come from Google, Facebook and the pharmaceutical industry.

    Loopd, a year-old, San Francisco-based company that makes location-tracking tools for conferences, has raised $1 million in seed funding, including from venture capitalist Tim Draper, Salesforce CEO Marc Benioff and Vuclip co-founder Xinhui Niu. TechCrunch has more here.

    Minerva Project, a two-year-old, San Francisco-based university that combines online learning with dorm life (students live together and classes are face-to-face, facilitated by faculty on a proprietary live video platform), is raising new $70 million in Series B funding, reports Venture Capital Dispatch. The round is being co-led by TAL Education Group, a China-based, publicly traded tutoring services provider for schoolchildren, along with the venture firm ZhenFund and the private equity investor Yongjin Group. Benchmark, which had provided the company with $25 million in Series A funding in 2012, is also participating in the new round.

    Nara Logics, a four-year-old, Cambridge, Ma.-based artificial intelligence company, has raised $6 million in Series A-2 financing from previous investors and new investors, including .406 Ventures. The company has now raised $13 million in Series A funding, including from the investment advisory firm Account Management of Boston. BostInno has more here.

    Orderbird, a 3.5-year-old, Berlin-based company that makes iPad point-of-sales systems for bars, restaurants and clubs, has raised $10 million in Series B funding led by ConCardis, with other, undisclosed investors participating. The company has now raised $14.4 million to date, shows Crunchbase.

    Ozy Media, a two-year-old, Mountain View, Calif.-based online media company, has raised $20 million in Series A funding from German publisher Axel Springer. The company has now raised $25.4 million altogether, including from Ron Conway and Larry Sonsini.

    Quantance, a six-year-old, San Mateo, Ca.-based company whose semiconductors increase the data speed and battery life of mobile devices, has raised $6 million in new fund, according to an SEC filing that lists a $9 million target. The company had previously raised $44.8 million, including from DoCOMo Capital, Granite Ventures, InterWest Partners, and TD Fund, shows Crunchbase.

    Rigontec, a 10-month-old, Bonn, Germany-based developer of RNA-based immunotherapeutics used to treat cancer and viral diseases, has raised about $12 million (€9.45 million) in Series A funding co-led by Wellington Partners and Boehringer Ingelheim Venture Fund, with NRW Bank and High-Tech Gründerfonds participating.

    Risk I/O, a three-year-old, Chicago-based vulnerability threat management platform, has raised $4.5 million in Series A funding led by Costanoa Venture Capital, with participation from return backers USVP, Tugboat Ventures and Hyde Park Angels. The company has raised $10.5 million to date.

    S2C, an 11-year-old, San Jose, Ca.-based developer of SoC/ASIC prototyping systems, has raised $4.6 million in Series C funding co-led by GVT Fund and Industrial Technology Investment Corp.

    Selecta Biosciences, a six-year-old, Watertown, Ma.-based company that helps make other biologic drugs on the market safer, has raised $20 million from new investors I2BF, Eminent Venture Capital, and an undisclosed backer, along with earlier investors Polaris Partners, Flagship Ventures, OrbiMed Advisors, NanoDimension, Rusnano, and Leukon Investments. The company has now raised $78.6 million altogether. Xconomy has more here.

    Thismoment, a 6.5-year-old, San Francisco-based digital marketing company that helps brands distribute user-generated content to engage their customers, has raised $17.6 million in Series D funding from earlier investors Sierra Ventures, Trident Capital and UMC Capital. The company has now raised $52 million to date, shows Crunchbase.

    —–

    New Funds

    Canaan Partners, the 27-year-old venture firm, with offices in the U.S., Israel, and India, has officially filed the paperwork required of its tenth fund. According to an early August report in peHUB, the firm is raising a $600 million fund with a $650 million cap. The firm closed its ninth and most recent fund with $600 million in 2012.

    CommonAngels, a Boston-area angel investment group, has closed its fourth fund at $26.5 million, up from its previous, $13 million fund, raised in 2010. Xconomy has more here.

    Lightbox, a Mumbai, India-based venture firm, has closed its newest fund with Rs 600 crore. The firm says it was initially targeting $90 million, but raised the target due to increased demand. The Times of India has more here.

    Osage University Partners, a Bala Cynwyd, Pa.-based venture firm that focuses on startups that are commercializing university research, is looking to raise up to $200 million for its second fund, according to an SEC filing that shows it has already raised roughly $151 million.

    Vintage Investment Partners, an Israel-based investment firm, has closed its latest fund of funds with $144 million of commitments, reports VentureWire, which says that Vintage is moving beyond its near-exclusive focus on Israel and now plans to invest in Israel, the U.S., and Europe.

    —–

    People

    Henrique De Castro, the former Google advertising executive who joined Yahoo as COO under Marissa Mayer and was later sent packing, $100 million under arm, is on the hunt for a new job, says Business Insider. Reportedly, De Castro has already met with a couple high profile venture capital firms; he’s also interested in joining the board of a startup, or becoming a startup advisor.

    Facebook COO Sheryl Sandberg and her husband, SurveyMonkey CEO Dave Goldberg, are leaning into a new home in Menlo Park, reports the Silicon Valley Business Journal. More here.

    Facebook CEO Mark Zuckerberg is giving $25 million to a foundation tied to the U.S. Centers for Disease Control and Prevention foundation to fight the spread of Ebola, he announced in a Facebook post yesterday, characterizing the Ebola outbreak as at “a critical turning point.”

    —–

    Jobs

    Saudi Aramco Energy Ventures, a unit of the Saudi Arabian Oil Company, is looking to hire a portfolio manager. The job is in Dallas. (H/T: Iris Dorbian)

    —–

    Data

    Datafox takes a look at the nearly 60 privately held companies now valued at more than $1 billion, breaking them down by top investors, sectors, and more. (If you click through its slideshow, you’ll find a downloadable spreadsheet that the firm has assembled and might be worth saving.)

    —–

    Essential Reads

    Snapchat’s real business plan. Hint, it’s not ads.

    Another day, another UberX horror story.

    Apple and Facebook now pay for employees wanting to freeze their eggs to help them (work) carve out the (work) lives they want (work). (Kidding. Sort of.)

    —–

    Detours

    Stunning architectural photography.

    Inside the tallest condo in the Western Hemisphere.

    Martha Stewart and Gwyneth Paltrow are going to have to take it outside soon.

    —–

    Retail Therapy

    Put your old iPad to good use. Turn it into a foosball table.

    Connie

  • Saying Goodbye to Age-Driven Lists

    Lgiphy-facebook_sast week, Fortune released its annual “40 under 40” list, and, as is always the case, writes its assistant managing editor, there was blowback about who was featured. One complaint about this year’s list is that there are just 15 women, which, she acknowledges, is “not parity – far from it.” However, she still defends Fortune’s reasoning, saying the business achievements of women under age 40 don’t match men of the same age group.

    The silver lining, continues the editor, is that “when you look at women between 40 and 44, the universe of powerful women explodes in number — and their roles are much bigger. The sweet spot for women in business, I would argue, is ages 40 to 44.”

    Maybe we’re supposed to slow clap here. Instead, we’d like to propose to Fortune and other outlets that they stop ranking businesspeople by age. Age lists are absurd on almost ever conceivable level.

    If you’re still in your twenties, you might not appreciate how weird it is that leading business publications celebrate professionals based on the year in which they were born. But it’s a fairly ghoulish obsession and worse, it feeds into society’s growing disregard for everyone over the age of 40.

    That’s a whole lot of people. According to U.S. Census Bureau figures from 2010, 30.6 million Americans, or roughly 10 percent of the population fell between the ages of 18 and 24 years, while 82.1 million or 26.6 percent fell between 25 and 44 years of age and roughly the same amount of people were between the ages of 45 and 64 years old.

    It isn’t fashionable to care about age diversity. Google didn’t disclose its employees’ ages in its diversity report. Neither did Facebook, Yahoo, LinkedIn or Pinterest, and there wasn’t much of an uproar about the subject. Everyone was too focused on how white and male-dominated each company appears to be.

    And, people like lists; they drive traffic and ad revenue. We get it.

    But the relentless focus of Silicon Valley and the broader business press on wunderkinds is discrimination, pure and simple. It’s also terrible for business given the skills of older employees and entrepreneurs.

    In Fortune’s postmortem about its “40 under 40” list, its editor proposes numerous reasons for the “long list of incredibly powerful women in their early 40s,” pointing to women’s busy early childcare years, as well as the comparatively thin numbers of female entrepreneurs as compared with men. She closes by saying it’s her hope that “one day the 40 under 40 [list] will reach parity.”

    Our hope is that Fortune spends a little less time worrying about business leaders’ birthdays when celebrating business leaders. That’s the real problem. And it’s remarkably easy to avoid.

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

    Connie

  • StrictlyVC: October 14, 2014

    Hello, dear readers, hope your Tuesday is off to a fine start! (Web visitors, this version of today’s email is easier to read than what you see below.)

    —–

    Top News in the A.M.

    Ireland announced today that it’s changing its tax code and, in the process, closing one of the world’s most famous corporate-tax loopholes.

    If you thought that Dropbox was hacked last night, think again, says the company. “Recent news articles claiming that Dropbox was hacked aren’t true. Your stuff is safe. The usernames and passwords referenced in these articles were stolen from unrelated services, not Dropbox.”

    —–

    Why You Can Probably Forget About Going Public in 2014

    You may have noticed: The market has been hitting the skids as investors grow nervous over a broadening array of concerns from Ebola to expected interest rate hikes. In fact, as of the market’s close yesterday, U.S. stock indexes had fallen nearly 10 percent since the beginning of last week — nearly enough to constitute an official correction.

    Things aren’t looking so great for recent tech issuers, either. Despite their highly celebrated IPOs, the shares of Yodlee, Wayfair, Hubspot and even Alibaba are down from their first day “pops,” and that “doesn’t work for IPO investors,” notes Kathleen Smith, a principal of Renaissance Capital, which manages an exchange-traded fund that tracks recent IPOs. “All these IPOs are not showing post first-day performance, which makes it hard for [other, still-private companies] to come out.”

    The IPO market is tied to the whims of the stock market, of course, but there are specific reasons that new tech stocks are sinking, says Smith. First and foremost, she says, the issue is linked to who, exactly, is acquiring new shares. “All this year, we’ve had a different set of buyers. It’s not the individual investors or small cap managers who, 10 years ago, might have talked up the stocks they were buying. They aren’t big commission generators for Wall Street, so it’s harder for them to get allocations,” she says.

    Smith thinks new issuers have been pricing their shares too richly, too. “It’s all about price discovery,” she says. “Public market investors aren’t tolerating excessive valuations. If companies think they come out at high valuations and watch their shares continue to rise, well, we’re not in that kind of market.”

    There’s also the so-called Alibaba effect to consider, notes John Fitzgibbon, founder of the research firm I.P.O. Scoop, which tracks IPOs. He compares the anticipation that surrounded the Chinese e-commerce giant’s September 19 IPO to what happened when both Facebook and Google went public, saying that in all three cases, public market investors have struggled with what next to get excited about. “The circus has left town,” says Fitzgibbon. “Alibaba was a one-day event. And now we’re back to the reality of the stock market, which is performing under the shadow of the [broader] stock market.”

    Fitzgibbon characterizes the market’s recent gyrations as a “healthy, sobering pullback.” Stocks are “bought on hype, held in greed and sold in fear. That’s your cycle,” he says, while declining to speculate about whether investors are likely to buy, hold, or continue to sell in the immediate future.

    Smith sounds more convinced that continued trouble lay ahead. “Private investors must be feeling nervous,” she says. “I know Box has talked about coming public. I see big companies in the pipeline. And a lot of them, I wonder about.”

    —–

    New Fundings

    2nd Watch, a four-year-old, Seattle-based cloud IT operations company that helps its users leverage Amazon Web Services, has raised $10 million in C1 funding, roughly 10 months after closing its $23 million Series C round last year. Top Tier Capital Partners led the new funding, with participation from earlier investors Columbia Capital and Madrona Venture Group. The company has now raised $37.6 million altogether.

    C-B4, a six-year-old, Herzliya, Israel-based predictive analytics company, has raised $6 million in funding from Sequoia Capital. Geektime has more here.

    CarTrade, a five-year-old, Mumbai, India-based online marketplace for new and used cars, has raised roughly $30 million in new funding led byWarburg Pincus, with earlier investors Canaan Partners and Tiger Global participating. Tech in Asia has more here.

    Checkr, a six-month-old, San Francisco-based startup that expedites background checks on new hires and delivers them in bulk to businesses, has raised $9 million in funding led by Accel Partners, with Khosla Ventures, SV Angel, Data Collective, Google Ventures, and a long list of notable individual investors participating. Venture Capital Dispatch has more here.

    EcoVent, a two-year-old, Boston-based startup whose wireless vents open or close based on the real temperature and humidity conditions of a room, has raised $2.2 million in a seed round via an AngelList Syndicate. The company has now raised $3.3 million to date, including from Tony Chen, Stewart Alsop, and TechStars, shows Crunchbase.

    Footmarks, a two-year-old, Bellevue, Wa.-based mobile retail app that delivers personalized content, including about deals and sales, to in-store customers, has raised $1.85 million in seed funding. Shawn Englund, the founder and former CEO of Learn Live Technologies, led the round. The company has raised $1.9 million to date.

    Fullbridge, a four-year-old, Cambridge, Ma.-based accelerated business education program, has raised $5 million in new funding from undisclosed high-net-worth individuals, along with earlier backer GSV Capital. The company has now raised $12.5 million to date, shows Crunchbase.

    Invitae, a two-year-old, San Francisco-based company whose genetic tests screen for hereditary disorders, has raised $120 million from a long list of new investors, including The Broe Group, Decheng Capital, Deerfield Management, OrbiMed, Perceptive Advisors, Rock Springs Capital and Wellington Management Company. Earlier investors Casdin Capital, Genesys Capital, Genomic Health, Randy Scott, Redmile Group and Thomas McNerney & Partners also joined the round. The company has now raised $207 million altogether.

    Loggly, a five-year-old, San Francisco-based company whose cloud-based log management software helps its customers track machine-based events in their IT infrastructure, has raised $15 million in Series C funding led by Harmony Partners, with previous investors participating. The company has now raised $43.3 million altogether, including from Matrix Partners, Trinity Ventures, Data Collective, True Ventures, and Cisco.

    Magic Leap, a three-year-old, Hollywood, Fla.-based still-stealth company that says its hardware and software will deliver “cinematic reality,” is raising up to $500 million in a new round that looks to involve a consortium of investors, including Google and Andreesseen Horowitz, sources tell Recode. The company disclosed back in February that it had raised $50 million from undisclosed investors for its “proprietary human computing interface technology.”

    Melotic, a months-old, Hong Kong-based cryptocurrency technology company, has raised $1.2 million in seed funding led by Ceyuan Ventures, a China-based venture firm. Other investors to participate in the round include Lightspeed China; Barry Silbert’s Bitcoin Opportunity Corp.; 500 Startups; and Marc Van Der Chijs, co-founder of the popular Chinese video sharing website Tudou.com.

    Pluto.TV, a months-old, L.A.-based web-video aggregator that organizes streams into about 100 channels, such as music, news, and sports, has raised $500,000 from satellite broadcaster BSkyB. The company had raised an earlier round of funding, including from United Talent Agency CEO Jeremy Zimmer and Terry Semel’s Windsor Media. Variety has more here.

    Raze Therapeutics, a new, Cambridge, Ma.-based biotechnology company that’s developing oncology therapeutics that target metabolic pathways to prevent tumors from surviving and growing, has raised $24 million in Series A funding from Atlas Venture, MPM Capital Management, MS Ventures, Partners Innovation Fund, Astellas Venture Management, and Novartis.

    Speakr, a four-year-old, L.A. based service that connects brands with influential people on social-media networks and was formerly known as twtMob, has raised $2.9 million in seed funding led by Toba Capital, with participation from Allegro Venture Partners and individual investors. The company has now raised $3.8 million to date.

    VerbalizeIt, a three-year-old, New York-based language translation startup, has raised $830,000 in seed funding from FG Angels, the angel syndicate of Foundry Group; Galvanize Ventures; and individuals, including Daniel Saul and Walter Winshall. The company had earlier raised $1.4 million in funding from Bullet Time Ventures and others. Venture Capital Dispatch has the story here.

    Vyu, a 10-month-old, L.A.-based social content app that helps users follow and share their favorite TV shows and to discover new ones, has raised $825,000 in seed funding led by Jabbar Internet Group, with other, unnamed investors participating.

    —–

    New Funds

    Life.Sreda, a two-year-old, Moscow-based venture firm focused on financial technology startups (from seed- to later-stage), is raising a $100 million second fund as it plans to shift the vast majority of its investments to U.S. and European startups, reports VentureWire. The firm’s newest investments include Scorista.ru, a Russian online credit assessment service for micro finance institutions that raised an undisclosed amount of seed funding last month, and SumUp, a Dublin, Ireland-based mobile point-of-sale company that raised $13 million in Series C funding in August.

    —–

    IPOs

    Good Technology, the mobile security startup, is postponing its IPObecause of worsening market conditions.

    As of last week, a couple of Bay Area biotech companies were planning to test the IPO market this week. We’re guessing that will change; stay tuned.

    —–

    Exits

    Cloudscaling, an eight-year-old, San Francisco-based cloud-computing startup, is being acquired by EMC Corp. for less than $50 million, reports Bloomberg. Cloudscaling had raised $14 million from investors, including Trinity Ventures, Juniper Networks, and Seagate Technology, shows Crunchbase.

    —–

    People

    Ben Bayat has joined the Oakland, Ca.-based venture firm Illuminate Ventures as a senior associate. Bayat, who will focus on enterprise cloud and mobile opportunities, was previously head of West Coast sales for IBM’s networking clients. He also recently nabbed his MBA from the UC Berkeley Haas School of Business.

    Looks like Microsoft cofounder Bill Gates and his family may be spending more time in Southern California. Reports say Gates, whose daughter jumps horses competitively, just acquired a 229-acre horse ranch in San Diego.

    Dorian Satoshi Nakamoto, the man Newsweek claimed was the apparent founder of Bitcoin, is raising money in order to sue Newsweek over the piece.

    Google‘s executive chairman Eric Schmidt tells EU policy makers in Berlin that Google is no monopoly, oh no. “If you are looking to buy something, perhaps a tent for camping, you might go to Google or Bing or Yahoo or Qwant, the new French search engine. But more likely you’ll go directly to Zalando or Amazon . . . last year almost a third of people looking to buy something started on Amazon — that’s more than twice the number who went straight to Google.”

    —–

    Jobs

    Qualcomm Ventures is looking for a financial analyst. The job is in San Diego.

    —–

    Data

    CB Insights just released its third quarter venture capital activity report. You can click through to read its many findings here. (Note: to download the entire 114 pages, you have to be a subscriber.)

    Meanwhile, Gil Dibner, a partner at DFJ Espirit in London, has pulled together some third-quarter data about venture capital in Europe and Israel. (“I decided that I wasn’t happy with any of the available data sources on venture capital deals” about either place, he writes.) Here’s what he found.

    —–

    Essential Reads

    Google is introducing a new Express membership, similar to Amazon Prime, that costs $95 per year or $10 per month.

    There’s Product Hunt. Now there is Closed Club, too (though we kind of prefer Product Grunt).

    —–

    Detours

    Why private donations aren’t helping America’s poor.

    Airplanes, computers, and the human factor, in this month’s Vanity Fair.

    Life lessons from Larry David.

    —–

    Retail Therapy

    Halloween is fast approaching. Time to buy a costume for your dog. (This one is also terribleamazing.)

    Connie

  • Why You Can Probably Forget About Going Public Any Time Soon

    saynotoiposYou may have noticed: The market has been hitting the skids as investors grow nervous over a broadening array of concerns from Ebola to expected interest rate hikes. In fact, as of the market’s close yesterday, U.S. stock indexes had fallen almost 10 percent since the beginning of last week — nearly enough to constitute an official correction.

    Things aren’t looking so great for recent tech issuers, either. Despite their highly celebrated IPOs, the shares of Yodlee, Wayfair, Hubspot and even Alibaba are down from their first day “pops,” and that “doesn’t work for IPO investors,” notes Kathleen Smith, a principal of Renaissance Capital, which manages an exchange-traded fund that tracks recent IPOs. “All these IPOs are not showing post first-day performance, which makes it hard for [other, still-private companies] to come out.”

    The IPO market is tied to the whims of the stock market, of course, but there are specific reasons that new tech stocks are sinking, says Smith. First and foremost, she says, the issue is linked to who, exactly, is acquiring new shares. “All this year, we’ve had a different set of buyers. It’s not the individual investors or small cap managers who, 10 years ago, might have talked up the stocks they were buying. They aren’t big commission generators for Wall Street, so it’s harder for them to get allocations,” she says.

    Smith thinks new issuers have been pricing their shares too richly, too. “It’s all about price discovery,” she says. “Public market investors aren’t tolerating excessive valuations. If companies think they come out at high valuations and watch their shares continue to rise, well, we’re not in that kind of market.”

    There’s also the so-called Alibaba effect to consider, notes John Fitzgibbon, founder of the research firm I.P.O. Scoop, which tracks IPOs. He compares the anticipation that surrounded the Chinese e-commerce giant’s September 19 IPO to what happened when both Facebook and Google went public, saying that in all three cases, public market investors have struggled with what next to get excited about. “The circus has left town,” says Fitzgibbon. “Alibaba was a one-day event. And now we’re back to the reality of the stock market, which is performing under the shadow of the [broader] stock market.”

    Fitzgibbon characterizes the market’s recent gyrations as a “healthy, sobering pullback.” Stocks are “bought on hype, held in greed and sold in fear. That’s your cycle,” he says, while declining to speculate about whether investors are likely to buy, hold, or continue to sell in the immediate future.

    Smith sounds more convinced that continued trouble lay ahead. “Private investors must be feeling nervous,” she says. “I know Box has talked about coming public. I see big companies in the pipeline. And a lot of them, I wonder about.”

    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: October 13, 2014

    Happy Monday/Columbus Day/Indigenous Peoples’ Day, everyone. Hope it’s off to a great start.:) (Web visitors, here’s an easier-to-read version of today’s email.)

    —–

    Top News in the A.M.

    The launch of Apple Pay is upon us.

    A production company is trying to make a reality show about venture capitalists. We’ll be waiting on tenterhooks for this one.

    —–

    Hiten Shah: Mr. Tough Love

    I’m sitting at a cafe in San Francisco’s North Beach neighborhood with Hiten Shah, and he’s telling me what’s right and wrong with StrictlyVC. The good news: it appears to have so-called product-market fit. The bad: its site is far too basic, though Shah puts it much more charitably. “It’s not like a criticism, but let’s make the design better. We can fix it with just some little tweaks.”

    In all likelihood, I’m one of at least five new people who will, over the course of the week, sit down with Shah, a three-time entrepreneur and occasional angel investor who has gained renowned in the Bay Area as an active startup advisor, and who is often sought out as a “growth hacker.” (Shah’s two most recent companies, bootstrapped Crazy Egg and venture-backed KISSmetrics, both help businesses measure and optimize their sites, their social and mobile applications, and their revenue.)

    I’ve sought him out for a latte and some light conversation. Our conversation has been edited for length.

    You spend a lot of time with entrepreneurs, many of whom are thinking about growth. When is it the right time to start obsessing over it?

    Well, first, I think growth hacking and all these tactics that people are sharing are good, but there isn’t enough conversation around the work that you have to do first. People tend not to spend a lot of time on foundational stuff before they start trying all kinds of random things. As for when to start thinking about growth, the common adage around here is that you want to think about it after you’ve hit product-market fit, meaning that enough of your customers already love what you’re doing that lots of other people in the world would probably benefit from your product.

    Is there a percentage of customers who have to really love a product? What’s the tipping point?

    There’s all kinds of market research around this. One stat suggests that if 12 out of 30 people really love your product – meaning they’d be very disappointed if it disappeared – you have what resembles product market fit. A small group can be very impactful in helping you understand [your product].

    You make occasional angel investments, including in the shared inbox app Front, which just raised $3.1 million in seed funding. Are bigger seed rounds the way to go? Any thoughts on this newish trend of serial seed rounds?

    The advice I always give people is to hold off on trying to raise money until they’ve removed as much risk as possible from their product. The startups they’re competing with today are much farther along than they were seven to 10 years ago.

    On the debate over whether companies should do seed rounds and [whether two rounds dilutes founders too much], it’s entrepreneurs’ fault. Maybe they received bad advice, but it’s more likely that they’ve overspent.

    Overspent on rent? Employees?

    Sometimes they spend money on marketing before they have product-market fit, or they hire too many people too fast, or they pay too much in rent.

    I’d think the latter would be particularly tricky, given the steep price of office space in San Francisco specifically, where so many startups want to be.

    I do think rent is an issue, but the talent pool here – from executives to [lower level staffers] — is higher than anywhere else right now, so if you’re not here, you have to offer all kinds of crazy things or else be the number one company in your area, which is hard. In San Francisco, you can be a [mid-tier] company and still hire a lot of great people. Luckily, there are lots of shared workspace options for startups, like Heavybit Industries.

    I think a bigger issue is a lack of education around operating an early-stage business.

    Why don’t you write a handbook?

    I don’t like writing. I’m doing a 30-day blogging challenge. I’m on day four and I’m still dreading what I’m going to write about.

    —–

    New Fundings

    BizEquity, a four-year-old, Wayne, Pa.-based company that provides business valuation services, has raised $5.1 million in funding from Frost Brooks, a new London-based private equity firm.

    Gainsight, a five-year-old, Mountain View, Ca.-based company that helps businesses manage customer accounts in the cloud, has raised $25 million in Series C funding led by Bessemer Venture Partners and Lightspeed Venture Partners. The company has raised $54.1 million altogether, shows Crunchbase, including from Salesforce Ventures, Summit Partners, Bain Capital Ventures, and Battery Ventures.

    Jukin Media, a five-year-old, L.A.-based multiplatform media company, has raised $1.2 million from investors including Bertelsmann Digital Media and Mandalay Entertainment CEO Peter Guber. Earlier this year, Jukin raised $1 million from a group that included Disney’s Maker Studios.

    MindTickle, a three-year-old, Mountain View, Ca.-based company whose gamification products are used to train employees, customers and partners, has raised $1.8 million in seed funding backed by Accel Partners and unnamed angel investors.

    Monsieur, a 1.5-year-old, Atlanta-based company that makes a robotic bartender, has raised $2 million in seed funding from BIP Capital, with participation from Base Ventures, Paul Judge, TechSquare Labs, NFL linebacker Derrick Morgan, and Glen Davis of the L.A. Clippers.

    Simplestream, a four-year-old, London-based provider of multi-platform live streaming and “catch-up” TV services has raised “substantial funding” from Beringea.

    Smartzer, a nearly two-year-old, London-based startup whose interactive video platform allows users to make purchases by clicking on video content, has raised $400,000 in seed funding from serial entrepreneur Jamie True and other, undisclosed individual investors. TechCrunch hasmore here.

    VoloMetrix, a three-year-old, Seattle-based business analytics company, has raised $12 million in Series B funding led by Split Rock Partners, with earlier investor Shasta Ventures participating. The company has raised $16.9 million to date, shows Crunchbase.

    Wahanda, a six-year-old, New York-based online health and beauty marketplace that helps users book appointments, has raised $26 million in funding from Recruit Strategic Partners, Fidelity Growth Partners Europe and Lepe Partners. The company has now raised $37.6 million to date, shows Crunchbase. TechCrunch has more here.

    —–

    New Funds

    Sequoia China is raising its fifth fund, according to a newly filed Form D that states the fund has yet to begin fundraising and that the amount it intends to raise is “indefinite.” Sequoia China had raised $200 million for its first fund in 2005; $250 million for its second fund in 2007; and $350 million for its third fund in 2010. The firm has been investing out out of its fourth fund, closed with $350 million in 2012. As Forbes noted in a profile of Sequoia China earlier this year, the “franchise firm” of 42-year-old Sequoia Capital on Sand Hill Road is very much its own outfit stylistically, including using a “big staff a la Andreessen Horowitz in Silicon Valley versus the still largely partner-driven style at Sequoia in the U.S.” The reasons why: the firm’s founding managing partner, Neil Shen, “believes in grooming young talent, sometimes taking associates and analysts straight out of business school.” The firm’s staff of roughly 50 is also seen as “critical” as “China’s market is harder to gauge, the books trickier to study.”

    SVB Capital has closed its seventh venture capital fund of funds at its $330 million hard cap, VentureWire reported on Friday.

    —–

    Exits

    Government Outreach, an 11-year-old, Pleasanton, Ca.-based company that eases communication between government agencies and citizens, including via iPhone apps, has been acquired by Accela, a 15-year-old, San Ramon, Ca.-based maker of civic engagement software. Government Outreach doesn’t appear to have raised outside funding. Accela has raised $50 million, most of it from the New York investment firm Bregal Sagemount.

    Subdelivery, an online food delivery service based in Brazil, has been acquired by Delivery Hero, the three-year-old, Berlin-based company that now runs a worldwide network of online food ordering sites. TechCrunch has more here.

    —–

    People

    Ryan Hoover, the 27-year-old founder of Product Hunt, is having a moment.

    —–

    Jobs

    Amazon is looking for a corporate development pro to add to its Amazon Web Services team. The job is in Seattle.

    AppDynamics, a very well-funded, six-year-old startup that develops application performance management software, is looking for a senior financial analyst. The job is in San Francisco.

    —–

    Data

    M&A activity for venture-backed startups hit $20.9 billion in the third quarter, the highest it’s been since the third quarter of 2000, according to VentureSource. Some other stats sure to thrill and terrify in equal parts: The number of third-quarter deals rose 9 percent from a year earlier while the amount raised increased by an astonishing 65 percent. Of the 139 deals sewn up in the third quarter, the median acquisition price was $75 million.

    Of the 115 healthcare accelerators in the world, 87 are in the U.S., and most of them are geared to digital health and under two years old, says venture capital investor and healthcare business consultant Lisa Suennen. More here.

    —–

    Essential Reads

    Twitter is joining the growing number of tech giants rushing into mobile payments. In fact, Reuters reports that one of France’s largest banks is teaming up with the social network this week to enable customers to transfer money via tweets.

    Venture capitalists return to backing science startups.

    Demographic trends for every big social network.

    —–

    Detours

    What happens when second graders are treated to a seven-course, $220 tasting meal.

    A celebrated bartender takes over The Mark Hotel in New York.

    —–

    Retail Therapy

    This isn’t your great, great, grandmother’s gramophone.

    Connie

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