• StrictlyVC: June 15, 2015

    Good Monday morning, everyone! Hope you had a wonderful weekend.

    Before we jump into things, as some of you already know, a little “personal news” of mine emerged Friday afternoon; I’ve joined TechCrunch as Silicon Valley Editor.

    The role will see me bolstering TC’s coverage of the money flowing into startups and I’m exceedingly happy about it. TechCrunch has a top-notch staff that I’m truly humbled to be joining. It’s also highly forward-thinking, as we’ve all seen in the past. Everyone at TC recognizes that this is a (now pretty big) community that’s important to me and valuable to you, and it’s very supportive of StrictlyVC’s continued growth, which I greatly appreciate. I think you will, too, given the extensive resources it will allow StrictlyVC to leverage.

    Note that in preparation for this new role at TechCrunch, I’m taking off two days at week end, so no SVC Thursday or Friday.

    Now back to our regularly scheduled programming.:)

    —–

    Top News in the A.M.

    China’s taxi app war is quickly growing more heated. Last week, we learned that Uber is raising $1 billion solely for its business in China. Now, Bloomberg is reporting that Didi Kuaidi — China’s largest taxi app company — is out to raise $1.5 billion at a $15 billion valuation.

    Alibaba plans to launch an online video streaming service in China later this summer called TBO, or Tmall Box Office, with content bought from China and other countries as well as made in-house. The idea: to emulate Netflix and HBO. Reuters has more here.

    That raid on the U.S. government’s personnel office likely included the theft of security-clearance information. Yikes. The breach, along with the Anthem data breach, reportedly pose indefinite threats of future harm, too.

    —–

    How Stanford Management Co. Sees the World (Brace Yourself, Israel)

    Last week, at the PreMoney Conference in San Francisco, veteran venture capitalist Heidi Roizen moderated a panel that asked institutional limited partners for their view of the world.

    The speakers each had unique insights, but the audience may have been particularly attuned to one – John Powers, who served as president and CEO of Stanford Management Company for nine years. (He left his post last year and remains “unpotted,” as he put it.) As Roizen noted in introducing Powers, Stanford is among the world’s most sought-after investors given the power of its imprimatur — not to mention the $25 billion it has to manage, roughly 5 percent of which it invests in venture capital.

    Luckily for attendees, Powers didn’t disappoint. In fact, he spoke candidly about a wide range of issues that may help capital-seeking venture firms better understand Stanford’s point of view, even while it’s likely to disappoint many of them. Here’s some of what he had to say:

    On whether or not Stanford is likely to reinvest in a firm it has backed previously:

    We’re looking at track record over time, and sticking pretty close to a roster of people who’ve been great VCs over a long period, because . . . there is a huge amount of persistence. It’s a brand business. It’s a business where the brand of the VC attracts the opportunity set. It’s sort of the only form of capital that I can think of that’s driven by brand attractiveness as opposed to price.

    On when and whether Stanford will invest in a new venture fund:

    We didn’t fund a lot of new venture funds over the course of my time there, but we did [invest] pretty steadily, every couple of years, in one or two new funds, [and] brandedness was the key. So what about this fund would lead us to think it can establish brandedness? That could come in the form of notorious founders. Andreessen Horowitz was branded day one because of the pedigrees of both Marc [Andreessen] and Ben [Horowitz]. The guys at Emergence Capital had a niche strategy that happened to be a large niche but was identifiable and you could see, okay, they can build a story around their early participation in and ownership of this view of the world. [We like that] as opposed to a general purpose, “We’re going to do a little software,  a little semis and hardware, and a little consumer” venture fund. It was much harder for us to see [how the latter types of funds could] get escape trajectory.

    On what Stanford worries about:

    The one thing you have to remember in venture is that a few outcomes can totally transform a fund. So whatever you do analytically to think, ‘These guys are going to get branded’ or whatever, stumbling into the right deal can transform a fund.

    That’s true, too, when you fire someone. If this guy’s long in the tooth, they’re not cutting it anymore, we’d like to fire them, you do that, [then] they come in with one home-run deal in the next fund and you look foolish in front of your board.

    On why Stanford isn’t keen on investing internationally:

    You’d invest internationally if you felt you were going to get better returns than domestically or if you felt that you were going to get something that diversified the stream of cash flows to you. So you go country by country.

    In very large measure, the Israeli venture community is the 51st state of the U.S. venture community; I think you don’t get superior returns over time or haven’t in general, and you don’t get diversification away from investing in a cybersecurity company in the U.S. So you’d go to Israel if you felt like you couldn’t gain access to the best stuff in the U.S. Therefore you were sub-optimizing but doing the best you could by investing in a very vibrant entrepreneurial community over there – just recognizing that it’s probably [not] going to match up over time with what Sequoia can do for you over here.

    China is very different. There are huge indigenous sources of demand, a massive reinvention of the economy; the streams of opportunity that you see there . . . may be emulative of, but not derivative of, what you get in the U.S. from a returns standpoint.

    India has been a bit of a confusing hybrid, with not the same level of indigenous demand [as China], though that appears to be changing to some degree.

    On being “cold-blooded”:

    Speaking from my former seat at Stanford, you have to be pretty cold-blooded. Are we better off spending time trying to get a little better allocation out of Sequoia in the next fund than we are flying around the Far East or something? [The answer, thinks Stanford, is yes.]

    ——

    New Fundings

    Aledade, a year-old, Bethesda, Md.-based company that partners with primary care physicians to provide everything they need to create and run an Accountable Care Organization (ACO), has raised $30 million in Series B funding led by ARCH Venture Partners, with participation from earlier investor Venrock. Forbes has more here.

    Codagenix, a four-year-old, Stonybrook, N.Y.-based software-based platform for vaccine design, has raised $2 million in Series A financing led by Topspin Partners. The company has now raised $3.8 million altogether.

    Doppler Labs, a two-year-old, N.Y.-based wearable technology company, has raised an undisclosed amount of funding from Live Nation Entertainment,Universal Music Group and WME. Among its first products: the Active Listening System, an in-ear system that uses two wireless buds and an app to let users control and personalize their live audio environment. The company is also running a Kickstarter campaign. More here.

    Homesuite, a 1.5-year-old Palo Alto, Ca.-based furnished rental platform, has raised $2.3 million in seed funding from Battery Ventures, Bessemer Venture Partners and Foundation Capital, with participation from GrubHub cofounder Mike Evans and renowned investor Pierre Lamond.

    Karma Recycling, a two-year-old, New Delhi, India-based electronic waste management and electronics buy-back company, has raised an undisclosed amount of funding from IIMA CIIE’s Infuse Ventures, one of the only clean tech-focused funds in India, and the global sustainability practice Environmental Resources Management.

    Milestone Pharmaceuticals, a 10-year-old, Montreal-based developer of cardiovascular drug therapies, has raised $17 million in Series B funding led by Domain Associates, with participation from earlier backers Fonds de solidarité FTQ, Pappas Ventures, BDC Capital, GO Capital, and iNovia Capital. The company has now raised $30 million altogether, shows Crunchbase.

    Moonlighting, an eight-month-old, Charlottesville, Va.-based on-demand, mobile jobs marketplace, has raised $1.9 million in funding led by The McClatchy Company, New Richmond Ventures, the Baltimore Angels and Millennial Media founder Paul Palmieri.

    PowWow Energy, a 2.5-year-old, Sunnyvale, Ca.-based SaaS startup that mines farmers’ utility billing information to track pump behavior, has raised $3 million in funding from the state of California, as well as funding from theUniversity of California Santa Barbara and UC Davis. Angel investors provided the remaining $700,000. More here.

    TripleLift, a three-year-old, New York-based programmatic native technology company, has raised $10.5 million in Series B funding led by Edison Partners. The company has now raised $16.6 million altogether, shows Crunchbase. Its earlier backers include True Ventures, iNovia Capital, Laconia Capital and NextView Ventures.

    Winko Games, a months-old, Barcelona, Spain-based studio that’s creating “hardcore” games on mobile, has raised $1.4 million in seed funding. Backers included London Venture Partners, Initial Capital, and Kibo Ventures. The company is planning to release its first game in the fourth quarter of this year.

    Yesware, a five-year-old, Boston- and San Francisco-based company whose sales acceleration platform helps streamline responses to prospects and customers, has raised $13.3 million in funding led by Foundry Group, with participation from Battery Ventures, Google Ventures, Golden Venture Partners and IDG Ventures. The company has now raised $33 million to date, shows Crunchbase.

    Zane Benefits, a nine-year-old, Salt Lake City, Ut.-based maker of individual health insurance reimbursement software for small businesses, has raised $1.5 million in funding from Kickstart Seed Fund and Royal Street Investment and Innovation Center.

    Zhong, a two-year-old, Shanghai-based online insurance seller, has raised 5.78 billion yuan ($931.3 million) in its first round of fundraising, including from Morgan Stanley; China’s top domestic investment bank, China International Capital Corp; and private equity firm CDH Investments. Zhong was founded by Alibaba Group Holding’s executive chairman Jack Ma, Tencent Holdings chairman Pony Ma and Ping An Insurance Group chairman Ma Mingzhe.  Ant Financial, the finance affiliate of Alibaba, is the largest shareholder in the company with a 16 percent stake, reports Reuters.

    —–

    New Funds

    Entertainer and investor Snoop Dogg is looking to raise $25 million for his new venture fund, Casa Verde Capital, shows an SEC filing first flagged by Fortune’s Dan Primack. Among the outfit’s most recent investments: Eaze, a medical marijuana delivery service in California that raised $10 million in April led by DCM Ventures.

    —–

    IPOs

    Fitbit is just one of 10 companies expected to price on U.S. exchanges this week. Renaissance Capital has the whole list here.

    —–

    Exits

    Stratasys, the publicly traded 3D printing and manufacturing company, is spinning off Bold Machines, a 10-month-old unit focused on incubating new products made with 3D printing. Bre Pettis, the founder and former head of MakerBot, which Stratasys acquired in 2013 for $403 million, will leave Stratasys to lead Bold Machines. TechCrunch has more here, including analysis about what drove the move.

    —–

    People

    Yahoo hearts Katie Couric. According to Recode sources, it’s just signed a new contract raising her annual pay from $6 million to $10 million — not far from the $15 million per year she was reportedly paid as the anchor of CBS.

    Meet real estate “rock star” Ken DeLeon, who has “taken the Silicon Valley real estate world by storm with his ambition, marketing skills and breezy braggadocio,” reports the San Jose Mercury News. “People are kind of drawn to me. They want to be around me,” he tells the outlet. “I pretty much raised the bar for everybody, for the expectations of what a good agent should be.”

    Twitter president Adam Bain is reportedly the front runner to succeed Dick Costolo as the company’s next CEO. But venture capitalist John Doerr appears to have other ideas. In an interview last week with Bloomberg’s Emily Chang, Doerr said he thought that “Reed Hastings would be a good CEO at Twitter. I think Sundar [Pichai] at Google would be a great CEO at Twitter.” When asked about the full-time jobs of both, Doerr said, “I expect the CEO that’s recruited to Twitter will have a job.”

    “For a time, he lived on a 20-acre estate in Bedford, N.Y., overseen by a butler whom he paid $50,000 a year, and he hosted grand parties for 60 guests or more.” Today, entrepreneur Fabrice Grinda leads a simpler life, one in which he apparently drives his friends and mother crazy, judging from this New York Times profile.

    —–

    Jobs

    Obvious Ventures, the nearly year-old, San Francisco-based venture firm started by Twitter co-founder Ev Williams, is hiring a senior associate. The job is in San Francisco.

    —–

    Essential Reads

    Here’s what happens to your $10 after you pay for a month of Apple Music.

    Facebook is eating the $140 billion hardware market. Business Insider explains here.

    Parking apps are facing obstacles at every turn.
    —–

    Detours

    Getting rich quick and preserving creative autonomy? That’s the yuccie dream.

    The real science behind Jurassic World.

    The Cinder Cone.

    —–

    Retail Therapy

    Sushi-themed suitcase covers.

    Connie

  • How Stanford Management Co. Sees the World (Brace Yourself, Israel)

    John PowersLast week, at the PreMoney Conference in San Francisco, veteran venture capitalist Heidi Roizen moderated a panel that asked institutional limited partners for their view of the world.

    The speakers each had unique insights, but the audience may have been particularly attuned to one – John Powers, who served as president and CEO of Stanford Management Company for nine years. (He left his post last year and remains “unpotted,” as he put it.) As Roizen noted in introducing Powers, Stanford is among the world’s most sought-after investors given the power of its imprimatur — not to mention the $25 billion it has to manage, roughly 5 percent of which it invests in venture capital.

    Luckily for attendees, Powers didn’t disappoint. In fact, he spoke candidly about a wide range of issues that may help capital-seeking venture firms better understand Stanford’s point of view, even while it’s likely to disappoint many of them. Here’s some of what he had to say:

    On whether or not Stanford is likely to reinvest in a firm it has backed previously:

    We’re looking at track record over time, and sticking pretty close to a roster of people who’ve been great VCs over a long period, because . . . there is a huge amount of persistence. It’s a brand business. It’s a business where the brand of the VC attracts the opportunity set. It’s sort of the only form of capital that I can think of that’s driven by brand attractiveness as opposed to price.

    On when and whether Stanford will invest in a new venture fund:

    We didn’t fund a lot of new venture funds over the course of my time there, but we did [invest] pretty steadily, every couple of years, in one or two new funds, [and] brandedness was the key. So what about this fund would lead us to think it can establish brandedness? That could come in the form of notorious founders. Andreessen Horowitz was branded day one because of the pedigrees of both Marc [Andreessen] and Ben [Horowitz]. The guys at Emergence Capital had a niche strategy that happened to be a large niche but was identifiable and you could see, okay, they can build a story around their early participation in and ownership of this view of the world. [We like that] as opposed to a general purpose, “We’re going to do a little software,  a little semis and hardware, and a little consumer” venture fund. It was much harder for us to see [how the latter types of funds could] get escape trajectory.

    On what Stanford worries about:

    The one thing you have to remember in venture is that a few outcomes can totally transform a fund. So whatever you do analytically to think, ‘These guys are going to get branded’ or whatever, stumbling into the right deal can transform a fund.

    That’s true, too, when you fire someone. If this guy’s long in the tooth, they’re not cutting it anymore, we’d like to fire them, you do that, [then] they come in with one home-run deal in the next fund and you look foolish in front of your board.

    On why Stanford isn’t keen on investing internationally:

    You’d invest internationally if you felt you were going to get better returns than domestically or if you felt that you were going to get something that diversified the stream of cash flows to you. So you go country by country.

    In very large measure, the Israeli venture community is the 51st state of the U.S. venture community; I think you don’t get superior returns over time or haven’t in general, and you don’t get diversification away from investing in a cybersecurity company in the U.S. So you’d go to Israel if you felt like you couldn’t gain access to the best stuff in the U.S. Therefore you were sub-optimizing but doing the best you could by investing in a very vibrant entrepreneurial community over there – just recognizing that it’s probably [not] going to match up over time with what Sequoia can do for you over here.

    China is very different. There are huge indigenous sources of demand, a massive reinvention of the economy; the streams of opportunity that you see there . . . may be emulative of, but not derivative of, what you get in the U.S. from a returns standpoint.

    India has been a bit of a confusing hybrid, with not the same level of indigenous demand [as China], though that appears to be changing to some degree.

    On being “cold-blooded”:

    Speaking from my former seat at Stanford, you have to be pretty cold-blooded. Are we better off spending time trying to get a little better allocation out of Sequoia in the next fund than we are flying around the Far East or something? [The answer, thinks Stanford, is yes.]

    Connie

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  • StrictlyVC: June 12, 2015

    Hello and happy Friday, everyone! Hope you have a super weekend.

    By the way, some of you mentioned finding yesterday’s newsletter in spam. We’re not sure why Gmail is giving us a hard time this week, but if you missed it, it’s here. (You can always email us about delivery issues or anything else and we’ll do our best to help.)

    —–

    Top News in the A.M.

    To the surprise of pretty much everyone — including those who’ve been asking for his head — Dick Costolo is stepping down from his role as CEO of Twitter after nearly nearly five years on the job. Company cofounder Jack Dorsey will serve as interim CEO — or maybe even as the company’s permanent CEO. He seemed to leave the door open to that possibility in an interview yesterday with Business Insder. The WSJ has letters from both men to Twitter employees here.

    Blackberry may be ditching its own operating system in favor of Android. More here.

    Uber is reportedly raising $1 billion expressly to take on its China-based rivals. The company suggests it’s further along in that fight than those rivals would have you believe, too. More here.

    —–

    A New Hardware Firm Emerges: Meet Root Ventures

    You may have noticed: Hardware investing is in vogue. Andy Rubin, creator the mobile operating system Android, recently launched Playground Global to advise device makers in exchange for equity. Formation 8 is raising a $100 million hardware-focused venture fund. That’s saying nothing of the seed-stage fund Bolt, which raised $25 million a few months ago, and the numerous accelerators now focused on backing hardware startups, including Haxlr8r, Lemnos Labs, and Highway1, which is an offshoot of the custom design manufacturing company PCH International.

    Now, the Bay Area has yet another entrant on the scene: San Francisco-based Root Ventures, which just closed its debut, hardware-focused fund with $31,415,927 (the first 10 digits of Pi), capital that it raised from a gaggle of high-net-worth investors along with the fund of funds manager Cendana Capital.

    Root Ventures is a single-GP fund founded by Avidan Ross, a trained engineer who was previously CTO of the private equity firm CIM Group. Ross isn’t widely known (yet) in press circles, but a growing number of venture capitalists and entrepreneurs have grown acquainted with him through the roughly 10 bets he has placed in recent years with the help of his friends’ capital.

    Some of Ross’s older bets include Wallaby Financial, a mobile finance company that was acquired by Bankrate in December for an undisclosed amount. Another is Skycatch, an aerial robotics platform that received its first check from Ross and which has gone on to raise $24.7 million altogether, including from Google Ventures. Ross also wrote the first check for Momentum Machines, a company whose robots turn raw ingredients into packaged hamburgers without human intervention. It just raised an undisclosed amount of follow-on financing from Founders Fund.

    “I don’t think people were investing in me based on my individual track record as an angel,” says Ross. “Those investing in me know me from a previous life [as CTO] of a pretty large investment firm where I built a lot of great relationships with people who trust my ability to invest in great technology.”

    Ross, who raised much of his new fund late last year, has so far made three investments on behalf of Root Ventures, where he plans to make concentrated bets and to write first checks in the range of $500,000.

    The most recent of his portfolio companies is operating in stealth mode, but it’s easy to see the appeal of the others. Mashgin — company Ross met through entrepreneur friends — has developed an automated checkout kiosk machine that employs computer vision to identify any object on a surface (down to the different-flavored Snapples, says Ross). The big idea: to create a far more seamless experience for shoppers.

    The company graduated late last year from Y Combinator and is about to announce a “significant” amount of follow-on funding, says Ross, who wrote its first check.

    Ross also invested in Prynt, which makes a smartphone case that prints out photos. He met the company during his honeymoon in China. The young company was operating out of the Haxlr8r accelerator in Shenzhen, “and I asked if I could take a three-hour break and visit with the companies. I immediately thought: ‘This is amazing.’”

    If you don’t understand why a printing up a digital photo might be interesting, Ross says Prynt’s opportunity goes “above and beyond printing out a polaroid. When you print a photo, you’re basically printing up the last frame of a 10 second video. With Prynt photos, you hand them to someone else, they point their phone at the photo, and the photo becomes alive [by featuring those full 10 seconds]. It’s like a Vine that only that person can watch. It creates privileged access.”

    Others must like it, too. Prynt recently raised $1.5 million in a Kickstarter campaign earlier this year.

    Ross says the company also just raised a “sizable seed round that’s unannounced. An earlier SEC filing suggests the amount is $2 million.

    —–

    New Fundings

    8tracks, a seven-year-old, San Francisco-based platform for music listeners to create their own playlists, has raised $2.5 million in debt funding from Silicon Valley Bank. The company has now raised $5.3 million altogether, shows Crunchbase. Its venture investors include SoftTech VC, Andreessen Horowitz, and Index Ventures.

    BloomThat, a two-year-old, San Francisco-based e-commerce florist, has raised $5.5 million in Series A funding led by Forerunner Ventures, with participation from SherpaVentures, Rothenberg Ventures and earlier backers First Round Capital and Vaizra Investments. The company has now raised $7.6 million altogether.

    Boxful, a six-month-old, Hong Kong-based startup that enables customers to store unwanted items in warehouses, has raised $6.6 million to develop its domestic business and expand into other parts of Asia. Investors include the real estate firms Great Eagle, Carlton Holdings and Soundwill Holdings, along with Chinese conglomerate Tinghsin Group and venture firms Arocrest Capital, Lonsdale Capital and Vega Properties. TechCrunch has more here.

    Convirza, a three-year-old, Draper, Ut.-based call marketing analytics platform, has raised more than $20 million in Series B funding led by an unnamed East Coast-based investment group. The company has raised nearly $25 million altogether. More here.

    Evrything, a four-year-old, Ontario-based platform that connects consumer products to the web and manages real-time data in the cloud to drive their applications, has raised $7.5 million in new funding from undisclosed sources. The company has now raised $14.5 million altogether, including from Cisco, Atomico, and Dawn Capital.

    GoGoVan, a two-year-old, Hong Kong-based on-demand logistics startup, has raised $10 million in Series B-plus funding, reports Tech In Asia. The round was led by former 91 Wireless CEO Hu Zemin, with participation from earlier backers, including Renren CEO Yizhou Chen.

    La Renon Healthcare, a seven-year-old, Ahmedabad, India-based pharmaceutical research, marketing and manufacturing company, has raised $16 million in Series A funding from Sequoia Capital. VC Circle has more here.

    Miura Systems, a U.K.-based company that makes point-of-sale devices, has raised $16 million in funding led by DFJ Esprit Secondaries, with participation from DFJ Esprit EIS funds. More here.

    Spire, a three-year-old, San Francisco, Ca.-based satellite-powered data company, has been awarded $2.9 million in grants from Scottish Enterprise, the international investment and trade promotion agency of the Scottish government. The funds follow $25 million in Series A funding that Spire raised last year from RRE Ventures, Moose Capital and others.

    —–

    People

    Serial entrepreneur Kevin Rose is merging his newest startup Watchville — a news aggregation app focused exclusively on wristwatches — with Hodinkee, a site for wristwatch enthusiasts. Hodnikee is based in Manhattan, and Rose, who is taking the full-time position of CEO of the company, is heading there to live, reports the New York Times.

    Investor Chris Sacca talked with Bloomberg’s Emily Chang yesterday, and they wound up talking about his hot tub at his California home near Lake Tahoe. (He calls it the Jam Tub.) According to Sacca, who has made a fortune owing to early and aggressive bets on Uber, Uber CEO Travis Kalanick used to spend “eight to ten hours” there at a time. “I’ve never seen a human with that kind of staying power in a hot tub,” Sacca said. He also told Chang that he invites entrepreneurs to his home to feed them and measure them up and wouldn’t invest in anyone who doesn’t get up to put their dishes in the sink.

    Sarah Tavel, a former VP at Bessemer Venture Partners who joined Pinterest as a product manager more than three years ago, is returning to VC as Greylock Partners’ first investment partner. More here.

    —–

    Essential Reads

    That recently disclosed hack of the federal Office of Personnel Management, the government’s human resources division, is a lot worse than first reported.

    No team? No idea? No problem. A new venture firm says it will fund you anyway.

    —–

    Detours

    A short history of Rupert Murdoch’s heirs apparent.

    Conversation resignation letter.

    Oh, those meddlng millennials’ parents!

    —–

    Retail Therapy

    Okay, fine, we’ll take one pair of these ridiculously cool sunglasses.

    Connie

  • Another Hardware Fund Emerges: Meet Root Ventures

    Root VenturesYou may have noticed: Hardware investing is in vogue. Andy Rubin, creator the mobile operating system Android, recently launched Playground Global to advise device makers in exchange for equity. Formation 8 is raising a $100 million hardware-focused venture fund. That’s saying nothing of the seed-stage fund Bolt, which raised $25 million a few months ago, and the numerous accelerators now focused on backing hardware startups, including Haxlr8r, Lemnos Labs, and Highway1, which is an offshoot of the custom design manufacturing company PCH International.

    Now, the Bay Area has yet another entrant on the scene: San Francisco-based Root Ventures, which just closed its debut, hardware-focused fund with $31,415,927 (the first 10 digits of Pi), capital that it raised from a gaggle of high-net-worth investors along with the fund of funds manager Cendana Capital.

    Root Ventures is a single-GP fund founded by Avidan Ross, a trained engineer who was previously CTO of the private equity firm CIM Group. Ross isn’t widely known (yet) in press circles, but a growing number of venture capitalists and entrepreneurs have grown acquainted with him through the roughly 10 bets he has placed in recent years with the help of his friends’ capital.

    Some of Ross’s older bets include Wallaby Financial, a mobile finance company that was acquired by Bankrate in December for an undisclosed amount. Another is Skycatch, an aerial robotics platform that received its first check from Ross and which has gone on to raise $24.7 million altogether, including from Google Ventures. Ross also wrote the first check for Momentum Machines, a company whose robots turn raw ingredients into packaged hamburgers without human intervention. It just raised an undisclosed amount of follow-on financing from Founders Fund.

    “I don’t think people were investing in me based on my individual track record as an angel,” says Ross. “Those investing in me know me from a previous life [as CTO] of a pretty large investment firm where I built a lot of great relationships with people who trust my ability to invest in great technology.”

    Ross, who raised much of his new fund late last year, has made three newer investments on behalf of Root Ventures, where he plans to make concentrated bets, and to write first checks in the range of $500,000.

    The most recent of its portfolio companies is operating in stealth mode, but it’s easy to see the appeal of the others. Mashgin — company Ross met through entrepreneur friends — has developed an automated checkout kiosk machine that employs computer vision to identify any object on a surface (down to the different-flavored Snapples, says Ross). The big idea: to create a far more seamless experience for shoppers.

    The company graduated late last year from Y Combinator and is about to announce a “significant” amount of follow-on funding, says Ross, who wrote its first check.

    Ross also invested in Prynt, which makes a smartphone case that prints out photos. He met the company during his honeymoon in China. The young company was operating out of the Haxlr8r accelerator in Shenzhen, “and I asked if I could take a three-hour break and visit with the companies. I immediately thought: ‘This is amazing.’”

    If you don’t understand why a printing up a digital photo might be interesting, Ross says Prynt’s opportunity goes “above and beyond printing out a polaroid. When you print a photo, you’re basically printing up the last frame of a 10 second video. With Prynt photos, you hand them to someone else, they point their phone at the photo, and the photo becomes alive [by featuring those full 10 seconds]. It’s like a Vine that only that person can watch. It creates privileged access.”

    Others must like it, too. Prynt recently raised $1.5 million in a Kickstarter campaign earlier this year.

    Ross says the company also just raised a “sizable seed round that’s unannounced. An earlier SEC filing suggests the amount is $2 million.

    Connie

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  • StrictlyVC: June 11, 2015

    Hi, everyone, good morning! The countdown to Game 4 begins, woot!

    —–

    Top News in the A.M.

    Jawbone is really putting the screws to its biggest rival in the wearable fitness device market, Fitbit. For the second time in two weeks, its parent company, AliphCom, has lodged a lawsuit again Fitbit, reports the WSJ. Its newest complaint: that Fitbit infringed on a patent for “a wellness application using data from a data-capable band” after Jawbone spent more than $100 million on R&D toward that end. Fitbit said in a statement, “We are unaware of any confidential or proprietary information of Jawbone in our possession and we intend to vigorously defend against these allegations.” In late May, Jawbone filed its first lawsuit against Fitbit, saying it hired away Jawbone employees who nabbed its intellectual property on their way out. Eight-year-old Fitbit unveiled plans to go public in early May.

    Google is launching a new company tasked with developing technologies that improve urban life, reports the New York Times. Called Sidewalk Labs, the company will be headed by Daniel Doctoroff, former deputy mayor of New York City for economic development and former chief executive of Bloomberg. Among other technologies the company is expected to pursue are those thatreduce pollution, curb energy use, and lessen the cost of city living. In September 2013, Google similarly launched another company, Calico, that aims to extend human life.

    —–

    Amid Unicorn Talk, High-Potential, Low-Glamour PayNearMe Slogs Along

    PayNearMe doesn’t get a lot of attention from the press. Partly, that’s because the five-year-old, Sunnyvale, Ca., company doesn’t seek it out. But PayNearMe is also in a business that’s not nearly so relatable to many in Silicon Valley as enterprise messaging or high-end black-car services. It’s focused on the roughly 25 percent of people in the U.S. who don’t have bank accounts but buy things — like the rest of us — that would be hard to pay for in cash, like rent, healthcare, and online goods.It’s a huge market, one that’s remarkably underserved excepting older players like MoneyGram and Western Union. It’s also a lot of work to build, making it a fairly long-term bet, one into which investors like True Ventures, August Capital, and Khosla Ventures have already sunk $71 million, including a $14 million inside round earlier this year.

    How does it work? Say a person needs to pay their rent or buy a bus ticket. PayNearMe has relationships with both brick-and-mortar stores –including, crucially, 7 Eleven, Ace Cash Express and Family Dollar — as well as businesses like property management software companies. Together, the companies make it possible for anyone to walk into one of more than 17,000 locations with cash, and walk out with a receipt for payment.

    This week, we talked with PayNearMe founder and CEO Danny Shader – previously a CEO of Good Technology, an EIR at both Kleiner Perkins and Benchmark, and cofounder of Accept.com, an online consumer-to-consumer payments service that sold to Amazon for $175 million in stock in 1999 – to learn more about the gritty, complex business he’s been building.

    PayNearMe doesn’t give out a lot of numbers, but you say that overall payment volume has more than tripled from this time last year. 

    Our business is growing five to 10 percent a month, which keeps compounding, so it’s getting to be a pretty sizable business. It’s extremely hard to build up an entirely new payment network, but we’ve done it, it’s working, it’s growing, and it’s incredibly defensive. But it’s not for the faint of heart.

    You could boil the ocean, trying to go after everyone who’s unbanked. What’s your process like?

    We pursue things vertical by vertical. So the biggest vertical is lending, then rent and municipal government payments, and now healthcare is driving a lot of new people into the insured ranks and they need to pay their premiums. Within a vertical, there’s a handful of software companies that are systems of record, whether it be for property management companies or government agencies, and we integrate into those software systems. For rents, for example, we integrate with AppFolio and ManageAmerica, a property management system for manufactured housing, meaning mobile homes.

    We try to go after very large accounts directly or go downstream.

    Going downstream [to smaller players] sounds like a lot of work. How do you do it? How many employees do you have altogether?

    We have more than 50, roughly half of whom are in Sunnyvale, with the rest scattered [around the U.S.]. And it does take time to get going on a new vertical. Say we want to do something in health, in medical records. We’ll go to a trade show and call on [some of the vendors] , and they’ll typically say, “Go away, my customers aren’t asking for you.” So we’ll go to end customers and invest heavily in getting them to work with us, and they do, and they talk about it, and a year later, the software providers say, “We want to integrate with you.”

    Processing rent payments is one of your biggest businesses, but we understand that Family Dollar will no longer be accepting rent payments, that it grew worried about safety issues around people walking in with large sums of cash. We’ve asked the company about it but they haven’t responded.

    I can’t speak for Family Dollar, but rent is a big vertical and we’re processing rent at a ton of other locations. Other folks will be joining our network, too.

    PayNearMe shares its economics with stores like Family Dollar and 7 Eleven. Do you discuss that split? Is it 50/50?

    I can’t comment on [the percentage of transaction fees we pay out], but it’s [a good deal for them]. Imagine: Hey, our sales force will sign up big entities like municipalities that will include your logo [so people know where to pay their bills], and we’ll pay you a commission, and by the way, we’re sending you valuable foot traffic.

    PayNearMe has a lot of stuff coming. Can you give readers a curtain raiser?

    I can say that we now have a complete set of money transmitting licenses in the U.S. and Puerto Rico that we spent the last three years and millions of dollars [to obtain]. The licenses allow us to act as an agent of a consumer, taking their money and delivering it to some other location. It lets us enter adjacent markets. [But that’s all I can say.]

    Do you anticipate these adjacent businesses will be larger than what you’ve already built?

    I think we could build a big public company doing what we’re doing. It’s a massive market hidden in plain sight. Most people in the Valley are asking if cash is going away. Actually, the cash market is increasing, and the bifurcation between the 1 percent and everyone else is contributing to that.

    —–

    New Fundings

    AbilTo, a seven-year-old, New York-based online video conferencing platform that delivers targeted health-changing programming, has raised $12 million in Series C funding led by HLM Venture Partners, with participation from earlier backers BlueCross BlueShield Venture Partners, .406 Ventures and Sandbox Industries. The company has now raised $21 million altogether, shows Crunchbase.

    Bright Funds, a three-year-old, San Francisco, Ca.-based platform for individual and workplace giving, has raised $1.8 million in funding led byAspiration Growth, with participation from Bloomberg Beta, 10K Investments, Wellspring Growth Partners, Mission & Market, and individual investors. Per Crunchbase, the company has now raised roughly $3 million altogether.

    Dojo Madness, a seven-month-old, Berlin, Germany-­based startup that makes a digital coaching app for a popular e-sports game called “League of Legends,” (and has broader plans up its sleeve), has raised $2.25 million in seed funding from DN Capital, London Venture Partners, March Capital Partners, 500 Startups, The HIVE, and numerous angel investors. VentureBeat has more here.

    Kolibree, a two-year-old, Paris, France-based company whose “connected” electric toothbrushes enable parents to follow their kids’ brushing on their mobile devices with real-time feedback, has raised an undisclosed amount of Series A funding from SEB Alliance, Innovacom, Cap Horn Invest and the Dental Investment Group for Health.

    Local ID, a nine-month-old, Venice, Ca.-based intelligence platform designed to maximize brands’ local marketing efforts, has raised $1.9 million in seed funding led by Crosscut Ventures, with participation from Technicolor, TenOneTen, Baroda Ventures, Double M Partners, Tallwave, Wavemaker Partners and Queens Bridge Venture Partners. TechCrunch has more here.

    Locent, a year-old, Santa Monica, Ca.-based company that’s aiming to help merchants sell products and services using two-way text messaging, has raised an undisclosed amount of funding from Chaac Ventures, a seed-stage firm focused on Princeton University’s alumni tech founders. (Locent founder Matt Joseph, who previously worked in investments and operations at LaunchPad LA, graduated in 2010.) More here.

    Luqa Pharmaceuticals, a five-year-old, Hong Kong-based pharma company focused on dermatology, has raised $15 million in new funding led byMorningside Ventures.

    QualMetrix, a three-year-old, Miami, Fla.-based company whose cloud-based healthcare analytics platform that provides reporting to payers, providers and employers, has raised $5 milion in Series B funding led by VSS Monitoring founder Terence Breslin. (His company was acquired for an undisclosed amount in 2012.) QualMetrix has now raised $9.3 million altogether.

    Tuhu Yangche, a four-year-old, Shanghai, China-based online car maintenance platform that invites customers to book car services appointments, as well as shop for products online, has reportedly raised roughly $100 million in Series C funding from Yuyue Capital, Far East Horizon, Legend Capital, and Qiming Venture Partners.

    Unum Therapeutics, a year-old, Cambridge, Ma.-based biotechnology company developing an antibody-directed cellular immunotherapy, has raised $65 million in Series B funding led by New Leaf Venture Partners, with participation from Brace Pharma Capital, Seattle Genetics, Cowen Private Investments, Jennison Associates (on behalf of certain clients), Novo A/S,Sabby Management,Sectoral Asset Management, and Wellington Management Company. Earlier backers Fidelity Biosciences, Atlas Venture and Sanofi-Genzyme BioVenture also joined the round. The company has now raised $77 milion altogether, shows Crunchbase. More here.

    XTuit Pharmaceuticals, a four-year-old, Cambridge, Ma.-based biopharmaceutical company that’s developing products for use in the diagnosis and treatment of oncological, tumor, and inflammatory diseases, has raised $22 million in Series A funding led by New Enterprise Associates, with participation from Polaris Partners, CTI Life Sciences, Arcus Ventures and Omega Funds.

    ZypMedia, a two-year-old, San Francisco, Ca.-based programmatic media-buying platform for local advertising, has raised $4.4 million in Series B funding led by publicly traded Sinclair Broadcast Group, with participation from earlier investor U.S. Venture Partners.

    —–

    Exits

    In April, Fortune reported that Ouya, the startup video game console maker, was on the auction block after tripping a debt convenant that it wasn’t able to restructure. Now, word is the company is talking with Razer, a computer and accessories maker popular with gamers. CNet has the story here.

    Whitepages, the online people and phone number directory, has acquired San Francisco-based NumberCop to bolster its abilities to detect spam and scam calls within its Caller ID smartphone application. CrunchBase doesn’t list any investors for NumberCop. More from TechCrunch here.

    —–

    People

    Venture capitalist Matt Murphy, who left Kleiner Perkins Caufield & Byers earlier this year, didn’t travel far for his new job, joining another  Sand Hill Road firm — Menlo Ventures — as managing director. He becomes one of seven investing partners at the firm, including Mark Siegel, with whom Murphy attended business school at Stanford. Venture Capital Dispatch has more here.

    For the year ended in April, Google CEO and cofounder Larry Page received a 97 percent approval rating from employees who submitted reviews to the career site Glassdoor. That makes him the most popular tech CEO, according to the site, which shows Facebook CEO Mark Zuckerberg isn’t doing too shabbily, either, with a 94 percent approval rating by employees. More here.

    The CEO of Otter Media, the Web video joint venture between AT&T and The Chernin Group, is leaving after less than a year on the job, reports Recode.

    In a letter to employees, Virasb Vahidi, formerly chief commercial officer at American Airlines, wrote that “it has become clear to [Chernin Group CEO Peter Chernin] and me that the role of the CEO is different than we had originally envisioned.”

    “Unicorn” companies are increasingly hunting for talent at the Googleplex.

    —–

    Jobs

    eBay is looking for a director of corporate development. The job is in San Jose, Ca.

    Oracle is hiring a corporate development associate. The job is in Redwood Shores, Ca.

    —–

    Essential Reads

    After trading some public jabs earlier this week, payroll provider ADP has filed a defamation lawsuit against the high-flying human resources firm Zenefits, reports the WSJ. ADP’s complaint states that Zenefits and its CEO, Parker Conrad, launched a “manipulative and malicious public relations campaign, ignoring its own conduct, to defame ADP and drive away ADP’s clients.” ADP has since sent an email offering a competing product called Opum to Zenefits customers. TechCrunch has more on that last twist here.

    Amazon may be launching daily live video shows to help sell stuff. More here in USA Today.

    —–

    Detours

    The Godfather of Clickbait.

    The first official TV trailer for the new Bond movie.

    —–

    Retail Therapy

    Nest Cam.

    Connie

  • Amid Unicorn Talk, High-Potential, Low-Glamour PayNearMe Slogs Along

    PayNearMePayNearMe doesn’t get a lot of attention from the press. Partly, that’s because the five-year-old, Sunnyvale, Ca., company doesn’t seek it out. But PayNearMe is also in a business that’s not nearly so relatable to many in Silicon Valley as enterprise messaging or high-end black-car services. It’s focused on the roughly 25 percent of people in the U.S. who don’t have bank accounts but buy things — like the rest of us — that would be hard to pay for in cash, like rent, healthcare, and online goods.

    It’s a huge market, one that’s remarkably underserved excepting older players like MoneyGram and Western Union. It’s also a lot of work to build, making it a fairly long-term bet, one into which investors like True Ventures, August Capital, and Khosla Ventures have already sunk $71 million, including a $14 million inside round earlier this year.

    How does it work? Say a person needs to pay their rent or buy a bus ticket. PayNearMe has relationships with both brick-and-mortar stores –including, crucially, 7 Eleven, Ace Cash Express and Family Dollar — as well as businesses like property management software companies. Together, the companies make it possible for anyone to walk into one of more than 17,000 locations with cash, and walk out with a receipt for payment.

    This week, we talked with PayNearMe founder and CEO Danny Shader – previously a CEO of Good Technology, an EIR at both Kleiner Perkins and Benchmark, and cofounder of Accept.com, an online consumer-to-consumer payments service that sold to Amazon for $175 million in stock in 1999 – to learn more about the gritty, complex business he’s been building.

    PayNearMe doesn’t give out a lot of numbers, but you say that overall payment volume has more than tripled from this time last year. 

    Our business is growing five to 10 percent a month, which keeps compounding, so it’s getting to be a pretty sizable business. It’s extremely hard to build up an entirely new payment network, but we’ve done it, it’s working, it’s growing, and it’s incredibly defensive. But it’s not for the faint of heart.

    You could boil the ocean, trying to go after everyone who’s unbanked. What’s your process like?

    We pursue things vertical by vertical. So the biggest vertical is lending, then rent and municipal government payments, and now healthcare is driving a lot of new people into the insured ranks and they need to pay their premiums. Within a vertical, there’s a handful of software companies that are systems of record, whether it be for property management companies or government agencies, and we integrate into those software systems. For rents, for example, we integrate with AppFolio and ManageAmerica, a property management system for manufactured housing, meaning mobile homes.

    We try to go after very large accounts directly or go downstream.

    Going downstream [to smaller players] sounds like a lot of work. How do you do it? How many employees do you have altogether?

    We have more than 50, roughly half of whom are in Sunnyvale, with the rest scattered [around the U.S.]. And it does take time to get going on a new vertical. Say we want to do something in health, in medical records. We’ll go to a trade show and call on [some of the vendors] , and they’ll typically say, “Go away, my customers aren’t asking for you.” So we’ll go to end customers and invest heavily in getting them to work with us, and they do, and they talk about it, and a year later, the software providers say, “We want to integrate with you.”

    Processing rent payments is one of your biggest businesses, but we understand that Family Dollar will no longer be accepting rent payments, that it grew worried about safety issues around people walking in with large sums of cash. We’ve asked the company about it but they haven’t responded.

    I can’t speak for Family Dollar, but rent is a big vertical and we’re processing rent at a ton of other locations. Other folks will be joining our network, too.

    PayNearMe shares its economics with stores like Family Dollar and 7 Eleven. Do you discuss that split? Is it 50/50?

    I can’t comment on [the percentage of transaction fees we pay out], but it’s [a good deal for them]. Imagine: Hey, our sales force will sign up big entities like municipalities that will include your logo [so people know where to pay their bills], and we’ll pay you a commission, and by the way, we’re sending you valuable foot traffic.

    PayNearMe has a lot of stuff coming. Can you give readers a curtain raiser?

    I can say that we now have a complete set of money transmitting licenses in the U.S. and Puerto Rico that we spent the last three years and millions of dollars [to obtain]. The licenses allow us to act as an agent of a consumer, taking their money and delivering it to some other location. It lets us enter adjacent markets. [But that’s all I can say.]

    Do you anticipate these adjacent businesses will be larger than what you’ve already built?

    I think we could build a big public company doing what we’re doing. It’s a massive market hidden in plain sight. Most people in the Valley are asking if cash is going away. Actually, the cash market is increasing, and the bifurcation between the 1 percent and everyone else is contributing to that.

    Connie

    ,
    , , , , , , , , , ,

  • StrictlyVC: June 10, 2015

    Hi, happy Wednesday, everyone! We have a slightly abbreviated version of the newsletter today. Between celebrating a certain 8-year-old’s birthday and watching yet another incredible NBA Final’s game last night, we were offline much of yesterday.

    On a separate note, we’ve heard from a number of you who’ve been finding your copy of StrictlyVC in spam. We’ve talked with our new email service provider about it, and the best advice it can offer is to a.) unmark the email as spam when you find it in the deepest recesses of your digital junk mail and b.) add our email address to your contact list. (We’ll be over here, cursing at Gmail, in the meantime.)

    —–

    Top News in the A.M.

    Chinese web giant Baidu will reportedly launch its first driverless car in the second half of this year, with the help of an unnamed car manufacturer. Worth noting: Baidu owns a stake in Uber, which also looks to be aggressively pushing into autonomous driving technologies. The BBC has the story here.

    That Spotify round is official. According to the WSJ, which reported in April that the music-streaming company was assembling another huge financing, Spotify just closed on $526 million in funding that values the company at $8.5 billion — twice the valuation of its publicly traded rival Pandora. (Both companies operate at a loss). Spotify’s new investors include a wide range of investors, including British asset managers Baillie Gifford, Landsdowne Partners and Rinkelberg Capital; Canadian hedge funds Senvest Capital and Discovery Capital Management; Nordic telecom operator TeliaSonera; and U.S. investors Halcyon Asset Management, GSV Capital, D.E. Shaw & Co., TCV, Northzone, P. Schoenfeld Asset Management, and Goldman Sachs. Founded nine years ago, Spotify has now raised $1.1 billion altogether.

    —–

    New Fundings

    Arrowlytics, a year-old, Charlotte, N.C.-based company whose online analytics dashboard helps healthcare organizations by pulling data from their various platforms nightly into one system, has raised $3 million in funding led by Surgical Care Affiliates. More here.

    Duolingo, a 3.5-year-old, Pittsburgh, Pa.-based free language education platform, has raised $45 million in new funding led by Google Capital in a round that values the company at $470 million. Duolingo had previously raised $38.3 million across three rounds, including from Union Square Ventures, New Enterprise Associates, and Kleiner Perkins Caufield & Byers. Business Insider has more here.

    Fetchr, a three-year-old, Dubai-based, Shyp-like company that picks up and delivers mail and other packages to customers in the Middle East (where not everyone has a street address), has just raised $11 million in Series A funding. New Enterprise Associates led the round, with participation from Triple Point Capital, Ben Narasin, Delta Partners, and Dhabi Holdings, among others. VentureBeat has more here.

    Melinta Therapeutics, a 15-year-old, New Haven, Ct.-based company that develops and commercializes antibiotics to overcome drug-resistant infections, has raised $67 in funding led by Malin Corporation, with participation from earlier backer Vatera Healthcare Partners. The company has now raised roughly $280 million altogether, according to Crunchbase data. Previous investors include Warburg Pincus, ABS Ventures, and Oxford Bioscience Partners, among many others.

    PAX Labs, an eight-year-old, San Francisco-based maker of vaporizers (the kind you inhale instead of smoking cigarettes), has raised $46.7 million in new funding from Fidelity Management & Research Company, Sivia Capital and earlier backers Tao Capital Partners and Sand Hill Angels, among others. TechCrunch has more here.

    Spreemo, a five-year-old, New York-based health-care software company that focuses on workers’ compensation specialty benefits management, has raised an undisclosed amount of funding from Pamplona Capital Management.

    SumUp, a three-year-old, Berlin-based mobile payments startup, has raised an undisclosed amount of funding led by Swiss backer Venture Incubator that brings its total funding to $45 million (€40 million), it tells TechCrunch. The company’s earlier investors include Tengelmann Ventures, Groupon, andBBVA Ventures. More here.

    Tile, a 2.5-year-old San Mateo, Ca.-based maker of a location-tracking device and app that helps users find items that are lost, has raised $3 million more in Series A funding from Khosla Ventures. The company has now raised $13 million in Series A funding altogether, including from GGV Capital, AME Cloud Ventures, Slow Ventures, Rothenberg Ventures, and Tandem Capital, among others. Altogether, the company has now raised $18.8 million, shows Crunchbase.

    Twist Bioscience, a two-year-old, San Francisco-based company that helps scientists create chemicals, pharmaceuticals and other products using synthetic biology, has raised $37 million in Series C funding led by publicly tradedIllumina, with participation from Fidelity Management & Research, Foresite Capital Management and earlier backers ARCH Venture Partners, Paladin Capital Group and Tao Invest. The company has now raised $82.1 million altogether, shows Crunchbase.

    Volta Industries, a five-year-old, San Francisco-based company that designs, installs, and maintains electrical charging stations in five cities, including San Francisco and L.A., has raised $7.5 million in funding: $4.5 million in equity financing led by Three Bridges Ventures and a $3 million financing facility from SQN Capital. More about the company here.

    Voonik, a two-year-old, Bangalore, India-based e-commerce platform that features the clothing and jewelry merchandise of numerous stores, has raised $5 million in Series A funding led by Sequoia Capital, with participation from earlier backer Seedfund. The company has now raised $5.5 million to date.

    WalkMe, a three-year-old, San Francisco-based company whose cloud-based service aims to help professionals guide and engage prospects and customers and complete online tasks, has raised $25 million in Series D funding led by Greenspring Associates, with participation from earlier backers Gemini Israel Ventures, Giza Venture Capital and Scale Venture Partners. The company has now raised $42.5 million altogether, shows Crunchbase data.

    —–

    New Funds

    High Alpha, a new, Indianapolis, Ind.-based venture studio focused on conceiving, launching, and scaling new enterprise cloud companies, has raised $35 million from investors, including Emergence Capital, Greenspring Associates, Hyde Park Venture Partners and numerous angel investors. The company’s partners include Scott Dorsey, cofounder and former CEO of ExactTarget (which sold to Salesforce for $2.5 billion in 2013); Mike Fitzgerald, ExactTarget’s former EVP of corporate development and cofounder of Gravity Ventures; Eric Tobias, founder and CEO of iGoDigital (which sold to ExactTarget); and Kristian Andersen, founder of Studio Science and cofounder of Gravity Ventures.

    Intel Capital yesterday took the wraps off a new fund that’s investing in tech startups run by women and underrepresented minorities. The Intel Capital Diversity Fund will commit $125 million to startups across a broad spectrum of industries, and it’s being led by Intel Capital managing director Lisa Lambert. Venture Capital Dispatch has more here. The fund has already made four investments, including Brit + Co, a San Francisco-based media and e-commerce platform. (We talked briefly with founder Brit Morin earlier this week about that new round.)

    OurCrowd, a early three-year-old, Jerusalem-based global equity crowdfunding platform, has launched a specialized $10 million early-stage fund focusing exclusively on seed-stage startups. The minimum investment is fixed at $50,000 for accredited investors while the fund will provide up to $500,000 for a select group of companies.

    —–

    Exits

    AOL has acquired a predictive analytics startup called Velos for an undisclosed amount, shutting down the startup’s service in the process. VentureBeat has more here.

    —–

    People

    Online measurement and advertising company Quantcast has hired a new CFO: Stephen Collins, former CEO at Bazaarvoice, reports TechCrunch. He replaces Peter Kuipers, who joined Quantcast at the end of last year from The Weather Company. Quantcast says Kuipers “has left the company to pursue other opportunities.”

    Indian e-commerce company Snapdeal has hired former Yahoo exec Anand Chandrasekaran as its chief product officer. According to the WSJ, Chandrasekaran will be working with Snapdeal’s roughly 1,000 software engineers, a group that’s expected to double in the next year as it increasingly focuses on improving Snapdeal’s mobile application, which now accounts for 75 percent of its sales.

    Being a billionaire isn’t as easy as it looks, Jack Ma suggested in a talk at the Economic Club of New York this week. The Alibaba founder and executive chairman, whose stake in the company is currently valued at roughly $37 billion, told attendees: “If you have less than $1 million, you know how to spend the money.” Once you become a billionaire, you’re expected to spend your wealth to benefit “society.” The New York Post has more here.

    —–

    Jobs

    Orix, the financial services giant, is looking to hire a managing director into its venture group. The job is in San Francisco.

    —–

    Essential Reads

    A simmering battle between the “unicorn” HR benefits company Zenefits and payroll giant ADP became public yesterday when Zenefits took to its site to tell those of its customers who are paid through ADP that ADP has been systematically deactivating Zenefits accounts that those small businesses had expressly set up. In a statement, ADP attributed its move to Zenefits “pulling sensitive information, including unmasked Social Security numbers and employee banking information, in a manner that did not comply with ADP’s standards for data security.”  TechCrunch has more here.

    Elon Musk’s SpaceX has asked the federal government for permission to begin testing a project that would see a constellation of 4,000 small, cheap satellites beam high-speed Internet signals to all parts of the world. It “would be like rebuilding the Internet in space,” Musk has said. The Washington Post has more here.

    The attorneys general of New York and Connecticut have been quietly investigating Apple‘s negotiations with music companies in search of potential antitrust violations. (So has the European Commission.) The New York Times has the story here.

    The Apple Watch: a break-up story.

    —–

    Detours

    Sixteen ways you’re using LinkedIn wrong.

    Jerry Seinfeld is tired of political correctness.

    “This Friday, June 12, will be my last day at Yelp. I don’t intend to look for another tech job.”

    Unusual homes around the world.

    —–

    Retail Therapy

    The D’Hauteville Concrete Chair. Cool. Also conducive for short meetings.

    Connie

  • StrictlyVC: June 9, 2015

    Good morning, everyone, happy Tuesday!

    —–

    Top News in the A.M.

    Apple had plenty to announce yesterday at its Worldwide Developers Conference. Among other reveals, Apple finally took the wraps off its music service, called (what else) Apple Music. One of our favorite newsletters, The Skimm, summed it up well, noting that it “costs $10 a month. Cough, like Spotify, cough. It has a 24-hour radio station. Cough, like Pandora, cough. And it lets artists directly upload content. Cough, like SoundCloud, cough.” (SoundCloud and Spotify aren’t publicly traded yet, but Pandora’s shares took a hit yesterday.) 

    Here are the nine other most important announcements to come out of Apple‘s WWDC yesterday.

    Meanwhile, it’s looking like Hewlett-Packard‘s doomed acquisition of software maker Autonomy will cost it another $100 million as it prepares to settle class-action litigation tied to the 2011 deal. The Associated Press has more here.

    —–

    Brit + Co Raises $20 Million More, Shifting Gears in the Process

    Brit + Co, a nearly four-year-old, San Francisco-based lifestyle site dedicated to all things D.I.Y., has often been likened to a next-generation Martha Stewart Living Omnimedia.

    It’s looking like Udemy, an online educational marketplace taught by experts who are not university professors, may be as apt a comparison.

    Indeed, fueled with $20 million in new Series B funding – from Intel Capital, Liberty Media, and retail veteran Ron Johnson, among others — the company is now planning to shower almost as much effort on educating visitors as it does on entertaining them. We caught up with founder (and former Googler) Brit Morin yesterday to learn more about the company’s evolution. Our chat has been edited for length.

    People think of Brit + Co as a media company. What’s changing?

    For more than three years, we’ve really focused on building out the media arm for a couple of reasons. First, we wanted to do one thing at a time. We also really wanted to build the foundation of the brand and understand from our audience what type of commerce they’d want from us. Although women were into it from an aspirational and inspiration standpoint, they said, ‘I have no idea how to do this,’ and it opened our eyes. So we launched into online education last year and we’ve since sold 15,000 classes and kits [required as part of the classes].

    How many classes versus kits is that?

    We don’t break that out but we have 15 different classes right now, and we’ll have more like 60 to 70 by year end. Our community of makers are the ones teaching the classes. [Editor’s note: classes range from 20 minutes to 60 minutes in length and from $9.99 to $19.99 in price, not including the kits.]

    How big is the media side of the company at this point?

    On the media side, we now have 12 million visitors every month. We have roughly 100 advertisers, with a 74 percent retention rate. And we’re doing millions in revenue, 99 percent of which is native advertising, meaning our content and videos somehow include the products of our sponsors, though our readers know it’s advertising. We’ll partner with Starbucks for example, and teach you how to make your own coffee ice cream.

    You also just acquired Snapguide, a free iOS app that lets users create and share step-by-step guides. Snapguide had raised $10 million from investors. Are you breaking out how much you paid? As important, what drove the deal?

    We aren’t disclosing price, but there are a number of cool things about Snapguide, including [the ways it helps a third aspect of the business, a year-old, Etsy-like marketplace where people can sell their homemade goods]. If you [as a participant of that marketplace] are creating your own step-by-step guide, you can use a photo or a video or a hybrid [thanks to Snapguide].

    You recently raised $20 million from investors, bringing your total funding to $27.6 million. Will you be in the market again any time soon?

    The way I approach is it: it’s great to be in a position where you don’t have to raise money, but we’re very opportunistic whether it be a great investor or [something else that provides] great option value for the company. We’re not opposed to raising money earlier.

    —–

    New Fundings

    Arcadia Data, a three-year-old, San Mateo, Ca.-based company whose software aims to make the big-data repository Hadoop easier for businesses to use, has raised  $11.5 million in Series A funding led by Mayfield, with participation from Intel Capital and Blumberg Capital.

    Adents, an eight-year-old, Massy, France-based company that makes product unit identification and traceability software for various industrial industries, has raised €8.5m ($9.5 million) in funding from NAXICAP Partners, CapHorn Invest, Omnes Capital and members of the company’s management team. More here.

    Blue Apron, a three-year-old, New York-based startup that delivers meal kits to the homes of people who subscribe to its service, has officially raised $135 million in new funding led by Fidelity Management and Research Company. The company has now raised $193 million altogether, shows Crunchbase; earlier backers include First Round Capital and Bessemer Venture Partners. More here.

    Brandtone, a five-year-old, Dublin, Ireland-based mobile marketing company, has raised €18.5 million ($20.9 million) in funding led by Ares Capital, with participation from earlier investors Unilever, Syngenta, Verlinvest and Vision Private Equity. More here.

    Celtaxsys, an eight-year-old, Atlanta, Ga.-based clinical-stage drug development company focused on inflammatory diseases (its once-daily oral medicine is designed to preserve lung function in people with cystic fibrosis), has raised $40 million in Series D funding led by Domain Partners, with participation from Lumira Capital, RMI Partners, Masters Capital Management and the Georgia Research Alliance Venture Fund. More here.

    eFileCabinet, a 14-year-old, Lehi, Ut.-based maker of document management software, has raised $14 million in Series B funding led by Allegis Capital and Signal Peak Ventures. More here.

    Envelop VR, a year-old, Bellevue, Wa.-based still-in-steath company whose enterprise software promises to allow users to create, work and play in a virtual reality environment, has raised $2 million in in seed funding from a long of investors, including Howard Morgan of First Round Capital and Shana Fisher of High Line Venture Partners.

    Illusive networks, a year-old Tel Aviv, Israel-based cyber security company that’s focusing on so-called advanced persistent threats, has raised $5 million in Series A funding from Team8, a cyber security foundry. More here.

    JethroData, a three-year-old, New York-based company behind an index-based SQL engine for Hadoop, has raised $8.1 million in Series B funding led by Square Peg Capital, with participation from earlier investor Pitango Venture Capital. The company has now raised $12.6 million to date, shows Crunchbase.

    Maker Media, a two-year-old, San Francisco-based platform centered on content and commerce (including the online publication Makezine, Make magazine, Make books and the Maker Faire event series) has raised $5 million from a syndicate of investors including Obvious Ventures, Raine Ventures, Azure Capital, and previous investors OATV and Floodgate. The company has also raised debt funding from Square 1 Bank. Rafe Needleman, most recently editorial director of Yahoo Tech, has joined as editor-in-chief.

    Mesitis, a two-year-old, Singapore-based trading and portfolio “visualization” platform that caters to high-net-worth individuals and startup funds, has raised $3 million in Series A funding from an undisclosed backer. More here.

    NeoChord, an eight-year-old, Eden Prairie, Mn.-based medical technology company whose device is used for minimally invasive mitral valve repair, has raised $20 million in Series C funding led by Deerfield Management, with participation from Baird Capital and earlier backers Hopen Life Science Ventures, CHV Capital, TGAP Ventures, and Heron Capital.

    Outset Medical, a five-year-old, San Jose, Ca.-based company that has created a simple, at-home device that treats kidney failure  (it’s been cleared by the FDA for use in acute and chronic care settings), has finished raising a round of $91 million in equity and debt funding. The $51 million in equity was led by new investor Fidelity Research and Management Company, with participation from Partner Fund Management, Perceptive Advisors and CRG. Earlier backers Warburg Pincus and The Vertical Group also joined the round. Meanwhile, CRG led the $40 million debt financing.

    Practo, a seven-year-old, Mumbai, India-based online platform for scheduling appointments with doctors, is reportedly in advanced talks with global investors, including Google Capital and Russian billionaire Yuri Milner, for a funding round estimated at Rs 400 crore ($74 million). The company has already raised at least $34 million from Sequoia Capital and Matrix Partners across two rounds, shows Crunchbase; its newest round was closed in February of this year. The Economic Times has more here.

    Pie, a two-year-old, Singapore-based enterprise messaging service, has raised $1.2 million in Series A funding led by GREE Ventures, with participation from earlier backers Koh Boon Hwee, Wavemaker Partners, Dennis Goh, and YSS Capital. The company had previously raised $800,000 in seed capital. Deal Street Asia has more here.

    PropertyGuru, a nine-year-old, Singapore-based online property portal group, has raised S$175m ($129.5 million) from investors, including TPG, Emtek Group and Square Peg Capital, in a deal that it’s calling the biggest investment in a Southeast Asian company this year. In conjunction with the funding, Scout24, an earlier backer, has sold its shares in the company.

    Ralali, a two-year-old, Jakarta, Indonesia-based business-to-business ecommerce marketplaces focused on industrial products (think generators, safety equipment, medical devices), has raised $2.5 million in Series A funding from Beenos Plaza, CyberAgent Ventures, and earlier investor East Ventures. Tech in Asia has more here.

    Rancher Labs, a year-old, Cupertino, Ca.-based startup developing Docker infrastructure software, has raised $10 million in Series A funding from Mayfield and Nexus Venture Partners. More here.

    Rinse, a year-old, San Francisco-based on-demand laundry startup that dispatches drivers who pick up and return customers’ clothes (and who use third parties, like traditional dry cleaners, in between), has raised $3.5 million in seed funding from a long list of investors, including Accelerator Ventures, Arena Ventures, Base Ventures, Expansion Venture Capital, ff Venture Capital, Great Oaks Venture Capital, MESA Ventures, Otter Rock Capital, Rothenberg Ventures and Structure Capital. Last December, the company raised $2 million in seed funding from investors.

    Roomi, a year-old, New York-based startup whose mobile app promises to simplify roommate and housing searches, has raised $2 million in seed funding led by DCM Ventures. Crunchbase shows the company had previously raised roughly $650,000 in seed funding, including from Wasabi Ventures, Great Oaks Venture Capital, and Sand Hill East. More here.

    Swiggy, a 10-month-old, Bangalore, India-based on-demand delivery platform, has raised $16.5 million in new funding led by Norwest Venture Partners, with participation from earlier backers Accel Partners and SAIF Partners. The company has now raised $33.5 million across three rounds, all in 2015. TechCrunch has more here.

    Talkdesk, a 3.5-year-old, San Francisco-based call center software maker, has raised $15 million in Series A funding led by DFJ, with participation from earlier investor Storm Ventures. The company has now raised $18 million altogether, including from 500 Startups, shows Crunchbase.

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    New Funds

    Clarus Ventures, a 10-year-old, Cambridge, Ma.-based venture firm focused on life sciences, has raised a new, $500 million fund, “well above its $375 million target,” the company announced this morning. More here.

    SEED Capital, an 11-year-old, Denmark-based venture firm focused on both IT and med tech, has held a first close on its third fund with $75.2 million. Backers in the fund, which has a final target of roughly $113 million, include ATP, Dansk Vækstkapital, The Danish Growth Fund and Augustinus Fonden. Five companies in its portfolio were acquired in the last year, including wireless speaker maker Libratone, which sold to a Hong Kong-based investor group for an undisclosed amount. Another of its companies, Windar Photonics, went public on the London Stock Exchange.

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    People

    Luis Hanemann has joined e.ventures as partner. Hanemann, who is based in Berlin, was formerly the chief marketing officer at Rocket Internet.

    Neal Mohan is expected to join Dropbox as its head of product, reports Recode. Mohan — dubbed Google’s $100 million man for the amount of money Google is said to have paid to keep him from earlier going to Twitter — joined Google via its DoubleClick acquisition in 2007. His current title at Google is VP of Display Advertising Products.

    Gilles Stephan, formerly Amazon’s Europe talent acquisition director and its EU head of next generation leaders, has joined Balderton Capital as talent director. In his new role, Stephan is expected to help the firm’s portfolio companies help scale their teams.

    David Strasser has joined SWaN & Legend Venture Partners as a managing director. Previously, Strasser worked at Janney Montgomery Scott, where he served as a managing director in equity research for the retail sector. He has also been a managing director at Banc of America Securities and cofounded Moda Partners, a retail- and consumer-focused hedge fund.

    In case you’re curious, Recode has published the full video of its interview with Snapchat CEO  Evan Spiegel at its recent Recode conference.

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    Jobs

    Twilio is looking to hire both a director of corporate development and a director of business development. The jobs are in San Francisco.

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    Jobs

    VCs spend an average of three minutes and 44 seconds on each pitch deck they read. That tidbit and other great data here.

    Indian startups are attracting billions of dollars from venture and private equity firms, but it’s mostly flowing into a handful of large companies. Quartz has the stats here.

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    Essential Reads

    Uber is making serious inroads in China by undercutting competitors on pricing, providing generally more luxurious cars than cabs, and paying drivers remarkably well — with bonuses up to three times the amount of their fares, reports the New York Times.

    Encouraged by investors like Sequoia Capital, growing numbers of Indian entrepreneurs are “making a beeline to startup hubs in Shanghai, Beijing and Guangzhou to pick up tips in the art of scalability from their peers in the world’s largest e-commerce market.” Economic Times has the story here.

    Yikes. (Don’t get sick.)

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    Detours

    The rise of the “hijabster.”

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    Retail Therapy

    Good news: A bike light that’s as bright as an actual car headlight. (The bad news: it costs $300.)

    Connie