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  • Thumbtack Take Its Own Investor, Google, Head On

    17046010043_91ccba83b0_mAt a StrictlyVC event in San Francisco last week, Charles Hudson of SoftTech VC sat down with Sequoia Capital partner Bryan Schreier and Marco Zappacosta to discuss Thumbtack, an online marketplace for hiring workers that Zappacosta co-founded soon after graduating from Columbia University in 2007.

    Thumbtack is interesting for numerous reasons, including the amount of funding it has raised — $148 million over three rounds, all within a 14-month period – and who its investors are. Sequoia is among them (Schreier sits on Thumbtack’s board). So is Google, which provided Thumbtack with $100 million last summer – and, the business world recently learned, is now entering into direct competition with Thumbtack.

    Hudson, who spends much of his time studying marketplaces, asked Zappacosta and Schreier – a former Googler – about their “multifaceted” relationship with Google, among other things. That conversation, edited for length, follows:

    CH: How did Sequoia and Thumbtack come together?

    MZ: Jason Calacanis introduced us to [Sequoia partner] Roelof Botha and another angel investor introduced us to Bryan. It was the fall of 2010. Unlike a lot of VCs, they were very explicit about what they thought was good and wasn’t yet good. When we [later] went back with numbers to show them [how we were growing], they did [write a check].

    CH: Many marketplaces sit in between the buyer and seller, but Marco, you’ve taken the opposite stance. Why?

    MZ: A lot of entrepreneurs and investors view the transactional model as a way to get a higher take rate. The problem in doing that is you’re solving your own problem; you’re not actually solving the customers’ problem at that point. There are times when you fundamentally [need to act as the facilitator]. Taking payment is key to making eBay work. It’s key to Uber, where speed is fundamental. But with Thumbtack, when a customer is spending $3,000 to repaint their house and you ask them what the hard part is, no one ever tells you it’s about paying the painter. It’s about finding the painter, and that’s the focus at Thumbtack. [Editor’s note: Thumbtack sends customer requests to service providers like plumbers, caterers, and painters. If the service provider thinks it’s a fit, they pay Thumbtack a fee to shoot a quote to the customer, who then chooses whether or not to work with that service provider.]

    CH: Is leakage –people going off platform to have a direct relationship – something you’ve ever worried about?

    MZ: If you haven’t created enough value for both sides to keep using your platform, that’s your problem.

    CH: [Tell us about your fees.]

    MZ: We’ve explicitly kept [them] very low — much lower than we think it could be. If you look at other marketplaces like Airbnb, it’s 10 to 12 percent. Uber is now 18 to 20 percent. eBay is like 13 percent. We’re below that and happily because our goal is to get market share. Today we move a billion dollars worth of commerce on the platform, which we feel good about, but that’s still nothing relative to the almost trillion dollars worth of commerce happening in the US. That’s the thousand x [opportunity] in front of us.

    CH: You recently raised $100 million from Google Capital. Google has also made some reference that they have designs on the home services market. 

    MZ: I have to give Bryan credit for board member words of encouragement when this happened, which is that if Google or Facebook or Amazon aren’t competing in your market, then you’re probably in a shitty market. And I think he’s exactly right.

    BS: You felt better for like three seconds, right?

    MZ: [Laughs.] It’s indicative of the opportunity being enormous. I don’t perceive any sort of nefarious action on the part of Google Capital. I think it’s unfortunate. It’s a 50,000 to 60,000 person organization, but it’s why we’ve kept them at arm’s length. We’re excited to have them as investors, but we’ve been careful of that relationship accordingly.

    BS: Thumbtack connects people to people; they don’t connect companies. They don’t connect ads to people. It’s a very different business, with people on both sides who have an intimate relationship. This is something that Google has never been very good at. [It isn’t] intrinsic to their DNA.

    MZ: The opportunity and the challenge in this space is just how fragmented it is. There’s no natural point of aggregation as there is in retailing, where you can go to a distributor and instantly get access to 30 or 40 percent of the inventory in that category. So Google and Amazon — despite their money and brands and hard working employees — have to go out and recruit these plumbers and caterers one by one, and that’s a fucking grind, one that we’re real good at, and one we’ve done without any salespeople and with a lot of technology and innovation.

    CH: How do you think about Amazon given its reach and scale and financial resources?

    BS: They still suffer from that corporate DNA issue, which is that they send packages to people, not people to people. And it’s very different. You have to get people on the phone when they’re fixing a toilet and really don’t want to be bothered.

    CH: You raised two fairly large rounds back to back. Why?

    MZ: The truth, at the end of the day: it’s because you can. We didn’t need the money. The business is growing great and generating very real revenue. These rounds in happen in quick succession and in ever-growing numbers because companies . . . [in a big space and with a big vision] . . . can.

    Connie

    May 22, 2015
    Entrepreneurs, Investment Opportunities
    Bryan Schreier, Charles Hudson, Google Capital, Jed Katz, Marco Zappacosta, Sequoia Capital, Thumbtack

  • StrictlyVC: May 21, 2015

    Hi, everyone, happy Thursday!

    No column today. (Busy morning.)

    —–

    Top News in the A.M.

    Watch out, on-demand delivery startups: Amazon announced today that its Prime Now service will now start delivering goods from local stores in Manhattan, with plans to expand to other neighborhoods and cities later this year.

    A top Apple analyst thinks a new iPhone is coming in August.

    The NSA developed a plan to deliver malware through Google and Samsung app stores, according to newly published documents obtained by Edward Snowden and published by The Intercept and CBC News. More here.

    —–

    New Fundings

    Black Duck Software, a 13-year-old, Boston, Ma.-based company whose software helps enterprises with the logistical challenges that come with open source adoption and management, has raised $5 million in fresh funding, including from Siemens Ventures. According to Crunchbase, the company has raised at least $75 million over the years, including from SAP, General Catalyst Partners, Intel Capital, Sapphire Ventures, Flagship Ventures, and Volition Capital.

    CloudTags, a three-year-old, New York-based company whose omnichannel analytics tell retailers who their customers are prior to checkout, has raised $2 million in funding from IDEA Fund Partners, Alerion Ventures, Knoll Ventures and Hallett Capital. The company has raised $4 million to date, shows Crunchbase.

    Cove, a two-year-old, Washington, D.C.-based provider of shared “productive spaces,” has raised $2.8 million in Series A funding from unnamed investors. More here.

    Directly, a four-year-old, San Francisco-based company that makes on-demand customer service apps that are used by Airbnb, Pinterest and others, has raised $10 million in Series A funding led by Costanoa Venture Capital and earlier investor True Ventures, with numerous seed investors participating. The company had earlier raised $3.1 million in seed funding, including from CrunchFund and investor Gil Penchina. More here.

    Edo Interactive, an eight-year-old, Nashville, Tn.-based ad tech company, has raised $20 million in Series E funding from VantagePoint Capital Partners, Baird Capital, and several unnamed local firms. More here.

    EnergySage, a six-year-old, Boston-based online solar energy marketplace, has raised $1.5 million in Series A funding led by Launchpad Venture Group, with participation from New York Angels and the Clean Energy Venture Group.

    eProdigy, a seven-month-old, New York-based fintech holding company with several subsidiaries serving the alternative finance space, announced yesterday that it has landed $100 million from an unnamed private equity firm in the form of a term loan, a convertible note feature, and participation rights.  The convertible note portion is a $20 million facility with the noteholder’s right to convert the full amount to equity at a $100 million valuation. More here.

    FraudMetrix, a two-year-old, Hangzhou, China-based Internet security firm founded by several former Alibaba executives, has raised $30 million in Series B funding led by Qiming Venture Partners, with participation from earlier backers China Broadband Capital, IDG Capital Partners, China Growth Capital, and Linear Venture . China Money Network has more here.

    Fuze, a six-year-old, San Francisco-based cloud video conferencing company, has raised $20 million in growth funding from Hermes Growth Partners. The round brings the company’s total funding to $68.5 million, shows Crunchbase. Fuze has also acquired for an undisclosed amount LiveMinutes, an online team workspace platform. Four-year-old LiveMinutes, also based in San Francisco, had raised $3.2 million from investors, including Pritzker Group Venture Capital and Great Oaks Venture Capital.

    General Fusion, a 13-year-old, Vancouver-based developer of fusion energy, has raised roughly $22 million (U.S.) in new funding led by Khazanah Nasional Berhad, the Malaysian government’s strategic investment fund, along with earlier backers BDC Capital, Bezos Expeditions, Braemar Energy Ventures, Cenovus Energy, Chrysalix Energy Venture Capital, Entrepreneurs Fund, GrowthWorks, SET Ventures and Sustainable Development Technology Canada.

    Glowforge, a year-old, Seattle, Wa.-based startup that wants to make 3-D laser printers that are easy enough to operate and affordable enough for home users, has raised $9 million in Series A funding led by Foundry Group, with participation from True Ventures and ex-MakerBot executives Bre Pettis and Jenny Lawton. Venture Capital Dispatch has more here.

    Guerrilla RF, a two-year-old, Greensboro, N.C.-based company that provides monolithic microwave integrated circuits to wireless network infrastructure OEMs, has raised $2 million in Series B funding led by Charlotte Angel Fundand Piedmont Angel Network, with participation from other individual investors. The company has raised $3.5 million in funding to date.

    Jiff, a four-year-old, Palo Alto, CA-based health technology company cofounded by serial entrepreneur James Currier, has raised $23.3 million in Series C funding led by Rosemark Capital, with participation from GE Ventures, Venrock, Aberdare Partners and Aeris Capital. The company has raised roughly $50 million so far, shows Crunchbase. More here.

    Justworks, a 2.5-year-old, New York City-based human resources and payments platform  has raised $13 million in Series B funding led by Bain Capital Ventures, with participation from previous backers Thrive Capital and Index Ventures. The company has now raised $20 million altogether.

    Liqid, a 2.5-year-old, Lafayette, Co.-based  data center startup operating in stealth mode, has raised $5.7 million in seed funding from Kingston Technology, Phison Electronics Corp., ABR Capital Management, and DH Capital. More here.

    Logmatic.io, a year-old, Paris-based SaaS-based log management platform, has raised $1 million in funding led by ISAI Seed Club.

    Lookup, a nine-month-old, Bangalore, India-based free and secure messaging app that connects shoppers with local businesses, has raised an undisclosed amount of Series A funding from Twitter co-founder Biz Stone. The company had previously raised $382,000 in seed funding from angel investors. The Economic Times has more here.

    Maana, a three-year-old, Palo Alto, Ca.-based company that’s been developing a search engine technology for big data, has raised $11 million in Series A funding from investors, including Chevron Technology Ventures,ConocoPhillips Technology Ventures, Frost Data Capital, GE Ventures, and Intel Capital. The company has now raised more than $14 million altogether. More here.

    Metabiota, a seven-year-old, San Francisco-based developer of epidemic prediction and prevention software, has raised $30 million in Series A funding led by RSTP, with participation from Capricorn Healthcare, WP Global Partners, Industry Ventures, and Data Collective. The company has now raised $32.8 million altogether.

    Qwilr, a year-old, Syndey, Australia-based platform whose cloud-based tools aim to make it easy to turn business documents into webpages (and replace PowerPoint decks in the process), has raised AUD $500,000 (about $395,000) in seed funding from investors, including Sydney Seed Fund and Macdoch Ventures. TechCrunch has more here.

    Regenexbio, a six-year-old, Rockville, Md.-based gene therapy company, has raised $70.5 million in Series D funding led by Vivo Capital, with participation from Brookside Capital, Venrock, Janus Capital Management, Jennison Associates, Perceptive Advisors, QVT Financial, Tourbillon Global Ventures, Sectoral Asset Management, Cormorant Asset Management,Foresite Capital Management, RTW Investments, Deerfield Managementand Fidelity Biosciences.

    Stripe, the five-year-old, San Francisco-based online payments processor, is raising a new round of funding that could reach $500 million, and at a $5 billion valuation, according to TechCrunch sources. To date, the company has raised $190 million from investors, including Khosla Ventures, Andreessen Horowitz, and Sequoia Capital, as well as investor-operators Elon Musk,Peter Thiel, and Aaron Levie.

    Samanage, an eight-year-old, Israel-based SaaS platform for managing internal assets, has raised $16 million in Series B funding co-led by Marker andVintage Investment Partners, with participation from earlier investorsCarmel Ventures, Gemini Israel Ventures and Silicon Valley Bank.

    Taplytics, a year-old, San Francisco, Ca.-based enterprise mobile A/B testing platform, has raised $2.4 million in seed funding from a long list of prominent individual investors, including serial entrepreneur Justin Kan and Matt Cutts, the longtime head of Google’s web spam team.

    Wibbitz, a four-year-old, Tel Aviv, Israel-based text-to-video startup, has raised $8 million in Series B funding led by NantMobile, founded by L.A based billionaire physician and entrepreneur Patrick Soon-Shiong. Earlier investorsHorizon Ventures, Lool Ventures, Initial Capital and Kima Ventures also participated. Geektime has more here.

    —–

    New Funds

    Formation 8, the three-year-old, San Francisco-based venture firm, has quietly held a first close on a new $100 million-targeted fund that will invest exclusively in hardware companies, reports Fortune. Among the fund’s LPs is Flextronics.

    Glilot Capital Partners, a four-year-old, Tel Aviv, Israel-based venture capital firm investing in early-stage, Israeli cyber-security and enterprise software start-ups, has raised a second fund with $77 million from limited partners, including Bank Hapoalim, Israel’s largest bank. The firm’s debut fund had closed with $30 million, which it invested across eight companies. Those include cloud security startup Aorato, which Microsoft acquired for a rumored $200 million, and the inbound marketing platform Insightera, which was acquired by Marketo for $20 million.<

    GreenSoil Investments, a four-year-old, Toronto-based investment firm, has held a first close of $25 million for its third fund, which is targeting between $80 million and $100 million. The firm now has $56 million in assets under management. More here.

    Ignition Partners, the 15-year-old firm with offices in Bellevue, Wa., and Palo Alto, Ca., has officially closed its sixth fund with $200 million, money it will invest in early-stage enterprise software startups. (We told you about this fund in March, when the firm filed an SEC form that stated its target.) Ignition says it could have raised more than $300 million from endowments, foundations, fund of funds and family offices but that it chose to stick to its core “boutique” model.

    The band Linkin Park recently launched a venture fund that’s targeting consumer-facing startups. We’re tempted to poke fun, but in the end (yes), they’ve assembled some pretty attractive stakes, including in the ride-sharing platform Lyft; the free-trading app Robinhood; and Shyp, the shipping app. CNN Money has more about the band’s firm, Machine Shop Ventures, here.

    Osage University Partners, a Philadelphia area-based venture capital firm that invests exclusively in startups that are commercializing university research, has closed its second fund with $215 million. The group has signed deals with 68 U.S. and two Israel universities and research institutions.

    Vistara Capital Partners, a Vancouver, Canada-based growth capital firm, has raised $80 million for its debut fund. The firm, which is targeting an overall fund size of $100 million, provides growth capital financing (debt and equity) to mid- and later-stage tech companies across Canada and the U.S.. The fund will invest in both private and public companies, providing between $5 million and $15 million per investment, with capital saved for follow-on investments. More here.

    —–

    IPOs

    Etsy, the 10-year-old, Brooklyn-based online crafts marketplace, saw its shares plunge 23 percent yesterday, a day after it posted a wider-than-expected loss in the most recent quarter. International Business Times has more here.

    Shopify, the nine-year-old, Toronto-based company whose software helps retailers sell goods online, priced its IPO yesterday at $17 a share, above the top end of a price range that had already been raised because of strong investor demand. More here.

    —–

    Exits

    Handy, a 3.5-year-old, New York-based on-demand cleaning, plumbing and other home services platform, is in talks to acquire its slightly younger, less well-capitalized, San Francisco-based rival, Homejoy, says TechCrunch. According to Crunchbase, Homejoy has raised at least $40 million, from First Round Capital, Google Ventures, Max Levchin, Redpoint Ventures, Signatures Capital, and Pejman Mar Ventures. Meanwhile, Handy has raised at least $60 milion, including from Sound Ventures, TPG Growth, Revolution, General Catalyst Partners, and Highland Capital Partners.

    TheLadders, the 12-year-old, New York-based online recruitment service, is nearing a sale, according to Fortune.

    —–

    People

    The venture-backed big-data software company ClearStory Data has named long-time Silicon Valley technologist Timothy Howes as chief technology officer, reports VentureWire. Howes has previously held CTO spots at Netscape, Opsware, HP’s enterprise software business, and RockMelt.

    —–

    Jobs

    Lift Ventures, a San Francisco-based startup studio, is looking to hire an associate.

    —–

    Data

    Atomico Ventures looks at 182 software companies worth more than a billion dollars and concludes that increasingly, they aren’t from the U.S.. They’re also hitting their “unicorn” status faster than ever. Silk lays out Atomico’s data here.

    —–

    Essential Reads

    The clock is ticking for Dropbox, argues Business Insider.

    Things are rocky for smartwatch maker Pebble, too, reports TechCrunch.

    The state of California has forced venture-backed Leap Transit to stop operating its luxury bus line without a permit.

    Spotify says it’s becoming a platform for more than just streaming music.

    —–

    Detours

    Letterman says goodbye.

    The plan to move an entire Swedish town.

    This is why we’re terrible with names.

    —–

    Retail Therapy

    Live like Woz. Buy the Los Gatos, Ca. house built just for him.

    (Also, in case you’re interested: Fast Company has just posted a little-seen Apple video with Steve Jobs and Steve Wozniak talking about the company’s beginnings.)

    Connie

    May 21, 2015
    Morning Summary

  • StrictlyVC: May 20, 2015

    Hi, everyone, happy Wednesday. It was fun seeing some of you yesterday at the jam-packed On-Demand conference in San Francisco. We moderated the last discussion, parts of which we’ll share with you here soon. (It was pretty interesting, thanks to some great VC panelists.)

    —–

    Top News in the A.M.

    Why Tweets are about to dominate your Google searches.

    —–

    Pantera Capital’s Dan Morehead on the Future of Bitcoin

    At a StrictlyVC event in San Francisco last week, Dan Morehead, founder of the San Francisco-based hedge fund Pantera Capital, sat down with seed investor and venture advisor Semil Shah to talk Bitcoin.

    Morehead knows Bitcoin as well as anyone. After logging time at Deutsche Bank and Goldman Sachs, then joining Tiger Management, where he rose to the head of global macro trading, Morehead founded Pantera, a 12-year-old outfit that has more recently committed to investing exclusively in Bitcoin and other digital currencies. We wanted to know why — as did Shah — so Shah asked him. Parts of their discussion follow, edited for length.

    SS: There was exuberance over Bitcoin, then not, and now it’s coming back. What’s going on?

    DM: Every technology goes through a hype cycle, where there’s a kernel of truth or a kernel of genius, and once the media catches it, it [captures everyone’s imagination] for a while. Then there’s an awkward period. And Bitcoin went through that. [But] it was more extreme because it has one unique feature. It’s a technology protocol that has a real time price feed. And that’s really, really weird.

    In 2011, no one really cared. By 2013, everyone had [that price feed] on their screens and the press was talking about it, and it led to extreme bubbles [including in Bitcoin mining]. At the end of 2013, the price of Bitcoin was 93 times higher than it was the year before. Bitcoin improves all the time, but it wasn’t 93 times better, so a bubble . . . had to deflate.

    SS: Was it rational for Bitcoin’s price volatilty to affect venture investment in the technology?

    DM: I think people did get over their skis in 2013, thinking it was going to change the world overnight. It’s going to change the world, but it’s going to take a couple decades to do it, as other Internet protocols [have taken].

    One data point about Bitcoin: All the companies in the Bitcoin ecosystem are worth just over $3 billion today. All the Bitcoin that exist are about worth that right now. So you have a ration of about 1:1. Meanwhile, in talking about the U.S. equity market or the developed company space, the market cap of all the companies in the U.S. is worth five times the value of money supply. So I think you’re going to see a persistent trend of value venture in Bitcoin increasing at a faster pace than the underlying currency or protocol.

    SS: Numerous traditional VCs have made bets on seed- and early-stage Bitcoin companies, but it seems like these bets will take longer [than expected] to play out. Will they have to continue supporting these companies, or will other investors come down the stack?

    DM: It’s certainly taking longer than some people expected a few years ago. But you’re seeing [an influx] of investors. Last month, Circle [Internet Financial] did a round with Goldman Sachs, which was the first major international bank to invest. So not only are you getting the traditional venture investors, but you’re getting strategic investors like big banks and big exchanges trying to get invested in the Bitcoin space.

    SS: You understand Wall Street. How does it perceive Bitcoin, both as a currency and as a technology platform?

    DM: I think most of Wall Street realizes that the systems that move money are incredibly antiquated and incredibly inefficient. Most of them were designed in the 1950s. The main thing for wiring money – SWIFT – is basically sending messages and it’s very primitive and can be disrupted by Bitcoin very easily, and most banks would like to see that happen.

    SS: How would that affect big banks’ fees and the way they make money?

    DM: I think too much was made in the early days of [Bitcoin’s ability] to disrupt banks. A lot of banks now have retail stores – selling services to people. So they can still retain their relationship with the customer and then swap out the back end.

    Also, there are a small number of banks that do cross-border money movement; they’re called correspondent banks, and there’s really only a dozen or so that control an entire market. An extreme example is Africa, where, if you want to move money into or out of the entire continent, there are only two banks that will do it and other banks need to use those two banks and it’s very expensive. So banks want a cheaper way to get money in and out of places like that.

    SS: What is happening in Bitcoin in the rest of the world outside the West, especially where rule of law is weak?

    DM: In mobile money, Kenya is actually the world leader. Southern Africa has weak institutions and currencies that deflate at a rapid rate; Zimbabwe is the world record holder with a 100 trillion dollar note now. So their citizens need a better solution to transact.

    They also are unbanked [along with billions] of other people on earth that don’t have access to a bank but do have a cellphone, and going straight to some mobile money solution — bitcoin is a great solution for that. Already, 75 percent of adults in Kenya use a mobile system called M-Pesa. In fact, 45 percent of the entire GDP of the country is processed in M-Pesa. To me, that’s the future of bitcoin.

    (If you’d like to hear more from this discussion, you can listen to it in its entirety here.)

    —–

    New Fundings

    Algolia, a three-year-old, San Francisco-based company whose hosted search API allows websites and mobile applications to deliver search without having to build it out, has raised $18.3 million in funding led by Accel Partners, with participation from Lead Edge Capital and earlier backers Alven Capital, Point Nine Capital and Storm Ventures. Individual investors, including Ilya Sukhar of Parse and Solomon Hykes of Docker, also joined the round. The company has now raised $21.1 million altogether. TechCrunch has more here.

    AlphaDraft, a year-old, San Diego, Ca.-based e-sports startup, has raised $5 million in seed funding from investors, including Metamorphic Ventures, William Morris Endeavor Entertainment, Melo7 Tech Partners, former NBA Commissioner David Stern, Upfront Ventures, IDG Ventures, KEC Ventures, Freestyle Capital, SK Ventures, Basset Investment Group, Gokul Rajaram, and Amplify.LA, which furnished the company with its first check earlier this year. The L.A. Times has more here.

    Blade, a year-old, New York-based app and logistics company centered around helicopter use (think Uber for choppers), has raised  $6 million at a $25 million valuation from some big names, including Google chairman Eric Schmidt, Discover Communications CEO David Zaslav, IAC’s Barry Diller, Alex von Furstenberg, Raine Ventures, and iHeart Media chairman Bob Pittman. Both Pittman and Schmidt have licenses to fly helicopters and jets, notes Business Insider, which has the story here.

    BookBub, a three-year-old, Cambridge, Ma.-based daily newsletter providing millions of readers deals on e-books, has raised $7 million in new equity and debt financing from undisclosed sources. The company had raised $3.8 million in Series A funding last year from NextView Ventures, Founder Collective,Avalon Ventures, and Bloomberg Beta. BetaBoston has the skinny here.

    Coho Data, a 3.5-year-old, Palo Alto, Ca.-based company that makes software-defined networking integrated storage appliances for private clouds, has raised $30 million in funding led by March Capital Partners, with participation from Hewlett Packard Ventures, Intel Capital and earlier investors Andreessen Horowitz and Ignition Partners. The company has now raised $67 million altogether.

    Farmers Business Network, a 1.5-year-old, San Francisco-based company whose computer systems evaluate public and private data on crop yields, weather patterns and planting practices, has raised $15 million in funding led by Google Ventures. Venture Capital Dispatch has more here.

    FlyOnWall, a two-year-old, New York-based live-streaming company formerly known as LiveLens, has raised $3 million in Series B funding from private investors. The company had previously raised $2.5 million from investors (also unnamed). More here.Little Labs, a year-old, L.A.-based smartwatch app studio, has raised $3 milion in funding led by New Enterprise Associates, with participation from Lightspeed Ventures, Lowercase Capital, and earlier backers Crosscut Ventures and Amplify.LA. More here.

    Mobcrush, a 10-month-old, Santa Monica, Ca.-based live streaming platform for mobile games, has raised $4.9 million in seed funding from a long list of investors, including Raine Ventures, First Round Capital, Lowercase Capital, CrunchFund, Rincon Venture Partners, Crosscut Ventures, Lionsgate, Advancit Capital, CAA Ventures, BAM Ventures, MTGx Ventures, and numerous individual investors.

    Oradian, a three-year-old, Zagreb, Croatia-based startup that makes cloud-based software for micro finance institutions in developing markets, has raised an undisclosed amount of seed funding from Credo Ventures, Playfair Capital, Day One Capital, Esther Dyson, Moaffak Ahmed and Pule Taukobong (Africa Angels Network). TechCrunch has more here.

    Shelvspace, a three-year-old, Scottsdale, Az.-based SaaS company targeting the consumer packaging goods industry, has raised $1 million led by Tallwave Capital, with participation from numerous individual investors.Stride Health, a two-year-old, San Francisco-based health insurance recommendation engine, has raised $13 million in Series A funding led by Venrock, with participation from Fidelity Biosciences and earlier investor New Enterprise Associates. The round brings Stride’s total to $17.5 million,reports TechCrunch.

    Tilt, a three-year-old, San Francisco-based crowdfunding platform, has raised a new round of funding that values the company at $400 million. TechCrunch has the story here. Tilt had previously raised roughly $37 million from investors, including Y Combinator, Andreessen Horowitz, QueensBridge Venture Partners, SV Angel, Sean Parker, Naval Ravikant, Silicon Valley Bank, Alexis Ohanian, and Felicis Ventures.

    WePay, a seven-year-old, Palo Alto, Ca.-based payments companies built to serve the needs of online marketplaces, has raised $40 million in Series D funding from the growth equity firm FTV Capital. The company has now raised roughly $74 million altogether, shows Crunchbase. Fortune has more here.

    Zaption, a three-year-old, San Francisco-based video learning company, has raised $1.5 million in seed funding from investors, including NewSchools Venture Fund, Redcrest Enterprises, Scion Capital and Telegraph Hill Capital. More here.

    —–
    New Funds

    Enmi Kendall and Anya Schiess met more than 10 years ago at business school; now, the two have reunited to form Healthy Ventures, a new seed-stage venture capital firm that’s attempting to get digital health ventures off the ground. Geekwire has the story here.Norwegian state-owned utility Statkraft AS has set up a venture capital unit, which will invest up to $11 million per year in clean energy-related start-ups in Europe. More here.

    —–
    Exits

    Booxmedia, a six-year-old, Helsinki-based cloud-TV platform, has been acquired by the Cambridge, U.K.-based, AIM-listed company Amino for €7.9 million ($8.8 million). According to Crunchbase, Booxmedia had raised roughly $580,000 in seed funding from individual investors. TechCrunch has more here.

    Next Big Sound, a seven-year-old, New York-based online music analytics platform, has been acquired by the streaming music service Pandora for undisclosed terms. According to Crunchbase, the company had raised roughly $8 million from investors, including Alsop-Louie Partners, Foundry Group,  IA Ventures, and SoftTech VC. VentureBeat has more here.

    Predilytics, a four-year-old, Burlington, Ma.-based predictive analytics company, has been acquired for undisclosed terms by the health management company WellTok, based in Denver. Predilytics had raised $20.5 million from investors, including Highland Capital Partners, Flare Capital Partners, Flybridge Capital Partners, Qualcomm Ventures, and Google Ventures. More here.

    Weathermob, a four-year-old, Boston-based company that uses crowdsourcing to provide an alternative to data from traditional weather stations, has been acquired by Weathernews, a nearly 30-year-old weather prediction technology company based in Chiba-shi, Japan. TechCrunch has more here.

    WooCommerce, an e-commerce tools company based in Cape Town, South Africa, has reportedly sold to WordPress parent company Automattic for roughly $30 million in cash and stock. Automattic CEO Matt Mullenweg wouldn’t comment on the price, but he told Recode yesterday that the acquisition is the largest his company has made  “by about 6x.”

    —–

    People

    Feroz Dewan, who has long run the hedge fund operations of Tiger Global Management — and helped steer it into numerous bets on privately held tech companies  —  is leaving next month to start his own business. Reuters has more here.

    Ilya Fushman, head of product at Dropbox, has left the company to become a general partner at Index Ventures, joining partners Danny Rimer and Mike Volpi at the venture firm’s San Francisco office. Index Ventures had led Dropbox’s $250 million Series B round in 2011, so the two sides know each other well. Fushman is no stranger to venture capital, either. Before joining Dropbox, he spent a roughly 1.5 years at Khosla Ventures as a principal. Business Insider has the scoop here.

    Mike Kail, CIO and SVP of infrastructure at Yahoo, has left the company after less than a year, reports the WSJ. Kail “has chosen to leave the company in order to pursue other opportunities,” Yahoo told the outlet. Presumably, he’s also busily battling a lawsuit filed against him by Netflix, his former employer, which has accused Kail of fraud, breach of fiduciary duties and other improper actions.

    David Lee has left the venture firm SV Angel after numerous years as its managing partner, according to a letter sent to its limited partners and companies. Recode has that letter here. Lee says (for now) that he’s leaving to spend more time with his family. In the meantime, Topher Conway will be moving up to the co-managing role alongside his father, SV Angel founder Ron Conway, notes TechCrunch.

    On Monday night, at a Fortune dinner in New York, Yahoo CEO Marissa Mayer said the best advice she has ever received came from Google cofounder Sergey Brin, who told her on her last day at Google: “Don’t forget to be bold.” More here.

    Every two years, Amazon founder Jeff Bezos annoints a new “shadow,” a person who acts as his advisor, sits by his side in meetings, and serves as a sounding board before being sent back into another role at the company. This time, it’s Maria Renz, who was most recently CEO of Quidsi, the parent company of Diapers.com that Amazon acquired in 2011. Recode has the story.

    Alexia Tsotsis, co-editor of TechCrunch, is stepping down to attend graduate school at Stanford. “I may never have another job I’ll love as much as this one, but I need to click on to the next gallery slide of my life,” she explained in a post this morning. More here.

    —–

    Jobs

    Yelp is hiring a senior manager of corporate development. The job is in San Francisco.

    —–

    Essential Reads

    Six Chinese men have been indicted for the theft of code from Silicon Valley companies. The New York Times has more here.

    —–

    Detours

    Don Draper’s complicated relationship history in one chart.
    —–

    Exits

    SaloonBox, because not everyone can mix a drink like Tom Cruise in “Cocktail.” (Not that we ever sat through all two and a half hours of  “Cocktail.” Ahem.)

    Connie

    May 20, 2015
    Morning Summary

  • Pantera Capital’s Dan Morehead on the Future of Bitcoin

    17639963136_8b2c64b746_mAt a StrictlyVC event in San Francisco last week, Dan Morehead, founder of the San Francisco-based hedge fund Pantera Capital, sat down with seed investor and venture advisor Semil Shah to talk Bitcoin.

    Morehead knows Bitcoin as well as anyone. After logging time at Deutsche Bank and Goldman Sachs, then joining Tiger Management, where he rose to the head of global macro trading, Morehead founded Pantera, a 12-year-old outfit that has more recently committed to investing exclusively in Bitcoin and other digital currencies. We wanted to know why — as did Shah — so Shah asked him. Parts of their discussion follow, edited for length.

    SS: There was exuberance over Bitcoin, then not, and now it’s coming back. What’s going on?

    DM: Every technology goes through a hype cycle, where there’s a kernel of truth or a kernel of genius, and once the media catches it, it [captures everyone’s imagination] for a while. Then there’s an awkward period. And Bitcoin went through that. [But] it was more extreme because it has one unique feature. It’s a technology protocol that has a real time price feed. And that’s really, really weird.

    In 2011, no one really cared. By 2013, everyone had [that price feed] on their screens and the press was talking about it, and it led to extreme bubbles [including in Bitcoin mining]. At the end of 2013, the price of Bitcoin was 93 times higher than it was the year before. Bitcoin improves all the time, but it wasn’t 93 times better, so a bubble . . . had to deflate.

    SS: Was it rational for Bitcoin’s price volatilty to affect venture investment in the technology?

    DM: I think people did get over their skis in 2013, thinking it was going to change the world overnight. It’s going to change the world, but it’s going to take a couple decades to do it, as other Internet protocols [have taken].

    One data point about Bitcoin: All the companies in the Bitcoin ecosystem are worth just over $3 billion today. All the Bitcoin that exist are about worth that right now. So you have a ratio of about 1:1. Meanwhile, in talking about the U.S. equity market or the developed company space, the market cap of all the companies in the U.S. is worth five times the value of money supply. So I think you’re going to see a persistent trend of value venture in Bitcoin increasing at a faster pace than the underlying currency or protocol.

    SS: Numerous traditional VCs have made bets on seed- and early-stage Bitcoin companies, but it seems like these bets will take longer [than expected] to play out. Will they have to continue supporting these companies, or will other investors come down the stack?

    DM: It’s certainly taking longer than some people expected a few years ago. But you’re seeing [an influx] of investors. Last month, Circle [Internet Financial] did a round with Goldman Sachs, which was the first major international bank to invest. So not only are you getting the traditional venture investors, but you’re getting strategic investors like big banks and big exchanges trying to get invested in the Bitcoin space.

    SS: You understand Wall Street. How does it perceive Bitcoin, both as a currency and as a technology platform?

    DM: I think most of Wall Street realizes that the systems that move money are incredibly antiquated and incredibly inefficient. Most of them were designed in the 1950s. The main thing for wiring money – SWIFT – is basically sending messages and it’s very primitive and can be disrupted by Bitcoin very easily, and most banks would like to see that happen.

    SS: How would that affect big banks’ fees and the way they make money?

    DM: I think too much was made in the early days of [Bitcoin’s ability] to disrupt banks. A lot of banks now have retail stores – selling services to people. So they can still retain their relationship with the customer and then swap out the back end.

    Also, there are a small number of banks that do cross-border money movement; they’re called correspondent banks, and there’s really only a dozen or so that control an entire market. An extreme example is Africa, where, if you want to move money into or out of the entire continent, there are only two banks that will do it and other banks need to use those two banks and it’s very expensive. So banks want a cheaper way to get money in and out of places like that.

    SS: What is happening in Bitcoin in the rest of the world outside the West, especially where rule of law is weak?

    DM: In mobile money, Kenya is actually the world leader. Southern Africa has weak institutions and currencies that deflate at a rapid rate; Zimbabwe is the world record holder with a 100 trillion dollar note now. So their citizens need a better solution to transact.

    They also are unbanked [along with billions] of other people on earth that don’t have access to a bank but do have a cellphone, and going straight to some mobile money solution — bitcoin is a great solution for that. Already, 75 percent of adults in Kenya use a mobile system called M-Pesa. In fact, 45 percent of the entire GDP of the country is processed in M-Pesa. To me, that’s the future of bitcoin.

    (If you’d like to hear more from this discussion, you can listen to it in its entirety here.)

    Connie

    May 20, 2015
    Entrepreneurs, Firm Dynamics, Investment Opportunities
    bitcoin, Dan Morehead, Pantera Capital

  • StrictlyVC: May 19, 2015

    Happy Tuesday, everyone! Apologies if you couldn’t find your issue of StrictlyVC yesterday. Google flagged it as spam for some reason that probably has nothing to do with our featuring a former Google exec who left for Uber, though we are not above planting that seed.:)

    If you were looking for it, it’s here.

    —–

    Top News in the A.M.

    Jawbone, the San Francisco-based wearable technology company, recently landed a $300 million investment from BlackRock, the asset management giant. But the investment wasn’t a $300 million cash infusion, reports BloombergView; it was a loan that offers BlackRock many protections, as well as gives it power over hiring, firing, and dealmaking. More here.

    A survey released this morning shows many drivers aren’t just texting; they’re using Facebook, Snapchat and Twitter, taking selfies, and even shooting videos. The New York Times has more here.

    —–

    AOL President Luke Beatty on What Happens Now

    Luke Beatty has had a busy couple of weeks. As President of Media Brands at AOL, Beatty manages an assortment of online media properties, including Techcrunch, Engadget, and MapQuest from his home base in Denver, Colorado. And he’s been spending a good amount of time helping his teams make sense of Verizon’s acquisition offer. (Verizon’s plan to buy AOL for $4.4 billion has yet to formally close.)

    Beatty’s ties to AOL run deep. He roomed with AOL CEO Tim Armstrong during and after college; installed Armstrong on the board of his content platform, Associated Content, which sold to Yahoo in 2010; and joined AOL as an executive in August 2013.

    We asked Beatty if he could explain Armstrong’s thinking around the deal to our readers. Parts of that chat follow, edited for length.

    You oversee nine different properties. How did people react to the news that Verizon is buying AOL?

    When you have a big mixed group like that, and a big announcement like [we had], to try to bundle everybody’s perspective into a common theme is difficult. The majority of my brands have come to AOL by way of acquisition, so I think they already understand what it’s like to be part of a publicly traded company.

    I think a lot care about the decision and they’re interested to see how it affects them both personally and professionally, particularly brands like TechCrunch and Engadget that are engaged in that world and are interested in knowing: Am I going to maintain my editorial independence? Meanwhile, with MapQuest, the implications of being owned by Verizon are very different and can present new opportunities that can be very exciting for them.

    What is going to happen to the content sites? Reports suggest Tim Armstrong is leaving the door open to numerous possibilities.

    I can firmly say there is zero intention on Verizon’s part to spin off the brands or sell them or to find a new home for them. They’re very focused on our media brands and there’s zero interest in divesting any of the brand outfits.

    Does anyone’s role change? Does yours?

    I don’t see any of our roles changing. We’re operating as an independent company within Verizon, run by Tim, and we plan to operate as we do now.

    What about acquisitions? Will your pacing change as a subsidiary of Verizon?

    We’re going to stay as active or more active than we’ve ever been [relating to] all three parts of AOL. I think that Verizon expects [it].

    One of the secrets to our success: We have a very unique strategy in the sense that when we acquire brands like TechCrunch or [the web ad platform] Adaptv on the platform side, we keep the teams and offices and culture together. We’re not great at everything, but that’s something AOL is great at – retaining expertise and talent.

    Given the beating that ad tech valuations have taken, might Verizon look to add even more pieces to its new ad tech business? Are there gaps it will look to fill?

    As the market evolves and new publisher services are needed, I expect the platform side to continue to add where they need to. If you look at acquisitions that [AOL Platforms CEO] Bob Lord and the [digital advertising] platform side have made over time, it’s been a steady drumbeat of acquisitions, including, recently, with Vidible [bought by AOL in December for a reported $50 million]. We also build internally.

    What part of the deal do you think people don’t fully appreciate or understand?

    [The acquisition] is huge opportunity for a lot of the brands at AOL, many of which are rooted in blogging and are now very popular brands that are moving to video. For example, “Crunch Report ” – a daily show on TechCrunch —  [you’ll see] that stuff happening more and more. The move to video is extremely exciting, and to have a partner like Verizon that has a big [over-the-top] audience and video distribution [reach] is a huge advantage for us.

    AOL made a big push into video last fall. What have you learned about what consumers want and don’t want, and what percentage of content are you shifting to video?

    Video across all our brands has been growing every month but it’s not like there’s a template, [like] we have to get to the point where 25 percent of the content we produce has to be video. It depends on the brand and the topic and categories. Some things in the tech space are sort of short form. HuffPo is getting into more long-form stuff. It’s about finding the right format for the message.

    What we are seeing, particularly concerning the tech brands, is that three years ago, they were [tailored] for [more niche audiences]. A brand like TechCrunch was for people who were in the business; Engadget was a site about the newest products, gadgets, and technologies, but it was for people inside tech companies. Now, people everywhere care about technologies and how they’re being funded. They want to see Marissa Mayer and Mark Zuckerberg [talk about] what they achieved in the last year. Video is helping that happen. It’s helping [people who don’t work in tech] get up to speed.

    —–

    New Fundings

    Acast, a year-old, Stockholm- and London-based podcasting app and web service, has raised $5 million in Series A funding from Bonnier Growth Media and earlier investor Moor. Reuters has more here.

    Akosha, a five-year-old, New Delhi, India-based messaging platform that connects customers directly to businesses, including Snapdeal, has raised $16 million in Series B funding led by earlier backer Sequoia Capital. The company has now raised $21.6 million altogether, reports TechCrunch.

    Bd4travel, a two-year-old, Frankfurt, Germany-based startup that offers a predictive analytics platform to the online travel industry to help profile and target site visitors, has raised $4.2 million in Series A funding led Hoxton Ventures, with participation from Talis Capital, and Robin Klein of The Accelerator Group. TechCrunch has more here.

    BetterCompany, a 1.5-year-old, San Francisco-based company that’s been developing a workplace communication platform, has raised $6 million in Series A funding led by BlueRun Ventures. The company had previously raised $1.7 million in seed funding from David Sacks, Adam Nash and numerous other angel investors. More here.

    DataHero, a 3.5-year-old, Palo Alto, Ca.-based data analytics startup, has raised $6.1 million in Series A funding led by Foundry Group. The company has now raised $10.3 million altogether, shows Crunchbase. More here.

    Dvtel, a 15-year-old, Ridgefield Park, N.J.-based video surveillance software company, has raised $9 million in funding from investors, including Seacoast Capital and EGIS Capital Partners. More here.

    eVolution Networks, a 2.5-year-old, Ramat-Gan, Israel-based company whose tech analyzes a mobile network’s traffic needs and adjusts the use of its resources based on real-time demand from subscribers, has raised $22.5 million in funding from IES Holding and GE Ventures.

    Exablox, a five-year-old, Sunnyvale, Ca.-based cloud storage company has added $7 million to a previously closed round of $16 million in Series C funding. The company’s newest investor is Toshiba America Electronic Components; it joins Dell Ventures in the round. Altogether, Exablox has now raised $45.5 million. More here.

    Feedzai, a 3.5-year-old, San Mateo, Ca.-based data science company that provides fraud prevention and detection services, has raised $17.5 million in Series B funding from backers, including Oak HC/FT, Sapphire Ventures, and Espirito Santo Ventures. The company has now raised $22 million altogether, shows Crunchbase. American Banker has more here.

    Flow Forward Medical, a five-year-old, Olathe, Ks.-based company whose external blood pump product helps quickly establish vascular access for hemodialysis, has raised $1.3 million in funding led by earlier backer the Kansas Bioscience Authority. The company had previously raised $4.4 million. More here.

    Hightower, a two-year-old, New York-based company whose enterprise app helps commercial real-estate brokers and owners manage their leasing operations via their mobile phones, has raised $13 million in Series B funding from RRE Ventures, Bessemer Venture Partners, Thrive Capital and Pritzker Venture Capital. The company has now raised $21.7 million altogether, shows Crunchbase.

    Meteor Development Group, a four-year-old, San Francisco-based JavaScript-based open-source platform that aims to make app development simple for developers, has raised $20 million in new funding led by Matrix Partners with participation from Andreessen Horowitz and Trinity Ventures. The company has now raised $31.2 million altogether, shows Crunchbase.

    MuleSoft, a nine-year-old, San Francisco-based company whose software automatically integrates disparate data, applications and application programming interfaces so they can all work together, has raised $128 million at a valuation of $1.5 billion from at least a dozen corporate, public market and venture capital investors, including Salesforce Ventures, which led the deal. The company — which had previously talked of going public soon — has now raised $259 million altogether. The WSJ has more here.

    iSpot.tv, an analytics firm that tracks national TV ads and related digital activity in real-time, has raised $21.9 million in Series B funding led by Insight Venture Partners, with participation from earlier backer Madrona Venture Group. The company had previously raised $5.9 million across two rounds. MediaPost has more here.

    Palico, a three-year-old, New York and Paris-based online marketplace for the private equity fund community, has raised $7.3 million in equity funding from six unnamed family offices and private equity executives from Europe and the U.S., says the company, which has now raised $19.2 million altogether.

    Polyera, a 10-year-old, Skokie, Il.-based startup that creates flexible electronics platforms to be used in wearables, mobile devices, and the Internet of Things, has just raised $24.5 million in Series C funding led by Chengwei Capital and Tsing Capital. The company originally spun out of Northwestern University. ChicagoInno has more here.

    PsiOxus, a five-year-old, Oxford, England-based oncolytic immuno-oncology company, has raised $38.5 million in Series C funding led by earlier backerImperial Innovations, with participation from Woodford Patient Capital Trust and other previous investors Invesco, SROne, Lundbeckfond Ventures and Mercia Technologies. According to Crunchbase, the company has raised at least $73.4 million to date. More here.

    Ripple Labs, the three-year-old, San Francisco, CA-based creator of the Ripple payment protocol and exchange network, has raised $28 million in Series A funding from a long list of backers. They include: IDG Capital Partners, the venture arms of CME Group and global data storage company Seagate Technology, Jerry Yang’s AME Cloud Ventures, ChinaRock Capital Management, China Growth Capital, Wicklow Capital,Bitcoin Opportunity Corp., Core Innovation Capital, Route 66 Ventures, RRE Ventures, Vast Ventures, and Venture 51. The company has now raised $37 million altogether, shows Crunchbase.

    Samsara, a months-old, San Francisco-based company that’s developing a simple, affordable sensor system that includes hardware, networking software and data analytics, has raised $25 million in first-round funding led by Andreessen Horowitz. Numerous individual investors, as well as the company’s founders — whose previous company, Meraki, was acquired for $1.2 billion by Cisco in late 2012 — also participated. Fortune has more here.

    Speakeasy Tech, a 1.5-year-old, San Francisco-based conference calling company, has raised $4.8 million in Series A funding from Bessemer Venture Partners and Salesforce Ventures. More here.

    Stox, a 10-month-old, Israel-based online broker cofounded by Yo cofounder Or Arbel, has raised $8 million from the Israeli venture capital firm Singulariteam, an investment firm headed by Yo’s other cofounder, Moshe Hogeg. Business Insider has more here.

    Switch Communications, a four-year-old, San Francisco-based cloud-based phone system built for Google App users, has raised $35 million in new funding led by the cross-border VC firm Amasia Associates. Other participants included Felicis Ventures, SoftBank, Work-Bench Ventures, and earlier backers Andreessen Horowitz and Google Ventures. The company has now raised $53 million altogether. TechCrunch has more here.

    Trafi, a 1.5-year-old, London-based company whose public transport app helps users plan their journeys, has raised $6.5 million in Series A funding led by Octopus Investments, with participation from EBRD Venture Capital Investment Programme, BaltCap, and previous investor Practica Capital. TechCrunch has more here.

    Xiu.com, a seven-year-old, Shenzhen, China-based e-commerce platform that sells luxury and fashion products, has raised $30 million in Series C funding led by Pacific Venture Partners, with participation from the company’s founders and previous investor Kleiner Perkins Caufield & Byers. The company had raised at least one, previous undisclosed round, and another round of $100 million led by Warburg Pincus in 2011, says China Money Network.

    —–

    People

    Charles Birnbaum is being promoted to vice president at Bessemer Venture Partners, which he joined a couple of years ago as a senior associate. Birnbaum, who is based in New York, previously spent four years as a director of business development at Foursquare. Earlier in his career, he worked as an investment banking analyst, including at Banc of America and Jefferies & Co.

    Sara Sperling has joined the local delivery services company DoorDash as HR director, she announced on Facebook yesterday. Sperling was most recently Snapchat’s HR director, leaving in February after a six-month stint owing to personal reasons, Recode reported at the time. She’d previously spent more than four years at Facebook, where she reportedly built internal programs and community groups for employees, as well as headed up its diversity efforts.

    —–

    Jobs

    5AM Ventures, the life sciences investment firm, is looking to hire a principal. The job is in Menlo Park, Ca.

    —–

    Essential Reads

    Inside Google’s secret war against ad fraud.

    Apple quietly shelved plans to make a high-definition TV set more than a year ago, according to WSJ sources.

    The rebirth of venture capital in France.

    —–

    Detours<

    Even very young children in the U.S. aren’t active enough, says a new study.

    A billionaire makes the case for gap years.

    A sub-seven-minute lap around Nurburgring, the famous German motorsports complex.

    —–

    Retail Therapy

    A duvet set for the young equestrian in your life.

    The Super Gorone desk, otherwise known as the “relationship killer.”

    Connie

    May 19, 2015
    Morning Summary
    AOL, Luke Beatty

  • AOL President Luke Beatty on What Happens Now

    Luke BeattyLuke Beatty has had a busy couple of weeks. As President of Media Brands at AOL, Beatty manages an assortment of online media properties, including Techcrunch, Engadget, and MapQuest from his home base in Denver, Colorado. And he’s been spending a good amount of time helping his teams make sense of Verizon’s acquisition offer. (Verizon’s plan to buy AOL for $4.4 billion has yet to formally close.)

    Beatty’s ties to AOL run deep. He roomed with AOL CEO Tim Armstrong during and after college; installed Armstrong on the board of his content platform, Associated Content, which sold to Yahoo in 2010; and joined AOL as an executive in August 2013.

    We asked Beatty if he could explain Armstrong’s thinking around the deal to our readers. Parts of that chat follow, edited for length.

    You oversee nine different properties. How did people react to the news that Verizon is buying AOL?

    When you have a big mixed group like that, and a big announcement like [we had], to try to bundle everybody’s perspective into a common theme is difficult. The majority of my brands have come to AOL by way of acquisition, so I think they already understand what it’s like to be part of a publicly traded company.

    I think a lot care about the decision and they’re interested to see how it affects them both personally and professionally, particularly brands like TechCrunch and Engadget that are engaged in that world and are interested in knowing: Am I going to maintain my editorial independence? Meanwhile, with MapQuest, the implications of being owned by Verizon are very different and can present new opportunities that can be very exciting for them.

    What is going to happen to the content sites? Reports suggest Tim Armstrong is leaving the door open to numerous possibilities.

    I can firmly say there is zero intention on Verizon’s part to spin off the brands or sell them or to find a new home for them. They’re very focused on our media brands and there’s zero interest in divesting any of the brand outfits.

    Does anyone’s role change? Does yours?

    I don’t see any of our roles changing. We’re operating as an independent company within Verizon, run by Tim, and we plan to operate as we do now.

    What about acquisitions? Will your pacing change as a subsidiary of Verizon?

    We’re going to stay as active or more active than we’ve ever been [relating to] all three parts of AOL. I think that Verizon expects [it].

    One of the secrets to our success: We have a very unique strategy in the sense that when we acquire brands like TechCrunch or [the web ad platform] Adaptv on the platform side, we keep the teams and offices and culture together. We’re not great at everything, but that’s something AOL is great at – retaining expertise and talent.

    Given the beating that ad tech valuations have taken, might Verizon look to add even more pieces to its new ad tech business? Are there gaps it will look to fill?

    As the market evolves and new publisher services are needed, I expect the platform side to continue to add where they need to. If you look at acquisitions that [AOL Platforms CEO] Bob Lord and the [digital advertising] platform side have made over time, it’s been a steady drumbeat of acquisitions, including, recently, with Vidible [bought by AOL in December for a reported $50 million]. We also build internally.

    What part of the deal do you think people don’t fully appreciate or understand?

    [The acquisition] is a huge opportunity for a lot of the brands at AOL, many of which are rooted in blogging and are now very popular brands that are moving to video. For example, “Crunch Report ” – a daily show on TechCrunch —  [you’ll see] that stuff happening more and more. The move to video is extremely exciting, and to have a partner like Verizon that has a big [over-the-top] audience and video distribution [reach] is a huge advantage for us.

    AOL made a big push into video last fall. What have you learned about what consumers want and don’t want, and what percentage of content are you shifting to video?

    Video across all our brands has been growing every month but it’s not like there’s a template, [like] we have to get to the point where 25 percent of the content we produce has to be video. It depends on the brand and the topic and categories. Some things in the tech space are sort of short form. HuffPo is getting into more long-form stuff. It’s about finding the right format for the message.

    What we are seeing, particularly concerning the tech brands, is that three years ago, they were [tailored] for [more niche audiences]. A brand like TechCrunch was for people who were in the business; Engadget was a site about the newest products, gadgets, and technologies, but it was for people inside tech companies. Now, people everywhere care about technologies and how they’re being funded. They want to see Marissa Mayer and Mark Zuckerberg [talk about] what they achieved in the last year. Video is helping that happen. It’s helping [people who don’t work in tech] get up to speed.

    Photo by Kevin Abosch.

    Connie

    May 19, 2015
    Entrepreneurs
    AOL, Engadget, Luke Beatty, TechCrunch, Tim Armstrong, Verizon

  • StrictlyVC: May 18, 2015

    Hi, welcome back, everyone! Hope you had a terrific weekend.

    —–

    Top News in the A.M.

    Google will reportedly launch buy buttons on its search-result pages in coming weeks, pitting it more directly against online marketplace rivals, including Amazon and eBay.

    —–

    Uber Exec Tom Fallows on the Company’s Culture, and More

    At a StrictlyVC event in San Francisco last week, Tom Fallows, Director of Global Expansion Products at Uber, talked with us about what’s important to Uber right now, why Uber sees the fight for India and China as far from over, and the various ways that Uber and Google differ culturally. (Fallows was hired away from Google late last year. He’d previously spent five years with the search giant, developing, among other things, the Google Express delivery service.)

    Fallows couldn’t answer questions about Uber’s funding situation or its reported bid on Nokia’s mapping business, but he was refreshingly forthcoming when answering others. Our chat, edited for length, follows.

    Explain what you do.

    Obviously, we have the mainline business of offering transportation to people; [my job is largely looking into] how do we expand into new opportunities.  Uber for Business is one of my projects, for example, and that’s just building an enterprise version of Uber so that companies large and small can use it for their business travel.

    Is that taking up the majority of your time? How many initiatives are you working on at any one time?

    It is taking up the majority of my time. I have six different teams that are working on new projects all the time, and in a healthy ecosystem way, projects that aren’t working get wound down or swallowed up and resources [are] diverted.

    Can you point to something that’s been shut down recently?

    Nothing since I’ve been [at Uber]. But I remember while at Google, reading about Uber testing a concept [to deliver common convenience store items to select customers through a pilot project] in Washington, D.C that no longer exists.

    What can you tell us about how some others of its initiatives — including delivering food and packages — are doing?

    I can’t discuss any numbers, but as the press has reported, the Uber Eats [food delivery] product has expanded into several more cities and I think the market has been pretty strong. We’re doing well with Uber Rush, which is a [bike] courier service [that Uber rolled out in New York a year ago].

    What do you make of the argument that not everyone wants Uber to deliver both their food and their transportation — that people want different relationships with different brands?

    I don’t think consumers inherently care about how their item is getting to them so long as it’s getting to them effectively and quickly.

    You founded Google Express. The service has been portrayed in the press as troubled recently, including because the head of Google’s commerce businesses, Sameer Samat, has left to join Jawbone as president. Is that fair?

    I can’t speak to recent stuff, but when I left five months or so ago, but it was doing well. I think it’s the wrong conclusion to draw that [Samat’s departure] is a reflection on the commerce business. It’s a big driver of growth, and a big driver of profitability [at Google]. I don’t know anything but I suspect this was a poaching situation.

    The problem we had at Google Express was that we didn’t have enough capacity. Like every single delivery and on-demand service out there, we had such product-market fit that we just couldn’t keep up with demand. At Uber, that causes surge pricing. At Shopping Express, that caused sellouts, and that was always the pain point that we were dealing with.

    Can you confirm that Uber is currently raising $2 billion more from investors at a $50 billion valuation?

    I read about it as you guys did [in the audience]. I have no idea.

    If the company were to raise $2 billion, what would its top priorities be?  Expanding domestically? Competing more aggressively in India and China?

    I don’t in any way tie this to a fundraising. I literally don’t know anything about it and don’t know if or why we need more money, but the company had said in the last funding round that there are big global opportunities that we’re going after, and in our type of business, for anybody building liquidity and network effect and going into new markets, it can be very expensive.

    India and China are obviously big battlegrounds. How do you compete with regional taxi app companies that have something like 99 percent of the market?

    China and India are huge potential markets and places where we really want to participate  and where we think we can offer great service. [And] although the alternatives in China are very big, the majority of the business is in the taxi ride hailing, which isn’t a business, it’s purely a matchmaking business. They take no fee whatsoever. They have, similar to us, black car and Uber X [type] businesses, but they aren’t nearly as big, so it’s not . . . an open-and-shut case.

    One thing that’s interesting: The transportation business is truly, inherently local. At Google, of course, we could do localization, and we had sales teams in each country, but we didn’t have tech teams or custom features in that many countries, whereas at Uber, you really have to serve every single city independently — even within the U.S. We consider it a strategic advantage, our ability to operationalize at scale the management of these locations that need custom technology and custom solutions.

    What are some other differences between these two powerful companies? We know you joined Uber just five months ago, but are there early impressions you can share?

    Well, the first, strange [observation I made] when I walked into Uber was that one out of three people is a former Google colleague. There are also lots of people from Facebook.  Top to bottom at Uber, it’s [top-notch employees].

    The biggest difference at Uber is that, at heart, it’s still very much a startup with an action bias. In my first couple of weeks, we’d be talking about a new feature and inevitably in that conversation, the question would arise: How long would this take to get out? And someone would say, “I think it’ll be two to three . . .” And in my head, I’d just default, think weeks. And they’d finish, “…days.” And I think, what? [Laughs.]

    It’s a combination of a couple things. It’s much younger technology stack. Also, we’ve all had that experience where something needs change and you just change it and 12 minutes later it’s in the world, and Uber is still on that continuum versus my experience at Google, which, I absolutely love the people and I have nothing but great things to say about it, but it’s not necessarily known for its nimbleness and speed. One of the challenges I had with Google Express was how do we launch and iterate in an environment where you have multi-week review cycles, and all for good reason. Everything had a justification behind it. It’s all part of being a big company. But it’s inherently slower.

    You get the feeling that nearly everything trickles up to Larry Page at Google. At Uber, whose sign-off do you need?

    Very explicitly, the rule inside is: nobody needs to sign off.

    (For more of our interview with Fallows, click here.)

    —–

    New Fundings

    Abcodia, a 4.5-year-old, U.K.-based biotech company that has developed an ovarian cancer screening test that it plans to bring to market this summer, has raised $8.2 million in new funding co-led by Cambridge Innovation Capital and Scottish Equity Partners, with participation from earlier backers Albion Ventures and UCL Business.AllSeated, a four-year-old, New York-based maker of event planning and collaboration tools, has raised an undisclosed amount of funding from Magma Venture Partners.

    Aliada, a 10-month-old, Mexico City, Mexico-based marketplace that pairs consumers with housekeeping services, has raised $800,000 in seed funding from regional investment firms Capital Invent, Variv Capital, and Dila Capital. TechCrunch has more here.

    Cyber adAPT, a year-old, Half Moon Bay, Ca.-based real-time network-based threat detection platform, has raised $4.1 million in Series A funding from Alvin Fund, Granite Point Capital Partners, Griffin Fund II, and Fundamental Capital Management.Decorist, a 2.5-year-old, San Francisco-based online platform that’s aiming to make interior design personal, affordable and easier, has raised $4.5 million in funding from Lowe’s Companies, the Women’s Venture Capital Fund and other angel investors.

    Drizly, a three-year-old, Boston-based on-demand alcohol delivery company, has raised $13 million in Series A funding led by Polaris Partners, with participation from First Beverage Group and previous backers, including Suffolk Equity Partners. The company has now raised $17.8 million altogether.

    EasyStack, year-old, Beijing, China-based OpenStack startup, has raised $16 million in Series B funding led by RuShan Capital, with participation fromYingDong and earlier backer BlueRun Ventures. The company has raised $18 million to date.

    Kapost,  a five-year-old, Boulder, Co.-based content marketing software company, has raised $10.25 million from investors, including Access Venture Partners, Cue Ball Capital, Iron Gate Capital and Salesforce Ventures, as well as earlier backers Lead Edge Capital and High Country Ventures. The company has now raised at least $18.45 million altogether.

    Mediabong, a four-year-old, Paris, France-based video syndication network, has raised $5 million in Series B funding from Entrepreneur Venture and Conegliano Venture, among others. The company has now raised $6.3 million altogether, shows Crunchbase.

    Omada, a 16-year-old, Copenhagen, Denmark-based maker of compliance management software, has raised $24 million in growth equity funding from C5 Capital, a year-old, London-based firm.

    Oyo Rooms, a 2.5-year-old, Bangalore, India-based chain of tech-driven, standardized hotels, is reportedly talking with Softbank about selling a 25 percent to 30 percent stake in its business for $100 million. According to Crunchbase, the company has thus far raised $25.7 million from investors, including Lightspeed Venture Partners, Sequoia Capital, and Greenoaks Capital Management. Times of India has the story.

    Rovop, a nearly four-year-old, Westhill, U.K.-based company that makes tethered, unmanned underwater vehicles used by the offshore oil and gas and renewables industries to carry out a wide range of tasks, has raised £10m ($15.7 million) in funding from the Business Growth Fund.

    ScaleFT, a months-old, San Francisc-based platform for cloud administration and security, has raised $800,000 in seed funding from Rackspace and numerous angel investors. More here.

    Telogis, a 14-year-old, Aliso Viejo, Ca.-based maker of fleet management software, has raised $25 million in new funding, according to an SEC filingflagged by Fortune. According to Crunchbase, the company had previously raised $95 million, including from Fontinalis Partners and Kleiner Perkins Caufield & Byers.

    Tissue Analytics, a year-old, Baltimore-based wound imaging and telehealth company, has raised $750,000 in seed funding led by the Chinese Internet giantTencent Holdings. TechCrunch has more here.

    Taboola, an eight-year-old, New York-based content recommendation startup, has raised an undisclosed amount of “multi-millions” of dollars from Baidu, just three months after Taboola raised $117 million in Series E funding at a  reported valuation of $1 billion. More here.

    TrucksFirst, a 10-month-old, Gurgaon, India-based based logistic service provider focused on improving the efficiencies of long-haul trucking in the country, has raised $10 million in Series A  funding from SAIF Partners, with participation from Singapore Post and McKinsey & Co’s Germany-based travel director Thomas Netzer. (TrucksFirst founder Deepak Garg previously spent more than eight years with McKinsey.) Tech-Portal has more here.YCharts, a 5.5-year-old, Chicago and NYC-based financial software company that provides investment research tools, has raised $6 million in Series C funding led by Morningstar, with participation from Reed Elsevier, I2A,Amicus Capital Partners, Hyde Park Angels and other individuals. The company has now raised $14.5 million altogether.

    —–

    New Funds

    Draper Nexus Ventures, a U.S.-Japan cross-border investment firm with offices in San Mateo, Ca., and Tokyo, Japan, has raised $80.3 million for its newest fund, according to an SEC filing that shows a $125 million target. The firm officially kicked off fundraising last September.

    Insight Venture Partners, the New York-based growth-stage venture capital and private equity firm, is nearing the close of a pair of funds totaling more than $4 billion, reports VentureWire. Insight Venture Partners IX LP fund has gathered $2.9 billion in commitments, according to a document distributed to investors and viewed by VentureWire. The other fund, Insight Venture Partners Growth-Buyout Coinvestment Fund LP, has reportedly raised about $1.1 billion so far.

    Mbloom, a Maui, Hawaii-based venture capital firm focused on startups in Maui and throughout the state, has raised $10 million from a private investor in China, bringing the fund to a total of $20 million, reports Pacific Business News. The fund held a first close on the fund in January 2014 with $5 million raised from Hawaii Strategic Development Corp. and $5 million from an undisclosed private investor.

    —–

    Exits

    Coherent Navigation, a seven-year-old, San Mateo, Ca.-based navigation company, has been acquired by Apple, the company confirmed yesterday. Terms of the deal were not disclosed but are expected to bolster Apple’s mapping technology and services. According to the LinkedIn page of Coherent’s CEO, Paul Lego, the acquisition took place five months ago. MacRumors has the story here.

    Miaxis Biometrics, a 15-year-old, Hangzhou, China-based developer of biometric software, has been acquired for $40.6 million by the point-of-sale terminal and e-payment solutions provider Xinguodu Technology, reports Reuters.

    StrikeAd, a five-year-old, New York-based advertising demand side platform (DSP), has been acquired by the publicly traded ad management platform company Sizmek for undisclosed terms. According to Crunchbase, StrikeAd had raised at least $7 million from investors in a Series A round that included Wavemaker Partners, Canyon Creek Capital, SoftTech VC, and DFJ Esprit.

    —–

    People< Fan Bao, founder of 11-year-old investment bank China Renaissance, has been involved in some of the country’s biggest IPOs and mergers. Now, his bank is scouring China’s startup scene to uncover a new wave of technology giants. Bloomberg profiles him here.

    Seven employees quit payment rewards startup Clinkle simultaneously Friday, reporting owing to frustration with its 24-year-old CEO Lucas Duplan. Indeed, says TechCrunch, the remaining team is “now believed to be less than a dozen, down from 70 several years ago.” The four-year-old company has raised $30 million in funding from investors, including a $25 million round that was boldly advertised at the time as the “largest seed round in Silicon Valley history.”

    Longtime LP and now Hamilton College CIO Anne Dinneen on how LPs evaluate venture partnerships.

    John and Ann Doerr — both of whom hold bachelor’s and master’s degrees in electrical engineering from Rice University — have donated $50 million to the school to create a leadership institute called the Doerr Institute for New Leaders. The couple has previously donated $15 million to the Rice Center for Engineering Leadership; their newest gift is the largest in the school’s history.

    San Francisco attorney Christopher Dolan has agreed to represent a client who says Uber stole his business idea. The evidence is thin, though, and the lawsuit a big gamble for Dolan’s firm, observes The Recorder.

    Veterans of Google‘s PR team — including Elliot Schrage,Anne Espiritu, and Rachel Whetstone — now run communications at many of Silicon Valley’s most prominent companies. Forbes takes a looks at what’s become the “farm team for the Valley’s spin machine.”Eric Nuzum, the former vice president of programming for NPR, has joined Amazon-owned Audible.com as it looks to move further into the world of podcasting, reports GeekWire. Nuzum — who developed some of NPR’s biggest shows, including “Wait, Wait, Don’t Tell Me” —  is joining as senior vice president of original content.

    On Friday, Snapchat CEO Evan Spiegel delivered a commencement address at USC’s Marshall School of Business. Among the many pointers he offered the school’s graduates: “You are going to make a lot of mistakes. I’ve already made a ton of them — some of them very publicly — and it will feel terrible, but it will be okay. Just apologize as quickly as you can and pray for forgiveness.” His full commencement speech is here.

    —–

    Jobs

    Yale is seeking academically inclined founders and investors to teach entrepreneurship on the faculty at Yale SOM. There are two openings.

    ——

    Data

    Sales on e-commerce websites increased 3.5 percent in the first three months of the year from the previous quarter, reaching a record $80 billion worth of purchases, according to Commerce Department figures released Friday and covered by Bloomberg. Year over year, online purchases were up 14.5 percent. Somewhat amazingly, the share of e-commerce as a percent of total retail sales is still just 7 percent, up from 0.6 percent in 1999.

    —–

    Essential Reads

    Axact calls itself Pakistan’s largest software exporter. The New York Times calls it a “fake education empire,” that’s “obscured by proxy Internet services, combative legal tactics and a chronic lack of regulation in Pakistan.”

    —–

    Detours

    David Letterman, revolutionary.

    —–

    Retail Therapy

    The Chewbacca hoodie. [Takes helmet by the brim, holds it in the air.]

    Connie

    May 18, 2015
    Morning Summary
    Tom Fallows, Uber

  • Uber Exec Tom Fallows on the Company’s Culture, and More

    Tom FallowsAt a StrictlyVC event in San Francisco last week, Tom Fallows, Director of Global Expansion Products at Uber, talked with us about what’s important to Uber right now, why Uber sees the fight for India and China as far from over, and the various ways that Uber and Google differ culturally. (Fallows was hired away from Google late last year. He’d previously spent five years with the search giant, developing, among other things, the Google Express delivery service.)

    Fallows couldn’t answer questions about Uber’s funding situation or its reported bid on Nokia’s mapping business, but he was refreshingly forthcoming when answering others. Our chat, edited for length, follows.

    Explain what you do.

    Obviously, we have the mainline business of offering transportation to people; [my job is largely looking into] how do we expand into new opportunities.  Uber for Business is one of my projects, for example, and that’s just building an enterprise version of Uber so that companies large and small can use it for their business travel.

    Is that taking up the majority of your time? How many initiatives are you working on at any one time?

    It is taking up the majority of my time. I have six different teams that are working on new projects all the time, and in a healthy ecosystem way, projects that aren’t working get wound down or swallowed up and resources [are] diverted.

    Can you point to something that’s been shut down recently?

    Nothing since I’ve been [at Uber]. But I remember while at Google, reading about Uber testing a concept [to deliver common convenience store items to select customers through a pilot project] in Washington, D.C that no longer exists.

    What can you tell us about how some others of its initiatives — including delivering food and packages — are doing?

    I can’t discuss any numbers, but as the press has reported, the Uber Eats [food delivery] product has expanded into several more cities and I think the market has been pretty strong. We’re doing well with Uber Rush, which is a [bike] courier service [that Uber rolled out in New York a year ago].

    What do you make of the argument that not everyone wants Uber to deliver both their food and their transportation — that people want different relationships with different brands?

    I don’t think consumers inherently care about how their item is getting to them so long as it’s getting to them effectively and quickly.

    You founded Google Express. The service has been portrayed in the press as troubled recently, including because the head of Google’s commerce businesses, Sameer Samat, has left to join Jawbone as president. Is that fair?

    I can’t speak to recent stuff, but when I left five months or so ago, but it was doing well. I think it’s the wrong conclusion to draw that [Samat’s departure] is a reflection on the commerce business. It’s a big driver of growth, and a big driver of profitability [at Google]. I don’t know anything but I suspect this was a poaching situation.

    The problem we had at Google Express was that we didn’t have enough capacity. Like every single delivery and on-demand service out there, we had such product-market fit that we just couldn’t keep up with demand. At Uber, that causes surge pricing. At Shopping Express, that caused sellouts, and that was always the pain point that we were dealing with.

    Can you confirm that Uber is currently raising $2 billion more from investors at a $50 billion valuation?

    I read about it as you guys did [in the audience]. I have no idea.

    If the company were to raise $2 billion, what would its top priorities be?  Expanding domestically? Competing more aggressively in India and China?

    I don’t in any way tie this to a fundraising. I literally don’t know anything about it and don’t know if or why we need more money, but the company had said in the last funding round that there are big global opportunities that we’re going after, and in our type of business, for anybody building liquidity and network effect and going into new markets, it can be very expensive.

    India and China are obviously big battlegrounds. How do you compete with regional taxi app companies that have something like 99 percent of the market?

    China and India are huge potential markets and places where we really want to participate  and where we think we can offer great service. [And] although the alternatives in China are very big, the majority of the business is in the taxi ride hailing, which isn’t a business, it’s purely a matchmaking business. They take no fee whatsoever. They have, similar to us, black car and Uber X [type] businesses, but they aren’t nearly as big, so it’s not . . . an open-and-shut case.

    One thing that’s interesting: The transportation business is truly, inherently local. At Google, of course, we could do localization, and we had sales teams in each country, but we didn’t have tech teams or custom features in that many countries, whereas at Uber, you really have to serve every single city independently — even within the U.S. We consider it a strategic advantage, our ability to operationalize at scale the management of these locations that need custom technology and custom solutions.

    What are some other differences between these two powerful companies? We know you joined Uber just five months ago, but are there early impressions you can share?

    Well, the first, strange [observation I made] when I walked into Uber was that one out of three people is a former Google colleague. There are also lots of people from Facebook.  Top to bottom at Uber, it’s [top-notch employees].

    The biggest difference at Uber is that, at heart, it’s still very much a startup with an action bias. In my first couple of weeks, we’d be talking about a new feature and inevitably in that conversation, the question would arise: How long would this take to get out? And someone would say, “I think it’ll be two to three . . .” And in my head, I’d just default, think weeks. And they’d finish, “…days.” And I think, what? [Laughs.]

    It’s a combination of a couple things. It’s much younger technology stack. Also, we’ve all had that experience where something needs change and you just change it and 12 minutes later it’s in the world, and Uber is still on that continuum versus my experience at Google, which, I absolutely love the people and I have nothing but great things to say about it, but it’s not necessarily known for its nimbleness and speed. One of the challenges I had with Google Express was how do we launch and iterate in an environment where you have multi-week review cycles, and all for good reason. Everything had a justification behind it. It’s all part of being a big company. But it’s inherently slower.

    You get the feeling that nearly everything trickles up to Larry Page at Google. At Uber, whose sign-off do you need?

    Very explicitly, the rule inside is: nobody needs to sign off. As a product manager, I’m an owner of my products and it’s my right and responsibility to launch things when I think they’re ready to launch and to be accountable for those consequences. It’s a very intentional, constructive environment, and it’s a bet, and you get mostly great outcomes in terms of speed. And sometimes you stumble because, well, safety checks are put in place for good reasons at good companies.

    So we’re still wonderfully on the side that it’s small enough and people subscribe to this ownership mentality of: I’m going to build, I’m going to launch, but I’m also going to sweat the details and whether it’s something silly like a typo or a weird experience or, meta like a privacy issue, I’m going to be really sure I don’t do that.

    Months after you left Google, Bloomberg reported that Google – an Uber investor – is developing its own self-driving app. Soon after, Google said, “It’s no big deal, it’s just this internal project.” Can you tell us what’s really going on?

    Uh, no. [Laughs.] Google is working on everything so I think probably all sides are true. I know a bunch of folks there . . . so there’s nothing particular I want to comment on . . .

    What about the news that Uber is bidding on Here to get away from its reliance on Google Maps? Is that happening and, either way, does it want to rely less on Google Maps?

    I read about that, too, and I don’t know. I think, macro, as Amazon has progressively moved toward owing its fulfillment centers and even now last-mile delivery, any company in the world strategically wants to ensure that the things that are important to them they somehow they control — whether via a strategic investment, partnerships, or building [their own products]. And there are a number of ways to achieve [that end]. I don’t know anything, but I wasn’t shocked to read that.

    Looking forward, what will Uber look like? This week it was flying people to Cannes in leased helicopters. Will it eventually be leasing planes? Will we see it get into the shipping business? What might surprise people about its roadmap?

    Whether it’s employing helicopters or delivering candy, those are mostly wonderful marketing stunts to get buzz going rather than [future lines of business]. So the short answer is probably no to those things. But, I think, goodness knows.

    Connie

    May 18, 2015
    Entrepreneurs, Morning Summary, Startup
    Google Express, Tom Fallows, Uber

  • StrictlyVC: May 15, 2015

    Hi, everyone! No column today. (Sorry to make it two days in a row but we were in meetings most of yesterday.)

    We do have newly posted pictures from our event this past Wednesday night; We also have lots of great content coming your way next week.

    Hope you have a terrific weekend.:)

    ——

    Top News in the A.M.

    This fight isn’t over yet. Lyft, the three-year-old, San Francisco-based ridesharing startup, has raised $100 million in new funding from Carl Icahn’s Icahn Enterprises. The investment is an extension of a round of funding announced in March that values Lyft at $2.5 billion. “If you look at the way the market evaluates Uber and then look at the valuation of Lyft—Lyft is a tremendous bargain,” Icahn tells the WSJ. “There is room for two.” Lyft, notes the WSJ, has raised a total of more than $1 billion in its battle against Uber, which has raised more than $5 billion.

    Watch out: Google’s self-driving cars hit the road this summer.

    —–

    New Fundings

    Alpha7, a year-old, Singapore-based technology consultancy, has raised $2.3 million in new funding from undisclosed backers. The company has now raised $3.6 million to date.

    Denali Therapeutics, a new, San Francisco-based biotech focused on treating and curing neurodegenerative diseases like Alzheimer’s, ALS and Parkinson’s, has raised $217 million in funding from Fidelity Biosciences, ARCH Venture Partners, Flagship Ventures, and the Alaska Permanent Fund, with participation from sovereign wealth funds, mutual funds, and private family offices. Denali was founded by three former top researchers at Genentech. Forbes has much more here.

    Geekie, a four-year-old, São Paulo, Brazil-based adaptive learning platform designed to help students gain acceptance into public universities, has raised $7 million in funding from Mitsui & Co. and Omidyar Network, as well as previous backers Gera Venture and Virtuose.

    Intact Vascular, a three-year-old, Wayne, Pa.-based company that makes medical devices for minimally invasive peripheral vascular procedures, has raised $38.9 million in Series B funding led by New Enterprise Associates, with participation from Quaker Partners, H.I.G. Bioventures and earlier investors.

    LeTV Sports, a new, Beijing, China-based online video site that focuses on live streaming sports events, (it’s a spin-off from online video firm LeShi Internet Information, which handles broadcast and media rights to hundreds of events in a dozen sports categories), has raised $128 million in Series A funding led by Alibaba founder Jack Ma and Wanda Group chairman Wang Jianin. Reports say the company is now valued at $452 million.

    IndianRoots.com, a two-year-old, Gurgaon, India-based e-commerce platform that features hundreds of designer brands, has raised $5 million in Series B funding at an $85 million valuation led by KJS Group. Inc42 has more here.

    Officevibe, a five-month-old, Montreal, Canada-based maker of employee engagement software, has raised $1 million in seed funding from GSoft Ventures.

    RealMassive, a two-year-old, Austin, Tex.-based cloud-based platform used by real estate agents looking to collaborate and to streamline their marketing efforts, has raised $8 million in funding led by RHS Investments, with participation from Hurt Family Investments, Capital Factory, HPI Real Estate Services, Aquila Commercial, Avison Young and InSite Realty. The company has now raised roughly $14 million, shows Crunchbase.

    Wonolo, a two-year-old, San Francisco-based on-demand staffing platform for businesses to fill their immediate hourly or daily labor needs, has raised $2.2 million in seed funding led by PivotNorth Capital, with participation from CrunchFund, Foundry Group, and angel investors. Coca-Cola also provided a convertible note of $1 million and has provided another note of $700,000 that will convert on the next round. Venture Capital Dispatch has more here.

    —–

    New Funds

    Collaborative Fund, a five-year-old, New York-based seed investment firm that’s focused on so-called collaborative consumption models, has raised $65 million for its third fund. Among its many bets to date: Hampton Creek,Earnest, and Kano Computing. Collaborative’s LPs include the San Francisco-based fund of funds Cendana Capital. Last July, Collaborative founder Craig Shapiro also rolled out a special purpose entity called Alignment Holdingsthat works with later-stage companies. We’d talked with him about it here.

    —–

    People<

    Bank of America Merrill Lynch is forming a new team called the Strategic & Private Capital Solutions Group to raise money for private companies, reports the WSJ. Bankers Sachin Aggarwal and Warren Fixmer will run the group.
    —–

    Jobs

    UC Davis is looking for an associate director to act as a liaison between investors and the school’s research, technology transfer and new venture development departments. The job is in Davis, Ca.

    —–

    Essential Reads

    Decoding the enigma of Satoshi Nakamoto.

    Coca Cola wants to fund the next billion-dollar startup, too.

    “Living” concrete that can heal itself.

    —–

    Detours

    A pilot’s-eye view of life in the sky.

    Playground purgatory.

    Real people, fake arms.

    —–

    Retail Therapy

    The Lily camera; just throw and go.

    Connie

    May 16, 2015
    Morning Summary

  • StrictlyVC: May 14, 2015

    Hi, happy Thursday, everyone. Thanks so much to the many of you who came out to our San Francisco event last night! We loved seeing you. Thanks again to our terrific guest speakers Jeremy Liew, Dan Morehead, Bryan Schreier, Marco Zappacosta, Semil Shah, Charles Hudson, and Tom Fallows. Thanks, too, to sponsors Galvanize, Personal Capital, and Amazon Web Services for their generous help in putting the evening together.

    We’ll be publishing stories and photos from the event in coming days. In the meantime, no column today. We’re still a little foggy this a.m.:)

    —–

    Top News in the A.M.

    PayPal will list on Nasdaq after spinning off from parent eBay, the company announced this morning. Its ticker, PYPL, is the same ticker it used before being acquired by eBay 13 years ago.

    —–

    New Fundings

    Actiance, a 17-year-old, Redwood City, Ca.-based company that makes compliance, security, archiving and eDiscovery software for critical business communications, has raised $28 million in growth funding from Golub Capital, along with earlier backers Credit Suisse NEXT Investors, JK&B Capital, Scale Venture Partners and Sutter Hill Ventures.

    A.I. Nemo, a Chinese startup that produces what it calls a “robot companion” for homes, has reportedly raised more than $10 million in Series B funding from undisclosed investors. The companies earlier backers include Innovation Works and Lightspeed China Partners. More here.

    Ahalogy, a 2.5-year-old, Cincinnati, Oh.-based Pinterest-focused marketing company, has raised $8 million in equity and debt from JobsOhio and Silicon Valley Bank. The company had previously raised $4.8 million from CincyTech, Hyde Park Angels and others, shows Crunchbase.

    Explain Everything, a five-year-old, New York-based maker of an interactive screencasting whiteboard, has raised $2 million in Series A funding led by Credo Ventures, with participation from New Europe Ventures and RTAventures. More here.

    Face++, a 3.5-year-old, Beijing, China-based face recognition tech startup, has added $25 million to an earlier Series B financing, bringing the total round to $47 million. Participants in the round include Innovation Works and Ignition Partners. Tech in Asia has more here.

    Gametime United, a 2.5-year-old, San Francisco-based company whose mobile app sells last-minute tickets to sporting events, has raised $13 million in Series A funding led by Accel Partners, with participation from tech, media and sports executives, Box CEO Aaron Levie and one-time Yahoo president Jeff Mallett. Venture Capital Dispatch has more here.

    Jumpshot, a nearly five-year-old, San Francisco-based marketing analytics platform, has raised $22 million in Series A funding led by Avast Software.

    MDSave, a three-year-old, Brentwood, Tn.-based online health marketplace for cash-paying customers, has raised $12 million in funding from earlier investor MTS Health Investors. The company has now raised $19.4 million altogether, shows Crunchbase.

    Mnubo, a three-year-old, Montreal, Quebec-based data analytics startup, has raised $6 million in new funding led by White Star Capital, with participation from McRock Capital. The company had previously raised an undisclosed amount of seed funding.

    Myomo, an 11-year-old, Cambridge, Ma.-based maker of myoelectric orthotics for people with neurological disorders, has raised $5 million in Series B-1 funding led by Mountain Group Capital. The company has now raised $12.6 million altogether, shows Crunchbase.

    Neumob, 1.5-year-old, Sunnyvale, Ca.-based company that promises to speed up users’ apps, has raised a $2.3 million in seed funding from a long list of investors, including Accel Partners, Lightbank, Menlo Ventures, Plug and Play Ventures, Shasta Ventures.

    NuSirt Biopharma, an eight-year-old, Nashville, Tn.-based developer of therapeutics for people with chronic metabolic diseases, has raised $6 million in Series C funding from Hatteras Venture Partners, Mountain Group Partners and TriStar Technology Ventures.

    Paidy, a Tokyo, Japan-based cardless e-commerce payment and instant credit service from the non-bank lender Exchange Corporation, has closed its Series A with $8.3 million, including from Arbor Ventures, SIG Asia and MS Capital.

    Percolate, a four-year-old, New York-based platform for enterprise marketing management, has raised $40 million in Series C funding led by Lightspeed Venture Partners, with participation from earlier investors Sequoia Capital, GGV Capital, First Round Capital and Lerer Hippeau Ventures.

    Pipedrive, a nearly five-year-old, Menlo Park, Ca.-based maker of sales pipeline management software, has raised $9 million in Series A funding led by Bessemer Venture Partners, with participation from Paua Ventures and earlier investors Rembrandt Venture Partners and AngelPad. TechCrunch has more here.

    Plancess EduSolutions, a months-old, Mumbai, India-based test preparation platform, has raised $2 million in funding. More here.

    PlanGrid, a 3.5-year-old, San Francisco-based company that makes productivity software for the construction industry, has raised $18 million in Series A funding led by Sequoia Capital, with participation from investor Ron Conway, and Yammer founder David Sachs. Fortune has the story here.

    Silversheet, a year-old, L.A.-based healthcare administration software platform that tackles physician credentialing, has raised $2.9 million in seed funding led by Upfront Ventures, with participation from BAM Ventures, Rincon Venture Partners, SV Angel, Slow Ventures, and Cyan and Scott Banister.

    Slyce, a 3.5-year-old, Toronto, Canada-based visual product search platform, has raised $8.7 million in funding led by Salman Partners and Beacon Securities, with PI Financial participating. The round brings the company’s funding to more than $36 million.

    Vouch, a nearly 2.5-year-old, San Francisco-based social lending startup that loans customers money based on who and how may people “vouch” for that person, has raised $6 million in funding from Core Innovation Capital, Data Collective, Stanford StartX Fund and Cooley. The company has now raised $9.6 million altogether, including from First Round Capital, Greylock Partners, IDG Ventures, and AngelList.

    —–

    New Funds

    Aspect Venture Partners, the VC firm formed last year by former DFJ partnerJennifer Fonstat and former Accel Partners managing director Theresia Gouw, has closed its debut fund with $150 million in capital commitments,reports Fortune.

    Redpoint Ventures, the 15-year-old, Sand Hill Road venture firm, has closed its sixth fund with $400 million (the same size as its predecessor), it announced in a blog post yesterday. More here.

    A new £300 million U.K. fund has been set up to support high tech startups looking to spin out of the University of Oxford. TechCrunch has more here.

    —–

    Exits

    McKinsey & Co.,  the management consulting giant, is buying Lunar, the design consulting giant, for undisclosed terms. Wired explains why.

    Samsung paid about $250 million earlier this year to acquire LoopPay, a startup whose technology will be used in the Samsung Pay mobile payments system when it launches later this year. LoopPay had raised more than $10 million from investors, including Visa. Recode has the news here.

    —–

    People

    Longtime VC Ifty Ahmed, who was accused by the SEC of insider trading, is now being accused of fraud by the SEC. Ahmed, an investor at Oak Investment Partners, allegedly transferred $27.5 million to accounts under his control “at the expense of investors in the Oak funds, including public pension investors,” according to the SEC. Oak provided the SEC with materials that led to this new, separate case against Ahmed, says Fortune. According to its report, Oak has also (unsurprisingly) fired Ahmed, who spent nearly a dozen years with the firm. Earlier in his career, Ahmed had worked as an associate at Goldman Sachs. He also spent several years as a senior associate with Fidelity Ventures.

    Jérémie Berrebi is leaving five-year-old, Paris-based Kima Ventures, a fund he co-founded with French telco and media entrepreneur Xavier Niel in 2010.  Berrebi tells TechCrunch he plans to focus instead on building new startups, the first of which is a real-estate investment platform called RoundVIP.com. He’ll also be doing some later-stage investing.

    Rachel Whetstone, the longtime head of Google’s public policy and communications unit, is taking on a similar job at Uber as SVP of policy and communications, reports Recode. She replaces former political advisor David Plouffe, who will become a chief adviser to the company as well as a board member. Whetstone is one of a long list of ex-Google execs to join Uber. (StrictlyVC interviewed another, Tom Fallows, last night at our San Francisco event. More on that chat to come.)

    Nick Woodman, GoPro‘s billionaire CEO, is $229 million dollars poorer after returning 4.7 million shares to the company this week, reports Bloomberg. The shares as part of an agreement he struck with the company for stock options that were granted to his college roommate Neil Dana, who attended the University of California at San Diego with Woodman, who was GoPro’s first employee, and remains GoPro’s director of music and specialty sales. Dana reportedly spent $3.6 million to exercise his options; they were valued at $229 million at the close of trading on Monday.

    —–

    Data

    According to CB Insights, investment activity in on-demand mobile services rose 514 percent year-over-year to hit $4.1 billion in 2014. And a spate of huge rounds in recent months has funding on track to double that amount in 2015. You can check out the full report here.

    The overarching ed-tech investment trend of 2015: More money, fewer deals. EdSurge has more here.

    —–

    Essential Reads

    Elon Musk’s space dream almost killed Tesla.

    How Facebook’s new experiment changes the news — and how it doesn’t.

    —–

    Detours

    The most popular baby name in every state.

    Your smartphone codependence, quantified.

    —–

    Retail Therapy

    The $65 million mansion atop Aspen’s “Billionaire Mountain.”

    Connie

    May 14, 2015
    Morning Summary
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