• Serial Entrepreneurs Rick Marini and Michael Levit are Selling Companies to China — for a Lot of Money

    img_0755Michael Levit knows a thing or two about China. As an executive vice president at the e-commerce services company Vendio, he stayed with the company for six months after Alibaba agreed to acquire it in 2010. (It marked the Chinese conglomerate’s first U.S. acquisition.)

    Levit says it was long enough to develop a consumer shopping project called Dealio that Alibaba had no interest in owning. So, he helped spin it off, renamed it Spigot, and eventually turned it into an application advertising company. (Users installing one app would receive a suggestion for another.) Roughly a year ago, Spigot also sold to a China-based company, publicly traded Genimous, for a reported $252 million.

    Now Levit is taking the lessons learned from those experiences, and turning it into his next startup. Specifically, he has teamed up with longtime friend and advisor Rick Marini — cofounder of Tickle (sold to Monster) and Branch (picked up by Hearst) —  to form Dragonfly Partners, a new advisory firm that’s matching U.S. companies looking to get sold with China-based companies that are hungry for revenue.

    They’ve also brought in a third partner, Gary Hsueh, who was most recently Yahoo’s global head of search partnerships and an investment banker with Goldman Sachs before that.

    I sat down with Levit yesterday to learn more about the business, and how it might help Silicon Valley founders who might be ready to hand over the keys.

    TC: This business sounds perfectly timed. What inspired it?

    ML: Selling Spigot was wonderful, but the sales process was very challenging and tedious, and partially that’s because there aren’t many people who understand cross-border transactions and specifically how you take a U.S. company and sell it to China. Thankfully, I still have a number of friends from my Alibaba days, including David Wei (who was Alibaba’s CEO when Vendio was bought). He remains one of my mentors and helped us through that process.

    TC: How many companies have you been working with, and have you sold anything yet?

    ML: The first two companies that we advised informally are [the ad tech company] Media.net, sold to a Beijing-based company called Miteno for $900 million in August, and [mobile ad tech company] AppLovin, which sold last month to the private equity firm Orient Hontai Capital for $1.4 billion.

    TC: You’re not an investment bank, but it sounds like you’re not far afield from one.

    We’re akin to being an investment bank, though frankly there are a lot of people on the ground in China who are formal investment bankers [working with us]. What [we’re more focused on is talking with entrepreneurs about] whether China is real, what do the numbers look like, what do [China-based companies] want, how do you create your financial forecast, how do you create the right PowerPoint presentation, and help put those materials together before you even meet with a bank. Then we make the introduction to the bank.

    TC: Which banks are you working with?

    ML: There are a couple that we work with, including CV Capital. We’re also starting to work with [the private equity firm] CSC Venture Capital [the private equity firm that has committed to invest $400 million on the AngelList platform].

    You have massive pools of capital in China that want to be deployed in the U.S.; you have entrepreneurs in the U.S. who want do business in China. What’s missing is a level of trust and understanding of how the two sides do business with each other. CSC solved that problem in part by partnering with AngelList. We’re doing something similar for much bigger deals and for M&A.

    Frankly, some companies in China will promise you the sun, moon, and stars, and won’t give you any of it. Conversely, there are other companies that are soft-stated and that you’d never find and that have $90 billion [in market cap]. There are multiple entities like that because of the scale of China. We want to be the trusted layer that helps founders find those entities.

    More here.

    (Pictured above: Michael Levit.)

    Connie

    , ,

  • StrictlyVC: October 31, 2016

    Good morning, everyone. We’re running over to a Halloween parade that we know will feature at least one San Francisco 49er and one “infected zombie chimp” so today’s edition is a tad short on funding news, but we’ll have more for you tomorrow. Happy Halloween; enjoy your office costume parties.:)

    —–

    Top News in the A.M.

    Massive telecom merger alert. To expand its fiber optic network and high-speed data services, CenturyLink said this morning it will buy Level 3 Communications in for about $24 billion. Reuters has more here.

    —–

    In Speech, Peter Thiel Defends Idea of Trump Above Actual Candidate

    Billionaire investor Peter Thiel may have been trying to drum up more support for Republican candidate Donald Trump this morning at the National Press Club in Washington. But a 15-minute long speech he delivered sounded more like a plea to Americans to understand what’s so wrong with this country, rather than a case for Trump. His pitch: American is broken, and there’s nothing crazy about supporting change — despite Trump.

    He didn’t talk about Trump’s intellect, his command of the issues, or his suitability for the office of president.

    Instead, Thiel spoke at length about the condition of the U.S., citing a litany of statistics mean to alarm: 64 percent of people age 55 in the U.S have less than a year’s worth of savings. Healthcare costs are “10 times” the cost of “simple medicines” anywhere else in the world. College tuition has risen faster than the rate of inflation. Millennials expect their lives to be worse than the lives of their parents. Incomes are stagnant, with the median household making less money today than 17 years ago. The government is “wasting trillions of dollars of taxpayer money” on foreign wars in Iraq, Syria, Yemen, Libya, and Somalia.

    Trump, argued Thiel, is a vote against the status quo, even while Thiel offered nary a detail about how Trump would address any of these issues.

    In many ways, follow-up questions that followed Thiel’s presentation were more interesting than the speech itself.

    Asked about Trump’s vulgar, decade-old comments about women that aired earlier this month, Thiel said they were in “extremely poor taste” and “extremely inappropriate” but he argued that Trump wouldn’t make the same comments today.

    Asked about his recent,  widely reported $1.25 million donation to Trump’s campaign, Thiel said he “didn’t think about it as much as I should have.” He noted that neither candidate’s campaign has been hugely successful on the fundraising front, adding that Trump specifically hasn’t raised much, so “I didn’t think he needed the money, and I hadn’t donated.”

    When the campaign finally asked him for help — apparently after it became clear that none was forthcoming — “I thought I’d go ahead and write a check,” Thiel said.

    Thiel was also asked about Trump’s personality traits and whether he is concerned about his temperament. Thiel mostly dodged the question, saying instead that when it comes to president, he’s more concerned with world view than temperament, and that he’s more worried about Democratic nominee Hillary Clinton, saying he thinks she has the propensity to get the U.S. into “more wars.”

    Asked about other government regulations, including around small businesses, Thiel said he thinks Trump “viscerally” understands them.

    What about Trump’s track record as a businessman? He has a “huge number of zeros” in his net worth, said Thiel.

    Pressed on what he thinks of Trump’s four (or more) bankruptcies, Thiel said he suspects that “real estate is very different than tech. It’s a fairly zero sum business — a very tough industry especially in big cities like Manhattan or San Francisco. I suspect in many ways what [Trump] did was par for the course in that context.”

    What about the tax returns that Trump has refused to admit? Here, Thiel suggested that government focuses too much on transparency, suggesting that it’s why we “in some ways have a less talented group running [for office] than 30 or 40 years ago.”

    More here.

    —–

    New Fundings

    Everything But The House, an eight-year-old, Cincinnati, Oh.-based startup creating a digital marketplace for estate sales, has raised $41.5 million in new funding led by earlier backer Greenspring Associates, with participation from returning investors Greycroft Partners and Spark Capital. The company has now raised $84.5 million altogether. Fortune has the story here.

    Giphy, a 3.5-year-old, New York-based search engine for the short, looping video files, has raised a fresh $72 million in funding led by DFJ, with participation from Institutional Venture Partners, China Media Capital, and earlier backers Betaworks, Lightspeed Venture Partners and GV. The company has now raised roughly $150 million altogether, and is valued at $600 million, says the WSJ. More here.

    Riskalyze, a five-year-old, Sacramento, Ca.-based company whose software helps investment advisors assess their client’s risk tolerance and find investments that fit them, has raised $20 million in growth equity led by FTV Capital. More here.

    —-

    New Funds

    Chicago Ventures, a 3.5-year-old early-stage venture firm focused on startups in Chicago and the central U.S., has closed its second fund with $66 million. The firm has also added to its roster of “entrepreneur partners” and advisors, which now includes Signal’s Eric Lunt, OkCupid’s Sam Yagan, Trunk Club’s Brian Spaly, and SteelBrick’s Godard Abel. Chicago Ventures closed its debut fund with $40 million in 2013. The Chicago Tribune has more here.

    Third Rock Ventures, the 10-year-old, Boston-based firm focused on fields such as oncology, immunology, neurological disorders, cardiovascular and rare genetic diseases. has closed its fourth fund with $616 million. It’s the firm’s largest fund yet. The Boston Globe has more here.

    —–

    Exits

    Starbreeze, an 18-year-old, Stockholm-based game development studio that also makes a VR headset, has purchased Nozon, a Belgium-based visual effects studio for about $7.75 million. More here.

    —–

    People

    Justin Kan, Y Combinator partner, serial entrepreneur, and one of the internet’s most-loved reality stars, has started another venture called Whale, a video Q&A app. More here.

    —–

    Jobs

    Cisco‘s corporate development team is looking to hire a senior manager. The job is in San Jose, Ca.

    Energy Capital Partners, a year-old early-stage venture firm that’s focused primarily on energy technologies, is looking to hire an associate. The job is in New York.

    —–

    Essential Reads

    Tesla unveiled new solar roof tiles on Friday and they look amazing. No one saw them coming, either.

    This past summer, Facebook made an unsuccessful bid to acquire Snow, a Snapchat-like service from Naver, the $25 billion-valued Korean firm behind chat app Line. TechCrunch has more here.

    A new study finds discrimination against women and black people by Uber and Lyft drivers.

    —–

    Detours

    Apparently, you can be asleep and awake at the same time.

    Forget bomb-sniffing dogs, we can now use spinach to detect explosives.

    A New York man just returned a book that was 42 years overdue.

    —–

    Retail Therapy

    Even if you have more money than you know what to do with, this seems wrong.

    Connie

  • StrictlyVC: October 28, 2016

    Friday!

    Quick mention: Our next SVC event will be in San Francisco on February 8, so mark your calendars, babies! (We were shooting for December 1, but we couldn’t make the timing work. We do hope to see some of you the following week, at London Disrupt.) Details to come. If you’d like to get involved as a sponsor, let us know; we’d love to talk.

    See you Monday, everyone.:)

    —–

    Top News in the A.M.

    Apple, why do you hate us?

    —–

    Accel Cofounder Jim Swartz: It Hasn’t Burst, But It’s a Bubble All Right

    Earlier this week, the Swartz Center for Entrepreneurship, a “hub for entrepreneurship” in the center of Carnegie Mellon University’s Pittsburgh campus, was officially launched in an event attended by upwards of 600 students, alums, and professors. They’ll have even more to celebrate when construction on the 300,000 square-foot business school where it’s being housed is completed in 2018.

    At the center of all: Jim Swartz, who cofounded the storied venture firm Accel Partners in 1983 and who last year donated $31 million to CMU, where Swartz nabbed his master’s degree in 1966. The native Pennsylvanian says the gift is designed to help Pittsburgh cement its new role as a thriving tech center. (Google, Microsoft, and Uber are among a growing number of companies with local campuses.)

    We talked with Swartz earlier today about the donation, as well as whether he remains active on the venture scene, and, if so, what he makes of the current state of things. Our chat has been edited for length.

    TC: You founded Accel with Arthur Patterson in 1983. When did you step back from the firm, and do you still invest in startups?

    JS: It’s been a continuous process and I’m still involved to a significant degree. Arthur and I ran the firm, then we brought in Jim Breyer, and the three of us ran it, then he ran it, then we created an operations committee that ran it, and now there’s a fourth generation. But we’re still involved, [mentoring the VCs there], helping wherever we can with new projects, or selling our ways into things. We’re not under the gun anymore, though, which is a good feeling.

    TC: How active an angel investor are you?

    JS: I’m not San Francisco bubble crazy, but I’m reasonably active, funding two or three companies a year, something like that. I still look for really good technology and great people.

    TC: What do you make of the current environment?

    JS: It won’t end well. I’ve been at this since 1970 and Arthur and I have seen five or six cycles at this point. This one is prolonged for sure. In truth, I thought [the last bubble] was over in 1997 and let it run and thank goodness because we made a ton of money. I think the difference here is Sarbanes-Oxley, which has made it incredibly different and unsavory to take companies public. The regulatory environment is too difficult. Before, if you had $50 million in revenue and could show a profit, you could go public; today that number is what, $200 million, $300 million?

    New funds are filling the funding gap. Accel Growth is one of them, and lot of other firms have taken advantage of things, too. But it creates questions about whether [founders] ever want to go public and how investors will get out.

    TC: Do you see an actual “crash”? It’s hard to see how that happens, with new capital continuing to come in.

    More here.

    —–

    New Fundings

    Ather Energy, a three-year-old, Bangalore-based company that sells premium electric scooters, is raising $31 million in new funding from Hero MotoCorp, the world’s largest seller of motorcycles and scooters. Hero will own as much as 30 percent of the startup. Tech in Asia has more here.

    Conekta, a five-year-old, Mexico City-based payments processing company, has raised $6.6 million in Series A funding from VARIV Capital, FEMSA Comercio, Jaguar Ventures, and Conconi Growth Partners. Forbes Mexico has more here (in Spanish).

    CubeWorks, a three-year-old, Ann Harbor, Mi.-based millimeter-scale computing company (its tech aims to enhance existing devices like wearables with its new energy harvesting methods), has raised an undisclosed amount of funding from Intel Capital. More here.

    KNL Networks, a five-year-old, Oulu, Finland-based wireless communications startup that provides IP communications to isolated and inaccessible areas, has raised $10 million in Series A funding led by Creandum, with participation from Inventure, Butterfly Ventures, and angel investors. Tech.eu has more here.

    Libryo, a year-old, London-based legal tech startup, has raised an undisclosed amount of seed funding from Nextlaw Labs, Seedcamp, and an unnamed seed-stage fund. More here.

    MPower Financing, a 1.5-year-old, Washington, D.C.-based peer-to-peer lending platform for student loans (it connects students to loans from investors without the need for a co-signer), has raised $6 million in Series A funding led by Zephyr Peacock, with participation from 1776 Ventures, Goal Structured Solutions, VilCap Investments, DreamIt Ventures, Fresco Capital, and University Ventures. Zephyr will help the company set up a location in Bangalore. The Tech Portal has more here.

    Orvibo, a four-year-old, Shenzhen, China-based maker of smart light switches, smart electrical plugs and smart fire alarms, has raised $16 million in Series B funding led by Shenzhen Topband, itself a manufacturer of a wide range of electronic products. Earlier backer SAIF Partners and others also joined the round. China Money Network has more here.

    Retention Science, a five-year-old, Santa Monica, Ca.-based AI-driven retention marketing startup, has raised $750,000 in seed funding led by Forerunner Ventures. The company reportedly raised $1.3 million in seed funding led by Baroda Ventures back in 2012. Best Techie has more here.

    Unity Biotechnology, a year-old, San Francisco-based company that’s targeting diseases related to aging and focusing its early work on halting the progression of atherosclerotic disease, has raised $116 million in funding. Arch Venture Partners, Baillie Gifford, Fidelity Management and Research Company, Partner Fund Management, Venrock, and Bezos Expeditions participated, along with earlier backers WuXi PharmaTech and Mayo Clinic Ventures. FierceBiotech has more here.

    —–

    New Funds

    MIT President Rafael Reif announced Wednesday night that the Institute will launch The Engine, a new accelerator program with a planned $150 million venture fund to support startups innovating in the science and technology spaces (and hopefully address Boston’s retention problem). BostInno has more here.

    System.One, a new, Berlin-based pre-seed venture capital fund with a global mindset and a single GP — Maximilian Claussen, who has formerly worked at Earlybird Ventures, Goldman Sachs and elsewhere — has launched with €8.2 million (roughly $9 million) in commitments. More here.

    —–

    IPOs

    China’s ZTO Express, the company that provides shipping and delivery services to Alibaba among others, saw its shares trade downward on its first day of trading yesterday on the NYSE. More here.

    Myovant Sciences, a Brisbane, Ca.-based drug company focused on women’s health diseases, raised $218 million in its IPO, making it the largest biotechnology IPO this year to date. Its shares hit the trading floor this morning (you can catch the action here). MedCity News has more here.

    Quantenna Communications, a Fremont, Ca.-based provider of Wi-Fi video networking for whole-home entertainment, has raised $107 million by offering 6.7 million shares at $16 per share, the top end of its range. You can see how the shares are trading here.

    —–

    Exits

    Earlier this year, Alibaba acquired a controlling stake in Lazada, the Rocket Internet-backed e-commerce company in Southeast Asia, for $1 billion. Now it’s taking steps to turn the business into the “emerging market Amazon,” says TechCrunch, which reports that Lazada is in advanced talks to acquire Redmart, a Singapore-based grocery delivery service. Much more here.

    PowWow Mobile, a four-year-old, San Francisco-based app mobility company, is spending an undisclosed amount to acquire its 4.5-year-old, Atlanta-based competitor StarMobile. StarMobile had raised more than $6 million from investors, shows Crunchbase. PowWow has meanwhile raised $8.3 million from its backers. SearchMobile Computing has more here.

    —–

    People

    Carmen Chang, a partner at New Enterprise Associates, has a new title: Chairman and Head, Asia. The firm also promoted two investors to general partner: Mohamad Makhzoumi, head of the firm’s healthcare services/IT investing practice; and Chetan Puttagunta, a tech investor focused on enterprise software. More here.

    Ryan Collins, the hacker who stole nude photos of female celebrities in 2014, has been sentenced to 18 months in federal prison, officials announced yesterday.

    Renowned iPhone hacker-turned-entrepreneur George Hotz has cancelled his autonomous driving startup’s first official product, an aftermarket add-on that would’ve allowed certain cars to gain Autopilot-like highway driving assistance abilities. He says it wasn’t worth providing detailed answers to 15 questions from the National Highway and Traffic Safety Administration about the technology.

    Vinod Khosla sat down with Bloomberg’s Emily Chang this morning to talk investing strategy, and how he feels about clean tech investing today.

    —–

    Jobs

    Verizon is looking for a strategy and corporate development manager. The job is in Palo Alto, Ca.

    —–

    Essential Reads

    Meal replacement powder maker Soylent has now halted sales of its main product as part of an investigation into why some customers have been getting sick after eating its products. Soylent has raised roughly $22 million from investors. More here.

    —–

    Detours

    Stand-up comedian Bobby Lee versus hot wings.

    Millennials aren’t cheap; they’re thrifty.

    I’m not an assh_le. I’m an introvert.

    —–

    Retail Therapy

    A beautifully designed toaster (really!).

    Connie

  • Accel Cofounder Jim Swartz: It’s a Bubble All Right

    screen-shot-2016-10-27-at-3-36-45-pmEarlier this week, the Swartz Center for Entrepreneurship, a “hub for entrepreneurship” in the center of Carnegie Mellon University’s Pittsburgh campus, was officially launched in an event attended by upwards of 600 students, alums, and professors. They’ll have even more to celebrate when construction on the 300,000 square-foot business school where it’s being housed is completed in 2018.

    At the center of all: Jim Swartz, who cofounded the storied venture firm Accel Partners in 1983 and who last year donated $31 million to CMU, where Swartz nabbed his master’s degree in 1966. The native Pennsylvanian says the gift is designed to help Pittsburgh cement its new role as a thriving tech center. (Google, Microsoft, and Uber are among a growing number of companies with local campuses.)

    We talked with Swartz earlier today about the donation, as well as whether he remains active on the venture scene, and, if so, what he makes of the current state of things. Our chat has been edited for length.

    TC: You founded Accel with Arthur Patterson in 1983. When did you step back from the firm, and do you still invest in startups?

    JS: It’s been a continuous process and I’m still involved to a significant degree. Arthur and I ran the firm, then we brought in Jim Breyer, and the three of us ran it, then he ran it, then we created an operations committee that ran it, and now there’s a fourth generation. But we’re still involved, [mentoring the VCs there], helping wherever we can with new projects, or selling our ways into things. We’re not under the gun anymore, though, which is a good feeling.

    TC: How active an angel investor are you?

    JS: I’m not San Francisco bubble crazy, but I’m reasonably active, funding two or three companies a year, something like that. I still look for really good technology and great people.

    TC: What do you make of the current environment?

    JS: It won’t end well. I’ve been at this since 1970 and Arthur and I have seen five or six cycles at this point. This one is prolonged for sure. In truth, I thought [the last bubble] was over in 1997 and let it run and thank goodness because we made a ton of money. I think the difference here is Sarbanes-Oxley, which has made it incredibly different and unsavory to take companies public. The regulatory environment is too difficult. Before, if you had $50 million in revenue and could show a profit, you could go public; today that number is what, $200 million, $300 million?

    New funds are filling the funding gap. Accel Growth is one of them, and lot of other firms have taken advantage of things, too. But it creates questions about whether [founders] ever want to go public and how investors will get out.

    TC: Do you see an actual “crash”? It’s hard to see how that happens, with new capital continuing to come in.

    More here.

    Connie

  • StrictlyVC: October 27, 2016

    Look, we will admit that we like the Cubs almost as much as the Indians, but we totally take back what we said yesterday. We can get used to winning! Team, let’s turn these stats around!

    Happy Thursday, everyone.:)

    —–

    Top News in the A.M.

    Yesterday, Tesla Motors posted a surprise profit of $21.9 million in the third quarter, defying Wall Street expectations.

    Twitter also reported much-needed, solid third-quarter performance yesterday, and it confirmed that it would lay off roughly 9 percent of its staff.

    Money, money, money: Snapchat will seek to raise as much as $4 billion in its planned IPO, which could value the company at between $25 billion and $35 billion.

    —–

    A Founder Seizes on Anti-Trump Sentiment to Market to Women

    Earlier this year, Kristen Koh Goldstein merged two of her companies, three-year-old Scalus and six-year-old BackOps into a new company called HireAthena, a back-office-as a service startup that also sells fully automated workflow software.

    From the start, the company has aggressively marketed itself to both customers and employees who are women, and it’s smartly playing up to them right now in a presidential election season where talk of sexism has often (yes) trumped talk of education, defense, and the war on drugs, among other national issues.

    Explains Goldstein of HireAthena’s workflow software, on which the company appears to be focusing most of its time and attention: “Our software levels the amount of self-advocacy among a team of people who have to get something done together” by making it easier to follow exactly who committed to do what and when.

    “Too often, you have skilled, hard-working women who are subject-matter experts having to deal with the Trumps of the world yelling over us,” says Goldstein, who worked earlier in her career as an analyst with both Goldman Sachs and Credit Suisse. “Our software enables the shy voice to work with the bold voice to get work done. Our engagement is high because women are saying, ‘I have to use this product; it keeps me from being blamed for stuff that isn’t my fault.’”

    Whether or not that’s true is hard to know. Goldstein doesn’t disclose many metrics about her business other than to say that it is profitable and that investors have expressed interest in providing HireAthena with more capital. (Goldstein’s earlier companies had raised a collective $10 million from Sherpa Capital, GV, Data Collective, Naval Ravikant, and Max Levchin among others.)

    Either way, faced with endless reports about Donald Trump’s history of dehumanizing women, and women outside of his sphere coming forward with their own stories of harassment, Goldstein is honing her recruiting and sales efforts around a specific pitch.

    More here.

    —–

    New Fundings

    Bonesupport, a 16-year-old, Lund, Sweden-based med-tech company that develops treatments for bone fractures, has raised $37 million in equity and debt funding led by Tellacq AB, with participation from HealthCap, Lundbeckfond Ventures, Industrifonden, AP3 and Carl Westin. The debt was provided by Kreos Capital. More here.

    BrainCheck, a two-year-old, Houston, Tex.-based app that helps users understand if they or a loved one may have suffered a concussion simply by playing games on an iPad, has raised $3 million in seed funding from undisclosed sources. TechCrunch has more here.

    Busfor, a four-year-old, Moscow-based platform for buying bus tickets across Russia (it plans to expand into Eastern Europe and Asia soon), has raised $20 million from two Russia-based firms: Baring Vostok and Elbrus Capital. Earlier backer InVenture Partners, also based in Russia, joined the round, too. The company has now raised $25 million altogether. TechCrunch has more here.

    Cloudian, a three-year-old, San Mateo, Ca.-based hybrid cloud object storage platform, has raised $41 million in Series D funding led by Eight Roads Ventures and Epsilon Venture Partners. Other partipants in the round include Lenovo, City National Bank and DVP Investment, as well as earlier backers Intel Capital, INCJ and Goldman Sachs. The company has now raised $79 million altogether. The Register has more here.

    DemystData, a six-year-old, New York, Hong Kong, and Singapore-based company that uses big data to create credit profiles, has raised $7 million in Series B funding led by MissionOG, with participation from Notion Capital and Singtel Innov8. More here.

    eMindful, a 13-year-old, Vero Beach, Fla.-based provider of behavioral change programs to help reduce employee stress,  has raised $6.85 million in Series B funding led by LFE Capital, with participation from One Earth Capital, Bridge Builders Collaborative, New Ground Ventures and Fairground Capital. FinSMEs has more here.

    ForeverCar, a five-year-old, Chicago-based online platform that allows consumers to purchase extended auto warranty contracts directly, has raised $10 million in funding ed by CUNA Mutual Group’s venture capital arm, with participation from KDWC Ventures and entrepreneur Jai Shekhawat. Crain’s Chicago Business has more here.

    NanoPay, a three-year-old, Toronto-based payments company that integrates loyalty, electronic receipts and coupons for its merchant customers, has raised $10 million in Series A funding from Goldman Sachs, APAGM Services, Jarnac Capital Management, and Rohatton. Banking Technology has more here.

    PointGrab, an eight-year-old, Hod Hasharon, Israel-based company whose machine learning technology is installed in optical IoT devices for home and building automation systems, has raised $7 million in funding from Philips Lighting, Mitsubishi UFJ Capital Co., and earlier backer ABB Technology Ventures. VentureBeat has more here.

    Super League Gaming, a two-year-old, Santa Monica, Ca.-based interactive video game league, has raised $5 million in funding from Toba Capital and aXiomatic. Forbes has more here.

    Wochit, a 4.5-year-old, New York City-based video creation platform company that helps publishers produce videos super fast, has raised $13 million in funding from ProSieben, Singapore Press Holdings’ SPH Media Fund, Carlo de Benedetti and earlier backers Redpoint Ventures, Marker LLC and Cedar Fund. Recode has more here.

    Rokid, a two-year-old, China-based AI and robotics company that makes what it calls a family service robot (it connects to smart home devices to control lighting, window curtains, and other home electronics, but it also has face recognition technologies), has raised $65 million in Series B funding led by IDG Capital Partners, with participation from Walden International. China Money Network has more here.

    —–

    IPOs

    Chinese logistics firm ZTO Express completed an IPO yesterday — the biggest of 2016 on the NYSE. It raised $1.4 billion in a deal that values it at more than $12 billion. Fortune has more here.

    —–

    Exits

    Flexera Software, a Itasca, Ill.-based software asset management company, is spending an undisclosed amount to acquire Palamida, a nearly 12-year-old, San Francisco-based company that makes application security software to track undisclosed code and associated security vulnerabilities. Palamida had raised $18.5 million over the years from Walden Venture Capital, Mitsui Global Investment, and HWVP. More here.

    Groupon is acquiring LivingSocial, its onetime rival, for an undisclosed but presumably not enormous sum. (It’s “not material,” says Groupon.)  More here.

    It’s official: Qualcomm will acquire NXP Semiconductor in a chip-making marriage made in heaven. The deal values NXP at around $47 billion in cash. More here.

    Samsung is spending an undisclosed amount to acquire Tachyon, a five-year-old, Reston Va.-based specialist in mobile device configuration and security for businesses. Samsung plans to integrate Tachyon into its enterprise offering to help businesses speed up the secure configuration of third-party apps on their Samsung devices. TechCrunch has more here.

    Verizon is buying Vessel, a San Francisco-based subscription video service founded three years ago by Hulu’s former CEO, Jason Kilar, and its former CTO, Richard Tom. Actually, Verizon is buying the company’s tech, with plans to shut down the service. Vessel had raised more than $130 million from investors, including Benchmark, Greylock Partners, Bezos Expeditions and Institutional Venture Partners. More here.

    —–

    People

    Billionaire Mohamed Alabbar, one of Dubai’s most prominent businessmen, plans a phone messaging service for the Middle East that aims to compete with services such as WhatsApp. It will be designed for an Arabic-speaking audience, he says.

    Tesla recently noted that car owners won’t be able to use their future self-driving Teslas to drive for Uber or Lyft. On Tesla’s Q3 earning call yesterday, CEO Elon Musk addressed claims that he’s taking aim at Uber.

    Amazon has signed up “Mad Men” creator Matthew Weiner to write an eight-episode dramatic series for it, and it’s paying him a whopping $70 million. Deadline has more here.

    —–

    Jobs

    Google’s “smart city” spinoff Sidewalk Labs is looking for an entrepreneur-in-residence to focus on modular housing. The job can be in San Francisco or New York.

    —–

    Essential Reads

    Well! Harvard Management Co. employees called its board inattentive and called out colleagues as “lazy, fat and stupid” in an internal review by McKinsey & Co. More here.

    Samsung is in trouble. The Korean electronics giant’s operating profit plunged 30 percent year-on-year as the effects of the Galaxy Note 7 crisis begin to take a financial toll. More here.

    Those Apple AirPods won’t be ready this month after all.

    —–

    Detours

    Caltech is now the hardest university to get into in the U.S.

    Scientists starting labs today say they have precious little time for actual research.

    It’s true: more people are behaving poorly on flights.

    —–

    Retail Therapy

    Microsoft is not messing around this time.

    Connie

  • StrictlyVC: October 26, 2016

    The Tribe won last night; the Cavs won, too. All this winning is starting to trigger an identity crisis for us!

    We have to race out the door this morning for a field trip with four second-grade classrooms. If you see a flare go up near the San Francisco Public Library, it is us. We’ll get you back tomorrow if we miss anything.:)

    —–

    Top News in the A.M.

    Apple reported its first annual revenue decline in 15 years and its shares are sliding as a result.

    Microsoft is expected to launch a “Slack killer” next week.

    —–

    Lending Club Zooms Into Car Refinancings as Part of Turnaround Effort

    Many Americans learned through Lending Club that they can refinance their credit card debt online; now, the lending marketplace is hoping they’ll start refinancing their automotive loans using its platform, too.

    Indeed, though automotive lending is a massive market, car refinance is far smaller owing to a lack of awareness, suggests Lending Club CEO Scott Sanborn, with whom we spoke by phone earlier today. “People know they can refinance their home. But after their home, their car is their second-largest purchase, yet the car refinance market in the U.S. was about $40 billion last year.”

    In comparison, the overall U.S. auto loan debt market had grown to $1.103 trillion by this past June, according to the research firm Experian Automotive.

    For Lending Club, it’s a prime opportunity (no pun intended), though it carries plenty of risk, as well.

    The publicly traded, San Francisco-based company has struggled throughout 2016, following the forced resignation of its founder and CEO Renaud Laplanche in May over alleged conflicts of interest and a mishandled sale of loans to Jefferies Group.

    Laplanche’s departure shook investors’ faith that the platform was among the strongest in the world of online lending. It also prompted more investors to examine whether the platform had become overly reliant on Wall Street banks that were looking for yield but are notoriously fickle customers.

    Scott Sanborn, who took over as CEO and who’d served as the company’s chief operating officer prior, has taken drastic steps to get the company back on course, but none has had a meaningful impact just yet.

    For example, in addition to hiring a new CFO, a new COO, a new general counsel and a new chief capital officer, Bloomberg reports that a separate new initiative hasn’t gone as well as hoped: providing loans to small businesses via partnerships with Alibaba and Alphabet.

    Asked about that earlier today, Sanborn says that what “gives us confidence when I think about auto is that it’s not just leveraging our technical skills and learnings but also takes advantage of our marketing acquisition skills,” which he suggests Lending Club has been less able to do with its small loans program, given that it’s depending on partners for their distribution.

    Sanborn also argues that though Lending Club has plenty of competition, the large auto lenders aren’t among its worries.

    More here.

    —–

    New Fundings

    Brickwork, a three-year-old, New York City-based SaaS platform for retailers that creates a path between online browsing and in-store purchasing, has raised $5 million in Series A funding led by Safeguard Scientifics, with participation from Recruit Strategic Partners, Advancit Capital, Beanstalk Ventures, Cowboy Ventures and Forerunner Ventures. More here.

    Culture Trip, a four-year-old, London-based content platform that serves us personalized content and recommendations based on where its users are based,  has raised $20 million in Series A funding led by PPF Group, the fund managed by entrepreneur Petr Kellner. TechCrunch has more here.

    Daqri, a six-year-old, L.A.-based augmented reality company whose flagship product is a smart helmet for construction workers, is trying to raise up to $200 million in funding, says Bloomberg. The company had earlier raised $15 million from Tarsadia Investments, shows CrunchBase. More here.

    Genomics Medicine Ireland, a year-old, Dublin, Ireland-based human genome startup, has raised $40 million in Series A funding from ARCH Venture Partners, Polaris Partners, the Ireland Strategic Investment Fund, and GV. Silicon Republic has more here.

    Habit, a new, San Francisco-based personalized nutrition and wellness company that will launch next year, has raised $32 million in funding from Campbell’s Soup Company. (The company’s founder and CEO, Neil Grimmer, previously led Plum Organics, a baby food firm acquired by Campbell Soup in 2013.) The Courier-Post has more here.

    Hyperloop One, a two-year-old, L.A.-based transporation company that eventually hopes to shuttle people and cargo in train-like pods at speeds of up to 700 miles per hour, is looking to raise $250 million in its next funding round early next year and is already seeking tens of millions in new financing, according to Forbes. The company raised a $50 million convertible note from DP World Group earlier this month; to date, it has raised $141.1 million. More here.

    Imzy, a year-old, Salt Lake City, Ut.-based social platform aiming to create positive online communities, has raised $8 million in Series A funding led by Index Ventures. TechCrunch has more here.

    Lendio, a 10.5-year-old, South Jordan, Utah-based loan company for small businesses, has raised $20 million in funding co-led by Comcast Ventures and Stereo Capital, with participation from Napier Park, Blumberg Capital, Tribeca Venture Partners, and North Hill Ventures. FinSMEs has more here.

    Perkbox, a two-year-old, London-based startup whose engagement platform aims to help companies retain both employees and customers, has raised £2.5 million ($2.7 million) in backing from the publicly listed European venture firm Draper Esprit. TechCrunch has more here.

    Selency, a two-year-old, Paris-based platform that features second-hand furniture and decor items, has raised €3 million ($3.3 million) in Series A funding led by Accel Partners, with participation from Kima Ventures. TechCrunch has more here.

    TVision Insights, a nearly two-year-old, Boston-based machine-learning startup that tracks who is watching what on TV and how they are reacting to it (then provides that data broadcasters and advertisers), has raised $6.8 million from Accomplice, Golden Venture Partners, Jump Capital, and ITOCHU Technology Ventures. The company has now raised $9.8 million altogether. TechCrunch has more here.

    Wavefront, a three-year-old, Palo Alto, Ca.-based cloud analytics company, has raised $52 million in Series B funding led by Tenaya Capital, with participation from Sequoia Capital and Sutter Hill Ventures. The WSJ is characterizing the deal as a down round. More here.

    Winnie, a year-old, San Francisco-based online director of family friendly places, has raised $2.5 million in funding from Homebrew, BBG Ventures, Ludlow Ventures, Flight Ventures, Deep Fork Capital, Kleiner Perkins, and #Angels. TechCrunch has more here.

    —–

    New Funds

    Javelin Venture Partners, a San Francisco-based, early-stage venture firm founded in 2008, has closed its fourth fund with $125 million, which is the same size as its third fund, closed exactly three years ago.The firm has also promoted principal-turned-partner Alex Gurevich to managing director. We have more here over at TechCrunch.

    SJF Ventures, a Durham, N.C.-based venture capital firm, has raised roughly $74 million for a fourth fund that’s targeting $125 million, according to two different SEC filings.

    Underscore.VC, a Boston-based early-stage firm cofounded by former North Bridge VC Michael Skok, has closed its first fund at $85 million. BostInno has much more about its new model here.

    —–

    People

    At Mail.ru, the Russian Internet giant that owns the country’s most popular email service; Russia’s Facebook equivalent Vkontakte; messaging service ICQ and a number of other properties, cofounder Dmitry Grishin is stepping down as CEO. Boris Dobrodeev, the current CEO of Vkontakte, will replace him. More here.

    The head of Google’s fiber business, Craig Barratt, is leaving (and layoffs are coming). Recode has more here.

    —–

    Essential Reads

    Somewhat amazingly, Amazon is about to become the biggest clothing retailer in the U.S.

    —–

    Detours

    The psychological case for dressing way up (or down) for work.

    —–

    Retail Therapy

    Inside elevator door mural.

    Connie

  • Lending Club Zooms Into Car Refinancings

    screen-shot-2016-10-25-at-12-57-25-pmMany Americans learned through Lending Club that they can refinance their credit card debt online; now, the lending marketplace is hoping they’ll start refinancing their automotive loans using its platform, too.

    Indeed, though automotive lending is a massive market, car refinance is far smaller owing to a lack of awareness, suggests Lending Club CEO Scott Sanborn, with whom we spoke by phone earlier today. “People know they can refinance their home. But after their home, their car is their second-largest purchase, yet the car refinance market in the U.S. was about $40 billion last year.”

    In comparison, the overall U.S. auto loan debt market had grown to $1.103 trillion by this past June, according to the research firm Experian Automotive.

    For Lending Club, it’s a prime opportunity (no pun intended), though it carries plenty of risk, as well.

    The publicly traded, San Francisco-based company has struggled throughout 2016, following the forced resignation of its founder and CEO Renaud Laplanche in May over alleged conflicts of interest and a mishandled sale of loans to Jefferies Group.

    Laplanche’s departure shook investors’ faith that the platform was among the strongest in the world of online lending. It also prompted more investors to examine whether the platform had become overly reliant on Wall Street banks that were looking for yield but are notoriously fickle customers.

    Scott Sanborn, who took over as CEO and who’d served as the company’s chief operating officer prior, has taken drastic steps to get the company back on course, but none has had a meaningful impact just yet.

    For example, in addition to hiring a new CFO, a new COO, a new general counsel and a new chief capital officer, Bloomberg reports that a separate new initiative hasn’t gone as well as hoped: providing loans to small businesses via partnerships with Alibaba and Alphabet.

    Asked about that earlier today, Sanborn says that what “gives us confidence when I think about auto is that it’s not just leveraging our technical skills and learnings but also takes advantage of our marketing acquisition skills,” which he suggests Lending Club has been less able to do with its small loans program, given that it’s depending on partners for their distribution.

    Sanborn also argues that though Lending Club has plenty of competition, the large auto lenders aren’t among its worries.

    More here.

    Connie

    ,