• StrictlyVC: November 19, 2014

    Hi, happy Wednesday, everyone! (Web visitors, here’s an easier-to-read version of what you see below.)


    Top News in the A.M.

    WhatsApp, the hugely popular instant-messaging platform, has “begun encrypting all its data by default, a move that privacy advocates say will aid dissidents and human rights activists seeking to protect their communications from governments and hackers alike,” reports the Washington Post.

    Yesterday, the Senate voted down the USA Freedom Act, a bill that would have ended the controversial phone record metadata collection by the NSA. The Verge has more here.


    On Startups’ Need for Speed

    Some of today’s fastest-growing startups act as if they’re immune to bad publicity.

    While Uber was in the news yesterday for deciding to retain it senior vice president of business, Emil Michael, despite his veiled threats against a journalist, it’s hardly alone. This past May, when troubling, years-old emails by Snapchat CEO Evan Spiegel were leaked to the media, Spiegel issued a short public apology and then went back to business as usual.

    Partly, today’s companies recognize that consumers and journalists have short attention spans. But today’s startups also realize that their window to succeed has never been smaller. As far as they’re concerned, nothing must get in their way.

    A new report tries to quantify this situation. According to the Bay Area consultancy Play Bigger, those select companies that hit the big time are meeting major milestones (including $500 million, $1 billion, and $5 billion valuations) two to three times faster than they did roughly 15 years ago.

    Indeed, poring over 500,000 venture-backed tech companies dating back to 2000, Play Bigger found that the winners founded between 2000 and 2003 took 8.5 years to reach a valuation of $1 billion, while a corresponding set of companies founded around 2009 and afterward have been hitting the same milestone in just 2.9 years. Similarly, startups founded in 2000 to 2003 took 4.5 years on average to reach a $500 million valuation, and companies founded in 2009 and afterward have been hitting the same target in just 1.6 years. The firm’s report is here.

    The reasons for this hyper-growth aren’t surprising. Thanks to social media, word-of-mouth about products and services spreads faster than ever before. The costs of scaling have fallen dramatically with cloud services. Ubiquitous mobile devices mean global distribution is easier than at any time in history. And startups have a wider variety of funding sources.

    Still, Uber and its brethren are making a mistake if they think their need-for-speed trumps good crisis management.

    Yes, the startup world forgets many of these stumbles quickly, but the public markets are much less forgiving. And when the same company keeps experiencing one public relations disaster after another, one has to wonder whether there’s some sort of systemic problem.

    Yesterday, in pardoning Michael, Uber CEO Travis Kalanick tweeted, “I believe that folks who make mistakes can learn from them – myself included.” We hope so. Time will tell.


    New Fundings

    Airware, a 3.5-year-old, San Francisco-based company behind a hardware, software, and cloud services platform for commercial drone development and operation, has raised an undisclosed amount of strategic funding from GE Ventures. Airware had raised roughly $40 million previously, including from Kleiner Perkins Caufield & ByersAndreessen Horowitz, First Round Capital, and Google Ventures.

    AllUnite, a 1.5-year-old, Copenhagen-based company that offers free Internet and location-based marketing for retailers, has raised €3 million ($3.7 million) in Series A funding led by Northzone, along with Denmark’s largest grocery chain retailer, Coop. The company had previously raised €1 million ($1.6 million), including from Danish investor Christian Stadil.

    Bigcommerce, a 5.5-year-old, Austin-based start-up whose software-as-a-service helps more than 55,000 companies create and manage their online stores, has raised $50 million in Series D funding led by SoftBank Capital, with participation from Telstra Ventures, American Express, and earlier investors General Catalyst Partners and Revolution Growth. The company has now raised $125 million altogether.

    Boost Media, a 5.5-year-old, San Francisco-based startup that uses crowdsourcing and split testing to help businesses find effective words and images for their online ads, has raised $19 million in Series C funding led by Battery Ventures. Earlier investors Javelin Venture Partners,Pinnacle Ventures, and Webb Investment Network also invested in the new round, which brings the company’s total funding to $31 million.

    Clef, a 1.5-year-old, Oakland, Ca.-based company whose two-factor service enables sites to replace passwords with verification from Apple’s Touch ID fingerprint reader, has raised $1.6 million in seed funding from Morado Ventures and angel investors.

    Cue, a 4.5-year-old, San Diego startup developing an inexpensive diagnostic screening device for the home, has raised $7.5 million in funding led by Sherpa Ventures. Actor Leo DiCaprio, Salesforce CEO Marc Benioff and former Obama campaign manager Jim Messina also participated in the round.

    Dispatch, a nearly two-year-old, Boston-based company that helps schedule and track on-demand services like home repairs, has raised $3.1 million in seed funding led by Promus Ventures and GrandBanks Capital. Other participants in the round include Kima Ventures, Launch Capital, and Salesforce Ventures, along with individual investors.

    GoGoVan, a 1.5-year-old, Hong Kong-based on-demand delivery service serving Asia, has raised $10 million from the Chinese social networkRenren in exchange for a 10 percent stake n the company, reports the WSJ. GoGoVan, which says it has access to 20,000 vehicles and 74,000 drivers, had raised $6.5 million in Series A funding led by Centurion Private Equity in August.

    Kik Interactive, a five-year-old, Waterloo, Ontario-based mobile messaging app focused on young teens, has raised $38.3 million in new funding led by Valiant Capital Partners, with participation fromMillennium Technology Value Partners and SV Angel, and earlier backers Foundation Capital, RRE Ventures, Spark Capital and Union Square Ventures. The company, which has now raised $70.5 million altogether, is using part of its new round to acquire a Toronto-based messaging service called Relay that it will integrate into its product. (Relay had raised $700,000 in funding, including from Valar Ventures and Real Ventures.) Some of the new funds are also being used to buy employee stock.

    LeddarTech, a seven-year-old, Quebec, Canada-based company that develops LED detection systems for object recognition and distance measurement applications, has raised $7 million in new funding led by earlier backers BDC Capital and GO Capital Fund. The company has now raised $16 million altogether, shows Crunchbase.

    Novaerus, a three-year-old, Chicago-based company whose technology scrubs the air using a plasma field to reduce airborne pathogens, has raised $10 million from new investors Polaris Partners and Fidelity Biosciences. Novaerus had previously received an undisclosed amount of funding from Oyster Capital Partners, an Ireland-based investment firm.

    Prezi, a five-year-old, San Francisco-based company that makes interactive, cloud-based presentation software, has raised $57 million in funding led by Spectrum Equity. Earlier backer Accel Partners also joined the round, which brings the company’s total funding to $71.3 million.

    Redbooth, a nearly six-year-old, Redwood City, Ca.-based communication and collaboration platform for enterprises, has raised $11 million in Series B funding led by Altpoint Ventures and Avalon Ventures. The company has now raised $17.5 million to date, including from Data CollectiveFJME Ventures, and individual investors.

    Seriously Digital Entertainment, a year-old, Helsinki, Finland-based mobile gaming company that was founded by two former Rovio executives, has raised $5 million from existing investors, including Daher Capital,Sunstone Capital and Upfront Ventures. The company has now raised $10 million altogether.

    Sweetgreen, a seven-year-old, Washington, D.C.-based farm-to-table healthy restaurant chain, has raised another $18.5 million from earlier investor Revolution Growth to expand to the West Coast. The company has now raised $57.5 million altogether. Venture Capital Dispatch has more here.

    WeMail, a new, Seattle-based email app maker founded by two Y Combinator alums (who happen to be brothers), has raised $1 million in funding from other founders in the YC network, including Twitch co-founders Justin Kan and Emmett Shear, Parse and Scribd co-founder Tikhon Bernstam, Flurry founder Sean Byrnes, and Reddit and Hipmunk co-founder Steve Huffman. TechCrunch has more here.

    Zipnosis, a five-year-old, Minneapolis, Mn.-based telemedicine company that offers 24/7 online diagnoses for common medical conditions, has raised an undisclosed amount of funding from Arthur Ventures, an investor in health-related software. The company, which was mostly bootstrapped prior, has now raised more than $2 million altogether, its chief executive tells VentureWire.

    Zomato, a six-year-old, New Delhi, India-based restaurant search and discovery service that provides information on hundreds of thousands of restaurants across 18 countries, has raised $60 million in new funding, this time from India’s Vy Capital and earlier backers Info Edge and Sequoia Capital. The company has now raised roughly $113 million altogether. TechCrunch has much more here.


    New Funds

    500 Startups has created a new $10 million fund focused on mobile startups called 500 Mobile Collective that will be managed by partner Edith Yeung.

    Kensington Capital Partners, an 18-year-old, Toronto-based firm has held an initial close on its Canada-focused fund of funds called Kensington Venture Fund with roughly $160 million. LPs in the fund include Royal Bank of Canada, BMO Financial Group, CIBC, and TD Bank Group, as well as the Canadian government, which owns 33 percent of the fund.

    Zetta Venture Partners, a firm launched last year by Mark Gorenberg, has raised more than it was targeting for its debut fund, shows a new SEC filing. Gorenberg, who spent more than 20 years as a managing director at Hummer Winblad Venture Partners, had initially set out to raise $40 million and fairly quickly assembled $30 million. The new filing shows he has since raised $56.5 million altogether. Zetta, where Gorenberg is the sole GP, is focused on early-stage analytics startups that are focused on the enterprise.



    The American Depository Shares of EHi Car Services, a Shanghai-based car rental and chauffeuring company, began trading yesterday on the NYSE and remained fairly flat. Initially sold at $12 each, raising $120 million for the company, the shares closed the day at $11.70 apiece.



    500friends.com, a four-year-old, San Francisco-based company that creates incentive programs for businesses, has been acquired by digital marketing company Merkle for “tens of millions” of dollars, the company tells Venture Capital Dispatch. The company had raised $10.9 million from investors, including Crosslink Capital, Intel Capital and Fung Capital. Merkle, a 25-year-old company, raised its first institutional funding in 2010 — a minority investment from Technology Crossover Ventures.

    BinOptics, a 14-year-old, Ithaca, N.Y.-based maker of optoelectronic components, has been acquired for $230 million in cash by M/A-COM Technology Solutions, a 50-year-old, Santa Clara, Ca.-based company that makes semiconductor devices and components. BinOptics had raised at least $37 million from investors, shows Crunchbase. Its backers includeRand Capital, Advantage Capital Partners, and Cayuga Venture Fund.

    Galvanize, a two-year-old, Denver-based venture-backed company that runs software-development education programs, has acquired Zipfian Academy, a year-old, data-science boot camp in San Francisco. Venture Capital Dispatch has more here.

    MedeAnalytics, a 20-year-old, Emeryville, Ca.-based health-care analytics company, has acquired software provider OnFocus Healthcare, a 29-year-old, Brentwood, Tn.-based performance management software company that targets hospitals and healthcare organizations. OnFocus has raised minimal amounts of outside funding over the years; MedeAnalytics raised $50 million from Bain Capital Ventures in 2008.



    Another day, another lawsuit filed by a former frat brother who says his best friends squeezed him out of the social media company they founded together. This time, it’s Yik Yak. Forbes has the story. (StrictlyVC wrote about Yik Yak’s growth in late October.)


    Job Listings

    Snapchat is looking for a product analyst. The job is in Venice, Ca.


    Essential Reads

    Twitter now lets you search for any tweet ever sent.



    Why it’s so hard for Millennials to find a place to live and work, in graphs.

    GQ spends a few days with comedian Dave Chappelle who is, as always,hilarious.

    Please Stop Spreading Around That Meme of Me Choking on a Grilled Cheese Sandwich.


    Retail Therapy

    Like baseball? Shoot baskets? Can we perhaps interest you in a sports site?

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