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Top News in the A.M
Poor Blackberry can’t catch a break. It looks like even the White House is moving on to Samsung phones.
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A Small Entrepreneur Takes On, Gulp, Uber
Across the U.S., new car-sharing services Lyft and Sidecar are spreading fast, while Uber, which now manages a ride-share service as well as connects passengers with career drivers, seems destined for world domination.
In short, it doesn’t sound like a great time to launch a new car service. Yet that’s exactly what Yamandou Alexander has done with GoGreenRide, a New York-based startup that Alexander has bootstrapped with $2.5 million of his own capital. (GoGreenRide is currently halfway through raising a new, $5 million outside round of fundraising.)
Oddly, Alexander may have had the idea of an alternative transportation fleet first. As the French-born entrepreneur tells it, he moved to New York City at 19, bussing tables at famed Upper East Side restaurant Daniel and selling Motorola Startacs to his coworkers, many of them fellow immigrants. He eventually began exporting the handsets to Africa, creating one telecom company and selling a second for enough money in 2012 to bring to life a concept he wanted, but couldn’t afford, to pursue in 2006 – a nicer, greener, more affordable version of a black car service.
We chatted recently about how that vision is coming together and why GoGreenRide makes sense now, even in a ride-sharing economy.
Your business differentiates itself in two key ways. For one thing, GoGreenRide owns or leases dozens of Prius cars. You also have 40 full-time employees, rather than contractors. You’re like the anti-Uber, except that Uber is so profitable precisely because it has so little overhead. Why does your strategy make sense?
With contractors, there’s a lack of control in presentation, quality, and customer service. We want our drivers to wear a uniform; to work on a schedule, rather than when they feel like it; to open doors; and to understand when it isn’t time to talk. We want to provide good, consistent customer service. We’re also concerned with Uber’s model from a liability standpoint.
As for the cars, based on plans to increase our fleet to 50 cars by summer, the company should reach break-even by December. Next year, the car should see a 13 percent EBITDA…and by 2018, 26 percent EBITDA.
Where are you turning to fund those plans?
We’re talking with VCs. Investors on the West Coast are more interested in less capital-intensive businesses, but we’re getting good traction with East Coast people who know and live the experience of trying to find transportation in New York. We’re also going out to AngelList for additional investment, and inviting GoGreenRide members to participate.
Uber gets a lot of flack for its surge pricing. Is your pricing flexible, too?
Pricing does fluctuate based on traffic conditions. But you always know how much you’ll pay before you get in a car via our mobile app, which sends you detailed information about your trip, including when the driver will arrive. Our metering is calculated based on the estimated time [it will take to transport a passenger from A to B], which we know based on historical data about traffic patterns.
As an alternative to black car service, what percent of your business comes from corporate partnerships?
About 40 percent. We cater to both customers taking long trips, who might otherwise take a black car service to the airport, and short trips, where we’re competing more directly with taxis. Our average fare is $34, which is the same as a yellow cab, but you’re getting a much nicer experience with GoGreenRide.
Beyond expanding your fleet, what’s on your road map, so to speak?
The short-term growth opportunity is for us to grow our model in New York, then move into L.A. or San Francisco. We’re also starting a franchising program, including [helping launch] a GoGreenRide in China.
We glad for Uber’s success and the acceptance it has gained in New York. But we also see a lot of people coming to us from them because of pricing, level of service, reliability, and safety.
New Fundings
Chatwala, a year-old, New York-based messaging app, has raised $625,000 in seed funding for its two-way video chat mobile app that lets users engage in staggered conversations VentureBeat has more here.
Crowdtap, a 4.5-year-old, New York-based startup that helps brands connect with their fans and reward them, has raised $5 million in Series B funding led by earlier investor Foundry Group. Other participants in the round included Tribeca Venture Partners, Alta Communications, and The Mustang Group. The company has now raised $15 million altogether, shows Crunchbase.
Elevate Digital, a three-year-old, Chicago-based interactive digital advertising and software company, has raised $3 million in funding from SFX Entertainment, a live event and festival promoter that plans to incorporate Elevate’s technology it into its events. The money brings Elevate’s Series A fund to a total of $7.2 million. Its other backers include Partners Path Investments and Advantage Capital Partners.
Faraday, an 18-month-old, Middlebury, Vt.-based cloud software provider aimed at helping housing contractors and handymen find new business, has raised $880,000 in Series A round of financing led by FreshTracks Capital. Renewable energy services provider 3Degrees, seed-stage venture investor LaunchCapital, environmental-opportunities-focused investor ARB, and a number of individual investors also participated.
Gigwalk, a 3.5-year-old, San Francisco-based company that asks people to use their smartphones to gather and submit to Gigwalk information about retailers they visit, has raised $10 million in a Series B round led by Nokia Growth Partners. Other participants in the funding includedRandstad Holding and earlier investors August Capital, Harrison Metaland SoftTech VC.
Invendo Medical, a 6.5-year-old, Garden City, N.J.-based maker of endoscopy products, has raised $28 million in financing led by Xeraya Capital. Other participants in the round included TVM Capital, Wellington Partners and 360° Capital.
Procured Health, a two-year-old, Chicago-based company whose software helps hospitals with their internal workflow, has raised $4 million in Series A funding led by FCA Venture Partners. The company had previously raised $1.1 million in seed funding from Zimmerman Ventures, Bessemer Venture Partners, Fidelity Biosciences, and Blueprint Health Accelerator.
Saffron Technology, a 15-year-old, Cary, N.C.-based company whose data analytics platform claims to unify and learn from structured and unstructured data in real time from a large variety of sources, has raised $7 million in Series B funding from unnamed sources. The company tells the Triangle Business Journal that it plans to use some of that funding to move to Silicon Valley.
Stir, a months-old, L.A-based creator of so-called “learning” height-adjustable desk, has secured $1.5 million in seed investment led by Vegas TechFund. Numerous angel investors also participated in the funding.
Testbirds, a 2.5-year-old Munich, Germany-based mobile and web app that lets companies outsource their app testing, has raised $2.9 million in Series A funding led by Seventure Partners. The company had previously raised roughly $1.8 million in seed funding, reports TechCrunch.
YouNoodle, a six-year-old, San Francisco-based company that builds platforms for entrepreneurship competitions all over the world, has raised $1.1 million in a new financing round, including from VegasTechFund,Lars-Henrik Friis Molin of Sweden, The Amicus Group of Korea, and Kolind A/S.
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New Funds
Flybridge Capital Partners, the 13-year-old, Boston-based venture capital firm, is raising $125 million for its fourth venture capital fund, according to an SEC filing that was first spied by Fortune. As Fortune’s report notes, the fund is far small than its immediate predecessor, a $280 million pool closed in 2008. It says the difference reflects numerous changes, including that the firm is no longer focused on healthcare deals. (In fact, the firm’s cofounder and primary healthcare investor, Michael Greeley, left Flybridge last fall to join another firm, Foundation Medical Partners. You can read an interview with him about the move here.) The new, more focused Flybridge is also reportedly backing out of Latin America as a focus area, with general partner Jon Karlen becoming an advisor to the firm, while New York-based principal Math Witheiler is promoted to general partner in New York.
Lightspeed Venture Partners, the 14-year-old, Sand Hill Road venture capital firm, has closed its tenth fund with a total of $1 billion in capital commitments, reports Fortune, which say the firm raised two separate funds: a $650 million early-stage fund, and a $350 million late-stage vehicle. The fund invests in consumer and enterprise deals, along with energy tech. Fortune has more here.
Qiming Venture, the 10-year-old, Shanghai-based venture capital firm cofounded by Gary Rieschel, has raised about $500 million for its fourth fund, according to China Money Network. The firm, which funds early- to growth-stage companies across China in the media and internet, IT, consumer and retail, healthcare, and clean technology sectors, raised its last, $450 million, fund in the spring of 2011.
Simon Property Group, a publicly traded, Indianapolis, In.-based commercial real estate giant, has announced a new, dedicated venture fund called Simon Venture Group that will look to invest in “retail innovation,” from seed-stage to high-growth companies, says the firm. The new venture group will be led by J. Skyler Fernandes, who was previously a partner at Centripetal Capital Partners, a multi-stage venture capital fund.
Technology Crossover Ventures, the 19-year-old growth equity firm, has officially closed on TCV VIII, a $2.23 billion fund. TCV began marketing the fund in the summer of 2012 with a $2.5 billion target.
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IPOs
Rubicon Project, the nearly seven-year-old, L.A. based ad tech company, priced its IPO yesterday at $17 a share, valuing the company at more than $450 million. The company has raised $51 million in funding from Mayfield Fund, Clearstone Venture Partners, Comcast Ventures, IDG Ventures, and News Corp. Its biggest shareholders are Clearstone, which owned 21.7 percent going into the offering; News Corporation, which owned 19.3 percent; and Mayfield, which owned 14.2 percent. (All three had plans to sell part of their stake in the IPO.) Rubicon today becomes the first L.A. tech company to go public since Demand Media‘s IPO in 2011.
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Exits
Mindbloom, a 5.5-year-old, Seattle-based mobile health firm, has been acquired by Welltok, a five-year-old health optimization company in Denver. No financial terms were disclosed. Mindbloom had raised $3.2 million in seed funding from undisclosed sources; Welltok has raised $48 million, including from New Enterprise Associates, IBM, Qualcomm Ventures, Emergence Capital Partners, InterWest Partners andMiramar Venture Partners.
Nervogrid Oy, a 10-year-old, Helsinki, Finland-based company that delivers IT infrastructure as a managed cloud service, has been acquired by the publicly traded Swiss company Also Holding for undisclosed terms.
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People
Steve Bennett, who was hired as the CEO of computer-security giant Symantec in July 2012, was fired yesterday, the company announced, saying it had appointed board member Michael Brown to lead while the company seeks a replacement. As you might suspect, the Mountain View, Ca.-based company didn’t elaborate on why it was terminating Bennett, though Bloomberg notes the company’s shares have fallen 15 percent in the past year amid declining revenue.
Mayfield India has named Vishal Dixit as a partner. Dixit was previously a director at Zephyr Peacock, where he was a founding team member of four India-focused funds.
Ferenc Huszar has joined Balderton Capital as a data scientist. Huszar, who recently completed his PhD in machine learning from the University of Cambridge, joins the firm from PeerIndex, a startup that aims to evaluate and understand the “social capital” that a person has built online.
Pat McGovern, who became a billionaire as the founder and majority owner of Boston-based technology publisher International Data Group, died on Tuesday. He was 76. No reason was given for this death. IDG publishes dozens of print publications and hosts hundreds of conferences each year.
Google CEO Larry Page suggested at the TED conference this week that rather than hand his fortune over to a traditional philanthropic organization, he’d rather give it entrepreneur genius Elon Musk, who has big ideas for changing the world.
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Job Listings
Oracle is looking for a corporate development associate at its Redwood Shores, Ca., headquarters.
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Essential Reads
Just after he was named CEO of Microsoft, Satya Nadella got a visit fromYahoo CEO Marissa Mayer. Re/code sources say the meeting was friendly “except when the topic got to the long-fraught search advertising and technology partnership between the companies, which Mayer has been agitating to change for some time now. Mayer’s basic message to Nadella has remained the same as it has been for a while now — Yahoo wants out of the deal, and sooner than later.”
Not all is lost, apparently. Mt. Gox, the Tokyo-based Bitcoin exchange that collapsed and filed for bankruptcy last month, said it had found 200,000 Bitcoins that were held in a digital storage file. Dealbook has more here.
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Detours
Director David Fincher says Oscar winner Christian Bale is his one and only choice to play Steve Jobs in an upcoming Jobs biopic.
Darkly funny photos of the San Francisco rental market.
Santa Monica is the new Silicon Valley, and the Times is on it.
“Mad Men” creator Matthew Weiner talks with The Atlantic about going to casinos and pretending to be Tunisian, Russian, or Armenian.
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Retail Therapy
Neat – a bike whose frame and rims are coated in a specially formulated powder that makes it shine under light (including car headlights).
StrictlyVC made the mistake of showing this to the kids this morning. Looks like we’re getting a new robot.
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