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

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

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

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

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

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

    How many classes versus kits is that?

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

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

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

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

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

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

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

  • Arvind Sodhani on the Giant that is Intel Capital

    arvindsodhaniintelcapital-304Last week, at a conference in San Francisco, I was asked to interview Intel Capital’s president Arvind Sodhani, who also holds the title of executive VP of Intel Corporation. The idea was to give the audience insight into how the nine-year-old corporate venture unit – which employs 85 investors around the world and invests between $300 million and $500 million each year – does what it does.

    Suffice it to say that it’s complicated. Here’s a cheat sheet, though, for investors and entrepreneurs looking for more, ahem, intel.

    Intel, like most corporate VCs, won’t invest in something that looks like it could be a financial home run but has no bearing on the company’s business. Every investment has to have the potential of delivering both a strategic and financial return. The good news: In one form or another, Intel’s business touches almost every sector out there, so it’s investing in everything from wearables to semiconductors to Hadoop, the bedrock software of so-called big data businesses — which Intel sees as a growth sector. Indeed, readers might recall that in late March, Intel forked over $740 million for an 18 percent stake in Cloudera, which produces the most popular version of the Hadoop software framework.

    Which raises another point: Intel Capital is stage agnostic. While it sometimes makes a swing-for-the-fences deal like Cloudera, it’s also willing to fund very nascent ideas, Sodhani told me last week, calling the organization’s “sweet spot between $5 million and $20 million – that’s where we’re doing the bulk of our investments.”

    As for where it’s making its bets geographically, Sodhani said that half of Intel Capital’s investments are here in the U.S., with the rest distributed globally, including in China, where the organization recently committed to invest up to $100 million in companies working on smart devices, as well as Israel, Russia, India, Brazil, Japan and elsewhere.

    Unsurprisingly, some places work out better than others. Intel Capital has backed companies in places like Vietnam and Chile, for example, but hasn’t been able to consistently find deal flow in either country. It also recently placed an investor in Nigeria to scout out opportunities in Africa, though Sodhani said it “takes a year-and-a-half to two years before someone new in a country can get going and see investments . . . When you arrive in a new country, it takes time to figure out the legal framework, what instruments are available . . . there are lots of different issues.”

    One of them is helping to develop a tech-friendly ecosystem, which Sodhani credits Intel Capital with doing in a variety of places like Vietnam, where startups are still a relatively new phenomenon. While there are plenty of founders, said Sodhani, wresting potential employees out of their solid jobs to work for those founders is still in an upward battle. “Entrepreneurs are willing to take the risk; the hard part is how do you get the rest of the people to come and join the company.”

    Before we’d parted ways, I’d asked Sodhani to share how investment decisions are made within Intel Capital. He suggested that, despite the sprawling design of the organization, it isn’t unlike most venture firms. Every Tuesday, it holds a weekly partner meeting where all deals receive some air time and potential new investments are presented. Company experts are then brought in to discuss and evaluate new funding prospects, questions are asked and researched, and after at least a second look at a company, a committee of five people within Intel Capital decides whether or not to back it. (Sodhani says that Intel Capital can “move lightening fast when there’s a great deal if we’re made aware that it’s a competitive situation. We can put together a term sheet in less than 24 hours if we want.”)

    Like a lot of firms with deep pockets, Intel Capital is also willing to overlook price if the technology is deemed as a must-have. “Valuations are very [high], and I’d say that we’re probably getting to a point where we need to be careful of them,” Sodhani said. Still, he’d added, “some things we have to hold our noses and say, [Let’s move forward], because the technology is important to us.”

    Open source software is one of those things, he continued. “It’s becoming very expensive, but open source is producing lot of software that’s critical. The whole trend of IT migration to the cloud — that’s a $30 trillion idea.”

  • Betaworks Closes a New $20 Million Round

    betaworks logoBetaworks, the six-year-old, New York City-based holding company that has collectively created and invested in more than a dozen startups focused on the “real time Web,” has raised $20 million in new funding, says cofounder John Borthwick, who tweeted in the wee hours of Friday morning: “Excited to bring a few new investors into betaworks. Approx. 20m total capital. The first time in 3 yrs+ that we have have done a raise.”

    A new SEC filing shows a partial list of the firms to participate in Betaworks’s newest round, including Lerer Ventures, RRE Ventures and White Star Capital in the U.K., all of which are existing investors.

    Also listed on the Form D are John Drzik, president and CEO of the management consulting company Oliver Wyman; Michael Buckley, a longtime managing director at Intel Capital who is now the head of finance and strategy at Nike Digital; and Paul Cappuccio, the chief legal officer at Time Warner.


    RRE Ventures, Lerer Ventures and White Star Capital were among the first firms to provide Betaworks with its first, $7.5 million round, announced in early 2008.

    Two years later, in 2010, Betaworks closed on a $20 million Series B round that was led by RRE Ventures and then-new investor Intel Capital, and which included DFJ Growth, AOL Ventures, The New York Times, Softbank Japan and Softbank NY, and Founder Collective.

    Betaworks both invests in, acquires, and helps create real-time media startups. One of its first big wins was with Summize, a search engine that Twitter acquired in a mostly stock deal in 2008. Betaworks is also the company behind the link-tracking analytics company bit.ly, the Web site monitoring service Chartbeat, and numerous other products.

    Recently, the company has made a big push into social reading, including acquiring Digg, which it nabbed at a fire-sale price last year, and  purchasing the bookmarking tool Instapaper for an undisclosed amount in April. Betaworks has since relaunched both products.

    Reached for comment on Saturday, Borthwick (nicely) declined to comment further, saying only that money was raised “recently.”

    Earlier this month, Betaworks hired former Huffington Post Media Group publisher Janet Balis as its very first chief revenue officer, a sign that it’s looking for more ways to earn money off its portfolio. As Borthwick told AllThingsD of Balis’s appointment: “Phase one of Betaworks was building great companies. ” Phase two is “really building Betaworks as an operating media company.”

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