• StrictlyVC: May 15, 2014

    Happy Thursday morning, everyone! One more day to go (not that StrictlyVC spends all week counting down the days until Friday; that would be ridiculous).


    Top News in the A.M.

    Today, the FCC will vote on the future of the Internet. Here’s everything you need to know.


    Nirav Tolia Charged with Felony Hit-and-Run Involving Executive Recruiter

    In late October, Nirav Tolia seemed to be on top of the world. The CEO of Nextdoor, a four-year-old, San Francisco-based social network for neighbors, had just raised $60 million in a financing led by Kleiner Perkins Caufield & Byers and Tiger Global Management – a round that brought the company’s funding to roughly $100 million.

    “We didn’t go out looking for money,” Tolia told Dealbook at the time. “To some extent the guys who were interested wouldn’t take no for an answer.”

    Yet a misstep two months earlier now threatens to cast a shadow over Tolia and the company. Specifically, Tolia is facing criminal charges over accusations that he caused a collision on Highway 101 in San Mateo County, south of San Francisco, on August 4th of last year. Self-employed executive recruiter, Patrice Motley, says it was then that, through aggressive maneuvering, Tolia caused her black Honda to spin across two lanes of traffic before hitting a concrete median and coming to rest in the fast lane of oncoming traffic.

    Motley has since hired Brent, Fiol & Nolan, a San Francisco personal injury law firm, and filed a civil suit against Tolia. Her complaint alleges that she suffered neck and back injuries, fracture of bones in her left hand, and post-traumatic stress disorder, all of which have rendered her incapable of accomplishing routine tasks necessary for independent living and seriously impacted her ability to earn a living.

    San Mateo County District Attorney Steve Wagstaffe is also now pursuing a felony hit-and-run charge against Tolia for leaving the scene of the crash.

    In an email to StrictlyVC yesterday, Tolia said, “I just learned about these allegations and will cooperate fully with authorities. This is a personal matter that happened last August and is not related to Nextdoor.”

    Meanwhile, I spoke yesterday afternoon with Joseph Brent, Motley’s attorney, about Motley’s version of events. He said Tolia, driving behind another car that was driving at a comparatively slower speed, veered into Motley in the adjacent lane in an attempt to get in front of the slower car. Motley “honked at him but he apparently didn’t hear [the honking] and didn’t realize he was [about to crash into Motley] until his wife informed him that he was about to hit a car. But it was too late and Patrice lost control of her car.”

    Tolia then “fled the scene,” said Brent. “If it weren’t for concerned citizens who watched what happened, and took down his license number, no one would have known who caused the car accident.”

    He added that Motley was “was left in harm’s way in the fast lane with cars rushing toward her at a high rate of speed. She was terrified.”

    Asked why Motley is filing a civil suit against Tolia now, roughly nine months after the accident, Brent said that “some of it has to do with confidential settlement communications with Mr. Tolia” and declined to comment further. Asked why San Mateo’s District Attorney is just now filing charges, he said, “I have no idea why the [D.A.] chose to file today, but I know why we filed today. The time was now. There was no reason to delay.”

    Because Motley’s background is likely to come under public scrutiny, I asked Brent whether she’s been involved in a lawsuit before. He said doesn’t know, but he quickly painted a picture of a model citizen who has an undergraduate and master’s degree from Michigan State, has worked as an adjunct professor at both UC Berkeley’s extension program and at SF State, is “very active in her community,” and was even “a candy striper.”

    In a police report filed by CHP investigators in the accident’s immediate aftermath, Tolia — who was cited for “making an unsafe lane change” — said he saw only part of what had happened. He told investigators that he saw Motley’s car spin out in front of him but he didn’t see it hit the median. According to that police report, Tolia “added that he did not call law enforcement because he was certain that someone had called. He also stated that he was in ‘shock’ and did not know what to do.’”

    As longtime Silicon Valley watchers will know, this isn’t the first lawsuit to involve Tolia. Earlier in his career, he was caught lying on his resume and forced to resign from Shopping.com, a bubble-era company that went public and was later acquired by eBay. Early employees of the company, which was originally called Epinions, had sued Tolia and Shopping.com backers Benchmark Capital and August Capital, alleging they’d conspired to deprive them of tens of millions of dollars in the sale. EBay later settledthe suit, and Benchmark, which has remained an ardent supporter of Tolia over the years, brought Tolia aboard an as an entrepreneur-in-residence.

    Indeed, Benchmark was among a long line of top firms to pile into Nextdoor’s first big institutional round, an $18.6 million funding closed in July 2012.

    Tolia is to appear May 29 in San Mateo County Superior Court in the criminal matter.


    New Fundings

    Chartbeat, a four-year-old, New York-based company that helps Web publishers monitor viewer usage on their sites, has raised $3.1 million in new funding led by earlier investors DFJ and Index Ventures. Other investors in the round included Freestyle CapitalLaunch FundLerer VenturesLowercase Capital and SoftTech VC. The company has raised $17.6 million altogether, shows Crunchbase.

    Click With Me Now, a 2.5-year-old, St. Louis, Mo.-based company whose Web-sharing application lets users share their Web screen with others and download an app without leaving a site, has raised $2.25 million from undisclosed angel investors, reports VentureWire. The company had previously raised $50,000 through the Capital Innovators accelerator in St. Louis.

    Darby Smart, a year-old, San Francisco-based online platform that helps do-it-yourself designers of fashion and home items market and sell their projects to consumers, has raised $6.3 million in Series A funding led by Maveron, with participation from Forerunner VenturesCAA Ventures and existing investors. The company has raised $7.3 million altogether.

    Gemmus Pharma, a 6.5-year-old, San Francisco-based biotechnology company that’s working on an improved host-targeted treatment for flu, has raised $3.3 million in Series B funding from a syndicate of angel groups led by the Life Science Angels. Other members of the syndicate include BlueTree Allied AngelsThe Angels’ ForumTech Coast Angels and Wilmington Investor Network.

    JustFab, a four-year-old, El Segundo, Ca.-based online shoe and apparel retailer that has already raised $164 million in venture backing, is talking with investors about a new round of between $50 million and $100 million,according to a Re/code source who’s familiar with the talks. JustFab’s current investors include Rho VenturesMatrix PartnersIntelligent BeautyShining Capital, and Technology Crossover Ventures.

    Netskope, a 1.5-year-old, Los Altos, Ca.-based cloud app analytics and policy enforcement company, has raised $35 million in Series C funding led by Accel Partners. Earlier investors Lightspeed Venture Partners and Social+Capital Partnership also participated in the round, which brings Netskope’s total funding to date to $56.4 million.

    OpenDNS, a 7.5-year-old, San Francisco-based company that provides a variety of services to companies and individuals, including identifying suspicious Internet traffic patterns, has raised $35 million in new funding from earlier investors Greylock PartnersSequoia Capital, and Sutter Hill VenturesAccording to Venturebeat, other participants in the round included Glynn CapitalCisco SystemsEvolution CapitalLumia CapitalMohr Davidow Ventures, and Northgate Capital.

    Oscar, a 10-month-old, New York-based next-generation health insurance company, has raised $80 million in fresh funding roughly five months after raising a $30 million round. Formation8 led the round, which also included Breyer CapitalFounders FundGeneral Catalyst PartnersKhosla Ventures, hedge fund manager Stanley Druckenmiller, and Thrive Capital, the venture fund of Oscar cofounder Joshua Kushner. The company has raised now raised $150 million altogether. Forbes has more on its new funding here.

    Pantheon, a 3.5-year-old, San Francisco-based corporate site platform that developers, marketers, and IT professionals use to build and run Drupal and WordPress sites, has raised $21.5 million in Series B funding led by Scale Venture Partners, which was joined by OpenView Venture Partners. Earlier investors First Round Capital and Foundry Group also participated in the round, which brings Pantheon’s total funding to $28.8 million.

    PeopleDoc, a 6.5-year-old, New York-based company whose software platform unifies human resources operations, has raised $17.5 million in Series B funding led by Accel Partners. Earier investors Alven Capitaland Kernel Investissements also participated in the round, which brings the company’s total funding to roughly $25 million.

    Stratos Genomics, a 6.5-year-old, Seattle-based company whose technology, called Sequencing By Expansion, converts DNA into a more easily read polymer (making it cheaper and faster to sequence), has raised $10 million of a $16.3 million Series B round, reports GeekWire. CEO Allan Stephan is not disclosing the company’s investors.


    New Funds

    Monk’s Hill Ventures, a new, Singapore-based venture capital firm, announced plans yesterday to invest $80 million in tech startups in both Southeast Asia and Silicon Valley. The idea: to write initial checks of between $1 million and $3 million in exchange for 15 percent to 30 percent of startups’ equity. The outlet Tech in Asia has more on the firm here.



    Good Technology, the 18-year-old, Sunnyvale, Ca.-based company whose software helps people use personal smartphones for work, has filedfor an IPO. The company, which has had dozens over investors of the years and survived more near-death experiences than David Blaine, is still losing money, to the tune of $188 million last year. (Put another way, we aren’t terribly optimistic about this one. But you never do know.)

    Cloud software company Zendesk priced its first batch of shares at $9 last night, setting the company up for a debut on Wall Street today that that will be “closely watched following a bloodbath for young Silicon Valley tech companies on Wall Street,” as reports the San Jose Mercury News. More here.



    LiveRamp, a six-year-old, San Francisco-based company whose technology enables companies to use their offline customer data in online advertising, has been acquired by the publicly traded data analytics company Acxiom for $310 million in cash. LiveRamp, formerly known as Rapleaf, had raised $32 million in venture capital, including from North Bridge Venture PartnersSoftTech VCFounders FundRembrandt Venture PartnersFelicis Ventures, and Pilot Group.



    Chris Dixon, a longtime New Yorker who today mostly works out the Sand Hill Road offices of Andreessen Horowitz, was asked at a conference this week when New York’s tech scene will more strongly rival Silicon Valley as an innovation hub. Said Dixon: “New York has always been an application city … It’s not about inventing technology, but applying it.” (GigaOm has more here.)

    The National Venture Capital Association announced yesterday that New Enterprise Associates‘s general partner Scott Sandell will serve as the organization’s new chairman for the coming year.

    The nonprofit advocacy group Consumer Watchdog doesn’t approve of the recent appointment of Google Chairman Eric Schmidt to the New York State Smart Schools Commission, and it’s fairly easy to see why. “This is not the case of an industry participant advising on general policy initiatives,” argues the group in a formal complaint. “[I]nstead, it involves Schmidt, the Executive Chairman of Google, advising on how to spend $2 billion on educational technology that Google offers in New York” when “Schmidt and Google want to grow substantially Google’s education business in New York and elsewhere” and “Schmidt’s ownership or control of Google stock represents approximately 5.5% of Google . . .”

    Investor Peter Thiel interviewed GE’s CEO Jeff Immelt during the last day of the NVCA’s annual conference yesterday, and the two talked about the traits they look for in the people they back. Their mutual conclusion: it’s hard to find entrepreneurs who have it all. “It’s a paradox,” said Thiel. “You want people who are pretty determined but good listeners. You want open minded people, yet ones that aren’t easily distracted.”


    Job Listings

    Box, the online data storage company, is looking for a corporate strategy associate. The job is in Los Altos, Ca.

    Palantir, the data insights company with roots in the intelligence world, is looking for a business operations and strategy person in New York.



    There’s been an explosion in collaborative consumption startups, but the failure rate is high. Datafox outlines some of the key pitfalls — and shines a light on who might fail next.


    Essential Reads

    Google said yesterday that it will reverse a long-held stance and reveal publicly how many minority workers are employed by the giant Internet company, in a report next month.

    Did Dr. Dre celebrate too soon? Apple’s planned deal to buy Beats Electronics for $3.2 billion may not be finalized until next week, reports Re/code.



    Why Jill Abramson was fired.

    A virtual tour of the National 9/11 Memorial Museum, opening to the public May 21.

    The most commonly spoken language in each state besides English and Spanish.


    Retail Therapy

    Mahabis: slippers with detachable soles.

    Drift Light: Nighty-night.


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