Good morning, everyone! Hope you had a great weekend. I also hope you’ll bear with us as we experiment with a few things, including our formatting. (Love it? Hate it? Let me know, at email@example.com or @cookie.)
Top News in the A.M.
In an open letter to President Obama and Congress this morning, Google, Apple, Microsoft and five more of the most prominent U.S. tech companies, are demanding the government set new, stricter limits on surveillance.
Mitch Kapor Asks: Where Is Twitter’s Person of Color?
Mitch Kapor, who founded Lotus and is widely considered a pioneer of the personal computing industry, wasn’t impressed when Twitter announced it had finally welcomed a woman – Marjorie Scardino – to its eight-member board last Thursday. As Kapor says of the move, “There’s no reason that Twitter had to wait until now to put a woman on the board.”
Scardino’s appointment also doesn’t address the fact that every member of Twitter’s board is white, says Kapor, noting people of color are even more active on the platform than whites. (According to Pew Research, 26 percent of black Internet users surveyed say they use Twitter, compared to 19 percent of Hispanic users and 14 percent of white users.) “No one is talking about the fact that people of color over-index on Twitter. Why aren’t we talking about the reason no one of color is on its board?” Kapor asks.
Late last week, I chatted with Kapor – today an active investor whose personal foundation works to ensure equity, particularly for low-income communities of color – about Silicon Valley and issues of race. Our conversation has been edited for length.
It often feels like Silicon Valley isn’t paying much attention to different ethnic and racial groups, including as end users. How big a problem is this in your view, and how is it remedied?
Entrepreneurs scratch their own itch, naturally, turning problems into opportunities. So as you have more underrepresented people of color starting companies, they’re naturally going to form them in ways that serve markets that have been overlooked.
But it has to be a multi-pronged approach, because while it’s the case that the Valley thinks of itself as a meritocracy, the gatekeepers take all kinds of shortcuts – paying attention to where you went to school, all the while professing that they don’t care what color or gender you are. It’s a ridiculous claim. People make all kinds of implicit assumptions about what success looks like that makes it harder for African Americans, Latinos, women, and people with accents to succeed.
What’s a practical way to get the ball moving? Is it a matter of getting more underrepresented groups integrated early on into the ecosystem?
A good first step would be to recognize that the smartest VCs and entrepreneurs are subject to systematic distortions from implicit bias. We could do much more to mitigate it if we’d stop pretending it doesn’t exist.
The powers that be on this subject say the most amazingly stupid things. They say things like, “I don’t care if you happen to be black or Latino.” But no one happens to be black or Latino; you can’t grow up and not be treated differently in one way or another. And to fail to take that into account is poor rationalization.
What else could ultimately make a difference? The country’s demographics are changing fast.
It’s sort of like climate change. Even though the science was strong, people took a wait-and-see position at first. After the science kept adding up, you were left with a relatively small number of climate denialists. On the topic of changing demographics, it’s the same thing. It’s inexorable. It will only come out one way. It’s just a question of how long it takes to get to critical mass.
At some point, especially if there’s one big outcome – one black billionaire – it will be a game changer. You can talk until you’re blue in the face without results. It’s when founders from nontraditional backgrounds start breaking out that we’ll start seeing a real impact.
Who have you backed recently who has a different perspective given his or her nontraditional background?
Take Regalii, a recent Y Combinator graduate whose founder is Latino. It’s a mobile solution for the international remittances market, and it comes out of [co-founder Edrizio de la Cruz’s] life experience as an immigrant from the Dominican Republic who went to Wharton. It’s a totally valid opportunity and the sort of thing that investors should fund, but it’s not the sort of thing that other people are necessarily going to think of, even though they should.
I agree 100 percent that there are lots of opportunities to cater to underserved markets that entrepreneurs aren’t going after. Because we’ve become known for being focused on high-growth opportunities that have a positive social impact, we’ve become a magnet, and we feel like we have an unfair competitive edge. These are companies not being fought over by other VCs. But that’s their loss and our gain.
BeHome247, a two-year-old, Austin, Tex.-based company that makes a smartphone-operated remote access, management, and property control system, has closed on $1.6 million in funding, shows an SEC filing. The company isdeclining to name its investors.
Chef, a five-year-old, Seattle-based company formerly known as Opscode, has closed a $32 Million Series D funding round led by Scale Venture Partners. Other new investors Citi Ventures and Amplify Partners also participated in the funding, alongside previous investorsBattery Ventures, DFJ, and Ignition Partners. Chef, an IT infrastructure automation company, has now raised roughly $55 million altogether.
Citrus, a three-year-old, Mumbai, India-based payment company that’s often likened to PayPal of China’s Alipay, has raised $5.5 million, reports Dow Jones, which saysSequoia Capital was part of the round.
Clever, a two-year-old, San Francisco-based company whose software helps schools set up and update their student information easily, from student enrollment status to class rosters to teacher schedules, has raised $10 million in new funding led by Sequoia Capital, reports TechCrunch. The funding brings the total capital raised by the company to $13 million, says the outlet.
Daily Secret, a three-year-old, New York-based company that emails users a daily “best kept secret” about their favorite cities, has raised a new, $1.25 million round of funding, shows an SEC filing that lists E.ventures, as well asPan Africa Investment Co. Daily Secret, which puts out editions for more than 35 cities, including Athens, San Francisco and Tel Aviv, raised a $1.85 million Series A round last year from E. Ventures, BV Capital, Greycroft Partners, and Trigger Media.
Honest Buildings, a 2.5-year-old, New York-based startup, has raised a fresh round of funding, just six months after closing its $5.5 million Series A round, judging by an SEC filing. Thrive Capital appears to have led the $4 million fundraise (its cofounder, Jared Kushner, is listed on the filing). Honest Buildings, whose online platform connects real estate construction and design space professionals, has received past funding from Westly Group, RockPort Capital Partners and Mohr Davidow Ventures; collectively, it has now attracted about $11.5 million.
Flurry, an eight-year-old, San Francisco-based mobile analytics company, has raised $12.5 million in new funding, according to TechCrunch. The company declined to name its new investors but told the outlet it has raised $62.5 million altogether. Its many existing investors include Draper Fisher Jurvetson, Union Square Ventures, First Round Capital, Crosslink Capital and Menlo Ventures.
ObserveIT, a seven-year-old, New York-based maker of activity recording and auditing software, has raised $20 million from Bain Capital Ventures. The company, whose monitoring and insight into user activity helps its customers solve their compliance, security and IT operational problems, hasn’t publicly disclosed previous institutional funding.
Practice Fusion, an eight-year-old, San Francisco-based company focused on electronic health records, has raised a $15 million Series D extension led by Qualcomm Venturesand Longtitude Capital. The funding brings Practice Fusion’s Series D to $85 million and its overall funding to $149 million.
Via Motors, a three-year-old, Orem, Utah-based company that specializes in extended-range electric trucks, vans and SUVs, is apparently in aggressive fundraising mode. Last month, it filed a Form D, showing it had $5.7 million as part of a $10 million round, with Silicon Valley real estate billionaire Carl Berg and automotive executive Bob Lutzlisted as non-executive directors. On Friday, the company filed a fresh Form D showing it’s now raising $50 million. In a press conference on the main stage of the LA Auto Show last month, Lutz announced that Via would start production of its trucks and vans soon.
Silicon Valley venture capital firm Benchmark has officially raised $425 million for its eighth fund, judging by an SEC filing. The fund size is exactly the same as the firm’s previous fund, closed in January 2011. Five GPs are listed in the filing: Matt Cohler, Bill Gurley, Mitch Lasky, Steven Spurlock, and Peter Fenton.
Paul Bragiel, a 36-year-old, American entrepreneur who three years ago founded the seed fund and accelerator i/o Ventures in San Francisco, has put his career on ice to try skiing in the 2014 Olympic Games — for Colombia. The Journal has much more on this very unusual story.
Blackberry cofounder Mike Lazardis made (and lost) a fortune on his ailing smartphone company. Now, he seems prepared to bet it all on quantum computing. As he tells the National Post of his investments, including a brand-new “Quantum Nano Centre” at the University of Waterloo: “There is a quantum revolution coming, an industrial revolution. It’s audacious.”
Art.com, the decades-old online seller of prints, posters, frames and canvas is still hoping for an IPO, according to USA Today, which says the company recently brought in investment banks to discuss the possibility.
Lumenis, a 22-year-old, Yokneam, Israel-based company that develops and sells lasers used in minimally invasive surgeries, has registered to go public on Nasdaq to raise up to $115 million. The company’s biggest outside investors include Viola-LM Partners, which owns 45.9 percent of the company, XT Hi-Tech Investments, which owns 35.5 percent, and Bank Hapoalim, which owns 5.2 percent.
Rubicon Project, the six-year-old, L.A.-based online- ad company, has picked Morgan Stanley and Goldman Sachs Group to lead its IPO, according to people who talked with Advertising Age. The company is reportedly aiming for a market debut next year. Rubicon has raised more than $50 million over the years, according to Crunchbase, including from Clearstone Venture Partners, Mayfield Fund and News Corp.
EdgeCast, a seven-year-old, Santa Monica, Calif.-based content delivery network company, has been acquired by Verizon for an undisclosed amount that a source tells TechCrunch is in excess of $350 million. Verizon will use EdgeCast’s technology to enhance its video delivery and Web services offerings. EdgeCast had raised roughly $75 million from investors, including Steamboat Ventures and Menlo Ventures.
getTalent, an 18-month-old, San Francisco-based company that made online engagement tools for recruiters, has been acquired by the job site Dice, says TechCrunch. getTalent had raised $2.6 million in funding from HR software maker SuccessFactors and angel investors. Terms of the acquisition weren’t disclosed, but in a note to TechCrunch, Dice’s president made it sound like an acqui-hire, writing: “We are pleased to have the team behind getTalent join our Dice.com development team.”
The 10th annual LeWeb Paris conference kicks off tomorrow; speakers include venture capitalists Fred Wilson, Tony Tjan, and Guy Kawasaki, along with a long list of founders and operating execs. You can learn more about what’s happening and when here.
The corporate giant Johnson & Johnson is looking for a manager of venture deal and analysis to help the company make equity investments in early-stage venture and publicly traded companies in the areas of pharmaceuticals, biotechnology, medical and surgical devices, health care information technology, diagnostics, and consumer products. The job is in Menlo Park, Calif.
Venture capital firms poured nearly $350 million into food-related startups last year, compared with less than $50 million in 2008, according to the research firm CB Insights. The AP has a nice report on the evolving landscape here.
Late last week, a federal judge gave the green light to an employee class-action suit against Uber that claims the ride-sharing company has stiffed drivers on tips and expenses. The case could now move forward, possibly even as a national class action. As the Recorder sees it, the move injects uncertainty into the freelancer model central to Uber and other tech ride-share startups like Lyft and Sidecar.
How to bet against the bitcoin bubble.
There really isn’t a VC industry in Spain, reports Tech.EU. And that’s a pretty big problem for the 38 startup programs now operating inside the country.
Go ahead. Mail your boring holiday cards.
Artist Jee Young Lee creates surreal dreamscapes in her small studio. (These are dazzling.)
These “dynamic balance” golf shoes look a little odd, but hey, when it comes to your swing, sometimes you gotta do what you gotta do.
Yes! Finally, a combination bottle opener and wire stripper.
A couple of weeks ago, I had to run off in the early a.m. to speak at Wharton‘s San Francisco campus. Here’s a clip if you’re interested. Thanks to Wharton’s vice dean, Doug Collom, for inviting me!
Please feel free to send us any and all story suggestions (anonymous or otherwise) by clicking here. If you’re interested in advertising in our email newsletter, please click here. To sign up for this newsletter, please click here.