StrictlyVC: January 23, 2014

110611_2084620_176987_imageGood morning, happy Thursday, everyone! Our column didn’t come together as expected today (sick kid), but we hope you find today’s discussion thought-provoking.


Top News in the A.M.

Whoa, the most crowdfunded project in history just hit $37 million, and it’s still climbing.


Albert Wenger Takes the Long View

Earlier this week, Albert Wenger, a managing partner at Union Square Ventures, departed from the standard VC script of promoting his own startups to discourse about the future of mankind. He shared his views on stage at the DLD (for Digital Life Design) conference in Munich. More specifically, he talked about where we are in the Information Age and what the past can tell us about the future.

It’s a 15-minute long chat that you can watch for yourself, but here were some of Wenger’s most interesting observations:

Innovations often come in disruptive, complementary pairs, though it isn’t always obvious at the time. As examples, Wenger pointed to agriculture and the domestication of animals, including horses. The two are seemingly nonlinear, but horses “become more valuable to you if you’ve got agriculture, and vice versa,” he noted. Wenger also pointed to power and manufacturing (steam and electric power enabled the latter); chemistry and deep mining (“We didn’t find out what the air was made of until the late 1700s; we didn’t figure out how to isolate a lot of elements until the early 1800s”); and computers and networks.

Recent examples include machine learning and robotics, imaging and 3D printing, and big data and cell biology.

These disruptions have had significant social implications. In the Stone Age, he noted, “there was no property or communal property.” Then, we “moved to the Agrarian Age, and people who had property had power, and those who didn’t, [didn’t].” It was only in the Industrial Age that people began to have “this really strong notion of personal, individual property that’s truly yours,” including intellectual property, he said.

Indeed, “a lot of what we take for granted are relatively new” developments, and what may seem immutable today is, in fact, highly variable. Take government. “We’ve gone from tribes to fiefdoms to kingdoms to empires to nation states. What do we want the [next] unit of governance to be?” It’s “up for grabs,” said Wenger, and “we should be thinking about what it should be.”

Privacy is “another very modern construct,” observed Wenger. “Foragers didn’t have privacy; they were living in caves. Early agrarian societies lived in very tiny villages. I think we need to question … exactly what we mean when we [say] we want to protect data.”

How we make a living has also changed time and again. In the Stone Age, it was “a communal thing.” In the Agrarian Age, “people sold what they made.” It was “only in the Industrial Age where we switched to a model where we’re paid for our time — and that turned out not to be a very good model for a lot of people,” making “that, too, up for grabs again.”

Ultimately, argued Wenger, “Because we’ve come from long periods where scarcity was the dominant paradigm, it’s led to a lot of things we may be able to replace.”

The question, he concluded, is “what we want it to look like. And I don’t think we know yet,” he said.


New Fundings

Chartio, a 3.5-year-old, San Francisco-based business intelligence startup, has raised $2.2 million in additional funding from previous investor Avalon Ventures, which led the company’s $4.4 million Series A round in 2011. The company has raised around $6.6 million altogether, including from Bullpen Capital and Y Combinator.

Cohera Medical, an eight-year-old, Pittsburgh, Pa.-based company that makes absorbable surgical adhesives and sealants, has raised an additional $9.3 million to close its Series D financing with $26.3 million. The company did not disclose its investors in a release, but Crunchbase shows the company has raised $66 million to date, including fromBradford Capital Partners and Kern Whelan Capital.

Drizly, a three-year-old, Boston-based app that enables consumers to order and have delivered to their doorsteps beer, wine, and liquor, has raised $2.25 million through an AngelList syndicate anchored by Atlas Venture. Among the other participants: Abundance PartnersBreakaway VenturesContinental AdvisorsFairhaven Capital and Reynolds & Company Venture Partners. Individuals also participated in the round, including Tom Crotty, a longtime managing general partner at Battery who is now a senior advisor.

Kensho, a year-old, New York-based company that’s developing intelligent computer systems that can answer complex financial and market research questions posed in natural language, has raised $10 million in seed funding. Investors from General Catalyst, New Enterprise AssociatesAccel PartnersGoogle VenturesDevonshire Investorsand other, unnamed, VCs participated. The company’s virtual market research assistant, “Warren,” is currently being tested by asset managers and research teams.

Lyst, a 3.5-year-old, London-based fashion ecommerce platform, has raised $14 million in Series B funding led by Balderton Capital. Previous investors DFJ Esprit and Accel Partners also invested in the round. Lyst has now raised around $20 million altogether.

MDLIVE, a seven-year-old, Sunrise, Fla.-based telehealth services and software company, has raised $23.6 million in funding from Heritage GroupSutter Health and Kayne Anderson Capital Advisors. The company has previously raised funds from Sentara Healthcare and serial CEO John Sculley, who serves of MDLIVE’s board.

MemSQL, a three-year-old, San Francisco company that’s focused on distributed in-memory database technology, has raised $35 million in Series B funding led by Accel Partners. The round included participation from Khosla Ventures and existing investors First Round Capital andData Collective, as well as from several individuals, and brings the company’s total funding to $45 million.

Mendix, an eight-year-old, Rotterdam, Netherlands-based app platform company, has raised $25 million in Series B funding led by Battery Ventures, with participation from Prime Ventures, its Series A investor. Mendix has raised $38 million altogether., a three-year-old, Hyderabad, India-based online comparison shopping site, has raised an undisclosed amount of funding from previous investors Accel Partners and Helion Venture Partners, [reports VCCircle]. The company had raised roughly $7 million previously, says the outlet.

NewsCred, a five-year-old, San Francisco-based content marketing platform, has raised $25 million in Series C funding led by InterWest Partners. Existing investors Mayfield FundFirstMark Capital and IA Ventures also participated in the round. The company has raised $45 million to date.

Sharethrough, a 5.5-year-old, San Francisco-based startup focused on native advertising, has raised $7 million in equity and $10 million in debt from new investors Elevation PartnersSilver Creek, and Sharethrough’s president, Patrick Keane. Earlier investors North Bridge Venture Partners and Floodgate also participated in the round.

Stripe, the four-year-old, San Francisco-based company that makes payment processing easier for developers, has closed on $80 million in new funding from investors that include Khosla VenturesSequoia Capital, and Founders Fundsays the WSJ. The round values the company at $1.75 billion. Stripe has raised $120 million to date, including from Redpoint VenturesGeneral Catalyst Partners, and Andreessen Horowitz.

StyleSeat, a three-year-old, San Francisco-based online marketplace for beauty and wellness services, has raised $10.2 million in Series A financing led by Lightspeed Ventures with participation from other contributors, including earlier investor Lowercase Capital. StyleSeat has raised $14 million altogether.

Victor, a three-year-old, London-based online marketplace for private jet charters and per seat bookings, has raised over $8 million in Series A funding. Investors include the company’s founder and CEO, Clive JacksonTim Richards, the CEO and founder of Vue Entertainment;Andrew Pisker, co-founder of Richmond Park Partners; and other individual investors.

Zenefits, a year-old, San Francisco-based startup that automates basic HR tasks like new enrollment for small and mid-size businesses, has raised $15 million in Series A funding led by Andreessen Horowitz. Earlier investors Maverick Venture Partners and Venrock also participated in the round. To date, Zenefits has raised $17.1 million.


New Funds

Contour Venture Partners, a New York-based venture firm focused on financial services, digital media and other Internet investments, is looking to raise up to $50 million for its third fund, shows an SEC filing. Contour has two managing partners: Matt Gorin and Bob Greene. Greene was formerly a managing partner of Flatiron Partners (the former firm of Union Square’s Fred Wilson). Gorin previously worked at a merchant bank called Promontory Financial Group. Among the firm’s newest investments are the startups Contently and

Yesterday, StrictlyVC spotted a filing for a new firm called Corazon Capital that listed CEO Sam Yagan, among others. For more information, we’ve reached out to Yagan — a serial entrepreneur who sold the dating service OkCupid to Match, and his earlier company, Spark Notes, to Barnes & Noble. We haven’t heard back yet, but Corazon has posted a bare-bones site that lists Yagan as the sole GP. It also lists five founding venture partners, including: Chris Coyne and Max Krohn, who cofounded Spark Notes and OkCupid with Yagan; Christian Rudder, an early employee of both Spark Notes and OkCupid; Zach Kaplan, founder and CEO of Inventables and a TechStars Chicago mentor; and Steve Farsht, an operator and investor who serves on the board of TechStars Chicago. Reached by Crain’s Chicago yesterday, Kaplan didn’t shed much more light on the effort, though he offered of the new fund that, “We’re looking for great entrepreneurs,” and that “Sam’s a brilliant guy.”

Lightspeed Venture Partners, the 14-year-old, Menlo Park, Calif.-based venture firm, is talking to limited partners about raising an early-stage fund and a growth-stage fund that could total roughly $800 million, reports peHUB. The firm raised $675 million for its ninth fund in 2012 and $800 million for its eighth fund in 2008.



UberVu, a five-year-old, London-based social analytics platform, has been acquired by HootSuite, a five-year-old platform for enterprises to manage their presence on social media sites. Terms of the deal were not disclosed. UberVu had raised $586,000 from Seedcamp and Eden Ventures. HootSuite has raised $190 million, including from Blumberg Capital,Insight Venture PartnersAccel Partners, and OMERS Ventures.



Napster cofounder Shawn Fanning receives the worst coverage imaginable from Valleywag, which alleges he may be a “deadbeat dad.” Everyone comes out looking lousy in this strange tale.

Yesterday, Facebook COO Sheryl Sandberg became one of the world’s youngest U.S. billionaires when Facebook closed at a record high, reports Bloomberg. Sandberg, 44, owns 12.3 million shares of the company, which were valued yesterday at around $750 million; meanwhile, she has already sold more than $300 million in shares since the company’s IPO and has 4.7 million stock options that began vesting in May of last year, says Bloomberg.

After 15 years, Lisa Suennen is leaving the healthcare-focused venture fund Psilos Group, according to my former colleague, Mark Boslet. Suennen told Boslet that she’ll continue to serve as a consultant to venture firms, startups and corporations as she evaluates new opportunities; she described the split as amicable.

Founders Yin Yin Wu and Xuwen Cao tell Fortune why the startup they dreamed up at Y Combinator is out of business seven months later.



Looking for hardware engineers? Next week’s DesignCon conference at the Santa Clara Convention Center in Silicon Valley could be a great place to chat up some of the hundreds of chip, board and systems designers expected to attend. From January 28th through the 31st. Details are here.



Eventbrite, the online ticketing platform is looking for a corporate development manager in San Francisco. Eventbrite has raised $140 million over the last seven years, including from pre-IPO investors Tiger Global Management and T.Rowe Price.



Pitchbook published a comprehensive study yesterday on venture capital and private equity fundraising. One takeaway from the report is that the venture “barbell,” as we all call it, may be growing less pronounced.

According to the firm, more than half of the funds closed in both 2012 and 2013 had less than $50 million in commitments. That’s pretty notable; it’s the only time so many small funds have been closed in the last decade.

But last year also saw a big uptick in mid-size funds. Twenty-five funds in the range of $100 million to $250 million garnered $4 billion in commitments — the highest total since 2009. The number of funds in the $250 million to $500 million range also grew meaningfully. In fact, 18 funds garnered a combined $6.1 billion in 2013, a 61 percent increase from 2012. Meanwhile, just seven funds raised more than $500 million or more in 2013, the lowest number since 2004. (Of course, some megafunds are coming this year, so we’ll see how that impacts the data next year.)

It’s worth taking a look at the report, which you can download here.

451 Research also has some excellent data out today on M&A. According to its findings, tech buyers spent $245 billion on targets last year, roughly 20 percent more than in 2012, 2011, or 2010. One company that wasn’t among them, surprisingly: Hewlett Packard. Though the company spent roughly $50 billion across 65 transactions between 2002 and 2011, 451 Research notes that it didn’t announce a single purchase in 2013. You can learn much more here.


Essential Reads

computer vision expert has taken a look at Snapchat’s revamped security technology and doesn’t see much of an improvement.

A good old-fashioned shareholder battle is brewing in the Pacific Northwest over an acquired startup that might have fetched a higher valuation. Geekwire has the story.



We were floored by this remarkable series called “Reflections” by Dallas photographer John Hussey.


Retail Therapy

If you own a gun, this would be a smart investment.

These shirts really are as nice as shirts that cost three times the price.

Russian nesting dolls that are each painted like one of Twitter’s many founding players, from poor Noah Glass up to Twitter CEO Dick Costolo. Very funny, though not a joke, interestingly.


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