StrictlyVC: January 31, 2014

110611_2084620_176987_imageIt’s Friday, good people. Hope you have a wonderful weekend, and we’ll see you back here next week.

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Top News in the A.M.

Ouch. Consumer Intelligence Research Partners came out with its latest numbers on mobile market share in the United States yesterday and found that BlackBerry devices accounted for zero percent of all smartphone activations in the fourth quarter of last year.

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An Invite-Only Social Network Turns to Crowdfunding

You may remember Erik Wachtmeister from his days at ASmallWorld, the exclusive, invitation-only social network community that he founded with his wife in 2004. The son of an ambassador and a countess, the aristocratic Wachtmeister disappeared from view after selling a majority stake in the business to movie mogul Harvey Weinstein, who elbowed Wachtmeister aside, tanked the business, and later sold it to a Nestlé heir, who has recently run into troubles of his own.

Now Wachtmeister is back and taking another shot at the genre with his newest venture, Best of All Worlds, an 18-month-old, invitation-only social network that’s even harder to join. It features a new wrinkle, though: starting next week, accredited investors will be able to buy their way into the platform via a crowdfunding campaign. “It’s a way for us to widen our base of investors, stakeholders and global ambassadors of the brand,” says Wachtmeister. We spoke yesterday morning; our conversation has been lightly edited for length.

We talked about Best of All Worlds in July 2012, when it was set to launch. What’s been happening since?

It’s been in private beta. We launched it with 35,000 people, a relatively small group in global terms. And we’ve since been evaluating how people use it, what features they most like, whether the user interface is intuitive or not and making adjustments.

Why did you decide to form another invitation-only social network?

Not so much to keep it exclusive but to maintain an intimate space where people can network more openly. You can’t just walk up to someone at an airport, but if you’re in a private venue, the social rules are different; it’s more acceptable to walk up to someone.

How does the admittance process work?

It’s very democratic. Members decide who can be invited, but not everyone gets invitation rights, so there’s an algorithm that [decides how many invitations are allotted those with invitation privileges]. It’s to prime it and hopefully ensure that it grows in the right direction. We don’t want an overwhelming amount of students, for example. We want a good mix geographically, professionally, age-wise.

Some might interpret this as yet another way for the “1 percent” to avoid everyone else.

Not at all. It’s very simple. All we’re doing is creating what exists in real life online. People don’t necessarily want to pass out their business cards at Grand Central Station; that’s not normal.

We want to grow our community in an orderly fashion, where you’re starting with people who have a lot of affinity for each other and know the same people and have similar appreciations for what’s around them. Our goal is to have an eclectic mix of people from all over the world, from all kinds of backgrounds, but there should be a certain commonality of interest.

You’re turning to crowd-funding. Will these investors who may well be strangers to your other members be able to access the site?

Anyone who invests will of course be able to become a member. At a very minimum, investors should be able to able to find their way around the site.

Why do it?

We see it as complementing our fundraising strategy with giving our members and other accredited investors the opportunity to “take a bet” on a private company.

Which crowdfunding platform are you using and what’s the minimum investment?

London-based crowdcube.com is doing the deal. The minimum size is $1,000, but we’re limiting the number of investors to 200. Our goal is to raise around $500,000.

Are you also talking to VCs?

We’re very open to it, though VCs tend to want to see that hockey stick [growth] being realized already – they want huge traction – and we’re not quite there yet.

What makes you think you can compete with Facebook?

I think people are sick of Facebook. They use it like a directory, to look up people, and if they’re bored, they’ll look to see what people did yesterday. It’s for vanity and self-expression. We’re more a utility.

Once we have critical mass, for example, we’ll create verticals for groups of people who share the same passions. Facebook Groups are great if you’re organizing something like a bachelor party but not if you want to hook up with people with a strong passion or knowledge in a given area. Facebook has several million of these groups, with an average size of 20 members; our goal is to have a few dozen “worlds” with tens of thousands of people in each world. It’s a completely different concept.

JamBase

New Fundings

BlueCava, a 3.5-year-old, New York-based company that sells online audience management and measurement services, has raised $13 million in funding from S3 VenturesPerformance Edge Partners and Zeitgeist Capital. The company has raised $36 million to date, according to Crunchbase.

Bow & Drape, a two-year-old, New York-based fashion technology startup, has raised $1.2 million in seed funding led by VegasTechFund. Other participants in the round included Great Oaks Venture Capital,Triple Point Capital, and StubHub co-founder Jeff Fluhr. The Journal takes a look at what the company is doing exactly here.

Cleverbug, a nearly three-year-old, Dublin, Ireland-based “social gifting” company that produces online photo cards and other gifts, has raised $6 million in financing led by Delta Partners. To date, the company has raised $8 million.

Enigma, a year-old, New York-based search and discovery platform for public data, has raised $4.5 million in Series A funding led by Comcast Ventures, with participation from American Express VenturesCrosslink Capital and the New York Times Company.

Moontoast, a four-year-old, Boston-based ad platform that helps brands get the most out of Facebook, has raised a $4.5 million extension to its Series B funding, secured early last year. The new investment was made by the Martin Companies, an early-stage firm based in Nashville that also led a $5 million round in Moontoast last year. The company has has raised $15.5 million altogether, shows Crunchbase.

One Kings Lane, the 4.5-year-old, San Francisco-based online home decor retailer, has raised $112 million in new funding led by Mousse Partners, with Fidelity and one other (unnamed) large institutional firm participating alongside earlier investors. The investment gives the company a $912 million post-money valuation. One Kings Lane has raised $229 million altogether, including from Kleiner Perkins Caufield & Byers,Greylock PartnersInstitutional Venture Partners and Tiger Global Management.

Practically Green, a 3.5-year-old, Boston-based company whose online tools help companies manage their sustainability programs, has raised $3 million in Series A funding. The round included CommonAngelsPan Asia SolarClean Energy Venture Group and Launchpad Venture Group. The company has raised $4.75 million so far.

Qordoba, a two-year-old, Dubai-based company that provides localization services for companies like Google and LinkedIn, has raised $1.5 million in Series A funding from Silicon Oasis Investments and MENA Venture Investments.

Zopa, an 8.5-year-old, London-based peer-to-peer lending platform, has raised $25 million in funding from Arrowgrass Capital Partners, a European-focused investment firm headquartered in London. Zopa, whose earlier backers include BenchmarkBessemer Venture Partners,Augmentum Capital and Wellington Partners, has now raised roughly $56 million altogether.

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New Funds

CrunchFund, 2.5-year-old, San Carlos, Ca.-based early-stage venture firm cofounded by Michael Arrington, is in the market for a second fund, according to an SEC filing that shows a target of $40 million. Fortune’s Dan Primack reports that CrunchFund already has held around a $25 million first close for the new fund, which includes a new commitment from founding investor AOL. CrunchFund has made more than 115 investments, including in Airbnb, Uber, and Yammer, acquired by Microsoft for $1.2 billion in 2012. Among its most recent investments is the video-sharing app Mindie.

Jerusalem Venture Partners is raising a new, $120 million cyber security fund, and Cisco plans to invest tens of millions of dollars in it, reports Haaretz.

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IPOs

JD.com, one of China’s biggest e-commerce companies, has filed with the SEC to raise $1.5 billion in a U.S. IPO. Formerly known as 360buy.com, the company is the second biggest e-commerce company in China and a rival to the e-commerce giant Alibaba Group. Dealbook has much more here.

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Exits

Incredible Labs, a three-year-old, San Francisco-based company that had developed a mobile personal assistant app called Donna, has beenacquired by Yahoo, which is shutting down Donna and bringing five of Incredible Labs’s seven employees onboard. Other terms of the transaction were not disclosed. Incredible Labs had raised $2.5 million from investors, including Khosla VenturesBetaworksWebb Investment NetworkCrunchFund, and Ashton Kutcher, among other angel investors.

LoopFuse, a six-year-old, Atlanta-based social analytics platform, has been acquired by marketing automation platform Salesfusion for an undisclosed amount. Two weeks ago, Salesfusion, also based in Atlanta, had raised $8.25 million in Series B funding, including from Noro-Moseley PartnersHallett Capital and BLH Venture Partners; it has raised roughly $10 million altogether. LoopFuse, meanwhile, had raised $1.4 million from True Ventures in 2009.

NaturalMotion, a 13-year-old games company with offices in Oxford, England and San Francisco, has been acquired by Zynga for $527 million in cash and stock. Among other things, NaturalMotion makes a popular app called “Clumsy Ninja” that was released late last year. Alongside news of the acquisition, Zynga also announced it was laying off 314 employees, representing 15 percent of its staff, as part of a cost reduction plan designed to save the money up to $35 million.

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People

Salesforce founder Marc Benioff tells the Journal how to address tensions in San Francisco: “I think these [Google, Facebook, and other tech company] buses — which if you hang out in the Mission, [they come] every five minutes — they’ve got to be massively regulated, we have toget them off our streets.”

The New York-based early-stage venture firm ff Venture Capital has promoted three employees: Ryan Armbrust, who joined the firm in 2012 from the technology transfer office of Columbia University, has been promoted from associate to director; Katie Frankel, who joined the firm in 2010, has been promoted from associate to director of community management; and Paul Bianco, who joined the firm from insurer AXA Equitable a year ago, has been promoted from analyst to associate.

Jason Kilar, former head of Hulu is back with a new stealth startup called The Fremont Project, and according to Re/code, its app will offer a mix of magazine and newspaper content and videos videos from which readers will pick and choose.

Bill Krause, the cofounder of 3Com, is Andreessen Horowitz‘s newest special advisor, the firm revealed in an interview with Krause yesterday. Krause is also affiliated with the powerful buyout firm The Carlyle Group, where his title is “operating executive” to Carlyle’s technology and business services group.

Josh Miller is taking on a part-time role as a venture partner atBetaworks in New York, the outfit announced yesterday. Miller founded Branch Media, acquired by Facebook this month for a reported $15 million. Betaworks was an investor and Miller and his team worked out of Betaworks’s offices for roughly nine months. Miller and his New York-based team are now forming a new “Conversations” group inside of Facebook to help users connect around their interests.

Could the long wait soon be over? According to Bloomberg’s sources,Microsoft‘s board is on the verge of annointing Satya Nadella, the company’s enterprise and cloud chief, as its newest CEO. More here.

Each new year, Facebook CEO Mark Zuckerberg chooses a new goal for himself. One year the goal was to learn Mandarin; another year, it was to only eat meat that he’d killed himself. In 2014, his goal is to write a thank-you note every day.

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Job Listings

Speaking of promotions at ff Venture Capital in New York, the firm is looking for a new analyst. Apply here.

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Data

It’s the Super Bowl this weekend, which means it’s also time for the Super VC Bowl, brought to you by PitchBook. Witness its fun look at the 2013 venture activity of the competing teams’ home states. Go Washington! Wait, go Colorado! Oh, forget it. We can’t muster any real enthusiasm for this one. (Sorry.)

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Essential Reads

Nest‘s team is becoming Google‘s core hardware group, reports TechCrunch.

Amazon is planning to offer a checkout system to retail stores later this year. But Amazon’s bricks-and-mortar ambitions may go far beyond payments.

There are very few things the public sector can do to encourage entrepreneurship, argues a new Kauffman Foundation study.

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Detours

A new paper looks at alcohol consumption and voting patterns from 1952 to 2010, finding that as states become more liberal politically, beer and spirit consumption increases.

Forgotify: The tool for discovering Spotify’s four million unheard (like, zero-play) tracks.

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Retail Therapy (Super Bowl Edition)

Maple Bacon Coffee Porter. Serve it to fans of the opposing team and have the last laugh!

Best Buds App, to help you locate the good stuff in Denver. (This announcement constitutes neither an endorsement nor a recommendation.)

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