StrictlyVC: February 6, 2014

110611_2084620_176987_imageHi, everyone, hope your Thursday is off to a great start.

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Top News in the A.M.

Apple has removed the world’s most popular bitcoin wallet from its App Store.

The New York Police Department is testing out Google Glass.

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Another Niche E-Commerce Company, Jack Erwin, Takes Off

VCs must be hearing a lot of pitches from companies that want to be the next Warby Parker, the chic discount online eyeglass vendor, whether it be high-tech wine gadgetsfitted shirts, or dress shoes for men.

If the market is getting saturated with these new brands, you wouldn’t know it. In fact, this morning, another new shoe company called Jack Erwin is announcing that it has raised $2 million in Series A funding led by Crosslink Capital, with participation by Shasta Ventures and Menlo Ventures. Yesterday, to learn more, I reached Lane Gerson, one of the founders of the six-person company, at the startup’s Brooklyn-based offices. Our chat has been edited for length.

You’ve worked as a CFO and a controller. Did you know anything about retail? And why shoes?

My friend and cofounder [Ariel Nelson] was shopping for shoes for a wedding and just wanted dress shoes, and they were all either too [fussy] or too expensive. We wondered if we could find someone to help us make a pair of shoes for $100 that we could then sell for $200, and we spent three months talking with everyone we knew, and each was a dead end. As it happens, Ariel went to a two-seat barber and wound up sitting next to a [product manager of footwear] at Ralph Lauren, who was dealing with buyers and suppliers. We all went for drinks a few weeks later. That was August 2012; he just came on full-time in January.

You have five core shoes in a few different colors. Where are they being made?

In Portugal, at a third-generation factory. We’d talked with factories in Brazil and Portugal and received a bunch of samples and this one had the best quality leather shoes. So we worked with a designer, they sent us samples, we corrected them, and we placed our first [purchase order] in May 2013.

You make it sound so easy. Where are the shoes shipped?

They’re warehoused in a third-party logistics center in Brooklyn, less than three miles from our office.

What’s your return policy?

Free shipping, free returns. We want people to try them on and then hopefully they’ll enjoy and keep them.

What percentage of your customers return the shoes?

About 25 percent, but the data is inconclusive right now. We launched the company publicly in October and we’ve had tremendous demand — so much so that we’ve sold through or initial order and are left with broken sizes. So people are buying sizes that aren’t the right size, and they want exchanges that we don’t have. We raised the [venture] money almost purely to buy inventory.

Is that supply-demand balance hard to manage? What’s been the biggest surprise so far?

It’s all been really positive actually. We’ve learned there’s an appetite for people to buy new product and I think people like a new story and are wiling to give us a try. And if you can give them a product that meets their expectations and you’re responsive to them, you meet great people. We’re discovering that just being nice goes a long way.

JamBase

New Fundings

Allovue, a year-old, Baltimore, Md.-based company whose financial software helps district officials and administrators track and analyze the impact of school spending on educational outcomes, has raised $800,000from the Maryland Technology CenterBaltimore Angels and Shulman Ventures. It has raised $900,000 altogether.

Apportable, a two-year-old, San Francisco-based platform that allows iOS applications to run on Android devices automatically, has raised $5 million in funding from Google Ventures and individual investors, including Paul BuchheitJerry Yang, and Alexis Ohanian. Apportable has raised $7.4 million altogether, including from Salesforce.com and Betaworks.

AtVenu, a two-year-old, San Francisco-based company whose software was designed to handle live event merchandise sales, has raised $1.1 million in funding led by Real Ventures of Montreal.

Celery, a two-year-old, San Francisco-based company whose “pre-commerce” platform makes it easier to e-tailers to accept pre-orders, has raised $2 million in seed funding. Y CombinatorSV Angel, and Max Levchin, among others, participated in the round. (Cofounder and CEOChris Tsai tells me that pre-orders are just the starting point for the company and that ultimately, it plans to become a full storefront platform.)

Citelighter, a three-year-old, New York-based software platform that helps students save, organize and cite information while writing their papers, has raised $1.52 million in seed funding, including from New York AngelsBlu Venture InvestorsJohn Cammack, managing partner of Cammack Associates, and Frank Bonsal, founder of venture-capital firms New Enterprise Associates and Red Abbey Venture Partners. The company has raised $2.45 million to date.

DataMentors, a 16-year-old, Wesley Chapel, Fla.-based business intelligence company, has received an undisclosed amount of funding fromBrook Venture PartnersBay Capital and Pride’s Crossing Capital.

Docurated, a two-year-old, New York-based document management platform company, has raised $3.75 million Series A funding led byRogers Venture Partners. The company has raised $5.35 million to date, shows Crunchbase.

Domo, a 2.5-year-old, Lindon, Ut.-based business intelligence startup launched by Omniture co-founder Josh James, has raised $125 million in Series C financing led by TPG GrowthDragoneer Investment Group,Fidelity InvestmentsMorgan StanleySalesforce.comT. Rowe Priceand Viking Global Investors also participated alongside earlier investorsGGV CapitalGreylock PartnersInstitutional Venture Partners, andMercato Partners. (If you have a couple of minutes, Fortune’s Jessi Hempel has a remarkable piece on how James landed the funding from a hospital bed.) Domo has raised more than $250 million to date.

Experiment.com, a two-year-old, San Francisco-based crowdfunding platform designed to fund science projects from chemistry to medicine, has raised an undisclosed amount of funding from Y CombinatorIndex Ventures and Andreessen Horowitz. The Journal has much more hereabout the platform, which launched yesterday.

Fantex, the 1.5-year-old, San Francisco-based trading exchange for investors to buy and sell interests in professional athletes, has raised $20 million, shows a new SEC filing. Former football start John Elway is listed as a non-executive director, along with Bruce Dunlevie, a longtime general partner with Benchmark Capital. (Former Benchmark general partner David Beirne is Fantex’s co-founder and chairman.)

Magic Leap, a three-year-old, Hollywood, Fla.-based maker of human computing interfaces and software, has raised more than $50 million across its seed and Series A rounds, the company announced yesterday,without disclosing its investors.

Motilo, a two-year-old, London-based social fashion platform that invites fashionistas to bounce ideas of one another, has raised a second tranche of post-seed funding from private investors. The startup raised $3.3 million during 2013; it has since raised another $2.5 million from the same group of undisclosed, U.K.-based investors.

OneFold, an eight-month-old, Menlo Park, Ca.-based mobile and wearable-data-focused analytics and visualization platform, has raised $400,000 in seed funding from Studio 9+ and a pool of angel investors.

Sialix, a seven-year-old, Cambridge, Ma.-based biotechnology company developing products to treat and prevent cancers, has raised $1.2 million in a second tranche of seed funding. The investors included Boston Harbor AngelsMass Medic AngelsLaunchpad AngelsMaine AngelsBeacon Angels and Desert Angels. The company has raised $4.2 million altogether, shows Crunchbase.

Totango, a nearly 4-year-old, Mountain View. Ca.-based customer engagement platform, has raised $15.5 million in Series B financing led by new investors Canvas Venture Fund and InterWest Partners. Earlier investors Pitango Venture Capital and Gemini Israel Ventures also participated.

UXPin, a 2.5-year-old, Gdynia, Poland-based freemium SaaS design service, has raised $1.6 million in funding led by Freestyle Capital, which was joined by earlier investors Andreessen Horowitz, IDG Ventures, and a long line of individuals. The company had previously raised $700,000.

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New Funds

A new brand is emerging in Silicon Valley: Aspect Ventures, founded by veteran VCs Jennifer Fonstad, a managing director Draper Fisher Jurvetson, and Theresia Gouw, a longtime managing partner at Accel Partners. The two met 25 years ago at Bain & Co., their first job out of college, and decided last fall to team up. For now, they’re funding the venture themselves, with plans to invest between $500,000 and $3 million in between 12 to 24 mobile investments. Patricia Sellers has much more here.

Purdue Research Foundation and Cook Medical have created a $12 million evergreen investment fund to financially support life science startup companies tied to Purdue University. Called The Foundry Investment Fund, it will be used to match outside donations to fund companies based on Purdue technology or expertise in the fields of human and animal health and plant sciences.

Weathergage Capital, a 6.5-year-old, Palo Alto, Ca.-based venture firm fund of funds, has begun raising capital for its third fund and it’s targeting $200 million, shows an SEC filing. The outfit, formed by former Knightsbridge Advisors execs, raised its last, $200 million, fund four years ago; its first fund closed with $250 million in commitments in 2007.

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IPOs

Alibaba Group’s estimated valuation rose to an average of $153 billion after the Chinese e-commerce company — said to be headed for the biggest IPO since Facebook‘s — reported surging sales. Bloomberg hasmore here.

The Rubicon Project, the 6.5-year-old, L.A.-based automated advertising platform, has filed to raise up to $100 million in an IPO. Rubicon Project’s services are used by about 96 percent of Internet users in the U.S. and more than 550 million users globally, the company says in its filing. Rubicon has raised just north of $50 million from investors, includingClearstone Venture PartnersMayfield FundStanford University, andPeacock Equity.

Twitter after the IPO: Five numbers to know from yesterday’s earnings report.

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Exits

Betterfly, a three-year-old, New York-based company “talent” marketplace, has been acquired by TakeLessons, an online marketplace for qualified and vetted teachers. No financial terms were disclosed. Betterfly has raised $2.5 million from Lightbank.

Double Helix Games, a six-year-old, Irvine, Ca.-based gaming studio, has been acquired by Amazon for undisclosed financial terms. Techcrunch looks at what it means.

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People

SF Luxe has just published its third annual “Bay Area Billionaires” list for 2014, which it devises using data from Forbes, Bloomberg, the Hurun Global Rich List, along with stock quotes. Among the new names in this year’s line-up: Twitter and Medium co-founder Evan Williams (Twitter IPO); Benchmark general partner Peter Fenton (Twitter IPO); Robert Pera, CEO of wireless equipment maker Ubiquiti Networks (which went public in October and now has a $3.4 billion market cap), Nicholas Woodman, founder of the action camera company GoPro (which was valued at $2.25 billion as of December 2012, when FoxConn bought a 9 percent stake in the company for $200 million), and Facebook COOSheryl Sandberg.

Speaking of big money, venture capitalist Marc Andreessen keeps making it. On Friday, the Facebook director sold 1,274,869 shares of the stock at an average price of $61.23, for a total of roughly $78 million. The transaction was disclosed in a filing with the SEC.

Eric Darwin, who was most recently responsible for Salesforce.com’s corporate venture program, has just joined Draper Fisher Jurvetson as a growth-stage investor. Before joining Salesforce, Darwin spent several years as an analyst at several investment banks, including Perella Weinberg Partners, Barclays Capital, and BCC Capital Partners.

Reid Hoffman of LinkedIn and Greylock Partners had some words of wisdom for entrepreneurs at a conference earlier this week, telling them to seek out mentors — discreetly. “It’s a little bit like going up to somebody at a cocktail party and saying, ‘You know, I’m looking to settle down. If you did that, they would say, ‘OK, please step a little further backwards.’”

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Job Listings

TPG Capital is looking for a fund operations associate in Dallas.

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Data

Pitchbook looks at the 40 vintage 2006 U.S. venture funds in the $100 million to $250 million range, finding their median IRR to date is 3.42 percent. The top performing forms as of today: 5AM Ventures II,Azure Capital Partners II, and Sterling Venture Partners II.

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Essential Reads

The ironic thing about DFJ ditching cleantech: It had some of the biggest IPOs.

The tech industry is flexing its muscle in a California race.

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Detours

The inefficiency of long hours.

Pet rats photographed with miniature teddy bears. (We had to do it.)

Wowsa, Vanity Fair has published one juicy cover story about Wendi Deng Murdoch and former British prime minister Tony Blair. “The passionate note surfaced amid the flotsam of a shipwrecked marriage. It was written in broken English by a woman to herself, pouring out her love for a man called Tony. ‘Oh, shit, oh, shit,’ she wrote. ‘Whatever why I’m so so missing Tony. Because he is so so charming and his clothes are so good. He has such good body and he has really really good legs . . . ‘”

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Retail Therapy

Van Cleef & Arpels will soon offer a limited-edition, 369-part miniature planetarium watch that will show you how long it takes Mercury to orbit the sun but not, alas, what time it is. Cost: a quarter of a million dollars. (This one is for you, Tom Perkins.)

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