StrictlyVC: May 7, 2014

Hello, and happy Wednesday morning, everyone!

For an easier-to-read version of today’s newsletter (we’ve been having some formatting issues with a new email service provider we’re been trying out) click here.

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Top News in the A.M.

Wow. In 2013, the USPTO granted nine patents for every patent application that was rejected and then abandoned by its applicant. That’s 92 percent, up from 68 percent in 2009, reports Vox.

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Mike Abbott of Kleiner Perkins on Snapcat, Box, and the Inherent Danger in High Valuations

Mike Abbott has only been a general partner at Kleiner Perkins Caufield & Byers for two-and-half years, but he’s a grizzled veteran of the startup industry nonetheless. Abbott previously served as Twitter’s VP of Engineering, for example, and as an SVP at Palm. In 2002, he also founded the data virtualization startup Composite Software, which was acquired by Cisco last year for $180 million in cash. (Composite had raised at least $38 million, including from Apax Partners, Palomar Ventures, and Clearstone Venture Partners.)

 

Little wonder that Abbott has a pretty strong perspective on many things startup related. The other day, we talked about a few of them, including attractive places to shop right now, why some transition on a startup’s board can be good, and what companies can do about spiraling valuations.

 

How would you characterize what you’re looking for right now?

 

Predominately, I spend time [considering] applications that are driven from large data processing . . . And I probably have a little more of a bias toward either design-centric and engineering-centric companies. That sounds generic, I realize, but that’s what I’ve done operationally. So . . looking at novel things around mining email in the enterprise, or what the implications are for sales forecasting, or mining digital health data for consumers or insurance providers.

 

I’ve also spent some time looking into the ephemeral content space.

 

That’s interesting. Ephemeral content seems afield from your other interests. 

 

I do office hours at Stanford and every time I meet with a student, I ask what’s on their phone’s home screen and take a peek. And over the last few years, [it's gone from] students using Facebook to not using Facebook not having it on their phones to the rise of Snapchat [and the idea that] not having content on your phone is a cool thing.

 

What does that mean for Twitter’s prospects? The Atlantic has already pronounced it a dead duck, as you likely know.

 

It’s funny, because [reporters] write these articles, then use Twitter to spread the word about them. A number of pieces have said that it’s dying, only to report six months later, “Oh, it’s back!” No one can doubt that Twitter is a meaningful information network that’s changing the world. Is everyone on it? No. And I think the company needs to evolve the product to make it easier for the masses to use. But there isn’t a clear number two, and it’s continuing to grow. I’m very bullish on the company.

 

Kleiner has gone through a transition and is a much smaller operation going forward. Have you taken on any of your colleagues board seats? 

 

I haven’t and for the most part, we’ve hoped to have partners stay on those boards on behalf of KP even if they’re [transitioning out of the firm].

 

Speaking generally, do you think there’s a particularly good way to transfer board seats? 

 

We always look at companies and ask if we have the right person on that board to help the company. So there may be changes in the future, depending on [partners'] different strengths and the different stages of a company. When I joined Kleiner, for example, I took over a seat at InMobi, the private ad network, where it happened to be that my background specifically at Twitter was helpful and they were excited. I do think it has to be a conversation between the company and the firm to get the right person.

 

There’s been a lot of talk this week about the impact of high valuations when the market turns less hospitable. How sensitive is Kleiner to price, and is that changing in this increasingly unpredictable environment?

 

For those of us who saw of this firsthand in 1999 and 2000, you [know that] you have to be cautious when you’re doing this higher-altitude fundraising because the market can change . . . I do think it’s going to be tough for some of these companies that have raised at these upper bounds to weather the storm.

 

Does the correction we’re seeing make you nervous? 

 

It’s not that much of a surprise, I guess. Also, at the early stage, it hasn’t impacted us too much. The venture world lags the public markets by six months typically. I do think for certain companies, there’s a new question being asked, which is: If the economy changes, will this service or product still be in demand. I won’t name any specific companies, but if you have a service that’s in higher demand along with higher disposable incomes when the economy is doing really well, what happens when it changes? I don’t necessarily know that that question would have been asked nine months ago. You could argue that it should have been.
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Founder Showcase
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New Fundings
Bloomlagoon, a two-year-old, Helsinki-based mobile games company, has raised $3.6 million in Series A funding round led by Northzone. Other investors in the round included Inventure and 360 Capital Partners along with earlier investors Jari Ovaskainen and London Venture Partners.
Delectable, a year-old, San Diego-based company whose iOS app allows users to find and share wine recommendations, has raised $3 million in Series A funding from Deep Fork Capital and numerous individual investors, including Ron ConwayMax Levchin, and David Sacks.
Fever, a year-old, Madrid, Spain-based event discovery and booking app, has raised $3 million in seed funding from a long line of individual investors, including professional soccer player Sergio Ramos of Real Madrid, and singer-songwriter Alejandro Sanz.

 

HG Data, a 3.5-year-old, Santa Barbara, Ca.-based business intelligence company,
has raised $2 million in additional Series A funding led by Rincon Venture Partners. Earlier investor Epic Ventures also participated in the round, along with several individual investors. The company has raised $6.3 million to date, shows Crunchbase.
Loxo Oncology, a year-old, New York-based company that’s focused on targeted cancer therapies, has raised $24 million in Series B funding from New Enterprise AssociatesOrbiMed Advisors, and Aisling Capital. The company has raised $57 million to date.

 

Metacloud, a 2.5-year-old, Pasadena, Ca.-based company that deploys and supports production clouds for companies across a range of industries, has raised $15 million in Series B funding from new investors Pelion Venture PartnersSilicon Valley Bank, and UMC Capital, as well as earlier investors AME Cloud VenturesCanaan Partners, and Storm Ventures. The company has raised $25 million to date.
Roseonly, a year-old, Beijing-based e-commerce company that sells on flowers, chocolates, and other high-end gifts, has raised $10 million in Series B funding from IDG Capital and Accel Partnersaccording to China Money Network. The latest round values the company at $100 million, says the report.
Smore, a nearly three-year-old, Palo Alto-based platform for easily creating single-page promotional websites, has raised $1.7 million in seed funding led by Founder’s Co-op, with participation by Greylock Partners Israel and various angels. Smore is a graduate of the TechStars accelerator program.
TrademarkNow, a two-year-old, Helsinki-based company whose online trademark search tool promises to make it easier to find potential trademark infringements, has raised $3.5 million in Series A funding led by Balderton Capital. Others of the company’s investors include Lifeline VenturesTekes, and angel investors.
Vaurum, a two-year-old, Palo Alto-based cryptocurrency company developing bitcoin exchange software for financial institutions, has raised $4 million in seed funding from Battery Ventures and angel investors, including Tim Draper and Steve Case.
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IPOs
Everything you need to know about Alibaba‘s IPO filing, along with everything to know about its early winners.
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Exits
Adometry, a nine-year-old, Austin, Tx.-based marketing analytics and optimization platform that had raised $44.6 million from investors, has been acquired by Google for an undisclosed amount. Adometry’s investors included Austin VenturesSierra Ventures and Shasta Ventures. The WSJ has more here.

Convertro, a five-year-old, Santa Monica, Ca.-based that (like Adometry), runs a marketing optimization platform, has been acquired by AOL for $89 million plus up to $10 million in earn-outs. Convertro had raised north of $5 million from MHS Capital,Bessemer Venture PartnersFounder Collective, and DAG Ventures.

Kippt, a two-year-old, San Francisco-based collaborative bookmarking system for professional networks, allowing users to collect and share content, has been acquired by the digital wallet technology company Coinbase for an undisclosed amount of money. Both companies are graduates of the summer 2012 Y Combinator accelerator program.
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People
Saydeah Howard, formerly a VP of human resources at the educational toy maker FrogLeap Enterprises, has joined Institutional Venture Partners as its VP of talent and venture services. Earlier in her career, Howard worked as an associate at Russell Reynolds Associates.
James Loftus, formerly the head of corporate development at Yahoo, has left the company to become a partner at Andreessen Horowitzreports Business Insider. Loftus had worked at Yahoo for nearly two years and for more than two years at Google before that, where he was in charge of mergers and acquisitions.
Anne Wojcicki is taking her genetics startup 23andme to English-speaking markets abroad after facing hurdles from the U.S. FDA, reports Reuters. In a company blog post, Wojcicki had stressed that she “stands behind the data” and would work in concert with the FDA to “lay the groundwork” for regulatory approval. Yet a friend of Wojcicki tells Reuters that without testing the waters outside the U.S., “it might be more difficult to get the data to support authorization in the U.S.”
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Job Listings
Twitter is looking for a business development manager for its mobile and connected devices group. The job is in San Francisco.
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Data
The National Venture Capital Association‘s annual Yearbook has new data on the incredibly shrinking venture industry. According to its findings, over the last decade the number of venture funds has fallen by 25 percent; the number of venture firms has fallen by 8 percent; and the number of venture capital professionals has fallen off a cliff, down to 5,891 in 2013 from 14,777 in 2003. Geekwire has more here.
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Essential Reads
Amazon remains the clear frontrunner when it comes to online sales. But new data reveals that the race is heating up, with Apple now in second place.
Yahoo is selling roughly 40 percent of its Alibaba stake in the Chinese Internet company’s upcoming IPO, a move that could generate more than $10 billion for the struggling Internet giant. Naturally, analysts are already weighing in on where CEO Marissa Mayer should invest it.
Wired takes readers inside Tindie, a thriving new marketplace for DIY gadgets.
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Detours
NFL Commission Roger Goodell agreed yesterday to do an online Q&A with followers of the NFL’s official Twitter account. He received lots of questions, too. Among them: “Is there anyone anywhere more out of touch and incompetent than you?” “How much wood could a woodchuck chuck if it wasn’t suffering brain trauma from 12 years as an NFL offensive lineman?” “Any predictions on who the next NFL player to be convicted of murder will be?”
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Retail Therapy
Star Trek cakes.
PostalPix aluminum prints.
The very last thing the world needs.
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Correction
In a people item in Monday’s newsletter about Fran Hauser, the newest partner at San Francisco-based Rothenberg Ventures, we reported that firm founder Mike Rothenberg was “formerly a director at his family’s residential real estate investment firm in Austin, Texas.” That wasn’t quite right; apologies. Rothenberg founded the firm with his brother, he told us in an email yesterday, explaining that it was “more of a startup than a family operation.”

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