StrictlyVC: June 9, 2014

Good Monday morning, everyone!

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Top News in the A.M.

Apple’s much-anticipated 7-for-1 stock split officially went into effect with its new pricing this morning.

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VC Keval Desai Talks Real Time Spending in a Want-Driven Age

Venture capitalist Keval Desai, a product management director at Google turned VC, has a differentiated take on investing. His two theses are based around want versus need and real-time investing, the former being a focus on companies that help fulfill consumers’ desire, the latter being companies that solve problems for consumers in real time. (Suffice it to say that far from seeing a bubble, Desai is bullish on the consumer Internet. Among his investments is the luxury consignment site RealReal, which just raised a fresh $20 million.)

We met at Rose’s Café in San Francisco on Friday to talk about it over eggs. Our conversation has been edited for length.

You worked on Google’s video ads efforts and a TV initiative that was eventually folded into YouTube. Do you think the company is still interested in TV?

I’d say yes. There are 5 billion homes in the world with a TV, compared with 2 billion with a PC and 1.3 billion with a smartphone, so if you want to reach a global audience, TV makes sense.

Silicon Valley has tried to reinvent TV over the last 20 years and we’ve failed, for the most part. I think Larry [Page]’s takeaway is that [past efforts] were too slow. He has an obsession — rightly so, I think — with speed. If you make something superfast, you have more success. Google was the fastest search engine; Chrome is fastest browser. So I think Google does have an interest, but it probably wants to reinvent TV in a way that’s fast and open makes it easy to discover content quickly.

How did your work at Google inform what interests you today as an investor?

I think the web is becoming more like TV, a discovery-driven entertainment medium. If you think about it, over the first 20 years, the Internet was more about fulfilling basic needs; it was more like a utility. You got your modem and broadband and browser and then identity, via Facebook. Once those basic needs were satisfied, we began focusing on things we want but don’t need: YouTube, Pinterest, Airbnb. Do I need to watch videos online? No. Do I need to go on vacation? No. The need economy was winner-take-all; how many broadband and email and browser providers do you need? But how many places do you go see a movie, eat a nice meal, stay in a hotel, travel for vacation, buy shoes? The want economy is not winner-take-all and it’s 100 times bigger.

What does that say about the valuations of Uber and Pinterest, big companies with growing numbers of competitors?

Generally, I think people and markets are smart. These people who are paying “lofty” valuations are sophisticated investors who’ve been investing for decades in many cases.

Also, the number of hours of the day that people have access to services is exponentially bigger than anything in the desktop era, so the mobile economy is huge. When Netscape and eBay and Amazon came out, it was very hard to reach $1 billion in revenue; now, there are 1.3 billion smartphone users in the world and Uber, which is in something like 50-plus cities, is probably already reaching half that addressable business. That translates into $2 per person per year. Then you put a 10x multiple on that? Sure. That’s not even a high multiple. Real time markets are changing everything.

Because people can order things whenever and wherever.

Think of the impact of that on service providers in our economy: Restaurants, taxi drivers, other businesses. Because end users can make decisions 24/7, every service now needs to be operating 24/7. I’m not an investor in HotelTonight, but I like them. They aren’t booking six months in advance. Instead, I show up to an airport and book a bed [at the last minute]. If I’m guaranteed a spot at a hotel that I like without paying an arm and a leg, I’m going to do it. It’s like [Google] AdWords. When I load a page, a relevant ad shows up. I think the whole world is moving in that direction.

Service providers have always hoarded inventory because consumers couldn’t make decisions in real time and there wasn’t enough data about matching the right buyers with the right sellers in real time. Both of those issues are being fixed.

Before we part, what’s one thing people might not know about you?

I’m on eight boards, and six of them are led by women.

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New Fundings

aCommerce, a year-old, Bangkok, Thailand-based e-commerce logistics and service provider for Southeast Asia, has raised $10.7 million in Series A funding, reports TechCrunch. Investors include Ardent CapitalInspire VenturesNTT DoCoMoSumitomoSinar Mas IndonesiaAsia Pacific DigitalCyberagent Ventures, and JL Capital, along with angel investors and employees.

Altair Semiconductor, a nine-year-old, Hod Hasharon, Israel-based fabless semiconductor company that makes LTE chipsets, has raised $25 million in new funding led by new investor Jerusalem Global Ventures, the company tells VentureBeat. The round, which closed in March, brings Altair’s total funding to more than $125 million. Previous investors includeBessemer Venture PartnersBRM CapitalGiza Venture CapitalJerusalem Venture Partners and Pacific Technology.

Cheetah Medical, 13-year-old, Newton Center, Ma.-based company that makes non-invasive hemodynamic monitoring system, has raised $5 million from HighCape Partners, a growth-equity firm. The company has raised at least $53 million to date, shows Crunchbase.

CityScan, a three-year-old, Chicago Heights, Il.-based company that inspects street-level activity to help users discover conditions that are impacting their city, has raised $2.3 million, according to a new SEC filing that shows a $5 million target. The company had previously raised $310,000 in seed funding, including from Origin Ventures, shows Crunchbase.

Curalate, a two-year-old, Philadelphia-based maker of analytics and marketing software, has raised $8.6 million in Series B financing, says the Philadelphia Business Journal. Earlier investors New Enterprise AssociatesFirst Round Capital and MentorTech Ventures participated in the round, along with new investor Vayner RSE.

Dayima, a two-year-old, Beijing-based fertility tracking and women’s health app, has raised $30 million in Series C funding from Ceyuan Ventures and earlier investors Sequoia Capital China and Bertelsmann Asia Investmentsreports TechNode. The company, which says it has 45 million registered users, had previously raised at least $45 million over three separate rounds, says TechNode.

Egenera, a 14-year-old, Boxborough, Ma.-based software company that helps its corporate customers deliver reliable IT and cloud services, has received $16 million in funding from Comvest Partners. The company has raised at least $44 million to date, shows Crunchbase.

Mesosphere, a year-old, Bay Area-based startup behind an increasingly popular data center operating system, has raised $10.5 million in new funding, reports the WSJ. Earlier investor Andreessen Horowitz led the round with participation from new investors Data Collective and Fuel Capital. Mesosphere had previously raised $2.25 million in seed funding, including from Kleiner Perkins Caufield & ByersFoundation Capital and SV Angel.

Mogujie, a four-year-old, Hangzhou, China-based social shopping platform that’s been likened to Pinterest, has raised $200 million in Series D funding from investors, including Hopu FundTBP CapitalQiming Venture PartnersIDG Capital Partners, and Banyan Fundreports TechNode, which says the company is valued at $1 billion. Mogujie has raised at least $212 million altogether, shows Crunchbase.

Repsley, a six-year-old, Worcester, Ma.-based maker of field sales and retail merchandising automation tools that was formerly known as Salespod, has raised $1.2 million in funding, shows a new SEC filing. The company, which was founded in Zagreb, Croatia, had previously raised roughly $120,000 in seed funding.

TrendKite, a two-year-old, Austin, Texas-based startup whose software helps brands and business clients track all of the promotional and media-generating efforts of their public relations’ campaigns, has raised $3.2 million co-led by Mercury Fund and Silverton Partners. The company had previously raised $1.2 million from investors, including Silverton and DreamIt Ventures.

Triblio, a year-old, Reston, Va.-based company that makes content-marketing software, has raised $3.4 million in seed funding led by Longworth Venture Partners and Kepha Partners.

Uber, the five-year-old, San Francisco-based company whose popular mobile app connects passengers with drivers for hire, has raised $1.2 billion in a new financing at a $17 billion valuation led by Fidelity Investments. Other investors in the new round include Wellington ManagementSummit PartnersBlackRockKleiner Perkins Caufield & Byers, and earlier investors such as Google Ventures and Menlo Ventures. The company has raised $1.5 billion to date.

XebiaLabs, a six-year-old, Boston-based company whose technology helps companies automate the deployment of new software, has raised $12 million in growth equity from Updata Partners. The round brings the company’s total funding to $21.5 million, shows Crunchbase.

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New Funds

FirstMark Capital, the six-year-old, New York-based, early-stage venture fund, is raising a new, $150 million fund, shows an SEC filing. FirstMark had announced its third and most recent fund — FirstMark Capital III, a $225 million vehicle like its immediate predecessor — in November of last year. StrictlyVC is trying to learn more, but the new fund may well be a later-stage vehicle to support the company’s early-stage investments. (FirstMark was an early investor in Pinterest and Shopify, for example.)

Health Enterprise Partners, an eight-year-old, New York-based private equity and venture capital firm that typically invests in healthcare services, has raised $134.1 million for a new fund, shows an SEC filing first flagged by VentureWire. Among the firm’s recent investments is AllyAlign, a Richmond, Va.-based care management services company, which raised an undisclosed amount from Health Enterprise Partners and Nashville-based Heritage Group earlier this year.

Kickstart Seed Fund, a six-year-old, Salt Lake City, Ut.-based seed fund focused on Utah and the Rocky Mountain region, has raised roughly $30 million of a targeted $40 million for a third fund, shows an SEC filing. Among its investments is Lucid Software, a five-year-old, Draper, Ut.-based company that makes a suite of graphical web applications and design apps. Kickstart closed its last fund last year with $26 million.

Pantera Bitcoin Fund, operated by the 11-year-old hedge fund Pantera Capital, has raised $96 million, shows an SEC filing. Founded by Tiger Management veteran Dan Morehead, Pantera was a macro hedge fund for most of its existence, but since 2011, the firm has focused ever more narrowly on bitcoin, Morehead told Dealbook earlier this year.

Sozo Ventures, a nearly two-year-old, Palo Alto, Ca.-based venture firm, has raised $58 million for a fund that’s targeting $250 million, shows an SEC filing. Sozo Ventures is partnered with the Kauffman Fellows Program and TrueBridge Capital and primarily invests capital into startups needing help with global expansion, especially into the Japanese market. (Mitsubishi is one LP.) Among its most recent investments is Lotame, an independent data management platform.

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IPOs

So much for that ugly lawsuitArista Networks, the nine year-year maker of high-performance switches that carry data traffic (eBay and Facebook are customers) had a strong debut on Friday. By day’s end, its stock was trading up 28 percent to close at $55 per share, giving the company a market cap of roughly $3.5 billion.

Zafgen, the Cambridge, Ma.-based obesity treatment developer that filed to go public in April, has disclosed in new SEC paperwork that it plans to sell 5 million shares at between $14 and $16 a piece in an effort to raise up to $86.2 million.

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Exits

Google is reportedly in talks to acquire Songza, a six-year-old, Long Island City, Ny.- based music curation and streaming service with 5.5 million active users, according to the New York Post. “Google is offering them around $15 million, the question is, does Songza take it?” said one source quoted in the piece. Songza has raised at least $6.7 million from investors, shows Crunchbase. They include Gary VaynerchukScooter BraunTroy CarterMetamorphic VenturesNicole JunkermannGeoff JudgeDeep Fork CapitalLerer VenturesAmazonWilliam Morris Endeavor, and AFSquare.

Spotsetter, a three-year-old, San Francisco-based social search engine using big data to offer personalized recommendations about places to go, has been quietly snapped up by Appleaccording to TechCrunch. The technology, which involves layering social data on top of a maps interface, could be used to beef up Apple Maps. Spotsetter had passed through the AngelPad incubator in the spring of 2012 and went on to raise $1.3 million in seed funding from Rahul Prakash2020 Ventures, and Javelin Venture Partners, according to CrunchBase.

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People

Marissa Campise has left Venrock, where she was a vice president, to join SoftBank Capital as a partner, reports Re/code. Campise’s past investments include Klout, Livefyre, and Burner. Before Venrock, Campise was a principal at Greycroft Partners.

Youtube cofounder Steve Chen is joining Google Ventures as an entrepreneur in residence, reports TechCrunch. Chen cofounded an incubator called Avos Systems with his longtime friend and Youtube cofounder Chad Hurley in 2011; Hurley will now focus singularly on one of that incubator’s companies, the mobile video platform MixBit.

Meg Sloan has joined Foundation Capital as its VP of marketing. Sloan previously spent five years at Facebook and was earlier a senior director at eBay.

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Job Listings

Norwest Venture Partners is hiring an associate. The job is in Palo Alto, Ca.

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Data

Trinity Ventures takes long look at the rise of mobile commerce, and identifies six categories from which it thinks the next, billion-dollar, venture-backed companies will emerge.

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Essential Reads

A deep dive into the scheduling opportunity for restaurant reservations.

Could TapTalk beat Snapchat at its own game?

Meet one of Chicago’s largest venture capital funds: Well Ventures, the corporate arm of Walgreens, which sources say has more than $150 million at its disposal. Crain’s Chicago Business has the story.

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Detours

Long bets.

Comics celebrate the genius of Dave Chapelle: “Chappelle gets up and riffs for forty-five minutes about—who’s the guy with the prosthetic legs? Oscar Pistorius? Dave was talking about how Pistorius would be the least vulnerable guy in prison, because all he has to do is scrape his legs on the steel bars every night. He started making this sharpening noise, and we were just done, all of us.”

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Retail Therapy

A luxury resort on Tetiaroa, Marlon Brando’s personal island in French Polynesia, is opening for business soon. (Take us with you. Please!)

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