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Top News in the A.M.
Google isn’t sure how to apply “very vague and subjective tests” to the more than 70,000 removal requests that have landed on its doorstep in the wake of the EU’s “right to be forgotten” ruling, says its chief legal officer, David Drummond.
Federal regulators announced yesterday that they’ve filed a lawsuit against Amazon for allegedly making it too easy for children to make purchases when using mobile apps without a parent’s permission.
The Beauty of Annoying Apps
Earlier this week, I stopped at the Palo Alto offices of General Catalyst Partners, an East Coast heavyweight that’s been politely muscling its way into more West Coast startups since planting a flag in the Bay Area in late 2010. One of those companies is Snapchat, the popular mobile messaging startup, and one of the investors I sat down with was Niko Bonatsos, who first brought Snapchat to General Catalyst’s attention. Among other things, we discussed why Snapchat’s most popular feature is no longer “snaps.” Our conversation has been edited for length.
Snapchat users appear to be less and less interested in the company’s “ephemeral” features. Is that a concern?
It’s the same thing that happens with other software products. When they get started, they’re very simple. Over time, their user base diversifies. So with Snapchat’s newest release, you can basically do a live video chat with others on Snapchat rather than one message at a time. And that’s fantastic. In the past, Snapchat was the icebreaker; now you can do much more. It’s still probably the fastest-growing app out there.
What early signals do you look for when it comes to non-transactional products like Snapchat?
If there’s anything that people are talking about in online communities, or if in reviews of apps, you see polarizing reviews, these are good signals.
When you’re controversial, it fuels word of mouth, which also gets amplified by the media. Back in the early days, for example, Snapchat was perceived as the ultimate tool [for lascivious] texting; it wasn’t true, because 75 percent of the user base was girls. But the media picked it up. Later, Facebook launched Poke, which was characterized as a Snapchat killer. Most people didn’t know Snapchat [at that point], and they looked it up and downloaded it. Controversy is great when it comes to building a brand and acquiring users for zero marketing spend. Obviously, you have to graduate from one controversy to another, or three to six months later there’s fatigue, but it can be controversy because of behavior, content, or because your product annoys people.
So investors should be looking for annoying apps.
Yes. With Snapchat, a lot of parents were very annoyed with it. With [anonymous messaging app] Yik Yak, a lot of schools and parents were annoyed. With [the mobile dating app] Tinder, people were telling their friends, “There’s an amazing app where I can check out girls and if I like them and they like me back, maybe we can start chatting and hook up later.” Meanwhile, older people were like, “This is terrible. What are young people doing these days?”
Secret and Whisper, apps where people share confessions and gossip anonymously, are controversial and, to some, annoying.
But their word of mouth isn’t as strong. Things don’t spread quickly from one community to another. Secret hasn’t managed to break out of its techie, Silicon Valley roots. You can see that it has something like 100,000 Android downloads. It launched on Android [in mid-May], but for a company that has raised so much money and been so [buzzed about], you’d expect some more.
I’m also a little hung up by the names Secret and Whisper. How many secrets do you have, really? Maybe one a day? Three times a week? I get the value proposition of the product; it’s like a Twitter parody account. But most content is, “My girlfriend just broke up with me,” or “I hate my boss.” It’s heartbreaking and after a couple of weeks, you don’t want to go back.
Before I go, what’s one last trend you’re seeing?
How fast we’ve gone from single apps to portfolios of apps. Google now has 150 apps between iOS and Android. Facebook has about 40. The world basically saw what happened in China, where companies like Tencent [the Chinese Internet company] now have [hundreds of] apps and do a lot of cross promotion and [essentially] game the app store. Mobility into the top 100 has become much harder for early-stage startups as a result, and if you aren’t in the top 100 app [download rankings], no one can find you. That’s the opportunity and the challenge.
Bop.fm, a 1.5-year-old, San Francisco-based music technology company that creates permalinks for songs to make them easier to find and share, has raised $2 million in Series A funding led by Charles River Ventures. Other participants in the round included SV Angel, Y Combinator, FundersClub, and individual investors. The WSJ has more here.
Button, a year-old, New York-based mobile marketing company, has raised $2.25 million in seed funding led by Atlas Venture. Other participants in the funding included by DCM, Greycroft Partners, Mesa+and VaynerRSE, as well as individual investors.
Cover, a mobile payments startup that enables restaurant diners to pay for their meals without involving a paper check or a credit card, has raised $5.5 million in funding led by Spark Capital. The company has collected $7 million to date. The WSJ has more here.
D-Wave Systems, a 15-year-old, Burnaby, Canada quantum computing technology company, has raised $28.4 million in new funding, according to a SEC filing that was flagged by TechCrunch. The capital brings the company’s total funding to $160 million, money that D-Wave has raised from Goldman Sachs, DFJ, and the Business Development Bank of Canada, among others.
Erecruit, a five-year-old, Boston-based company that makes software designed for larger staffing firms, has raised $25 million in funding from North Bridge Venture Partners. It’s the company’s first institutional round of financing.
Jobandtalent, a five-year-old, Hondón de los Frailes, Spain-based service that matches professionals with available job opportunities and sends them related alerts, has raised $14 million in Series A funding from Qualitas Equity Partners, Kibo Ventures, FJME Ventures, Pelayo Cortina Koplowitz, and Nicolas Luca de Tena. The company has raised $18.7 million altogether, shows Crunchbase.
KeVita, a four-year-old, Ojai, Ca.-based company that makes a line of organic probiotic drinks, has raised $6 million in Series D funding led by SPK Capital, with participation from existing investors KarpReilly and Ecosystem Integrity Fund.
Landscape Mobile, a young, San Francisco-based company whose mobile technology enables users to clip, save and retrieve reading materials in one step, has raised $1.85 million in seed funding from IDG Capital and individual investors.
Malwarebytes, a six-year-old, San Jose, Ca.-based that develops anti-malware technologies to detect and remove malicious programs, has raised $30 million in funding from Highland Capital Partners. The round represents the company’s first institutional round of financing.
Olacabs, a 3.5-year-old, Bangalore, India-based car rental service, has raised $41.5 million in Series C funding led by Steadview Capital and Sequoia Capital. Earlier investors Matrix Parters India and Tiger Global Management also participated in the round, which brings the company’s funding to $66.5 million, shows Crunchbase.
Tablo, a two-year-old, Melbourne, Australia-based online platform for creating and publishing e-books, has raised $375,000 in seed funding from Y Combinator and individual investors, including Kevin Hale, a partner at Y Combinator. The company has raised roughly $400,000 to date.
Vidyo, a 9-year-old, Hackensack, N.J.-based videoconferencing company, has raised $20 million in Series E funding from earlier investors Menlo Ventures, Rho Ventures, Sevin Rosen Funds,QuestMark Partners, Saints Capital, Four Rivers Group, ORR Ventures, Triangle Peak Partners and Juniper Networks. The company has now raised $139 million altogether.
FreshTracks Capital, a small, 14-year-old venture capital firm based in Shelburne, Vt., has raised $11.5 million for its third venture capital fund. Assembled with the help of 48 limited partners, the firm intends to spread the capital across 10 to 15 companies. Notable past investments include EatingWell Media Group, acquired by Meredith Corporation in 2011. Notable current invesments include Quirky, a product invention platform that has raised about $175 million over the last five years, including from Kleiner Perkins Caufield & Byers, Andreessen Horowitz, and General Electric, among others. Vermont Business Magazine has more here.
The founder of GetJar, a mobile app store that was acquired earlier this year by China’s Sungy Mobile, has created a new fund to back 20 Eastern European startups a year, reports VentureWire. The firm, Nextury Ventures, was founded late last year by Ilja Laurs and former Microsoft country manager Mindaugas Glodas. It’s focusing on mobile startups primarily, with a particular focus on business-to-consumer products.
InnoSpring, a two-year-old accelerator founded in Silicon Valley to help U.S. and Chinese tech startups expand across borders, is raising a second, $5 million, fund, reports VentureWire. The organization was established by a joint partnership between Tsinghua University Science Park, Shui On Group, Northern Light Venture Capital and Silicon Valley Bank. Its first seed fund, of undisclosed size, was backed by both Chinese and U.S. venture firms, including Kleiner Perkins Caufield & Byers, Northern Light Venture Capital, GSR Ventures, China Broadband Capital, and TEEC Angel Fund.
Alibaba may launch its IPO process as soon as the end of the month, according to a timetable it shared with some investors in an email. The WSJ has more here.
ReWalk Robotics, a 13-year-old, Israel-based company whose motorized device, designed to aid movement for some people with lower body paralysis, recently received FDA approval, has filed to go public in order to raise roughly $60 million. The company’s biggest backers include SCP Vitalife Partners, which owns 28.4 percent of the company; Yaskawa Electric Corporation, which owns 25.4 percent; Israel Healthcare Ventures, which owns 18.4 percent; Pontifax, which owns 10.6 percent; and Previz Ventures, which owns 6.5 percent.
Kior, the publicly traded, advanced biofuel producer that billionaire investor Vinod Khosla personally incubated and which he has backed financially alongside Microsoft cofounder Bill Gates, is considering selling itself after missing a $1.88 million loan payment, reports Bloomberg. Kior failed to make the payment on June 30 to the state of Mississippi, where it opened its first U.S. commercial-scale cellulosic biofuel plant in 2012. It still owes the state $69.4 million on a $75 million loan it was provided; Mississippi has agreed to a forbearance period while Kior pursues financing options.
RelateIQ, a three-year-old, Palo Alto, Ca.-based relationship intelligence platform that allows teams to track, share and analyze professional relationships, has been acquired by Salesforce for roughly $350 million, according to an SEC filing. RelateIQ had raised roughly $70 million from Morgenthaler Ventures, Accel Partners, SV Angel, Stage One Capital, Battery Ventures, Formation 8, Accel Partners, AITV, Redpoint Ventures, Kleiner Perkins Caufield & Byers, Felicis Ventures, and News Corp.
“He’s a great shot, don’t let him tell you otherwise” — Governor Chris Christie on skeet shooting in Sun Valley with SurveyMonkey
founder CEO (and husband to Facebook COO Sheryl Sandberg) Dave Goldberg. (H/T: Sarah Frier.)
Venture capitalist Bill Gurley has authored a hard-hitting post on the potential market size of Uber, in response to a piece in the FiveThirtyEight blog that Gurley suggests was rife with “unnecessary errors.”
Yahoo CEO Marissa Mayer has been keeping a low profile at the Allen & Co. conference this week, but Dealbook spotted her heading into a meeting yesterday with Hiroshi Mikitani, CEO of the Japanese e-commerce company Rakuten – as well as leaving half an hour later. Mayer, says Dealbook, told another attendee that the meeting didn’t go so well.
Tesla Motors CEO Elon Musk is donating $1 million to a science center being built at the site of a Long Island laboratory where Serbian inventor Nikola Tesla once toiled, reports VentureBeat. Musk also plans to build a supercharger station for his company’s electric vehicles at the 16-acre site. Musk was spurred to action by the comic website The Oatmeal, which had previously raised more than $1.3 million for the science center through a crowdfunding campaign and gently nudged Musk this spring to get involved.
Dan Raveh has joined San Francisco-based Commerce Ventures as as a senior associate. Commerce Ventures was formed in the summer of 2012 by Dan Rosen, who’d previously spent six years at Highland Capital Partners. (Its focus — on the intersection of mobile, payments, and retail — has led to bets like the in-store analytics company RetailNext, which announced a $30 million round earlier this week.) Raveh was most recently a teaching assistant at the Wharton School. Earlier, he spent two-and-a-half years with Viola Private Equity.
Pandora is looking for a head of corporate strategy. The job is in Oakland.
Sony Pictures Entertainment is looking for a director of corporate development in L.A.
Microsoft’s massive mobile problem—and opportunity—in two charts.
Five years in, growing pains are hitting the popular meme and photo-sharing site Imgur.
If we could turn back time, we’d probably unread this.
A new algorithm that finds the most beautiful routes, instead of the shortest ones.
A portable party, disguised as a cooler. Count us in!