StrictlyVC: August 27, 2014

It is Wednesday, fine people! Hope your morning is off to a great start.

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Top News in the A.M.

Apple is reportedly preparing to make its largest-ever iPad, with production scheduled to begin early next year.

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Eric Liaw Means Business

Eric Liaw of Institutional Venture Partners has been at the center of two of this week’s biggest deals, both of which happen to be in L.A. On behalf of IVP, Liaw led a $63 million investment in the jobs aggregation platform ZipRecruiter. Liaw is also on the board of The Honest Company, the maker of eco-friendly baby products, which just closed on $70 million in Series C funding.

Given that Liaw is still a principal and not a partner, we thought his involvement in both deals was interesting, so we chatted with him yesterday about how things work at IVP and how interested the firm has become in Southern California specifically.

You joined IVP from Technology Crossover Ventures in 2011 but you’re not yet a partner. Is it typical for a principal at the firm to lead deals?

At our firm, it’s something we’ve been doing for a while. When [general partner] Jules Maltz was a principal, he was leading deals. For [current principal] Somesh [Dash], it’s the same. Our firm is fairly small so it’s something we decided to do and we think it’s working.

Honest just raised a huge round of funding in preparation for an eventual IPO. When, exactly, did you get involved with the company?

Lightspeed [Venture Partners] had funded the company in September 2011 and we came in for a little bit, then General Catalyst Partners led a Series A-1 in the company in March 2012 and we participated. [Honest raised $27 million across those fundings.] We then led the company’s [$25 million] Series B round in October 2012. Finding Honest was a team effort. [General partner] Dennis Phelps and I have been spending a lot of time in L.A.; we’d gotten to know Honest cofounder Brian Lee at LegalZoom [which Lee also cofounded and is another IVP investment]. It was a little unorthodox for us to invest in something that didn’t even have a site yet, but we knew early on that it was a good thing to get involved with and it’s grown by leaps and bounds since. Brian and [cofounder] Jessica [Alba] have said publicly that they passed the $100 million run rate back in January, and it’s safe to say that the business has only accelerated from there.

Do you divide your time between San Francisco and L.A.? Is that how you came to know of ZipRecruiter?

I went to high school in L.A. and my parents still live down there, but the firm is based up here. Half our deals are in the Valley; the rest are outside, including L.A., New York, Austin, Scandinavia … ZipRecruiter we met a couple of years ago but they hadn’t wanted to seek outside funding. When the opportunity came up in the earlier part of this year, they talked with a handful of firms. It was very competitive. But our success in building subscription businesses at the growth stage [won over the company].

So it largely comes down to product experience?

There has to be a lot of comfort around the table, too. One piece of advice I gave [ZipRecruiter CEO Ian Siegel] was that [founders] should be super comfortable with whoever they’re going to work with, because it’s a lot easier to get into a deal than get out of it when things go sideways. Also, in this case, the founders retain significant majority of company, so I had to be comfortable with [the team] and I certainly am.

As a late-stage investor, how are you feeling about valuations?

You can look at valuations as indicators of broader trends and excitement. People are definitely feeling more comfortable in investing in [late-stage venture] where the perception of risk has been diminished — accurately or inaccurately — because the market is perceived to be much larger.

We look at valuations on a company-by-company and deal-by-deal basis. It’s like public stocks. The “market” is a basket of individual stocks. Some do well even when most do not.

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New Fundings

Admittedly, a 1.5-year-old, New York-based online college advisory platform, has raised $1.2 million in seed funding from investors, including Quotidian VenturesRRE VenturesCorrelation VenturesJoanne Wilson, and Shawn Byers.

AirStrip Technologies, a 10-year-old, San Antonio, Tx.-based platform that delivers critical patient information directly to a doctor’s smartphone, has raised $25 million in funding led by the Gary and Mary West Health Investment FundSequoia Capital, and Wellcome Trust. The company has now raised at least $65 million to date, shows Crunchbase.

Bizible, 3.5-year-old, Seattle-based maker of marketing performance management software, has raised $8 million in funding led by Scale Venture Partners. Earlier investors also participated in the round, including Madrona Venture PartnersMHS CapitalInvestment Group of Santa Barbara, and RealNetworks founder Rob Glaser. Bizible has raised $10.5 million to date, shows Crunchbase.

Brandnew, a year-old, Berlin-based startup that helps brands create native ad campaigns for Instagram and Pinterest, has raised $1.9 million in seed funding, including a $1.1 million grant from the city of Berlin, and $845,000 from investors including the French multinational marketing firm PubliGroupe and Berlin Ventures.

Bridestory, a months-old, Indonesia-based has raised an undisclosed amount of seed funding from Sovereign’s CapitalBEENOS PlazaEast Ventures and Fenox Venture CapitalMore here.

Feedvisor, a three-year-old, Tel Aviv-based algorithmic pricing and business intelligence platform for online retailers, has raised $6 million in Series A funding led by Australia’s Square Peg Capital. Earlier investors JAL VenturesOryzn Capital and Micro Angel Fund participated in the round, too. The company has now raised $7.7 million altogether, shows Crunchbase.

The Honest Company, a three-year-old, L.A.-based company that sells a line of eco-friendly, non-toxic products, has raised $70 million in fresh funding led by Wellington Management Company and other public market institutional investors. Earlier investors Lightspeed Venture PartnersInstitutional Venture PartnersGeneral Catalyst Partners and ICONIQ Capital also participated. The company has now raised $172 million altogether and is eventually planning to go public, General Catalyst’s Neil Sequeira tells Venture Capital Dispatch.

Mobiquity, a three-year-old, Wellesley, Mass.-based mobile engagement startup, has added $5 million to its Series B round, led by earlier investor NewSpring Capital. The company had raised $12 million in Series B funding in June of last year from Longworth Venture PartnersSigma Partners and Thomas Weisel Partners. The company has raised $24 million to date. BostInno has more here.

Pluralsight, a 10-year-old, Cedar Valley, Ut.-based online technology education company for serious software developers, has raised $135 million in Series B funding led by Insight Venture PartnersICONIQ Capital and Sorenson Capital Partners. The money represents the largest-ever financing round for a Utah company, notes Venture Capital Dispatch. Pluralsight has now raised $165 million altogether, shows Crunchbase.

Smarter Remarketer, a four year-old, Indianpolis-based marketing software startup, has raised $7 million in venture debt from City National Bank. The company, which raised $7 million in Series A funding earlier this year from Battery Ventures, has raised $17.3 million altogether, shows Crunchbase.

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New Funds

A new seed fund in New South Wales, Australia is hoping to attract outside investment to early-stage startups at a local university’s accelerator program. ZDNet has more here.

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IPOs

Civitas Therapeutics, a five-year-old, Chelsea, Ma.-based biopharmaceutical company developing and commercializing therapeutics, has filed to go public. It plans to raise up to $86.25 million. The company’s biggest shareholders include Longitude Capital Partners, which owns 19.9 percent of the company; Canaan Partners, which owns 18.9 percent; Fountain Healthcare Partners, which owns 10.2 percent; Bay City Capital, which owns 10.5 percent; and Alkermes, which owns 7 percent.

ReWalk Robotics, a 13-year-old, Yokneam, Israel-based company whose motorized devices are designed to aid movement for people with lower body paralysis, yesterday disclosed plans to raise $50 million by offering 3.4 million shares at a price range of $14 to $16. 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.

Vivint Solar, the three-year-old, Provo, Ut.-based home security and solar-energy provider owned by Blackstone Group, has gone public with its IPO plans, reports Reuters. The company, which had filed confidentially earlier this month, is the second-biggest installer of residential solar panels in U.S. behind SolarCity, backed by Elon Musk. Vivint plans to raise up to $200 million.

Snapchat, the three-year-old, Venice, Ca.-based messaging startup, is raising up to $20 million at a $10 billion valuation from Kleiner Perkins Caufield & Byersreports the WSJ. At least one strategic investor has also committed to invest in its newest round, which isn’t yet closed, reports the WSJ. (The WSJ goes on to report that Snapchat now has more than 100 million monthly users.) Snapchat has raised more than $160 million since it was founded, including from TencentSV AngelLightspeed Venture PartnersBenchmarkGeneral Catalyst PartnersInstitutional Venture Partners, and Coatue Management.

Sofatutor, a six-year-old, Berlin-based online education platform for high school and college students, has raised $5.8 million in new funding led by the school book publishing company Cornelsen. Earlier investors Acton Capital PartnersJ.C.M.B. and IBB Beteiligungsgesellschaft also participated in the round, which is the company’s third.

Snapdeal, the four-year-old, New Delhi, India-based e-commerce juggernaut, has raised an undisclosed amount of funding from Ratan Tata, the chairman emeritus of Indian conglomerate Tata Group, says the Economic Times. The funding follows the roughy $233 million that the company has raised in two prior rounds this year, notes TechCrunch. The company, in a land grab with its biggest rival, Flipkart, has raised $435 million to date, notes Crunchbase.

Square, the five-year-old, San Francisco-based payments provider that turns any smartphone into a credit card terminal, is in the process of raising $200 million at a $6 billion valuation, reports CNBC, whose sources say part of the round will likely come from the Government of Singapore Investment Corporation. The company has already raised $440 million in equity and debt financing, shows Crunchbase.

Strut, a year-old, San Francisco-based, social commerce company focused on mobile shopping, has raised $1.5 million in seed funding led by Khosla Ventures. Other participants in the round included Eniac VenturesSherpa VenturesSlow VenturesSK VenturesFG AngelsBase VenturesKevin RoseRick MariniRyan BloomerDarius MonsefSteve JangDan RoseDaniel BrusilovskyElliot LohBo Han, and Owen Van Natta. (StrictlyVC talked earlier this week with Strut co-founder and CEO, Mark Daniel, a winner of last year’s Thiel Fellowship, about Strut’s very big syndicate; we wondered whether investors are beginning to descend on Thiel Fellows with the same enthusiasm as they do Y Combinator-backed startups. “The Fellowship has no relationship to any fundraising process or specific investors,” said Daniel. “Given the variety of projects Fellows work on, it makes sense for some to raise venture money and for some not to. It’s not a incubator of any sort. It’s very much like a grant and everyone hits the ground running on their own projects. Investors certainly don’t view Fellows in terms of a ‘batch.’ You’re definitely pitching as a normal entrepreneur.” Given that Thiel Fellows are typically students under the age of 20 who drop out of school in exchange for $100,000 and guidance over two years, we also asked Daniel if he planned to return to college. His answer: Nope. “Dropped out of Babson College. Did Freshman year. No current plans to return.”)

Zuli, a two-year-old, San Francisco-based company that makes a Bluetooth-enable smart plug, has raised $1.65 million in seed funding, including from Menlo VenturesXG VenturesWinklevoss CapitalLogitech, and DeNA. The company had previously raised $175,000 from a Kickstarter campaign. TechCrunch has more here.

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Exits

BruteProtect, a security and management tool that’s currently used by 110,000 WordPress sites, has been acquired by WordPress parentAutomatticreports TechCrunch. Reportedly, the company was talking to Automattic founder Matt Mullenweg about funding; Mullenweg decided to acquire the company instead.

LeapPay, a New York-based company that provides funding against account receivables, has been acquired by the U.K.-based peer-to-peer loan platform company Funding Circlereports TechCrunch. In an unusual twist, LeapPay’s three co-founders and sole full-time employees are not joining Funding Circle as part of the acquisition, adds TechCrunch’s report.

Rezopia, a 4.5-year-old, Lucerne Valley, Ca.-based cloud technology provider for travel companies, is now majority owned by Sonata Software of New Delhi, India, which has acquired a controlling stake for an undisclosed amount. The Economic Times has more here.

WaveGroup Sound, a 19-year-old, Burlingame, Ca.-based audio production company that specializes in sound for games, has been acquired for undisclosed terms by Facebook, which has turned WaveGroup’s employees into its in-house sound design team. TechCrunch has more here.

Zync Render, a five-year-old, Boston-based service that makes it easier for movie studios to render their visual effects in the cloud, has been acquired by Google for undisclosed terms. PCWorld has more here.

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People

As Andreessen Horowitz celebrates its fifth anniversary, founders Marc Andreessen and Ben Horowitz take a stab at explaining “everything.”

“Note and Vote”: How the Google Ventures team tries avoiding groupthink in meetings.

Three stewards of Utah Capital Investment — an 11-year-old quasi-public entity that has invested more than $100 million in business startups — have overstated the returns on their investments, downplayed the costs of doing business and haven’t been transparent enough, according to an audit of the agency. The Salt Lake Tribune has the story here.

Startup employees flush with cash are beginning to invest it in businesses with high failure rates. They aren’t tech startups; they’re restaurants and bars.

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Job Listings

Citi Ventures is looking for a program manager. The job is in Palo Alto, Ca.

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Happenings

Applications are still open for the next batch of companies at the accelerator 500 Startups, but the deadline is this Friday, August 30, so get a move on if you’re thinking of applying.

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Essential Reads

Uber is starting to make the cab industry smell like a rose. According to The Verge, the company is “arming teams of independent contractors with burner phones and credit cards as part of its sophisticated effort to undermine Lyft and other competitors.”

How social media silences debate.

Err, great? These 3-D printed skeleton keys can pick high-security locks in seconds.

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Detours

“How many male novelists does it take to screw in a lightbulb?”

And you wonder why there were so many alcoholics in your family.

Geez, sometimes, you just cannot win.

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Retail Therapy

Pretend you can’t be bothered with Only Black V-necks.

The Coolest cooler is now the most-funded startup in Kickstarter history. And it’s not too late to get in on the action (though almost!).


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