Hi, good Wednesday morning, everyone! (Web visitors, here‘s an easier-to-read version of today’s newsletter.)
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Top News in the A.M.
Investor Peter Thiel appeared on CNBC this morning and had some provocative things to say about Twitter, calling it “hard to evaluate. They have a lot of potential. It’s a horribly mismanaged company—probably a lot of pot-smoking going on there. But it’s such a solid franchise it may even work with all that.”
Yet another firm, Battery East, wants to convince start-ups to let it arrange secondary transactions in their stock. It opens its doors today.
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The Best-Funded Connected Home Startup You’ve Never Heard of
You probably haven’t heard of Leeo, a 1.5-year-old, San Francisco-based maker of smart home products and services. But investors are well aware of it, along with a growing number of engineers. Indeed, the now 60-person company has quietly raised $37 million in financing, including from Formation 8; E.ON, one of the world’s largest investor-owned power and gas companies; and Visionnaire Ventures, the fund of billionaire Taizo Son, who is the youngest brother of Softbank magnate Masayoshi Son.
The attraction isn’t surprising, given the murderer’s row of operators that Leeo has assembled. Cofounder Adam Gettings was cofounder and CTO of RoboteX, a maker of first responder robots that he launched with his brother Nathan, who also cofounded the data analysis company Palantir Technologies and is now Leeo’s chief data advisor.
Adding product development smarts is chief operating officer Charles Huang, who with his brother founded RedOctane, publisher of the best-selling videogame franchise “Guitar Hero.” And on the form factor side, Leeo’s chief designer is Robert Brunner, who was Apple’s first design chief and most recently the chief designer at Beats Electronics.
It sounds like a winner. Just don’t ask what the company is making. (It’s not saying yet.) I talked with Gettings and Huang last week about their secretive company.
Why start Leeo?
Gettings: It was largely inspired by a friend who saw a fire from a distance and realized it was her home. She wound up losing the house and all of her pets and it was tragic for our circle of friends to be so close to the situation. [Afterwards], we started wondering how we could create a connection between the home and people so people could be better linked to their homes when they’re away. Our first product coming out [will address the issue], then a series of other products [will follow].
Is this a smoke detector? Is it something that exists in the market that you’re improving on or is this a new device entirely?
Huang: It’s a product that takes advantage of existing infrastructure. It isn’t difficult for consumers to use in their homes yet uses the benefits of connected devices.
That was quite a non-answer! Should Nest Labs be nervous?
Gettings: I don’t know. I think our design chops are pretty good. It’s an interesting space and relatively early when you consider how long Nest Labs has been around. Every day there seems to be new entrants into the [Internet of Things] market. The space will be very big in the future – it’s the next big evolution of the Internet.
Huang: One thing we’re excited about is getting enormous incumbents involved through strategic investors, like E.ON [for which we’ll create] custom-designed smart home products and services. [E.ON has roughly 35 million customers in more than 10 European countries.] We’re also working with Softbank, which owns Sprint and has more than 180 million mobile phone subscribers to which they want to provide more products and services, including through their Sprint stores in the U.S. and their Softbank stores in Asia.
Why this staggered launch announcement, with details about your funding but not about your product?
Gettings: We’re very excited about building the team and assembling the product and it’s a chance for us to say hello to the world.
Huang: There are a lot of interesting parts to this story, so we’re trying to tell it chapter and chapter and not overload people with one massive press campaign.
Okay, tell us this: You’ve both formed companies with your brothers. What’s it like to work with your sibling?
Huang: Great. You have an instinctive trust. You can almost know what he’s thinking before he says it. But you do behave just like you did as kids. One of you will say something and the other will respond, “That’s just the stupidest thing I’ve ever heard,” like you’re eight years old. [Laughs.]
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New Fundings
Bellabox, a three-year-old, Singapore-based company that has become Australia’s biggest beauty subscription site, has raised $2.7 million in funding from Allure Media, a digital publishing company owned by Fairfax Media. The company has raised $4.1 million altogether. TechCrunch has the story here.
Daojia, a four-year-old, Shanghai, China-based restaurant food delivery startup, has raised $50 million in new funding co-led by Chinese e-commerce giant JD.com and Macquarie Capital. Morningside Ventures and CDH Venture also participated in the round. To date, the company has raised roughly $75 million. Venture Capital Dispatch has more here.
eJiaJie, a 1.5-year-old, Beijing-based platform centered around hourly housekeeping services, has raised $4 million in funding from Shanda Capital and Tencent. According to Tech in Asia, the company had previously raised $650,000 in seed funding, including from Tencent.
eSentire, a 13-year-old, Cambridge, Ontario-based cyber security company, has raised a $12.7 million in Series C funding led by Georgian Partners, with participation from Cisco Investments and Northleaf Venture Catalyst Fund. Earlier investors Edison Partners and VentureLink also participated in the round, which brings the company’s total funding to $19.6 million, shows Crunchbase.
Fastly, a three-year-old, San Francisco-based content delivery network, has raised a $40 million in Series C funding led by August Capital. Earlier investors Battery Ventures, O’Reilly AlphaTech Ventures and Amplify Partners also participated in the round, along with new investor IDG Ventures. To date, the company has raised $54 million, shows Crunchbase.
Gousto, a two-year-old, London-based online web application that sends customers the ingredients they need to cook meals they’ve pre-selected, has raised $8.3 million from Unilever Ventures, with participation from earlier investor MMC Ventures. The company has now raised $11.4 million altogether, shows Crunchbase.
Jet, a six-month-old, Montclair, N.J.-based e-commerce company that was founded by entrepreneur Marc Lore, has raised $20 million in growth capital from Western Technology Investments and a $5 million asset-backed facility from Silicon Valley Bank, bringing its Series A round — which also includes $55 million from New Enterprise Associates, Accel Partners, Bain Capital Ventures and MentorTech Ventures — to a whopping $80 million. Lore, whose company is operating in stealth mode for now, previously cofounded Quidsi, parent company of Diapers.com, which sold to Amazon for $550 million in 2010. He’s building Jet with his Quidsi co-founders, former VP of special operations Nathan Faust, and project director Mike Hanrahan. TechCrunch has the story here.
MileIQ, a two-year-old, San Francisco-based mileage tracker app, has raised $3 million in seed funding led by CRV, with participation from Salesforce founder Marc Benioff, SV Angel and others.
Newsela, a New York-based education tech startup that provides daily news articles that are extracted from national and regional newspapers, has raised $4.1 million in Series A funding led by Owl Ventures, a new venture firm that solely backs ed-tech startups. Other participants in the round include Knight Foundation’s Knight Enterprise Fund, Cambridge Information Group and earlier investors NewSchools Venture Fund and Kapor Capital. The company has raised roughly $5.7 million to date. Venture Capital Dispatch has the story here.
RightCare Solutions, a three-year-old, Horsham, Pa.-based company whose software helps hospitals and other health care providers optimize their discharge planning process, has raised $4 million in funding from NewSpring Health Capital. The company had previously raised $6.8 million from Domain Associates and Compass Partners.
Semmle, an eight-year-old, Oxford, England-based business analytics platform that aims to optimize other companies’ IT projects by analyzing the quality of their developers’ code and how much they’re spending on software development, has raised $8 million in Series A funding led by Accel Partners. TechCrunch has more here.
Synereca Pharmaceuticals, a five-year-old, Chapel Hill, N.C.-based company that develops drugs that restore the effectiveness of existing antibiotics, has raised $1.4 million in convertible debt led by Accele Venture Partners. i2E, a not-for-profit corporation focused on growing small businesses in Oklahoma, also participated in the round along with individual investors.
Talkdesk, a three-year-old, Mountain View, Ca.-based company that says its software enables companies to create a call center in the browser in less than 5 minutes, has raised $3 million in seed funding from Storm Ventures.
TrueAccord, a year-old, San Francisco-based company that uses behavioral engineering and machine learning to automate the process of debt collecting, has raised $5 million in Series A funding from Khosla Ventures, Homebrew, serial entrepreneur Max Levchin, and Braintree founder Bryan Johnson.
WeiChaiShi, a 20-month-old, Shanghai, China-based Chinese mobile task outsourcing platform, has raised $3.2 million in funding led by ClearVue Partners, with Nokia Growth Partners participating. The company has raised at least $6.2 million to date, shows Crunchbase.
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New Funds
Providence Health & Services, a not-for-profit Catholic health-care ministry in Renton, Wa., says it will invest $150 million in early- to mid-stage companies that aim to improve patient care. The fund is being led by Aaron Martin, who came to Providence earlier this year from Amazon’s publishing and print-on-demand business. He reportedly led Amazon’s content acquisition Kindle’s North American trade publishing business. The Puget Sound Business Journal has more here.
Stem, a five-year-old, Millbrae, Ca.-based energy storage startup whose battery systems are meant to be used when grid power is too expensive, has created a new fund to finance up to $100 million in new projects featuring its technology. More here.
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IPOs
Proteon Therapeutics, a 13-year-old, Waltham, Ma.-based biopharmaceutical company that develops drugs for renal and vascular disease, has filed to go public. The company has raised at least $126 million over the years, shows Crunchbase. Its principal shareholders include TVM Capital, which owns 19.4 percent; Abingworth Bioventures, which owns 19.1 percent; Prism Venture Partners, which owns 15.6 percent; Skyline Venture Partners, which owns 15.3 percent; Deerfield, which owns 10.5 percent; Pharmstandard International, which owns 10.5 percent; Intersouth Partners, which owns 10.4 percent; and MPM Capital, which owns 10.3 percent.
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Exits
Darjeelin, a 1.5-old, Paris-based startup whose online flight search engine is powered by “flight hackers” who tell users when there are cheaper flights available, has been acquired by Voyage Privé Group-owned L’Officiel des Vacances, a site that offers travel deals from around the web. Terms of the deal weren’t disclosed. TechCrunch has more here.
Mail.ru, a publicly traded Russian Internet company, confirmed yesterday that it has acquired the remaining shares of “Russia’s Facebook” Vkontake that it didn’t already own for $1.47 billion. The deal means Mail.ru now controls Russia’s two most popular social networks, VK and Odnoklassniki (“classmates”). Circa has more here.
Ostrovok.ru, a Russian travel booking site that raised $28 million in a Series B round last year led by General Catalyst Partners, has seen a change in ownership, reports Venture Capital Dispatch, which says both General Catalyst and earlier backer Accel Partners have quietly divested their holdings, likely owing to continuing conflict in neighboring Ukraine. (They aren’t saying.) Whatever the case, they wanted out. Lev Leviev, a co-founder of Vaizra Investments, which recently invested in Ostrovok.ru, tells the outlet that Accel and General Catalyst “didn’t sell their shares, they gave them up.”
Pounce, a two-year-old, Tel Aviv-based mobile shopping app that surfaces deals from retailers, has been acquired by visual search company Slyce for $5 million in shares, cash and earn-out incentives. TechCrunch has more here.
Virtual, a Delray Beach, Fla.-based pre-launch virtualization platform for both Android and iOS, has been acquired by Citrix, reports TechCrunch. Terms of the deal aren’t being disclosed.
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People
The 30 most important women under age 30 in tech, according to Business Insider.
Scott Bartlett, the technical lead behind Google’s Nexus phone program, has left to become the director of hardware at Hello, maker of a spherical sleep sensor called Sensor that we wrote about last month. TechCrunch has much more here.
Emergence Capital Partners has promoted Santi Subotovsky to partner and Joe Floyd to principal. Prior to joining Emergence in 2010, Subotovsky was an advisor at Aqua Capital Partners. Before joining Aqua Capital Partners, he was a summer associate at Storm Ventures. Before joining Emergence in 2012, Floyd was an associate at both American Capital and McKinsey & Co. He was also a Kauffman Fellow.
Marty Hanaka has joined Highland Capital Partners as an operating partner. He most recently was interim chief executive of Guitar Center, a Highland portfolio company. Previously, he was chairman and CEO of Golfsmith International Holdings, chairman and CEO of Sports Authority, and president and chief operating officer of Staples.
Peter Thiel, Reid Hoffman, Paul Graham, and Marc Andreessen are among other prominent investors and founders who’ve signed on to teach a 20-session Y Combinator course at Stanford called “How to Start a Startup.” In nice news for founders everywhere: all materials from the class, including videos, will be posted to the site of Y Combinator president Sam Altman.
VCs weigh in on Bill Gurley‘s public warning that companies are taking on too much risk. Says Jeff Clavier of SoftTechVC: “The thing I am missing with Gurley’s piece is, so what? There wasn’t a clear call to action. If you believe everything is in overdrive and you have shares of Uber at [an $18 billion valuation] and shares of Snapchat at [a $10 billion valuation], you wonder if he should sell some of them.”
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Job Listings
McKinsey & Co. is looking for an M&A analyst. The job is in New York.
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Essential Reads
Worth noting: Most of technology’s most notable names aren’t soaring along with today’s Internet darlings, as happened in the late ’90s.
Facebook has built an app for super private sharing.
The seven new startups capturing San Francisco’s attention right now.
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Detours
A wife’s happiness is more crucial than her husband’s in keeping marriage on track, a Rutgers study finds. (What? We’re just reporting the news here!)
Aerial views of a colorful Italian beach town.
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Retail Therapy
Looks like we’re all getting new iPhones.