Good morning, everyone, hope you had a great weekend. (Web visitors, click here for an easier-to-read version of what you see below.)
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Top News in the A.M.
Bitcoin services provider Coinbase is set to launch a U.S. exchange this morning – one reportedly already approved by regulators in 25 states. More here.
WikiLeaks is reportedly demanding answers after learning that Google handed off information about three of its staff members to the U.S. government several years ago. Google says it was prevented by gag order from disclosing sooner that it had provided emails and other digital data about the staffers.
Storied venture firm Kleiner Perkins Caufield & Byers tried, and failed, to acquire The Social+Capital Partnership, the young venture firm founded by former Facebook exec Chamath Palihapitiya, reports Fortune. The talks ended within the past few weeks. Much more here.
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AltSchool Looks to Next Round, as Parent Demand Balloons
If you don’t live in the Bay Area, you might not be familiar with two-year-old AltSchool, a budding network of schools founded by Max Ventilla. But the former Googler — who worked at the company both before and after it paid $50 million his startup, Aardvark — has huge ambitions to change the way we educate children. VCs like his vision, too. Andreessen Horowitz and Founders Fund led a $33 million investment in the school last year, and they’ll likely commit more, says Ventilla. (AltSchool, which is also operating on $11 million in debt from Silicon Valley Bank, will raise another round in coming months that’s likely to come “more or entirely” from insiders, Ventilla says.)
No doubt investors are drawn to AltSchool’s “full-stack approach,” as Ventilla characterizes it. Among other ways the company is trying to reconstruct education via its tech-heavy, personalized-learning approach: students follow tailored curriculum based on their individual skills and needs. Children are spread across numerous, smaller locations than many schools. Not last, at AltSchool – which has three schools in San Francisco and four more in the works, including in Brooklyn — kids are grouped by age brackets rather than grade levels.
The results of AltSchool’s grand experiment will take some time. An outstanding question in the meantime is how the school provides investors with a venture-like return. While demand for AltSchool is high and growing — it received 1,000 applications for just 150 slots this past year — there aren’t many acquirers for a business like AltSchool. Meanwhile, Wall Street has a love-hate relationship with ed tech companies. Perhaps unsurprisingly, Ventilla says he’s already thinking about alternatives to going public. We talked last week. Here’s part of that conversation, edited for length:
Why start a new school system from scratch?
I’d had some amazing work experiences at Google, most recently [as the head of personalization] at Google, running a high-caliber team of about 100 engineers. I’m a startup guy, though, and so the team and I started to talk about what kind of thing we’d want to do next. I felt like I had one more startup in me – likely the last one – so we were looking for things that would be big and important and meaningful in terms of impact and relevance to our skills and experiences. And few industries are as large and in need of improvement as education.
How did you settle on AltSchool’s very specific and different approach?
We were fortunate as a founding team to include four educators — two with longstanding experience. We’re also operating in a wonderful space in terms of how transparent people are willing to be. I can go into any ed tech company and say, “What’s working? What’s not?” It’s a very different atmosphere in terms of openness and collaboration than anything I’ve experienced before.
You start with first principals in an environment that you can control. We operate the schools from the real estate to the IT to the lunches that get delivered. Based on that proximity to students and parents and teachers, from whom we’re getting monthly satisfaction data on a granular level, we iterate. We’re a constant work in progress. But we think that as we scale, we’ll accelerate our rate of improvement.
Your vision includes an expanding network of classrooms and schools, so students can move from one location to another seamlessly. Why is that important to you?
Because how long people tend to live in one place is plummeting. Our kids will likely live in 20 different places when they’re grown.
And AltSchool is interested in smaller spaces — so you can establish far more schools?
Yes, onerous and justified building code restrictions are one reason. But there’s also a much more efficient real estate market for 8,000-square-foot spaces versus 100,000 square feet [the size of traditional schools], where 95 percent of the space includes shared halls, an underused gym [and so forth]. On average, we offer children 95 square feet of facility space and 70 to 75 percent of square feet of classroom. Traditional schools offer 175 square feet of facility space and just 45 square feet of classroom.
You have several locations that right now charge families roughly $20,000 per student, a cost you plan to lower over time. But you also expect to license what you’re developing. Which will be the bigger business ultimately?
In the long term [licensees] is what we’re charting toward. It’s hard to imagine that you wouldn’t have an order of magnitude more impact [through licensing aspects of the business]. That said, I think it’s extraordinarily important to have an expanding number of schools; it’s how we iterate and refine what we’re doing and how we’ll stay closest to the school experience.
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New Fundings
51auto, an 11-year-old, Shanghai, China-based used car trading platform owned by the holding company Shenyou Advertising, has raised $30 million in Series C funding led by Softbank China Venture Capital, with participation from SIG Asia Investment, F&G Venture, and DT Capital Partners.
Crossover Health, a five-year-old, Aliso Viejo, Ca.-based on-site primary care provider to big employers (including Facebook), has raised $15 million in growth funding from Norwest Venture Partners, according to LBO Wire.The company had previously raised at least $6.5 million, shows an SEC filing.
Everspin Technologies, a 12-year-old, Chandler, Az.-based memory chip maker, has added another $7 million to its Series B funding, bringing the round’s total to $29 million. The newest investors in the company include Globalfoundries and Western Digital Capital. Earlier backers in the round include Lux Capital, DFJ, EPIC Ventures, New Venture Partners, and Sigma Partners. According to Crunchbase, the company has raised $55.8 million altogether.
FilterEasy, a 2.5-year-old, Raleigh, N.C.-based company whose subscription business centers on delivering air filters to users’ doors, has raised $1.2 million in convertible debt from Azure Capital Partners, RTP Capital, and a handful of angel investors.
Innovent Biologics, a 3.5-year-old, Suzhou, China-based bio-pharmaceutical firm that’s developing monoclonal antibodies, has raised $100 million in Series C funding led by Legend Capital, with Singapore’s Temasek Holdings and earlier backers Fidelity Biosciences, Fidelity Growth Partners Asia, Lilly Asia Ventures, and Frontline Bioventures participating.
Iora Health, a 3.5-year-old, Cambridge, Ma.-based health care service that provides patients with personal physicians and personal health coaches who remain in contact during and between office visits, has raised $28 million in Series C funding from new investors Foundation Medical Partners, Rice Management Company, GE Ventures, and Khosla Ventures, with participation from earlier backers .406 Ventures, Fidelity Biosciences and Polaris Partners.
Money Dashboard, a six-year-old, Edinburgh, Scotland-based personal finance app company, has raised $3.7 million in funding led by Calculus Capital, with participation from Ariadne Capital, Par Equity, and The Scottish Investment Bank. The company has raised $7.8 million to date, shows Crunchbase.
Ripple Labs, a three-year-old, San Francisco-based company behind a bitcoin-like technology that enables institutions to transfer money internationally, is about to close a $30 million round at a $100 million valuation, reports Venture Capital Dispatch. Investors include Andreessen Horowitz, Google Ventures, IDG Capital Partners and previous backers, which include Bitcoin Opportunity Fund, Camp One Ventures, Core Innovation Capital, FF Angel, Lightspeed Venture Partners, Vast Ventures and Venture51. To date, the company has raised $9 million across three rounds, shows Crunchbase.
TransferWise, a four-year-old, London-based company that uses peer-to-peer technology to allows individuals around the world to swap currencies without incurring bank transfer fees, has raised $58 million in new funding led by Andreessen Horowitz. The company’s backers also include Valar Ventures and billionaire Richard Branson. Dealbook has more here.
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New Funds
Banyan Capital, a young, China-focused venture capital firm, has reportedly closed on $362 million for its second fund, according to China Money Network. The fundraising process took little more than one month(!), according to the report. Banyan focuses on seed-stage and growth-stage investments in China’s technology, media and telecom sector. Last week, it backed Beibei, a nine-month-old, Hangzhou City, China-based mother and baby-focused e-commerce company that raised $100 million in Series C funding. Just one year ago, Banyan closed on $206 for its first venture capital fund. The firm’s founders were previously with IDG Capital Partners in China.
Horsley Bridge Partners, the 32-year-old, San Francisco-based investment firm, is raising a new venture fund of funds, according to an SEC filing that shows a $1 billion target.
iRobot, the 25-year-old, Bedford, Ma.-based company behind the Roomba vacuum cleaner (and bomb disposal robots, and other tech), is launching a venture capital firm and looking for a West Coast investor to head up the effort. TechCrunch has more here.
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IPOs
Box had quite a Friday. After raising $175 million in its IPO, its shares rose 66 percent to close at $23.23 after being priced at $14, giving it a valuation of $2.7 billion — slightly more than the $2.4 billion valuation it was assigned during its last private funding round last July.
Of the past 100 IPOs, nearly 60 percent have posted net losses during the last months.
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b
Revolution Analytics, an eight-year-old, Mountain View, Ca.-base open-source analytics company, has been acquired by Microsoft for undisclosed terms. According to Crunchbase, the company had raised $37.8 million from investors, including Intel Capital and North Bridge Venture Partners. TechCrunch has more here.
Strata Decision Technology, a 19-year-old, Chicago-based company that makes a cloud-based platform that’s used by more than 175 healthcare systems and 1,000 hospitals, has been acquired by publicly traded Roper Industries. Terms of the deal were not disclosed. The company had been acquired by the PE firm Veronis Suhler Stevenson back in 2011.
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People
AOL staffers are anticipating some layoffs as the company’s ad business becomes more reliant on programmatic (machine-driven) advertising, reports Recode. AOL is restructuring all over the place, in fact. TechCrunch reported last week that it’s also “preparing to lay off staff and close or fold up underperforming titles as part of a bigger restructuring aimed at simplifying [AOL] around ad tech, stronger content operations and video.”
Billionaire VC Vinod Khosla is still refusing to provide public access to a popular California surf spot that runs alongside his 89-acre, $32.5 million beach property, despite threats from California’s State Lands Commission that it may use powers never employed in its 77-year history to seize the land. Khosla has argued in court that the beach is privately owned, that there is no easement for the public to use the area and that development permits required by coastal regulations don’t apply to him. BusinessWeek has much more here.
Kleiner Perkins Caufield & Byers, facing gender-bias claims by ex-partner Ellen Pao, may not access performance reviews, complaints about Pao, and other personnel records it sought from her other employers, reports Bloomberg. In a tentative ruling last week, Judge Charles Geerhart said the firm’s subpoenas were too wide in scope or not relevant. Pao’s lawsuit is scheduled for trial on Feb 17.
Michael Mullany, the former CEO of software company Sencha, has joined Jafco Ventures as a venture partner. Jafco, an investor in Sencha, has also changed its name to Icon Ventures.
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Job Listings
Glassdoor is looking to hire a general counsel with public company experience. The job is in Mill Valley, Ca.
Soylent, which just scored $20 million in funding led by Andreessen Horowitz, is looking for a VP of finance. The job is in L.A.
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Essential Reads
Fortune takes a long look at the trials and tribulations of Jawbone, a company that, as an analyst told this reporter back in 2012, is “executing really well, but doesn’t have an exit strategy … The company is kind of in a pickle in terms of where do they go from here.”
The challenge for incumbents: that new expectations spread.
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Detours
The new thing: selling fully furnished homes to the affluent that look like they’ve been lived in for ages.
Twenty unbelievable photos of pollution in China.
How to get a copy of every tweet you’ve ever posted.
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Retail Therapy