Hi, everyone! We’re so excited to see some of you tomorrow at StrictlyVC’s first INSIDER series event. It’s sold out, but we do have good news for those who wanted to come and couldn’t be accommodated owing to space constraints. We’re now planning a second event at the top of San Francisco’s Transamerica building May 13 (thank you, Rembrandt Venture Partners), and a third event in Boston on June 4 at the expansive offices of OpenView Venture Partners. (Have you seen its roof deck? Let’s use it!)
We’ll have more details about both for you soon. In the meantime, we want to say one last giant thank you to Next World Capital for hosting us tomorrow at its beautiful space. Thanks, too, to our wonderful partners in this endeavor, Ballou PR and Standish Management.
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Top News in the A.M.
Thefts involving smartphones have declined dramatically in three major cities since manufacturers began implementing “kill switches,” authorities said yesterday. More here.
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IVP’s Sandy Miller on Big Banks: They’re “Ideal” Competition
Later this year, the peer-to-peer student loan startup Social Finance (SoFi), will likely go public. If it does, the company – whose marketplace enables college alumni to provide student loans at better rates – will join a line of online lenders in the portfolio of Institutional Venture Partners with similar plans. (IVP’s other investments include OnDeck, the small business lender, which went public in December, and Prosper Marketplace, a peer-to-peer lending platform that appears to be laying the foundation for an IPO later this year.)
Last week, we caught up with Sandy Miller, a longtime general partner at IVP who once managed 3i’s late-stage technology business, as well as cofounded the investment bank Thomas Weisel Partners. We talked about just how many online lending bets the firm might make – and whether those companies might wind up competing head-on in the not-too-distant future.
SoFi just raised $200 million. It’s reportedly valued at $1.3 billion and poised to go public. But student loans are just the beginning for the firm. Is IVP at all concerned that its portfolio companies will start knocking into each other?
All of our investments are completely different businesses. OnDeck is lending to small businesses, a market that the banks have really abandoned. Meanwhile, SoFi lends primarily to relatively recent, well-educated college graduates, refinancing their student loans as a next step in these young professionals’ careers. We don’t know what the businesses will do [going forward], but online lending is an enormous category; there’s plenty of room [for everyone].
Everyone is so confident that big banks like Wells Fargo will completely cede this territory. Why?
Regulation and litigation from the financial crisis is part of it. It’s also a matter of technology. Most of the big banks have been built up through a series of acquisitions, and all are dealing with legacy architectures and cumbersome bureaucracies. Because their cost structure is so high, they can’t compete. They reflexively look at small loans as not profitable, whereas small loans can be very profitable for younger, nimble companies using advanced technology.
IVP has placed numerous bets on online lending companies. Are you actively looking for more?
We have four online lending companies: OnDeck, Prosper, SoFi, and Opportune, which focuses on the underbanked Hispanic community. There’s nothing imminent [in terms of new investments], but we’re really happy with the four companies we’ve backed and we think that finance overall is one of the most attractive areas of new investment because of several factors. First, it’s an absolutely massive category. Also, it’s all digital, compared with some companies that have to ship stuff that’s delivered to your door. Third, the big banks are ideal companies to have as competitors for the reasons we’ve just discussed.
You say it’s all digital, but people still need to go to the bank on occasion. Do you think we’ll see more of these lenders lease space for marketing and other business purposes, as we’re seeing happen with online retailers?
A lot of businesses do benefit from both an offline and online presence. Opportune has locations in targeted geographies. The others [of our portfolio companies] don’t have any plans [to create storefronts] as far as I know, but the concept is a valid one and I do think more tech businesses will be marrying offline and online.
IVP has finance companies beyond online lending. How much of your time do you think you’ll spend looking at and potentially investing in new finance companies in 2015?
We don’t really know until the end of each year. We just look at the best companies. We’re roughly half consumer and half enterprise, and finance cuts across both. We have Personal Capital, for example, an online wealth management platform; and Klarna, for online payments in Europe; and the leading crowdfunding site Indiegogo. There’s quite a range.
Is IVP looking at international opportunities, or do your U.S.-based finance companies have you covered globally?
We generally focus here, but we do find companies in northern Europe that seem to meet our criteria. Regulations vary by country, even state by state in the U.S., so [for these U.S.-based companies to branch out globally] isn’t a trivial task. At the same time, it’s all digital, so these are all potentially global markets. I generally think they’ll move cautiously since regulations are different everywhere and there’s so much opportunity here.
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New Fundings
Angani, a two-year-old, Nairobi, Kenya-based company that claims to be the first public cloud infrastructure company in the region, has raised an undisclosed amount of seed funding led by Invested Development, with participation from Africa’s Talking, Savannah Fund, and Africa Angels Network.
Alice, a 2.5-year-old, New York-based platform that allows hoteliers to provide mobile services to their guests so they can secure tables, order tickets to shows and more, has raised $3 million in seed funding from the property management company Tishman Realty, 645 Ventures and numerous angel investors.
AppDirect, a 5.5-year-old, San Francisco, Ca.-based start-up focused on helping customers like ADP, Samsung, and Comcast sell software online, has raised $50 million in new funding led by earlier backer Mithril Capital Management, with participation from private equity magnate Henry Kravis and ContiGroup chairman and CEO Paul Fribourg. The company has now raised $105.8 million to date, shows Crunchbase. Dealbook has more here.
Bento, a 1.5-year-old, San Francisco-based company that offers businesses a full-featured Mastercard that allows them to set rules by employee, place, time and category, has raised $2.5 million in seed funding led by Anthemis Group. Other participants in the round include Blumberg Capital, LionBird and Pivot Investment Partners. More here.
Borro, a 6.5-year-old, U.K.-based online platform for luxury asset-backed lending, has raised $19.5 million in new funding co-led by the crowdfunding platform OurCrowd and Rocket Internet, with participation from earlier backers Canaan Partners, Eden Ventures and Augmentum Capital. The company has now raised $171.6 million altogether, most of it through a $112 million Series D round that closed a year ago.
Bottlenose, a four-year-old, L.A.-based data analytics startup, has raised $13.4 million in Series B funding led by KPMG Capital, with participation from Origin Ventures and earlier backers, including Lerer Hippeau Ventures, Transmedia Capital, ff Venture Capital, and others. The company has raised $17 million to date.
Capital Float, a two-year-old, Bangalore-based financial tech startup that wants to make it easier for small businesses in India to get loans, has raised $13 million in Series A funding led by SAIF Partners and Sequoia Capital, with participation from earlier backer Aspada. The company has raised $17 million to date.
ComparaGuru, a six-month-old, Mexico City, Mexico-based price comparison site that helps consumers and companies order a variety of financial products, has raised $4 million in funding from the Spanish venture capital firm Seaya Ventures.
EPatientFinder, a two-year-old, Austin, Tx.-based platform that connects patients with clinical trials, has raised $2.6 million in Series A funding through Parsons & Whittemore, alongside a group of angel investors. The company had previously raised $1.4 million in seed funding.
Faaso’s, a two-year-old, Pune, India-based Indian fast food chain that primarily sells wraps, has raised $16 million in Series B funding from Sequoia Capital and Lightbox Ventures. According to the outlet Inc42, the company also just raised $4 million in debt financing.
Fancy, a six-year-old, New York-based social shopping platform, has raised $20 million in Series D funding led by billionaire Carlos Slim, reports TechCrunch. Fancy has now raised roughly $124 million altogether, including from Allen & Co., General Catalyst Partners, and a long list of big-name angel investors, including entrepreneur Jack Dorsey.
Hammer & Chisel, a 2.5-year-old, San Francisco-based online gaming company, has raised an undisclosed amount of Series A funding from Tencent Holdings, Benchmark, and the accelerator 9+. TechCrunch has more here.
Inoviem Scientific, an 18-month-old, Strasbourg, France-based contract research biotech firm, has raised €500,000 ($566,000) in seed funding led by Cap Innov’Est, a $41 million seed-stage fund.
Lamudi, a two-year-old, Berlin-based real estate classifieds site serving emerging markets in Asia, South America and beyond, has raised $19 million in new funding led by Holtzbrinck Ventures, with participation from earlier backers Rocket Internet and Tengelmann Ventures. The company has now raised $25 million altogether, shows Crunchbase.
Locket, a two-year-old, San Francisco-based company whose mobile app pushes personalized news and other stories to users’ Android phone lock screens, has raised $3.2 million in seed funding, including from entertainer Tyra Banks, Turner Broadcasting, Great Oaks Venture Capital and numerous angel investors. The company has raised $3.7 million altogether, shows Crunchbase.
MineralTree, a five-year-old, Cambridge, Ma.-based company whose Web-based software helps companies manage their accounts payable, has raised $11.1 million in Series B funding led by the payments processor First Data Corp. Earlier backers .406 Ventures and Fidelity Growth Partners also joined the round, which brings the company’s total funding to $22.7 million..
Miovision Technologies, a 10-year-old, Kitchener, Ontario-based company that uses video to analyze traffic data, has raised $24 million in Series B funding led by MacKinnon, Bennett & Co., with participation from Investeco Capital, Renewal Funds, Plaza Ventures and Comerica.
Move Loot, a 1.5-year-old, San Francisco-based startup that helps sellers make money off their used goods by picking them up, taking pictures of them, storing them and delivering them to buyers once payment has been made, has secured $9 million led by Metamorphic Ventures. Other participants in the round include First Round Capital, Index Ventures, Great Oaks Venture Capital, IDG Capital Partners, and Sherpa Ventures. The company has now raised $11.8 million altogether, including from Y Combinator and Google Ventures.
New Matter, a 14-month-old, Pasadena, Ca.-based company at work on affordable 3D printers, has raised $6.5 million in Series A funding led by Alsop Louie Partners, with participation from Arden Road Investments, Dolby Family Ventures, First Round Capital, Idealab and frogVentures. GigaOm has more here.
NinePoint Medical, a 4.5-year-old, Cambridge, Ma.-based maker of medical devices for advanced optical imaging, has secured a $15 million venture loan facility led by Horizon Technology Finance Corporation. The company had previously raised $67 million from investors, including Corning, Third Rock Ventures, and Prospect Venture Partners.
Proletariat, a 2.5-year-old, Cambridge, Ma.-based multiplayer games maker, has raised $6 million in Series A funding led by Spark Capital, with participation from Atlas Venture and FirstMark Capital.
Quixey, a six-year-old, Mountain View, Ca.-based search engine that helps people discover the right mobile apps for their needs, is reportedly raising $60 million in Series D funding at a $600 million valuation led by the e-commerce giant Alibaba, with Twitter, SoftBank Corp., an investment platform controlled by investor George Soros, Goldman Sachs, and GGV Capital participating. The company has previously raised $74.9 million, including via a $50 million round in 2013 led by Alibaba.
Rally Bus, a four-year-old, New Haven, Ct.-based startup that offers crowdsourced event travel on luxury buses, has raised $1.25 million in seed funding from the YEI Innovation Fund (run by the Yale Entrepreneurial Institute), Connecticut Innovations, First Niagara Bank, and angel investors.
Sigfox a 5.5-year-old, Toulouse, France-based cellular network that aims to be a bigger player in the market for internet connected objects, has raised $115 million (€100 million) in Series D funding from earlier backer Partech Ventures, along with new investors, such as telecom operator Telefonica SA, Korea’s SK Telecom and Japan’s NTT DoCoMo. The company has now raised roughly $150 million altogether.TechCrunch has more here.
Team8, a months-old, Tel Aviv, Israeli-based cybersecurity startup foundry and think tank, has raised $18 million in Series A funding, including from Alcatel-Lucent, Bessemer Venture Partners, Cisco Investments andInnovation Endeavors. Venture Capital Dispatch has more here.
Thirty Labs, an eight-month-old, New York-based video-focused startup studio, has raised $2 million in funding from a long list of investors, including Elisabeth Murdoch,Tumblr founder David Karp, Bloomberg Beta, and Advancit Capital. TechCrunch has more here.
Wandera, a 2.5-year-old, San Francisco-based secure mobile gateway company, has raised $15 million in new funding led by 83North, with participation from Bessemer Venture Partners. The company has raised $25 million altogether, shows Crunchbase.
Zig Bang, a Seoul, Korea-based apartment hunting app, has raised $18 million from Company K Partners and Stone Bridge Management. The company had reportedly raised $8.21 million from investors previously.
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New Funds
Lux Capital, a 15-year-old venture capital firm that’s focused on physical and life sciences and has offices in New York and Menlo Park, Ca., is looking to raise up to $350 million for its fourth fund, shows an SEC filing. StrictlyVC talked about the firm and how it works with partner Shahin Farshchi last summer.
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New Fundings
PGI Specialty Materials, a 5.5-year-old, Charlotte, N.C.-based producer of polymer-based personal and industrial nonwoven materials (they’re used in everything from diapers to those indestructible disinfectant wipes), has registered plans to raise up to $100 million in an IPO. The company is owned by Blackstone. Reuters has more here.
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Exits
Curby, an L.A.-based valet parking app that allows its customers to monitor cars and staff in real time, has been acquired by a local competitor, CurbStand, in a cash and stock deal whose value isn’t being disclosed. TechCrunch has more here.
Mortar Data, a 4.5-year-old, predictive analytics company, has been acquired for undisclosed terms by Datadog, a 4.5-year-old company whose software helps customers monitor what’s happening within their IT infrastructures. According to TechCrunch and Crunchbase, Mortar Data had raised just $3 million in equity and debt, while Datadog has raised $53.4 million from a long list of investors, including Amplify Partners, IA Ventures, OpenView Venture Partners, RTP Ventures, and Index Ventures.
Pentaho, a 10.5-year-old, Orlando, Fl.-based big-data platform-integration and business-analytics startup, has been acquired by Hitachi Data Systems, a wholly owned subsidiary of Hitachi Ltd, for an undisclosed amount that the companies are describing as the “the largest private big data acquisition transaction to date.” Crunchbase shows Pentaho had raised $72 million from investors, including DAG Ventures, New Enterprise Associates, Index Ventures, and Benchmark.
Rocket Internet has agreed to purchase two online food takeaway operators in the Middle East. It will pay around 150 million euros ($169 million) to acquire Talabat, based in Kuwait. The company will become part of Rocket’s newly created Global Online Takeaway Group. Rocket also said its 50-percent-owned Foodpanda had struck a deal to buy24h.ae, a strong player in the United Arab Emirates. Reuters has more here.
StudioKUMA, a Hong Kong-based company whose app filters out marketing calls and suspicious numbers, has been acquired for undisclosed terms by Gogolook, a subsidiary of Korean Internet giant Naver. TechCrunch has more here.
Voltage, a 13-year-old, Cupertino, Ca.-based encryption and tokenization technology company, is being acquired by Hewlett-Packard for undisclosed terms. Crunchbase shows the company had raised at least $27.6 million from investors, including Icon Ventures, Siemens Venture Capital, Trident Capital, Hummer Winblad Venture Partners, Morgenthaler Ventures, and Menlo Ventures.
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People
Erik Bardman is the new chief financial officer of the software tools maker Atlassian. Bardman had previously served as the CFO of Roku and Logitech, among other past jobs. Atlassian’s former CFO, Alex Estevez, is now a venture advisor with Accel Partners.
Anthony Noto, the top Goldman banker turned Twitter CFO, was unpleasantly surprised yesterday when his Twitter account was hijacked, sending his 13,000 followers roughly 300 spam tweets over the course of 20 minutes. The Verge has more here.
Twitter CEO Dick Costolo, Google CEO Larry Page, Nest Labs CEO Tony Fadell, former Microsoft CEO Steve Ballmer, Sun co-founders Scott McNealy and Bill Joy, and Craigslist CEO Jim Buckmaster are among other Detroit natives to take over the tech world. As Detroit “finds its footing as a modern city,” here’s what many of them have to say about what’s happening in their hometown.
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Jobs
Ubeam, the wireless power startup, is in the market for a VP of manufacturing and production. The job is in L.A.
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Essential Reads
The mathematical theory cited by analysts to justify concerns over Apple’s growth potential doesn’t really exist, says Apple CEO Tim Cook.
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Detours
How to be a rock star for $290.
Timelapse video of a slow-moving landslide.
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Retail Therapy
The $100 wallet.
Egg balls. Because.