It is Wednesday, phew. (This time change is still kicking our arse.)
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Top News in the A.M.
Instagram may change your feed, personalizing it with an algorithm.
First, Amazon patented one-click purchasing buying. Now it’s pursuing a patent that will allow customers to pay by taking selfies.
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Super Hot Korea Gets a New Venture Fund
Korea is sizzling, and the fact isn’t lost on Altos Ventures or its backers. The early-stage venture firm, with an office on Sand Hill Road and in Seoul, has just raised an oversubscribed $110 million fund to invest exclusively in the country, the second fund of its type for Altos, which raised its last Korea-focused fund with $60 million in 2013. (The firm has also raised four U.S.-focused funds over the last decade.)
It’s easy to understand LPs’ enthusiasm. Korea boasts the world’s 12th economy, with more than 50 million inhabitants and GDP per capita of roughly $25,000, according to the World Bank. Its inhabitants are entrepreneurial, with 28 percent of the population self-employed versus 10 percent in the U.S. Korea also has among the world’s fastest and mostly broadly deployed broadband.
Also very notably, Korea has produced more than a dozen Internet companies worth more than a billion dollars over the last decade or so, including the web search giant Naver, a now publicly traded company valued at $17 billion; the web search company Daum Kakao, formed when Korean internet firm Daum merged with domestic messaging app company Kakao in a $2.9 billion deal in 2014 (it’s now valued at $5.5 billion); and Yello Mobile, whose mobile apps business was valued at $4 billion during its most recent funding round in December.
Yesterday, we talked with Altos Ventures managing director Anthony Lee to get a better picture of what’s going on, and how his firm is going to invest its new fund.
When and why did you start investing in Korea?
About 10 years ago. We started seeing this opportunity that was very much overlooked in many ways. Everyone knows the country for LG and Samsung, but there are now a lot of very real, billion dollars companies, and there’s almost zero Western capital in those companies. Many bootstrapped themselves. They were almost entirely missed by VCs in Silicon Valley.
That must be changing. What other investors are you starting to see who you didn’t see five years ago?
There’s now a domestic VC market, investing $1.5 billion annually in all sorts of things, from Internet stuff to hardware, movies, medical, and manufacturing. We’re seeing a lot more foreign attention now, too. At the later stages, you’re seeing Chinese hedge funds, Japanese corporates — Softbank invested $1 billion in [our portfolio company, the e-commerce startup] Coupang last year. Goldman Sachs is coming in. Blackrock also led an investment in Coupang in late 2014. At the earlier stage, you’re also starting to see, Japanese, Chinese, and more U.S. investors start to venture over there.
There’s a much stronger focus on profitability in Korea than in the U.S., is that right?
Yes. Korean venture has been more merchant banking and corporate in its nature, meaning it invests for very quick returns. The government is a large LP in many funds and they’ve [accordingly been] optimized for lower risk. We sometimes find ourselves pushing companies in the direction of growth and not profitability. At the same time, of the 30 companies we’ve invested in there, we’ve only had one loss. It’s a bit emblematic of the way Korean entrepreneurs work. They hate to fail.
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New Fundings
Credly, a 3.5-year-old, New York-based online platform for verifying, sharing and managing digital credentials and badges (to recognize students or employees, for example), has raised $2.5 million in seed funding co-led by University Ventures and New Markets Venture Partners, with participation from Lumina Foundation Venture Fund, City & Guilds Group, and Lion Brothers Company. EdSurge has more here.
Crowdstreet, a three-year-old, Portland, Ore.-based crowdfunding marketplace that connects accredited investors with real estate investments, has raised $3.5 million in Series A funding led by Rally Ventures, with participation from seed investors Green Visor Capital, Seven Peaks Ventures and Portland Seed Fund. The company has now raised $4.8 million altogether. GeekWire has more here.
eeGeo, a 5.5-year-old, U.K.-based startup focused on interactive outdoor and indoor 3D mapping, has raised $5 million in funding led by NetSol Technologies, a company that provides IT solutions to the asset finance industry. TechCrunch has more here.
HealthTell, a five-year-old, San Ramon, Ca.-based diagnostics company that aims to commercialize panels for tests for autoimmune diseases like lupus, has raised $26 million in Series B funding led by Third Point Ventures. More here.
InstaRem, a two-year-old, Singapore-based international remittance payments startup, has raised $5 million in Series A funding led by Vertex Ventures, with participation from Fullerton Financial Holdings and existing investor Global Founders Capital. TechCrunch has more here.
Linmon Pictures, a 1.5-year-old, Shanghai, China-based boutique entertainment studio, has raised $77 million in Series B funding led by the Chinese private equity firm Hony Capital, with participation from Tencent and Mango V Foundation. DealStreetAsia has more here.
Prenetics, a seven-year-old, Hong Kong-based DNA testing technology company, has raised $10 million in Series A funding led by Ping An Ventures, the venture arm of one of China’s largest insurance groups, with participation from Venturra Capital, 500 Startups, COENT Venture, and Capital Union Investments. TechCrunch has more here.
Ring, a five-year-old, Santa Monica, Ca.-based company that makes Wi-Fi-connected video doorbells that allow users to remotely see who’s standing at their door from their phones, has raised $61.2 million in Series C funding led by Kleiner Perkins Caufield & Byers, with participation from Richard Branson. The round brings the company’s fundraising total to $93.7 million. Fortune has more here.
Striim, a nearly four-year-old, Palo Alto, Ca.-based streaming analytics and intelligence platform, has added $10 million in funding to its Series B round, which now stands at $30 million. The fresh capital came from Atlantic Bridge Capital. Earlier investors include Intel Capital, Summit Partners, Panorama Venture Partners, Regis McKenna and Frank Caufield. More here.
Usermind, a nearly three-year-old, Seattle-based enterprise business operations platform, has raised $14.5 million in Series B funding led by Menlo Ventures, with participation from earlier backers Andreessen Horowitz and CRV. GeekWire has more here.
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New Funds
Contour Venture Partners, a 10-year-old, New York-based early-stage venture capital firm, has closed its third fund with $56 million in capital commitments, including from the New York State Common Retirement Fund. (The firm says it was targeting $50 million.) Contour also raised a $25 million “opportunity” fund to invest in the later rounds of its more mature portfolio companies. Contour — which focuses on financial services, enterprise SaaS and digital media sectors, with a particular emphasis on startups in New York City — now has $145 million under management. More here.
New Crop Capital, a seven-month-old, Washington, D.C.-based venture capital fund that invests exclusively in plant and culture-based alternatives to animal agriculture, along with tech platforms that make plant-based eating easier, is announcing a $25 million, debut seed-stage fund. More here.
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Exits
Verizon has acquired Volicon, a 12-year-old, Burlington, Ma.-based maker of video capture and monitoring software for TV broadcasters, for undisclosed terms. According to CrunchBase, Volicon had raised an undisclosed amount of funding from Globespan Capital Partners, Brookline Capital Partners, and Naftali Investments. TechCrunch has more here.
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People
Etsy, the Brooklyn-based online marketplace, just expanded paid parental leave benefits for its 800-plus employees worldwide to 26 weeks, effective April 1. The company says it will no longer distinguish between the concept of “primary” and “secondary” caregivers, either.
Noah Lichtenstein, a business development executive who joined Cowboy Ventures as a partner in January 2013, announced on Facebook yesterday that he’s leaving his full-time role and transitioning to venture-partner.
Pope Francis already tweets and may soon start posting on Instagram, too. Italian newswire ANSA reports that the pontiff will make his Instagram debut on March 19 using the handle Franciscus.
Nick Tomaino, a former business development executive with Coinbase, is joining the Russia-based venture firm Runa Capital as a principal in San Francisco (h/t: Fortune’s Dan Primack).
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Data
Lex Machina just released its annual patent litigation year-in-review report. Some highlights: 5,819 patent cases were filed in 2015, up 15 percent from 2014; 43.7 percent of all 2,540 patent cases filed in 2015 were filed in the Eastern District of Texas; Samsung overtook Apple as the most-sued patent defendant in 2015 (64 cases versus 57 for Apple); Amazon, HP, LG Electronics, Dell and HTC are among the top patent defendants. More here.
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Essential Reads
Venture capital’s answer to high-priced housing: dorms for grown-ups.
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Detours
Turning rescue dogs into Broadway stars.
Findings from the newest World Happiness Report.
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Retail Therapy