Monthly Archives: January 2014

StrictlyVC: January 31, 2014

110611_2084620_176987_imageIt’s Friday, good people. Hope you have a wonderful weekend, and we’ll see you back here next week.

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Top News in the A.M.

Ouch. Consumer Intelligence Research Partners came out with its latest numbers on mobile market share in the United States yesterday and found that BlackBerry devices accounted for zero percent of all smartphone activations in the fourth quarter of last year.

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An Invite-Only Social Network Turns to Crowdfunding

You may remember Erik Wachtmeister from his days at ASmallWorld, the exclusive, invitation-only social network community that he founded with his wife in 2004. The son of an ambassador and a countess, the aristocratic Wachtmeister disappeared from view after selling a majority stake in the business to movie mogul Harvey Weinstein, who elbowed Wachtmeister aside, tanked the business, and later sold it to a Nestlé heir, who has recently run into troubles of his own.

Now Wachtmeister is back and taking another shot at the genre with his newest venture, Best of All Worlds, an 18-month-old, invitation-only social network that’s even harder to join. It features a new wrinkle, though: starting next week, accredited investors will be able to buy their way into the platform via a crowdfunding campaign. “It’s a way for us to widen our base of investors, stakeholders and global ambassadors of the brand,” says Wachtmeister. We spoke yesterday morning; our conversation has been lightly edited for length.

We talked about Best of All Worlds in July 2012, when it was set to launch. What’s been happening since?

It’s been in private beta. We launched it with 35,000 people, a relatively small group in global terms. And we’ve since been evaluating how people use it, what features they most like, whether the user interface is intuitive or not and making adjustments.

Why did you decide to form another invitation-only social network?

Not so much to keep it exclusive but to maintain an intimate space where people can network more openly. You can’t just walk up to someone at an airport, but if you’re in a private venue, the social rules are different; it’s more acceptable to walk up to someone.

How does the admittance process work?

It’s very democratic. Members decide who can be invited, but not everyone gets invitation rights, so there’s an algorithm that [decides how many invitations are allotted those with invitation privileges]. It’s to prime it and hopefully ensure that it grows in the right direction. We don’t want an overwhelming amount of students, for example. We want a good mix geographically, professionally, age-wise.

Some might interpret this as yet another way for the “1 percent” to avoid everyone else.

Not at all. It’s very simple. All we’re doing is creating what exists in real life online. People don’t necessarily want to pass out their business cards at Grand Central Station; that’s not normal.

We want to grow our community in an orderly fashion, where you’re starting with people who have a lot of affinity for each other and know the same people and have similar appreciations for what’s around them. Our goal is to have an eclectic mix of people from all over the world, from all kinds of backgrounds, but there should be a certain commonality of interest.

You’re turning to crowd-funding. Will these investors who may well be strangers to your other members be able to access the site?

Anyone who invests will of course be able to become a member. At a very minimum, investors should be able to able to find their way around the site.

Why do it?

We see it as complementing our fundraising strategy with giving our members and other accredited investors the opportunity to “take a bet” on a private company.

Which crowdfunding platform are you using and what’s the minimum investment?

London-based crowdcube.com is doing the deal. The minimum size is $1,000, but we’re limiting the number of investors to 200. Our goal is to raise around $500,000.

Are you also talking to VCs?

We’re very open to it, though VCs tend to want to see that hockey stick [growth] being realized already – they want huge traction – and we’re not quite there yet.

What makes you think you can compete with Facebook?

I think people are sick of Facebook. They use it like a directory, to look up people, and if they’re bored, they’ll look to see what people did yesterday. It’s for vanity and self-expression. We’re more a utility.

Once we have critical mass, for example, we’ll create verticals for groups of people who share the same passions. Facebook Groups are great if you’re organizing something like a bachelor party but not if you want to hook up with people with a strong passion or knowledge in a given area. Facebook has several million of these groups, with an average size of 20 members; our goal is to have a few dozen “worlds” with tens of thousands of people in each world. It’s a completely different concept.

JamBase

New Fundings

BlueCava, a 3.5-year-old, New York-based company that sells online audience management and measurement services, has raised $13 million in funding from S3 VenturesPerformance Edge Partners and Zeitgeist Capital. The company has raised $36 million to date, according to Crunchbase.

Bow & Drape, a two-year-old, New York-based fashion technology startup, has raised $1.2 million in seed funding led by VegasTechFund. Other participants in the round included Great Oaks Venture Capital,Triple Point Capital, and StubHub co-founder Jeff Fluhr. The Journal takes a look at what the company is doing exactly here.

Cleverbug, a nearly three-year-old, Dublin, Ireland-based “social gifting” company that produces online photo cards and other gifts, has raised $6 million in financing led by Delta Partners. To date, the company has raised $8 million.

Enigma, a year-old, New York-based search and discovery platform for public data, has raised $4.5 million in Series A funding led by Comcast Ventures, with participation from American Express VenturesCrosslink Capital and the New York Times Company.

Moontoast, a four-year-old, Boston-based ad platform that helps brands get the most out of Facebook, has raised a $4.5 million extension to its Series B funding, secured early last year. The new investment was made by the Martin Companies, an early-stage firm based in Nashville that also led a $5 million round in Moontoast last year. The company has has raised $15.5 million altogether, shows Crunchbase.

One Kings Lane, the 4.5-year-old, San Francisco-based online home decor retailer, has raised $112 million in new funding led by Mousse Partners, with Fidelity and one other (unnamed) large institutional firm participating alongside earlier investors. The investment gives the company a $912 million post-money valuation. One Kings Lane has raised $229 million altogether, including from Kleiner Perkins Caufield & Byers,Greylock PartnersInstitutional Venture Partners and Tiger Global Management.

Practically Green, a 3.5-year-old, Boston-based company whose online tools help companies manage their sustainability programs, has raised $3 million in Series A funding. The round included CommonAngelsPan Asia SolarClean Energy Venture Group and Launchpad Venture Group. The company has raised $4.75 million so far.

Qordoba, a two-year-old, Dubai-based company that provides localization services for companies like Google and LinkedIn, has raised $1.5 million in Series A funding from Silicon Oasis Investments and MENA Venture Investments.

Zopa, an 8.5-year-old, London-based peer-to-peer lending platform, has raised $25 million in funding from Arrowgrass Capital Partners, a European-focused investment firm headquartered in London. Zopa, whose earlier backers include BenchmarkBessemer Venture Partners,Augmentum Capital and Wellington Partners, has now raised roughly $56 million altogether.

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New Funds

CrunchFund, 2.5-year-old, San Carlos, Ca.-based early-stage venture firm cofounded by Michael Arrington, is in the market for a second fund, according to an SEC filing that shows a target of $40 million. Fortune’s Dan Primack reports that CrunchFund already has held around a $25 million first close for the new fund, which includes a new commitment from founding investor AOL. CrunchFund has made more than 115 investments, including in Airbnb, Uber, and Yammer, acquired by Microsoft for $1.2 billion in 2012. Among its most recent investments is the video-sharing app Mindie.

Jerusalem Venture Partners is raising a new, $120 million cyber security fund, and Cisco plans to invest tens of millions of dollars in it, reports Haaretz.

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IPOs

JD.com, one of China’s biggest e-commerce companies, has filed with the SEC to raise $1.5 billion in a U.S. IPO. Formerly known as 360buy.com, the company is the second biggest e-commerce company in China and a rival to the e-commerce giant Alibaba Group. Dealbook has much more here.

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Exits

Incredible Labs, a three-year-old, San Francisco-based company that had developed a mobile personal assistant app called Donna, has beenacquired by Yahoo, which is shutting down Donna and bringing five of Incredible Labs’s seven employees onboard. Other terms of the transaction were not disclosed. Incredible Labs had raised $2.5 million from investors, including Khosla VenturesBetaworksWebb Investment NetworkCrunchFund, and Ashton Kutcher, among other angel investors.

LoopFuse, a six-year-old, Atlanta-based social analytics platform, has been acquired by marketing automation platform Salesfusion for an undisclosed amount. Two weeks ago, Salesfusion, also based in Atlanta, had raised $8.25 million in Series B funding, including from Noro-Moseley PartnersHallett Capital and BLH Venture Partners; it has raised roughly $10 million altogether. LoopFuse, meanwhile, had raised $1.4 million from True Ventures in 2009.

NaturalMotion, a 13-year-old games company with offices in Oxford, England and San Francisco, has been acquired by Zynga for $527 million in cash and stock. Among other things, NaturalMotion makes a popular app called “Clumsy Ninja” that was released late last year. Alongside news of the acquisition, Zynga also announced it was laying off 314 employees, representing 15 percent of its staff, as part of a cost reduction plan designed to save the money up to $35 million.

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People

Salesforce founder Marc Benioff tells the Journal how to address tensions in San Francisco: “I think these [Google, Facebook, and other tech company] buses — which if you hang out in the Mission, [they come] every five minutes — they’ve got to be massively regulated, we have toget them off our streets.”

The New York-based early-stage venture firm ff Venture Capital has promoted three employees: Ryan Armbrust, who joined the firm in 2012 from the technology transfer office of Columbia University, has been promoted from associate to director; Katie Frankel, who joined the firm in 2010, has been promoted from associate to director of community management; and Paul Bianco, who joined the firm from insurer AXA Equitable a year ago, has been promoted from analyst to associate.

Jason Kilar, former head of Hulu is back with a new stealth startup called The Fremont Project, and according to Re/code, its app will offer a mix of magazine and newspaper content and videos videos from which readers will pick and choose.

Bill Krause, the cofounder of 3Com, is Andreessen Horowitz‘s newest special advisor, the firm revealed in an interview with Krause yesterday. Krause is also affiliated with the powerful buyout firm The Carlyle Group, where his title is “operating executive” to Carlyle’s technology and business services group.

Josh Miller is taking on a part-time role as a venture partner atBetaworks in New York, the outfit announced yesterday. Miller founded Branch Media, acquired by Facebook this month for a reported $15 million. Betaworks was an investor and Miller and his team worked out of Betaworks’s offices for roughly nine months. Miller and his New York-based team are now forming a new “Conversations” group inside of Facebook to help users connect around their interests.

Could the long wait soon be over? According to Bloomberg’s sources,Microsoft‘s board is on the verge of annointing Satya Nadella, the company’s enterprise and cloud chief, as its newest CEO. More here.

Each new year, Facebook CEO Mark Zuckerberg chooses a new goal for himself. One year the goal was to learn Mandarin; another year, it was to only eat meat that he’d killed himself. In 2014, his goal is to write a thank-you note every day.

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Job Listings

Speaking of promotions at ff Venture Capital in New York, the firm is looking for a new analyst. Apply here.

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Data

It’s the Super Bowl this weekend, which means it’s also time for the Super VC Bowl, brought to you by PitchBook. Witness its fun look at the 2013 venture activity of the competing teams’ home states. Go Washington! Wait, go Colorado! Oh, forget it. We can’t muster any real enthusiasm for this one. (Sorry.)

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Essential Reads

Nest‘s team is becoming Google‘s core hardware group, reports TechCrunch.

Amazon is planning to offer a checkout system to retail stores later this year. But Amazon’s bricks-and-mortar ambitions may go far beyond payments.

There are very few things the public sector can do to encourage entrepreneurship, argues a new Kauffman Foundation study.

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Detours

A new paper looks at alcohol consumption and voting patterns from 1952 to 2010, finding that as states become more liberal politically, beer and spirit consumption increases.

Forgotify: The tool for discovering Spotify’s four million unheard (like, zero-play) tracks.

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Retail Therapy (Super Bowl Edition)

Maple Bacon Coffee Porter. Serve it to fans of the opposing team and have the last laugh!

Best Buds App, to help you locate the good stuff in Denver. (This announcement constitutes neither an endorsement nor a recommendation.)

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An Invite-Only Social Network Turns to Crowdfunding

Erik_Wachtmeister.SquarecropYou may remember Erik Wachtmeister from his days at ASmallWorld, the exclusive, invitation-only social network community that he founded with his wife in 2004. The son of an ambassador and a countess, the aristocratic Wachtmeister disappeared from view after selling a majority stake in the business to movie mogul Harvey Weinstein, who elbowed Wachtmeister aside, tanked the business, and later sold it to a Nestlé heir, who has recently run into troubles of his own.

Now Wachtmeister is back and taking another shot at the genre with his newest venture, Best of All Worlds, an 18-month-old, invitation-only social network that’s even harder to join. It features a new wrinkle, though: starting next week, accredited investors will be able to buy their way into the platform via a crowdfunding campaign. “It’s a way for us to widen our base of investors, stakeholders and global ambassadors of the brand,” says Wachtmeister. We spoke yesterday morning; our conversation has been lightly edited for length.

We talked about Best of All Worlds in July 2012, when it was set to launch. What’s been happening since?

It’s been in private beta. We launched it with 35,000 people, a relatively small group in global terms. And we’ve since been evaluating how people use it, what features they most like, whether the user interface is intuitive or not and making adjustments.

Why did you decide to form another invitation-only social network?

Not so much to keep it exclusive but to maintain an intimate space where people can network more openly. You can’t just walk up to someone at an airport, but if you’re in a private venue, the social rules are different; it’s more acceptable to walk up to someone.

How does the admittance process work?

It’s very democratic. Members decide who can be invited, but not everyone gets invitation rights, so there’s an algorithm that [decides how many invitations are allotted those with invitation privileges]. It’s to prime it and hopefully ensure that it grows in the right direction. We don’t want an overwhelming amount of students, for example. We want a good mix geographically, professionally, age-wise.

Some might interpret this as yet another way for the “1 percent” to avoid everyone else.

Not at all. It’s very simple. All we’re doing is creating what exists in real life online. People don’t necessarily want to pass out their business cards at Grand Central Station; that’s not normal.

We want to grow our community in an orderly fashion, where you’re starting with people who have a lot of affinity for each other and know the same people and have similar appreciations for what’s around them. Our goal is to have an eclectic mix of people from all over the world, from all kinds of backgrounds, but there should be a certain commonality of interest.

You’re turning to crowd-funding. Will these investors who may well be strangers to your other members be able to access the site?

Anyone who invests will of course be able to become a member. At a very minimum, investors should be able to able to find their way around the site.

Why do it?

We see it as complementing our fundraising strategy with giving our members and other accredited investors the opportunity to “take a bet” on a private company.

Which crowdfunding platform are you using and what’s the minimum investment?

London-based crowdcube.com is doing the deal. The minimum size is $1,000, but we’re limiting the number of investors to 200. Our goal is to raise around $500,000.

Are you also talking to VCs?

We’re very open to it, though VCs tend to want to see that hockey stick [growth] being realized already – they want huge traction – and we’re not quite there yet.

What makes you think you can compete with Facebook?

I think people are sick of Facebook. They use it like a directory, to look up people, and if they’re bored, they’ll look to see what people did yesterday. It’s for vanity and self-expression. We’re more a utility.

Once we have critical mass, for example, we’ll create verticals for groups of people who share the same passions. Facebook Groups are great if you’re organizing something like a bachelor party but not if you want to hook up with people with a strong passion or knowledge in a given area. Facebook has several million of these groups, with an average size of 20 members; our goal is to have a few dozen “worlds” with tens of thousands of people in each world. It’s a completely different concept.

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StrictlyVC: January 30, 2014

110611_2084620_176987_imageHi, Happy Thursday, everyone!

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Top News in the A.M.

The PC may be dying, but tablet growth is slowing, too, as saturation sets in.

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Swell, a Pandora for News Radio

It’s hard to find an overlooked niche, but Palo Alto-based Concept.io may have found one with Swell, a seven-month-old smartphone app focused on streaming personalized news radio.

Unlike competitors whose users choose what they want to hear, Swell is a discovery service that learns users’ listening preferences over time and pushes them content they’re liable to enjoy. Don’t like what’s steaming? Swipe, it’s on to the next story.

The app is easy, even delightful, particularly for fans of NPR, the BBC or Comedy Channel — just three of Swell’s growing number of content partners.

The question is whether young app users will embrace it in large enough numbers. Pew Research Center’s recent surveys find that while nearly 60 percent of Baby Boomers say they enjoy following the news “a lot,” the number drops to 45 percent of Gen Xers and just 29 percent of Millennials, a generational difference that has remained virtually unchanged over years of surveys. (When it comes to news radio, specifically, 38 percent of Gen-Xers and 27 percent of Millennials tell Pew they’ve consumed news radio as recently as “yesterday.”)

To learn more about who’s using the app and when and what’s next, I caught up with Concept.io founder and CEO Ram Ramkumar, whose last company, SnapTell, sold to Amazon in 2009. Our chat has been edited for length.

How did the idea of Swell come about?

We really wanted to build a product that people would use every day and that would really engage users and make use of their time when they’re driving or exercising – time that’s underutilized, generally.

Much of product’s allure is that you just turn it on, like the music discovery service Pandora. Broadly speaking, how does the personalization technology work?

It’s complicated. Let’s say you’re interested in startups, and perhaps you love long content in the afternoon and shorter content in the morning. Well, we have to manage the freshness of the content, which is unique to the spoken word. If you think about it, music is relatively evergreen, but with news or stories, you don’t want to hear something that’s stale, so it’s a difficult problem. We’re shifting through thousands of individual tracks and finding the ones that you most want.

Are there any humans involved?

We have an audio curator who comes from the radio world and curates the content that goes into Swell at a program level. After that, an algorithm kicks in your preferences, so someone who loves the “Freakanomics Radio” show might like an Economist podcast. Then, the most powerful element comes into play, which is the community network effect, where what Swell’s hundreds of thousands of users love gets automatically promoted — and what they don’t love is less likely to show up in your queue.

So Swell has hundreds of thousands of users?

Yes, hundreds of thousands and not millions yet, but it’s growing gradually. And we have really strong engagement. We see more than 40 minutes of listening per day and over four hours of listening per week. There’s a big uptick in the morning and also in the afternoon, when people are commuting.

And eventually, you’ll insert ads into the stream, a la Pandora?

Right. Ads and subscriptions are the way to go, though there are also special things you can do, like offering users access to their entire listening histories so they can search through what they’ve listened to in the past. So we can do premium features along with advertising as it gets to critical mass. What we’re working on next is adding identity and a social layer to the product, so you can sign into Swell and see what your friends are listening to and share.

You raised $5.5 million from Google Ventures and others last summer. Is that expected to last you a couple of years? Are you interested in raising more yet?

We’ve had interest and continue to have interest. Our A round was preemptive – someone called and wanted to invest — and there’s a possibility that that will happen again. But we’re not looking to raise money.

JamBase

New Fundings

Blue Bottle Coffee, the 12-year-old, Oakland, Ca.-based specialty roaster, has raised $25.75 million from a “range of high-profile Internet players” and numerous clients of Morgan Stanley Investment Management, reports Re/code. The company has now raised roughly $45 million altogether, including from Google VenturesIndex VenturesTrue VenturesKevin SystromEvan WilliamsChris Sacca and skateboarding star Tony Hawk.

Daily Secret, a three-year-old, New York-based digital media startup, has raised Series B funding led by PanAfrican Investment Co., founded byRichard Parsons and Ronald Lauder. Return backers Greycroft Partners and e.Ventures also participated in the round. The company isn’t reporting the amount, but StrictlyVC had flagged a filing for this round in early December that showed $1.25 million in new funding. Daily Secret, which emails users a daily “best kept secret” about their favorite cities, has raised $3.1 million altogether.

Flat World Education, a 6.5-year-old, Washington, D.C.-based education content and software startup, has raised $9.5 million led by Bessemer Venture Partners. Earlier investors Valhalla PartnersTribeca Venture PartnersPenguin Random House Holdings and Bertelsmann Digital Media Investments, also participated in the funding.

Guardly, a 3.5-year-old, Toronto-based company whose mobile safety apps are designed to help schools, corporations, healthcare organizations, transit systems and municipalities, communicate more effectively during emergency situations, has raised $1.45 million in seed funding led by Freestyle CapitalGolden Venture Partners and MaRS Investment Accelerator Fund also participated in the round.

Origami Logic, a 2.5-year-old, Menlo Park, Ca.-based company that’s developing a visual, self-service analytics platform specifically for marketers, has raised $15 million in Series B funding led by Jafco Ventures. Earlier investors Accel Partners and Lightspeed Venture Partners also participated in the round, which brings Origami’s total funding to date to roughly $24 million.

Versa, a 2.5-year-old, New York-based company that designs interactive media experiences for advertisers — including sponsored products that run in major papers like the Houston Chronicle, has finished raising a $2 million seed round led by the Omidyar Network. Others to participate in the round included the James L. Knight Foundation and Quotidian Ventures. The company’s earlier investors include Digital News VenturesComcast VenturesBrooklyn Bridge VenturesLiberty City Ventures and Gabriel Investments.

ZappRx, a two-year-old, Cambridge, Ma.-based platform for electronic prescriptions, has raised $1 million in seed funding led by earlier investorAtlas Venture. The funding also included SR One, and individual investorsTerry MeguidDavid HamamotoSean Trigony and James Glimm. The company has raised $2.2 million altogether so far.

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New Funds

China-focused venture firm Banyan Capital has closed on $206 for its first venture capital fund, according to China Money Network. The fund will focus on technology, media and telecommunications startups. The firm’s founders were previously with IDG Capital Partners in China.

A new startup accelerator, Boomtown, is launching in Boulder, Co. to help nurture new Internet, mobile and software startups. Atlanta-based venture capital firm Farmore Capital Group is the lead investor.

Anil Joshi, who previously headed Mumbai Angels network, is raising a$25 million fund designed to make pre-Series A investments. Called Dev Venture Fund, the vehicle will back 15 to 20 companies with checks in the range of $300,000 to $2 million. Joshi became the president of the angel investors network two years ago. He held a number of operating roles earlier in his career, including as a marketing officer at the Mumbai-based rayon filament yarn producer Century Rayon.

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IPOs

Ultragenyx Pharmaceutical, a 3.5-year-old, Novato, Ca.-based rare drug developer, has increased its IPO offering price to $19 to $20 per share, up from $14 to $17 per shape. It’s hoping to raise as much as $98 million from the sale of 4.8 million shares this week. The company’s biggest backers are TPG, which owns 13.2 percent, Beacon Bioventures, which owns 13.2 percent, HealthCap, which owns 11.7 percent, Adage Capital Partners, which owns 7.4, Capital Research Global Investors, which owns 6.4, and A.M. Pappas Life Science Ventures, which owns 5.9 percent.

FierceBiotech takes a look at the rest of the expected deluge of first-quarter biotech IPO filings.

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Exits

Digitalsmiths, a 16-year-old, Durham, N.C.-based video technology company, has been acquired for $135 million in cash by publicly tradedTiVo. Digitalsmiths, whose “seamless discovery” technology reportedlymakes it easier to find video content on a wide variety of screens, had raised $31.5 million over the years, including from Aurora Funds,Chrysalis VenturesCisco, and .406 Ventures.

Dijit Media, a two-year-old, San Francisco-based social TV startup whose offerings included a personalized programming guide, has been acquired by competitor Viggle, which offers rewards for checking into TV shows and listening to music through its app. Terms of the deal weren’t disclosed.More here. Dijit had raised money from individual investors, including Alan Braverman, a former Geni.com exec who went on to work for Yammer and Fwix.

DVS Sciences, a 10-year-old, Sunnyvale, Ca.-based company that had developed a single-cell protein analysis platform, has been acquired by publicly traded Fluidigm for $207.5 million in cash and stock. DVS had raised $14.6 million from investors, including 5AM VenturesMohr Davidow Ventures and Pfizer Venture Investments.

HowAboutWe.com, a 3.5-year-old, New York-based company, announced yesterday that it has acquired the lifestyle and dating site Nerve.com. The terms of the deal aren’t being disclosed. HowAboutWe has raised roughly $22 million from investors, including fromFounder Collectiveff Venture CapitalHigh Line Venture Partners,RRE Ventures and Khosla Ventures.

The Kernel, a two-year-old, London-based news site about online culture, has been acquired by Austin-based Daily Dot Media, which oversees a pop and tech culture site. Terms of the deal aren’t being disclosed. The Kernel had raised seed funding from BERLIN42 and angel investors. Its founder and editor, Milo Yiannopoulos, will be “pursuing new projects,” he said in a statement.

Lenovo is buying the Motorola handset business from Google at the bargain-basement price of $2.91 billion in cash, stock, and a three-year promissory note. Google, which paid $12.5 billion for Motorola in the spring of 2012, will retain most of Motorola’s patent holdings, reports Re/code, while Lenovo gains access to 2,000 patents, the Motorola brand, and its product portfolio.

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People

Chris Girgenti, a managing partner at Chicago’s Pritzker Group Venture Capital, says the firm is making a stronger push into New York as it broadens its investment strategy. “Eventually, we’ll open an office [here],” he tells Crain’s New York Business.

John Hershey, the senior investment officer in charge of the alternatives portfolio at Oregon State Treasury, is moving into a new, expanded role, effective February 1, reports Chris Witkowsky, who says Hershey’s new role includes managing the outfit’s private equity portfolio.

Kristin Richards and Elisa Schreiber have joined Greylock Partners, the firm announced yesterday. Richards, the firm’s new VP of Talent, comes to the firm from Spencer Stuart; before joining Spencer Stuart, she spent four years as director of executive recruiting at Accel-KKR. Schreiber joins as VP of Marketing from Hulu, where she served as its head of communications for several years.

Paul Sagan, the former CEO of Akamai Technologies, has joined General Catalyst Partners as a partner. Dealbook has more here.

Joerg Sievert has left SAP Ventures European Advisors, where he was a managing director. In an email sent to his contacts yesterday, Sievert, who has spent the last years with SAP Ventures, said he’d accepted a job as a managing director of a “global fund.”

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Job Listings

Pinterest is looking for a head of mobile business development in San Francisco.

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Essential Reads

Facebook wants to be a newspaper. And it wants you to be writing some of its best stories.

A U.S. terrorism defendant who was spied on by the NSA filed a challenge to the constitutionality of the surveillance yesterday, in a case likely to be litigated all the way to the Supreme Court.

Shares of Vringo jumped as much as 37 yesterday morning, after a judge increased the royalty rate Google must pay for violating its patents related to Google’s AdWords business.

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Detours

Facebook is 10 years old. How much time have you wasted of your own life on the platform? Find out using this upsetting app.

What is that thing? A gravity-defying home, on Sunset Boulevard.

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Retail Therapy

Nothing says, “Let’s get this deal done,” like a power pair of dog-faced cufflinks. (Are we right or are we right?)

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The Scoop on Swell, a Pandora for News Radio

SwellIt’s hard to find an overlooked niche, but Palo Alto-based Concept.io may have found one with Swell, a seven-month-old smartphone app focused on streaming personalized news radio.

Unlike competitors whose users choose what they want to hear, Swell is a discovery service that learns users’ listening preferences over time and pushes them content they’re liable to enjoy. Don’t like what’s streaming? Swipe, it’s on to the next story.

The app is easy, even delightful, particularly for fans of NPR, the BBC or Comedy Channel — just three of Swell’s growing number of content partners.

The question is whether young app users will embrace it in large enough numbers. Pew Research Center’s recent surveys find that while nearly 60 percent of Baby Boomers say they enjoy following the news “a lot,” the number drops to 45 percent of Gen Xers and just 29 percent of Millennials, a generational difference that has remained virtually unchanged over years of surveys. (When it comes to news radio, specifically, 38 percent of Gen-Xers and 27 percent of Millennials tell Pew they’ve consumed news radio as recently as “yesterday.”)

To learn more about who’s using the app and when and what’s next, I caught up with Concept.io founder and CEO Ram Ramkumar, whose last company, SnapTell, sold to Amazon in 2009. Our chat has been edited for length.

How did the idea of Swell come about?

We really wanted to build a product that people would use every day and that would really engage users and make use of their time when they’re driving or exercising – time that’s underutilized, generally.

Much of product’s allure is that you just turn it on, like the music discovery service Pandora. Broadly speaking, how does the personalization technology work?

It’s complicated. Let’s say you’re interested in startups, and perhaps you love long content in the afternoon and shorter content in the morning. Well, we have to manage the freshness of the content, which is unique to the spoken word. If you think about it, music is relatively evergreen, but with news or stories, you don’t want to hear something that’s stale, so it’s a difficult problem. We’re shifting through thousands of individual tracks and finding the ones that you most want.

Are there any humans involved?

We have an audio curator who comes from the radio world and curates the content that goes into Swell at a program level. After that, an algorithm kicks in your preferences, so someone who loves the “Freakanomics Radio” show might like an Economist podcast. Then, the most powerful element comes into play, which is the community network effect, where what Swell’s hundreds of thousands of users love gets automatically promoted — and what they don’t love is less likely to show up in your queue.

So Swell has hundreds of thousands of users?

Yes, hundreds of thousands and not millions yet, but it’s growing gradually. And we have really strong engagement. We see more than 40 minutes of listening per day and over four hours of listening per week. There’s a big uptick in the morning and also in the afternoon, when people are commuting.

And eventually, you’ll insert ads into the stream, a la Pandora?

Right. Ads and subscriptions are the way to go, though there are also special things you can do, like offering users access to their entire listening histories so they can search through what they’ve listened to in the past. So we can do premium features along with advertising as it gets to critical mass. What we’re working on next is adding identity and a social layer to the product, so you can sign into Swell and see what your friends are listening to and share.

You raised $5.5 million from Google Ventures and others last summer. Is that expected to last you a couple of years? Are you interested in raising more yet?

We’ve had interest and continue to have interest. Our A round was preemptive – someone called and wanted to invest — and there’s a possibility that that will happen again. But we’re not looking to raise money.

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StrictlyVC: January 29, 2014

110611_2084620_176987_imageHi, good morning, everyone!

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Top News in the A.M.

President Obama made a push for an expanded high-tech manufacturing base in the U.S. during his State of the Union address last night, proposing the creation of six new high-tech manufacturing hubs this year.

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A Silicon Valley Firm for Startups That are Eyeing Europe

Most Bay Area venture firms don’t pay much attention to Europe. That’s just fine with Next World Capital, a four-year-old, expansion-stage firm backed by the European clients of Next World Group, an affiliated investment advisory firm with offices in Paris and Brussels.

Though Next World’s cofounder Craig Hanson tells me these ties are a small part of the firm’s value to entrepreneurs, he admits that it’s a point of intrigue for at least 80 percent of the startups he meets with – a much higher percentage than he’d anticipated when endeavoring to start the firm. We talked recently in the firm’s airy office building in San Francisco (atop which sits one exceedingly nice roof deck). Our conversation has been edited for length.

You’ve kept your profile somewhat low until recently. Why?

We’ve been building the organization; we wanted to establish a reputation with entrepreneurs first. Now, we’re hiring and staffing up, and we’re in a good place to tell the story of who we are for the first time.

You’ve been investing a $200 million debut fund, writing initial checks of between $7 million and $12 million. How many companies have you funded so far, and have you had any early exits?

We’ve funded 10 companies and had two fantastic exits so far. We invested in [the private cloud management software company] DynamicOps [which sold in 2012 to VMWare for an undisclosed amount, after raising $16.3 million]. A year later, NexGen Storage, a flash storage system company that we’d gotten involved with [leading its Series B round] was approached by Fusio.io. [It acquired NexGen, which had raised $10 million from investors, for roughly $120 million.]

How did you break into deals as a new fund in the Valley?

We did it by going directly to companies rather than rely on investor relationships. Once we had the meeting with the CEO…we were able to have in-depth conversations right off the bat. It wasn’t, “Give us your PowerPoint.” We’d say, “We’ve talked with 20 vendors, experts, and customers in the space and we’d love to trade notes.” At that first meeting, we were having second- or third-meeting [types] of conversations.

How strongly do you pitch CEOs on your European ties, including a Paris-based partner? Is your ability to help abroad a big or small selling point?

We thought it’d be useful in niche cases. We found instead that it’s a core, strategic priority for most companies, and that it’s happening much faster in their development than it used to. Particularly for cloud-based, SaaS companies, and mobile companies, they’re getting pulled to expand internationally much faster than companies used to.

What are early considerations these CEOs need to make as they look to Europe?

Well, among other things, you need to consider when to enter the European market, where specifically you go, and how you orient your positioning around the product, which, in a lot of cases, is slightly different than how you’d approach the U.S. market.

If you had to generalize, what are some of the distinctions between regions that U.S. entrepreneurs should know?

Germany is a very large and sophisticated market, for example, so you have to have credibility there, either by investing in employees and resources there, and/or having strong partnerships with credible local firms. If you’re trying to sell a sophisticated infrastructure software product or enterprise app into that market, trying to do that by just flying people out occasionally from a London hub isn’t going to be as effective. There’s a similar dynamic in France.

The Benelux countries or Nordic countries are more open and used to vendors not having a specific office in their country; they’re used to looking at vendors and relationships and partners across Europe.

It’s interesting. We tend to hear so much about the importance of expanding into Asia Pacific.

There’s more cultural and business familiarity in working with European markets. They’re very large economies, and in term of enterprise IT spend, it’s the next largest market to go after [following the U.S.].

JamBase

New Fundings

BrightFarms, a three-year-old, New York-based company that designs, finances, builds and operates hydroponic greenhouse farms at, or near, supermarkets, has raised $4.9 million in Series B funding from a group of investors, including NGEN PartnersEmil Capital Partners, BrightFarms founder Ted Caplow. The company has raised $9.2 million to date, according to Crunchbase.

CloudLock, a seven-year-old, Waltham, Mass.-based cloud data security company, has raised $16.5 million in Series C funding led by Bessemer Venture Partners. Existing investors Cedar Fund and Ascent Venture Partners participated in the round, which brings the company’s total funding to around $28 million.

Cotap, a year-old, San Francisco-based enterprise mobile messaging service, has raised $10 million in Series B financing led by Emergence Capital Partners. Earlier backer Charles River Ventures also participated in the fundraising, which brings the company’s total funding to $15.5 million. Cotap’s founders are former Yammer execs Jim Patterson and Zack Parker. (I’d written a short profile about the company last year.)

Ensighten, a four-year-old, Cupertino, Ca.-based tags management company that helps sites track data for third party services, has raised $40 million in Series B funding from Insight Venture Partners. The round brings the company’s total funding to $55 million. Previous investors include Volition CapitalLead Edge CapitalFloodgateThe Halo Fund, and Eastern Advisors Private Fund.

Health Catalyst, a 5.5-year-old, Salt Lake City, Ut.-based data warehousing and analytics company, has raised $41 million in Series C funding existing investors, including Sequoia CapitalNorwest Venture Partners, and Kaiser Permanente Ventures. The company has raised nearly $100 million to date.

Fitbay, an eight-month-old, Copenhagen-based social network for clothes shopers, has raised $400,000 in seed funding from entrepreneur-investorJesper Buch and the Nordic venture capital firm Creandum.

GoCardless, a three-year-old, London-based service that enables smaller merchants to more easily set up interbank transfers for customers, has raised $7 million in Series B funding led by Balderton Capital. Others of the company’s backers include Accel Partners and Passion Capital. The company has raised $11.8 million altogether, according to Crunchbase.

GutCheck, a four-year-old, Denver-based company whose tools facilitate one-to-one dialogue between businesses and their target customers, has raised $4 million in funding led by Icon Venture Partners and existing investors. The money comes on the heels of a $4 million Series B round announced last May. GutCheck has raised $10 million altogether, including from Grotech VenturesHighway 12 VenturesVillage Ventures, andCrawley Ventures.

Madison Reed, a year-old, San Francisco-based e-commerce company focused on delivering salon-quality hair care products to consumers’ front doors, has raised $12 million in Series B funding led by Norwest Venture Partners, which was joined in the round by True Ventures and Maveron. Madison Reed had raised $3.9 million in Series A funding from True and Maveron last April. The company’s CEO and cofounder is Amy Errett, who spent several years as a partner at Maveron beginning in 2008 and who was previously CEO of the lifestyle company Olivia.

Medium, the 18-month-old, San Francisco-based collaborative publishing startup cofounded by Twitter cofounders Ev Williams and Biz Stone, has raised $25 million led by Greylock Partners, which was joined in the funding by a long list of investors, including: Google Ventures,BetaworksCode AdvisorsCAA VenturesScienceRon Conway,Chris SaccaPeter CherninTim O’ReillyMichael Ovitz, and Gary Vaynerchuk. The round marks the company’s first outside funding, reports Re/code.

Mercatus, a four-year-old, San Jose, Ca.-based company whose analysis and decision-making platform is designed for solar energy investors, has raised an undisclosed amount of Series A funding led by Trepp, an information, analytics and technology company. Other investors in the round include Vision Ridge PartnersAugment Ventures and Shah Capital.

PowerVision, a 12-year-old, Belmont, Ca.-based company thats developing an intraocular lens, has raised $20 million in Series D funding from earlier investors VenrockJohnson & Johnson Development Corp., MedtronicAdvanced Technology VenturesLexington Capitaland Frazier Healthcare Ventures. PowerVision plans on raising an additional $10 million as part of the Series D funding round. To date, the company has raised around $77 million.

Rocketmiles, a 14-month-old, Chicago-based travel booking site that offers customers incentives, has raised a $6.5 million Series A round led by August Capital, with participation from Peterson VenturesLink VenturesAtlas VentureChicago Ventures and entrepreneur-investor Sam Yagan.

Simple Energy, a three-year-old, Boulder, Co.-based company whose software platform aims to engage customers and drive energy savings through social game mechanics, has raised $6 million in Series B funding led by the Westly Group. The company has raised just less than $9 million to date, including from TechstarsVision Ridge PartnersGreen Tree EquityJove Equity Partners, and Valero Capital.

Yiftee, a three-year-old, Menlo Park, Calif.-based service for sending local gifts to friends, has raised $2.1 million in Series A funding fromTransPacific Ventures; Intuit co-founder Scott CookBurt Sugarman and his wife, TV personality Mary HartAsset Management CompanyBroad Strategy Fund; and Michael Levinthal. The company previously raised $1 million in seed funding in 2012.

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New Funds

Hearst Corp., owner of Cosmopolitan magazine and part owner of ESPN, is making a bigger push into healthcare by creating a new division calledHearst Health, a division that reportedly consists of five healthcare-information companies, an innovation lab and a $75 million venture fund to back early-stage providers of health-care information products.

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IPOs

Another day, another company that’s eyeing the public markets. This time, it’s seven-year-old, Cambridge, Ma.-based online marketing company HubSpot. As the company told the Journal‘s Lizette Chapman, it saw $77 million in revenue last year, a 50 percent annual jump. The company has raised $100 million from investors, including General Catalyst PartnersAltimeter CapitalCross Creek CapitalCharles River VenturesSequoia Capital, and Google Ventures.

Fantex, a start-up looking to sell stocks tied to athletes’ future earnings, is “getting back in the game after taking a couple of hits,” reports Dealbook. The company said yesterday that it’s moving forward with a planned IPO linked to San Francisco 49ers tight end Vernon Davis.

Trevena, a six-year-old, King of Prussia, Pa.-based venture-backed biotech that’s developin treatments for pain and acute heart failure,lowered its proposed deal size for its IPO today, saying it planned to raise $60 million by offering 8.5 million shares at $7 per share, rather than its original plan to sell 5.8 million shares at a range of $12 to $14.

—–

People

Wesley Chan, a general partner at Google Ventures since 2009 (and a Google project manager before that), has taken a role as an entrepreneur-in-residence at the organization, reports Fortune‘s Dan Primack. At the moment, Chan isn’t discussing what drove the move, saying instead to “stay tuned.”

Steven Chu, the former Secretary of Energy, just joined the board ofAmprius, a Stanford spinoff that’s developing high energy and high capacity lithium-ion batteries. (The company had announced a $30 million round of funding a couple of weeks ago.)

Facebook CEO Mark Zuckerberg spoke yesterday to an audience of engineers in San Jose, and his stated goals, says the New York Times, “paint a picture of someone who wants to do more than just be the king of social media. He wants to change the high-tech business, all the way to the guts of the data center. And he thinks he’s on his way to doing it.” (Illuminating, and short, piece.)

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Job Listings

Orbimed Advisors, the New York-based, life sciences focused investment firm, is in the market for a senior associate, a job designed to last two to three years. In early November, Orbimed raised $735 million for its largest venture capital partnership to date.

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Data

In the third quarter of last year, VCs invested a record $1.12 billion across 150 U.S.-based mobile and telecom deals. CB Insights takes a look at where it all went.

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Essential Reads

Airbnb will soon start adding new services to its home-rental business, said CEO Brian Chesky in an interview in Davos. He also said Airbnb won’t be going public any time soon. “We are not going public this year. We will do it at a time when it benefits the company. When we have a good reason.”

Here come the Google Glass videogames.

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Detours

The cities where people own the fewest cars.

The “homeless billionaire” settles down.

In the spring of 2015, Alex Bellini will fly to Greenland, jump on an iceberg, and live there until it melts. (We fear this will not end well.)

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Retail Therapy

Authentic, vintage gear from the 1980 Winter Olympic Games. Just in time for your big Olympics-themed party next month. Get some before it’s gone.

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A Silicon Valley Firm for Startups Eyeing Europe

craig hansonMost Bay Area venture firms don’t pay much attention to Europe. That’s just fine with Next World Capital, a four-year-old, expansion-stage firm backed by the European clients of Next World Group, an affiliated investment advisory firm with offices in Paris and Brussels.

Though Next World’s cofounder Craig Hanson tells me these ties are a small part of the firm’s value to entrepreneurs, he admits that it’s a point of intrigue for at least 80 percent of the startups he meets with – a much higher percentage than he’d anticipated when endeavoring to start the firm. We talked recently in the firm’s airy office building in San Francisco (atop which sits one exceedingly nice roof deck). Our conversation has been edited for length.

You’ve kept your profile somewhat low until recently. Why?

We’ve been building the organization; we wanted to establish a reputation with entrepreneurs first. Now, we’re hiring and staffing up, and we’re in a good place to tell the story of who we are for the first time.

You’ve been investing a $200 million debut fund, writing initial checks of between $7 million and $12 million. How many companies have you funded so far, and have you had any early exits?

We’ve funded 10 companies and had two fantastic exits so far. We invested in [the private cloud management software company] DynamicOps [which sold in 2012 to VMWare for an undisclosed amount, after raising $16.3 million]. A year later, NexGen Storage, a flash storage system company that we’d gotten involved with [leading its Series B round] was approached by Fusio.io. [It acquired NexGen, which had raised $10 million from investors, for roughly $120 million.]

How did you break into deals as a new fund in the Valley?

We did it by going directly to companies rather than rely on investor relationships. Once we had the meeting with the CEO…we were able to have in-depth conversations right off the bat. It wasn’t, “Give us your PowerPoint.” We’d say, “We’ve talked with 20 vendors, experts, and customers in the space and we’d love to trade notes.” At that first meeting, we were having second- or third-meeting [types] of conversations.

How strongly do you pitch CEOs on your European ties, including a Paris-based partner? Is your ability to help abroad a big or small selling point?

We thought it’d be useful in niche cases. We found instead that it’s a core, strategic priority for most companies, and that it’s happening much faster in their development than it used to. Particularly for cloud-based, SaaS companies, and mobile companies, they’re getting pulled to expand internationally much faster than companies used to.

What are early considerations these CEOs need to make as they look to Europe?

Well, among other things, you need to consider when to enter the European market, where specifically you go, and how you orient your positioning around the product, which, in a lot of cases, is slightly different than how you’d approach the U.S. market.

If you had to generalize, what are some of the distinctions between regions that U.S. entrepreneurs should know?

Germany is a very large and sophisticated market, for example, so you have to have credibility there, either by investing in employees and resources there, and/or having strong partnerships with credible local firms. If you’re trying to sell a sophisticated infrastructure software product or enterprise app into that market, trying to do that by just flying people out occasionally from a London hub isn’t going to be as effective. There’s a similar dynamic in France.

The Benelux countries or Nordic countries are more open and used to vendors not having a specific office in their country; they’re used to looking at vendors and relationships and partners across Europe.

It’s interesting. We tend to hear so much about the importance of expanding into Asia Pacific.

There’s more cultural and business familiarity in working with European markets. They’re very large economies, and in term of enterprise IT spend, it’s the next largest market to go after [following the U.S.].

Sign up for our morning missive, StrictlyVC, featuring all the venture-related news you need to start you day.




StrictlyVC: January 28, 2014

110611_2084620_176987_imageHappy Tuesday, everyone!

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Top News in the A.M.

Indiegogo, the six-year-old, San Francisco-based, popular crowdfunding platform, has raised $40 million in Series B funding led by Institutional Venture Partners and Kleiner Perkins Caufield & Byers. (More in “New Fundings.”)

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Futurist Paul Saffo: This Backlash is Just Beginning

In October 2011, I wrote a story featuring renowned futurist Paul Saffo, who voiced concern about the widening economic gulf between Silicon Valley and the rest of the U.S. — as well as the growing divide between the haves and the have-nots in the Bay Area itself.

“All my instincts as a forecaster tell me this has the feel of something very big happening,” he’d said. “I’m standing on the beach and noticing the water heading back out toward the horizon.”

At the time, everyone was having too much fun to pay much attention to some gloomy forecaster. Unfortunately, Saffo was right to be worried. San Francisco County and its neighboring counties, Marin and San Mateo, are now home to more millionaires per capita than anywhere else in the state thanks to the tech industry. The more troubling outcomes we’re seeing as a result of this wealth generation – the displacement of earlier residents, anxiety, and, now, protests – are just the tip of the iceberg, too, says Saffo, who I spoke with again yesterday. Our conversation has been edited for length.

There are so many dimensions to what we’re seeing right now. Where to start?

There are really three dimensions. One is that living in the Bay Area is more expensive than ever. Another is that post-Internet-bubble wealth is very different than the old money. In the ‘80s, the motto was “Show no chrome.” I can remember [Intel cofounder] Gordon Moore driving a beat-up station wagon forever. Though there’ve always been a couple of flashy types, if you had a lot of money, you didn’t flash your wealth.

The income gap wasn’t so great in the past, either. If you worked for Apple, you had a comfortable life, but you still owned a rancher in Cupertino. Now, money is going much further down into some of these workforces. An engineer at Google might be getting paid $5 million. So the wealth differential is greater; more people are wealthy, and because they’re coming into this money at a younger age, they don’t have the good sense to keep their mouth shut.

So what happens next?

In the short term, people who can afford it are going to continue to buy houses in San Francisco, and people who can’t will go elsewhere in the Bay Area.

That means that everyone will have longer commutes, including schoolteachers who can’t afford to live in San Francisco on their salaries. That means civil servants who’ve lived in San Francisco their entire professional lives.

Eventually, that could also mean Facebook and Google employees [who are less wealthy than their peers], as well as contractors who don’t have stock. This inequality has a certain unpredictable whimsy to it. It’s not just the haves and have-nots but the lucky and the unlucky.

How can we shift the momentum here, practically speaking?

There’s no one answer, but the big local companies really need to engage locally. There needs to be transportation for everyone; even you aren’t using public transportation, it’s in everyone’s interest to have it. They need to step up and do things that build strong community, including mixed communities of different wealth levels. You don’t want your schoolteachers or your police force living 50 miles away. I’d bet 70 percent of San Francisco’s firefighters already live in the East Bay. You do not want that in an earthquake.

Do you really think companies will go down that path?

I’m genuinely optimistic. I think Silicon Valley companies will eventually get very engaged in this issue at a corporate level and that their employees will get engaged, too. [Their employees] are basically decent people who haven’t considered themselves privileged or special. But all this attention is leading to self-reflection, and I think that will drive social entrepreneurship within these companies. Frankly, I think if these companies applied just a tiny fraction of the vision they apply to their business mission to social issues, we’d see dramatic results.

In the meantime?

Well, in the very long run, we’re going to have to have a national conversation about wealth redistribution. I’m not a Marxist but [Oxfam] just reported that the world’s 85 richest people own as much as half the world’s population. I’m a forecaster, and I know when something isn’t sustainable.

JamBase

New Fundings

AutoGrid Systems, a three -year-old, Redwood Shores, Calif.-based analytics company focused on the energy industry, has raised $12.75 million in Series C financing led by a consortium of investors, including the European utility E.ON, along with existing investors Foundation CapitalVoyager Capital and others. The company has raised $21.8 million to date, according to Crunchbase.

AMCS Group, a decade-old, Limerick, Ireland-based software company that sells to the recycling and waste management industry, has raised $32.1 million in funding from Highland Capital Partners Europe.

CDI, a 33-year-old, Markham, Ontario-based company that refurbishes and sells IT equipment to schools, has raised an undisclosed amount of funding from H.I.G. Growth Partners, an affiliate of the private equity firm H.I.G. Capital.

Igenica, a 5.5-year-old, Burlingame, Calif.-based company that’s developing cancer treatment therapies, has raised $14 million in Series C extension funding. All major existing investors participated in the funding round, including The Column Group5AM VenturesOrbiMed Advisors and Third Rock Ventures. The company has raised slightly more than $70 million altogether.

Indiegogo, the six-year-old, San Francisco-based, popular crowdfunding platform, has raised $40 million in Series B funding led by Institutional Venture Partners and Kleiner Perkins Caufield & Byers. Earlier investors Insight Venture PartnersMHS CapitalMetamorphic Ventures and ff Venture Capital also joined the round, which brings the company’s total funding to $56.5 million.

Mixamo, a 5.5-year-old, San Francisco-based game animation technology developer, has raised $3.2 million in a mix of equity, options, and other securities, according to an SEC filing that shows a target of $3.7 million. The company had previously raised $8.7 million in mostly equity, including from Granite Ventures and Keynote Ventures.

MyActivityPal, a months-old, Seattle-based company whose mobile messaging and social networking app is slated to launch in April, has raised an undisclosed amount of Series A funding from Sameer Gehlaut, the chairman and co-founder of Indiabulls, an Indian business conglomerate headquartered in Gurgaon.

PricePanda, a two-year-old, Berlin-based price comparison site that addresses a number of South Asian markets, including Indonesia, Malaysia, and Singapore, has raised $3 million in funding from the German retail company Tengelmann Corp.reports TechCrunch. The company reportedly has close ties to Rocket Internet, the Samwerbrothers’ investing vehicle, though it has never official disclosed any funding from them.

Shockwave Medical, a five-year-old, Bellevue, Wa.-based maker of intravascular devices for patients with calcified cardiovascular disease, has raised $12.5 million in Series A funding led by Sofinnova Partners.

ToutApp, a 3.5-year-old, San Francisco-based sales lead software company, has raised $3.35 million in Series A funding led by Sigma West. Earlier investors, including Founder Collective500 Startups,Launch Fund and angel investors like Esther DysonEric Ries andScott Banister, also participated.

Upstart, a 20-month-old, Palo Alto-based funding platform that pairs investors with people who’ve finished college and are looking for relatively small amounts of money, is raising $2.5 million in debt, shows an SEC filing. Upstart, founded by former Google executive Dave Girouard, has raised $7.65 million in equity to date, including fromKleiner Perkins Caufield & ByersNew Enterprise AssociatesFirst Round Capital, and Google Ventures.

Yoyocard, a 1.5-year-old, San Francisco-based company that’s operating in stealth mode, has raised $960,000, according to an SEC filing that lists its target as $1.9 million. The form lists Christopher Gottschalk of Blumberg Capital and Joyce Kim of Freestyle Capital. Its CEO, Sean Safahi, has a background in payments industry marketing and product development. Yoyocard’s site says the service will debut this year.

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New Funds

500 Luchadores, a Mountain View, Calif.-based seed fund focused on Mexico-based startups, has raised $2 million, according to an SEC filingthat shows the fund is targeting $5 million. The fund’s managing member is Dave McClure, the founder of the technology incubator and investment program 500 Startups.

Draper Triangle Ventures, a 14-year-old, Pittsburgh-based early-stage venture firm that backs both IT and healthcare companies, is opening two offices in Michigan, as it looks to establish a wider footprint in the Midwest; the firm is currently investing its third fund, a $75 million pool to which it hopes to add another $25 million. (The firm’s second fund closed on another $72.5 million.) Crain’s Detroit Business has more.

A “high” tech startup boom could grow around the pot plant, andEmerald Ocean Capital, an eight-month-old, Newport Beach, Calif.-based firm is aiming to help fund it. It just needs $25 million to get started.

We told you about the new fund of Silicon Valley venture capitalist Gen Isayama last Monday; now, BusinessWeek takes a closer look at Isayama’s plans.

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IPOs

LendingClub, the six-year-old, San Francisco-based peer-to-peer lending platform is planning to go public this spring, its CEO tells the WSJ. The company was valued at $2.3 billion when it last raised a round of capital last October, a $57 million secondary deal involving DST Global and Coatue Management. LendingClub has raised roughly $220 million altogether, including from its earliest investor, Amidzad Partners. Other investors include Norwest Venture PartnersCanaan Partners,Foundation CapitalMorgenthaler VenturesUnion Square Ventures,Google Ventures, and Kleiner Perkins Caufield & Byers.

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Exits

Yahoo is in talks to acquire the 18-month-old, San Francisco-based business app developer Tomfoolery for about $16 million, say WSJ sources, who peg the price at $16 million. Tomfoolery has raised about $1.7 million from a long line of investors, including former Twitter engineer Sam Pullara and Andreessen Horowitz. The Journal suggests the hire would primarily be a talent grab. The company’s CEO is Kakul Srivastava, a seven-year veteran of Yahoo who helped manage photo-sharing site Flickr;

UserEvents, a two-year-old, Fredericton, Canada-based company whose flagship product, CxEngage, aggregates and processes customer feedback from different channels like social, web, mobile, and voice calls, has been acquired by LiveOps, the contact center and customer service company. Terms of the acquisition weren’t disclosed. Yesterday, LiveOps announced it had raised a fresh $30 million in debt funding. You can read more about the deal here.

—–

People

Paul Palmieri has joined New Enterprise Associates as a venture advisor, the firm announced yesterday. Palmieri is the founder and former chairman and CEO of the Baltimore-based ad tech companyMillennial Media, founded in 2006. Palmieri announced his resignation from the company yesterday. Michael Barrett, a former Yahoo executive, replaced him. Millennial went public in March 2012, its shares priced at $13; after a promising debut, they began slipping and trade at $7.36 as of this writing.

Kleiner Perkins Caufield & Byers cofounder Tom Perkins talked yesterday with BloombergTV about his comparing the Bay Area’s simmering class tensions to Nazi Germany’s persecution of the Jews. Among other things, Perkins reiterated his feeling that the “creative 1 percent is threatened.” He also insisted that his firm co-founder Eugene Perkins would have agreed with his letter and its point.

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Job Listings

Disgruntled LP readers, take note: Toronto-based Canadian Pension Plan Investment Board, which was managing close to $200 billion in assets as of last September, is looking for an associate.

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Data

China’s market is heating up. Venture capital firms invested in 106 deals in the third quarter of 2013, marking the busiest period of the year, according to DJX VentureSource. Deal flow in the fourth quarter was also 66 percent higher than in the same period a year earlier. More here.

Pitchbook tracks the 30 funds that raised between $100 million and $250 million in 2007 and finds that the median IRR is 12 percent and the top quartile IRR “hurdle rate” is 24.9 percent. The top performers, as of today, are: Avalon Ventures VIIIEmergence Capital Partners Fund II,Flagship Ventures Fund 2007 and Foundry Venture Capital 2007.

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Essential Reads

Apple paid out $2 billion to developers in the first fiscal quarter of 2014. That’s three to four times the amount Apple paid developers during the same period last year, notes TechCrunch.

Re/code takes a much deeper look at DeepMind, Google’s newest acquisition.

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Detours

Angry Birds and Dreamy Smurfs are watching you. (Yes, you.)

A school in New Zealand lets its students do whatever they want during playtime. Are American parents ready to endorse a similar policy here?

New York’s first $100 million apartment is coming soon, but it’s only been in the last decade or so that prices have reached anywhere near that price, observes Departures magazine.

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Retail Therapy

Neat. Nearly 200 dog breeds in a single chart. (H/T: Maria Popova.)

Luxury car makers evidently want to strengthen their relationship with you. We showed you Bugatti’s $84,000 belt buckle a couple of weeks ago. Now, Bentley is getting into the home furnishings business, in partnership with the upholstered furniture company Club House Italia. Hey, as long as everyone’s throwing money around anyway, right? (We do kind of love this nearly $10,000 armchair from the collection.)

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Futurist Paul Saffo: This Backlash Is Just the Beginning

a storm's a comin'In October 2011, I wrote a story featuring renowned futurist Paul Saffo, who voiced concern about the widening economic gulf between Silicon Valley and the rest of the U.S. — as well as the growing divide between the haves and the have-nots in the Bay Area itself.

“All my instincts as a forecaster tell me this has the feel of something very big happening,” he’d said. “I’m standing on the beach and noticing the water heading back out toward the horizon.”

At the time, everyone was having too much fun to pay much attention to some gloomy prediction. Unfortunately, Saffo was right to be worried. San Francisco County and its neighboring counties, Marin and San Mateo, are now home to more millionaires per capita than anywhere else in the state thanks to the tech industry. The more troubling outcomes we’re seeing as a result of this wealth generation – the displacement of earlier residents, anxiety, and, now, protests – are just the tip of the iceberg, too, says Saffo, who I spoke with again yesterday. Our conversation has been edited for length.

There are so many dimensions to what we’re seeing right now. Where to start?

There are really three dimensions. One is that living in the Bay Area is more expensive than ever. Another is that post-Internet-bubble wealth is very different than the old money. In the ‘80s, the motto was “Show no chrome.” I can remember [Intel cofounder] Gordon Moore driving a beat-up station wagon forever. Though there’ve always been a couple of flashy types, if you had a lot of money, you didn’t flash your wealth.

The income gap wasn’t so great in the past, either. If you worked for Apple, you had a comfortable life, but you still owned a rancher in Cupertino. Now, money is going much further down into some of these workforces. An engineer at Google might be getting paid $5 million. So the wealth differential is greater, more people are wealthy, and because they’re coming into this money at a younger age, they don’t have the good sense to keep their mouth shut.

So what happens next?

In the short term, people who can afford it are going to continue to buy houses in San Francisco, and people who can’t will go elsewhere in the Bay Area.

That means that everyone will have longer commutes, including schoolteachers who can’t afford to live in San Francisco on their salaries. That means civil servants who’ve lived in San Francisco their entire professional lives.

Eventually, that could also mean Facebook and Google employees [who are less wealthy than their peers], as well as contractors who don’t have stock. This inequality has a certain unpredictable whimsy to it. It’s not just the haves and have-nots but the lucky and the unlucky.

How can we shift the momentum here, practically speaking?

There’s no one answer, but the big local companies really need to engage locally. There needs to be transportation for everyone; even you aren’t using public transportation, it’s in everyone’s interest to have it. They need to step up and do things that build strong community, including mixed communities of different wealth levels. You don’t want your schoolteachers or your police force living 50 miles away. I’d bet 70 percent of San Francisco’s firefighters already live in the East Bay. You do not want that in an earthquake.

Do you really think companies will go down that path?

I’m genuinely optimistic. I think Silicon Valley companies will eventually get very engaged in this issue at a corporate level and that their employees will get engaged, too. [Their employees] are basically decent people who haven’t considered themselves privileged or special. But all this attention is leading to self-reflection, and I think that will drive social entrepreneurship within these companies. Frankly, I think if these companies applied just a tiny fraction of the vision they apply to their business mission to social issues, we’d see dramatic results.

In the meantime?

Well, in the very long run, we’re going to have to have a national conversation about wealth redistribution. I’m not a Marxist but [Oxfam] just reported that the world’s 85 richest people own as much as half the world’s population. I’m a forecaster, and I know when something isn’t sustainable.

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StrictlyVC: January 27, 2014

110611_2084620_176987_imageHi, and good morning, everyone! Hope you had a nice weekend.

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Top News in the A.M.

The Supreme Court has taken up six patent cases this term that, collectively, may have the patent troll business on the line.

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VCs and Twitter: A Simple Relationship Turns Complicated

Over the weekend, New York Times reporter Jenna Wortham wrote of Twitter that it “seems to have reached a turning point, a phase in which its contributors have stopped trying to make the service as useful as possible for the crowd, and are instead trying to distinguish themselves from one another.”

If Wortham is becoming disillusioned with the platform, she’s hardly alone. Even venture capitalists – among Twitter’s savviest and earliest users –no longer view Twitter with the same zeal they once did, with a growing number turning away from the service for longer periods of time, if not logging off altogether.

Chris Dixon of Andreessen Horowitz talked with investor-entrepreneur Semil Shah last November about why he no longer tweets as actively as he once did. “I actually think Twitter has changed,” said Dixon, whose tweet count is nearing 15,000. “Part of it is Twitter just got more popular…For me, the golden days of Twitter were 2010 maybe, 2011, where it was a bunch of early adopter/startup people…now, everyone realizes that if you say something wrong, it’s going to be excerpted and put on Business Insider…”

On New Year’s Day, another power user, Shervin Pishevar of Sherpa Foundry, announced that after an astonishing 34,777 tweets dating back to 2007, he’d decided to “take a break” – for all of 2014. It was time to “disconnect from this overtly present present and live in the moment more,” Pishevar wrote on Medium (the newest platform from Twitter’s cofounders).

In a more recent renouncement of the platform, Paul Lee, a general partner at Chicago-based Lightbank, tweeted last Wednesday that he was “Going to be taking a break on twitter for a while (at least trying).”

When afterward, I asked Lee why, he explained that Twitter “ended up taking a lot of mindshare and creating a lot of noise in my head.” Though Lee consumes more than he publishes (over the last six years, he has sent 2,342 tweets), he finds Twitter just as distracting as someone who more actively participates in conversations.

“Imagine you’re in a meeting and you have eight people sitting on your shoulders,” he said. After logging on, even for brief periods, “It kind of felt like that. My mind was going 100 miles per hour.”

Plenty of VCs still actively use Twitter, of course. Homebrew cofounder Hunter Walk says that among the ways it helps him as an investor is his ability to share his thoughts, meet new people, and “lazyweb” questions about who is working on what.

Walker, who says he spends “toooo much” time on the platform (he has composed more than 18,000 tweets), says it doesn’t exhaust him primarily because he tries to use it “as a human being who also happens to be a VC.”

Josh Felser, a cofounder of Freestyle Capital, similarly says that his approach is not to overthink things but rather “say mostly whatever I want.” Felser (12,600 tweets) also notes that Twitter is “helpful in building my business brand” particularly given that “most entrepreneurs are on it.”

Lee acknowledges the value in Twitter that Felser sees. In fact, he says Lightbank has funded two startups that it sourced through Twitter. “So from a branding perspective – meaning branding of [Lightbank] and self-branding – it’s been really effective.”

Lee says he’s still prepared to avoid it for now. “It’s only been a few days,” he told me Friday morning. He said he was already feeling “less tied to it, less compelled to check it.” But he was also quick to call it “an experiment. I don’t want to get ahead of myself.”

In the meantime, the Twitter-fatigued might pay special attention to Marc Andreessen, someone known for the shrewd way in which he has marketed his venture firm. A big fan of “counterprogramming,” Andreessen has taken to Twitter with great relish over just the last month.

In the six years prior, he sent out two tweets.

JamBase

New Fundings

Aduro BioTech, a 14-year-old, Berkeley, Calif.-based company that has developed a vaccine to treat pancreatic cancer, is raising a Series C round from Morningside Ventures and others, says VentureWire. Morningside also participated in its $19.25 million Sereis B round in 2011. The company has raised more than $33 million altogether, says Crunchbase.

LiveOps, the 13-year-old, Santa Clara, Ca.-based cloud contact center and customer service company, has raised $30 million in debt funding that comes “almost entirely” from Comerica Bank, reports Techcrunch. It’s the largest round yet for the company, which has raised $81 million to date, including from Menlo VenturesBenchmark, and IronPort Systems co-founder Scott Banister.

Matter.io, an 11-month-old, Cambridge, Ma.-based company that’s making it possible to customize 3D products in your browser, then have them shipped to your door, has raised $400,000 in seed funding, says VentureWire. The money largely comes from individuals with ties to theMIT Media Lab.

Redmart, a 2.5-year-old, Singapore-based online grocery service has raised a $5.4 million bridge round leading up to a larger Series B, the company tells VentureBeat. The company has raised $10 million to date; it says its biggest investor is Facebook co-founder Eduardo Saverin, who moved to Singapore in 2009.

SoundCloud, a six-year-old, Berlin-based streaming audio company, has raised more than $60 million in Series D funding at a valuation of roughly $700 million, reports the WSJ. The round was led by Institutional Venture Partners with participation from the Chernin Group, the investment firm founded by former News Corp. president Peter Chernin.

TigerText, a four-year-old, Santa Monica, Ca.-based enterprise messaging service, has raised $21 million in Series B funding led by Shasta Ventures, with OrbiMed AdvisorsTELUS, and Reed Elsevier Venturesparticipating. TigerText has raised roughly $31 million to date, according to Crunchbase.

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New Funds

Union Square Ventures, the 10-year-old, New York-based venture firm, has raised roughly $340 million, according to several new SEC filings. USV has raised $166 million in fresh capital for its fourth early-stage fund, and $166 million for its second “opportunities” fund, which the firm will use to provide bigger slugs of capital to those breakout companies that need it. The firm has also raised an $8.3 million side LP fund.

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IPOs

Achaogen, a 14-year-old, South San Francisco-based company that’s developing antibacterials to treat multi-drug resistant infections, filed an S-1on Friday to raise up to $75 million in a IPO. Its biggest shareholders include Domain Partners, which owns 18.8 percent of the company;Venrock, which owns 16.2 percent; the Wellcome Trust, which owns 14.6 percent; ARCH Venture Fund, which owns 13.2 percent; Versant Venture Capital, which owns 11.9 percent; Omega Fund, which owns 8.22 percent; and 5AM Ventures, which owns 5.6 percent.

Shares of Care.com were up 43 percent by the close of trading Friday, from their IPO price of $17. The company also joined the estimated three percent of companies that have gone public between 1996 and last year with a female CEO at the helm.

Pre-IPO stock listings are coming, it seems. Marketwatch reports that the Financial Industry Regulatory Authority has quietly approved a market for “private growth companies” that will be run jointly by Nasdaq andSharesPost. Nasdaq still needs to get approval from the SEC to launch the market, to be called Nasdaq Private Market.

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Exits

Cloud Party, a 2.5-year-old, San Jose, Calif.-based gaming company specializing in virtual worlds, has been acquired by Yahoo for an undisclosed sum. The company’s CEO said the service would be shut down next month. Cloud Party had never reported any outside funding.

DeepMind, a three-year-old, London-based artificial intelligence company that’s operating in stealth mode, has been acquired by Googlereports Re/code. The company was founded by neuroscientist Demis Hassabis, who is described in online bios as child prodigy in chess. (He also seemspretty skilled at poker.) Sources tell Re/code the company had raised funding from Founders Fund and Horizons Ventures, among others. The Information says that as a result of the acquisition, Google is establishing an ethics committee, one designed “to ensure the artificial intelligence technology isn’t abused.” The Information pegs DeepMind’s purchase price at “more than $500 million.”

LinkTech Navi, a 13-year-old, Beijing-based company behind a mapping service, is being acquired by the Chinese Internet giant Tencent for $9.92 million, according to TechNode.

The assets of Tutorspree, a 2.5-year-old, New York-based company that married students with private tutors, have been acquired by the company’s much better-funded competitor, WyzAnt, based in Chicago. Tutorspree had raised $1.8 million from Sequoia CapitalLerer VenturesFounder Collective, and SV Angel, among others, but the company was shutteredlast year, reports Techcrunch, its remaining capital returned to investors. WyzAnt, meanwhile, raised $21.5 million from Accel Partners in December.

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People

Over the weekend, in a letter to the Wall Street JournalTom Perkins, cofounder of Kleiner Perkins Caufield & Byers, compared the “progressive war on the American one percent, namely the ‘rich'” to Nazi Germany’s war on the Jews. Hours later, Kleiner wrote from its Twitter account: “Tom Perkins has not been involved in KPCB in years. We were shocked by his views expressed today in the WSJ and do not agree.” It’s doubtful Kleiner was “shocked”; Perkins routinely courts attention to suit his ends. Still, KP’s partners probably wouldn’t mind if Perkins were to travel very far away on his luxurious submarine, out of the reach of the media, forever.

Sony Pictures has acquired the rights to Lean In, the best-selling book by Facebook COO Sheryl Sandberg. The studio has given the assignment of writing the script — which will be a “narrative film” on the themes contained in the book, says Deadline Hollywood — to veteran TV writer Nell Scovell, who helped Sandberg write the book. Scovell’s past credits include “The Simpsons,” “Murphy Brown,” and “Sabrina, The Teenage Witch.” Sandberg, who reportedly became a billionaire last week, will donate her proceeds from the project to her foundation.

Snapchat cofounder Evan Spiegel on why his company remains firmly rooted in L.A.: I often talk with people about the conflicts between technology companies and content companies – I’ve found that one of the biggest issues is that frequently technology companies view movies, music, and television as information. Directors, producers, musicians, and actors view them as feelings, as expression. Not to be searched, sorted, and viewed – but experienced.”

Uber‘s staff has been intentionally wasting the time and resources of much smaller competitor, Gett, including by ordering cars from the service, then abruptly canceling them. Altogether, reports Valleywag, at least 13 employees, including the general manager of Uber’s New York office,regularly participated in the scheme.

Alisher Usmanov, Russia’s richest tycoon, has increased his control over Russia’s largest social network, VKontakte, after its founder Pavel Durovsold his 12 stake in the company to an ally of Usmanov. Learn more here.

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Job Listings

OpenView Venture Partners, the Boston-based, expansion-stage venture capital fund, is looking to hire a growth strategist who will develop, manage and create content and marketing programs that raise OpenView’s profile, among other things.

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Data

CB Insights has published a list of the top most active U.S. healthcare investors of 2013. In descending order, they are: Versant VenturesNew Enterprise AssociatesDomain AssociatesPolaris PartnersOrbiMed AdvisorsSV Life SciencesMPM CapitalArch Venture Partners,Kleiner Perkins, and InterWest Partners. To see who tends to partner with whom — “the BFFs of healthcare VC,” as CB Insights puts it — read on.

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Essential Reads

According to the WSJ, Apple is laying the groundwork for an expanded mobile-payments service.

Good news, bad news: According to Nielsen, online advertising grew 32 percent last year, but that’s still just 4.5 percent of advertisers’ overall spend; the bulk of it — 57.6 percent — is still going to TV.

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Detours

“Mitt,” Al Gore, and our identification with presidential losers.

Highly educated, highly indebted: The lives of today’s 27-year-olds, in charts.

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Retail Therapy

A theater, for your face. Coming soon, maybe.

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VCs and Twitter: A Simple Relationship Turns Complicated

VCs on TwitterOver the weekend, New York Times reporter Jenna Wortham wrote of Twitter that it “seems to have reached a turning point, a phase in which its contributors have stopped trying to make the service as useful as possible for the crowd, and are instead trying to distinguish themselves from one another.”

If Wortham is becoming disillusioned with the platform, she’s hardly alone. Even venture capitalists – among Twitter’s savviest and earliest users –no longer view Twitter with the same zeal they once did, with a growing number turning away from the service for longer periods of time, if not logging off altogether.

Chris Dixon of Andreessen Horowitz talked with investor-entrepreneur Semil Shah last November about why he no longer tweets as actively as he once did. “I actually think Twitter has changed,” said Dixon, whose tweet count is nearing 15,000. “Part of it is Twitter just got more popular…For me, the golden days of Twitter were 2010 maybe, 2011, where it was a bunch of early adopter/startup people…now, everyone realizes that if you say something wrong, it’s going to be excerpted and put on Business Insider…so I just think everyone is vastly more on guard, and it’s just not as fun.”

On New Year’s Day, another power user, Shervin Pishevar of Sherpa Foundry, announced that after an astonishing 34,777 tweets dating back to 2007, he’d decided to “take a break” – for all of 2014. It was time to “disconnect from this overtly present present and live in the moment more,” Pishevar wrote on Medium, the newest publishing platform launched by Twitter’s cofounders.

In a more recent renouncement of the platform, Paul Lee, a general partner at Chicago-based Lightbank, tweeted last Wednesday that he was “Going to be taking a break on twitter for a while (at least trying).”

When afterward, I asked Lee why, he explained that Twitter “ended up taking a lot of mindshare and creating a lot of noise in my head.” Though Lee consumes more than he publishes (over the last six years, he has sent 2,342 tweets), he finds Twitter just as distracting as someone who more actively participates in conversations.

“Imagine you’re in a meeting and you have eight people sitting on your shoulders,” he said. After logging on, even for brief periods, “It kind of felt like that. My mind was going 100 miles per hour.”

Plenty of VCs still actively use Twitter, of course. Homebrew cofounder Hunter Walk says that among the ways it helps him as an investor is his ability to share his thoughts, meet new people, and “lazyweb” questions about who is working on what.

Walker, who says he spends “toooo much” time on the platform (he has composed more than 18,000 tweets), says it doesn’t exhaust him primarily because he tries to use it “as a human being who also happens to be a VC.”

Josh Felser, a cofounder of Freestyle Capital, similarly says that his approach is not to overthink things but rather “say mostly whatever I want.” Felser (12,600 tweets) also notes that Twitter is “helpful in building my business brand” particularly given that “most entrepreneurs are on it.”

Lee acknowledges the same value in Twitter that Felser sees. In fact, he says Lightbank has funded two startups that it sourced through Twitter. “So from a branding perspective – meaning branding of [Lightbank] and self-branding – it’s been really effective.”

Still, Lee says he’s prepared to avoid it for a while, even if he’s uncertain for how long. “It’s only been a few days,” he told me Friday morning. He said he was already feeling “less tied to it, less compelled to check it.” But he was also quick to call it “an experiment. I don’t want to get ahead of myself.”

Meanwhile, the Twitter fatigued might pay special attention to Marc Andreessen, someone known for the shrewd way in which he has marketed his venture firm. A big fan of “counterprogramming,” Andreessen has taken to Twitter with great relish over just the last month.

In the six years prior, he sent out two tweets.

Correction: The original version of this story referred to Wortham by her Twitter handle, @jennydeluxe.

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