Happy Tuesday, dear readers. We know many of you didn’t receive yesterday’s email. Why it doesn’t make it through to everyone on certain days will remain one of those great unsolved mysteries (until we hire a much-needed consultant), but if you’d like to check out what you missed, it is here.
Top News in the A.M.
Smartphone giants Apple and Samsung are seeing their market share decline slightly in the face of growing competition from Huwaei and Lenovo, according to new data released last night.
Wealth Manager: “VCs Do Tend to Have Strong Opinions”
Mark Castelin, a director of investment advisory services at the wealth management firm Harris myCFO, handles a lot of the “unique” needs of ultra high-net-worth venture capitalists. We talked last week about how VCs differ from some of the firm’s other clients. Our conversation has been edited for length.
Your firm does a lot of analysis on different sectors and considers itself a kind of sounding board for clients. I would think VCs are hard to advise, though. Are they?
VCs do tend to have strong opinions where they want to invest in the venture space, though they may say they know nothing about bonds or emerging markets. So sometimes they use us as a resource for specific things. Other times they want validation that a path they’re pursuing is being pursued by others. And they want to know [their peers’ strategies].
Your clients typically have $25 million in investable assets and a net worth of roughly $100 million or more. How much of that money do you counsel them is safe to invest in venture-backed startups?
Maybe it will be 40 percent exposure to private markets, and half of that will be venture capital, so the implication is that they have a $20 million bucket to allocate [to startups]. Then we make sure that the client holds to that number and we work with that person to ensure that they diversify their holdings so that they include everything, including biotech and clean tech, as well as some geographic diversification, because so much is going on outside the U.S. right now.
Do you steer ever, or often, steer them to secondary investments?
They come along fairly infrequently, but in our mind, they’re a very good investment opportunity. These are companies that are fairly far along in the J curve . . . so the multiples might not be as high as with primary [investments] but you have much better odds of success.
The saying in tech circles was once “show no chrome.” But people have grown flashier, seemingly. What are you seeing?
I’d argue that [self-made] people are still more conservative than those who inherit money. Given all the stresses and strains that go into birthing a successful business, not many are wont to go run around spending it willy nilly. I don’t really see that many going on global sprees.
There’s that old saying about “suits to shirtsleeves in three generations.” There are those who make the money, then the second generation that’s close enough to kind of respect it. The third generation is so far removed that they just see it as numbers in a bank account and they’re happy to spend it.
Is the Giving Pledge impacting the way people view that self-made wealth?
People of wealth have always been generous, but [Bill] Gates and [Warren] Buffett turning over entire fortunes to charity [has inspired more people to do the same]. I don’t think we’ve ever seen that practiced in the ultra high net worth arena except in the last three years or so, when it’s begun to gain traction. I think in the past, perhaps without the ability to connect so easily, people might not have thought they could have as much of an impact on other people as they do today.
AbCelex Technologies, a 3.5-year-old, Toronto-based biotech company that focuses on detection and prevention of food-borne illnesses, has raised $2 million in Series A funding led by the Chicago-based fund Cultivian Sandbox Ventures.
Algal Scientific, a five-year-old, Plymouth, Mi.-based company that’s developing a wastewater treatment system that removes and recovers nutrients using an algae-based process, has raised $3 million from Evonik Venture Capital GMBH, Formation 8, and Independence Equity.
Alibaba and founder Jack Ma’s Yunfeng Capital have shelled out $1.22 billion for an 18.5 percent stake in China’a biggest online video company,Youku Tudou. Alibaba will hold about 16.5 percent of Youku, while Yunfeng will have about 2 percent, reports Bloomberg. You can find more here on the acquisition and other ways Alibaba is prepping for its IPO.
Aston Club, a year-old, Melbourne, Australia-based company whose hospitality-focused payment app enables patrons of bars and restaurants to pay their bill without dealing with credit cards, has raised $1.5 million in seed funding from a group of angel investors.
B2M Solutions, a 12-year-old, Oxfordshire, England-based company that sells mobile device analytics and process optimization software to enterprise customers, has raised an undisclosed amount of funding from Motorola Solutions Venture Capital.
Bidu, a two-year-old, Brazil-based online insurance comparison and brokerage company, has raised $8.9 million from the British venture capital firm Amadeus Capital Partners. The company was incubated by São Paulo-based Monashees Capital and the insurance brokerage company MBS Seguros. Monashees and other past investors, including Bertelsmann Group and Otto Capital, also participated in the new financing round. Dealbook has more here.
Brightpearl, a seven-year-old, San Francisco-based company that sells a cloud-based multi-channel retail management system to help customers with sales order management, inventory, and so on, has raised $10 million in a funding round led by MMC Ventures, with participation from new investor Quayle Munro. Earlier investors Eden Ventures and Notion Capital also joined the round. Brightpearl has raised $24.5 million to date, shows Crunchbase.
Caviar, a two-year-old, San Francisco-based food delivery startup that promises to help high-end restaurants sell and deliver anything on their menu to take-out customers, has raised $13 million from Tiger Global Management, says the WSJ. The company raised $2 million in seed funding last year from Andreessen Horowitz, Winklevoss Capital,Harvard Common Press, Iron Fire Capital and Paul Bucheit.
CrowdComputing Systems, a 3.5-year-old New York-based maker of SaaS-based products for building an online workforce, has changed its name to WorkFusion, as well as raised a $15 million Series B round led by Mohr Davidow Ventures. The company has raised $22.3 million to date, including from earlier investors Greycroft Partners, iNovia Capitaland RTP Ventures.
Doximity, a three-year-old, San Mateo, Ca.-based professional network for U.S. healthcare professionals, has raised $54 million round in Series C funding co-led by DFJ and T. Rowe Price. New investor Morgan Stanley Investment Management also participated in the round, alongside earlier investors Emergence Capital Partners, Morgenthaler Ventures and InterWest Partners. Doximity has raised roughly $82 million to date.
Farfetch, a 6.5-year-old, London-based online shopping platform that features a variety of independent fashion boutiques’ brands and styles, has raised a $40 million round of funding that’s expected to close this week, sources tells Fortune’s Erin Griffith. The company previously raised $42.5 million over three rounds of funding from Index Ventures,Advent Venture Partners, E.ventures, and Conde Nast.
Kite Pharma, a 4.5-year-old, L.A.-based company that’s developing therapies meant to train the immune system to eradicate cancer, has raised $50 million in new funding from an unnamed syndicate of healthcare investors. Last year, the company raised a $35 million Series A round, including from Alta Partners.
LendUp, a 2.5-year-old, San Francisco-based lending company, has raised a $50 million credit debt facility from Victory Park Capital, reports TechCrunch. The company had previously raised $18 million in venture funding from Google Ventures, Data Collective, ThomVest Ventures,Andreessen Horowitz, QED Investors and others. Victory Park Capital has provided debt financing to numerous next-generation lenders, including Kabbage, Avant, and Zest, notes TechCrunch.
Lover.ly, a three-year-old, New York-based search engine for finding bridal ideas, trends and other wedding-related information, is closing a $2.5 million Series B round at a valuation at or north of $15 million, according to TechCrunch’s sources. No word yet on who is leading the round or otherwise participating in the investment. Lover.ly has raised $1.2 million in seed funding to date, including from Quotidian Venturesand individual investors like Joanne Wilson.
New Relic, a six-year-old, San Francisco-based maker of application monitoring tools for developers, has raised $100 million in funding led by BlackRock and Passport Capital, with T. Rowe Price and Wellington Management participating. The company has now raised roughly $274 million, shows Crunchbase, including from Benchmark, Trinity Ventures, and Tenaya Capital.
PolicyMic, a three-year-old, New York-based site that publishes a mix of original and aggregated articles about “what’s happening in the world and why it matters,” has raised $10 million in new funding from numerous investors, including Netscape cofounder Jim Clark, who said in a statement that the company’s founders “remind me of my younger self and I’m excited to partner with them on this challenge.” PolicyMic had previously raised $5 million from Lightspeed Venture Partners, Lerer Ventures, Red Swan, and Bertelsmann Digital Media Investors, among others.
URX, a year-old, San Francisco-based company focused on mobile deep linking — interconnecting mobile apps in a way similar to how the Web itself operates via clickable links — has closed $12 million in Series A funding led by Accel Partners. Other participants included First Round Capital, Google Ventures and SV Angel. The round values the company, which has raised $15.1 million altogether, at $40 million, says TechCrunch.
RRE, the 20-year-old, New York-based venture firm that largely focuses on New York-based startups, has officially closed its sixth fund with $280 million in commitments. The firm raised the money in just six weeks, co-founder Stuart Ellman tells Business Insider. Last fall, StrictyVC hadinterviewed cofounder Jim Robinson, who suggested the firm would be in the market again shortly. At the time, RRE had mostly finished investing its fifth, $230 million fund, closed in 2011 (a fund that has a 59 percent RRE, the firm tells Business Insider).
As Business Insider notes, some of RRE’s higher-profile deals include OnDeck Capital, the still-private small business lending company;Whiptail, which was acquired by Cisco for $415 million; and Makerbot, which was acquired for nearly $604 million by the 3D printing company Stratasys. “We’re both proud and humbled by what New York startups have been able to achieve,” Ellman tells the outlet. “We think the best is yet to come.”
Aspen Aerogels, a 13-year-old, Northborough, Ma.-based company that designs, develops and makes aerogel insulation that’s used primarily in large-scale energy infrastructure facilities, has filed an S-1 with the SEC. The company, which has raised at least $136 million from investors over the years, counts among its biggest shareholders: Arcapita Ventures, which owns a 13.5 percent stake in the company; GKFF Ventures (formerly known as Argonaut Ventures), which owns 27.1 percent; Reservoir Capital Partners, which owns 32.7 percent; and RockPort Capital Partners, which owns 7.7 percent.
Metabolon, a 14-year-old, Durham, N.C.-based medical technology company that tests how diseases and drugs affect the body, is working on an IPO that could launch by June, sources tell the WSJ. The company has already confidentially filed with the SEC under the JOBS Act. It has raised at least $47.7 million to date, shows Crunchbase; its backers include Sevin Rosen Funds, the Aurora Funds, Camden Partners, Fletcher Spaght Ventures, and Syngenta Ventures.
This one really falls into the almost-an-exit bucket: Fortune is reporting that Walt Disney Co. was in talks to acquire the online content juggernaut BuzzFeed earlier this year, but that talks broke down over price. BuzzFeed, which has raised $19.3 million from investors, was reportedly seeking up to $1 billion.
Also not quite an exit but maybe, possibly getting there: The WSJ is reporting that discussions of a $300 million-plus acquisition of the Indian online clothing retailer Myntra Designs by Flipkart, the Indian retail site, have stalled over how Myntra would be managed afterward. “We want to stay an independent entity; that is nonnegotiable,” Myntra CEO Mukesh Bansal tells the outlet.
Jaspersoft, a 13-year-old, San Francisco-based maker of subscription-based business intelligence software, has been acquired by publicly traded Tibco Software for $185 million. Jaspersoft had raised at least $43 million over four rounds, including from Scale Venture Partners,SAP Ventures, Partech Ventures, DCM, and Morgenthaler Ventures.
Fortune profiles DFJ‘s Steve Jurvetson, who is thinking way, way ahead, as usual — all the way to the software and services layer that will be created when SpaceX and others create cheaper access to space. “These things take so much time and effort to build, it’s kind of like NASCAR,” he says of his own rockets, which he builds with his son. “If it weren’t for the potential for a wreck, it would be a bit less exciting.”
Silicon Valley Business Journal introduces readers to “the other Khosla,”Neeru Khosla, wife of famed venture capitalist Vinod Khosla and founder of the education foundation CK-12, which focuses on content related to science, technology, engineering and math. Says Vinod Khosla of his wife and her efforts: “As a family, we sort of started with the view that only a science education is an education — a somewhat bigoted view, I would say, of mine and hers . . . It’s almost been religion in our family.”
Ted Schlein, a longtime partner at Kleiner Perkins Caufield & Byers, talks with the Silicon Valley Business Journal about a variety of things, including the state of Kleiner Perkins. Says Schlein: “I think people like to talk about stuff that may have taken place 10 years ago when we were focused on green tech. Did that pan out the way we thought it was going to pan out? No, it didn’t. That’s life. OK. So now we focus on some of these other areas, and I think it’s been good.We had a very large number of IPOs and M&A events last year, and the pipeline is quite good for this year. So I think things are going great. But people will say what they are going to say.”
Nokia late yesterday said it was naming former networking unit head Rajeev Suri as its new chief executive, following the sale of its flagship device business to Microsoft. Suri joined Nokia in 1995. Re/code has more here.
Yelp is looking for a senior manager of business development in San Francisco.
Israeli private high-tech firms raised $673 million in venture capital in the first quarter, up 53 percent from a year earlier, the Israel Venture Capital (IVC) Research Center announced this morning. The sum is 16 percent lower than the record amount raised in the fourth quarter but is still exceptionally high, said IVC. More here.
How Twitter‘s monetization strategy is coming together.
A mom packs an encouraging note in her own lunch. (StrictlyVC is days away from doing this.)
An amazing high-rise apartment building in France looks like a tree.
What is a photocopier? (Very funny, though presumably not for the actual people involved. H/T: Balaji Srinivasan)
Dear BMW: We are very confused by this. That is all.