StrictlyVC: June 26, 2014

Hi, good Thursday morning, everyone, and go U.S.A.! (The game starts at 9 a.m. PST.)


Top News in the A.M.

Everything you need to know about Google’s I/O keynote yesterday. (And here is what didn’t come up, to the surprise of many attendees.)

Tell the holdouts in your life: Costco is now offering iPads and iPhones online on the cheap.


The Promise, and Challenges, of Synthetic Biology

Synthetic biology, a discipline that combines chemistry, engineering, and molecular biology to manipulate particular molecules for specific ends, is a little too complex for most Bay Area cocktail parties, where talk of Snapchat usually predominates. “It’s a quagmire of discussion,” says Hemai Parthasarathy, a neuroscientist who is today the scientific director at Peter Thiel’s Breakout Labs in San Francisco.

It could also be one of the most lucrative fields in science. By using gene-sequence information and synthetic DNA, a growing number of established companies and startups are attempting to reconfigure the metabolic pathways of cells to perform new functions that could benefit everything from the agricultural to cosmetic industries.

One such company is Pareto Biotechnologies, which has already raised seed funding from Breakout Labs and other, undisclosed investors. Soon, Pareto will be seeking Series A funding, too.

The company, though young, is farther along than most. Ten year’s worth of lab work has already gone into its platform by founders who include a chemical biology and proteomics professor at the Salk Institute in San Diego, and a serial entrepreneur who has previously founded three other molecular biology companies.

“I don’t want to call other companies we’ve seen naïve,” says Parthasarathy. “But there isn’t necessarily depth to their underlying technology. A lot [of teams] will submit proposals to us that are theoretically sound, but execution is where synthetic biology lives and dies, and it always ends up being harder than you think.”

Pareto is also going after not just one molecule or organism but a system for designing whole classes of molecules, and the company has already developed enzymatic pathways that can, it hopes, lead more quickly to end products.

Right now, for example, the company is working with a cosmetics company that “has a molecule that’s worth hundreds of millions of dollars to them,” says Pareto’s CEO and cofounder Jamie Bacher. “The chemical falls perfectly in the class that we can work with,” and it wants Pareto to modify it in a way that improves its interaction with skin.

Pareto has designed a simple, two-week experiment to see if it can produce the desired outcome. If it succeeds, scaling comes next. Pareto wants to be able to generate enough molecules – maybe a few milligrams’ worth — to prove to the cosmetics company that it’s a viable commercial process. Cosmetics happens to be a $200 billion a year industry, but it’s just one of the sectors Pareto is targeting. “We can cross up and down industries,” says Bacher.

Pareto isn’t without its challenges. While it may have a jump on some of the competition thanks to its knowledge around certain metabolic pathways, it’s still in the process of proving out its technology.

The broader industry, while potentially quite lucrative, is also often dogged by concerns over the cultural implications of altering nature. Consumers might not care what was involved in the making of their anti-aging creams, but flavors and fragrances that are being genetically modified by micro-organisms in vats — rather than extracted from plants — are getting pushback from critics who say the technologies threaten farmers in third world countries.

There’s also debate over what’s “natural.” Explains Parthasarathy, “You can chemically synthesize some of these molecules of interest using organic chemistry processes, and people call that artificial flavoring. Or you can grow it in a forest and purify it and then it’s ‘natural’ flavor. People claim synthetic biology products are natural because they’re being grown in an organism, and there’s some question whether that’s a valid designation.”

Ultimately, it comes down to consumer buy-in, notes Parthasarathy. For her part, she thinks it’s all much ado about nothing. “I think it’s irrelevant how a particular chemical is produced, whether it’s natural or artificial. If it’s a purified chemical, it’s irrelevant to one’s health how it came to be purified.”


New Fundings

Akvolution, a 1.5-year-old, Berlin, Germany-based water treatment technology company, has raised a “six-digit” seed funding round from High-Tech-Gründerfonds, it says.

BlockScore, a 1.5-year-old, Menlo Park, Ca.-based maker of identity-verification and anti-fraud technology for online businesses, has raised $2 million in seed financing from a group that includes Battery VenturesKhosla VenturesLightspeed Venture PartnersNew Atlantic VenturesBoost VCY Combinator and several angels.

The Bouqs, a 1.5-year-old, Venice, Ca.-based cut-to-order online flower delivery service, has raised $6 million in Series A financing led by Azure Capital Partners, which was joined by KEC Ventures. The company had previously raised $1.1 million in seed funding from numerous individual investors and firms, including Mich MathewsDennis PhelpsAndy DunnBrian SpalyTelegraph Hill CapitalQuest Venture Partners, and Siemer Ventures.

Coherent Path, a two-year-old, Arlington Heights, Ma.-based retail analytics startup, has raised $6.3 million in Series A funding led by Sigma Prime Ventures and GrandBanks Capital. The company has raised roughly $7 million altogether, including from dunnhumby VenturesCommonAngels, and BOLDstart Ventures.

CoPatient, a two-year-old, Portland, Or.-based medical-billing company that helps patients spot mistakes in their medical bills, has raised $3.6 million in Series A funding led by .406 Ventures. Earlier investors Cambia Health Solutions and Athenahealth executive Jonathan Bush also participated in the round. CoPatient had previously raised $1.1 million in seed funding.

Couchbase, a five-year-old, Mountain View, Ca.-based NoSQL database company, has raised $60 million in Series E funding led by WestSummit Capital and Accel Growth Fund, as well as earlier investors. The company has now raised $116 million, shows Crunchbase. The WSJ has much more here.

Curiyo, a 2.5-year-old, Jerusalem-based company whose browser app enables users to look up names, places, and other terms in a pop-up window without leaving a Web page, has raised $1.9 million in seed funding from OurCrowdCedar FundMorton MeyersonKima VenturesTom GlocerGigi LevyJumpSpeed Ventures, and other private investors. Curiyo was founded by Bob Rosenschein, founder and former CEO of The company has raised $3.3 million to date, shows Crunchbase data.

Deliveroo, a two-year-old, London-based restaurant take-out platform, has raised $4.6 million in Series A funding led by Index Ventures, with participation from Hoxton Ventures. TechCrunch has more here.

Fingerprint, a four-year-old, San Francisco-based developer of mobile game apps for children, has raised $10.9 million in new funding led byDreamWorks Animation SKG, which was joined by Reed Elsevier and Corus Entertainment. The company has raised roughly $20 million to date.

mCube, a five-year-old, San Jose, Ca.-based company that makes semiconductor chips that are reportedly comparable to the size of a grain of sand, has raised $37 million in new funding led by previous investors Kleiner Perkins Caufield & ByersMediaTekiD Ventures America, and DAG Ventures. New investors Keytone VenturesSK Telecom Ventures, and Korea Investment Partners also participated in the round, which brings the company’s total funding to $70 million.

MobileRQ, a two-year-old, Portland, Or.-based company whose software aims to help travel and hospitality marketers deliver targeted content to travelers’ mobile devices, has raised $1.3 million in new funding from earlier investor Verizon Ventures and new investors Coremix CapitalRogue Ventures and TiE Oregon. The company has now raised $8 million altogether.

Nutmeg, a four-year-old, London-based online investment management company that builds and oversees investment portfolios for companies, has raised $32 million from investors, including Balderton CapitalSchroders, and individual investors Tim Draper and Daniel Aegerter. The company has raised $37.3 million altogether, shows Crunchbase.

RedOwl Analytics, a 2.5-year-old, Baltimore, Md.-based company whose software helps organizations analyze their internal corporate data streams, has raised $4.6 million from investors, including Salesforce CEO Marc BenioffIgor Sill of Geneva Venture Group; Christian Lawless of Conversion Capital; Attractor VenturesPropel Baltimore; and Tedco’s new Veterans’ Opportunity Fund. The company has raised $7.5 million altogether, shows Crunchbase.

Sapho, a months-old, San Francisco-based mobile app that uses software APIs to pull from a company’s various enterprise applications and provide relevant updates for each user, has raised $3 million in funding from a group of investors that includes Raymond Tonsing of Caffeinated Capital, Bloomberg Beta, Redpoint Ventures founder Brad Jones, and Andy Rankin. TechCrunch has more on the company, cofounded by serial entrepreneur Peter Yaredhere.

TapZen, a two-year-old, L.A.-based mobile gaming startup, has raised $8 million in new funding from Tencent Holdings. The company had previously raised $10 million in “seed” funding from social games giant Zynga, reports the WSJ. More here.

Truveris, a five-year-old, New York-based health information technology company that provides pricing and analysis tools to sponsors of prescription benefit plans, has raised $12.75 million in Series C funding led by Canaan Partners. Earlier investors New Leaf Venture PartnersTribeca Venture PartnersNew Atlantic Ventures and First Round Capital also participated in the round, which brings the company’s funding to roughly $26.5 million.

Whoop, a 2.5-year-old, Boston-based wearable health tech startup, has raised $6 million, according to an SEC filing first flagged by Xconomy. Jeff Fagnan of Atlas Venture is listed as a director.

WISErg, a 2.5-year-old, Issaquah, Wa.-based biotech company that converts food scraps into organic fertilizer, has raised $5 million in Series B funding from undisclosed investors. The company has raised $7.75 million to date.



GoPro is going public today, and the San Jose Mercury News has anexcellent overview of its history, what customers love about the company, and why it needs a solid content strategy to stay in the good graces of public market investors. The San Mateo, Ca., company priced its shares last night at $24 apiece, with some early investors selling 17.8 million shares.

Taking a step back, Renaissance Capital reports that 18 IPOs are set to price this week (five had priced as of yesterday morning), which could make it the most active week for IPOs in a decade.



Appurify, a two-year-old, San Francisco-based startup that makes it possible for developers to automate the testing and optimization of their mobile apps and websites, has been acquired by Google, the search giant announced yesterday. Terms of the deal aren’t being disclosed, butTechCrunch says it will “stay open as freemium cross-platform service.” Appurify had raised $6.3 million from investors, shows Crunchbase, including Google VenturesFoundation CapitalRadar PartnersFelicis VenturesWebb Investment NetworkData CollectiveInspovation Ventures and individual investors.



Facebook released diversity-related stats about its workforce yesterday, and they look an awful lot like those of Google’s and LinkedIn’s, which is to say, not good.

Venture capitalist Ben Horowitz received a special birthday tribute this week by rapper Divine.

The Supreme Court ruled yesterday that Aereo, a TV streaming service, had violated copyright laws by capturing broadcast signals and delivering them to subscribers for a fee. Calling the ruling a “massive setback,” the company’s founder, Chet Kanojia, went on to say in a published statement that, “We are disappointed in the outcome, but our work is not done. We will continue to fight for our consumers and fight to create innovative technologies that have a meaningful and positive impact on our world.”

Hey, L.A.: Serial entrepreneur Sean Parker is “having a serious sniff around a super-luxe, nearly three acre, compound-like estate in Brentwood owned by a billionaire financier (and hardcore real estate baller) who’s shopping the posh property on the QT with a $30-ish million price tag,”reports Real Estalker.

FCC Chairman Tom Wheeler was in Silicon Valley yesterday and Tuesday to hear what the tech community thinks of net neutrality proposal. (We can imagine how that went.)


Job Listings

Lerer Hippeau Ventures will be adding “one or two” new associates to its team, managing director Eric Hippeau told StrictlyVC on Tuesday. We’re not sure how soon the firm plans to bring anyone new on board, but you might want to start working your connections. The firm is based in New York.

Visa is looking for a director of portfolio management in Foster City, Ca., just south of San Francisco.



Tomorrow in San Francisco, 500 Startups hosts PreMoney, a one-day conference for accredited investors about the future of venture capital. You can check out the speaker line-up here; registration is over here. (We’ll be there for the first half of the day; hope to see some of you.)



Trying to keep tabs on who has what? You might check out this comprehensive database of venture funds that have raised $200 million or less since the beginning of 2011, care of Silk.


Essential Reads

Google is about to make it easier for other Internet applications to use information in your email.

Amazon is rolling out a food takeout service, “a direct competitor to GrubHub, Seamless and DeliveryHero,” says someone who worked on the service to TechCrunch.



The same family, in front of the same backdrop, every year for 21 years.

Dramatic wedding photos.

Do not let your doctor operate on you on a Friday.

Can I still eat it? Your guide to real expiration dates.


Retail Therapy

Good people of San Diego, this one is for you.

And the purpose of your visit?


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