Top News in the A.M.
People are likely better acquainting themselves with Apple’s two-factor authentication system, after explicit photos of more than 100 celebrities were leaked over the weekend — stolen, seemingly, from their iCloud accounts. (Actress Kirsten Dunst, one of the victims, had some choice words for the cloud-storage service yesterday.)
Uber is now banned across Germany.
With Kleiner’s Snapchat Deal, There Isn’t Much to See
About a week ago, the WSJ reported that Kleiner Perkins Caufield & Byers is investing up to $20 million in Snapchat at a $10 billion valuation as part of a larger round that the messaging app is assembling. The piece noted that just months earlier, DST Global had also quietly committed capital — at a $7 billion valuation.
The news generated a lot of chatter, with one piece in particular suggesting that Kleiner is part of a broader pump-and-dump scheme to keep valuations frothy until retail market investors are convinced to buy companies like Snapchat on the public market. (If Snapchat is eventually sold for top dollar to a publicly traded acquirer like Facebook and Google, that’s apparently just as pernicious as they, too, are partly owned by retail investors.)
It’s not the first time tech investors have been accused of looking to sell their shares to a greater fool. When it comes to Kleiner’s investment, though, the argument misses the mark. Kleiner’s motivations look simpler to me.
First and foremost, despite a recent string of exits for the firm, including Dropcam’s sale to Google, Kleiner is still seen as slightly out of touch compared with some of its Sand Hill Road peers. It nearly missed Facebook and Twitter. It bet heavily on Zynga. And it has parted ways with many of its younger partners, through attrition, downsizing, and a lawsuit, which probably doesn’t make it any cooler to young entrepreneurs (or younger LPs, for that matter). Some say that institutional investors are no longer swayed by the logos in a venture firm’s portfolio, but LPs don’t swoon over Kleiner like they once did. In this case, maybe Kleiner is hoping the logo makes an impression.
Another motivating factor might be Kleiner’s desire to acquire information rights to Snapchat. What direction is Snapchat moving toward? What new technologies is it developing that will change the face of mobile apps? Who is it partnering with and which startups might it acquire? While it might seem like general information, it puts Kleiner in the know and could help its portfolio companies, at least tangentially.
There’s also IRR to consider. Kleiner’s Snapchat investment might not generate a good cash-on-cash return for the firm, but it could turn into a high IRR deal if Snapchat sells soon, which seems as likely as any scenario given that it has virtually no revenue at this point. Even if an acquisition doesn’t do much for Kleiner’s overall fund, it’s always nice to have some flashy numbers to produce for potential investors.
It may be convenient to use Snapchat as an example of a bubble in Silicon Valley. But pointing to Kleiner’s role in Snapchat’s soaring valuation is giving Kleiner a bit too much credit. The reality is more mundane, as far as I can tell. Kleiner wanted to be associated with a high-profile deal and it was willing to get in at any cost. And it succeeded.
Clearside Biomedical, a three-year-old, Alpharetta, Ga.-based biopharmaceutical company that’s developing drug therapies to treat blinding diseases of the eye, has raised $16 million in Series B financing from new investor RusnanoMedInvest, along with earlier investors Hatteras Venture Partners, Santen Pharmaceuticals Co., Mountain Group Capital, and Georgia Research Alliance Venture Fund. The company has now raised $33.9 million altogether, shows Crunchbase.
eNeura Therapeutics, a 14-year-old, Sunnyvale, Ca.-based medical technology company whose stimulation devices treat migraines, has raised $5.8 million in new funding, shows new SEC paperwork. Previous filings show the company has now raised roughly $14.6 million in equity and debt over the last two years alone. Terry Lierman, the founder of Summit Global Ventures, is among those directors listed on the filing.
FreeCharge, a four-year-old, Mumbai, India-based online platform that lets user earn coupons when they add money to their prepaid mobile phone plans or pay utility bills online, has raised a $33 million in Series B funding from Sequoia Capital, Sofina, and RuNet. The company has also added several new board members, including Gokul Rajaram, a well-known Silicon Valley operator who is currently head of online payments at Square. TechCrunch has the story here.
GC-Rise Pharmaceutical, a six-year-old, Beijing-based pharmaceutical company that specializes in women and children’s healthcare, has raised $15 million in Series B round funding from OrbiMed. GC-Rise makes a wide array of products, including to address anti-aging, reproductive health, autoimmune diseases and central nervous system disorders.
MindMixer, a 4.5-year-old, Kansas City, Mo.-based online platform that allows local governments and school districts to connect with their communities, has raised $17 million in Series C funding led by the Omaha-based firm Dundee Venture Capital, with Govtech Fund and another, unnamed strategic investor participating. The company has now raised $23.2 million altogether, it says.
Nabysys, a 10-year-old, Providence, R.I.-based life sciences company that makes semiconductor tools for DNA analysis, has raised $25 million in new funding, shows a new SEC filing that shows a $32 million target. The company had previously raised at least $58 million, shows Crunchbase. Its investors include Stata Venture Partners, Bay City Capital, and Point Judith Capital.
Purposely, a 1.5-year-old, Phoenix, Az.-based company whose online platform helps optimize college students’ employment preparation, has raised $2.4 million in new funding, shows an SEC filing. An earlier filing shows the company had previously raised $2 million from investors.
Ting Ting Group (“DXY”), a 14-year-old, China-based social media platform focused on healthcare services, has received $70 million in strategic funding from Tencent in exchange for a minority stake in its business. Reportedly, the company had previously raised two rounds of funding from DCM and Shunwei China Internet Fund. TechNode has the story here.
Whill, a two-year-old, San Carlos, Ca.-based company that creates high-performance wheelchairs, has raised $11 million in Series A funding from Innovation Network Corp., 500 Startups, NTT DoCoMo Ventures, Jochu Technology Co. and Sun Microsystems co-founder Scott McNealy, reports the WSJ. (If this deal sounds familiar, it’s because we reported on this round in July after spotting a related SEC filing.) The company had earlier raised $1.9 million in seed funding, including from Bridge Global Ventures, 500 Startups, Itochu Technology Ventures, KAMIA, MUFJ Capital, and VegasTechFund. It also ran a small, successful campaign on Kickstarter, which you can still see here.
DN Capital, a 14-year-old, London-based Pan-European early-stage venture firm, has raised $200 million for its third fund, reports TechCrunch. The firm, whose latest effort is three times the size of its predecessor, has now raised $320 million altogether. Among its newest bets is the real estate agency PurpleBricks, which raised a $13.4 million Series A round last month, and the online reservation platform Quandoo, which raised $25 million in Series C funding in July. (DN Capital also participated in Quandoo’s $8 million Series B round, closed last last year.)
Floodgate, the eight-year-old, Palo Alto, Ca.-based early-stage firm, has closed its fifth fund with $75.8 million, the third fund in a row that has closed at roughly the same size, says the firm.
Sequoia Capital is raising a fifth China fund, shows an SEC filing that doesn’t list a target and says the first sale has yet to occur.
Surgical Frontiers, a Utah-based incubator and investor in new medical technologies, has closed its inaugural fund with $7 million, reports VentureWire.
The highly anticipated public offering of e-commerce giant Alibaba is coming — fast. According to Bloomberg, the company “tentatively” looks to price its offering on September 18.
Business Insider remembers the kings of the dot.com bubble, and catches us up on where they are now.
Google‘s Sergey Brin Is “totally obsessed” with high-adrenaline exercise, says Business Insider in a sensational (but fun) read.
Eric Cantor, the recently defeated House majority leader, has joined the boutique investment bank Moelis & Co.; he’ll open a new office for the firm in Washington, reports the WSJ.
Steve Case, the former chief executive of AOL and founder of Revolution, is planning an 1,800-mile bus tour next month to draw attention to entrepreneurial communities in Madison, Wi.; Minneapolis, Mn.; Des Moines, Ia.; and Kansas City, Mo. Each stop will include a pitch competition whose winner will receive a $100,000 investment from Case.
Brian O’Malley, a general partner at Accel Partners, has some harsh words about Twitter CEO Dick Costolo, squarely blaming him for much of the company’s C-suite departures in 2014. “If someone’s gotten divorced once, you really don’t know who’s to blame,” O’Malley tells BusinessWeek. “But if someone’s gotten divorced five times, there may be a pattern there.” (O’Malley is a straight shooter. When StrictlyVC sat down with him last winter, just before Accel poached him from Battery Ventures, he also noted that “investors are fundamentally lazy.”)
You might take a second (or third) look at Y Combinator’s most recent graduates. Investor-entrepreneur Keith Rabois calls the 75 teams “almost surely the best batch as a whole that has ever existed at YC.”
Lindsay Sharma has joined Industry Ventures as a vice president, working with the firm’s secondary investment team. Sharma was most recently a principal in corporate strategy and development at Intuit.
Y Combinator is launching a recruiting drive to get more black entrepreneurs into its incubator program, including by adding black colleges to its recruiting tour this fall.
Online retailer Zulily is looking for a director of business development. The job is in Seattle.
BoxWorks gets underway in San Francisco today. Keynote speakers include Box CEO Aaron Levie, author Jim Collins, DreamWorks Animation CEO Jeffrey Katzenberg, and LinkedIn CEO Jeff Weiner.
Women venture capitalists underperform their male counterparts by some 15 percent, according to a new Harvard University study of old data. The study further suggests that difference narrow over time and at firms that employ more than one female VC.
Most accelerators aren’t worth much, according to Silk.
Startups are accruing funding in case of leaner times, they tell the New York Times.
The top 10 reasons that Apple rejects apps.
Even Ikea can’t be bothered to assemble its furniture.
The “sweet rides” of tech’s millionaires and billionaires.
We’ve definitely been peeling apples the wrong way.
If you’re in the market for a spider-shape, blow-up home that could be highly useful in a refugee situation and also a party-pad situation at Burning Man, billionaire Bob Pittman has you covered.