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Top News in the A.M.
Apple announced this morning that it has sold more than 10 million new iPhone 6 and iPhone 6 Plus models just three days after launching them — a new record for the company.
Kuaidi Dache Races to Become the Uber of China — Before Uber Does
Kuaidi Dache, a two-year-old ride-sharing app and service that’s headquartered in Hangzhou, positions itself as the Uber of China. Now, it just has to outperform Uber itself, which opened an office in Shanghai in February and currently offers its marquee black car service in six major cities — with hiring underway in at least eight others.
At the moment, Kuaidi seems well-positioned to win. The company began life as a free taxi-booking service, and it has since amassed 100 million users who place about 3 million daily orders to more than one million drivers in roughly 300 cities, says the company.
In July, Kuaidi added a luxury car service that’s now operating in 32 cities to strengthen its challenge. But taking on Uber isn’t for the faint of heart, considering Uber’s funding ($1.5 billion to date), its famously aggressive tactics, and its designs on winning China, where more than 500 million users access the Internet from their phones. Both Uber and Kuaidi are also competing against a third player in China, Didi Taxi, which has raised $117 million so far, including from Tencent Holdings. But Kuaidi’s backers –Alibaba, Matrix Partners China, and New Horizon Fund – have pretty deep pockets of their own, and they are in it to win it, suggests Kuaidi’s cofounder, serial entrepreneur Joe Lee. We talked last week with Lee about the company’s game plan.
You gained traction through a free taxi-hailing app. Now you have a two-month-old car service. How much traction are you seeing, and are these drivers your employees or do they also work for other car services?
We have about 10,000 orders per day, eight weeks after its launch. And we have a combination of both types of drivers. We use licensed cars in China to ensure that we can fulfill the regulatory requirements, so most of the drivers work for us exclusively, but in some new cities, we also work with some part-time drivers.
Are there also eventual plans for an UberX type service, using cheaper vehicles and/or a ride-sharing service like Uber launched in Beijing this past summer, allowing private individuals to pick up passengers?
We’re exploring different opportunities in expanding our fleet. However, the way we look at this business is we have to collaborate with the government authorities to ensure we can move forward without any bumps. As you can imagine in China, to have the business grow in a big way, we have to pay extra attention to the regulatory requirements.
Including a ban on the use of booking apps by cab drivers and private vehicles for hire during rush hour periods in both Beijing and Shanghai, correct?
Yes, during the peak hours, they prefer that drivers not use the app. The key point behind it is safety. The traffic is so jammed that even if you operate on your phone by tapping on it, it’s not safe. So we’re in a very new business, and the law isn’t 100 percent designed to address the new technology, so we’re always talking with all stakeholders.
Uber is known for its hardball tactics, including trying to lure drivers from competitors. Have you bumped up against the company?
For us, it’s a respectable player in the market. In our market, we haven’t seen much of this situation. A lot of drivers are working for us exclusively, so there’s no way to lure them by offering them an extra $2 or $5 per order.
With your car service, are you getting pushback from cab drivers whose business you’ve long helped?
The beauty of our model is that we still work with taxi drivers, so we start off with a good relationship with the taxi industry. We also have a channel with them to talk with them, so we communicate concerns to each other. In our case, when we launched our limo service in China, we received a lot of feedback. Some said it’s a complementary service, some said they have concerns about the safety of our cars and are they licensed – they were fearful of competition. But we haven’t seen any substantial response or feedback.
Uber has always viewed itself as a logistics company, one with plans to enter into many other lines of business. What’s your vision for Kuaidi?
There are many possibilities. With a million drivers and a huge user base that’s specifically using our apps for transportation, we see many opportunities. We have a drink-and-drive service, for example. Along those lines, you could think about car rentals. This market isn’t as established as it is in the States, so we see many ways to leverage our user base.
Kuaidi has announced eventual plans to go after the European and U.S. markets. Why not just focus on China right now?
It’s true that we’ve just started in China, so we first focus on all these low hanging fruits and build a fence to ensure the fruits are protected. At the same time, we are taking small steps forward in our international plan. Our first operation out of mainland China has been launching our taxi service in Hong Kong, where, aside from the language, a lot is different — user behavior, regulations, the taxi industry, interested parties. So we’ll [pace ourselves], that’s the plan.
Club W, a three-year-old, Manhattan Beach, Ca.-based e-commerce wine business, has raised $9.5 million in Series A funding led by Bessemer Venture Partners. The company has now raised $13.1 million altogether, including from Amplify.LA, Canyon Creek Capital, Guild Capital,Wavemaker Partners, Crosscut Ventures, and 500 Startups.
Cribspot, a 1.5-year-old Ann Arbor, Mi.-based startup that helps college students find places to live, has raised $660,000 in seed funding led byHuron River Ventures, with First Step Fund participating. Crain’s Detroit Business has more here.
EdCast, a year-old, Mountain View, Ca.-based startup that creates online learning platforms for educators, companies, and governments, has raised $6 million in Series A funding led by Softbank Capital, with Mitch Kapor, Menlo Ventures, Novel TMT Ventures, Cervin Ventures, Aarin Capital, NewSchools Venture Fund, and Stanford StartX (which helped accelerate the company) participating.
Gem, an 11-month-old, Venice, Ca.-based bitcoin startup formerly known as BitVault, has raised $2 million in seed funding led by First Round Capital and Tekton Ventures, with participation from RRE Ventures,MESA+, Amplify.LA, Birchmere Labs, Idealab, ECEG Partners, Baroda Ventures, Wavemaker Labs, Bitcoin Shop, Crypto Currency Partners and QED Associates.
Honeybook, a 1.5-year-old, San Francisco-based invite-only planning platform that helps creative businesses and their clients collaborate, has raised $10 million in funding led by Aleph. Other participants in the round include Hillsven VC; Khosla Ventures; James Currier and Stan Chudnovsky of Ooga Labs; Ev Williams; Naval Ravikant; Michael Birch; and Ben Narasin. Earlier investor UpWest Labs also joined the round.
Housing.com, a two-year-old, Mumbai, India-based online real estate portal that helps people rent and buy homes, is in talks to raise as much as $30 million (about Rs 180 crore) from existing and new investors including VC Yuri Milner and Tybourne Capital, reports the Economic Times. The company raised $19 million in its fourth round of funding just four months ago, from Helion Venture Partners, Nexus Venture Partners, and Qualcomm Ventures.
iHealth, a four-year-old, Mountain View, Ca.-based maker of a wireless blood glucose monitor, has raised $25 million from Xiaomi Ventures for its first institutional round of financing. The company is a subsidiary of the medical device manufacturing company Andon Health.
MobiKwik, a five-year-old, Gurgaon, India-based mobile wallet startup, is in talks with venture capital funds to raise $25 million (about Rs 155 crore), reports the Economic Times. The move comes “weeks after the Reserve Bank of India asked ventures providing services to domestic consumers to follow the two-step authentication process, a directive that has given a boost to India’s nascent digital payments sector,” says the report.
QuotaDeck, a months-old, Salt Lake City, Ut.-peer-to-peer sales marketplace, has raised $400,000 in seed funding, including from Peterson Partners, Kickstart Seed Fund, TechStars, in whose accelerator program the company is currently enrolled. (The company completes the program on October 9.) Silicon Slopes has more here.
Draper Nexus Ventures, a 13-year-old, San Mateo, Ca.-based early stage venture firm that backs startups in the U.S. and Japan, has raised $29.3 million for its second fund, according to an SEC filing that shows a target of $125 million.
Restart Capital, a new St Petersburg, Russia-based venture fund formed by Dmitriy Filatov, a founder of an online dating site called Topface, has launched with $2.5 million in capital, which Filatov characterizes as a starting point. The fund will focus on Russia-based social and mobile services startups like messaging and dating services; advertising businesses and marketplace operators; and financial services, including cryptocurrencies. The London-based outlet Unquote has the story.
The China-focused private equity firm SAIF Partners has teamed up with China-based appliance maker Haier Group to jointly establish a $52.1 million industry fund to invest in smart home products and services in the country, reports China Money Network, citing a regulatory filing. Last October, KKR agreed to acquire a 10 percent stake in Haier for $552 million as part of a strategic partnership.
Tola Capital, a 4.5-year-old, Seattle-based venture firm, has raised $33 million for its first fund, according to an SEC filing that shows a target of $150 million. The firm’s founders include Sheila Gulati and Stacey Giard, both longtime Microsoft managers. GeekWire has much more here.
U.S. Venture Partners, the 33-year-old, Menlo Park, Ca.-based venture firm, is targeting $275 million for its eleventh fund, according to a new SEC filing that states the first sale has yet to occur. The firm closed its tenth fund with $625 million in 2008; in the intervening years, many of its GPs left, including to start their own funds.
Calithera Biosciences, a four-year-old, South San Francisco, Ca.-based clinical-stage pharmaceutical company at work on small molecule drugs directed against tumor metabolism, is planning to sell six million shares at a price range of $13 to $15 for its IPO, shows a new filing for the company. Calithera’s biggest shareholders include Delphi Ventures, which owns 19.5 percent of the company; Morgenthaler Venture Partners, which owns 18.3 percent; Advanced Technology Ventures, which owns 18.3 percent; Adage Capital Management, which owns 18.1 percent; T. Rowe Price, which owns 7.2 percent; Wellington Management Company, which owns 6.0 percent; and Longwood Fund, which owns 5.8 percent.
Sientra, an 11-year-old, Santa Barbara, Ca.-based maker of silicon implants, has filed to raise $86.3 million in an IPO. The company has raised at least $150 million from investors, shows Crunchbase. Its biggest shareholders include Abingworth Bioventures, which owns 18.6 percent of the company; OrbiMed, which owns 33.8 percent; and Clarus Lifesciences, which owns 29.8 percent.
Twitpic, a photo sharing service that recently announced it would be closing its doors following a legal trademark battle with Twitter, disclosed late last week that it isn’t shutting down after all; the company is being acquired, though it’s not saying yet who its new parent company will be.
Joe Green, the president of FWD.us, has resigned from the political organization backed by numerous tech luminaries, including Facebook cofounder Mark Zuckerberg, Microsoft cofounder Bill Gates and Dropbox cofounder Drew Houston. According to an email leaked (repeatedly) to Recode, it looks like his resignation was forced, too.
Pierre Lamond, who spent nearly 20 years at Sequoia Capital and another four or so at Khosla Ventures, which he left in June, has accepted a new advisory position at Formation 8, the venture firm founded by Joe Lonsdale, Jim Kim and Brian Koo. TechCrunch has more here.
After abruptly resigning nine days into his role as the chief strategy officer of the food and technology startup Hampton Creek, Ali Partovi is now disputing the company’s account that he will remain an advisor in the company. “I resigned completely,” Partovi told the New York Times on Friday night. “I’m not working with Hampton Creek in any capacity.” To which Hampton Creek CEO Josh Tetrick said, “O.K. Like every person in our world, if they prefer not to be an adviser, that’s their call.”
Oliver Samwer, co-founder of CEO Rocket Internet, is reportedly poised to increase his stake in the German venture capital firm under a stock options program that will be part of Rocket Internet’s planned stock market offering. Specifically, says Reuters, Samwer stands to receive options that entitle him to buy 4.5 million shares, or about 4 percent of the current share capital, at an unspecified discount over the next five years based on certain business performance targets.
Victoria Song has joined Flybridge Capital Partners as a principal in New York. Song spent a couple of years as an associate with the firm before heading off to Harvard Business School to get her MBA. While at Flybridge, she had sourced two portfolio companies Tracelytics, acquiredby AppNeta, and Crashlytics, acquired by Twitter. You can learn more here.
Angie’s List, the reviews site that went public in 2012, is looking for a VP of strategy and business development. The job is in Indianapolis, In.
BBG Ventures, the newly announced AOL-backed venture fund that’s focusing on women-led tech start-ups and led by Susan Lyne, is looking for a fall semester intern. The job is in New York.
There are now 2,325 billionaires in the world, up 7 percent over last year, according to Wealth-X and UBS. That’s one billionaire for every three million people on the planet, notes the WSJ, and most of them are in Europe, where there are 775 billionaires. (The U.S is home to 571 billionaires, if you’re curious. It’s also home to four million millionaires, according to RBC Wealth Management data cited by the WSJ.)
Meet the “network of connectors” in L.A. and beyond that are bringing together celebrities with startup stakes.
Zenefits is blowing up the businesses of health insurance brokers across the country. The New York Times explains.
A new startup finds money in email bounce-backs.
Vox looks at how Betaworks has managed to rebuild Digg and repair its reputation.
The New York Times profiles social psychologist Amy Cuddy, a rising star in the business world. (I interviewed Cuddy in 2010; she shared some useful tips on how to connect quickly with others in business settings.)
The men’s business suit onesie hybrid. Up for a vote right now by the clothing company Betabrand. Says commenter Matt: “Tell me that it doesn’t need to be dry cleaned, and I will buy 5.”