• Venture Debt Giant WTI on Good Times, and Dangers Ahead

    maurice-werdegarThe 34-year-old venture debt firm Western Technology Investment (WTI) has seen some cycles, and its CEO, Maurice Werdegar, thinks investor Bill Gurley had a point when he talked publicly last week about the excessive risk that startups are taking on.

    He doesn’t think Gurley scared anyone straight, though. “I think the [dot com bubble of the late ‘90s] is a distant memory to many participants in the ecosystem, so we’re not seeing anyone panic or ring the alarm bell,” says Werdegar. “We’re seeing burn rates increase across the board, and that’s emblematic of companies that think they’re supposed to accelerate into their opportunity without thinking about whether they can raise the next round.”

    It can mean brisk business for venture debt companies like WTI, which is currently joining about 100 financing deals a year, but it’s also dangerous, notes Werdegar. We talked about the environment, and WTI’s role in it, yesterday morning. Our chat has been edited for length.

    For readers who don’t completely understand venture debt, can you explain why a startup would turn to you?

    There are a number of cases, including to finance equipment, like when it comes to bitcoin mining. When a startup is behind on its plan, venture debt can also give it time to achieve the milestones it needs to obtain. Or it can be used to provide more runway to a company that may be hiring and spending ahead of its original plans because it sees a product-market fit and doesn’t necessarily want to be forced into raising another [VC] round prematurely.

    Another case is to get to profitability. Sometime companies close enough to achieving breakeven raise debt rather than raise capital again, which can change acquisition discussions. Some startups also turn to venture debt to take out a competitor. Maybe they didn’t contemplate an acquisition when they raised their last round; venture debt [enables them to acquire that competitor anyway].

    What types of deals are you doing and what’s your minimum threshold?

    Ninety percent are tech deals right now. Another 10 percent are life sciences. We’ve done deals right out of Y Combinator on the low end; many of the deals we’re doing are with seed syndicates. We’ve also done deals north of $30 million, with several greater than $10 million in size this year, including Jet.com [the new e-commerce company by Quidsi cofounder Marc Lore].

    The seed stuff is interesting. You were actually involved with Facebook, as reported in David Kirkpatrick’s book, The Facebook Effect.

    We were the first venture debt for both Google and Facebook. We supplied debt along with Google’s Series A. With Facebook, we supplied two consecutive venture debt rounds of $300,000; they were buying servers because the cloud didn’t exist yet. We were also a seed equity investor in Facebook, writing a $25,000 check alongside Peter Thiel’s $500,000 check and the $37,000 checks of [entrepreneurs] Reid Hoffman and Mark Pincus, and we did a $3 million venture debt deal when Accel [led Facebook’s] $12 million Series A round [to cover the cost of computers and other hard assets]. The debt, in addition to the equity the company raised early on, helped position it for that next round. They don’t all go that way, though. [Laughs.]

    What kinds of convenants do you ask for?

    We have none . . . so we’re taking true risk. Our industry is known for taking money back when it gets nervous. Our firm actually loses money. It’s easy to lend money to a famous company, but much harder to work through unforeseen difficulties to keep a company alive and we’ll work through that adversity.

    What kind of return are you looking for when you get involved with a company?

    We have to deliver reasonably consistent, positive returns, but I’d rather not quote a number. There are often competitors that offer money less expensively, but it will come with covenants. Ours is more expensive but more usable. It’s a bit of you-get-what-you-pay-for in this industry.

    There are obvious upsides to venture debt, including that it reduces dilution to the founder. What are the biggest downsides?

    If it’s overused or abused, it can kill you. In any application of debt, there’s an amount that’s too much and it can get in the way. Say you’re a Y Combinator company and you raise $10 million in debt; the next round of investors won’t be interested in coming in with that kind of debt load. No one wants to finance a company that’s overburdened with debt.

    If debt can be called back, it can cause unforeseen calamity, too. If your bank account has been swept, legally, that’s scary for companies.

    You haven’t seen any reaction outside of the media to Bill Gurley’s proclamations last week. Does that worry you?

    We ourselves feel as if things can’t get a whole lot better than the current environment. A lot depends on Facebook and Google. If they trade down 20 percent, you can be sure the venture market will take a pause. It’s imperative that they keep feeding the pump from the M&A side.

    Any thoughts on valuations?

    Most valuations that you’re seeing are by no means the value of company if it were to try to sell itself today. It’s the Black-Scholes model – [pricing options] based on what a company might become worth, which could be very different than what it’s worth [currently]. That, I think, is dangerous.

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

    Connie

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  • StrictlyVC: September 22, 2014

    Hello and good Monday morning, everyone! (Web visitors, here‘s a version of today’s email that’s easier on the eyes than what you’ll find below.)

    —–

    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.

    —–

    New Fundings

    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.

    —–

    New Funds

    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.

    —–

    IPOs

    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.

    —–

    Exits

    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.

    —–

    People

    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.

    —–

    Job Listings

    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.

    —–

    Data

    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.)

    —–

    Essential Reads

    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.

    —–

    Detours

    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.)

    —–

    Retail Therapy

    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.”

    Connie

    ,

  • Kuaidi Dache Races to Become the Uber of China, Before Uber Does

    Kuaidi OneKuaidi 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 three six million daily orders to more than one million drivers in 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 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 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.

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

    Related articles

    Connie

    , , ,

  • StrictlyVC: September 19, 2014

    Happy Friday morning, everyone! We hope you have a stellar weekend; we’ll see you back here on Monday. (In the meantime, here is an easier-to-read version of today’s email.)

    —–

    Top News in the A.M.

    Alibaba is now worth more than either Amazon or eBay, with a market value of close to $224 billion as of this writing. As it rings in the day (and the bell) at NYSE, Recode offers a few things to keep in mind about the largest tech IPO of all time.

    —–

    Jon Sakoda: Never Mind What Angels Say, VCs Have Your Back

    Partner Jon Sakoda of New Enterprise Associates, who co-heads the firm’s seed-stage practice, doesn’t know yet if it makes sense for NEA – which manages billions of dollars — to be dabbling with nascent startups.

    Over lunch recently at San Francisco’s MarketBar brasserie, Sakoda spoke candidly about the firm’s concerns about “diluting the NEA brand and the experience that an entrepreneur has with an NEA partner. We didn’t want to emulate other models where you get a second-tier experience because you’re a seed-funded company versus a prime-time NEA company.” NEA’s limited partners also “question whether it’s a good use of our time,” said Sakoda between bites of his BLT. “If I’ve invested $2.5 million in other companies and $250,000 in these other companies, is it really worth my time to invest in what can be some very challenging times for these companies?”

    Unsurprisingly, perhaps, NEA thinks the answer is yes. Out of 75 seed investments the firm has made since delving into the world of seed investing in 2011 — with 50 now far enough long to have either attracted follow-on funding, been acquired, or floundered – 25 have gone on to raise Series A funding, 10 of them from NEA. “It’s a little better than we’d thought” NEA would see on an overall basis, said Sakoda, adding that: “Of course, in five years, we’ll have to look and ask how much time we invested in these companies and whether we have enough meaningful returns. Because the Series A is not the end goal from our LPs’ perspective.”

    Here’s more from that conversation, edited for length:

    There still seems to be some confusion over whether it’s better to have a syndicate of investors, all of whom bring something to the table, or one or two investors who are more invested in the company.

    You could argue both sides, but our experience would suggest that it’s better to have a syndicate of investors and it’s also largely better to have an institutional VC because the startup’s likelihood of raising a Series A round is higher. Our own research shows entrepreneurs are 50 percent more likely to get funding from another firm if they take money from us.

    So you don’t put much stock in signaling risk.

    I joke that signaling risk was created so that angels could do no wrong. What’s the logic behind [thinking that if a] a high-quality institutional VC invests in your seed round, that somehow sends a negative signal? Some people think if that same VC doesn’t lead your Series A, then all hell breaks loose. And it’s true that when things aren’t going well, the investors in your syndicate aren’t likely to lead your Series A – but neither is anyone else.

    When the going gets tough, we’re the first people to go into our pocketbooks and bridge companies and give them a second seed and give them a chance to survive. We’re the most supportive when things are going sideways because if you think about it, we’re investing in these long-term relationships.

    I think it’s frequently the angel investors who aren’t doing this full time and don’t view this as a career investment in the individual who are the least likely to support these companies when times get tough. How can they? They don’t have the resources, they don’t have the time, they maybe have 50 investments.

    They’d probably argue that you don’t have unlimited bandwidth, either.

    Actually, we let any partner sponsor a seed investment and I’m one of two people [the other is NEA principal Rick Yang] who approves each investment. If I was sponsoring 75 investments, I’d be no different than angel inevstors. But I have 12 or 13 partners who are making five to seven seed investments over the course of a few years — maybe doing one or two a year — so they can spend as much time with the [seed-stage] entrepreneur as if they’d invested $5 million or $10 million. We want every partner to own the relationship with the entrepreneur. And we’re constantly paying attention to that. Are we doing too many deals? Are providing that same quality of service?

    There’s a lot of competition for the best seed deals. Are you having to find new ways to reach entrepreneurs?

    No, but we have had to be a lot more outspoken and public about what we do for our companies. People used to come to us, but in an environment where you have firms that are being much more outbound-oriented about promoting their services, we’ve had to rely on more active referencing for our network, including connecting entrepreneurs from our enterprise companies with CIOs and throwing events for our companies that need help with their marketing. In many ways, we’ve had to institutionalize things we were doing ad hoc because the industry grew more promotional about these services, and we’ve had to respond to that.

    —–

    New Fundings

    Campus Job, a months-old, New York-based online hiring marketplace for students in search of part-time jobs, has raised $965,000 in seed funding led by BoxGroup, with Lerer Hippeau Ventures, Kal Vepuri, Female Founders Fund and Red Sea Venture Partners participating. AlleyWatch has more here.

    CoinPlus, a months-old, Luxembourg-based bitcoin startup that’s developing a multi-support payment processor and a currency exchange platform, has raised $222,000 in seed funding from undisclosed investors. Chronicle.lu has more here.

    DroneDeploy, a 1.5-year-old, San Francisco-based smart drone management platform that makes it easy for anyone to analyze the images they capture using drones, has raised $2 million in seed funding from SoftTech VC, Data Collective, Red Point Ventures, DFJ and AngelPad. (The company participated in AngelPad’s accelerator program last year.)

    Etaoshi, two-year-old, Beijing-based online food ordering and delivering service provider, has raised $20 million in Series B funding from Beijing New Hope Industry Investment Center, reports China Money Network. The company had previously raised $10 million in Series A funding from Highland Capital Partners and other undisclosed investors, says the outlet.

    Genisphere, a 17-year-old, Hatfield, Pa.-based nanotechnology company focused on targeted drug delivery technologies, has raised $2 million from earlier investors, including Corporate Fuel Partners, a New York fund.

    Hazelcast, a nearly six-year-old, Palo Alto, Ca.-based open source in-memory platform for data distribution, has raised $11 million in Series B funding led by Earlybird Venture Capital. Earlier investors, including Bain Capital Ventures and individuals Ali Kutay and Rod Johnson, also participated in the round, which brings the company’s total funding to $13.5 million.

    Kelase, a 10-month-old, Jakara, Indonesia-based technology platform that enables schools to have their own private social networks, has raised an undisclosed amount seed funding from PT Insights Investments, a regional investment firm. Tech in Asia has more here.

    KIN, a seven-year-old, Santa Monica, Ca.-based digital media company, has raised $12 million in Series C funding, led by Corus Entertainment, with participation by Emil Capital. Earlier investors Mayfield Fund,General Catalyst Partners and Rustic Canyon Partners also participated in the round.

    New Vision, a Padua, Italy-based startup whose platform allows users to collaboratively manage content, has raised roughly $8 million in funding from Innogest Sgr, Withfounders, Centerboard Partners, and other unnamed investors.

    Odilo, a three-year-old, Madrid, Spain-based company whose digital asset management platform makes it possible to lend and otherwise manage digital content, has raised $2.8 million in funding from Active Venture Partners.

    Placemeter, a two-year-old, New York-based computer vision platform that translates common video feeds into structured data that can be analyzed in real time, has raised $6 million in Series A funding. The round was led by New Enterprise Associates, with participation Qualcomm Ventures, Collaborative Fund, and existing investors. The company has now raised $7.8 million to date, shows Crunchbase.

    PrecisionHawk, a three-year-old, Indianapolis, In.-based startup that uses unmanned aerial vehicles to collect data for numerous industries, has raised $10 million in Series B funding led by Millennium Technology Value Partners. Earlier investors, including Red Hat cofounder Bob Young and Innovate Indiana Fund, also participated in the round, which brings the company’s funding to $11 million.

    Reveal Chat, a new, Seattle-based free anonymous mobile chat app designed to let users reveal more about themselves to strangers as they go along, has raised $1 million from investors, including Microsoft Ventures. GeekWire has more here.

    SchoolMint, a 1.5-year-old, San Francisco-based company that makes mobile and online-enrollment software for K-12 public, charter and private schools, has raised $2.2 million in seed funding led by NewSchools Venture Fund, Runa Capital and Crosslink Capital. Other participants in the round include Kapor Capital, Imagine K12, Romulus Capital, Fresco Capital, EdMentor VC, and individual investors.

    Shippo, a year-old, San Francisco-based company that has built an API that makes shipping more affordable for small businesses that aren’t eligible for bulk discounts, has raised $2 million in seed funding led by SoftTech VC, with participation from Version One Ventures, 500 Startups, Joanne Wilson, Slow Ventures, Fabrice Grinda, and other angels. The company had previously raised $275,000 in seed funding.

    Shuttlerock, a three-year-old, Christchurch, New Zealand-based visual marketing platform, has raised $2.35 million in Series A funding, including from Opt, ICE Angels, Air New Zealand and Black Cat Cruises.

    Zipari, a, months-old, Brooklyn, N.Y.-based maker of customer relationship management software for health insurance companies, has raised an undisclosed amount of funding from Vertical Venture Partners, the new venture firm of longtime Sierra Ventures managing director David Schwab.

    —–

    New Funds

    Aglaia, a Bilthoven, Netherlands-based venture firm, has held a first, $65 million, close on its Aglaia Oncology Fund II, which is targeting between $80 million and $100 million. LPs include high-net-worth families and the European Investment Fund. Through the new fund, Aglaia will be investing in 10 to 15 biotechnology start-ups, and it will be scouring Europe and the Netherlands in particular for opportunities.

    Altos Ventures, an 18-year-old Silicon Valley venture capital firm, has just finished raising a $60 million fund dedicated to South Korea-based startups, reports Fortune, which suggests it’s the largest Korea-focused fund ever raised by a U.S. venture firm.

    Amadeus Capital Partners, a 17-year-old, London-based technology venture capital firm that focuses largely on mobile technologies, financial services, and digital media, is planning to enter the Indian market, according to LiveMint. The country is “at a tipping point and there’s a lot of maturity in the market, particularly in the online services space,” Jason Pinto, a partner at the firm, tells the outlet of its plans to open a regional office.

    —–

    IPOs

    Alibaba‘s IPO is minting thousands of millionaires. Dealbook has an interesting look at how the event might transform the “leafy manufacturing hub two hours southwest of Shanghai,” where they live and where Alibaba is based.

    —–

    Exits

    Concur, a 21-year-old vendor that delivers cloud-based expense and travel management solutions, has been acquired by SAP for $129 per share, or a 20 percent jump over Concur’s latest closing price, making the deal worth more than $8 billion.

    Pheed, an 18-month-old, Beverly Hills, Ca.-based social media platform, has been acquired for $40 million by a similar-but-bigger privately held company, Mobli, whose real-time visual media platform allows users to share photos and videos. It isn’t clear that Pheed had outside investors; Mobli has meanwhile raised $86 million over its four-year history. Forbes has more here.

    VAN, a London-based company that helps brands create and distribute branded content campaigns, has been acquired by Sharethrough, a six-year-old, San Francisco-based software company that powers in-feed, native ads for premium publishers & brand marketers. VAN’s funding isn’t public, seemingly; Sharethrough has raised $28 million from investors, shows Crunchbase. TechCrunch has more here.

    —–

    People

    Larry Ellison, who cofounded and headed up the database giant Oracle for more than 35 years, stunned the business world yesterday by stepping down as CEO and replacing himself with co-presidents Mark Hurd and Safra Catz. Hurd will run sales, marketing and strategy, while Catz will remain CFO and oversee legal and manufacturing operations. Ellison, who turned 70 in August, will become chairman. Bloomberg has more here.

    Google‘s first 21 employees and where they are now.

    Peter Hazlehurst has joined the on-demand delivery startup PostMates as its new COO, reports TechCrunch. Hazlehurst was previously a director of product management for Google Wallet, leading a team of nine product managers. He was also the chief product officer of the personal financial management platform Yodlee for nearly eight years.

    Alshon Jeffery, a 24-year-old wide receiver for the Chicago Bears, yesterday became the latest professional football player to sign up to sell shares through Fantex, the San Francisco start-up that is trying to create a market for stock linked to the future earnings of athletes. Dealbook has the story.

    Microsoft confirmed yesterday that it’s cutting 2,100 jobs across the company worldwide. It’s also closing its Silicon Valley-based R&D lab.More here.

    David Socks has joined Frazier Healthcare as a venture partner in Boston. Socks co-founded two Frazier Healthcare-backed startups, including Incline Therapeutics, acquired last year by The Medicines Company for upwards of $390 million, and Cadence Pharmaceuticals, acquired last year by Mallinckrodt Pharmaceuticals for $1.3 billion. MedCity News has more here.

    Airbnb CFO Andrew Swain has left the company, and TechCrunch sources say he was asked to leave — that there there “was a recognition that he wasn’t the right fit for the startup moving forward.” Swain joined Airbnb more than two years ago. Previously, he was a VP of finance at Intuit’s consumer group as well as a VP of corporate strategy at Intuit.

    —–

    Job Listings

    Comcast Ventures is looking to hire an associate in New York.

    Zelkova Ventures is looking for an intern in New York, preferably an undergrad.

    —–

    Data

    Emboldened by the success of Alibaba, investors are plowing more money into late-stage China-based companies, according to Preqin data. Firms have invested an average of $54 million into Series C rounds and $84 million into Series D rounds this year, up from average of $26 million and $76 million at the Series C and D stages respectively in 2013. VentureWire has more here.

    —–

    Essential Reads

    The looming threat for Uber and other startups that employ contractors.

    Venture Capital Dispatch reported on Tuesday that General Catalyst Partners and Accel Partners have quietly divested shares in Russia-based Ostrovok.ru. Now the Moscow-based online travel company is piping up, reportedly telling a local publication of the firms: “I think it may be difficult for [Accel and General Catalyst] to explain to their investors how they managed to invest more than $25 million in a Russian company and never visit the company’s office after the investment.”

    —–

    Detours

    On a wide variety of dimensions, living conditions for most people on Earth are getting better. Here’s some proof.

    “[O]ne of the reasons that people are vitriolic is because part of them wants to be a hipster – but of course they’d never admit it.”

    —–

    Retail Therapy

    Johnny Cash’s 1970 Rolls Royce Silver Shadow, with just 32,000 miles on the odometer. Black, naturally, and up for sale soon.

    Connie

  • Jon Sakoda: Never Mind What Angels Say, VCs Have Your Back

    Sakoda-e1394772959555-480x500Partner Jon Sakoda of New Enterprise Associates, who co-heads the firm’s seed-stage practice, doesn’t know yet if it makes sense for NEA – which manages billions of dollars — to be dabbling with nascent startups.

    Over lunch recently at San Francisco’s MarketBar brasserie, Sakoda spoke candidly of the firm’s concerns about “diluting the NEA brand and the experience that an entrepreneur has with an NEA partner. We didn’t want to emulate other models where you get a second-tier experience because you’re a seed-funded company versus a prime-time NEA company.” NEA’s limited partners also “question whether it’s a good use of our time,” said Sakoda between bites of his BLT. “If I’ve invested $2.5 million in other companies and $250,000 in these other companies, is it really worth my time to invest in what can be some very challenging times for these companies?”

    Unsurprisingly, perhaps, NEA thinks the answer is yes. Out of 75 seed investments the firm has made since delving into the world of seed investing in 2011 — with 50 now far enough long to have either attracted follow-on funding, been acquired, or floundered – 25 have gone on to raise Series A funding, 10 of them from NEA. “It’s a little better than we’d thought” NEA would see on an overall basis, said Sakoda, adding that: “Of course, in five years, we’ll have to look and ask how much time we invested in these companies and whether we have enough meaningful returns. Because the Series A is not the end goal from our LPs’ perspective.”

    Here’s more from our conversation with Sakoda, edited for length:

    There still seems to be some confusion over whether it’s better to have a syndicate of investors, all of whom bring something to the table, or one or two investors who are more invested in a seed-stage company.

    You could argue both sides, but our experience would suggest that it’s better to have a syndicate of investors and it’s also largely better to have an institutional VC because the startup’s likelihood of raising a Series A round is higher. Our own research shows entrepreneurs are 50 percent more likely to get funding from another firm if they take money from us.

    So you don’t put much stock in signaling risk.

    I joke that signaling risk was created so that angels could do no wrong. What’s the logic behind [thinking that if a] a high-quality institutional VC invests in your seed round, that somehow sends a negative signal? Some people think if that same VC doesn’t lead your Series A, then all hell breaks loose. And it’s true that when things aren’t going well, the investors in your syndicate aren’t likely to lead your Series A – but neither is anyone else.

    When the going gets tough, we’re the first people to go into our pocketbooks and bridge companies and give them a second seed and give them a chance to survive. We’re the most supportive when things are going sideways because if you think about it, we’re investing in these long-term relationships.

    I think it’s frequently the angel investors who aren’t doing this full time and don’t view this as a career investment in the individual who are the least likely to support these companies when times get tough. How can they? They don’t have the resources, they don’t have the time, they maybe have 50 investments.

    They’d probably argue that you don’t have unlimited bandwidth, either.

    Actually, we let any partner sponsor a seed investment and I’m one of two people [the other is NEA principal Rick Yang] who approves each investment. If I was sponsoring 75 investments, I’d be no different than angel investors. But I have 12 or 13 partners who are making five to seven seed investments over the course of a few years — maybe doing one or two a year — so they can spend as much time with the [seed-stage] entrepreneur as if they’d invested $5 million or $10 million. We want every partner to own the relationship with the entrepreneur. And we’re constantly paying attention to that. Are we doing too many deals? Are providing that same quality of service?

    There’s a lot of competition for the best seed deals. Are you having to find new ways to reach entrepreneurs?

    No, but we have had to be a lot more outspoken and public about what we do for our companies. People used to come to us, but in an environment where you have firms that are being much more outbound-oriented about promoting their services, we’ve had to rely on more active referencing for our network, including connecting entrepreneurs from our enterprise companies with CIOs and throwing events for our companies that need help with their marketing. In many ways, we’ve had to institutionalize things we were doing ad hoc because the industry grew more promotional about these services, and we’ve had to respond to that.

    In some ways, being one of the largest and quietest players means we have a further distance to travel.

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

    Connie

  • StrictlyVC: September 18, 2014

    Hi, everyone, we don’t have a column today (kid stuff). Hope you have a great morning! Web visitors, here’s an easier-to-read version of what you see below.

    —–

    Top News in the A.M.

    A message from Tim Cook about Apple’s commitment to your privacy. “Our business model is very straightforward: We sell great products. We don’t build a profile based on your email content or web browsing habits to sell to advertisers. We don’t ‘monetize’ the information you store on your iPhone or in iCloud. And we don’t read your email or your messages to get information to market to you,” Google, cough.

    Scotland heads to the polls. (Related: Nine questions about Scottish culture answered.)

    —–

    New Fundings

    Augmate, a 1.5-year-old, New York-based wearable platform that accelerates the development of digital eyewear applications, has raised $2.8 million in seed funding from Tim Draper and others.

    Beyond Verbal, a two-year-old, Tel Aviv, Israel-based company whose technology can extract, decode, and measure a full spectrum of human emotions in a person’s voice over any voice-enabled device, has raised $3.3 million in Series A funding, reports Venture Capital Dispatch. The company, whose earlier investors include Genesis Angels and angel investor Kenges Rakishev, has raised $7.1 million to date.

    Chobolabs, a two-year-old, mobile gaming startup that brings competitive synchronous multiplayer gaming to smartphones and tablets, has raised $1.3 million in funding led by Innovation Endeavors, with XG Ventures and numbers angel investors participating. Chobolabs is part of Stanford’s StartX community. (Meanwhile, here is a list of 11other startups that are just emerging from the StartX accelerator program.)

    ClassPass, 1.5-year-old, New York-based membership program for fitness classes across multiple gyms and studios, has raised $12 million in Series A funding, led by angel investors Fritz Lanman (who led ClassPass’s seed round) and Hank Vigil. Other investors in the round include SV Angel, Gordy Crawford, Owen van Natta, and Blake Krikorian. The company has now raised $14 million altogether, shows Crunchbase.

    Colorescience, a 14-year-old, Carlsbad, Ca.-based makeup company that sells through medical and resort spa channels, has raised $15 million in Series B funding led by Longwood Fund, with existing investors contributing half the capital. The company had previously raised $10 million in Series A funding from Montreux Equity Partners and Split Rock Partners.

    CrowdFlower, a seven-year-old, San Francisco-based platform to help data scientists collect, clean and label data to make it useful, has raised $12.5 million in Series C financing led by Canvas Venture Fund, with participation from earlier investors Bessemer Venture Partners and Trinity Ventures. The company has raised $25.7 million to date, shows Crunchbase.

    CyActive, a 1.5-year-old, Be’er Sheva, Israel-based cybersecurity company takes existing malware strains and mutates them into every possible format to predict and head off future attacks, has raised an undisclosed amount of funding from Siemens Venture Capital. Venture Wire Dispatch has more on the company here.

    EatWith, a two-year-old, Tel Aviv, Israel-based company whose community marketplace offers dining experiences in people’s homes around the world, has raised $8 million in funding from Greylock Partners. Part of the funding will be used to relocate the 18-person company to San Francisco, says the company, which currently has 500 “hosts” on the platform who’ve cooked for guests in more than 160 cities worldwide.

    HowGood, an eight-year-old, Brooklyn, N.Y.-based app that rates grocery products according to both their nutritional content and how sustainably they were created, has raised $2 million in funding from FirstMark Capital, Highline Ventures, Great Oaks Venture Capital, Serious Change LP, Jake Lodwick and Joanne Wilson.

    Jack Erwin, a 1.5-year-old, New York-based men’s footwear company, has raised $9 million in Series B funding led by the footwear companyBrown Shoe Co., with participation from earlier investors CrossLink Capital, Shasta Ventures and FundersGuild. StrictlyVC talked with the company in February, when it raised $2 million in Series A funding. The company had raised $750,000 in seed funding in 2013.

    JW Player, a seven-year-old, New York-based online and mobile video platform and player technology company, has received $20 million in Series C funding led by Greycroft Growth and Greenspring Associates, with participation from Cue Ball Capital and e.ventures.

    LightSpeed Retail, a nine-year-old, Quebec-based company that makes point-of-sale software for retailers, has raised $35 million in funding led by iNovia Capital, with participation from earlier Accel Partners. The company has now raised a total of $65 million.

    PeerSpace, a year-old, San Francisco-based startup whose online platform facilitates the rental of short-term space (from offices to theaters to exercise studios), has raised a seed round of $1.5 million led by Structure Capital. Individual investors, including Ran Makavy, Michael Horowitz, and Ron Pizzuti, also participated.

    Ping Identity, a 12-year-old, Denver-based company that sells cloud-based identity management software to companies and government organizations, has raised $35 million in new funding led by KKR, with participation from Ten Eleven and numerous earlier investors. The company has now raised $110 million to date, including from SAP Ventures, DFJ Growth, W Capital Partners, Avista Partners, Triangle Peak Partners, General Catalyst Partners, and Appian Ventures.

    Porch, a two-year-old, Seattle-based startup that helps homeowners make decisions regarding home improvements, has raised $27.6 million in Series A funding from Lowe’s, the home improvement giant told Dow Jones yesterday. Porch had previously raised $6.25 million in seed funding from SV Angel and a long list of individual investors.

    SocialChorus, a 6.5-year-old, San Francisco-based brand marketing company that puts employees and “brand ambassadors” to work to share a company’s content, has raised $7.5 million in Series B funding led by earlier investor Kohlberg Ventures. The company has raised $15.5 million to date, including from Windforce Ventures.

    Splice, a 1.5-year-old, New York-based music production storage and collaboration startup, has raised $4.5 million in Series A funding led by True Ventures, with participation from Union Square Ventures. The company was founded by Steve Martocci, who previously cofounded the messaging app GroupMe. (As a reminder, GroupMe was acquired by Skype in 2011 for a reported $68 million, including earn-outs.)

    Swrve, a three-year-old, San Francisco-based company whose app marketing platform helps mobile product teams optimize their applications and games, has raised $10 million in Series B Capital from Acero Capital, with participation from earlier investors, including Intel Capital and Atlantic Bridge. The company has now raised $22 million from investors.

    TouchPal, a six-year-old Shanghai-based company whose keyboard app is among several third-party keyboards coming to the iOS for the first time, has raised “significantly” more than $20 million in new funding, reports TechCrunch. Sequoia Capital led the deal, with earlier investor Qiming Venture Partners and Qualcomm Ventures participating. The company had previously raised $5 million in funding.

    —–

    New Funds

    Lowe’s, the 68-year-old, North Wilkesboro, N.C.-based home improvement company, is in the early stages of forming a venture arm,says VentureWire. The company has already made four bets, including on smart energy and home monitoring startup AlertMe; membership-based workshop TechShop; the solar services company Sungevity; and Porch. (See more about the last above, in New Fundings.) “We are starting to build the capacity for a fund,” a company executive tells the outlet. “We don’t have a dollar amount attached to it.”

    Nova Founders Capital, a two-year-old, Hong Kong-based firm that builds and invests in companies, has raised $50 million from Pacific Century Group, one of Asia’s leading investment groups. The firm, run by Mads Faurholt-Jorgensen and Raphael Strauch, two former partners of Rocket Internet, has disclosed a handful of investments to date, including GlassesGroupGlobal, a two-year-old Asia-Pacific online eyewear retailer that has so far raised $3 million, and Lion & Lion, a year-old, Jakarta-based digital advertising company that has raised an undisclosed amount of seed funding.

    Top Tier Capital Partners, the San Francisco-based fund-of-funds manager, has raised $202 million for its seventh fund, which is targeting $404 million, according to an SEC filing. The company held a $441 million final close on its sixth fund just earlier this year, in January.

    —–

    IPOs

    About $8 billion worth of Alibaba shares are not locked up and could be sold as soon as the e-commerce company goes public later this week,reports the WSJ.

    —–

    Exits

    FeedHenry, a four-year-old, Waterford, Ireland-based provider of a platform for mobile app developers, specifically for enterprises to build apps, has been acquired by Red Hat, the open source company, for $82 million in cash. TechCrunch has more here. FeedHenry had raised $9 million in funding from Kernel Capital Partners, Intel Capital, VMware,Enterprise Ireland, and ACT Venture Capital.

    Metacloud, a three-year-old, Pasadena, Ca.-based company that powers enterprise-grade cloud platforms for its corporate customers, has been acquired by Cisco. Financial terms of the deal weren’t disclosed, but Metacloud has raised at least $25 million in funding over the past few years, including from Pelion Venture Partners, Silicon Valley Bank, UMC Capital, AME Cloud Ventures, Canaan Partners, and Storm Ventures.

    GitHub, the six-year-old, San Francisco-based web-based repository hosting service company, is shutting down the Easel website-designing service it acquired back in January. VentureBeat has more here.

    Stonestreet One, a five-year-old, Louisville, Ky.-based developer and licensor of Bluetooth software, was acquired yesterday by Qualcomm Atheros, the networking and connectivity subsidiary of Qualcomm. Terms of the deal weren’t disclosed, but a Stonestreet investor tells StrictlyVC it was a “great strategic exit.” The company has raised $3.4 million from local angels and seed funds.

    Ubersense, a three-year-old, Boston-based company specializing in interactive video analysis and instruction, has been acquired by the privately held sports video software company Hudl. Terms of the deal weren’t disclosed. Ubersense had raised a small amount of seed funding from BDS Venture Fund, Google Ventures, Atlas Venture, and Boston Seed Capital. Recode has more here.

    —–

    People

    Apple CEO Tim Cook talks with BusinessWeek in what’s a must-read profile. Reports BW: “Cook says he wishes he could make [Apple Watch, which starts at $349] more affordable, particularly since the company boasts of its potential to help customers manage their health and wellness (‘that’s the humanitarian coming out’), but he won’t compromise Apple’s large profit margins to make it happen.”

    Uber has David Plouffe. Now former House Democratic Leader Dick Gephardt’s lobbying group is working with Lyft to “advocate for the removal of barriers that inhibit ride sharing,” according to Recode.

    Hightail, the cloud storage and file-sharing company that last week parted ways with CEO Brad Garlinghouse and brought back cofounder Ranjith Kumaran to run the show, is cutting roughly 100 people, which is roughly half its employees, reports Recode.

    Microsoft is also reportedly laying off a lot of people today.

    Sequoia Capital’s Michael Moritz talks with the WSJ, telling the paper that Sequoia owns shares in Alibaba (news to us) and that he thinks U.S. companies have a disadvantage right now to their China-based counterparts. “Over the next decade, to some extent, I think the advantage lies with the Chinese companies. The Chinese companies will have an easier time competing in the West then the Western companies will have competing in China.”

    Google cofounder Larry Page has a lot of things on his to-do list, including creating a second major research lab alongside Google X and, well, also building a model airport and city. The Information has more here.

    Bill Pescatello has been promoted from principal to partner at Lightbank, the Chicago-based investment fund started by Groupon co-founders Eric Lefkofsky and Brad Keywell. Pescatello had joined the firm in 2011 from NBCUniversal in New York, where he was a VP and founding member of Peacock Equity Fund, NBCUniversal’s venture capital arm.

    Uh oh. Roughly one week into his new post as chief strategy officer at Hampton Creek, serial entrepreneur Ali Partovi has abruptly left the company, which has raised $30 million from Founders Fund and Khosla Ventures and others (including Partovi and his brother, Hadi) to develop egg-free food alternatives. The WSJ has the story here, including an email that Partovi sent friends, confirming his departure. “This will surely come as a surprise to you, and I’m sorry for waiting so many days to share the news,” he wrote. “We parted ways with mutual respect. The people at Hampton Creek are incredible, and we’ll continue to wish each other well.”

    Investor Peter Thiel doesn’t think Alibaba is such a great long-term investment. He tells CNN: “Alibaba is sort of this protected Chinese company – it will do well, but it is fundamentally a political entity that is somehow very deeply connected with the Chinese government . . .You’ll get a pop and you’ll do well if it continues to stay in the good graces of the Chinese government, but it’s fundamentally a political investment.”

    George Zachary of CRV had talked with investor Semil Shah about Silicon Valley bubbles on the eve of Facebook’s May 2012 IPO, and it’s an interesting discussion — particularly in light of the current bubble chatter. Shah just reposted it here if you’re interested in browsing the transcript.

    The most powerful people in tech at every age, including an eight-year-old who is clearing more than a million dollars a year by reviewing games and toys on YouTube(!).

    —–

    Job Listings

    Credit Suisse is looking for an equity capital markets analyst in New York.

    Prosper, the peer-to-peer lending marketplace, is looking for a senior business development manager. The job is in San Francisco.

    —–

    Essential Reads

    Apple has partnered with everyone who’s anyone in the payments world for its new Apple Pay service, including Visa, MasterCard, and American Express. Then there’s Stripe, the five-year-old, San Francisco-based payments company.

    Even San Francisco International Airport has startup fever. It just opened a “place for travelers to innovate and collaborate while waiting for their flights,” reports Government Technology. Adding the space just made sense, according to the airport’s public relations officer, who was presumably not joking.

    —–

    Detours

    The scourge of “relatability.”

    The 20 colleges with the most billionaire alumni.

    A man and his dog.

    —–

    Retail Therapy

    The best first-class airline seats in the world.

    Do you need a $199 e-reader? Because Amazon thinks you do.

    Connie

  • StrictlyVC: September 17, 2014

    Hi, good Wednesday morning, everyone! (Web visitors, here‘s an easier-to-read version of today’s newsletter.)

    —–

    Top News in the A.M.

    Investor Peter Thiel appeared on CNBC this morning and had some provocative things to say about Twitter, calling it “hard to evaluate. They have a lot of potential. It’s a horribly mismanaged company—probably a lot of pot-smoking going on there. But it’s such a solid franchise it may even work with all that.”

    Yet another firm, Battery East, wants to convince start-ups to let it arrange secondary transactions in their stock. It opens its doors today.

    —–

    The Best-Funded Connected Home Startup You’ve Never Heard of

    You probably haven’t heard of Leeo, a 1.5-year-old, San Francisco-based maker of smart home products and services. But investors are well aware of it, along with a growing number of engineers. Indeed, the now 60-person company has quietly raised $37 million in financing, including from Formation 8; E.ON, one of the world’s largest investor-owned power and gas companies; and Visionnaire Ventures, the fund of billionaire Taizo Son, who is the youngest brother of Softbank magnate Masayoshi Son.

    The attraction isn’t surprising, given the murderer’s row of operators that Leeo has assembled. Cofounder Adam Gettings was cofounder and CTO of RoboteX, a maker of first responder robots that he launched with his brother Nathan, who also cofounded the data analysis company Palantir Technologies and is now Leeo’s chief data advisor.

    Adding product development smarts is chief operating officer Charles Huang, who with his brother founded RedOctane, publisher of the best-selling videogame franchise “Guitar Hero.” And on the form factor side, Leeo’s chief designer is Robert Brunner, who was Apple’s first design chief and most recently the chief designer at Beats Electronics.

    It sounds like a winner. Just don’t ask what the company is making. (It’s not saying yet.) I talked with Gettings and Huang last week about their secretive company.

    Why start Leeo?

    Gettings: It was largely inspired by a friend who saw a fire from a distance and realized it was her home. She wound up losing the house and all of her pets and it was tragic for our circle of friends to be so close to the situation. [Afterwards], we started wondering how we could create a connection between the home and people so people could be better linked to their homes when they’re away. Our first product coming out [will address the issue], then a series of other products [will follow].

    Is this a smoke detector? Is it something that exists in the market that you’re improving on or is this a new device entirely?

    Huang: It’s a product that takes advantage of existing infrastructure. It isn’t difficult for consumers to use in their homes yet uses the benefits of connected devices.

    That was quite a non-answer! Should Nest Labs be nervous?

    Gettings: I don’t know. I think our design chops are pretty good. It’s an interesting space and relatively early when you consider how long Nest Labs has been around. Every day there seems to be new entrants into the [Internet of Things] market. The space will be very big in the future – it’s the next big evolution of the Internet.

    Huang: One thing we’re excited about is getting enormous incumbents involved through strategic investors, like E.ON [for which we’ll create] custom-designed smart home products and services. [E.ON has roughly 35 million customers in more than 10 European countries.] We’re also working with Softbank, which owns Sprint and has more than 180 million mobile phone subscribers to which they want to provide more products and services, including through their Sprint stores in the U.S. and their Softbank stores in Asia.

    Why this staggered launch announcement, with details about your funding but not about your product?

    Gettings: We’re very excited about building the team and assembling the product and it’s a chance for us to say hello to the world.

    Huang: There are a lot of interesting parts to this story, so we’re trying to tell it chapter and chapter and not overload people with one massive press campaign.

    Okay, tell us this: You’ve both formed companies with your brothers. What’s it like to work with your sibling?

    Huang: Great. You have an instinctive trust. You can almost know what he’s thinking before he says it. But you do behave just like you did as kids. One of you will say something and the other will respond, “That’s just the stupidest thing I’ve ever heard,” like you’re eight years old. [Laughs.]

    —–

    New Fundings

    Bellabox, a three-year-old, Singapore-based company that has become Australia’s biggest beauty subscription site, has raised $2.7 million in funding from Allure Media, a digital publishing company owned by Fairfax Media. The company has raised $4.1 million altogether. TechCrunch has the story here.

    Daojia, a four-year-old, Shanghai, China-based restaurant food delivery startup, has raised $50 million in new funding co-led by Chinese e-commerce giant JD.com and Macquarie Capital. Morningside Ventures and CDH Venture also participated in the round. To date, the company has raised roughly $75 million. Venture Capital Dispatch has more here.

    eJiaJie, a 1.5-year-old, Beijing-based platform centered around hourly housekeeping services, has raised $4 million in funding from Shanda Capital and Tencent. According to Tech in Asia, the company had previously raised $650,000 in seed funding, including from Tencent.

    eSentire, a 13-year-old, Cambridge, Ontario-based cyber security company, has raised a $12.7 million in Series C funding led by Georgian Partners, with participation from Cisco Investments and Northleaf Venture Catalyst Fund. Earlier investors Edison Partners and VentureLink also participated in the round, which brings the company’s total funding to $19.6 million, shows Crunchbase.

    Fastly, a three-year-old, San Francisco-based content delivery network, has raised a $40 million in Series C funding led by August Capital. Earlier investors Battery Ventures, O’Reilly AlphaTech Ventures and Amplify Partners also participated in the round, along with new investor IDG Ventures. To date, the company has raised $54 million, shows Crunchbase.

    Gousto, a two-year-old, London-based online web application that sends customers the ingredients they need to cook meals they’ve pre-selected, has raised $8.3 million from Unilever Ventures, with participation from earlier investor MMC Ventures. The company has now raised $11.4 million altogether, shows Crunchbase.

    Jet, a six-month-old, Montclair, N.J.-based e-commerce company that was founded by entrepreneur Marc Lore, has raised $20 million in growth capital from Western Technology Investments and a $5 million asset-backed facility from Silicon Valley Bank, bringing its Series A round — which also includes $55 million from New Enterprise Associates, Accel Partners, Bain Capital Ventures and MentorTech Ventures — to a whopping $80 million. Lore, whose company is operating in stealth mode for now, previously cofounded Quidsi, parent company of Diapers.com, which sold to Amazon for $550 million in 2010. He’s building Jet with his Quidsi co-founders, former VP of special operations Nathan Faust, and project director Mike Hanrahan. TechCrunch has the story here.

    MileIQ, a two-year-old, San Francisco-based mileage tracker app, has raised $3 million in seed funding led by CRV, with participation from Salesforce founder Marc Benioff, SV Angel and others.

    Newsela, a New York-based education tech startup that provides daily news articles that are extracted from national and regional newspapers, has raised $4.1 million in Series A funding led by Owl Ventures, a new venture firm that solely backs ed-tech startups. Other participants in the round include Knight Foundation’s Knight Enterprise Fund, Cambridge Information Group and earlier investors NewSchools Venture Fund and Kapor Capital. The company has raised roughly $5.7 million to date. Venture Capital Dispatch has the story here.

    RightCare Solutions, a three-year-old, Horsham, Pa.-based company whose software helps hospitals and other health care providers optimize their discharge planning process, has raised $4 million in funding from NewSpring Health Capital. The company had previously raised $6.8 million from Domain Associates and Compass Partners.

    Semmle, an eight-year-old, Oxford, England-based business analytics platform that aims to optimize other companies’ IT projects by analyzing the quality of their developers’ code and how much they’re spending on software development, has raised $8 million in Series A funding led by Accel Partners. TechCrunch has more here.

    Synereca Pharmaceuticals, a five-year-old, Chapel Hill, N.C.-based company that develops drugs that restore the effectiveness of existing antibiotics, has raised $1.4 million in convertible debt led by Accele Venture Partners. i2E, a not-for-profit corporation focused on growing small businesses in Oklahoma, also participated in the round along with individual investors.

    Talkdesk, a three-year-old, Mountain View, Ca.-based company that says its software enables companies to create a call center in the browser in less than 5 minutes, has raised $3 million in seed funding from Storm Ventures.

    TrueAccord, a year-old, San Francisco-based company that uses behavioral engineering and machine learning to automate the process of debt collecting, has raised $5 million in Series A funding from Khosla Ventures, Homebrew, serial entrepreneur Max Levchin, and Braintree founder Bryan Johnson.

    WeiChaiShi, a 20-month-old, Shanghai, China-based Chinese mobile task outsourcing platform, has raised $3.2 million in funding led by ClearVue Partners, with Nokia Growth Partners participating. The company has raised at least $6.2 million to date, shows Crunchbase.

    —–

    New Funds

    Providence Health & Services, a not-for-profit Catholic health-care ministry in Renton, Wa., says it will invest $150 million in early- to mid-stage companies that aim to improve patient care. The fund is being led by Aaron Martin, who came to Providence earlier this year from Amazon’s publishing and print-on-demand business. He reportedly led Amazon’s content acquisition Kindle’s North American trade publishing business. The Puget Sound Business Journal has more here.

    Stem, a five-year-old, Millbrae, Ca.-based energy storage startup whose battery systems are meant to be used when grid power is too expensive, has created a new fund to finance up to $100 million in new projects featuring its technology. More here.

    —–

    IPOs

    Proteon Therapeutics, a 13-year-old, Waltham, Ma.-based biopharmaceutical company that develops drugs for renal and vascular disease, has filed to go public. The company has raised at least $126 million over the years, shows Crunchbase. Its principal shareholders include TVM Capital, which owns 19.4 percent; Abingworth Bioventures, which owns 19.1 percent; Prism Venture Partners, which owns 15.6 percent; Skyline Venture Partners, which owns 15.3 percent; Deerfield, which owns 10.5 percent; Pharmstandard International, which owns 10.5 percent; Intersouth Partners, which owns 10.4 percent; and MPM Capital, which owns 10.3 percent.

    —–

    Exits

    Darjeelin, a 1.5-old, Paris-based startup whose online flight search engine is powered by “flight hackers” who tell users when there are cheaper flights available, has been acquired by Voyage Privé Group-owned L’Officiel des Vacances, a site that offers travel deals from around the web. Terms of the deal weren’t disclosed. TechCrunch has more here.

    Mail.ru, a publicly traded Russian Internet company, confirmed yesterday that it has acquired the remaining shares of “Russia’s Facebook” Vkontake that it didn’t already own for $1.47 billion. The deal means Mail.ru now controls Russia’s two most popular social networks, VK and Odnoklassniki (“classmates”). Circa has more here.

    Ostrovok.ru, a Russian travel booking site that raised $28 million in a Series B round last year led by General Catalyst Partners, has seen a change in ownership, reports Venture Capital Dispatch, which says both General Catalyst and earlier backer Accel Partners have quietly divested their holdings, likely owing to continuing conflict in neighboring Ukraine. (They aren’t saying.) Whatever the case, they wanted out. Lev Leviev, a co-founder of Vaizra Investments, which recently invested in Ostrovok.ru, tells the outlet that Accel and General Catalyst “didn’t sell their shares, they gave them up.”

    Pounce, a two-year-old, Tel Aviv-based mobile shopping app that surfaces deals from retailers, has been acquired by visual search company Slyce for $5 million in shares, cash and earn-out incentives. TechCrunch has more here.

    Virtual, a Delray Beach, Fla.-based pre-launch virtualization platform for both Android and iOS, has been acquired by Citrix, reports TechCrunch. Terms of the deal aren’t being disclosed.

    —–

    People

    The 30 most important women under age 30 in tech, according to Business Insider.

    Scott Bartlett, the technical lead behind Google’s Nexus phone program, has left to become the director of hardware at Hello, maker of a spherical sleep sensor called Sensor that we wrote about last month. TechCrunch has much more here.

    Emergence Capital Partners has promoted Santi Subotovsky to partner and Joe Floyd to principal. Prior to joining Emergence in 2010, Subotovsky was an advisor at Aqua Capital Partners. Before joining Aqua Capital Partners, he was a summer associate at Storm Ventures. Before joining Emergence in 2012, Floyd was an associate at both American Capital and McKinsey & Co. He was also a Kauffman Fellow.

    Marty Hanaka has joined Highland Capital Partners as an operating partner. He most recently was interim chief executive of Guitar Center, a Highland portfolio company. Previously, he was chairman and CEO of Golfsmith International Holdings, chairman and CEO of Sports Authority, and president and chief operating officer of Staples.

    Peter Thiel, Reid Hoffman, Paul Graham, and Marc Andreessen are among other prominent investors and founders who’ve signed on to teach a 20-session Y Combinator course at Stanford called “How to Start a Startup.” In nice news for founders everywhere: all materials from the class, including videos, will be posted to the site of Y Combinator president Sam Altman.

    VCs weigh in on Bill Gurley‘s public warning that companies are taking on too much risk. Says Jeff Clavier of SoftTechVC: “The thing I am missing with Gurley’s piece is, so what? There wasn’t a clear call to action. If you believe everything is in overdrive and you have shares of Uber at [an $18 billion valuation] and shares of Snapchat at [a $10 billion valuation], you wonder if he should sell some of them.”

    —–

    Job Listings

    McKinsey & Co. is looking for an M&A analyst. The job is in New York.

    —–

    Essential Reads

    Worth noting: Most of technology’s most notable names aren’t soaring along with today’s Internet darlings, as happened in the late ’90s.

    Facebook has built an app for super private sharing.

    The seven new startups capturing San Francisco’s attention right now.

    —–

    Detours

    A wife’s happiness is more crucial than her husband’s in keeping marriage on track, a Rutgers study finds. (What? We’re just reporting the news here!)

    Aerial views of a colorful Italian beach town.

    Postcards for ants.

    —–

    Retail Therapy

    Looks like we’re all getting new iPhones.

    Connie

  • The Most-Funded Connected Home Startup You Haven’t Heard Of

    investments-leeoYou probably haven’t heard of Leeo, a 1.5-year-old, San Francisco-based maker of smart home products and services. But investors are well aware of it, along with a growing number of engineers. Indeed, the now 60-person company has quietly raised $37 million in financing, including from Formation 8; E.ON, one of the world’s largest investor-owned power and gas companies; and Visionnaire Ventures, the fund of billionaire Taizo Son, who is the youngest brother of Softbank magnate Masayoshi Son.

    The attraction isn’t surprising, given the murderer’s row of operators that Leeo has assembled. Cofounder Adam Gettings was cofounder and CTO of RoboteX, a maker of first responder robots that he launched with his brother Nathan, who also cofounded the data analysis company Palantir Technologies and is now Leeo’s chief data advisor.

    Adding product development smarts is chief operating officer Charles Huang, who with his brother founded RedOctane, publisher of the best-selling videogame franchise “Guitar Hero.” And on the form factor side, Leeo’s chief designer is Robert Brunner, who was Apple’s first design chief and most recently the chief designer at Beats Electronics.

    It sounds like a winner. Just don’t ask what the company is making. (It’s not saying yet.) I talked with Gettings and Huang last week about their secretive company.

    Why start Leeo?

    Gettings: It was largely inspired by a friend who saw a fire from a distance and realized it was her home. She wound up losing the house and all of her pets and it was tragic for our circle of friends to be so close to the situation. [Afterwards], we started wondering how we could create a connection between the home and people so people could be better linked to their homes when they’re away. Our first product coming out [will address the issue], then a series of other products [will follow].

    Is this a smoke detector? Is it something that exists in the market that you’re improving on or is this a new device entirely?

    Huang: It’s a product that takes advantage of existing infrastructure. It isn’t difficult for consumers to use in their homes yet uses the benefits of connected devices.

    That was quite a non-answer! Should Nest Labs be nervous?

    Gettings: I don’t know. I think our design chops are pretty good. It’s an interesting space and relatively early when you consider how long Nest Labs has been around. Every day there seems to be new entrants into the [Internet of Things] market. The space will be very big in the future – it’s the next big evolution of the Internet.

    Huang: One thing we’re excited about is getting enormous incumbents involved through strategic investors, like E.ON [for which we’ll create] custom-designed smart home products and services. [E.ON has roughly 35 million customers in more than 10 European countries.] We’re also working with Softbank, which owns Sprint and has more than 180 million mobile phone subscribers to which they want to provide more products and services, including through their Sprint stores in the U.S. and their Softbank stores in Asia.

    Why this staggered launch announcement, with details about your funding but not about your product?

    Gettings: We’re very excited about building the team and assembling the product and it’s a chance for us to say hello to the world.

    Huang: There are a lot of interesting parts to this story, so we’re trying to tell it chapter and chapter and not overload people with one massive press campaign.

    Okay, tell us this: You’ve both formed companies with your brothers. What’s it like to work with your sibling?

    Huang: Great. You have an instinctive trust. You can almost know what he’s thinking before he says it. But you do behave just like you did as kids. One of you will say something and the other will respond, “That’s just the stupidest thing I’ve ever heard,” like you’re eight years old. [Laughs.]

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

    Connie

    , , , , , ,

  • StrictlyVC: September 16, 2014

    Hi, everyone, good morning! (Pst, web visitors, here’s an easier-to-read version of this morning’s email, below, right here.)

    —–

    Top News in the A.M.

    PayPal just attacked Apple Pay in a full-page New York Times ad that reads: “We the people want our money safer than our selfies. PayPal, protecting the people economy.” Well. This should be interesting!

    —–

    DataFox Aims to Disrupt Company Intelligence, Upset Michael Bloomberg

    Bloomberg and Thomson Reuters had better watch their backs – or else get out their checkbooks. The financial information giants suddenly face a spate of startups ready to take a big bite of their businesses, with DataFox, a year-old, nine-person team in Palo Alto, Ca., among the newest.

    So far the company, run by Stanford alums, has raised $1.78 million in seed funding from Google Ventures Ventures, Sherpalo Ventures, and Green Visor Capital, among others, for its subscription-based deal intelligence platform. The idea: replace expensive and sometimes far-flung analysts with algorithms that can turn structured and unstructured data into real-time, competitive insights about companies.

    DataFox, which has three subscription tiers — $49 per month, $399 per month, and “call us,” essentially — says it isn’t ready for another round of funding just yet. At the moment, at least, it’s more focused on launching its beta product, after testing out its service for the past year with more than 2,000 trial users. Still, cofounder and CEO Bastiaan Janmaat says paying customers, including Box, Twitter and Bloomberg Beta, think the company is on the right path. In fact, he says of his company (only half-kiddingly): “This probably isn’t what ex-Mayor Bloomberg is looking for upon his return as CEO.” He shared more with us yesterday.

    DataFox mines all kinds of public information to do its job. Does it create new data, too, or might it?

    We do create new data, but we do it automatically. One example is competitors lists. Other databases suck at this. Human analysts at [the business data and analytics company] Dun & Bradstreet update their list just once a year. Our algorithms look at things such as co-mentions in news articles and similar press releases to automatically generate a list of similar companies, updated in real-time. The same is true of sector classifications. We invented our own sector taxonomy of more than 70,000 keywords . . . so now a company like Box is classified as “file sharing, web hosting, cloud computing, ftp replacement” plus 20 other terms, instead of just “file storage.”

    You “push” out information that you deem relevant to your customers, like a headcount mention deep in a news article. How is that information delivered?

    People get one weekly email. We’ll soon allow for opt-in daily alerts. Meanwhile, people login to DataFox for the real-time feed.

    A lot of your customers are interested primarily in private company information, but you also track public companies, correct?

    Yes, which is why our business is such a radical departure from the status quo, meaning CapIQ, Thomson Reuters, Bloomberg, and so forth. We’re building entity-agnostic algorithms that, over time, we can apply to any company, person or theme. We have around 7,000 public companies in our database currently. Whenever a customer requests that a company to be added, all we need is the URL, and we’ll auto-generate a one-pager in a matter of hours.

    What’s on your roadmap? What else will DataFox offer customers next year?

    Collaborative and team features. Expanded company coverage. We’re currently at 450,000, but I expect to cover more sectors within a year and more international companies. We’ll also be tracking more types of events. We have the pipes and parsers built, so we’ll continue to write more rules to identify more structured data points beyond the headcount, revenue, and valuation data we currently collect — like new major customers and new offices.

    You say you aren’t raising money again until some time next year. What milestones do you plan to reach before talking again with investors?

    We’re a subscription business, so we’re looking to continue growing revenues, but the one metric we care about most is engagement, meaning the frequency of logins and alert email opens, as well as the number of companies that [customers currently] follow, which is 35 per user. If we can continue to get daily engagement from analysts at Intuit, Bloomberg Beta, Google, Goldman Sachs, and the like, we’ll bolster our prognosis that we’re disrupting the large incumbents, and that data can’t be “pull” anymore. It needs to be predictive.

    Why are you so convinced that “push” is the way to go?

    The volume of communication and data is exploding, there are too many streams to pull from, so mathematically it’s necessarily becoming less likely that you are able to pull the right data point at the right time. Specifically for our customers, companies’ online footprints are expanding, so there’s more information out there, but they don’t have time to monitor a company’s employees on LinkedIn, their Twitter account, their Delaware filings, and the regional papers that cover them. Hence the need for push. I train my delivery pipe to understand my interests, schedule, and priorities. The pipe decides what’s important and surfaces that for me.

    —–

    New Fundings

    Carta Worldwide, a seven-year-old, Ontario-based company behind a digital transaction processing platform, has raised $7 million in Series D funding led by Toronto-based merchant bank Difference Capital and DC Thomson in the U.K. The round represents the first tranche of what is expected to be a $12 million round. To date, the company has raised roughly $50 million altogether, reports the outlet Cantech.

    DHgate, a 10-year-old, Beijing-based business-to-business e-commerce platform that connects small and medium-size businesses with buyers overseas, has raised $16.3 million in Series D funding from China Growth Capital and TDF Capital, according to China Money Network. According to the report, the company had raised previously north of $30 million from investors, including Jafco, Warburg Pincus, and Kleiner Perkins Caufield & Byers.

    DipJar, a six-year-old, New York-based company that makes a jar containing a standard credit card reader (so people can tip their barista, even when cashless), has raised $420,000 in seed funding to fuel further software development of its product, reports TechCrunch. The round was led by Project 11, a new fund created by Brightcove founder Bob Mason, and numerous other angel investors.

    Docker, a four-year-old, San Francisco-based open platform for distributed applications for developers, has raised $40 million in Series C funding led by Sequoia Capital, with participation from earlier investors Benchmark Capital, Greylock Partners, Insight Ventures, Trinity Ventures and Jerry Yang. The company had previously raised $25.8 million. Venture Capital Dispatch has more here.

    Kateeva, a six-year-old, Menlo Park, Ca.-based maker of flat panel OLED displays, has raised $38 million in Series D funding from Samsung Ventures, Sigma Partners, Spark Capital, Madrone Capital Partners, DBL Investors, New Science Ventures and VEECO Instruments. The company has now raised more than $110 million altogether.

    Molecular Templates, a five-year-old, Georgetown, Tx.-based company that develops antibody-drug conjugates, has added $3.5 million to its $8.5 million C round, with the new funding coming from AJU IB Investment, a new investor. The company has now raised about $33.5 million to date, shows Crunchbase. Its previous backers include Excel Venture Management and Santé Ventures.

    NeoSystems, a 14-year-old, Tysons Corner, Va.-based company that that performs strategic back office services for government contractors, nonprofit organizations, and commercial entities, has raised $15 million in funding led by OFS Capital. The company has raised at least $20 million to date, including from Salem Halifax Capital Partners, shows Crunchbase.

    Palantir Technologies, the 10-year-old, Palo Alto, Ca.-based data analysis company, has raised a round of equity, options, warrants and rights amounting to $444.2 million, according to an amended SEC filing flagged by VentureWire. The company has now raised at least $950 million from investors, shows Crunchbase.

    Power2SME, a 2.5-year-old, Gurgaon, India-based online buying hub for small and medium enterprises, has raised roughly $6.9 million in Series C funding from earlier investors Accel Partners, Kalaari Capital and Inventus Capital. VCCircle has more here.

    QuanTemplate, a three-year-old, London-based company behind what it promises is a secure, web-based platform for finance and insurance business transactions, has raised an undisclosed amount of seed funding from Anthemis Group and existing investors. The company had previously raised a little more than $2 million from investors, including Techstars and Burlington Capital.

    RJMetrics, a six-year-old, Philadelphia, Pa.-based analytics platform for online businesses, has raised $16.5 million in Series B funding from August Capital and earlier investors Trinity Ventures and SoftTech VC. RJMetrics has now raised a total of $22 Million.

    Sidecar, the four-year-old, San Francisco-based ridesharing startup, has raised $15 million in fresh funding from earlier investors Avalon Ventures and Union Square Ventures, which were joined in the round by Virgin founder Sir Richard Branson. Sidecar has now raised $35 million altogether. GeekWire has more here. Fred Wilson of Union Square explains why his firm “doubled down” on the company despite stiff competition from Uber and Lyft here.

    WebTeb, a three-year-old, Ramallah, Palestine-based health and lifestyle portal aimed at Arabic-speaking users, has raised $3.2 million in Series C funding led by Sadara Ventures. Earlier investors, including Siraj Palestine Fund, also participated in the round.

    WorkPop, a seven-month-old, L.A.-based online job board, has raised $7 million in Series A funding led by Trinity Ventures. The company had previously raised $900,000 in seed funding, including from SV Angel, Box Group, Obvious Ventures, Cornerstone OnDemand, Slow Ventures, Ironfire Capital, Plus Capital and individuals investors. Venture Capital Dispatch has much more here.

    Yongche, a four-year-old, Beijing-based car rental service company, has raised as much as $100 million in Series D funding led by the Singaporean sovereign wealth fund GIC Private Limited, says China Money Network, which adds that several unnamed investors also participated in the round. Yongche had previously raised at least $80 million from investors, according to the report. Its earlier investors include Ctrip, DCM, Morningside Ventures, Qualcomm Ventures, CBC Capital, and Zhen Fund. The company also runs a taxi calling mobile app Dache Xiaomi.

    —–

    New Funds

    A group of Dartmouth alums is forming a small, early-stage venture fund to help startups with ties to the school, reports Venture Capital Dispatch. Green D Founders Fund, which Boston-based Launch Angels will advise, is targeting $1 million to $2 million; Dartmouth has no direct involvement in the the fund.

    The University of California is planning a $250 million venture fund to finance startups formed around research conducted by its faculty and students, it announced yesterday. Assuming it’s approved by the UC Regents, who will vote on it this Thursday, the fund will be one of the largest of its kind. The University of California has 10 campuses, 233,000 students, 190,000 faculty and staff, five medical centers and three affiliated national laboratories — in addition to more than 20 incubators and accelerators, notes the San Francisco Business Times.

    —–

    Exits

    Euvision Technologies, a four-year-old, Amsterdam-based specialist in image recognition applications powered by artificial intelligence, has been acquired by Qualcomm for undisclosed terms, reports TechCrunch.

    FolioDynamix, a seven-year-old, New York-based cloud-based investment and wealth management technology platform, is being acquired by Actua Corp., a Radnor, Pa.-based cloud computing business that specializes in the public sector, chemical compliance and insurance markets. Actua is paying $199 million in cash.

    GrabCAD, a five-year-old, Cambridge, Ma.-based online community that has been described as the “Github for mechanical engineers,” is being acquired by 3D printing giant Stratasys for around $100 million in all cash,reports TechCrunch. GrabCad has raised at least $13.6 million from investors, shows Crunchbase. Its backers include David Sacks, CRV, NextView Ventures, Atlas Venture, and Matrix Partners.

    Make Believe Labs, a year-old, Santa Monica, Ca.-based company, has been acquired by JibJab Bros. Studios in the latter’s first major purchase in its 15-year history, reports TechCrunch. Make Believe Labs hadn’t raised outside funding before its acquisition, says the the report. Terms of the all-cash deal were not disclosed.

    TriZetto, an Englewood, Co.-based company that serves about 350 health-care plans and supplies software to almost 245,000 doctors and other care providers, is being acquired by publicly traded Cognizant, an IT, consulting, and business process outsourcing company, for $2.7 billion in cash and stock. TriZetto, once a publicly traded company, was acquired by Apax, the London-based private-equity firm, for $1.19 billion in 2008. BlueCross BlueShield of Tennessee and Cambia Health Solutions are minority shareholders.

    —–

    People

    Adams Street Partners, the Chicago-based private equity firm, announced a raft or organizational changes yesterday, including the promotion of Jeff Diehl, a partner on its venture capital and growth equity team, to the Head of Investments. Much more here.

    After only two years, Salesforce CEO Marc Benioff has decided to leave Cisco’s board of directors, according to documents filed with the SEC. Business Insider has the story here.

    “Real estate is one of the few industries in the world that’s bigger than transportation,” writes former Facebook exec Sam Lessin in The Information. “But in the coming decades, companies like Uber and Lyft—eventually super-charged by self-driving cars—are likely to change living patterns and upend property markets in ways that we’ve only begun to understand.”

    Sean Parker of Napster and Facebook fame, is expecting a son with his wife Alexandra, the couple tell People magazine. The baby will be the couple’s second child. The pair, who famously married last year in an expensive and controversial ceremony in Big Sur, are also parents to 20-month-old Winter Victoria, who reportedly “can’t wait to be a big sister.”

    Michael Tseytlin, an executive who’d been working on Google’s efforts to deliver Internet service via satellite, has taken a similar role at Facebook, reports the WSJ. An expert in satellite design, Tseytlin had been working on Google’s satellite efforts with satellite entrepreneur Greg Wyler, who also recently left Google.

    —–

    Job Listings

    LinkedIn is looking for candidates for its two-year business leadership program, comprised of four six-month rotations across the company’s finance, strategy, corporate development and sales operations groups. The program is in Mountain View, Ca.

    —–

    Happenings

    Applications for Y Combinator‘s winter batch are due in roughly one month, and it sounds like the incubator is still looking for teams to apply.

    —–

    Data

    With companies taking ever longer to exit, the number of still-private companies to raise more than $100 million from investors has ballooned.Mattermark looks at which VCs have funded the most of these “potential unicorns, or heavily funded duds.“

    —–

    Essential Reads

    Tony Fadell hatches a connected home. In Fast Company.

    Despite raising $49 million from top investors, online recruiting company BranchOut — which once flourished on Facebook’s platform — is now in discussions with several acquirers about selling itself off. TechCrunch hasmore here. (We wish we’d been wrong, but we sort of called this one in 2011.)

    —–

    Detours

    Facing customers who weren’t thrilled to discover U2’s newest album on their phones as a gift from Apple, the company has posted instructions on how to wrest “Songs of Innocence” out of one’s iTunes library.

    —–

    Retail Therapy

    The Unpocket. It lets you block all cell, WiFi, GPS and RFID signals. Perfect for drug dealers, contract killers and anyone else concerned about privacy. (Europeans, we’re talking to you.)

    Connie

  • DataFox Aims to Disrupt Company Intelligence, Upset Michael Bloomberg

    Bastiaan JanmaatBloomberg and Thomson Reuters had better watch their backs – or else get out their checkbooks. The financial information giants suddenly face a spate of startups ready to take a big bite of their businesses, with DataFox, a year-old, nine-person team in Palo Alto, Ca., among the newest.

    So far the company, run by Stanford alums, has raised $1.78 million in seed funding from Google Ventures Ventures, Sherpalo Ventures, and Green Visor Capital, among others, for its subscription-based deal intelligence platform. The idea: replace expensive and sometimes far-flung analysts with algorithms that can turn structured and unstructured data into real-time, competitive insights about companies.

    DataFox, which has three subscription tiers — $49 per month, $399 per month, and “call us,” essentially — says it isn’t ready for another round of funding just yet. At the moment, at least, it’s more focused on launching its beta product, having tested out its service over the past year with more than 2,000 trial users. Still, cofounder and CEO Bastiaan Janmaat says paying customers, including Box, Twitter and Bloomberg Beta, think the company is on the right path. In fact, he says of his company (only half-kiddingly): “This probably isn’t what ex-Mayor Bloomberg is looking for upon his return as CEO.” He shared more with us yesterday.

    DataFox mines all kinds of public information to do its job. Does it create new data, too, or might it?

    We do create new data, but we do it automatically. One example is competitors lists. Other databases suck at this. Human analysts at [the business data and analytics company] Dun & Bradstreet update their list just once a year. Our algorithms look at things such as co-mentions in news articles and similar press releases to automatically generate a list of similar companies, updated in real-time. The same is true of sector classifications. We invented our own sector taxonomy of more than 70,000 keywords . . . so now a company like Box is classified as “file sharing, web hosting, cloud computing, ftp replacement” plus 20 other terms, instead of just “file storage.”

    You “push” out information that you deem relevant to your customers, like a headcount mention deep in a news article. How is that information delivered?

    People get one weekly email. We’ll soon allow for opt-in daily alerts. Meanwhile, people login to DataFox for the real-time feed.

    A lot of your customers are interested primarily in private company information, but you also track public companies, correct?

    Yes, which is why our business is such a radical departure from the status quo, meaning CapIQ, Thomson Reuters, Bloomberg, and so forth. We’re building entity-agnostic algorithms that, over time, we can apply to any company, person or theme. We have around 7,000 public companies in our database currently. Whenever a customer requests that a company to be added, all we need is the URL, and we’ll auto-generate a one-pager in a matter of hours.

    What’s on your roadmap? What else will DataFox offer customers next year?

    Collaborative and team features. Expanded company coverage. We’re currently at 450,000, but I expect to cover more sectors within a year and more international companies. We’ll also be tracking more types of events. We have the pipes and parsers built, so we’ll continue to write more rules to identify more structured data points beyond the headcount, revenue, and valuation data we currently collect — like new major customers and new offices.

    You say you aren’t raising money again until some time next year. What milestones do you plan to reach before talking again with investors?

    We’re a subscription business, so we’re looking to continue growing revenues, but the one metric we care about most is engagement, meaning the frequency of logins and alert email opens, as well as the number of companies that [customers currently] follow, which is 35 per user. If we can continue to get daily engagement from analysts at Intuit, Bloomberg Beta, Google, Goldman Sachs, and the like, we’ll bolster our prognosis that we’re disrupting the large incumbents, and that data can’t be “pull” anymore. It needs to be predictive.

    Why are you so convinced that “push” is the way to go?

    The volume of communication and data is exploding, there are too many streams to pull from, so mathematically it’s necessarily becoming less likely that you are able to pull the right data point at the right time. Specifically for our customers, companies’ online footprints are expanding, so there’s more information out there, but they don’t have time to monitor a company’s employees on LinkedIn, their Twitter account, their Delaware filings, and the regional papers that cover them. Hence the need for push. I train my delivery pipe to understand my interests, schedule, and priorities. The pipe decides what’s important and surfaces that for me.

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    Connie

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