StrictlyVC: March 9, 2015

Good morning, everyone, and welcome back! Hope you had a terrific weekend. (Web visitors, save your eyes: Here’s an easier-to-read version of this morning’s email.)

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Top News in the A.M.

It’s Apple‘s first big event of the year today, and everyone is buzzing about what to expect.

The CIA embarked on a sweeping restructuring Friday that will create 10 new centers that significantly expand its focus on digital espionage.

Ellen Pao takes the stand today in her case against Kleiner Perkins Caufield & Byers.

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As Meerkat Heads to Austin, a Looming Question: Will It Last?

South by Southwest kicks off in Austin this coming Friday. Judging by its enthusiastic embrace by users, Meerkat — an iOS platform enabling users to stream live videos over Twitter — looks to be anointed the Next Big Thing at the festival, too.

The nine-week-old app began as a side project by the Israeli startup Life On Air, and much of its appeal centers on allowing anyone who sees a tweet about a live Meerkat broadcast to follow along and comment on it. Meerkat has generated so much buzz since its February 27 rollout, in fact, that Twitter is reportedly talking with another live streaming app called Perioscope about an acquisition.

It’s no wonder. While Meerkat has plenty of predecessors in live broadcasting online — from Qik to uStream to Google’s Hangouts on Air — by simply appearing in Twitter users’ feeds, Meerkat has managed to change the game. As writer-analyst Ben Thompson noted at a San Francisco dinner last week, “I almost find Meerkat more compelling from a Twitter perspective than a Meerkat one. It really just gets at how being native for video – being in the stream – is important.”

No one yet knows, of course, if Meerkat will turn into anything. Twitter could kick it off its platform. Prospective users, frustrated by frequent crashes, could abandon it. Through its commenting feature, Meerkat could also suffer the same kind of abusive behavior that has plagued other popular social networking apps. (That’s saying nothing of its business model, or lack of one.)

Back home in Israel, not everyone appears to be cheering for its success, either. Last week, StrictlyVC talked with Mike Feldman, a Hong Kong-based consultant who advises on cross-border technology investments from China to Israel, and who has helped a rival of Meerkat — four-year-old, Tel Aviv-based Mobli — raise capital from investors. (The company has garnered $86 million across four rounds so far. Life on Air has meanwhile raised $3.6 million.)

From Feldman’s perspective, Mobli – an Instagram-like platform that last year introduced live broadcasting from within the Mobli app – has more staying power, even if it isn’t as much on the radar of Silicon Valley’s illuminati. For one thing, he says, it already has 25 million users, including across South America and Russia.

To the degree that it has succeeded, it has done so without the help of Silicon Valley’s hype machine, too, Feldman says, noting that Mobli’s unconventional roster of investors includes Mexican tycoon Carlos Slim and tennis star Serena Willlams.

“I think there’s just some companies — maybe you call them the Product Hunt type companies — that get backing among the twittering VCs in Silicon Valley,” Feldman continues. “But to those of us half a world away, what happens there doesn’t necessarily represent the world as a whole. Meerkat is totally integrated with Twitter, so it’s been drawing the same kind of people who use Twitter. But the vast majority of people are not using Twitter.”

Whether or not that’s true — Twitter has gone so far as to cut off employee access to its metrics — Meerkat’s creator, Ben Rubin, doesn’t sound like someone who expects Meerkat to become the next Twitter, whose own star took off at the South by Southwest Festival in 2007. At least, he appears to know to hope for the best but expect the worst.

“People get excited by the novelty of live streaming, but it wears off,” he told GigaOm last week. “I’ve seen my product go through word of mouth before and I’ve seen it wear off. I know what that feels like in a week.”

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New Fundings

Blippar, a 3.5-year-old, New York-based image-recognition platform that uses augmented reality technology, has raised $45 million in Series A funding from undisclosed investors. According to Crunchbase, the company had previously raised an undisclosed amount of seed funding from Qualcomm Ventures. More here.

Carbylan Therapeutics, a 10-year-old, Palo Alto, Ca.-based company developing an injectable treatment for osteoarthritis pain, has raised $4 million in debt. Late last year, the company filed for a $93 million IPO, with plans to hit the market in early February; it later decided to postpone its offering. The company has raised $35 million altogether; its venture backers include InterWest Partners, Vivo Ventures, and Alta Partners.

CoverHound, a five-year-old, San Francisco-based online insurance marketplace, has raised $14 million in Series B funding from Core Innovation Capital, Route 66 Ventures, Thomas Lehrman, Tugboat Ventures and American Family Ventures, along with earlier backers RRE Ventures, Blumberg Capital, and Bullpen Capital. The company has now raised $23.4 million altogether.

LiquiGlide, a 2.5-year-old, Cambridge, Ma.-based company whose coating technology allows it to engineer slippery surfaces for liquids and viscous materials like gels and pastes, has raised $7 million in funding from Roadmap Capital, a Toronto-based investment firm. More here.

Photobucket, a 12-year-old, Denver-based image and video hosting site, has raised $3.6 million in new funding, the company confirms to TechCrunch. The additional capital is reportedly part of an $8 million round that’s still in progress. Photobucket was sold in 2007 to Fox Interactive Media for $250 million, then sold again in 2009 for $60 million to a Seattle-based imaging startup called Ontela. The merged company kept the Photobucket brand.

Quixey, a 5.5-year-old, Mountain View, Ca.-based mobile search startup, has raised $60 million in new funding led earlier backer Alibaba Group, with participation from Goldman Sachs, GGV Capital, and SoftBank Capital. The company has now raised $134.9 million altogether, shows Crunchbase.

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New Funds

Navitas Capital, a five-year-old, L.A-based venture firm investing in energy and other technologies used by so-called intelligent buildings, is targeting $4 million for its second seed-stage fund, shows an SEC filing. The firm had earlier raised a $1.5 million seed fund. Among its investments is Building Robotics, a software company that enables office workers to control the temperature at their office work stations, and Gridium, a smart meter data analytics company.

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IPOs

Good Technology, a 19-year-old, Sunnyvale, Ca.-based mobile device management company, reported in an updated IPO filing on Thursday that it continues to narrow its losses while growing its revenue. (Some recent layoffs have presumably helped.) Good, which has raised funding from pretty much every firm in Silicon Valley over the years, filed to go public in May of last year. Silicon Valley Business Journal has more here.

Social Finance, the four-year-old, San Francisco-based online-lending platform known as SoFi, is planning an IPO that would value the company at a whopping $3.5 billion, sources tell Bloomberg. The company may raise $500 million this year, Bloomberg adds. SoFi has already raised $766 million from investors, including a $200 million round that closed in January. More here.

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Exits

Appfluent Technology, a 10-year-old, Rockville, Md.-based company that makes data analytics software, has been acquired by Attunity, a publicly traded company. Appfluent had raised at least $4.1 million, from Updata Partners and The New Markets Growth Fund.

CyActive, a two-year-old, Be’er Sheva, Israel-based “predictive” cyber security company, has been acquired by PayPal for what ZDNet’s sources say is at least $60 million. According to Crunchbase, CyActive had raised one, undisclosed round of funding from Siemens Venture Capital in the form of a convertible note. More here.

Stitch, a two-year-old, San Francisco-based sales productivity software company, has been acquired by SugarCRM, which is reportedly shutting down the service. According to Crunchbase, Stitch had raised $3.3 million from investors, including Freestyle Capital, SoftTech VC, Google Ventures and Foundation Capital. SugarCRM, an 11-year-old, Cupertino, Ca.-based maker of customer relationship management software, has raised $104 million from investors over the years, shows Crunchbase. Its backers include DFJ, New Enterprise AssociatesGoldman Sachs, and Walden Venture Capital.

VCCircle, a 10-year-old, Noida, India-based media company whose news sites include VCCircle.com and Techcircle.in, has been acquired by News Corp. for undisclosed terms. The deal represents News Corp’s third, recent investment in India. News Corp. also invested $30 million in the real estate sales platform PropTiger last November and acquired the online financial planning company Bigdecisions in December.

Veenome, a four-year-old, Arlington, Va.-based service that analyzes online video to reduce fraud, eliminate objectionable material and more, has been acquired by Integral Ad Science, a company whose technology aims to direct the right viewers to the right ads. Terms of the acquisition weren’t disclosed. According to TechCrunch, Veenome had raised at least $2.5 million from investors, including Stardust Venture Partners, India Venture Partners, and Piedmont Investment Advisors. Integral Ad Science has raised nearly $50 million from investors, including August Capital, Atlas Venture, Pelion Venture Partners, and Founder Collective.

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People

The investment company of Saudi Arabia’s Prince Alwaleed bin Talal has met with Snapchat CEO Evan Spiegel about “future potential business cooperation,” it announced in a somewhat strange statement yesterday that didn’t elaborate further. More here.

The team at Formation 8 is breathing a little easier this week. According to TechCrunch, the firm has been removed as a defendant in a lawsuit filed in January against firm cofounder Joe Lonsdale, who is being sued by a former girlfriend.

Stephen Hirschfeld, an attorney hired by Kleiner, Perkins, Caufield, and Byers to investigate allegations of discrimination against the firm, testified last week that partner Trae Vassallo had run the numbers on both male and female partners and, according to her calculations, the women came out ahead of the men in multiple measures of profitability, despite that the men forecasted higher revenues for their investments than the women. More here.

Robert Kalin, who “came up with the idea for Etsy, raised its first batches of venture capital, and was its chief executive officer during its formative years” before being “unceremoniously pushed out in 2011,” is not on Etsy’s S-1, meaning he owns less than 5 percent of the company he founded, notes Bloomberg.

Longtime tech writer Steven Levy takes readers behind Marissa Mayer’s SpinCo, a “company that does nothing but hold Chinese Internet stock and keep investors off her back.”

Meanwhile, Business Insider reports that Yahoo’s Mayer has been quietly firing people on a weekly basis.

Jeff Shotts has joined the note-taking app developer Evernote as its first CFO, suggesting the company aims to go public soon. Shotts was most recently the president and CFO of the online fashion retailer ModCloth. Earlier in his career, he was a VP at Logitech and a senior director at eBay.

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Essential Reads

College campuses have no idea what to do about the anonymous messaging app Yik Yak.

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Detours

Fourteen Facebook hacks you need right now.

Oxytocin just keeps getting more intriguing.

A home with retractable walls that let the sun shine in.

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Retail Therapy

The Aero 8, with “mohair soft-top and rear opening clam-shell boot.” They had us at “mohair.”


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