Hi, happy Thursday, everyone!
In yesterday’s issue, we let you know that we now have a slightly larger venue for our next INSIDER event so we can accommodate more of you.
Relatedly, we’d like to thank two new blue-chip sponsors that are partnering with us on the evening: Amazon Web Services, the cloud computing arm of everyone’s favorite global online retailer, and Personal Capital, the digital wealth management founded by former Intuit and PayPal CEO Bill Harris.
We’re proud to be working with both brands.
Now on to the news!
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Top News in the A.M.
Yahoo is pulling the plug on its China operations.
Move over, Apple Watch? Swiss watchmaker TAG Heuer is teaming up with Google and Intel to create a luxury smartwatch. Its CEO just called it the “biggest announcement ever” in his 40-year industry career.
Greylock Partners is in talks to invest in the live broadcasting app Meerkat, reports The Information. More here.
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An IPO Survey Hints at Trouble
This morning, the law firm Fenwick & West published its most recent report on the state of the IPO market. Its “2014 IPO Survey” doesn’t hold many surprises, but it does underscore an important point: Public market investors have grown more discriminating than they were in the late ’90s — and that’s bad news for the many late-stage companies that are being assigned bubble-era valuations.
Let’s start with the number of IPOs in the U.S. across all industries last year. Sixty-eight life sciences companies went public (up from 41 in 2013). Meanwhile, 38 U.S.-based tech companies went public, which is almost exactly how many went public in 2013 when 37 IPO’d. (For some context, in 1999, 308 U.S. tech companies went public.)
Life sciences offerings were on average smaller than technology deals, reports Fenwick, and they faced more pricing uncertainty. Of the life sciences deals in the first half and second half of 2014, approximately 44 percent and 52 percent priced below the bottom end of their expected range, compared with 15 percent and 27 percent of tech deals.
Then again, they went public much faster, says Fenwick, which reports that of the tech companies that priced in the second half of last year, roughly two-thirds were on file for more than five months before pricing.
Either way, the trend, post offering, was downward. According to Fenwick, those tech companies to go public in the first half of last year saw their shares fall by an average of 16.2 percent by the time their lock-up periods had expired. On average, shares of life sciences companies to go public in the first half of last year were down 1.3 percent by the end of their lock-up periods.
Castlight Health, the cloud-based health-care tech company whose shares soared 149 percent on its opening day roughly a year ago, probably factors meaningfully into the above figures. Almost immediately after its IPO, its stock began to spiral. Today, those shares, originally priced at $16, are trading at $9.
Still, the second half of the year looked much the same. In fact, first-day pricing appears to have grown even more rational, with tech stocks falling an average of 3 percent by the time their lock-up periods had ended, and life sciences shares dropping by 1.5 percent.
That lack of drama is good for the public market investors, who are plainly approaching new offerings more carefully than they did during the go-go days of the late ’90s Internet boom and bust.
It’s bad news for the many still-private tech companies have been raising money at exuberant valuations. (They can’t all be the next Uber.)
You can download Fenwick’s full report here.
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New Fundings
1More, a two-year-old, Shenzhen, China-based maker of high-performance earbuds, has raised $15 million in Series B funding led by GGV Capital. Xiaomi is a co-investor in the company.
CafeX Communications, a two-year-old New York-based startup whose service allows apps and websites to include plugin-less video chat and screen sharing, has raised an undisclosed amount of funding from Intel Capital. The company had previously raised $19.6 million from investors, including Illuminate Ventures.
Conversa Health, a two-year-old, San Rafael, Ca.-based company that operates a personalized patient relationship management platform, has raised $2.5 million in seed funding from unnamed health care angel investors. VentureBeat has more here.
Degreed, a three-year-old, San Francisco-based free service that scores and validates a user’s lifelong education from accredited and non-accredited sources, has raised $7 million in Series A funding led by Signal Peak Ventures. The company had previously raised $1.8 million.
Draft, an eight-month-old, New York-based daily fantasy sports app, has raised $3.5 million in Series A funding led by Upfront Ventures, with participation from Advancit Capital, BoxGroup, the Chernin Group, and QueensBridge Venture Partners. Recode has the story here.
Fundbox, a three-year-old, San Francisco-based company whose data analytics software aims to accelerate cash flow and clear invoices for small businesses, has raised $40 million in Series B financing led by General Catalyst Partners, with participation from NyCa Investment Partners and earlier backer Khosla Ventures. The company also announced a new credit facility in partnership with Silicon Valley Bank and other institutions. The company had previously raised $17.5 million from investors.
Ginkgo Bioworks, a 6.5-year-old Boston-based company that genetically programs microbes to produce molecules used in flavors, fragrances, cosmetics and nutritional ingredients, has raised $9 million in Series A funding from Felicis Ventures, OS Fund, Data Collective, iGlobe Partners and Vast Ventures. The company was the first biotechnology startup to go the Y Combinator accelerator, graduating last summer. Venture Capital Dispatch has more here.
Healthfinch, a 5.5-year-old, Madison, Wi.-based company whose software helps simplify health organizations’ prescription refill process, has raised $1.5 million in funding led by Jumpstart Ventures, with participation from Chicago Ventures, OCA Ventures and Wisconsin entrepreneur and investor Mark Bakken.
Hungama, a 10-year-old, Sri Lanka-based company that aggregates, develops, publishes and distributes Bollywood and South-Asian entertainment content, is reportedly in “advanced talks” with investors — including previous backers Intel Capital and Bessemer Venture Parters— to raise more than $100 million in fresh funding. TechCrunch has more here.
Hypori, a four-year-old, Austin, Tx.-based mobile data security company, has raised $6.7 million in Series A-1 funding from multiple investors, including Green Visor Capital. The company has now raised $13.8 million altogether. Austin Business Journal has more here.
Joyable, a 15-month-old, San Francisco-based company whose online tools aims to help users overcome social anxiety, has raised $2.1 million in seed funding from Thrive Capital, Harrison Metal, and angel investors, including Benchmark co-founder Andy Rachleff.
Nimbus Therapeutics, an 6.5-year-old, Cambridge, Ma.-based company that has developed an oral drug designed to disrupt a common condition called nonalcoholic fatty liver disease, has raised $43 million in Series B funding led by Pfizer Venture Investments and Lightstone Ventures. Earlier backers Atlas Venture, SR One, Lilly Ventures, and Bill Gates also joined the round, which brings the company’s total funding to roughly $67 million. Xconomy has more here.
Petkit, a 1.5-year-old, Shanghai, China-based company whose wearable device for dogs lets owns record and analyze behavioral data and track their pet’s location, has raised an undisclosed amount of Series A funding from GGV Capital.
Reevoo, a 10-year-old, London-based online customer reviews company used by global brands for insights into how their products are perceived, has raised an undisclosed amount of capital that brings its total funding to £6.5 million ($9.6 million). MMC Ventures led the round and was joined by Talis Capital, Eden Ventures and Banexi Ventures.
Remitly, a four-year-old, Seattle-based mobile payments service that enables users to make person-to-person international money transfers from the U.S., has raised $12.5 million in Series B funding led by DFJ, with participation from DN Capital and earlier backers QED Investors and Trilogy Equity Partners. The company has now raised $23 million altogether, shows Crunchbase.
Sentisis, a three-year-old, Madrid, Spain-based natural language processing startup whose tools analyze information from social networks, has raised $1.3 million in Series A funding led by Axon Partners Group and the Fundación José Manuel Entrecanales. Earlier investors, including Startcaps Ventures and 500 Startups, also participated in the round. The company had previously raised roughly $500,000. TechCrunch has more here.
Shuddle, a year-old, San Francisco-based car-share service and app that’s zeroing in on minors and seniors, has raised $9.6 million in Series A funding led by RRE Ventures, with participation from earlier backers Comcast Ventures, Forerunner Ventures, Accel Partners, and numerous angel investors. The company, whose service has only been available in the Bay Area to date, has now raised $12 million altogether.
Twin Prime, a 3.5-year-old, Redwood City, Calif.-based company whose technology promises to speed mobile data delivery, has raised $9.5 million in Series A funding led by DFJ and True Ventures, with participation from Milliways Ventures and Moment Ventures.
Vidder, a six-year-old, Campbell, Ca.-based cybersecurity company whose software mitigates network-based attacks by making servers invisible to everyone except authorized users, has raised $12 million in Series B funding led by LDV Partners, with participation from Presidio Ventures and earlier backers Onset Ventures and Voyager Capital.
Zimi, a Nanjing, China-based company that makes a portable battery charger for the smartphone maker Xiaomi, has raised $15 million in Series B funding led by GGV Capital.
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New Funds
AppWorks, a 5.5-year-old, Taipei, Taiwan-based accelerator program, has raised a new, $50 million multistage venture fund to invest in mobile commerce and connected device startups. The accelerator’s investors include National Development Fund, Cathay Life, Phison Electronics,UDN Group, CID Group, FarEastTone Telecommunications, Fubon Life, China Trust Ventures, and CDIB Capital. Its previous fund closed with $11 million in 2012. TechCrunch has more here.
Vivo Capital, an 18-year-old, Palo Alto-based healthcare investment firm that focuses on later-stage medical companies in the U.S. and China, has raised a new, $750 million fund — twice the size of the $375 million it raised for its last fund in late 2011. (According to VentureSource, it’s one of the largest health-care venture funds ever.) In addition to Palo Alto, Vivo has offices in Shanghai, Beijing, and Chengdu, China.
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IPOs
GoDaddy has set a price range for its IPO. More here.
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Exits
OverDrive, a 29-year-old, Cleveland, Oh.-based e-book and audiobook marketplace, has been acquired for $410 million by the Japanese e-commerce giant Rakuten, which has been looking to boost its digital content business. TechCrunch has much more here.
SurfEasy, a four-year-old, Toronto-based company whose virtual private network (VPN) app lets users browse the web more securely, has been acquired by Opera, maker of the popular Opera web browser. Terms of the deal were not disclosed. SurfEasy had raised one undisclosed amount of funding, according to Crunchbase.
Yieldex, an eight-year-old, New York-based ad tech platform, has been acquired by a better-financed ad tech company in New York, eight-year-old AppNexus, in a cash-and-stock deal reportedly worth about $100 million. Yieldex had raised $18.5 million from investors, including Triangle Peak Partners, Hearst Ventures, Sequel Venture Partners, First Round Capital, and Woodside Fund. AppNexus has raised roughly $310 million over the years, including from WPP, Technology Crossover Ventures, Venrock, Tribeca Venture Partners, Microsoft, First Round Capital, Kodiak Venture Partners, and Khosla Ventures. Venture Capital Dispatch explains what’s going on here.
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People
A former Facebook product manager who was fired from the company is suing it for gender discrimination, racial discrimination, and sexual harassment—and she’s using attorney Theresa Lawless, who is currently representing Ellen Pao is her case against Kleiner Perkins Caufield & Byers. According to her suit, Chia Hong, who spent several years at Facebook, was “belittled at work” and asked to complete tasks that were not part of her job description, such as “organize parties and serve drinks to male colleagues.” She also says that she was “replaced by a less qualified, less experienced male” after being terminated. Wired has more here.
Madrona Venture Group has announced that it has three new strategic directors to work its portfolio company founders and executives. They are: John McAdam, Sujal Patel and Steve Singh, who’ve been the CEOs of publicly traded F5 Networks, Isilon Systems (acquired by EMC) and Concur (acquired by SAP), respectively. More here.
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Jobs
GE Ventures is looking to hire an associate to specialize in advanced manufacturing. The job is in Chicago.
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Essential Reads
The fuzzy, insane math that’s creating so many billion-dollar tech companies.
Forget passwords. Yesterday, Alibaba Group’s Jack Ma Monday showed off a new facial recognition tool that’s intended for use with the Alipay mobile payments service.
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Detours
A guide to (avoiding the) most offensive gestures around the world.
Your personality could be making you fat.
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Retail Therapy
Pinocchio party picks.