StrictlyVC: April 29, 2015

Good morning, dear readers. Our upcoming event in San Francisco is just two weeks from tonight — squeal! Excited to see many of you there.

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Top News in the A.M.

Uber is quietly testing a massive merchant delivery program. More here.

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A Startup Exposes the Shadiness of Shipping

Among a sea of specialized data companies,Windward, a five-year-old, 35-person, Tel Aviv-based company, stands out. The reason: it’s among few companies attempting to collect and sell detailed, real-time information about global ship activity.

Its story attracted Horizon Ventures of Hong Kong to its door. (Horizon just led a $10.8 million strategic investment in the company, with participation from Windward’s early backer, Aleph). Windward also counts a dozen governments around the world as customers. After poring over some of Windward’s findings about ship behavior, we also found ourselves wanting to learn more.

Luckily, we were able to catch Windward’s cofounder and CEO, Ami Daniel, as he bounded around New York City yesterday, trying to strike new partnerships. Our chat, edited for length, follows.

You were a navy officer for six years before starting Windward. Did you start thinking about the company during that period?

I was entrepreneurial as a teenager, and when I left the Navy, I hooked up with [Windward cofounder] Mantan [Peled], who I’d served with for five or six years. We wanted to do something big, and we felt that oceans were the Wild West. More than 90 percent of the world’s trade is carried by sea [according to the International Maritime Organization, or IMO], yet the shipping ecosystem is much more opaque than most people realize.

How so?

Talk to a big commodity trader, for example – someone who buys and sells more than $100 million in oil every year. His secret sauce is his connections, like port agents who know who is entering or leaving the ports, or the mine manager who knows when cargo is rolling out to market, or the contact in Nigeria who knows how to buy [low and sell high]. It’s an industry that’s based on 200-year-old methods. It’s all very gray. It’s kind of like real-estate in New York. [Laughs.]

You claim Windward has a better picture than anyone of everything that’s happening. How does your tech work? 

We start by checking whether you are who you say you are and creating a record of what you’ve been doing. We also calculate what you say you’re transporting by gauging, for example, how long you’re in the jetty, and how long it’s taking you to load what you’re carrying compared with the average loading rate for the same cargo. We don’t necessarily trust you to tell us how much oil you’re carrying. There’s a lot of [subterfuge in shipping]. For example, ships only report their final destination 41 percent of the time, and 55 percent of ships misrepresent their port of call for most of their voyage.

Aren’t there mandates against doing such things?

The IMO is responsible for maritime data and there are mandates issued by the UN, which is the regulator. But there is no punishment for not complying. You can steal an identity. You can turn off your data transmissions. I personally approached the head of the IMO to give him an executive summary of our findings and to ask for the organization’s feedback and they never called us back.

And you collect all this information how? Through satellites? Sensors? 

It starts with public information, then we get commercially available information. Spire, for example, is a San Francisco-based company that tracks ship transmissions and weather and sells information to companies like us. Beyond our data partnerships, we go to port agents and logistics brokers and we say, “We’ll give you technology [in exchange for information].”

Everyone has a small segment of the picture. There are no magic solutions, no one vendor, no one protocol. Everybody’s stories are different, so it’s very time- and resource-intensive work. But one of the moats we’re building is one of the biggest databases ever.

But you have competitors. 

We do have competitors, including IHS [a company that sells information and analytics about the maritime industry to customers]. But what we’re doing is better. Others take this older approach of information services, with analysts looking at databases and writing reports and then selling a giant report to everybody. We’re taking a data science approach, using Hadoop and Apache Spark to compute and slice and dice things automatically according to different queries.

You have a dozen governments paying you to subscribe to this platform. Can you give us some idea of what they’re paying you?

We’re happy that we’re being paid for the value that we’re providing, which is high, but I can’t be more specific except to say that we’re seen three times revenue growth year over year for the last three years and we’re making enough that we’ve barely touched the [$5 million Series A round we closed in 2013 from Aleph].

Like another intelligence specialist, Palantir Technologies, Windward started with government customers but wants to begin targeting financial clients. Have you lined up any firms so far?

We’re in beta testing. No one is paying yet. But we’re not cash strapped. We can afford to engage with customers as we develop the product. We want to make a billion dollar company out of this  That’s why I’m in New York, meeting with hedge funds and commodity traders. Legwork!

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New Fundings

Access Integrated Healthcare, a six-year-old, L.A.-based healthcare services company, has raised $8.5 million in its first round of growth capital led by Penta Mezzanine FundMore here.

Albeado, a five-year-old Santa Clara, CA-based software company that markets its predictive analytics and causal modeling platform to the healthcare, utilities and mining industries, has raised $3 million in Series A funding led by the tech consulting outfit Brillio.

CargoSense, a three-year-old, Reston, Va.-based big data and analytics SaaS company that targets the pharmaceutical, cold chain, and refrigerated storage industries, has raised $2.5 million in seed funding from IrishAngels, Middleburg Capital Development and Virginia’s Center for Innovative Technology.

Crispr Therapeutics, a two-year-old, London-based biopharmaceutical company that’s hoping to use a particular genome-editing technology to create medicines for serious human genetic diseases, has raised a combined $89 million in Series A and Series B funding, it just announced. Its investors include SR One, Celgene Corp., New Enterprise Associates, Abingworth, and Versant Ventures.

The Daily Dot, a four-year-old, New York-based media company, has raised $10 million in funding from an undisclosed media company, reports The Observer. More here.

Dedrone, a year-old, Kassel, Germany-based maker of drone early-warning and detection systems, has raised $2.9 million in funding. The round was led by Target Partners, with participation from angel investors, including  Tom Noonan, a Cisco exec who was long CEO of Internet Security Systems (acquired by IBM).

Empathetics, a four-year-old, Boston, Ma.-based interpersonal skills training company for medical professionals, has raised $1.5 million in funding led by GDN Holdings and Key Venture Partners.

Grab A Grub, a three-year-old, Mumbai, India-based food delivery service, has raised $1 million in seed funding from Oliphans Capital and former Network18 CEO Haresh Chawla. The startup says it has more than 500 delivery people in Mumbai and that it connects users to more than 350 restaurants in the city. VC Circle has more here.

Huakang Mobile Health, a three-year-old, Shenzhen, China-based mobile healthcare app developer, has raised $32 million in Series B funding from Yunfeng Capital (cofounded by Alibaba’s Jack Ma), Shenzhen Co-Win Venture Capital Investments, New Horizon Capital, and Henan Haijie Healthcare Investment. More here.

InCarda Therapeutics, a six-year-old, Palo Alto, Ca.-based biotech company that’s developing inhaled therapies for acute cardiovascular conditions, has raised more than $5 million in Series A funding led by Morningside Venture, with participation from other angel investors.

Infinidat, a five-year-old, Herzliya, Israel-based data storage company, has announced a whopping $150 million in new funding, at a valuation of $1.2 billion, led by TPG Growth. The company has now raised $230 million altogether. Venture Capital Dispatch has much more here.

Jukely, a 2.5-year-old, New York-based concert subscription service, has raised $8 million in fresh funding led by Northzone and 14W, with participation from a long list of individual investors, including GroupMe founders Steve Martocci and Jared Hecht. The company has now raised $11.3 million to date, shows Crunchbase.

Kaizen Platform, a two-year-old,  San Francisco-based marketing optimization platform, has raised $4 million in funding from Fidelity Growth Partners and GREE Ventures. The company has now raised $9.8 million altogether, shows Crunchbase. AdWeek has more here.

Ninox Medical, a three-year-old, Lyon, France-based medical device company that’s developing a wearable to treat obstructive sleep apnea, has raised $10 million in Series B funding led by Mérieux Développement and Pitango Venture Capital, with participation from earlier backer Xenia Venture Capital.

Pamlico BioPharma, an Oklahoma City, Ok.-based company that’s developing human monoclonal antibody therapeutics to treat human pathogens, cancer, and autoimmune diseases, has raised $2.2 million in Series A funding led by Accele Venture Partners and the Oklahoma Seed Capital Fund.

ReGlobe, a six-year-old, New Delhi, India-based consumer electronics refurbishment platform, has reportedly raised around $1 million in seed funding from Bessemer Venture Partners and Blume Ventures. The Economic Times has more here.

ShipBob, a year-old, Chicago-based shipping startup, has raised $1 million in seed funding from SV Angels, Funders Club, and WeFunder, and others. ChicagoInno has more here.

SlamAd, a 16-month-old, New York-based ad tech startup that’s developing a mobile texting application that integrates advertising, has raised $1.2 million in seed funding from unnamed strategic investors.

Styla, a three-year-old, Berlin, Germany-based company whose software makes it possible for anyone to publish an online magazine, has raised $2.5 million in seed funding led by Redalpine Venture Partners, with participation from Groupe Arnault, Atlantic Labs,Cherry Ventures, and Westtech Ventures.

ThreatQuotient, a two-year-old Dulles, Va.-based cybersecurity software company, has raised $1.5 million in seed funding led by Blu Venture Investors, the Center for Innovative Technology, the Virginia Tech Investor Network and angel investor Todd Headley.

Tracxn, a two-year-old, Palo Alto, Ca.-based analytics firm that tracks data from startups, has raised 3.5 million in Series A funding from SAIF Ventures.

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New Funds

Foundation Medical Partners is announcing a new name today — Flare Capital Partners — and a new, $200 million fund. The 14-year-old, Boston-based firm specializes in early-stage and growth-equity investments in healthcare technology, and it’s led by three general partners: Bill Geary, Michael Greeley and Lee Wrubel. Flare also recently appointed Kristen Laguerre as a partner and its CFO.

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IPOs

Teladoc, a 13-year-old, Dallas, Tex.-based health services company that provides medical care via video conferencing and phone consultations, has taken a first step toward an IPO, filing a confidential registration statement with the SEC, it tells MedCity News. The company has raised at least $74.3 million from investors, shows Crunchbase. Its backers include Icon VenturesCardinal PartnersKleiner Perkins Caufield & ByersQuestMark PartnersGreenspring Associates, and FLAG Capital Management.

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Exits

Bitcoin Shop, a year-old, Arlington, Va.-based blockchain startup whose shares trade on the over-the-counter market, is merging with Spondoolies, a digital currency server manufacturer. Spondoolies, a two-year-old, Kiryat Gat, Israel-based company, has raised $5 million from investors, including Aleph partner Eden Shochat.

SolarWinds, a 15-year-old, Austin, Tx.-based, publicly traded IT performance management service, has acquired Papertrail, a four-year-old, Seattle-based log management service, for $41 million in cash. Papertrail hadn’t raised outside funding. Geekwire has more here.

Twitter has acquired the six-year-old, Burlingame, Ca.-based commerce ads tech firm TellApart, which was formerly a big Facebook ad partner. TellApart had raised $17.8 from investors, including Harrison MetalBain Capital VenturesGreylock Partners, SV Angels and Twitter CEO Dick Costolo (who presumably recused himself from the selection process of else sold his stake previously). More here.

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People

Yesterday, at the Milken Institute Global Conference at the Beverly Hilton, Ben Horowitz of Andreessen Horowitz talked again about why the firm’s general partners are exclusively male, reportedly saying at one point,  “It would be great if we could attract a great person to that position, but why should that be a goal? It’s not going to actually change Silicon Valley.” Megan Quinn, an investor-turned-strategic advisor to Kleiner Perkins Caufield & Byersrespectfully disagrees.

Rahul (“RJ”) Jain has joined the Menlo Park, Ca.-based venture firm Foundation Capitalas an entrepreneur-in-residence. Jain cofounded Appurify, a performance optimization platform for mobile applications that Google acquired last year for undisclosed terms. Earlier in his career, Jain was director of engineering at the ride-sharing startup Sidecar Technologies and a principal software engineer at the games company Zynga.

Saul Klein, a longtime partner at Index Ventures, is leaving the firm, he announced in a post yesterday.

Stripe, the five-year-old payment company, has just leased 300,000 square feet of a building in San Francisco’s South of Market neighborhood, says the San Francisco Business Times. It’s apparently the largest lease deal of the year.

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Jobs

Adobe is looking to add a senior manager to its corporate development team. The job is in San Jose or San Francisco.

Hewlett-Packard is also looking for a senior manager who will be part of its venture investment, as well as corporate development, teams. The job is in Palo Alto.

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Essential Reads

OUYA, a three-year-old, L.A.-based company that makes game consoles for television, is on the auction block after tripping a debt covenant, according to an email sent to investors from CEO Julie Uhrman and obtained by Fortune. Sounds like something has to happen by month’s end.

Investors have spent the last year criticizing Twitter’s slowing user growth. After seeing its first-quarter numbers yesterday, their big concern now is revenue.

Facebook‘s impact on surrounding real estate prices in East Palo Alto and Menlo Park has been profound, reports TechCrunch.

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Detours

David Letterman on his 33-year run.

The billionaire, the dealer, and the $186 million Rothko.

Antartica.

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Retail Therapy

Wet suits.



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