Monthly Archives: May 2015

StrictlyVC: May 29, 2015

How great are short weeks? Hope you have a wonderful weekend, everyone. See you back here Monday.

—–

Top News in the A.M.

At its annual developer’s conference yesterday, Google introduced a service to store and organize an unlimited number of photos and videos — for free. The Google Photos app will be available on both Android and Apple devices and support pictures of up to 16 megapixels and 1080p high-definition video. More here.

Google also unveiled Android Pay yesterday to take on Apple Pay, which allows iPhone 6, 6 Plus, and Apple Watch users to make purchases on their device or in brick-and-mortar stores. More here.

You know what? Just — here’s everything Google announced yesterday in one handy list.

——

Four VCs on What’s Happening Now in On-Demand Startups

Last week, at the new On-Demand conference in San Francisco, we interviewed a panel of venture investors about the many companies they’re seeing – and funding — that deliver food, massages, and medical advice in real-time. We talked about the opportunity presented by these startups, as well as the many open questions that on-demand companies have created.

Each of the panelists – Patricia Nakashe of Trinity Ventures, Satya Patel of Homebrew, Simon Rothman of Greylock Partners, and Steve Schlafman of RRE Ventures – had thoughtful points of view. And while our recording of the event wasn’t crystal clear owing to the room’s acoustics, we were able to piece together parts of that discussion below.  Hope you enjoy it.

So many on-demand companies have now been funded. How is that impacting what you’re seeing? Are there fewer on-demand startups knocking on your doors or more?

SR: I actually counted. If you look at marketplaces, [we’ve been pitched] by about 1,000 of them in the last 18 months.

SS: We’re seeing them every single day. It’s across the board: B2B, B2C, infrastructure, some more horizontal apps in platforms; we’re not seeing any let up at all.

SP: We see 200 new companies each month and probably a quarter are related to the on-demand economy.

What are they centered around? Anything really novel?

TN: They come in cohorts, seemingly, so a couple of weeks ago, it was alcohol delivery on-demand and on-demand massage startups. But we’re also seeing more companies in transportation, in food delivery, in health and wellness and finance.

SP: We’re not seeing any slowdown in transportation [and food delivery] companies. We’re kind of seeing things in every single vertical.

Does that make sense? Is there enough untapped opportunity to support more food-delivery startups, for example? Where are we in the grand scheme of things?

SR: There’s definitely too much money [funding these me-too startups]. The odds of  five companies ahead of you falling apart is probably not a good business [strategy]. It’s okay not to be the first in a space, but once a space feels like [earlier companies are] approaching liquidity [meaning they’ve established both supply and demand], it’s probably time to move on to another space.

How narrow can these startups go?  Would you back a startup that’s say, delivering dairy products exclusively?

TN: It’s the age-old debate from the software world: Do you invest in a platform or a best-of-breed solution, and I think it depends on how big the problem is that you’re solving. I think you can go too narrow to justify a standalone service, but does Uber eat the whole world? No, I don’t believe that.

SS: It’s not just obvious industries like transportation and food. Pretty much every industry where there are service-based professionals is up for grabs. One of the craziest ideas [I’ve heard] is private investigators [which is] this weird market that exists probably on Craigslist and on the web and [a startup is now] taking it and making an experience out of it.

Certain white collar professionals might argue that their industries can’t be too thoroughly disrupted because of their relationships with clients.

SP: I don’t think there’s any professional service or product field that can’t benefit from improved efficiency.

SR: It’s about quality. Take medicine, as an example. The outcome matters; it can mean the difference between life and death. Not everyone lives in a market where you can get a great doctor. Technology can remotely deliver that care, giving you truly efficient access to the world’s best [physicians], and I think that trumps anything having to do with your relationship with a mediocre doctor.

Would you rather fund a telemedicine or other business that doesn’t require rolling out locally, versus a startup that’s physically expanding city by city?

SR: It’s a lot easier. Anyone who has tried to build a marketplace nationally will tell you [that] every local marketplace is almost like doing another startup. You [may have] a playbook, but you have to get supply and demand in every city over and over again, you have to customize it, sometimes you have to have a local team. The footprint may be smaller of [that distributed] team, and the demand may be centralized, but you still have decentralized supply.

For companies that do go the city-by-city route, what are the top things they should have down before expanding into new markets?

SR: Well here’s the one thing to avoid. I think everyone is trying to take Uber’s local rollout playbook and just copy it, but it doesn’t work.

For more of this conversation, click here.

—–

New Fundings

Beepi, a two-year-old, Los Altos, Ca.-based online platform for buying and selling used cars, is raising at least $300 million in fresh funding at a $2 billion valuation, reports Venture Capital Dispatch. The company has raised roughly $80 million to date. Its investors include Yuri MilnerSherpaVentures, and Foundation Capital.

CyberFlow Analytics, a two-year-old, San Diego, Ca.-based maker of security behavior analytics software, has raised $4 million in seed funding from Toshiba America Electronic Components, Siemens Venture Capital, and angel investors. Xconomy has more here.

Ingogo, a four-year-old, Sydney, Australia-based taxi app and mobile payments platform, has raised AU$12 million in new funding ($9.1 million), bringing the company’s total funding to AU$28 million ($21.4 million). More than a third of its new round was raised on the crowd-equity platformVentureCrowd. Financial Review has more here.

NewsWhip, a four-year-old, Dublin, Ireland-based company that tracks and predicts the stories, events and people getting engagement on social networks, has raised more than $1.6 million in funding from The Associated Press, 500 Startups, Tribal.vc, Matter, Social Starts, and others. According to Crunchbase, the company had previously raised three rounds of seed funding, including a $1.1 million round in 2013.

Postmates, the three-year-old delivery platform that primarily delivers food, is raising more than $50 million at a roughly $400 million valuation, reports The Information, which says many of the company’s earlier backers are participating in the deal. To date, Postmates has raised $58 million, including from AngelPadMatrix PartnersCrosslink CapitalSpark Capital, and SoftTech VC.

Twenga, a nine-year-old, London-based e-commerce site centered around fashion, has raised €10 million (nearly $11 million) from Idinvest Partners. Rude Baguette has more here.

Wealthminder, a two-year-old, Reston, Va.-based digital wealth platform that includes financial planning and automated investment advice tools, as well as connects consumers with financial advisors, has raised $1.45 million in seed funding, including from Green Visor Capital, Signatures Capital and other angel investors.

—–

New Funds

Generali, which is Europe’s third-largest insurer, has announced it will indirectly invest 1.25 billion euros in emerging financial technology by 2019 and it will work with a group  of venture capital funds, including Ribbit Capital, toward that end.  “This is an industry that has been lagging behind every other industry — it has been paralyzed,” CEO Marco Greco tells the Financial Times. “Either you understand it and you move towards the forefront of change […] or this industry will disappear.”

Passion Capital, a four-year-old,  London-based venture capital firm backed partly by the government, has raised a new £45 million ($68.7 million) fund to invest in U.K.-based tech and digital companies. TechWorld has more here.

—–

Exits

Apple has acquired Metaio, a 12-year-old, Munich, Germany-based augmented reality startup that launched originally as an offshoot of a project at Volkswagen. TechCrunch has the story here.

Hewlett-Packard has acquired ConteXtream, a nine-year-old, Mountain View, Ca.-based network virtualization company for undisclosed terms. According to Crunchbase, ConteXtream had raised at least $23.8 million from investors, including Verizon Ventures, Comcast Ventures, Benhamou Global Ventures, Sofinnova Ventures, Gemini Israel Ventures, and Norwest Venture Partners.

Path, the 4.5-year-old, San Francisco-based social network for smaller communities, disclosed yesterday that it’s being acquired by Daum Kakao, the Korean Internet company formed by the merger last year of Korean Internet company Daum Communications and the mobile messaging service KakaoTalk. It doesn’t sound like the entire company is being swallowed up. Rather, Path’s founder and CEO Dave Morin announced the sale of Path’s flagship social network, Path, and Path Talk, a separate app that lets users chat with local businesses as well as with other users. Fortune has much more here on the deal. (Meanwhile, it looks like investors weren’t informed of what happens next — at least, not straightaway. Last night, entrepreneur investor Kevin Rose tweeted to Morin, “What does this mean for Path investors? I think we’re in the dark here.” Rose, who cofounded the once-popular user-driven social news site Digg, quickly added in a more conciliatory tone: “Silicon Valley dances around failure. It’s how we learn/improve.  Digg was a failure, Path was a failure. Embrace it and try again, ya know?”

——

People

Yesterday, during the last day of the Code Conference, three CEOs of so-called “unicorns” — Slack’s Stewart Butterfield, Houzz’s Adi Tatarko and Stripe’s Patrick Collison — spoke candidly about how rich valuations are impacting their respective startups. “One is the impact it has on motivation,” said Butterfield, whose business messaging service is valued at $2.8 billion. “The bigger problem for us is avoiding the feeling of okay, we’ve done it.” (Video here.)

—–

Essential Reads

Amazon is getting into the private-label business like many mass-market retailers before it. Among the items planned: milk, cereal, baby food and household products. The WSJ has more here.

Netflix now accounts for almost 37 percent of North American Internet traffic.

Jay Z’s Tidal streaming music company has been a disaster. Bloomberg Business week lays out why.

—–

Detours

The birth of the Congratulatron.

Why some of your best anecdotes are probably stolen.

—–

Retail Therapy

Lenovo has created a pair of shoes that it claims can show a person’s mood. But what about their sole, Lenovo. (Too easy?)


Four VCs on What’s Happening Now in On-Demand Startups

Now ButtonLast week, at the On-Demand conference in San Francisco, StrictlyVC interviewed a panel of venture investors about the many companies they’re seeing – and funding — that deliver food, massages, and medical advice in real-time. We talked about the opportunity presented by these startups, as well as the many open questions that on-demand companies have created.

The panelists – Patricia Nakache of Trinity Ventures, Satya Patel of Homebrew, Simon Rothman of Greylock Partners, and Steve Schlafman of RRE Ventures – each had thoughtful points of view. And while our recording of the event wasn’t crystal clear, owing to the room’s acoustics, we were able to piece together parts of that discussion below. Hope you enjoy it.

So many on-demand companies have now been funded. How is that impacting what you’re seeing? Are there fewer on-demand startups knocking on your doors or more?

SR: I actually counted. If you look at marketplaces, [we’ve been pitched] by about 1,000 of them in the last 18 months.

SS: We’re seeing them every single day. It’s across the board: B2B, B2C, infrastructure, some more horizontal apps in platforms; we’re not seeing any let up at all.

SP: We see 200 new companies each month and probably a quarter are related to the on-demand economy.

What are they centered around? Anything really novel?

PN: They come in cohorts, seemingly, so a couple of weeks ago, it was alcohol delivery on-demand and on-demand massage startups. But we’re also seeing more companies in transportation, in food delivery, in health and wellness and finance.

SP: We’re not seeing any slowdown in transportation [and food delivery] companies. We’re kind of seeing things in every single vertical.

Does that make sense? Is there enough untapped opportunity to support more food-delivery startups, for example? Where are we in the grand scheme of things?

SR: There’s definitely too much money [funding these me-too startups]. The odds of five companies ahead of you falling apart is probably not a good business [strategy]. It’s okay not to be the first in a space, but once a space feels like [earlier companies are] approaching liquidity [meaning they’ve established both supply and demand], it’s probably time to move on to another space.

How narrow can these startups go? Would you back a startup that’s say, delivering dairy products exclusively?

PN: It’s the age-old debate from the software world: Do you invest in a platform or a best-of-breed solution, and I think it depends on how big the problem is that you’re solving. I think you can go too narrow to justify a standalone service, but does Uber eat the whole world? No, I don’t believe that.

SS: It’s not just obvious industries like transportation and food. Pretty much every industry where there are service-based professionals is up for grabs. One of the craziest ideas [I’ve heard] is private investigators [which is] this weird market that exists probably on Craigslist and on the web and [a startup is now] taking it and making an experience out of it.

Certain white collar professionals might argue that their industries can’t be too thoroughly disrupted because of their relationships with clients.

SP: I don’t think there’s any professional service or product field that can’t benefit from improved efficiency.

SR: It’s about quality. Take medicine, as an example. The outcome matters; it can mean the difference between life and death. Not everyone lives in a market where you can get a great doctor. Technology can remotely deliver that care, giving you truly efficient access to the world’s best [physicians], and I think that trumps anything having to do with your relationship with a mediocre doctor.

Would you rather fund a telemedicine or other business that doesn’t require rolling out locally, versus startups that have to physically tackle city by city?

SR: It’s a lot easier. Anyone who has tried to build a marketplace nationally will tell you [that] every local marketplace is almost like doing another startup. You [may have] a playbook, but you have to get supply and demand in every city over and over again, you have to customize it, sometimes you have to have a local team. The footprint may be smaller of [that distributed] team, and the demand may be centralized, but you still have decentralized supply.

For companies that do go the city-by-city route, what are the top things they should have down before expanding into new markets?

SR: Well here’s the one thing to avoid. I think everyone is trying to take Uber’s local rollout playbook and just copy it, but it doesn’t work.

Why?

SR: I don’t think local presence is mandatory. I see a lot of companies with a local presence in every city they’re operating in, without any good reason other than, that’s how it’s done. That’s actually not how it’s done. It’s how Uber did it and that’s fine and it works for them. But the default should always be to keep it in-house if possible.

SP: You’re going to better understand where things are likely to break in remote cities if you take the time to understand your own operations.

SR: The push right now is to get big fast in lots of markets. But if you haven’t unlocked the core market you’re in and really made your experience amazing, your chances of success declines with every city you expand into. Being first to the market isn’t winning. Being right is winning. It’s a race to liquidity; it is not a race to geography.

Speaking of which, from a logistical standpoint, how do these on-demand startups address everyone who doesn’t live in an urban center? Would it make sense for more of these startups to launch early trials outside of major cities?

SP: It’s more about more use that’s being addressed. If a company is solving a universal [problem] and its way of doing that is clean and focused, it doesn’t really matter where it starts. Operationally, it’s easier to build liquidity in more densely populated areas. There’s a question of whether some of these work in suburban areas, but operating early in urban environments gives you the flexibility to figure out suburban environments.

What if they don’t work in suburban areas? Is there enough supply and demand in cities to justify these investments and valuations?

SR: If you can get a meaningful percent [of the overall market] in those large areas, you can build a very large company.

On-demand companies are dependent on contract workers. What happens if regulations change in such a way that companies have to treat them as full-time employees? Is that a concern, and either way, do you think these companies have a responsibility to turn these contract workers into full-time employees at some point?

SR: I personally think the 1099 [tax classification] framework is broken. It existed in a world of monolithic, centralized corporations, not in a world of distributed companies, so I think there needs to be a third class of worker [and that we’ll eventually have one], though it will take a while.

[I think these] decentralized environments are the future, and [that’s a good thing as] they enable assets to be decentralized, too. Uber doesn’t need to [own cars], for example, and that produces more money that can be pushed back to the company and customers and its employees [so that we’re eventually seeing] high-wage jobs with a lot of control.

SP: I think regulation is going to change, but in the short term, as a business, you can decide your responsibilities will be dictated by a framework, or you can decide that your responsibilities are dictated by what’s right. And [these companies] need to do what’s right, which is to take care of workers and provide them not just with benefits and uniforms and living wages, but real career paths with the ability to grow their careers.

SS: [Our portfolio company] Managed by Q [an on-demand office cleaning company], said early on that ‘We’re actually going to hire the workers and give them a great culture and train them and give them career advancement,’ and I think that’s brilliant . . . because at the end of the day, those employees are who your customers are interacting with, and you want to make sure they’re as good as your product.

SP: When workers are getting all the [traditional benefits they’ve enjoyed], they’re likely to stick around longer, too.


StrictlyVC: May 28, 2015

Good Thursday morning, everyone! No column today.

—–

Top News in the A.M.

Avago Technologies is buying rival Broadcom for $37 billion in cash and stock, the latest in a wave of deals for giant chip makers. The combined company will be called Broadcom. More here from the WSJ.

Amazon isn’t messing around when it comes to the same-day delivery wars. It announced today that it’s expanding its same-day delivery service to two new markets — San Diego and Tampa Bay — while also making the service free to customers whose orders exceed $35. The service is now available in roughly 15 cities across the country. TechCrunch has more here.

Jawbone has sued its rival Fitbit, accusing it of “systematically plundering” confidential information by hiring Jawbone employees who downloaded sensitive materials shortly before leaving, including, in one case, a market trends and opportunities presentation, and, in another, confidential information about future products. Dealbook has the story here. (Interestingly, among Jawbone’s specific allegations, it says Fitbit poached one employee owing to his expertise in audio design, saying in its complaint that audio projects now appear to be a strategic initiative of Fitbit. Recode examines the claim here.)

A Canadian man was just ticketed for playing with his Apple Watch while driving. (He’s contesting the ticket, saying the watch does not qualify as a handheld device, which are illegal to operate in Quebec while at the wheel.)

—–

New Fundings

AutoGraph, a four-year-old, Seattle-based company whose technology enables users to get targeted deals without giving up personal information, has raised $2.7 million in funding from earlier backers Voyager Capital and members of the Alliance of Angels. The company has now raised $7.4 million altogether. GeekWire has more here.

BarTendr, a five-year-old, Oakland, Ca.-based social app centered around drinking (really; it analyzes the user-generated information and sells its findings about users’ habits and preferences to the beverage industry), has raised $1 million in seed funding New York Angels and Band of Angels. The company has now raised $2.3 million altogether.

Calimmune, a nine-year-old Tucson, Az.-based clinical-stage company whose lead therapy was engineered to control HIV infection and protect individuals with HIV from progressing to AIDS, has raised $15 million in Series B funding by a large (unnamed) pharmaceutical company, with participation from Alexandria Venture Investments and earlier backers RA Capital Healthcare Fund and Translational Accelerator.

Carvana, a three-year-old, Phoenix, Az.-based company that sells used cars online, is attempting to raise $300 million in growth funding to ramp up operations, reports TechCrunch. To date, the company has been financed by DriveTime, a Phoenix-based network of used-car dealerships.

CitizenShipper, a seven-year-old, Austin, Tex.-based online shipping marketplace that uses a peer-to-peer, auction-style platform to connect people in need of shipping services with drivers, haulers and transporters, has raised $500,000 in funding, including from Marvel Venture Partners.

ClearDATA, a 16-year-old, Tempe, Az.-based company that sells HIPAA-compliant cloud hosting and information security services to the healthcare industry, has raised $25 million in Series C funding from Heritage Group, HLM Venture Partners and Flare Capital Partners, along with earlier backers Norwest VenturePartners, Merck Global Health Innovation Fund and Excel Venture Management.

Complete, a new, Palo Alto, Ca.-based platform for people to share their to-do lists, has raised $1 million in funding led by Alloy Ventures, Structure Capital, and Red Eagle Ventures. The San Francisco Chronicle has more here.

Dockwa, a 10-month-old, Newport, R.I.-based mobile app providing reservations to boaters and the marine industry, has raised $1.1 million in seed funding, including from David Skok of Matrix Partners, HubSpot executives Brian Halligan and Mike Volpe, and other individual investors. The company has now raised $1.4 million altogether.

Flat4Day, a three-year-old Istanbul, Turkey-based vacation rental website that lists nearly 30,000 properties, most of them homes in Turkey and elswhere in Europe, has raised $2 million in funding led by publicly traded HomeAway, with participation from regional venture capital fund 212. The company has now raised just more than $6 million altogether.

Freedom Meditech, a nine-year-old, San Diego-based medical device company whose first product is a non-invasive tool that measures the autofluorescence in the eye, has raised $4.8 million in Series C funding from undisclosed sources. The company has now raised $14 million altogether, it says.

GumGum, an eight-year-old, Santa Monica, Ca.-based “in-image” advertising provider for publishers and brands, has raised $26 milion in new funding at a $200 million valuation led by Morgan Stanley Expansion Capital, with participation from New Enterprise Associates, Upfront Ventures and First Round Capital. The company, which had previously raised $10.8 million participating, says it chose Morgan Stanley with the hope that the bank will help take it public in 2017 — assuming ad tech stocks have rebounded by then. “The reality is that we’ve been around for a while and we want to provide some liquidity to our shareholders,” CEO Ophir Tanz tells Venture Capital Dispatch.

LifeIMAGE, a seven-year-old, Newton, Ma.-based network for exchanging medical imaging, has raised $17.5 million in new funding led by Cambia Health Solutions, with participation from earlier backers Cardinal Partners,Galen Partners, Long River Ventures, Mass Ventures, and Partners Innovation Fund.

Lystable, a seven-month-old, London-based startup whose cloud-based workflow management platform helps enterprises evaluate and manage contracts with external parties like freelancers, has raised $1.5 million in funding led by Valar Ventures, with participation from Backed, Playfair Capital, and numerous individual investors.

Monese, a 1.5-year-old, U.K.-based soon-to-launch mobile banking service for immigrants and expats who might otherwise find it difficult to open a bank account outside of their home country, has raised $1.8 million in backing from Seedcamp, SmartCap, and Spotify advisor and investor Shakil Khan, among others. More here.

NeuWave Medical, an 11-year-old, Madison, Wi.-based medical device company focused on the ablation of soft-tissue lesions, has raised $25 million in Series C funding led by Versant Ventures, with participation from earlier backers H.I.G. BioVentures, Venture Investors and others. The company has now raised at least $57.4 million, shows Crunchbase.

Pronutria Biosciences, a five-year-old Cambridge Ma.-based biotechnology company developing a new class of therapeutics to mediate amino acid biology, has raised $39 million in Series C funding led by Fidelity Management & Research Company, with participation from founding investor Flagship Ventures, among others. The company has now raised $62.1 million altogether, shows Crunchbase.

Tapad, a five-year-old, New York-based cross-screen marketing technology platform, has raised $18.5 million in B-2 funding led by Blue Cloud Ventures, with participation from Avalon Ventures, FirstMark Capital, G&H PartnersKnightEnterprise Fund, Silicon Valley Bank and Zanadu Capital Partners. The company has now raised $26.8 million altogether, shows Crunchbase.

Tegile Systems, a five-year-old, Newark, Ca.-based company that makes flash-driven storage arrays for databases, virtualized server and virtual desktop environments, has raised $70 million in new funding. The capital comes from Capricorn Investment Group, Cross Creek Advisors and Pine River Capital Management, along with earlier backers August Capital, Meritech Capital Partners, Western Digital and SanDisk. The company has now raised $117.5 million altogether.

Trustpilot, an eight-year-old, Copenhagen-based online source of user-generated reviews of (primarily online) businesses, has raised $73.5 million in Series D funding led by Virtruvian Partners, with participation from earlier backers DFJ Esprit, Index Ventures, Northzone and SEED Capital Denmark. The company has now raised $118 million to date. Venture Capital Dispatch has more here.

Virgin Pulse, the 11-year-old, Framingham, Ma.-based corporate wellness arm of Richard Branson’s Virgin Group, has raised $92 million in funding led byInsight Venture Partners, with participation from Virgin Group. BetaBoston has more here.
—–

New Funds

Next Frontier Capital, a new, Montana-based venture firm, has closed its debut fund with $20 million. The outfit plans to invest between $200,000 and $1.5 million in startup it backs — all based in Montana.

—–

Exits

CA Technologies is acquiring Rally Software, a provider of Agile development software and services, for approximately $480 million. Rally had gone public in 2013. EWeek has more here.

InsideSales, an 11-year-old, Provo, Ut.-based sales acceleration platform, has acquired the eight-year-old, San Mateo, Ca.-based predictive sales company C9for undisclosed terms. C9 had raised roughly $40 million from investors, including Mayfield Fund, InterWest Partners and Leapfrog Ventures. InsideSales has raised $199 million, including from HWVP, Kleiner Perkins Caufield & Byers, and Zetta Venture Partners. Venture Capital Dispatch has more color here.

Sony has acquired the optical data storage company Optical Archive, founded by Frank Frankovsky, a former VP of hardware design and supply chain operations for Facebook. The deal — whose terms aren’t being disclosed — is expected to help Sony market new products to business customers. The WSJ has the story here.

—–

People

Reddit‘s interim CEO, Ellen Pao, said yesterday that she has no regrets about suing her former employer, Kleiner Perkins Caufield & Byers. You can find her comments here.

Apple expert John Gruber dissects what Jony Ive’s promotion to chief design officer at the company really means.

—–

Happenings

Tonight in San Francisco, a Tedx event designed to champion the issues of women in tech. More information is available here.

Coming up June 12: the PreMoney conference, featuring Dave Morin, Ellen Pao, Naval Ravikant, Kate Mitchell and many others. Register here and use the code STRICTLYVC for a $150 discount.

—–

Jobs

Hulu is hiring a corporate development associate. The job is in Santa Monica, Ca.

Visa‘s corporate development and M&A unit is hiring an associate. The job is in San Francisco.

—–

Essential Reads

Google is set to unveil plans for an overhaul of its mobile payment products today at the company’s biggest event of the year. (The Verge is live-blogging the event right here, by the way.)

Self-driving cars are “farther out than some people are predicting,” says GM CEO Mary BarryMore here.

—–

Detours

A map that compares the gross domestic product of each U.S. state with the national GDPs of other nations.

How family incomes affect children’s college chances.

One of the best police blotters in America.

—–

Retail Therapy

You’ll be able to buy your virtual reality Oculus headset soon, but it won’t come cheap. CEO Brendan Iribe said at Recode’s conference yesterday that he expects consumers will have to shell out $1,500 — a price he hopes will fall to below $1,000 over time.

Ecocapsule. Just in case.


StrictlyVC: May 27, 2015

Hi, everyone! Hope you’re having a fine Wednesday.

——

Top News in the A.M.

Recode, the news website led by the veteran journalists Walt Mossberg and Kara Swisher, is being acquired in an all-stock deal by Vox Media, a move that “reflects the turmoil among digital organizations focused on covering the tech industry,” notes the New York Times. No one is talking about the price, but Quartz notes that the two digital publishers already shared an investor in Comcast, which could wind up owning them outright.

A new SEC filing reveals that the Chinese microblog Weibo is investing $142 million in China’s dominant taxi-hailing firms Didi Taxi and Kuaidi Taxi, presumably to fend off their aggressive U.S. rival Uber. Reuters has more here.

Investment-banker-turned-VC Mary Meeker released her newest Internet Trends report this morning. You can view it here.

——-

With $2.5 Million from VCs, Mapsense Charts Its Next Steps

Mapsense, a 12-person, San Francisco-based company that’s been quietly producing map analytics tools for corporate customers, is today revealing that it has raised $2.1 million in funding led by General Catalyst Partners, with participation from Redpoint Ventures, Formation 8 and Amplify. LA.

The announcement is interesting for a few reasons, starting with what Mapsense is at its core: a modern API for geo data visualizations. Indeed, according to the company, it can cater to any customer wanting to make better sense of the many billions of location-based data points being streamed constantly from a wide variety of sources, including smartphones, connected cars, cheap satellites, commercial drones and smart grids, to name a few.

Mapsense co-founder and CEO Erez Cohen puts it in perspective, noting that “there was more location data produced in 2014 than in all of time until then.”

Mapsense counts as customers, for example, two publicly traded credit card companies that respectively see 10 percent and 50 percent of the transaction data in the U.S. While they’re (hopefully) mindful of using the data they collect in a responsible way, Mapsense is helping them help their customers. For instance, they can show restaurateurs what people are paying for Thai food in certain neighborhoods, and how their competitors down the street fared last Tuesday (and how they fared the next town over, and around the country, if they really want to know).

Others of Mapsense’s customers include mobile ad companies looking to better target potential customers.

Obviously, Mapsense is well-timed, particularly given growing corporate interest in mapping technologies. (Nokia’s mapping division has become a particularly hot commodity of late.)

Starting today, Mapsense — which charges its enterprise customers a yearly average of “six figures” based on the amount of data they push to Mapsense —  is also hoping to sell its analytics tools to developers.

They won’t be paying as much to use Mapsense’s technology, but it’s a way to accelerate its growth, says Cohen, who adds that anyone can upload their data for free if they’re willing to make it public.

Worth flagging, particularly for StrictlyVC readers: Mapsense is announcing its newest funding today but actually sealed up the round a year ago. (It has raised $2.5 million to date.)

Cohen – a former Palantir Technologies engineer – insists the company’s funding announcement has nothing to do with its future fundraising plans. If it did, Mapsense would be among a growing number of companies to go public with their funding just as they begin looking to the next round.

(By the way, here’s a rough video demonstration of how Mapsense’s technology works.)

—–

New Fundings

Campanda, a two-year-old, Berlin-based booking site for motor homes and trailers, has raised €5 million ($5.4 million) in Series A  funding led by the European investment fund Ecomobility Ventures, with participation from Ringier Digital Ventures, Accel Partners, Groupe Arnault, and previous investors Atlantic Labs, and b-to-v.

DocuSign, the 12-year-old, San Francisco-based end-to-end document management company, has raised an additional $45 million from the venture arms of Dell and Intel, just weeks after closing funding from growth investors at a $3 billion valuation. The money brings the company’s Series F round to $278 million and its overall funding to $508 million. Venture Capital Dispatch has the story here.

eGifter, a four-year-old, Huntington, N.Y.-based e-gifting company, has raised $3.5 million in funding from the Long Island Angel Network, BDS CapitalAngel Dough Ventures, 94Bits and several angel investors.

Enervee, a three-year-old, Santa Monica, Ca.-based, smart data and commerce platform designed to help consumers compare energy products, has raised $3.7 million in funding led by Obvious Ventures, with participation from angel investors in the U.S. and Europe.  Enervee had previously raised $1 million in seed funding. Vator has more here.

EverCompliant, an eight-year-old, Tel Aviv, Israel-based company that sells security risk and compliance management software, has raised $3.5 million in Series A funding from Carmel Ventures, Nyca Partners and earlier investor Joey Low of Star Farm Ventures.

Jobandtalent, a six-year-old, Valencia, Spain-based recruitment startup that uses linguistic analysis to alert candidates to jobs they might otherwise have missed, has added $25 million in funding to its previously closed Series A round, bringing its total to $39 million. The newest infusion was led by earlier investor, Percacer CEO Pelayo Cortina Koplowitz, with participation from Qualitas Equity Partners, Kibo Ventures, Fundación José Manuel Entrecanales, and business angel Nicolás Luca de Tena.

Kantox, a four-year-old, London-based currency exchange marketplace that says it offers small and mid-size businesses better rates than banks or traditional brokers, has raised $11 million in Series B funding led by Partech Ventures and IDinvest Partners, with participation from Cabiedes & Partners. All three are already investors in the company, which has now raised $19 million altogether.

Mapi Pharma, a seven-year-old, Ness Ziona, Israel-based pharmaceutical company focused on treating multiple sclerosis, has raised $10 million in Series A funding led by Shavit Capital, with participation from chairman and CEO Ehud Marom.

MatterFab, a two-year-old, San Francisco-based metal 3D printer manufacturing company, has raised $5.75 million in Series A funding from GE Ventures and earlier backer Innovate Indiana Fund. MatterFab had received an undisclosed amount of previous funding, including from Lemnos Labs and Kima Ventures.

Notion, a two-year-old, Denver, Co.-based company that makes sensors for in-home monitoring, has raised $2 million in seed funding from Draper Nexus Ventures, Gabriel Investments, Galvanize Ventures, Foundry Group Angels and TechStars. The startup, a TechStars Boulder alum, raised just over $280,000 in crowdfunding last year. More here.

Omadi, a four-year-old, Provo, Utah-based company whose app offers paperless reports, on-duty task assignments, photo management and GPS tools to provide visibility into the operations of distributed workforces, has raised $700,000 in funding led by Peak Ventures. More here.

Pryynt, a two-year-old, London-based in-app photo printing platform for iOS and Android apps, has raised $2 million in seed funding from undisclosed investors. More here.

QR Pharma, a seven-year-old, Berwyn, Pa.-based biopharmaceutical company developing therapies to treat Alzheimer’s, Parkinson’s and other neurodegenerative diseases, has raised $5.7 million in Series A funding led by QR Pharma’s chairman, Michael Hoffman, with participation from Robin Hood Ventures, earlier angel investors, and additional angel investors from Delaware Crossing and from Keiretsu Forum.

Rani Therapeutics, a three-year-old, San Jose, Ca.-based maker of a “robotic pill” that could deliver drugs like insulin without the use of a needle, has raised roughly $25 million in Series C funding led by the pharmaceutical giantNovartis, with participation from returning investors Google VenturesInCube Ventures and VentureHealth, among others. Venture Capital Dispatch has more here.

Shift Messenger, a months-old, San Francisco-based online communication tool designed to help coworkers manage their schedules, has raised $1.5 million in seed funding led by Version One Ventures. Other investors in the round include Golden Venture Partners, Kapor Capital, Commerce VenturesNewGenVenture Partners, Venrock, and QueensBridge Venture Partners.

Si-Bone, Inc., a seven-year-old, San Jose, Ca.-based medical device company that makes a titanium implant system for the sacroiliac joint, has raised $21 million infunding led by Redline Capital Management, with participation from all existing major investors. According to Crunchbase, the company has now raised roughly $82 million altogether, including from OrbiMed Advisors,Montreux Equity Partners, Skyline Ventures, and Novo A/S.

Ubimo, a three-year-old, Tel Aviv, Israel-based startup that uses location-based data to make mobile ads more relevant, has raised $7.5 million in Series B funding led by Pitango Venture Capital, with participation from OurCrowd and Yahoo Japan Capital. The company has now raised $9.7 million altogether. TechCrunch has more here.

VitalFields, a four-year-old, Estonia-based farm management startup, has raised $1.2 million in Series A funding from investors, including SmartCap, the investment arm of taxpayer-funded Estonian Development Fund, and an unnamed Bay Area venture firm. TechCrunch has more here.

—–

New Funds

Airware, a four-year-old, San Francisco-based platform for developing and operating commercial drones, has announced the Commercial Drone Fund, which the company says will be used to invest anywhere from $250,000 to $1 million in dozens of nascent startups. In fact, says the company, it has already backed two companies: RedBird, a Paris-based drone data processing startup, and Sky-Futures, a London-based company that builds drone sensors for monitoring oil and gas infrastructure. Airware has itself raised roughly $40 million from investors, including Andreessen Horowitz, Kleiner Perkins Caufield & Byers, and Google Ventures. TechCrunch has much more here.

Kurma Partners, a six-year-old, Paris, France-based venture firm, has held the first closing of its third venture capital fund at €33 million ($35.9 million). The firm, which acts as a venture accelerator, helping to develop Europe-based diagnostics startups, counts The European Investment Fund, Fonds National d’Amorçage, Institut Pasteur and BNP Paribas as limited partners. It has raised two funds previously: Kurma Biofund I (€51M) & Kurma Biofund II (€75M).

Rockaway Capital, a venture firm focused on internet startups in emerging markets, has entered the U.S. market with its first office in San Francisco. The firm has invested $28 million so far in seed-stage start-ups; its first offices were in Prague and São Paulo.

—–

Exits

Aberdeen Asset Management, the Philadelphia-based asset management giant, is acquiring the fund of funds firm FLAG Capital ManagementMore here.

The publicly traded data storage giant EMC has purchased seven-year-old Virtustream, a cloud management firm, for $1.2 billion, to incorporate into its newly formed cloud managed services business. Virtustream had raised $129.6 from investors, shows Crunchbase, including TDF Ventures, QuestMark Partners, Columbia Capital, Noro-Moseley Partners, and Intel Capital.

Knowingly, an Austin, Tex.-based Internet startup, announced yesterday that it has acquired a portion of the assets of the shuttered tech blog Gigaom, including its website and content library. Talking New Media has more here about the deal, terms of which were not disclosed. Meanwhile, Mathew Ingram, a former writer for GigaOm, has more about Knowingly here.

The 17-year-old French tech company Mandriva is being liquidated. Business Insider has the story here.

Oculus VR has acquired the eight-month-old, London-based (seemingly bootstrapped) startup Surreal Vision to sharpen its expertise in recreating real-time 3D representations of the outside world. Terms were not disclosed. PC Gamer has more here.

Time Inc.  has acquired Missouri-based FanSided, a (seemingly bootstrapped) eight-year-old, Austin, Tex.-based sports, entertainment and lifestyle network of several hundred websites. Terms of the deal were not disclosed.

—–

People

A Siberian Husky owned by Wang Jianlin, the son of China’s richest man, is reportedly being “hounded” on the social network Weibo for owning not one but two gold Apple watches. (Is it so wrong for a dog to want to know its heart rate?)

Ken King, who advises companies as head of the Silicon Valley law office of the Skadden, Arps, Slate, Meagher & Flom, says he now spends about 30 percent of his time advising tech companies on investor activism, up from about 5 percent three years ago. His tactics reportedly include writing mock letters from potential activists.

Cameron Lester — a former Credit Suisse investment banker who cofounded the San Francisco-based venture firm Azure Capital Group in 2000 — is back at Credit Suisse, this time as its new global head of internet banking. He replaces Imran Khan, Credit Suisse’s former top internet banker, who joined Snapchat as chief strategy officer last December. No word on how Lester’s move impacts Azure. (StrictlyVC reached out to the firm yesterday but hasn’t heard back yet.) The WSJ has the story here.

—–

Jobs

Cisco is looking to add an associate to its venture investing unit. The job is in San Jose, Ca.

—–

Essential Reads

It isn’t just Twitter that’s kicking the tires at Flipboard. In recent weeks, reports the WSJ, Google and Yahoo have also held early discussions with the newsreader app maker.

Four-year-old Snapchat plans to go public, its cofounder and CEO, Evan Spiegel, disclosed yesterday at the popular tech summit Code Conference. Spiegel didn’t offer a timeframe for an IPO, but he said Snapchat now has nearly 100 million users logging onto the platform daily. (Here’s some video from his appearance.)

——

Detours

You’re kind of a jerk behind the wheel. Here’s why.

A new report says the billionaire boom may be ending.

Finally, all-in-one software. (Business Edition. Gold. Plus.)

—–

Retail Therapy

Brilliant bikes (founded by two former VCs, Adam Kalamchi and Kane Hsieh).


With $2.5 Million from VCs, Mapsense Charts Its Next Steps

MapsenseMapsense, a 12-person, San Francisco-based company that’s been quietly producing map analytics tools for corporate customers, is today revealing that it has raised $2.1 million in funding led by General Catalyst Partners, with participation from Redpoint Ventures, Formation 8 and Amplify. LA.

The announcement is interesting for a few reasons, starting with what Mapsense is at its core: a modern API for geo data visualizations. Indeed, according to the company, it can cater to any customer wanting to make better sense of the many billions of location-based data points being streamed constantly from a wide variety of sources, including smartphones, connected cars, cheap satellites, commercial drones and smart grids, to name a few.

Mapsense co-founder and CEO Erez Cohen puts it in perspective, noting that “there was more location data produced in 2014 than in all of time until then.”

Mapsense counts as customers, for example, two publicly traded credit card companies that respectively see 10 percent and 50 percent of the transaction data in the U.S. While they’re (hopefully) mindful of using the data they collect in a responsible way, Mapsense is helping them help their customers. For instance, they can show restaurateurs what people are paying for Thai food in certain neighborhoods, and how their competitors down the street fared last Tuesday (and how they fared the next town over, and around the country, if they really want to know).

Others of Mapsense’s customers include mobile ad companies looking to better target potential customers.

Obviously, Mapsense is well-timed, particularly given growing corporate interest in mapping technologies. (Nokia’s mapping division has become a particularly hot commodity of late.)

Starting today, Mapsense — which charges its enterprise customers a yearly average of “six figures” based on the amount of data they push to Mapsense —  is also hoping to sell its analytics tools to developers.

They won’t be paying as much to use Mapsense’s technology, but it’s a way to accelerate its growth, says Cohen, who adds that anyone can upload their data for free if they’re willing to make it public.

Worth flagging, particularly for StrictlyVC readers: Mapsense is announcing its newest funding today but actually sealed up the round a year ago. (It has raised $2.5 million to date.)

Cohen – a former Palantir Technologies engineer – insists the company’s funding announcement has nothing to do with its future fundraising plans. But if it did, Mapsense would be among a growing number of companies to go public with their funding just as they begin looking to the next round.

(By the way, here’s a rough video demonstration of how Mapsense’s technology works.)


StrictlyVC: May 26, 2015

Hi, good morning, everyone, and welcome back!

—–

Top News in the A.M.

It’s official. Charter Communications has agreed to acquire Time Warner Cable in a deal valued at $78.7 billion.

This is getting interesting: last Thursday, the Florida Department of Economic Opportunity decided that former Uber driver Darrin McGillis was an employee of the company, not a contractor as the company contends, and is thus eligible for unemployment insurance. Buzzfeed has the story here.

—–

Jeremy Liew on Snapchat, Anonymous Apps, and the Fallibility of Intuition

Last week, we published several interviews from our most recent event in San Francisco. Today we’re running the last of those interviews, with venture capitalist Jeremy Liew, because it’s also worth sharing.

Liew joined Lightspeed Venture Partners in 2006 from AOL, where he’d worked in corporate development, and as many readers will know, his star has risen quickly in the last nine years, thanks to investments like Snapchat, Bonobos, and The Honest Company. (Snapchat is reportedly valued at upwards of $20 billion and Liew wrote its first check, for $500,000. Meanwhile, both Bonobos and The Honest Company are expected to go public in the not-too-distant future.)

Liew — who primarily focuses on social media, commerce, gaming and financial services — doesn’t seem to be taking anything for granted. Parts of our chat, edited for length, follow.

What’s your day like? Are there certain things you pore over every morning like App Annie?

Probably three-ish years ago, taking more of a quantitative approach and looking at data sources was a more of an advantage; you could spot things before other people did. I still think that it’s good to see what everybody’s seeing, and we want to do that, but oftentimes, there’s an awful lot of interesting stuff that’s not as well-known, and you have to go looking for that. Bitcoin is a good example. Now there’s a lot of coverage about it, but two or three years ago, that wasn’t the case, and you could meet every interesting Bitcoin company in the world, which then was 15 or 20 companies.

So you develop a thematic approach, then dig in?

First, just being able to observe the present without judgment [is important]. It’s easy to rush to judgment based on your intuition, but you have to recognize that your intuition can be pretty fallible before you write something off.

You also have to have a point of view that’s differentiated. Some people did around [virtual reality]; we didn’t. we missed that whole thing. But when you pick a sector early, you really can be as well-versed in that sector as anybody else.

You think you’ve already missed the virtual-reality wave? 

There are some sectors where you really have to spend time to develop a point of view. I haven’t [when it comes to VR] not because I don’t think it’s interesting but because I’ve been focused on other stuff. And I think VC is becoming more of a specialist business. If you don’t know enough about a category, entrepreneurs probably figure that out pretty quickly.

You’ve said that you think L.A. is more in touch with what the rest of the country wants than Silicon Valley. How much time do you spend there?

I have one board seat in the Bay Area, five in L.A and five in New York. It’s not that I don’t want to invest in Bay Area, but [I no longer believe there’s a] path that starts [here] with the digerati and that spreads to everyone else as they slowly grow to understand what we’ve always known. Instead, it’s actually young women who are the carriers of cultural viruses; it’s young women who are early adopters who will evangelize technologies and help spread them. And you ask yourself: who understands what young women in middle America will be doing, people in Silicon Valley or people in L.A. and New York?

One of your biggest L.A.-based bets is on Snapchat. For those who don’t know, how did that deal come together?

It was in 2012. It’s a lucky thing. One of my partners has a daughter who, at the time, was in high school. He’s an engaged dad and he noticed she was using this new app all the time, and [asked about it]. She said everybody in school has three apps: Instagram, Angry Birds, and Snapchat. (Remember, it was 2012, so people were still playing Angry Birds.)

He mentioned it to me since I focus on consumer stuff, so I downloaded the app, and I really didn’t understand what the big deal was [but figured if a] subset of people are using something intensively, it’s worth understanding why. So I saw [an email address] on Snapchat’s site and I emailed it and never heard back. I [turned to] LinkedIn and no one was listed as an employee at Snapchat. [Eventually] I turned to a WhoIs [domain] lookup [and it listed] Evan Spiegel, who was a sophomore at Stanford, so I emailed him through LinkedIn and never heard back. Then I started randomly emailing [different possible gmail addresses for him] and didn’t hear back. I was about to give up but tried one last thing. Since Evan was a Stanford student and I was a Stanford grad from business school, we were in the same Facebook [group], so I direct messaged him. And I heard back from him one second later, and he said, “Oh, I’d love to talk with you.” [Laughs.]

He wandered over the next day, cracked open his Mixpanel [mobile analytics] account and I was shocked by the engagement, retention and growth . . . It was growing so fast that he said, “We can’t pay our server bills,” and we said, “We can help you with that!”

Reports say Snapchat is now worth $10 billion to $20 billion. What do you think it’s worth right now?

I agree that’s what reports say. [Laughs.]

Have you taken some of your money off the table?

For more of our interview with Liew, continue reading here.

—–

New Fundings

Bluebee, a four-year-old, Delft, the Netherlands-based DNA analytics startup, has raised €1.75m ($1.9 million) from the Belgian investment firm Buysse & Partners and Delft University of Technology, from which the company spun off. More here.

Boost Academy, a three-year-old, San Diego, Ca.-based developer of an interactive math tutoring platform for the iPad, raised $600,000 in seed funding from individual investors, including serial entrepreneur Tom Ladt. More here.

Clutch, a three-year-old, Ambler, Pa.-based platform that helps consumer-focused marketers identify, understand and engage their customers, has raised $5 million in Series B funding led by Safeguard Scientifics. The company has now raised $14.4 million altogether. More here.

FruitDay, a nine-year-old, Shanghai, China-based company that sells fresh produce across China, has raised $70 million in Series C funding led by e-commerce giant JD.com, with participation from earlier investors Susquehanna International Group and ClearVue. TechCrunch has more here.

Funding Options, a nearly four-year-old, Manchester, U.K.-based online broker that matches small businesses with finance providers, has £2m ($3 million) in funding led by GLI Finance. More here.

GoFactory, a four-year-old, San Francisco-based company that specializes in helping industrial-scale businesses connect to the Internet of Things, has raised $2 million in seed funding led by Visionnaire Ventures, with participation from executives in the industrial and manufacturing sectors including Reuben Brothers, David Clark, Jonathan McQueen, Swordfish Investments and Thomas Kunz.

Granify, a four-year-old, Edmonton, Alberta, Canada-based revenue optimization platform that applies machine learning to predict in real time which shoppers aren’t going to make a purchase at an online site and provide them with additional contextual stimuli to overcome their objections, has raised $7 million in Series A funding led by Peter Thiel’s Valar Ventures, with participation from earlier backers iNovia Capital, Social Starts and angel investors. More here.

HelloTech, an eight-month-old, L.A.-based on-demand in-home tech support and technology sales service, has raised $2 million in seed funding from investors, including Collaborative Fund, Baroda VenturesGreycroft Partners, and Silicon Valley Bank. The company has now raised $4.5 million altogether, including from Accel Partners, Upfront VenturesCrosscut Ventures, and Amplify.LA. StrictlyVC talked with cofounder and CEO Richard Wolpert about HelloTech, a play on “tech support for your parents,” earlier this year.

Hotels.ng, a three-year-old, Lagos, Nigeria-based company that claims to be the country’s largest hotel booking site in Nigeria, has raised $1.2 million to expand across Africa. Investors include EchoVC Pan-Africa Fund and Omidyar Network. TechCrunch has more here.

Iprice group, a year-old, Kuala Lumpur, Malaysia-based online shopping community company featuring local and international brands, has raised $550,000 in funding from Asia Venture Group. More here.

Iyzico, a three-year-old Istanbul, Turkey- based secure payment processing and management system for online businesses and enterprises, has raised $6.2 million in Series B funding led by International Finance Corporation (the World Bank’s investing arm), the Istanbul-based venture capital firm 212, New York-based investor Endeavor Catalyst, and Speedinvest from Austria. The company has now raised $9.4 million altogether.

Kobojo, a seven-year-old, Paris, France-based company that makes online role-playing games that are designed for touch devices, has raised $7 million in funding led by Oxford Capital, with participation from the Scottish Investment Bank and Endeavour Vision. The company has raised at least $14.7 million to date, shows Crunchbase.

Magnetic, a seven-year-old, New York City-based digital advertising technology company, has raised $25 million in funding led by Edison Partners, with participation from CRV, ORIX Ventures, the Honeywell pension, Jonathan Kraft, Roger Ehrenberg, and others. In related news, the company has merged with MyBuys, a San Mateo, Ca.-based multi-channel marketing and personalization platform. MediaPost has more here.

Mitoo, a 1.5-year-old, San Francisco, Ca.-based sports league platform, has raised $1.5 million in seed funding from Slow Ventures, Lift Partners, Kima Ventures, and 500 Startups, among others. VentureBeat has more here.

Mode Media, an 11-year-old, Brisbane, Ca.-based startup previously known as Glam Media, has raised $30 million led by earlier investor Hubert Burda Media, a German media company. The company, which began life as a women-focused online ad network and is today a hub for video creators, has raised $244.6 million altogether, shows Crunchbase. Earlier backers include GLG Partners, DFJ, Accel Partners, Information Capital, and Walden Venture Capital.

Munchery, a four-year-old, San Francisco-based service that delivers quick, microwavable meals to users, has raised $85 million in new funding that values the company at $300 million. Earlier backers SherpaVentures and Menlo Ventures led the deal, with participation from NorthGate Capital, 137 Ventures, Mousse Partners, e.ventures, and Greycroft Partners. The company has now raised $117.2 million altogether, says VentureBeat.

PayItSimple, a six-year-old, New York-based company whose payment technology is used by merchants to offer consumers the ability to make purchases using interest-free installments, has raised $10 million in debt funding from Simpel Management in New York. More here.

Rubrik, a year-old, Palo Alto, Ca.-based company that offers live data access for recovery and application development by fusing enterprise data management with web-scale IT, has raised $41 million in Series B funding led by Greylock Partners, with participation from Lightspeed Venture Partners and existing angel investors. The company has now raised more than $51 million altogether it says. More here.

Spring, a two-year-old, New York-based shopping app, has raised an undisclosed amount of funding from the popular messaging app Snapchataccording to Recode’s sources. Spring announced a $25 million funding in April that did not include Snapchat (but did include Thrive Capital, Google Ventures, Groupe Arnault/LVMH, Yuri Milner, and BoxGroup.) As notes Recode, an SEC filing suggests that Spring parent company Jello Labs is still open to raising an additional $5.7 million for a total of $30.7 million.

—–

New Funds

Globespan Capital Partners, the 12-year-old, Boston-based venture firm, is looking to raise $75 million for its sixth fund, shows a new SEC filing. The firm closed its fifth fund with $380 million in 2007. Globespan was launched when members of the senior investment team at JAFCO Ventures, the venture of Tokyo-based JAFCO, decided to spin out on their own. Its bets include Roku, Redfin, and Credit Sesame, among others.

The Social+Capital Partnership, the four-year-old, Palo Alto, Ca.-based venture firm founded by former Facebook VP Chamath Palihapitiya, has raised $600 million for its third fund, reports a Fortune profile on Palihapitiya. According to earlier SEC documents, the firm was targeting $450 million fund. The firm’s two previous funds were $275 million and $325 million in size, respectively.

—–

IPOs

Alarm.com has registered plans to raise up to $75 million in an IPO. The company is predominately owned by Technology Crossover Ventures, which hold a 42.9 percent stake, and ABS Capital Partners, which owns 41.6 percent of the company. Fortune has more here.
—–

Exits

Travel giant Expedia has sold its majority stake in the China-focused travel agency eLong for $671 million. TechCrunch has more here.

—–

People

Apple‘s Jony Ive has a new job.

Longitude Capital, an investment firm that focuses on venture growth investments in drug development and medical technology, has promoted Sandip Agarwala to managing director. Agarwala joined the firm in 2013 and focuses on structured investments in both biotechnology and medical device companies.

BlackBerry said Friday that it’s laying off an undisclosed number of employees in its device business including those focused on development of smartphone software and applications. The WSJ has more here.

Numerous tech entrepreneurs and investors have collectively donated $5 million to help house homeless veterans in San Francisco’s Mission Bay neighborhood, where a 50-unit building is being built for a total expense of $48 million. The money is expected to advance construction by one year. (It has yet to begin.) Donors include Peter Thiel, Sean Parker, Andrew Mason, Drew HoustonAlfred and Rebecca Lin, Marc Benioff and Ron Conway. More here.

—–

Jobs

LinkedIn is looking to add an associate, senior associate, or manager to its corporate development team. The job is in Mountain View, Ca.

—–

Essential Reads

Twitter has been engaged in an ongoing series of talks to acquire Flipboard in an all-stock deal that would value the company at more than $1 billion, reports Recode, which adds that though the two have numerous ties, talks “seem to be currently stalled.”

—–

Detours

The digital artists who create those amazing “Game of Thrones” landscapes.

Ask a tween: What is dating like?

Why you think you’re the one doing all the work.

—–

Retail Therapy

Sunoco Burnt Rubber Cologne. Somebody has a sense of humor at the oil company.


Jeremy Liew on Snapchat, Anonymous Apps, and the Fallibility of Intuition

17666532621_d1d0dc8be6_zLast week, we published several interviews from our most recent StrictlyVC event in San Francisco. Today we’re running the last of those interviews, with venture capitalist Jeremy Liew.

Liew joined Lightspeed Venture Partners in 2006 from AOL, where he’d worked in corporate development, and as many readers will know, his star has risen quickly in the last nine years, thanks to investments like Snapchat, Bonobos, and The Honest Company. (Snapchat is reportedly valued at upwards of $20 billion and Liew wrote its first check, for $500,000. Meanwhile, both Bonobos and The Honest Company are expected to go public in the not-too-distant future.)

Liew — who primarily focuses on social media, commerce, gaming and financial services — doesn’t seem to be taking anything for granted. Parts of our chat, edited for length, follow.

What’s your day like? Are there certain things you pore over every morning like App Annie?

Probably three-ish years ago, taking more of a quantitative approach and looking at data sources was a more of an advantage; you could spot things before other people did. I still think that it’s good to see what everybody’s seeing, and we want to do that, but oftentimes, there’s an awful lot of interesting stuff that’s not as well-known, and you have to go looking for that. Bitcoin is a good example. Now there’s a lot of coverage about it, but two or three years ago, that wasn’t the case, and you could meet every interesting Bitcoin company in the world, which then was 15 or 20 companies.

So you develop a thematic approach, then dig in?

First, just being able to observe the present without judgment [is important]. It’s easy to rush to judgment based on your intuition, but you have to recognize that your intuition can be pretty fallible before you write something off.

You also have to have a point of view that’s differentiated. Some people did around [virtual reality]; we didn’t. we missed that whole thing. But when you pick a sector early, you really can be as well-versed in that sector as anybody else.

You think you’ve already missed the virtual-reality wave? 

There are some sectors, where you really have to spend time to develop a point of view. I haven’t [when it comes to VR] not because I don’t think it’s interesting but because I’ve been focused on other stuff. And I think VC is becoming more of a specialist business. If you don’t know enough about a category, entrepreneurs probably figure that out pretty quickly.

You’ve said that you think L.A. is more in touch with what the rest of the country wants than Silicon Valley. How much time do you spend there?

I have one board seat in the Bay Area, five in L.A and five in New York. It’s not that I don’t want to invest in the Bay Area, but [I no longer believe there’s a] path that starts [here] with the digerati and that spreads to everyone else as they slowly grow to understand what we’ve always known. Instead, it’s actually young women who are the carriers of cultural viruses; it’s young women who are early adopters who will evangelize technologies and help spread them. And you ask yourself: who understands what young women in middle America will be doing, people in Silicon Valley or people in L.A. and New York?

One of your biggest L.A.-based bets is on Snapchat. For those who don’t know, how did that deal come together?

It was in 2012. It’s a lucky thing. One of my partners has a daughter who, at the time, was in high school. He’s an engaged dad and he noticed she was using this new app all the time, and [asked about it]. She said everybody in school has three apps: Instagram, Angry Birds, and Snapchat. (Remember, it was 2012, so people were still playing Angry Birds.)

He mentioned it to me since I focus on consumer stuff, so I downloaded the app, and I really didn’t understand what the big deal was [but figured if a] subset of people are using something intensively, it’s worth understanding why. So I saw [an email address] on Snapchat’s site and I emailed it and never heard back. I [turned to] LinkedIn and no one was listed as an employee at Snapchat. [Eventually] I turned to a WhoIs [domain] lookup [and it listed] Evan Spiegel, who was a sophomore at Stanford, so I emailed him through LinkedIn and never heard back. Then I started randomly emailing [different possible gmail addresses for him] and didn’t hear back. I was about to give up but tried one last thing. Since Evan was a Stanford student and I was a Stanford grad from business school, we were in the same Facebook [group], so I direct messaged him. And I heard back from him one second later, and he said, “Oh, I’d love to talk with you.” [Laughs.]

He wandered over the next day, cracked open his Mixpanel [mobile analytics] account and I was shocked by the engagement, retention and growth . . . It was growing so fast that he said, “We can’t pay our server bills,” and we said, “We can help you with that!”

Reports say Snapchat is now worth $10 billion to $20 billion. What do you think it’s worth right now?

I agree that’s what reports say. [Laughs.]

Have you taken some of your money off the table?

We haven’t. Venture is a game of extremes. You aren’t successful because you have a high hit rate; you’re successful because of your best deals. So you have to ride out your winners. If Evan and the team think there’s opportunity here, then we do, too.

You’ve also backed the anonymous app Whisper, whose most direct competitor, Secret, just went out of business, while another, Yik Yak, seems to chugging along. Has your view on anonymous apps evolved in any way?

With Whisper or Yik Yak, you actually get very different things. Yik Yak is very geographically focused. Whisper is much more about topic. You can connect with and emphasize with others about being gay in high school, or around loving your kids but sometimes just needing to be by yourself a little bit. Whatever it is, you’re not sure who you talk with about some of that stuff, and this gives you a forum to do that.

That’s the upside of anonymity. The downside is bullying or just mean-spiritedness. One of the few tools you have with these social sites is the culture within the community. If you go to an app where everybody else is ragging on other people, then it’s you think it’s okay to do that. If you go to an app where everyone is empathetic and supportive, then you say, okay, that’s kind of what we do here. Think of Pinterest, which essentially started as a photo sharing site. Users could have posted [lewd] pictures but they didn’t because they could see no one else did. You’d have to be a real jackass to think [behaving badly] is a cool thing to do when other people aren’t doing that, and most people aren’t real jackasses.

What did you make of Secret’s end? People seemed upset that the founders had taken $6 million off the table in the Series B, but no one was holding a gun to investors’ heads when they struck that deal with them.

I think in every transaction, a willing buyer meets a willing seller, and they agree on terms. The outcome there was probably what nobody was planning for but that happens in entrepreneurship and startups.

When is the right time for founder liquidity?

There’s no universal answer. Sometimes, investors want to own more than they’re able to. That’s probably not a great reason, but that’s actually one key reason, and it’s what I suspect happened in Secret’s case. Other times, it’s about alignment. Maybe you have founders who were in college two years ago and there’s an opportunity for the company to sell for $100 million. It must be pretty tempting to have a life-changing moment, and having the founders aligned with investors in wanting to go for a bigger opportunity is a good reason for founders to take money off the table. In any event, it’s a rare thing. It shouldn’t be a standard thing.


StrictlyVC: May 22, 2015

Oh, Friday, how we love you so.

Hope you have a wonderful long weekend everyone! See you Tuesday.

—–

Top News in the A.M.

The Pittsburgh Business Times give readers a first look at Uber’s self-driving test car. As you likely recall, in February, Uber announced plans to partner with Pittsburgh-based Carnegie Mellon to develop mapping, vehicle safety, and autonomous driving technologies. Since then, Uber has hired away 50 people from the school’s National Robotics Engineering Center (NREC) as it builds its own Advanced Technologies Center, a 53,000-square foot facility nearby. (Unsurprisingly, the arrangement is straining relations between Carnegie Mellon’s current and former employees.)

——

Thumbtack Takes Its Own Investor, Google, Head On

At a StrictlyVC event in San Francisco last week, Charles Hudson of SoftTech VC sat down with Sequoia Capital partner Bryan Schreier and Marco Zappacosta to discuss Thumbtack, an online marketplace for hiring workers that Zappacosta co-founded soon after graduating from Columbia University in 2007.

Thumbtack is interesting for numerous reasons, including the amount of funding it has raised — $148 million over three rounds, all within a 14-month period – and who its investors are. Sequoia is among them (Schreier sits on Thumbtack’s board). So is Google, which provided Thumbtack with $100 million last summer – and, the business world recently learned, is now entering into direct competition with Thumbtack.

Hudson, who spends much of his time studying marketplaces, asked Zappacosta and Schreier – a former Googler – about their “multifaceted” relationship with Google, among other things. That conversation, edited for length, follows:

CH: How did Sequoia and Thumbtack come together?

MZ: [Angel investor] Jason Calacanis introduced us to [Sequoia partner] Roelof Botha and another angel investor introduced us to Bryan. It was the fall of 2010. Unlike a lot of VCs, they were very explicit about what they thought was good and wasn’t yet good. When we [later] went back with numbers to show them [how we were growing], they did [write a check].

CH: Many marketplaces sit in between the buyer and seller, but you’ve taken the opposite stance. Why?

MZ: A lot of entrepreneurs and investors view the transactional model as a way to get a higher take rate. The problem in doing that is you’re solving your own problem; you’re not actually solving the customers’ problem at that point. There are times when you fundamentally [need to act as the facilitator]. Taking payment is key to making eBay work. It’s key to Uber, where speed is fundamental. But with Thumbtack, when a customer is spending $3,000 to repaint their house and you ask them what the hard part is, no one ever tells you it’s about paying the painter. It’s about finding the painter, and that’s the focus at Thumbtack. [Editor’s note: Thumbtack sends customer requests to service providers like plumbers, caterers, and painters. If the service provider thinks it’s a fit, they pay Thumbtack a fee to shoot a quote to the customer, who then chooses whether or not to work with that service provider.]

CH: Is leakage –people going off platform to have a direct relationship – something you’ve ever worried about?

MZ: If you haven’t created enough value for both sides to keep using your platform, that’s your problem.

CH: [Tell us about your fees.]

MZ: We’ve explicitly kept [them] very low — much lower than we think it could be. If you look at other marketplaces like Airbnb, it’s 10 to 12 percent. Uber is now 18 to 20 percent. eBay is like 13 percent. We’re below that and happily because our goal is to get market share. Today we move a billion dollars worth of commerce on the platform, which we feel good about, but that’s still nothing relative to the almost trillion dollars worth of commerce happening in the US. That’s the thousand x [opportunity] in front of us.

CH: You recently raised $100 million from Google Capital. Google has also made some reference that they have designs on the home services market. 

MZ: I have to give Bryan credit for board member words of encouragement when this happened, which is that if Google or Facebook or Amazon aren’t competing in your market, then you’re probably in a sh_tty market. And I think he’s exactly right.

>BS: You felt better for like three seconds, right?

MZ: [Laughs.] It’s indicative of the opportunity being enormous. I don’t perceive any sort of nefarious action on the part of Google Capital. I think it’s unfortunate. It’s a 50,000 to 60,000 person organization, but it’s why we’ve kept them at arm’s length. We’re excited to have them as investors, but we’ve been careful of that relationship accordingly.

BS: Thumbtack connects people to people; they don’t connect companies. They don’t connect ads to people. It’s a very different business, with people on both sides who have an intimate relationship. This is something that Google has never been very good at. [It isn’t] intrinsic to their DNA.

MZ: The opportunity and the challenge in this space is just how fragmented it is. There’s no natural point of aggregation as there is in retailing, where you can go to a distributor and instantly get access to 30 or 40 percent of the inventory in that category. So Google and Amazon — despite their money and brands and hard working employees — have to go out and recruit these plumbers and caterers one by one, and that’s a f_cking grind, one that we’re real good at, and one we’ve done without any salespeople and with a lot of technology and innovation.

CH: How do you think about Amazon given its reach and scale and financial resources?

BS: They still suffer from that corporate DNA issue, which is that they send packages to people, not people to people. And it’s very different. You have to get people on the phone when they’re fixing a toilet and really don’t want to be bothered.

CH: You raised two fairly large rounds back to back. Why? 

MZ: The truth, at the end of the day: it’s because you can. We didn’t need the money. The business is growing great and generating very real revenue. These rounds in happen in quick succession and in ever-growing numbers because companies . . . [in a big space and with a big vision] . . . can.

—–

New Fundings

Biosyntia, a 3.5-year-old, Denmark-based synthetic biology and metabolic engineering company, has raised roughly $1.9 million in funding led by Novo Seeds. More here.

Bitbar Technologies, a 20-year-old, Helsinki, Finland-based company behind a mobile development and testing service called Testdroid, has raised an undisclosed amount of new funding led by Inventure, with participation from earlier investors Qualcomm Ventures, DFJ Esprit, Creathor and AveraMore here.

Brit Media, a 3.5-year-old, San Francisco-based content and commerce platform centered around DIY projects for women and girls primarily, has raised $23 million, according to an SEC form that was flagged by Business Insider. Among its new investors: Intel Capital. The company had previously raised  $7.6 million in funding from Index Ventures, Cowboy Ventures, Lerer Ventures, Marissa Mayer, and Oak Investment Partners.

CyPhy Works, a 6.5-year-old, Danvers, Ma.-based maker of advanced unmanned aerial vehicles, has raised an undisclosed amount of funding from Draper Nexus. The company had previously raised $12.5 million in equity and debt, shows Crunchbase; its other backers include Lux Capital, General Catalyst Partners and Felicis Ventures.

Guildery, a 1.5-year-old, Los Altos, Ca.-based e-commerce company that offers digitally printed fabrics and other home accessories like pillows, drapes, and ottomans, has raised $2.1 million in seed funding from Forerunner Ventures, Cowboy Ventures, SoftTech VC and AOL’s BBG Ventures. TechCrunch has more here.

InRiver, an eight-year-old,  Malmoe, Sweden-based enterprise software company whose technology helps companies like Office Depot and BMW distribute their product information, has raised $10 million in Series A funding led by Verdane Capital Advisors. The company has now raised $13 million, shows Crunchbase.

Iris PR Software, a three-year-old, Phoenix, Az.-based company that makes software for PR professionals, has raised $1 million in seed funding from individual investors. More here.

MBio Diagnostics, a six-year-old, Boulder, Co.-based provider of clinical diagnostics and sample testing, has raised $6.3 million in Series B funding led by unnamed new and existing investors. The company had previously raised $2 million from unnamed investors.

Outset Medical, a San Jose, Ca.-based company that has created a simple, at-home device that treats kidney failure, is in the process of raising $60 million dollars, the company tells MedCity News. The funding was provided by earlier investors Warburg Pincus and Vertical Group, as well as newer, unnamed backers. The company had previously raised $9.5 million, suggest previous SEC filings.

Redbubble, an eight-year-old, Melbourne, Australia- and San Francisco-based online marketplace for artist-designed products, has raised $15.5 million in funding from Acorn Capital and Piton Capital, along with numerous individual investors, including Bebo cofounder Michael Birch and Ooga Labs founder (and now PayPay exec) Stan Chudnovsky.

Rightpoint, an eight-year-old, Chicago, Il.-based digital agency and technology consultancy, has raised $55 million in funding from Stella Point Capital. Crain’s Chicago Business has more here.

Softgarden, a 14-year-old, Berlin, Germany-based maker of recruiting software, has raised $3.3 million in funding from Cipio Partners and Neuhaus Partners.

Wave, a 13-year-old, Kirkland, Wa.-based gigabit fiber and broadband services company, has raised $130 million via a bond sale led by Deutsche Bank and supported also by Wells Fargo, Sun Trust, and RBC Daniels. TechCrunch has more here.

—–

New Funds

Obvious Ventures, the nearly year-old, San Francisco-based venture capital firm started by Twitter co-founder and Medium CEO Ev Williams, has closed its debut fund with $123,456,789. “The number was absolutely intentional. We’ve got some math and computer science geeks — myself included — on the team and thought we’d have a little fun with our Form D filing,” Obvious Ventures co-founder James Joaquin tells Business Insider.

——

IPOs

Shopify, the nine-year-old, Toronto-based company whose software helps retailers sell goods online, went public yesterday, and its shares soared 51 percent. Meanwhile, another tech company that went public yesterday, eight-year-old, China-based Baozun, ticked up just 4.6 percent. TechCrunch has more here.

—–

Exits

Clarabridge, a Reston, Va.-based company that makes so-called customer experience management software, has acquired Engagor, a Ghent, Belgium-based platform for real-time social customer service and engagement. The amount of the transaction was not disclosed. Clarabridge had raised $80 million in growth funding in late 2013 and acquired survey software provider MarketMetrix in 2014. Engagor had raised $2.6 million from Strike4 and Hummingbird Ventures.

Zuora, an eight-year-old, Foster City, Ca.-based company that provides its customers with subscription billing, recurring revenue, payments, and billing software and services, has acquired two-year-old Frontleaf, a Oakland, Ca.-based customer usage analytics provider that had raised roughly $500,000, including an early check from Alchemist Accelerator. The financial terms of the transaction were not disclosed.

—–

People

Scott McNealy, the longtime Sun Microsystems CEO and chairman, is back at the helm of a company. This time, it’s Denver-based Wayin, a startup that helps companies turn posts on social networks like Facebook into marketing messages. The WSJ has the story here.Oculus VR, the virtual reality company acquired by Facebook last year for $2 billion, is being sued by two men who say founder Palmer Luckey passed off work that he did for them as his own. The Recorder has the lowdown here.

—–

Jobs

MassMutual Ventures, the small venture arm of the financial services company, is looking to hire an associate. The job is in Boston.

—–

Essential Reads

Uber is seeking a $1 billion credit line from banks, reports the WSJ, adding that the move could ” signal an eventual initial public offering.”

The 17 “hottest” startups in Germany, per Business Insider.

—–

Detours

Ten U.S. ghost towns worth visiting.

Gimlet Media releases its newest podcast, Mystery Show.

Motorcycle surfing. (Gulp.)

—–

Retail Therapy

We love these, though we’re also keen on obnoxious, old-fashioned arcade games. (They’re about half the price, too.)


Thumbtack Take Its Own Investor, Google, Head On

17046010043_91ccba83b0_mAt a StrictlyVC event in San Francisco last week, Charles Hudson of SoftTech VC sat down with Sequoia Capital partner Bryan Schreier and Marco Zappacosta to discuss Thumbtack, an online marketplace for hiring workers that Zappacosta co-founded soon after graduating from Columbia University in 2007.

Thumbtack is interesting for numerous reasons, including the amount of funding it has raised — $148 million over three rounds, all within a 14-month period – and who its investors are. Sequoia is among them (Schreier sits on Thumbtack’s board). So is Google, which provided Thumbtack with $100 million last summer – and, the business world recently learned, is now entering into direct competition with Thumbtack.

Hudson, who spends much of his time studying marketplaces, asked Zappacosta and Schreier – a former Googler – about their “multifaceted” relationship with Google, among other things. That conversation, edited for length, follows:

CH: How did Sequoia and Thumbtack come together?

MZ: Jason Calacanis introduced us to [Sequoia partner] Roelof Botha and another angel investor introduced us to Bryan. It was the fall of 2010. Unlike a lot of VCs, they were very explicit about what they thought was good and wasn’t yet good. When we [later] went back with numbers to show them [how we were growing], they did [write a check].

CH: Many marketplaces sit in between the buyer and seller, but Marco, you’ve taken the opposite stance. Why?

MZ: A lot of entrepreneurs and investors view the transactional model as a way to get a higher take rate. The problem in doing that is you’re solving your own problem; you’re not actually solving the customers’ problem at that point. There are times when you fundamentally [need to act as the facilitator]. Taking payment is key to making eBay work. It’s key to Uber, where speed is fundamental. But with Thumbtack, when a customer is spending $3,000 to repaint their house and you ask them what the hard part is, no one ever tells you it’s about paying the painter. It’s about finding the painter, and that’s the focus at Thumbtack. [Editor’s note: Thumbtack sends customer requests to service providers like plumbers, caterers, and painters. If the service provider thinks it’s a fit, they pay Thumbtack a fee to shoot a quote to the customer, who then chooses whether or not to work with that service provider.]

CH: Is leakage –people going off platform to have a direct relationship – something you’ve ever worried about?

MZ: If you haven’t created enough value for both sides to keep using your platform, that’s your problem.

CH: [Tell us about your fees.]

MZ: We’ve explicitly kept [them] very low — much lower than we think it could be. If you look at other marketplaces like Airbnb, it’s 10 to 12 percent. Uber is now 18 to 20 percent. eBay is like 13 percent. We’re below that and happily because our goal is to get market share. Today we move a billion dollars worth of commerce on the platform, which we feel good about, but that’s still nothing relative to the almost trillion dollars worth of commerce happening in the US. That’s the thousand x [opportunity] in front of us.

CH: You recently raised $100 million from Google Capital. Google has also made some reference that they have designs on the home services market. 

MZ: I have to give Bryan credit for board member words of encouragement when this happened, which is that if Google or Facebook or Amazon aren’t competing in your market, then you’re probably in a shitty market. And I think he’s exactly right.

BS: You felt better for like three seconds, right?

MZ: [Laughs.] It’s indicative of the opportunity being enormous. I don’t perceive any sort of nefarious action on the part of Google Capital. I think it’s unfortunate. It’s a 50,000 to 60,000 person organization, but it’s why we’ve kept them at arm’s length. We’re excited to have them as investors, but we’ve been careful of that relationship accordingly.

BS: Thumbtack connects people to people; they don’t connect companies. They don’t connect ads to people. It’s a very different business, with people on both sides who have an intimate relationship. This is something that Google has never been very good at. [It isn’t] intrinsic to their DNA.

MZ: The opportunity and the challenge in this space is just how fragmented it is. There’s no natural point of aggregation as there is in retailing, where you can go to a distributor and instantly get access to 30 or 40 percent of the inventory in that category. So Google and Amazon — despite their money and brands and hard working employees — have to go out and recruit these plumbers and caterers one by one, and that’s a fucking grind, one that we’re real good at, and one we’ve done without any salespeople and with a lot of technology and innovation.

CH: How do you think about Amazon given its reach and scale and financial resources?

BS: They still suffer from that corporate DNA issue, which is that they send packages to people, not people to people. And it’s very different. You have to get people on the phone when they’re fixing a toilet and really don’t want to be bothered.

CH: You raised two fairly large rounds back to back. Why?

MZ: The truth, at the end of the day: it’s because you can. We didn’t need the money. The business is growing great and generating very real revenue. These rounds in happen in quick succession and in ever-growing numbers because companies . . . [in a big space and with a big vision] . . . can.


StrictlyVC: May 21, 2015

Hi, everyone, happy Thursday!

No column today. (Busy morning.)

—–

Top News in the A.M.

Watch out, on-demand delivery startups: Amazon announced today that its Prime Now service will now start delivering goods from local stores in Manhattan, with plans to expand to other neighborhoods and cities later this year.

A top Apple analyst thinks a new iPhone is coming in August.

The NSA developed a plan to deliver malware through Google and Samsung app stores, according to newly published documents obtained by Edward Snowden and published by The Intercept and CBC News. More here.

—–

New Fundings

Black Duck Software, a 13-year-old, Boston, Ma.-based company whose software helps enterprises with the logistical challenges that come with open source adoption and management, has raised $5 million in fresh funding, including from Siemens Ventures. According to Crunchbase, the company has raised at least $75 million over the years, including from SAP, General Catalyst PartnersIntel CapitalSapphire VenturesFlagship Ventures, and Volition Capital.

CloudTags, a three-year-old, New York-based company whose omnichannel analytics tell retailers who their customers are prior to checkout, has raised $2 million in funding from IDEA Fund Partners, Alerion Ventures, Knoll Ventures and Hallett Capital. The company has raised $4 million to date, shows Crunchbase.

Cove, a two-year-old, Washington, D.C.-based provider of shared “productive spaces,” has raised $2.8 million in Series A funding from unnamed investors. More here.

Directly, a four-year-old, San Francisco-based company that makes on-demand customer service apps that are used by Airbnb, Pinterest and others, has raised $10 million in Series A funding led by Costanoa Venture Capital and earlier investor True Ventures, with numerous seed investors participating. The company had earlier raised $3.1 million in seed funding, including from CrunchFund and investor Gil Penchina. More here.

Edo Interactive, an eight-year-old, Nashville, Tn.-based ad tech company, has raised $20 million in Series E funding from VantagePoint Capital PartnersBaird Capital, and several unnamed local firms. More here.

EnergySage, a six-year-old, Boston-based online solar energy marketplace, has raised $1.5 million in Series A funding led by Launchpad Venture Group, with participation from New York Angels and the Clean Energy Venture Group.

eProdigy, a seven-month-old, New York-based fintech holding company with several subsidiaries serving the alternative finance space, announced yesterday that it has landed $100 million from an unnamed private equity firm in the form of a term loan, a convertible note feature, and participation rights.  The convertible note portion is a $20 million facility with the noteholder’s right to convert the full amount to equity at a $100 million valuation. More here.

FraudMetrix, a two-year-old, Hangzhou, China-based Internet security firm founded by several former Alibaba executives, has raised $30 million in Series B funding led by Qiming Venture Partners, with participation from earlier backers China Broadband Capital, IDG Capital Partners, China Growth Capital, and Linear Venture . China Money Network has more here.

Fuze, a six-year-old, San Francisco-based cloud video conferencing company, has raised $20 million in growth funding from Hermes Growth Partners. The round brings the company’s total funding to $68.5 million, shows Crunchbase. Fuze has also acquired for an undisclosed amount LiveMinutes, an online team workspace platform. Four-year-old LiveMinutes, also based in San Francisco, had raised $3.2 million from investors, including Pritzker Group Venture Capital and Great Oaks Venture Capital.

General Fusion, a 13-year-old, Vancouver-based developer of fusion energy, has raised roughly $22 million (U.S.) in new funding led by Khazanah Nasional Berhad, the Malaysian government’s strategic investment fund, along with earlier backers BDC Capital, Bezos Expeditions, Braemar Energy Ventures, Cenovus Energy, Chrysalix Energy Venture CapitalEntrepreneurs Fund, GrowthWorks, SET Ventures and Sustainable Development Technology Canada.

Glowforge, a year-old, Seattle, Wa.-based startup that wants to make 3-D laser printers that are easy enough to operate and affordable enough for home users, has raised $9 million in Series A funding led by Foundry Group, with participation from True Ventures and ex-MakerBot executives Bre Pettis and Jenny Lawton. Venture Capital Dispatch has more here.

Guerrilla RF, a two-year-old, Greensboro, N.C.-based company that provides monolithic microwave integrated circuits to wireless network infrastructure OEMs, has raised $2 million in Series B funding led by Charlotte Angel Fundand Piedmont Angel Network, with participation from other individual investors. The company has raised $3.5 million in funding to date.

Jiff, a four-year-old, Palo Alto, CA-based health technology company cofounded by serial entrepreneur James Currier, has raised $23.3 million in Series C funding led by Rosemark Capital, with participation from GE VenturesVenrock, Aberdare Partners and Aeris Capital. The company has raised roughly $50 million so far, shows Crunchbase. More here.

Justworks, a 2.5-year-old, New York City-based human resources and payments platform  has raised $13 million in Series B funding led by Bain Capital Ventures, with participation from previous backers Thrive Capital and Index Ventures. The company has now raised $20 million altogether.

Liqid, a 2.5-year-old, Lafayette, Co.-based  data center startup operating in stealth mode, has raised $5.7 million in seed funding from Kingston Technology, Phison Electronics Corp., ABR Capital Management, and DH Capital. More here.

Logmatic.io, a year-old, Paris-based SaaS-based log management platform, has raised $1 million in funding led by ISAI Seed Club.

Lookup, a nine-month-old, Bangalore, India-based free and secure messaging app that connects shoppers with local businesses, has raised an undisclosed amount of Series A funding from Twitter co-founder Biz Stone. The company had previously raised $382,000 in seed funding from angel investors. The Economic Times has more here.

Maana, a three-year-old, Palo Alto, Ca.-based company that’s been developing a search engine technology for big data, has raised $11 million in Series A funding from investors, including Chevron Technology Ventures,ConocoPhillips Technology Ventures, Frost Data Capital, GE Ventures, and Intel Capital. The company has now raised more than $14 million altogether. More here.

Metabiota, a seven-year-old, San Francisco-based developer of epidemic prediction and prevention software, has raised $30 million in Series A funding led by RSTP, with participation from Capricorn Healthcare, WP Global Partners, Industry Ventures, and Data Collective. The company has now raised $32.8 million altogether.

Qwilr, a year-old, Syndey, Australia-based platform whose cloud-based tools aim to make it easy to turn business documents into webpages (and replace PowerPoint decks in the process), has raised AUD $500,000 (about $395,000) in seed funding from investors, including Sydney Seed Fund and Macdoch Ventures. TechCrunch has more here.

Regenexbio, a six-year-old, Rockville, Md.-based gene therapy company, has raised $70.5 million in Series D funding led by Vivo Capital, with participation from Brookside Capital, VenrockJanus Capital Management, Jennison Associates, Perceptive Advisors, QVT Financial, Tourbillon Global Ventures, Sectoral Asset Management, Cormorant Asset Management,Foresite Capital Management, RTW Investments, Deerfield Managementand Fidelity Biosciences.

Stripe, the five-year-old, San Francisco-based online payments processor, is raising a new round of funding that could reach $500 million, and at a $5 billion valuation, according to TechCrunch sources. To date, the company has raised $190 million from investors, including Khosla Ventures, Andreessen Horowitz, and Sequoia Capital, as well as investor-operators Elon Musk,Peter Thiel, and Aaron Levie.

Samanage, an eight-year-old, Israel-based SaaS platform for managing internal assets, has raised $16 million in Series B funding co-led by Marker andVintage Investment Partners, with participation from earlier investorsCarmel Ventures, Gemini Israel Ventures and Silicon Valley Bank.

Taplytics, a year-old, San Francisco, Ca.-based enterprise mobile A/B testing platform, has raised $2.4 million in seed funding from a long list of prominent individual investors, including serial entrepreneur Justin Kan and Matt Cutts, the longtime head of Google’s web spam team.

Wibbitz, a four-year-old, Tel Aviv, Israel-based text-to-video startup, has raised $8 million in Series B funding led by NantMobile, founded by L.A based billionaire physician and entrepreneur Patrick Soon-Shiong. Earlier investorsHorizon Ventures, Lool Ventures, Initial Capital and Kima Ventures also participated. Geektime has more here.

—–

New Funds

Formation 8, the three-year-old, San Francisco-based venture firm, has quietly held a first close on a new $100 million-targeted fund that will invest exclusively in hardware companies, reports Fortune. Among the fund’s LPs is Flextronics.

Glilot Capital Partners, a four-year-old, Tel Aviv, Israel-based venture capital firm investing in early-stage, Israeli cyber-security and enterprise software start-ups, has raised a second fund with $77 million from limited partners, including Bank Hapoalim, Israel’s largest bank. The firm’s debut fund had closed with $30 million, which it invested across eight companies. Those include cloud security startup Aorato, which Microsoft acquired for a rumored $200 million, and the inbound marketing platform Insightera, which was acquired by Marketo for $20 million.<

GreenSoil Investments, a four-year-old, Toronto-based investment firm, has held a first close of $25 million for its third fund, which is targeting between $80 million and $100 million. The firm now has $56 million in assets under management. More here.

Ignition Partners, the 15-year-old firm with offices in Bellevue, Wa., and Palo Alto, Ca., has officially closed its sixth fund with $200 million, money it will invest in early-stage enterprise software startups. (We told you about this fund in March, when the firm filed an SEC form that stated its target.) Ignition says it could have raised more than $300 million from endowments, foundations, fund of funds and family offices but that it chose to stick to its core “boutique” model.

The band Linkin Park recently launched a venture fund that’s targeting consumer-facing startups. We’re tempted to poke fun, but in the end (yes), they’ve assembled some pretty attractive stakes, including in the ride-sharing platform Lyft; the free-trading app Robinhood; and Shyp, the shipping app. CNN Money has more about the band’s firm, Machine Shop Ventures, here.

Osage University Partners, a Philadelphia area-based venture capital firm that invests exclusively in startups that are commercializing university research, has closed its second fund with $215 million. The group has signed deals with 68 U.S. and two Israel universities and research institutions.

Vistara Capital Partners, a Vancouver, Canada-based growth capital firm, has raised $80 million for its debut fund. The firm, which is targeting an overall fund size of $100 million, provides growth capital financing (debt and equity) to mid- and later-stage tech companies across Canada and the U.S.. The fund will invest in both private and public companies, providing between $5 million and $15 million per investment, with capital saved for follow-on investments. More here.

—–

IPOs

Etsy, the 10-year-old, Brooklyn-based online crafts marketplace, saw its shares plunge 23 percent yesterday, a day after it posted a wider-than-expected loss in the most recent quarter. International Business Times has more here.

Shopify, the nine-year-old, Toronto-based company whose software helps retailers sell goods online, priced its IPO yesterday at $17 a share, above the top end of a price range that had already been raised because of strong investor demand. More here.

—–

Exits

Handy, a 3.5-year-old, New York-based on-demand cleaning, plumbing and other home services platform, is in talks to acquire its slightly younger, less well-capitalized, San Francisco-based rival, Homejoy, says TechCrunch. According to Crunchbase, Homejoy has raised at least $40 million, from First Round CapitalGoogle VenturesMax LevchinRedpoint VenturesSignatures Capital, and Pejman Mar Ventures. Meanwhile, Handy has raised at least $60 milion, including from Sound VenturesTPG GrowthRevolutionGeneral Catalyst Partners, and Highland Capital Partners.

TheLadders, the 12-year-old, New York-based online recruitment service, is nearing a sale, according to Fortune.

—–

People

The venture-backed big-data software company ClearStory Data has named long-time Silicon Valley technologist Timothy Howes as chief technology officer, reports VentureWire. Howes has previously held CTO spots at Netscape, Opsware, HP’s enterprise software business, and RockMelt.

—–

Jobs

Lift Ventures, a San Francisco-based startup studio, is looking to hire an associate.

—–

Data

Atomico Ventures looks at 182 software companies worth more than a billion dollars and concludes that increasingly, they aren’t from the U.S.. They’re also hitting their “unicorn” status faster than ever. Silk lays out Atomico’s data here.

—–

Essential Reads

The clock is ticking for Dropbox, argues Business Insider.

Things are rocky for smartwatch maker Pebble, too, reports TechCrunch.

The state of California has forced venture-backed Leap Transit to stop operating its luxury bus line without a permit.

Spotify says it’s becoming a platform for more than just streaming music.

—–

Detours

Letterman says goodbye.

The plan to move an entire Swedish town.

This is why we’re terrible with names.

—–

Retail Therapy

Live like Woz. Buy the Los Gatos, Ca. house built just for him.

(Also, in case you’re interested: Fast Company has just posted a little-seen Apple video with Steve Jobs and Steve Wozniak talking about the company’s beginnings.)