Hello and happy Friday, everyone! Hope you have a super weekend.
By the way, some of you mentioned finding yesterday’s newsletter in spam. We’re not sure why Gmail is giving us a hard time this week, but if you missed it, it’s here. (You can always email us about delivery issues or anything else and we’ll do our best to help.)
Top News in the A.M.
To the surprise of pretty much everyone — including those who’ve been asking for his head — Dick Costolo is stepping down from his role as CEO of Twitter after nearly nearly five years on the job. Company cofounder Jack Dorsey will serve as interim CEO — or maybe even as the company’s permanent CEO. He seemed to leave the door open to that possibility in an interview yesterday with Business Insder. The WSJ has letters from both men to Twitter employees here.
Blackberry may be ditching its own operating system in favor of Android. More here.
Uber is reportedly raising $1 billion expressly to take on its China-based rivals. The company suggests it’s further along in that fight than those rivals would have you believe, too. More here.
A New Hardware Firm Emerges: Meet Root Ventures
You may have noticed: Hardware investing is in vogue. Andy Rubin, creator the mobile operating system Android, recently launched Playground Global to advise device makers in exchange for equity. Formation 8 is raising a $100 million hardware-focused venture fund. That’s saying nothing of the seed-stage fund Bolt, which raised $25 million a few months ago, and the numerous accelerators now focused on backing hardware startups, including Haxlr8r, Lemnos Labs, and Highway1, which is an offshoot of the custom design manufacturing company PCH International.
Now, the Bay Area has yet another entrant on the scene: San Francisco-based Root Ventures, which just closed its debut, hardware-focused fund with $31,415,927 (the first 10 digits of Pi), capital that it raised from a gaggle of high-net-worth investors along with the fund of funds manager Cendana Capital.
Root Ventures is a single-GP fund founded by Avidan Ross, a trained engineer who was previously CTO of the private equity firm CIM Group. Ross isn’t widely known (yet) in press circles, but a growing number of venture capitalists and entrepreneurs have grown acquainted with him through the roughly 10 bets he has placed in recent years with the help of his friends’ capital.
Some of Ross’s older bets include Wallaby Financial, a mobile finance company that was acquired by Bankrate in December for an undisclosed amount. Another is Skycatch, an aerial robotics platform that received its first check from Ross and which has gone on to raise $24.7 million altogether, including from Google Ventures. Ross also wrote the first check for Momentum Machines, a company whose robots turn raw ingredients into packaged hamburgers without human intervention. It just raised an undisclosed amount of follow-on financing from Founders Fund.
“I don’t think people were investing in me based on my individual track record as an angel,” says Ross. “Those investing in me know me from a previous life [as CTO] of a pretty large investment firm where I built a lot of great relationships with people who trust my ability to invest in great technology.”
Ross, who raised much of his new fund late last year, has so far made three investments on behalf of Root Ventures, where he plans to make concentrated bets and to write first checks in the range of $500,000.
The most recent of his portfolio companies is operating in stealth mode, but it’s easy to see the appeal of the others. Mashgin — company Ross met through entrepreneur friends — has developed an automated checkout kiosk machine that employs computer vision to identify any object on a surface (down to the different-flavored Snapples, says Ross). The big idea: to create a far more seamless experience for shoppers.
The company graduated late last year from Y Combinator and is about to announce a “significant” amount of follow-on funding, says Ross, who wrote its first check.
Ross also invested in Prynt, which makes a smartphone case that prints out photos. He met the company during his honeymoon in China. The young company was operating out of the Haxlr8r accelerator in Shenzhen, “and I asked if I could take a three-hour break and visit with the companies. I immediately thought: ‘This is amazing.’”
If you don’t understand why a printing up a digital photo might be interesting, Ross says Prynt’s opportunity goes “above and beyond printing out a polaroid. When you print a photo, you’re basically printing up the last frame of a 10 second video. With Prynt photos, you hand them to someone else, they point their phone at the photo, and the photo becomes alive [by featuring those full 10 seconds]. It’s like a Vine that only that person can watch. It creates privileged access.”
Others must like it, too. Prynt recently raised $1.5 million in a Kickstarter campaign earlier this year.
Ross says the company also just raised a “sizable seed round that’s unannounced. An earlier SEC filing suggests the amount is $2 million.
8tracks, a seven-year-old, San Francisco-based platform for music listeners to create their own playlists, has raised $2.5 million in debt funding from Silicon Valley Bank. The company has now raised $5.3 million altogether, shows Crunchbase. Its venture investors include SoftTech VC, Andreessen Horowitz, and Index Ventures.
BloomThat, a two-year-old, San Francisco-based e-commerce florist, has raised $5.5 million in Series A funding led by Forerunner Ventures, with participation from SherpaVentures, Rothenberg Ventures and earlier backers First Round Capital and Vaizra Investments. The company has now raised $7.6 million altogether.
Boxful, a six-month-old, Hong Kong-based startup that enables customers to store unwanted items in warehouses, has raised $6.6 million to develop its domestic business and expand into other parts of Asia. Investors include the real estate firms Great Eagle, Carlton Holdings and Soundwill Holdings, along with Chinese conglomerate Tinghsin Group and venture firms Arocrest Capital, Lonsdale Capital and Vega Properties. TechCrunch has more here.
Convirza, a three-year-old, Draper, Ut.-based call marketing analytics platform, has raised more than $20 million in Series B funding led by an unnamed East Coast-based investment group. The company has raised nearly $25 million altogether. More here.
Evrything, a four-year-old, Ontario-based platform that connects consumer products to the web and manages real-time data in the cloud to drive their applications, has raised $7.5 million in new funding from undisclosed sources. The company has now raised $14.5 million altogether, including from Cisco, Atomico, and Dawn Capital.
GoGoVan, a two-year-old, Hong Kong-based on-demand logistics startup, has raised $10 million in Series B-plus funding, reports Tech In Asia. The round was led by former 91 Wireless CEO Hu Zemin, with participation from earlier backers, including Renren CEO Yizhou Chen.
La Renon Healthcare, a seven-year-old, Ahmedabad, India-based pharmaceutical research, marketing and manufacturing company, has raised $16 million in Series A funding from Sequoia Capital. VC Circle has more here.
Miura Systems, a U.K.-based company that makes point-of-sale devices, has raised $16 million in funding led by DFJ Esprit Secondaries, with participation from DFJ Esprit EIS funds. More here.
Spire, a three-year-old, San Francisco, Ca.-based satellite-powered data company, has been awarded $2.9 million in grants from Scottish Enterprise, the international investment and trade promotion agency of the Scottish government. The funds follow $25 million in Series A funding that Spire raised last year from RRE Ventures, Moose Capital and others.
Serial entrepreneur Kevin Rose is merging his newest startup Watchville — a news aggregation app focused exclusively on wristwatches — with Hodinkee, a site for wristwatch enthusiasts. Hodnikee is based in Manhattan, and Rose, who is taking the full-time position of CEO of the company, is heading there to live, reports the New York Times.
Investor Chris Sacca talked with Bloomberg’s Emily Chang yesterday, and they wound up talking about his hot tub at his California home near Lake Tahoe. (He calls it the Jam Tub.) According to Sacca, who has made a fortune owing to early and aggressive bets on Uber, Uber CEO Travis Kalanick used to spend “eight to ten hours” there at a time. “I’ve never seen a human with that kind of staying power in a hot tub,” Sacca said. He also told Chang that he invites entrepreneurs to his home to feed them and measure them up and wouldn’t invest in anyone who doesn’t get up to put their dishes in the sink.
Sarah Tavel, a former VP at Bessemer Venture Partners who joined Pinterest as a product manager more than three years ago, is returning to VC as Greylock Partners’ first investment partner. More here.
That recently disclosed hack of the federal Office of Personnel Management, the government’s human resources division, is a lot worse than first reported.
No team? No idea? No problem. A new venture firm says it will fund you anyway.
A short history of Rupert Murdoch’s heirs apparent.
Conversation resignation letter.
Oh, those meddlng millennials’ parents!
Okay, fine, we’ll take one pair of these ridiculously cool sunglasses.