Hello, dear readers, and happy Tuesday!
Top News in the A.M.
Uber is telling prospective investors that it generates $470 million in operating losses on $415 million in revenue, according to a document obtained yesterday by Bloomberg. That Uber is spending so much on growth isn’t a complete shock. More concerning, perhaps, is that rival apps in other parts of the world, like Ola Cabs and GrabTaxi, are “in some cases beating Uber by a ratio of four to one, in terms of app installs,” reports the Information. (Subscribers only.)
Yikes. A two-tier internet will be created in Europe as the result of a late-night “compromise” between the European Commission, European Parliament and the EU Council. More here.
VC David Cowan in Betting on Space (and Counting on Space Travel)
This morning, Spire, a nearly three-year-old, San Francisco-based maker of small, software-packed satellites, announced $40 million in fresh funding from investors, including Promus Ventures, which led the round, and Bessemer Venture Partners. (We wrote a piece for TechCrunch about the news here.)
Late last week, we talked with Bessemer partner David Cowan about the deal, and why he’s intrigued by space startups more broadly. That conversation follows, edited for length and clarity.
How did you settle on your investment in Spire?
As an early investor in Skybox [a satellite imagery companyacquired by Google last year], we were approached by pretty much every early-stage space startup out there. Back when Spire was called NanoSatisfi, [founder] Peter [Platzer] reached out to us, but the company looked as flaky as the rest of them, meaning, here was a smart guy with an ambitious idea that he was going to put up a big constellation. But after one-and-a-half years, he actually did all the things he said he was going to do. In fact, when we looked to find who might be taking advantage of Moore’s Law in space, Spire stood out as the company most likely to lead the trend. It’s pretty clear that by this time next year, Spire will have the largest constellation known to man [based on the number of satellites it has in space].
Right now, that honor belongs to Iridium, which has around 75 satellites up there. Give readers a sense of how different the two companies’ satellites are.
Iridium’s satellites are on the order of a metric ton, whereas satellites now being developed are basically 10-centimeter cubes, so maybe the size of a Kleenex tissue box. Spire’s satellites amount to three of those cubes [each].
How dramatically do they compare in terms of power?
It’s a different class. Iridium satellites are high-capacity and high-powered, but they cost a lot of money and time to build and launch. This new generation of satellites is so small and cheap that you can basically make them out of cell phone parts, with the camera and radios and GPS that goes into them. They aren’t space-hardened. Solar flares and other stuff in space [take a toll much faster]. But you aren’t looking to get 12 years out of them. You’re looking to get two or three. It’s a different attitude. You sprinkle them out there. You’re constantly changing them and tweaking them. It’s like comparing a network of mobile devices with a mainframe.
Who are Spire’s biggest customers?
The first two major applications that we’re addressing are marine craft tracking via the AIS beacons that ships have when they’re out in the open sea; the second is weather. Starting a year from now, it’s expected that the U.S. will be blind to the weather — that the [three] satellites [the government has been relying on] will no longer be functioning. As you can imagine, it’s imperative that we have weather data. It’s critical to agriculture, critical to national security, critical to understanding climate change.
To date, the government has had its own satellites to produce this data, but there’s generally a movement to outsource more and more in the industry. It’s why SpaceX has received a mandate to carry astronauts [encouraged by NASA]. Congress is saying the same about other formerly proprietary NASA activities, too, including authorizing the government to buy weather data.
It sounds like Spire has other ambitions, too.
We’re not satisfied to just do the weather. It’s a big market but there’s no reason that, once the satellites are out there, we can’t put more antennae on them and [wring more information] out them. There’s been a lot of awareness in the last couple of years that we have aircraft disappearing off the grid, for example. There are currently satellites in space that talk with airplanes when they’re underneath those satellites, but there aren’t satellites tracking flights going over the North Pole; a system with lots of little satellites that blanket the planet [could solve that problem].
Basically, there are no application-specific satellites any more. It’s like the internet, where the same pipes that are carrying this call also carry email and Netflix and so much more.
What other space companies has Bessemer backed?We have two other related investments, though only one is disclosed: Rocket Lab, which is building rockets to deliver this whole new class of nano satellites. Think of it as a low-end SpaceX.
What do you make a space tourism?
It interests me as a customer but not as an investor. I think it would be great. Ten years from now, I won’t have school-age children and it will be way safer, so I’m hoping I’ll be a customer.
Adaptive Insights, a 12-year-old, Palo Alto, Ca.-based startup that sells cloud-based services to management teams to model a company’s performance and other business intelligence, has raised $75 million in funding from new investor JMI Equity, along with earlier backers Norwest Venture Partners,ONSET Ventures, Bessemer Venture Partners, Cardinal Venture Capital,Monitor Ventures, and Information Venture Partners. The company has now raised roughly $176 million altogether. TechCrunch has more here.
The Chope Group, a four-year-old, Singapore-based online restaurant reservations platform, has raised $8 million in new funding from F&H Fund Management, NSI Ventures, DSG Consumers Partners, Frontier Ventures, and Singapore Press Holdings. The company says it has now raised $11.5 million altogether.
Classy, a nine-year-old, San Diego, Ca.-based online fundraising platform that helps nonprofits and social enterprises mobilize and empower communities, has raised $18 million in new funding led by Mithril Capital Management. Other participants in the round included Salesforce Ventures, Bullpen Capital,Venture51, Galileo Partners and Rethink Impact, with $2 million of the $18 million round reserved for certain strategic investors. Classy had previously raised three undisclosed amounts of funding, shows Crunchbase.
Distil Networks, a four-year-old, San Francisco-based company that makes bot detection and mitigation software, has raised $21 million in Series B financing. New investor Bessemer Venture Partners led the round, with participation from current investors Foundry Group, TechStars, ff Venture Capital, Idea Fund and Correlation Ventures. The company has now raised $38 million to date.
Flatchat, a nine-month-old, Bangalore, India-based app that helps users find roommates in India, has raised $2.5 million in seed funding from CommonFloor, one of India’s biggest real-estate listing sites. CommonFloor had acquired Flat.io, the previous company of Flatchat’s founders, last year. TechCrunch has more on the new round here.
HomeHero, a two-year-old, in-home senior care marketplace that helps families find qualified caregivers and track their activity, has raised $20 million in Series A funding led by Graham Holdings, with participation from Tencent Holdings and earlier backers Social+Capital Partnership and The Launch Fund. The company has now raised $23 million altogether.
Klear, a three-year-old, Israel-based social media analytics company, has raised $1.5 million in new funding from Altair, GIG, and TMT Investments. It is also rebranding from its earlier name, Twtrland, as it now looks at data from a variety of social media platforms other than Twitter, including Facebook and Instagram. The company has raised $2 milion altogether. TechCrunch has more here.
MakeTime, a year-old, Lexington, Ky.-based company that enables durable goods companies to trade machine capacity using its online marketplace, has raised $2.65 million in Series A funding led by Almaz Capital, with participation from Kentucky Science & Technology Corporation. The company has raised a total of $3.87 million to date. More here.
One Month, a two-year-old, New York-based online platform that teaches individuals to code, create web applications, and more, has raised $1.9 million in seed funding co-led by earlier backer Idea Bulb Ventures and new investor Arena Ventures. Cornerstone On-Demand also joined the round. The company has now raised $2.6 million altogether. TechCrunch has more here.
PowerToFly, a 10-month-old, New York-based platform that matches companies with women in tech, design, sales, marketing, editorial, and other fields that can be done from anywhere, has raised $6.5 million in Series A funding led by Crosslink Capital, with participation from Hearst Ventures and Lerer Hippeau Ventures. The company has now raised $7.5 million altogether. (Cofounder Katherine Zaleski had written a widely read piece earlier this year about why she founded the company. You can find it here, in Fortune.)
Proterra, an 11-year-old, Greenville, S.C.-based company that makes all-electric buses that it sells to mostly municipal transit authorities, has raised $55 million in equity and debt, reports the WSJ. Of the $30 millionin equity, $19 million came from a growth fund in the Bay Area that Proterra isn’t naming. Other participants included a sovereign wealth fund and a family office (also unnamed). The company also drew on $25 million in debt from an unnamed source or sources. More here.
Rithmio, a two-year-old, Chicago-based gesture recognition platform for wearables, has raised $3 million in seed funding co-led by KGC Capital and Intel Capital. Other participants in the round included MAS Capital, OCA Ventures, Hyde Park Ventures Partners, Hyde Park Angels, Foley Ventures, MKRC Ventures, Serra Ventures, and New Coast Ventures. The company had earlier raised $650,000 in seed funding, shows Crunchbase.
SimplyInsured, a two-year-old, San Francisco-based health insurance marketplace and administration platform for small businesses, has raised $5.9 million in Series A funding from Polaris Partners, with participation from Bessemer Venture Partners, Altair.VC, Corazon Capital, and other individual investors. The company had raised $1.75 million in seed funding just two months ago. TechCrunch has more here.
Benhamou Global Ventures, an 11-year-old, Palo Alto, Ca.-based early-stage venture capital firm, has closed its second fund with $72 million, up from a target of $60 million, it says. The firm, founded by former 3Com CEO Eric Benhamou, focuses primarily on enterprise IT sectors like cyber security, cloud-based services and applications, web scale infrastructure, business analytics, and the Internet of Things. It invests in the U.S., Israel, and Europe.
Foundry Group, the nine-year-old, Boulder, Co.-based early-stage venture fund, is in the process of raising its newest fund, shows an SEC filing first flagged by Fortune. Its target: $225 million. Foundry, which could presumably raise much, much more — particularly on the heels of Fitbit’s IPO ( Foundry owned 28.9 percent of the company as it headed into its recent offering) — is known for keeping to its knitting. In the fall of 2013, Foundry raised a $225 million to invest in its existing portfolio companies — a first for the firm. But its other early-stage funds, including in 2007, 2010, and 2013, were also exactly $225 million.
Cisco is buying the 10-year-old, San Francisco-based cloud security company OpenDNS for $635 million in cash. OpenDNS had raised $51.3 million from investors, according to Crunchbase (though some of its shares traded handsalong the way). Either way, investors are presumably seeing a nice return, as is (hopefully) OpenDNS’s well-liked founder and CEO David Ulevitch. TechCrunch has more here.
Uber will acquire a portion of Microsoft’s maps technology and extend employment offers to around 100 engineers on Microsoft’s mapping team, it said yesterday. More here.
Uber Senior VP David Plouffe talks with LinkedIn about a recent California ruling that classified an Uber driver as an employee, saying the company’s driver’s “concern almost universally was that they did not want us to set their hours. The employees don’t have a regular schedule. It’s very erratic. They may drive 20 hours one week and five the next. They may drive a Friday night one week and a Tuesday morning the next. There is nothing like it on our economy where you can [turn off and on your job].”
Facebook just listed a new corporate development associate opening. The job is in Menlo Park, Ca.
Microsoft is handing over responsibility for sales of display, mobile and video ads on Microsoft properties in the U.S. and eight other markets to AOL, which is extending job offers to roughly 1,200 Microsoft employees who work in ad sales, reports the WSJ. Over the past decade, Microsoft has “invested in almost every corner of digital advertising – from ad-serving to automated marketplaces – in an effort to compete with Google and other big players,” notes the WSJ report. “But many of those efforts failed to bear fruit and Microsoft has steadily retrenched.”
“Game of Thrones” death toll. (We’re still haunted by this past season.)
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The easiest languages for native English speakers to learn.
The Cubrick cabinet.