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A quick reminder that investor-writer Semil Shah is in charge of our columns while Connie is offline, riding her bicycle. If you need to reach Semil, you can find him on Twitter.
Top News in the A.M.
After months of speculation, Nokia has agreed to sell its HERE mapping business to a consortium of automobile makers including Audi, BMW Group and Daimler in a deal valued at €2.8 billion ($3.07 billion). TechCrunch has more here.
The Honest Company is under fire, following a slew of complaints that its sunscreen is ineffective. USA Today has more here.
Startup L. Jackson on Interest Rates, Bubbles, and Anonymity
By Semil Shah
Twitter persona Startup L. Jackson has published roughly 5,400 savvy startup-related tweets over the last four years, observations that have earned him roughly 50,000 followers — as well as great interest in uncovering his identity. So far, he has managed to keep it a secret, and if he can help it, his real name will remain unknown to most. Says Jackson of why he does it: “You are forced as a reader to judge the ideas rather than the speaker.”
We talked with him recently about his strange role in the tech-investing landscape.
Startup L Jackson seems to have the makings of a media company. Why not do the whole thing — blog, podcast, YouTube — all on the back of the Twitter account?
That sounds like a lot of work. I have a blog (startupljackson.com), but post to it infrequently due to the time it takes to do well. The others are less anonymous and more time-consuming. (I do have a day job.) Twitter is great because it fits into my normal learning-about-the-startup-world time. I can just show up and tweet about the last person I met with, an article I just read, or ideas I’ve been kicking around for a while.
Anonymity enables you to say things about people and topics that would otherwise be taboo. Is that a good or bad thing?
I am somewhat provocative, but I don’t think it’s really anything you couldn’t tweet [otherwise]. And, by the way there’s a circle of people who do know my identity. I think the common assumption is that the account is for saying things I couldn’t say [in real life], but people who know me realize I don’t have much of a filter there either.
I think the “good” thing about it—or at least the thing I think makes it interesting—is that you are forced as a reader to judge the ideas rather than the speaker. My experience is that Silicon Valley is obsessed with pattern matching and pedigree, and that makes it much harder to discuss ideas than it should be. In practice, SLJ is a great hack to get around that limitation.
You seem to like AngelList, you take Lyft Line, and you are clearly aware of the ins and outs of investing. Can we expect SLJ Ventures to be forming anytime soon? Either way, what’s your view on the continued push toward smaller funds, micro funds?
I can neither confirm or deny the SLJ fund. What fun would it be if you knew for certain which side of the table I’m on? I do use AngelList, and knowing VC is smart wherever you sit in the ecosystem.
In terms of small funds, it seems to me that there are a lot of small funds because there are a lot of new funds, and funds start small. I think it’s a obviously a great thing for entrepreneurs, and probably for LPs. Big funds can’t afford to spend their time at the earliest phases of a business, especially as they get bigger. It’s not economical when a $100,000 check is out of a $100 million-plus fund. For a small fund, a $50,000 to $250,000 check is meaningful, so they can write the check that’s meaningful, and then pay attention. These VCs are hungry.
As for the VCs/LPs, I think very early-stage investing is still inefficient in terms of discovery versus later stages, so there’s not as much of a winner-take-all dynamic, but there are still power law outcomes. I see very few Series A and B funds that I believe will beat bonds. Maybe five to ten. I think many more small funds will do well.
What excites you most about the San Francisco-Silicon Valley startup ecosystem right now? And what most concerns you?
Big picture, I think we’re in the second inning of the internet, and it’s defined by the other 90 percent (much of it in the U.S., by the way) of the world coming online with supercomputers in their pockets. That’s why I don’t think there’s a bubble, and why I think it’s less a question about the one to three big opportunities in the next decade and a question of where you want to focus. San Francisco is still ground zero. That’s exciting.
In terms of industry worries, there is a question of what happens to venture capitalists if interest rates go up significantly. We could see fewer funds at all stages. But that’s a problem for the VC industry. Tech will do fine even if financing changes significantly. If I were a VC, I’d be cognizant that the current boom is at least in part a function of investors having nowhere else to put their money.
BuzzFeed, the seven-year-old, New York-based digital publisher, is reportedly on the cusp of raising $250 million from NBCUniversal in a deal that will value the company at around $1.5 billion. Recode, which has the story, reports that early BuzzFeed investors may sell shares via secondary sales connected with the transaction. More here.
OYO Rooms, a 2.5-year-old, Bangalore, India-based platform for low-cost, standardized hospitality bookings throughout SouthEast Asia, has raised $100 million in fresh funding led by SoftBank. The round comes just five months after the startup raised $25 million in funding from Lightspeed Venture Partners, Sequoia Capital and Greenoaks Capital Management. TechCrunch has more here.
Snapdeal, the five-year-old, New Delhi, India-based e-commerce juggernaut, has raised $500 million in fresh funding led by the Chinese e-commerce giant Alibaba. Foxconn, the Taiwanese company, also invested, as well as Snapdeal’s earlier investor SoftBank. Snapdeal had previously raised $1.1 billion across eight rounds, shows Crunchbase. Recode has more on the newest funding here.
Uber, the six-year-old, ride-hailing company, has completed a new round of funding that values it at close to $51 billion, according to the WSJ. Among its newest investors: Microsoft and the investment arm of Indian media conglomerate Bennett Coleman & Co. More here.
Vox Media, an 11-year-old, Washington, D.C.-based digital publisher, isreportedly in talks with NBCUniversal about a new round that would value the company at $850 million. Last fall, Vox Media raised money at a $380 millionvaluation.
WizRocket, a two-year-old, Palo Alto, Ca.-based company that helps companies increase user engagement by fine-tuning mobile, web, and e-mail notifications, has raised $8 million in new funding from Sequoia Capital and earlier investor Accel Partners. TechCrunch has more here.
Zscaler, a seven-year-old, San Jose, Ca.-based company that provides its customers with integrated, cloud-delivered internet security, including web security, firewalls, and mobile security, has raised $100 million led by TPG, with participation from earlier backers EMC and Lightspeed Venture Partners. The company, now valued at north of $1 billion, has raised $138 million altogether. Venture Capital Dispatch has more here.
Yahoo announced on Friday that it is acquiring the style-focused community Polyvore. Terms of the deal were not disclosed. Polyvore, based in Mountain View, Ca., had raised roughly $22 million over its eight years as a standalone company. Its backers include DAG Ventures, Goldman Sachs, Matrix Partners, Benchmark, Harrison Metal, and investor Aviv “Vivi” Nevo.
Battery Ventures is acquiring Physical Security Business Unit (PSBU), part of the security division of publicly listed NICE Systems, in a transaction valued at up to $100 million. Under the deal, PSBU, which makes video-management, video-analytics and situation-management software, will be spun out into an independently operating business.
Sounds like Practice Fusion is prepping for an IPO. It just brought aboard Alan Black, CFO at the now publicly traded help-desk software company Zendesk, as its audit chair. Venture Capital Dispatch has more here.
Facebook CEO Mark Zuckerberg revealed some rare and wonderful personal news Friday. He and wife, Priscilla Chan, are expecting a baby girl. Zuckerberg also shared the news that before entering this “new chapter in our lives,” the couple suffered through three miscarriages, noting it was not easy, but that talking with the many friends who’ve gone through the same experience helped them realize how frequently they occur. Wrote Zuckerberg on Facebook: “You feel so hopeful when you learn you’re going to have a child. You start imagining who they’ll become and dreaming of hopes for their future. You start making plans, and then they’re gone. It’s a lonely experience. . . In today’s open and connected world, discussing these issues doesn’t distance us; it brings us together. It creates understanding and tolerance, and it gives us hope. . .We hope that sharing our experience will give more people the same hope we felt and will help more people feel comfortable sharing their stories as well.”
Bradley Tusk, a former campaign manager for New York’s last mayor, Michael Bloomberg, is starting Tusk Ventures, a political consulting firm geared toward helping start-ups work with — and in some cases, fight against — government regulators. (Uber is among his clients.) More here.
Bigcommerce, a six-year-old, Austin-based start-up whose subscription-based service helps tens of thousands of companies create and manage their online stores, is looking for an SVP of business and corporate development. The job is in San Francisco.
How Google quietly revved up its very own car company.
As it rapidly matures into a Silicon Valley giant, Zenefits has also racked up a number of customer complaints over issues like software glitches and human error. Buzzfeed has the story here.
Famous movies mashed up as “Uptown Funk.”
On the neediness of narcissists.
Bid on the props of “Mad Men.”
Soylent 2.0. It “reaches an unprecedented level of environmental sustainability.” Yum!