• Having Won Over VCs, Y Combinator Turns to LPs

    y_combinator_logo_400-400x220Last week, Y Combinator ran investors through 105 presentations by early-stage startups in a two-day show it calls Demo Day. The pace of deal-making for such events, staged every summer and winter, has grown so feverish that the incubator introduced a new wrinkle: backers could commit to plowing millions into a company by simply clicking the equivalent of an “easy button” via an online dashboard that Y Combinator created.

    Many local VCs seemed too busy to notice. Brian O’Malley of Accel Partner was walking around on his phone. Jon Sakoda of New Enteprise Associates made the rounds. Hunter Walk of Homebrew looked to be taking a couple of meetings, too.

    Yet there were other, more surprising guests. There, in the front row, was “Stevie” Cohen, the famed hedge fund manager. Elsewhere in the audience, a money manager for Major League Baseball sat rapt, listening to the procession of startup presentations.

    Perhaps the most interesting category of attendee, though, were more traditional limited partners, who typically invest in venture and private equity funds.

    Indeed, while it used to be that VCs treated their LPs a bit like mushrooms, keeping them mostly in the dark, today’s LPs want to be closer to the action, and for them, Y Combinator is Ground Zero.

    More here.

  • StrictlyVC: August 21, 2015

    Friday, old friend, are we ever happy to see you. (Long Thursday.) Hope you have a stupendous weekend, everyone!

    —–

    Top News in the A.M.

    Uber plans to go public in the next 12 to 18 months, according to a leaked presentation.

    Twitter‘s shares closed at $26 last night — meaning they’re all the way back down to their IPO price. More here.

    Intuit announced surprising plans yesterday to sell Quicken (among other properties). More here.

    Worries of a deepening China economic slowdown intensified earlier today after a private survey showed the factory sector shrank at its fastest rate in almost6.5 years this month.

    —–

    CrowdFunding Platform OurCrowd Seeks a Broader Audience, Including with Traditional VCs

    Many crowdfunding startups now make it easier for founders to reach a bigger audience of investors. The question is whether investors are as keen to continue funding crowdfunding sites.

    OurCrowd may find out soon. The two-and-a-half-year-old, Jerusalem-based hybrid platform enables accredited investors to back startups through its site, as well as makes direct investments in each of those companies. In the meantime, it’s thinking about its own, next funding round.

    To learn the latest about the company, which raised $25 million in Series B funding from undisclosed investors last year, we talked yesterday with founder and CEO (and longtime VC) Jon Medved.

    OurCrowd has brand recognition in the U.S., but I’m not sure people understand how it differs from other crowd-funding platforms.

    Honestly, ten years ago, the Valley was much less Valley-centric than it is today. The world goes global and is connected on the web, yet the Valley becomes more hyper local than ever. It’s really contrary to all the trends. We can all meet in cyberspace, but if you’re not physically in the Valley, it’s often like, “Who are you?”

    Dare I ask if you’ve thought about opening a Bay Area office?

    We’re looking to establish a presence in Silicon Valley. We’re actively looking for a managing director [in the Bay Area], someone with rich angel and venture capital experience, if you want to tell your readers.

    You sometimes lead deals on your platform, is that correct?

    Yes, in fact, we just launched a deal for $25 million that we’re leading. Most people, when they think of crowdfunding, they think of deals that are small, but we’re far ahead of that; we’re doing millions of dollars on average, and in this particularly case, we’re investing more than $10 million.

    The already profitable company [called Mprest] basically makes software that powers the Iron Dome, which is the Israel-based system that shoots missiles out of the air before they land. In Israel, you have about 15 seconds if someone shoots at you from the Gaza Strip. This system responds within a second, creating instruction sets to intercept whatever has been fired — and it’s now taking its technology into the Internet of Things.

    To do what?

    More here.

    —–

    New Fundings

    Avegant, a three-year-old, Redwood City, Ca.-based company whose media headset, Glyph, supports 3-D and virtual reality content, has raised $24 million in Series B funding led by the Chinese mobile Internet company Hangzhou Liaison Interactive Information Technology Co. Ltd. Venture Capital Dispatch has the story here.

    Carbon3D, a two-year-old, Redwood City, Ca.-based maker of 3D printing machinery and software, has raised $100 million in funding led by Google Ventures, with participation from Reinet Investments, Yuri Milner and earlier investors Sequoia Capital, Silver Lake Kraftwerk and Northgate Partners. VentureBeat has more here.

    ChurchDesk, a five-year-old, Copenhagen, Denmark-based startup that makes mobile apps for church engagement and management, has raised $2 million in funding led by Mangrove Capital Partners. TechCrunch has more here.

    Dianrong.com, a nearly three-year-old, Shanghai, China-based peer-to-peer lender, has raised $207 million in new funding co-led by Standard Chartered Private Equity and China Fintech Fund, with participation from Boahi Leasing. Earlier this year, Tiger Global Management also invested an undisclosed amount of money in the company. TechNode has more here.

    GuiaBolso, a three-year-old, Sao Paolo, Brazil-based personal finance management platform, has raised $7 million in new funding led by Ribbit Capital, with participation from Omidyar Network, QED Investors, Kaszek Ventures, e.Bricks,Valor Capital, and numerous individual investors. More here.

    Hightower, a 2.5-year-old, New York-based leasing management platform for the commercial real estate industry, has raised an undisclosed amount of strategic funding from Newmark Grubb Knight Frank Corp., Starwood Capital CEO Barry Sternlicht, Rudin Management CEO Bill Rudin, and earlier backer Aaron Levie of Box. The funding comes just four months after the company raised $13 million in Series B funding led by RRE Ventures. New York Business Journal has more here.

    Marilyn Monroe Spas, a three-year-old, Orlando, Fla.-based chain of spas that plans to begin teaching classes about the salon, spa, and beauty industry, has raised $20 million in funding from JCR Holdings. The round brings the company’s total funding to $36 million, it says. More here.

    Orbus Therapeutics, a 3.5-year-old, Palo Alto, Ca.-based company working on therapies to treat rare diseases like anaplastic astrocytoma, has raised $32.5 million in Series A funding from Longitude Capital, H.I.G. BioVentures and Adams Street Partners. More here.

    —–

    New Funds

    Lerer Hippeau Ventures, the 5.5-year-old, seed-stage, New York-based venture capital firm, is looking to raise up to $75 million for its fifth fund, shows an SEC fiing that states the first sale has yet to occur. The firm closed its fourth fund with $62 million in June of last year. StrictlyVC had chatted with managing director Eric Hippeau about that vehicle, and what the firm finds most interesting, here.

    Point Judith Capital, a 14-year-old, Boston-based early-stage venture firm, is looking to raise up to $100 million for its fourth fund, shows an SEC filing that states the first sale has yet to occur. The firm had targeted the same amount for its third fund, which it began raising in 2011 and whose closing it didn’t publicly announce.

    —–

    Exits

    Local Motion, a four-year-old, San Mateo, Ca.-based fleet management startup that had raised more than $6 million from investors, including Andreessen Horowitz, has been acquired by the car-sharing company Zipcar for an undisclosed amount. More here.

    Maxymiser, a nine-year-old, New York-based maker of cloud-based consumer personalization software that had raised more than $15 million from investors, including NXT CapitalInvestor Growth Capital, and Pentech Ventures, has been acquired by enterprise software giant Oracle for undisclosed terms. ZDNet has more here.

    —–

    People

    Tech stocks have been taking a beating lately, and venture capitalist Bill Gurley of Benchmark thinks private market valuations might be next.

    Facebook and Asana cofounder Dustin Moscovitz writes smartly on Amazon, tech company culture, and why rest matters.

    —–

    Jobs

    SurveyMonkey is looking to hire a director of corporate strategy. The company is in Palo Alto, Ca.

    WPP is looking to fill a junior corporate development role. The job is in New York.

    —–

    Essential Reads

    Spotify just “got real creepy with the data it collects” about users, Forbesreported yesterday. For this weirdness, the company now says it’s sorry.

    Google’s Life Sciences unit, previously part of its X research lab, is becoming its own company under Alphabet. More here.

    The coders, entrepreneurs, venture capitalists, designers, and scientists (and, yes, one actress) behind L.A.’s tech boom.

    —–

    Detours

    Glenn O’Brien opens up about the abrupt end of his beloved “Style Guide” column in GQ.

    —–

    Retail Therapy

    Sidecar bicycle. Do not try this in New York, or any other crowded, urban setting for that matter, unless you have a death wish.

  • StrictlyVC: August 20, 2015

    Happy Thursday, everyone!

    Really nice seeing some of you yesterday at Y Combinator‘s second Demo Day. For those of you who missed it or else maybe spaced out occasionally, here’s a list of the 52 startups that pitched investors.

    —–

    Top News in the A.M.

    Snapchat lost $128 million and generated only $3 million in revenue between January and November of 2014, according to leaked financials published yesterday by Gawker.

    JPMorgan Chase, Goldman Sachs and Morgan Stanley are teaming up to create a company that will pull together and clean reams of data used to determine pricing and transaction costs. The WSJ has the story here.

    —–

    Amazon Softens Blow of Times Piece, But Attorneys Warn of Celebrating Too Soon

    In recent days, Amazon has worked to soften the blow of a blistering piece about its culture in Sunday’s New York Times. In the article’s immediate aftermath, Jeff Bezos wrote a memo to employees, saying the account “doesn’t describe the Amazon I know or the caring Amazonians I work with every day.” He further pointed employees to a newer piece by current Amazon engineer Nick Ciubotariu that praises the company’s workplace environment.

    The moves helped push the story in a positive direction for the company, as did the Times’s own public editor’s assessment of the story, which, she wrote yesterday, should have provided more balance and context. (The Times’s executive editor, Dean Banquet, later let her know that he disagreed entirely with her assessment.)

    Still, employment attorneys suggest it may be a little soon for Amazon to break out the bubbly. They think there could well be a class-action lawsuit in the many anecdotes cited by the Times of employees who were treated poorly — particularly those who appear to have they lost their jobs owing to health issues and other demands outside of Amazon.

    Says Wilma Liebman, a visiting scholar at Rutgers University School of Management and Labor Relations, who spent three terms as a member of the National Labor Relations Board (including, most recently, as its chair): “Being a very tough boss, not being nice, not being sympathetic – that isn’t illegal in itself.” Violating overtime law and discriminating against women because they are pregnant is, however.

    More here.

    —–

    New Fundings

    Grand Rounds, a four-year-old, San Francisco-based service that connects patients with highly specialized care, has raised $55 million in new funding, including from Facebook CFO David Ebersman and Venrock. The company has now raised $106 million to date. The New York Times has more here.

    Payoneer, a 10-year-old, New York-based financial services company that enables users to transfer and receive money through re-loadable MasterCards, has raised $50 million in Series E funding led by Wellington Management Company, with participation from earlier backer Susquehanna Growth Equity. Shares were purchased from existing investors, though all major shareholders in the company retained their holdings, says the company. More here.

    Ring, a four-year-old, Santa Monica, Ca.-based smart doorbell maker that aims to reduce crime by enabling homeowners, no matter where they are, to see and speak with visitors over their smartphones, has raised $28 million in Series B funding led by Sir Richard Branson, Shea Ventures and American Family Insurance. Other participants in the round included True Ventures, Upfront Ventures and angel investor Sky Dayton.Siklu, an 8.5-year-old, Petah Tiqva, Israel-based millimeter wave technology company, has raised $18 million in Series D funding from investors, including Sercomm Corporation, Argonaut Private Equity, Evergreen Venture Partners, DFJ Tamir Fishman Ventures, Qualcomm Ventures, The Tamares Group and Amiti Ventures.

    SmackHigh, a nearly two-year-old, Boston-based startup that aggregates submissions from high school students via social media and its own website and distributes them across thousands of high schools across the U.S., has raised $1.65 million in seed funding led by Flybridge Capital Partners, with participation from an AngelList syndicate led by Twitter exec Wayne Chang, and Boston Seed Capital. Several prominent angel investors from the Boston area also joined the round. BetaBoston has more here.

    Solexel, a 10-year-old, Milpitas, Ca.-based solar cell and module maker backed by solar panel maker SunPower and semiconductor company Spirox, has seemingly closed a Series D round with $95 million in funding from investors, including King Saud University in Saudi Arabia, through its venture arm, Riyadh Valley Company. Other investors in the round include Kleiner Perkins Caufield & Byers, DAG Ventures, Gentry Ventures, GSV Capital, Gentry Ventures, and Jasper Ridge Partners. Global University Venturing has more here.

    Sovrn Holdings, a 20-month-old, Boulder, Co.-based programmatic advertising and publisher platform company, has raised $18 million in funding led byFoundry Group, with participation from Oak Investment Partners, Archer Venture Acquisitions and entrepreneur John Battelle. More here.

    Yoogaia, a two-year-old, Espoo, Finland-based startup that charges monthly subscriptions to users wanting to watch live yoga classes and other fitness instruction via its web platform, has raised $3 million in seed funding from Nokia Growth Partners, Inventure, Sanoma Ventures and Point Nine Capital. TechCrunch has more here.

    Zynergy, a four-year-old, Singapore-based renewable energy company, has raised an undisclosed “multi-million dollar” amount of funding from Kohli Ventures. More here.

    —–

    Exits

    Freshdesk, a three-year-old provider of SaaS customer support software, has acquired the three-year-old, Bangalore, India-based live video chat and co-browsing platform 1CLICK for an undisclosed amount. The acquisition follows a $50 million Series E funding that Freshdesk closed in April, led by Tiger Global Management. (The company has raised $95 million altogether.) Meanwhile, 1Click.io had raised an undisclosed amount of seed funding from Blume Ventures.

    Viki, the five-year-old, Seoul-based video site owned by Japan’s Rakuten, has acquired Soompi, an English-language news and fan site dedicated to Korean cinema and dramas, for “less than $10 million.” Interestingly, as TechCrunch notes, Soompi was a property of rival Crunchyroll, an anime video distribution company that Chernin Group had acquired for undisclosed terms last year.

    —–

    People

    SoftBank’s Nikesh Arora — the man who Chairman and CEO Masayoshi Son is backing as his replacement at the Japanese company — is doubling down on his employer after he agreed to buy $483 million in company shares from his own pocket. As tweeted investor Hunter Walk about the news yesterday, “Wow. Kinda beats that Twitter insider buying news from last week, eh?”

    Colin Bryar, a former Amazon vice president, has joined the Singapore-based online grocery-delivery service RedMart as COO. Venture Capital Dispatch hasmore here.

    Cecile Lal, a former Yahoo employee sued by the company in May for breach of contract and fiduciary duty, has agreed in a settlement to pay the company an undisclosed sum and to cooperate with its ongoing investigation of confidential information leaked to journalist Nicholas Carlson. Carlson published a book about Yahoo CEO Marissa Mayer in January. More here.

    Serial entrepreneur Alex Rampell, who most recently cofounded the e-commerce payment and advertising company TrialPay (sold to Visa earlier this year), is the newest general partner at Andreessen Horowitz. Rampell, who will be focused on fin tech startups, is longtime friends with fellow Andreessen Horowitz general partner Chris Dixon. One of Rampell’s earlier companies, FraudEliminator, merged into a company of Dixon’s called SiteAdvisor. SiteAdvisor was later acquired (in 2006) by McAfee. The New York Times has more here.

    —–

    Jobs

    Uber is looking to hire a business operations and corporate development associate to primarily cover UberChina. The job is in San Francisco.

    —–

    Essential Reads

    YouTube is opening a production studio in Mumbai, India. TechCrunch has more here.

    California regulators said they have evidence that Uber has failed to screen out 25 drivers with criminal records, including convictions for kidnapping and murder. The WSJ has more here.

    Microsoft is reportedly interested in acquiring the cloud-computing software startup Mesosphere, valued by bankers at more than $1 billion. Mesosphere has raised roughly $50 million from investors, shows Crunchbase. Its backers include Khosla VenturesAndreessen HorowitzCenter ElectricFuel Capital, SV Angel, and Data Collective. The Information has the story here.

    —–

    Detours

    Black arts: the $800 million family selling art degrees and false hopes.

    Forty old high-school yearbook photos of Wall Street’s titans.

    —–

    Retail Therapy

    The Embassy Gardens sky pool, coming soon to London.

  • Amazon Softens Blow of Times Piece, But Attorneys Warn Against Celebrating Too Soon

    dnews-files-2013-05-drinking-champagne-improves-memory-660-jpgIn recent days, Amazon has worked to soften the blow of a blistering piece about its culture in Sunday’s New York Times. In the article’s immediate aftermath, Jeff Bezos wrote a memo to employees, saying the account “doesn’t describe the Amazon I know or the caring Amazonians I work with every day.” He further pointed employees to a newer piece by current Amazon engineer Nick Ciubotariu that praises the company’s workplace environment.

    The moves helped push the story in a positive direction for the company, as did the Times’s own public editor’s assessment of the story, which, she wrote Tuesday, should have provided more balance and context. (The Times’s executive editor, Dean Banquet, later let her know that he disagreed entirely with her assessment.)

    Still, employment attorneys suggest it may be a little soon for Amazon to break out the bubbly. They think there could well be a class-action lawsuit in the many anecdotes cited by the Times of employees who were treated poorly — particularly those who appear to have they lost their jobs owing to health issues and other demands outside of Amazon.

    Says Wilma Liebman, a visiting scholar at Rutgers University School of Management and Labor Relations, who spent three terms as a member of the National Labor Relations Board (including, most recently, as its chair): “Being a very tough boss, not being nice, not being sympathetic – that isn’t illegal in itself.” Violating overtime law and discriminating against women because they are pregnant is, however.

    More here.

  • StrictlyVC: August 19, 2015

    Hi, everyone. It is Wednesday! Already!

    We’ll be at Y Combinator’s second Demo Day for part of this afternoon, representing TechCrunch. If you’re also heading there and want to chat about your top picks, please find us; we’d love to tawk. In the meantime, here are the 50 startups that presented at its Demo Day yesterday.

    —–

    Top News in the A.M.

    GrabTaxi, the taxi-hailing app that rivals Uber in Southeast Asia, is getting some support from China after it announced a $350 million Series E round from a range of investors that — most interestingly — includes Didi Kuaidi, China’s largest taxi app firm. TechCrunch has more here.

    Snapdeal — currently in a three-way battle for e-commerce dominance in India with rivals Flipkart and with Amazon — has raised $500 million in fresh funding at a valuation of $4.7 billion led by Alibaba and Foxconn. Bloomberg has more here.

    Uber is upping its focus on India, with an undisclosed amount of strategic funding from Tata Capital, one of India’s largest wealth management organizations. As TechCrunch notes: Tata is a “potentially very influential ally in Uber’s battle against Indian rival Ola, which is present in over 100 cities and has the support of SoftBank, Tiger Global and other heavy-hitting investors.”

    —–

    Adam Lisagor of Sandwich Media on Making the Killer Corporate Video

    Adam Lisagor, an L.A.-based video producer, has more demand for his corporate videos than he can handle, thanks to the breakout success of product launch videos for Square, Airbnb, and Warby Parker among many dozens of others. Demand doesn’t look to be tapering off any time soon, either. We talked with Lisagor about his own six-year-old, startup, Sandwich Video, yesterday.

    A Forbes piece earlier this year attributed your early success to a seemingly serendipitous meeting with Jack Dorsey, who asked you to make a video for Square. How did he find you?

    I was Internet friends, then real-life friends, with Robert Andersen, who was the first lead designer at Square [and is today its creative director]. Since we were friends and I’d done my own video for an app I worked on with a friend, and done one professional video for Genentech that no one saw, Robert suggested I fly up and meet with Jack. I thought he was photogenic and charismatic and that he could speak about the product as clearly as anyone, but he said, “No, I want you to do it.” And that was that.

    Sandwich’s pricing model allows for startups to pay you partly in equity. How many stakes have you amassed that way?

    About 35 at this point.

    You also announced the Sandwich Fund earlier this year with Ludlow Ventures, a Detroit-based venture firm. The idea is to assemble a portfolio of select companies that will provide you with early shares instead of pay you the roughly $100,000 that it costs to make a video. How many stakes have you taken through that fund?

    Only one so far: Cur, [which makes a pain relief wearable that people apply like a bandaid]. As a product, it was really interesting to me because it seemed like such a slam sunk. I tried it and it worked exactly as promised.

    Has Sandwich itself raised any outside funding or would it?

    For more of our interview with Lisagor, click here.

    —–

    New Fundings

    AlienVault, an 8.5-year-old, San Mateo, Ca.-based company that delivers a hybrid threat management solutions combined with a crowd-sourced threat intelligence platform, has raised $52 million in new funding led by Institutional Venture Partners, with participation from Trident Capital, Kleiner Perkins Caufield & Byers and GGV Capital. The company has now raised roughly $116 million altogether. TechCrunch has more here.

    Api.ai, a five-year-old, Palo Alto, Ca.-based developer of artificial intelligence and natural language tech that enables developers to add Siri-like conversational interfaces to their apps, has raised $3 million in funding led by SAIC Capital. TechCrunch has more here.

    CastAR, a year-old, Palo Alto, Ca.-based augumented reality gaming startup, has raised $15 million in a round led by Playground Global, the hardware accelerator and fund launched earlier this year by Android co-founder Andy Rubin. Venture Capital Dispatch has more here.

    Guideline Technologies, a months-old, San Mateo, Ca.-based company whose automated investment technology incorporates an individual’s entire financial ecosystem to make ongoing recommendations and adjustments to his or her 401(k), has raised $2 million in seed funding from investors, including New Enterprise Associates, Lerer Hippeau Ventures, SV Angel, Red Swan Ventures, BoxGroup, Xfund, and 500 Startups. More here.

    Iconixx, a five-year-old, Austin, Tex.-based maker of compensation management software, has raised $10 million in funding co-led by Harbert Venture Partners and S3 Ventures, with participation from earlier backer Ballast Point Ventures. More here.

    IntelligenceNODE, a three-year-old, Mumbai, India-based big data analytics startup that serves retailers, has raised $4 million in Series A funding led by New Enterprise Associates and Orios Venture Partners. TechCrunch has more here.

    Kahuna, a four-year-old, Palo Alto, Ca.-based mobile marketing startup, has raised $45 million in Series B funding led by Tenaya Capital, with participation from earlier backers Sequoia Capital and SoftTechVC. The company has now raised about $58 million altogether. Venture Capital Dispatch has more here.

    Kik, a six-year-old, Waterloo, Ontario-based messaging app, has raised $50 million in new funding from China’s Tencent at around a $1 billion valuation. More here.

    Kindara, a three-year-old, Boulder, Co.-based startup that helps women track ovulation cycles and fertility, has raised $5.3 million in seed funding led by Boston Seed Capital, with participation from SOS Ventures, Good Works Ventures, PV Ventures, MENA Venture Investments, and 62 Mile Ventures. TechCrunch has more here.

    Klarna, a 10-year-old, Swedish payments startup, has reportedly seen its valuation double to $2.25 billion in a secondary offering that involvedNorthzone, mutual fund Wellington Management, and the foundation Wellcome Trust, which purchased roughly $80 million worth of stock from company insiders. Klarna was valued at about $1.4 billion last year when it raised roughly $100 million from earlier backers. Venture Capital Dispatch has more here.

    Mirantis, a 4.5-year-old, Mountain View, Ca.-based company that says it delivers all the software, services, training and support needed for running OpenStack, has raised $75 million in fresh funding, according to regulatory filing flagged by Dow Jones. The company had raised $100 million in funding in October of last year led by Insight Venture Partners. More here.

    NextHealth Technologies, a two-year-old, Denver-based predictive analytics company, has raised $1 million in funding, including from the City of Denver’s Office of Economic Development and numerous health industry veteran executives. More here.

    Owlet Baby Care, a two-year-old, Provo, Ut.-based maker of the Smart Sock baby monitor, has raised $6 million in Series A funding led by Formation 8, with participation from TOMS Shoes founder Blake Mycoskie and earlier backers Azimuth Ventures, ffvc, Eniac Ventures and Peak Capital. Owlet also receiving another $1 million for participating in a government National Institutes of Health grant. The grant and the Series A collectively bring the amount that Owlet has raised to $9.2 million. More here.

    Revel Systems, a five-year-old, San Francisco, Ca.-based iPad point-of-sale platform, has raised $13.5 million in Series C-3 funding from ROTH Capital Partners. the round has now reached $110 million altogether, and the company has collectively raised $128.5 million, according to Crunchbase. More here.

    Royole Corporation, a two-year-old, Shenzhen, China-based company that develops rollable displays that can be incorporated into smartphones, computers and TVs, has raised $172 million in Series C funding from investors, including IDG Capital Partners, Shenzhen Capital Group, Shenzhen Green Pine Capital Partners, AlphaWealth, Jack and Fisher Investment, and other undisclosed investors. China Money Network has the news here.

    SpotHero, a four-year-old, Chicago-based on-demand parking app, has raised $20 million in Series B funding led by Insight Venture Partners, with participation from Battery Ventures, Bullpen Capital, Chicago Ventures,Draper Associates, OCA Ventures, Pritzker Group Venture Capital and 500 Startups. The company had previously raised $7 million. TechCrunch hasmore here.

    WaVe Life Sciences, a six-year-old, Boston-based genetic medicine company focused on advancing stereopure nucleic acid therapies for patients impacted by rare diseases, has raised $66 million in Series B funding led by new investorForesite Capital, with participation from Fidelity Management & Research Company, New Leaf Venture Partners, Redmile Group, Jennison Associates (on behalf of certain clients), Cormorant Asset Management, and certain private investment funds advised by Clough Capital Partners. Earlier backers RA Capital Management and Kagoshima Shinsangyo Sosei Investment also joined the round. BioPortfolio has more here.

    —–

    IPOs

    Edge Therapeutics, a six-year-old, New Providence, N.J.-based company with a drug delivery system for brain hemorrhaging and other acute neurological conditions, has filed an S-1 form with the SEC, revealing plans to raise up to $115 million. Just five months ago, the comapny had raised $72.5 million in Series C funding, including a C-2 round led by Venrock, with participation from Sofinnova Ventures, Janus Capital Management, New Leaf Venture Partners and BioMed Ventures.

    RegenXBio, a seven-year-old, Rockville, Md.-based company that’s developing gene therapies for rare diseases and licensing out gene delivery technology, has filed with the SEC to raise up to $100 million in an IPO. More here.

    SynCardia Systems, a 14-year-old, Tucson, Az.-based developer and manufacturer of temporary implantable artificial hearts, has registered plans with the SEC to raise up to $40 million in an IPO. More here.

    —–

    Exits

    Anova, maker of an automated sous vide cooker, is spending $9.2 million in cash to acquire Get Fresh, whose CEO, Stephen Svajian, will become CEO of Anova. Anova, which had raised $1.8 million in a Kickstarter campaign in 2013, is paying $9.2 million in cash. Get Fresh had raised one seed round from Zenefits COO David Sacks and Cotap CEO Jim Patterson (who were formerly colleagues at Yammer). GetFresh never disclosed the amount of that seed round. TechCrunch has more here.

    PayPal has bought Modest, a Chicago-based startup headed by the former chief technology officer of President Obama’s 2012 re-election campaign. Modest helps merchants build mobile apps, and had raised an undisclosed amount of seed funding from Hyde Park Venture Partners and Base Ventures. Fortune has the story here.

    —–

    People

    After three years, Paul Maritz is stepping down as CEO at Pivotal Software, a data analytics, cloud computing and software-development services company spun out of EMC and VMware. His successor: Rob Mee, who cofounded Pivotal Labs, a software development company. The WSJ has more here.

    —–

    Jobs

    Kapor Capital is looking for a full-time portfolio services director. The job is in Oakland, Ca.

    —–

    Data

    From the New York Times: “Last year, Yale paid about $480 million to private equity fund managers as compensation — about $137 million in annual management fees, and another $343 million in performance fees, also known as carried interest — to manage about $8 billion, one-third of Yale’s endowment. In contrast, of the $1 billion the endowment contributed to the university’s operating budget, only $170 million was earmarked for tuition assistance, fellowships and prizes.”

    —–

    Essential Reads

    Hackers finally posted that stolen Ashley Madison data.

    With the help of its investors, including Sequoia Capital and China Broadband Capital, the home-sharing startup Airbnb is gearing up for a big push into the booming market of Chinese travelers.

    —–

    Detours

    How to be an expert in anything.

    At Lucali, pizza for the A-list and the landlady upstairs.

    “I’m Phil Brock, and I want to be your bald wingman.”

    —–

    Retail Therapy

    Surf Snowdonia. (GoPro CEO Nick Woodman checks it out here.)

  • StrictlyVC: August 18, 2015

    Hi, everyone! Hope you have a great Tuesday.

    —–

    Top News in the A.M.

    Google has finally launched Android One, a standard created for Android devices in developing countries, in Africa. VentureBeat has more here.

    In other Google news, the next version of Android, called “Marshmallow,” is reportedly coming soon, though there’s no official timetable. TechCrunch has more here.

    —–

    EShares, Now Valued at $77 Million, Looks Far Beyond Silicon Valley

    Three-year-old eShares digitizes paper stock certificates along with stock options, warrants, and derivatives to create a real-time picture of who owns what at a startup. It also makes it far simpler to transfer ownership of all of the above — which goes a long way in explaining the company’s traction. The Mountain View, Ca.-based outfit right now maintains the cap tables of 1,500 companies, including Slack and Blue Bottle Coffee, and says it’s adding 200 more companies each month. Perhaps more important, eShares has won the trust of roughly 35 law firms, the gatekeepers for most startups and their paper certificates.

    But eShares — which has just raised $17 million in Series B funding at a post-money valuation of $77 million from insiders like Spark Capital and Union Square Ventures — isn’t just racing to win over tech startups. Now, the 42-person company wants the rest of the world’s still-private small and mid-size businesses on its platform, too.

    We talked with cofounder and CEO Henry Ward about his big plans yesterday.

    As of last year, eShares charged companies $159 a month or roughly $1,900 a year to maintain an ongoing valuation. It also charged a $20 fee every time a company issued a new grant and another $20 every time someone exercised the sale of one of their holdings.

    That hasn’t changed, and the model works well at the early stage, though a lot of our larger customers go to an all-you-can-eat annual subscription model. We don’t publish the pricing (publicly) but that typically happens when companies hit 50 employees.

    Worth noting: Employees on eShares can hook up their bank account to their eShares account and self-exercise their options and we wire the money straight to the company, as well as issue the employee new stock certificates. It’s much easier than the normal paper exercise, where employees have to get the company to process [the transaction every time they want to exercise their options].

    You must have pretty good insight into what’s happening in terms of secondary sales, too. Are you noticing more shares selling to insiders versus third parties or vice versa? 

    >I can’t talk specifics, but secondaries are getting a lot of attention. We joined forces with [the secondary investment firm] Industry Ventures [which participated in eShare’s new round] to work on streamlining the process and bringing more transparency to it.

    As an investor, does Industry Ventures get “first dibs” on secondary sales where you’re helping companies facilitate their movement?

    For more of our conversation with Ward, click here.

    —–

    New Fundings

    Apiary, a four-year-old, San Francisco-based company that aims to make API development simpler and more collaborative, has raised $6.8 million in Series A funding led by Flybridge Capital Partners, with participation from Baseline Ventures and Credo Ventures. The company has now raised $8.4 million to date. More here.

    Aviacode, a 16-year-old, Salt Lake City-based medical coding-related software and services company, has raised $16 million in growth equity funding from Frontier Capital. More here.

    Away, a months-old, New York-based direct-to-consumer luggage company that sources its own components and promises to bring down prices by cutting out middle men, has raised $2.5 million in seed funding co-led by Forerunner Ventures and Accel Partners. TechCrunch has more here.

    BuzzFeed, the seven-year-old, New York-based media company, has raised $200 million in funding from NBCUniversal. (Recode had reported this was coming a couple of weeks ago, though its number was off by $50 million.) The company has now raised roughly $300 million altogether, including from Andreessen Horowitz, New Enterprise Associates, Lerer Hippeau Ventures, and RRE VenturesMore here.

    CloudDesk, a two-year-old, Singapore-based desktop virtualization software company that originally targeted educational institutions and is now moving into other commercial and governmental sectors, has raised roughly $418,000 from the Singapore National Research Foundation and IncuVest, a Singapore-based investment firm and incubator. The outlet e27 has more here.

    Datameer, a six-year-old, San Francisco-based big data analytics company built on Hadoop, has raised $40 million in Series E funding led by ST Telemedia, an investment firm based in Singapore. Top Tier Capital Partners, Kleiner Perkins Caulfield & Byers, Redpoint Ventures, Next World Capital, and Software AG also participated. The company has now raised more than $76 million altogether. TechCrunch has more here.

    Deezer, an eight-year-old, Paris, France-based music-streaming service that targets consumers in Europe and Africa, is seeking funds from investors in a transaction that could value it at about 1 billion euros ($1.1 billion), reports Bloomberg. Deezer has 16 million actively monthly users and 6 million paid subscribers, compared with Spotify’s more than 75 million active users and 20 million subscribers. More here.

    Filament, a three-year-old, Reno, Nev.-based developer of decentralized Internet-of-things infrastructure, has raised $5 million in Series A funding led byBullpen Capital, with participation from Verizon Ventures, Crosslink Capital, Samsung Ventures, Digital Currency Group, Haystack, Working Lab Capital, and Techstars. More here.

    First Light Fusion, a four-year-old, Oxford, England-based company that was spun out from the University of Oxford to develop a process for achieving affordable fusion energy, has raised £22.7 million ($35.5 million) from investors, including the intellectual property business IP Group, a fund managed by Invesco Asset Management, clients advised or managed by Sandaire Investment Office, and the University of Oxford.

    MarketInvoice, a four-year-old, London-based peer-to-peer business lender, has raised £6 million ($10 million) from Northzone and the family office of Paul Forster, the co-founder of job search engine Indeed.com. Business Insider has more here.

    Marvel, a two-year-old, London-based startup that lets users turn sketches into mobile app “prototypes,” has raised $2 million in new seed funding from Index Ventures and Connect Ventures, with participation from earlier backers. TechCrunch has more here.

    Peach, a year-old, Seattle-based company whose web-based technology provides order processing and food logistics services to restaurants under a revenue-sharing agreement, has raised $8 million in Series A financing led by Madrona Venture Group, with participation from Vulcan Capital. Xconomy has much more here.

    Piramal Realty, the four-year-old, Mumbai, India-based real estate development arm of the Piramal Group, has raised $150 million from Goldman Sachs in exchange for a minority stake in its business. The capital follows roughly $284 million invested in the company earlier this year by the private equity firm Warburg Pincus. The Hindu has the story here.

    Platform9, a two-year-old, Sunnyvale, Ca.-based cloud service that aims to transform infrastructure into an agile, self-service private cloud in minutes, has raised $10 million in Series B funding led by Menlo Ventures, with participation from earlier backer Redpoint Ventures. The company has now raised $14.5 million altogether. TechCrunch has more here.

    Roposo, a nearly two-year-old, Gurgaon, India-based fashion discovery startup, has raised $15 million from Tiger Global Management just a few months after having attracted a $5 million Series A check from the firm. Times of India has the story here.

    Solu, a year-old, Helsinki, Finland-based startup that’s operating in stealth but is reportedly targeting the personal computer market with a new type of OS and its own hardware, has raised $1.3 million in seed funding from KSV Finland, along with numerous individual investors. TechCrunch has more here.

    Swipe, a three-year-old, London-based, web-based PowerPoint alternative that features audience analytics, real-time polls and live syncing, has raised an undisclosed amount of capital from earlier investors Passion Capital and Playfair Capital. The company say it has now raised roughly $1 million in total. TechCrunch has more here.

    Talenta, a 1.5-year-old, Jakarta, Indonesia-based, cloud-based human resources management startup, has raised an undisclosed amount of bridge funding led by Fenox Venture Capital, with participation from earlier backer East Ventures. Tech in Asia has more here.

    Tracksmith, a 2.5-year-old, Wellsley, Ma.-based running apparel brand that features classic styling (think “run-swim-run” shorts, among other things), has raised $4.1 million in Series A funding led Pentland Brands, the management group behind Reebok, Speedo, and Lacoste footwear, among other sporting brands. The company has now raised $5.7 million altogether. TechCrunch has more here.

    —–

    New Funds

    OMERS Ventures, the four-year-old venture unit of Canada’s Ontario Municipal Employees Retirement System, has raised $199 million in new funding. The WSJ has more here.

    —–

    People

    Joanne Bradford, a longtime media executive who was most recently Pinterest’s head of partnerships, has joined the online lender SoFi as its chief operating officer. Recode has the story here.

    Entrepreneur-investor Justin Kan was the victim of a hate crime over the weekend, when an unidentified man wrote a derogatory racial epithet on his garage door. Reports Buzzfeed: After a neighbor painted over the epithet in the wrong color (without seeking Kan’s approval), and a TV station misspelled his last name, Kan joked on Facebook hat he’d been the “victim of a hate crime, a help crime, and now a name crime.”

    —-

    Essential Reads

    Product Hunt, the app discovery site, is taking aim at Reddit and Twitter by introducing live interviews.

    Uber, the ride-sharing startup that has suffered from several data breaches, plans to quadruple the size of its 25-person security team by year end, its chief security officer Joe Sullivan told the Financial Times yesterday. More here.

    —–

    Detours

    This is what happens to your body when you stop exercising. (Do not read if you’ve stopped exercising.)

    Manspreading, upstreaming, and other stock photos of New Yorkers.

    Future grooms, a very high bar has just been set.

    —-

    Retail Therapy

    If you liked Lite-Brite as a kid, you’re going to love (like?) Everbright.

  • EShares, Now Valued at $77 Million, Looks Far Beyond Silicon Valley

    eSharesThree-year-old eShares digitizes paper stock certificates along with stock options, warrants, and derivatives to create a real-time picture of who owns what at a startup. It also makes it far simpler to transfer ownership of all of the above — which goes a long way in explaining the company’s traction. The Mountain View, Ca.-based outfit right now maintains the cap tables of 1,500 companies, including Slack and Blue Bottle Coffee, and says it’s adding 200 more companies each month. Perhaps more important, eShares has won the trust of roughly 35 law firms, the gatekeepers for most startups and their paper certificates.

    But eShares — which has just raised $17 million in Series B funding at a post-money valuation of $77 million from insiders like Spark Capital and Union Square Ventures — isn’t just racing to win over tech startups. Now, the 42-person company wants the rest of the world’s still-private small and mid-size businesses on its platform, too.

    We talked with cofounder and CEO Henry Ward about his big plans yesterday.

    As of last year, eShares charged companies $159 a month or roughly $1,900 a year to maintain an ongoing valuation. It also charged a $20 fee every time a company issued a new grant and another $20 every time someone exercised the sale of one of their holdings.

    That hasn’t changed, and the model works well at the early stage, though a lot of our larger customers go to an all-you-can-eat annual subscription model. We don’t publish the pricing (publicly) but that typically happens when companies hit 50 employees.

    Worth noting: Employees on eShares can hook up their bank account to their eShares account and self-exercise their options and we wire the money straight to the company, as well as issue the employee new stock certificates. It’s much easier than the normal paper exercise, where employees have to get the company to process [the transaction every time they want to exercise their options].

    You must have pretty good insight into what’s happening in terms of secondary sales, too. Are you noticing more shares selling to insiders versus third parties or vice versa? 

    I can’t talk specifics, but secondaries are getting a lot of attention. We joined forces with [the secondary investment firm] Industry Ventures [which participated in eShare’s new round] to work on streamlining the process and bringing more transparency to it.

    As an investor, does Industry Ventures get “first dibs” on secondary sales where you’re helping companies facilitate their movement?

    For more of our conversation with Ward, click here.

  • StrictlyVC: August 17, 2015

    Hi, happy Monday, everyone, hope you had a terrific weekend.

    We are back! No column today, though. (We arrived back in town a little late yesterday and we’re still knee deep in tangled chargers and dirty clothes.)

    —–

    Top News in the A.M.

    The NSA‘s ability to capture Internet traffic in the U.S. is reportedly rooted in an “extraordinary, decades-long partnership with a single company: AT&T.” ProPublica has the story here. (You may have already seen the Snowden documentary “Citizenfour.” If not, we recommend catching that at some point, too.)

    The owner of home shopping network QVC is acquiring five-year-old Internet retailer Zulily for $2.4 billion in cash and stock, the companies said this morning. It’s paying $18.75 per share, a 49 percent premium to Zulily’s closing price of $12.8 on Friday. The WSJ has more here.

    —–

    New Fundings

    Ascentage Pharma, a six-year-old, Hong Kong-based biopharmaceutical company at work on a drug meant to treat chronic lymphocytic leukemia and glioblastoma multiforme, has raised $15.5 million in Series A funding co-led byOriza Seed Capital and YuanMing Capital, with participation from EFung Capital, BioVenture Capital, Grains Valley Venture Capital, and undisclosed investors.

    EnTouch Controls, a six-year-old, Richardson, Tex.-based company that develops energy management systems for small commercial facilities, has raised $6 million in Series C funding from undisclosed investors. Earlier backers in the company include SJF Ventures, NRG Energy, and Trailblazer CapitalMore here.

    Helper.io, a six-month-old, Los Gatos, Ca.-based automated hiring marketplace that says it uses machine learning, psychometric assessments, and data analytics to improve hiring decisions, is looking to raise its first round of capital, shows an SEC form that doesn’t list a target. More here.

    ImmunoGum, a four-year-old, Orange, Ca.-based company that packages together vitamins that support the immune system in gum form, has raised $1.2 million in seed funding from Tech Coast Angels. More here.

    Loyalty Bay, a 1.5-year-old, London-based maker of lead generation software, has raised a $1 million round led by Talis Capital, with Howzat PartnersNEON Adventures, Chris Mairs and Richard Verney participating. TechCrunch has more here.

    MapD, a two-year-old, San Francisco-based company that builds fast GPU-databases to allow users to interact with and visualize big data in real time, has raised $7.8 million from investors, shows an SEC filing. The company had previously raised $2 million in seed funding from Google Ventures, Nvidia, and Vanedge Capital.

    Pacific Ag, a 17-year-old, Hermiston, Ore.-based crop residue supply company, has raised $7 million in funding from Advantage Capital Agribusiness Partners. More here.

    Shijiebang, a three-year-old, Beijing, China-based online travel firm that creates customized travel packages for wealthy Chinese tourists traveling overseas, has raised an undisclosed amount of Series B funding, says the company. According to Crunchbase, Shijiebang has previously raised $12 million, including from China Rock Capital, Fosun Kinzon Capital, and Yahoo cofounder Jerry Yang. More here.

    Yogrt, a year-old, Indonesia-based dating application, has raised $3 million in funding from Centurion Private Equity and Linear Ventures. The company was co-founded by Jason Lim, former managing director of Acer Indonesia, and several serial entrepreneurs. More here.

    YourStory Media, a seven-year-old, Bangalore, India-based company that showcases Indian startups, has raised between $3 million and $5 million in venture funding led by Kalaari Capital, with participation of Ratan TataQualcomm Ventures and others. It’s the first external round for the company. VCCircle has more here.

    —–

    New Funds

    Decheng Capital, a four-year-old, Shanghai, China-based healthcare investment firm that provides capital to early and growth stage life science companies in China and the U.S., is looking to raise up to $250 million for its second fund, shows an SEC filing. The company had targeted $125 million for its debut fund in 2012. (We’re not sure if it hit, or exceeded, that target.) More on the firm here.

    —–

    Exits

    Grid Dynamics, a nine-year-old, Menlo Park, Ca.-based company that sells scalable ecommerce technology software to grocery companies, has acquired Qubell, a two-year-old company that had developed an autonomic application management platform for cloud applications. Terms of the deal weren’t disclosed, but Grid Dynamic is using part of a new, undisclosed amount of Series B funding led by previous backer Benhamou Global Ventures to help fund it. More here.

    Housing.com, a SoftBank-backed real estate platform in India, has spent $2 million to acquire HomeBuy360, a four-year-old, Bangalore-based startup that provides an online sales and customer relations management platform that connects developers, agents and buyers. TechCrunch has more here.

    —–

    People

    Amazon founder Jeff Bezos responds to the New York Times’s gripping weekend read about Amazon’s “bruising workplace,” saying that “The NYT article prominently features anecdotes describing shockingly callous management practices, including people being treated without empathy while enduring family tragedies and serious health problems. The article doesn’t describe the Amazon I know or the caring Amazonians I work with every day.”More here.

    Tyson Clark has joined Google Ventures as a partner, reports Fortune. Clark most recently worked in corporate development at Andreessen Horowitz, and, earlier in his career, spent six years in the U.S. Navy as a nuclear propulsion submarine officer. More here.

    For what it’s worth, the fund owned by billionaire George Soros has sold most of its shares in retail giant Alibaba, slicing its holdings to 60,000 shares (worth $4.9 million) down from $370 million worth of shares at March’s end. The BBC has more here. (Meanwhile, the WSJ has more here on the fresh threat Alibaba faces from new rivals.)
    —–

    Jobs

    Twitch, the video platform and gamer community acquired by Amazon last year, is looking to hire a VP of business development.

    —–

    Essential Reads

    An Airbnb stay went very wrong recently, and confused about what to do, the company opted not to get involved.

    Buzzfeed takes a deep dive into Pinterest’s ambitious e-commerce platform.

    VCs have invested tens of millions of dollars in companies that service society’s upper crust, while largely passing on profitable companies aiming to help the downtrodden.

    —–

    Detours

    Zombie fashion: Why dead brands are coming back.

    How old people became the future of the auto industry.

    The problem with ever-changing work schedules and child-rearing.

    President Obama is plotting life after the presidency (and soliciting advice toward that end from Reid Hoffman, John Doerr, and Vinod Khosla, among others).

    —–

    Retail Therapy

    Tired of answering questions about your Apple Watch? Try this.

  • StrictlyVC: August 14, 2015

    It is Friday! Wunderbar! Major thanks to investor-writer Semil Shah, who has been an enormous help over the last three weeks while Connie spent a little quality time offline, finishing her kit car. If you want to talk with him about his column in today’s newsletter, you can find him here on Twitter.

    Also, thanks very much to the many of you who’ve volunteered to help with next month’s event in San Francisco. This readership is the best, truly. We’re still trying to figure out exactly how many people we need, but we’ll let each of you know what’s up as soon as we get things sorted (either today or Monday).

    —–

    Top News in the A.M.

    Alphabet, the new parent company of Google, has a new company in its portfolio: Ingress, an internal unit that was just spun out on its own.

    Apple customers waiting for the company to revolutionize live television will have to wait until next year.

    Uber just won the dismissal of lawsuit by 15 Connecticut taxi and limousine companies seeking to stop it from doing business in the state.

    —–

    To Atomize or to Grow?

    By Semil Shah

    The growth in micro VC funds is now well-documented. While there are many reasons to explain why this trend took hold, the more interesting question to ask is: What will happen to those funds which survive?

    Grow the Team

    A natural desire of any entrepreneurial endeavor — including starting a fund — is to keep growing it. In the context of small funds, traditional LPs will naturally hope this new crop of managers who emerge will grow a franchise, will add people to the team, and ultimately manage more money. Eventually, some of these franchises can grow to manage quite a bit of money per fund per GP and can, in effect, become a new type of Series A firm. This is the theory. It remains to be seen if more than just a few can make this transition, as the models at seed versus Series A are obviously quite different.

    Stay the Course as Lone Wolf

    While it may sound traditional to turn a good micro VC fund into a more traditional venture franchise, creating a strong general partnership is not a simple, check-the-box activity. Noting the difficulty, some micro VCs have opted to stay as solo operators longer than LPs had imagined. (See Manu Kumar.) Some, of course, continue to outperform and earn the right to manage more money per fund (if they choose to). In this instance, the LPs aren’t able to invest more and more of their funds into the GP. In the same way a large VC fund may look for opportunities to increase their ownership in a great company in their portfolio in order to make its own economics work, a large LP will often have a similar desire.

    Differentiate and Evolve

    Just as investors may have “app fatigue” or “food delivery service” fatigue, LPs pitched by micro VC funds have their own flavor of fatigue. As a way to cut through the noise, many of them drill into what differentiates a GP they’re considering an investment in. This can nudge micro VCs to differentiate on the basis of sector (hardware, Bitcoin, etc.), or geography (focusing in emergent areas outside the Valley especially), or stage (pre-seed vs seed, etc.), and more. And the success of Y Combinator and the potential for more steady budgets for an accelerator or incubator could encourage more to let go of the traditional fund model altogether.

    I know these choices because I have been faced with them. The LPs rightly ask these questions and conduct references to determine which way the micro VC wants to go. But the truth is that, just like most at seed don’t know how well a company will do at the very early stages, most of them also don’t know what the optimal path to take is. This can lead to an awkward discussion, where LPs may want or need to hear certain things to “check the box” in their processes versus having the raw discussion about what is working and what doesn’t. The truth is that most people don’t know, and in this market, which is changing year to year, the main value in these smaller funds is that their inherent nimbleness by virtue of being small gives them the right level of flexibility to adapt to a dynamic, ever-changing environment.

    —–

    New Fundings

    ChatID, a four-year-old, New York-based startup that helps businesses instant message to communicate with their customers, has raised $11.2 million in Series B funding led by Costanoa Venture Capital. The company has now raised $19.2 million altogether, including from earlier investors FirstMark Capital and Mack Capital. More here.

    EShares, a three-year-old, Mountain View, Ca.-based company that stores data about private companies’ ownership and value, has raised $17 million in Series B funding led by earlier investor Spark Capital, says VentureWire. Other participants in the round include Union Square Ventures, Subtraction Capital, and Industry Ventures.

    GrabTaxi, the four-year-old, Singapore-based smartphone booking and dispatch platform that competes with Uber in Southeast Asia, is about to close a $400 million round of funding led by China Investment Corp (CIC), China’s sovereign wealth fund, reports the WSJ. The company has already held a first close on $200 million led by Coatue Management.

    Intelex, a 23-year-old, Toronto-based maker of environmental, health, safety, and quality management software, has raised C$160 million ($122.9 million) in growth equity funding led by JMI Equity, with participation from HarbourVest.More here.

    The Honest Company, a four-year-old, Santa Monica, Ca.-based company that sells eco-friendly baby and cleaning products, has raised $100 million in Series D funding led by new investor Glade Brook Capital Partners. Other participants in the round include AllianceBernstein and earlier backers Fidelity Management & Research Company, Wellington Management Company and Institutional Venture Partners.

    Massdrop, a three-year-old, San Francisco-based online discussion platform for gatherings of particular enthusiasts (from audio to cooking), has raised $40 million in Series B funding led by August Capital, with participation from earlier backers Cowboy Ventures, First Round Capital, and Mayfield. The company has now raised $47.9 million altogether. TechCrunch has more here.

    Rift.io, a two-year-old, Burlington, Ma.-based company that aims to deliver scalable network virtualization to enterprises, has raised $16 million in Series A funding led by North Bridge Venture Partners, with participation from unnamed strategic investors. More here.

    —–

    New Funds

    Elephant Partners, a growth equity firm launched earlier this year by former Highland Capital Partners investors Jeremiah Daly and Andy Hunt — they also cofounded the eyeglasses company Warby Parker — is seeking up to $125 million for its debut fund. The WSJ has much more here.

    Rocket Internet, the eight-year-old, Berlin, Germany-based publicly traded internet company founded by the Samwer brothers, is raising up to €1 billion ($1.1 billion) for a growth fund, according to the German business publication WirtschaftsWoche (WiWo). Reportedly, the vehicle will be named, simply, Rocket Internet Growth Fund. Tech.eu has more here.

    —–

    People

    Apple CEO Tim Cook on the company’s latest diversity numbers: “There’s a lot more work to be done.” TechCrunch has more here.

    Zirtual founder Maren Kate Donovan blamed the company’s collapse, in part, on an outsourced CFO that she would not name. That individual now tells Fortune his side of the story here.

    Bill Maris of Google Ventures says that having a new parent company, Alphabet, doesn’t change things for his group (if you were curious). More here.

    —–

    Jobs

    RRE Ventures is looking to hire a director of platform. The job is in New York.

    —–

    Essential Reads

    VW has spent two years trying to hide a big security flaw. Bloomberg has the story here.

    But when will they go public? A profile of the average company at IPO.

    —–

    Detours

    Inside the secret dating app for famous people.

    Ten untranslatable words, beautifully illustrated.

    Things that will happen if I don’t take my phone out right now.

    —–

    Retail Therapy

    Apple (pocket) Watch.

    The world’s largest hard drive, courtesy of Samsung. (It can store up to two years of video.)

  • To Atomize or to Grow?

    seedlingBy Semil Shah

    The growth in micro VC funds is now well-documented. While there are many reasons to explain why this trend took hold, the more interesting question to ask is: What will happen to those funds which survive?

    Grow the Team

    A natural desire of any entrepreneurial endeavor  — including starting a fund — is to keep growing it. In the context of small funds, traditional LPs will naturally hope this new crop of managers who emerge will grow a franchise, will add people to the team, and ultimately manage more money. Eventually, some of these franchises can grow to manage quite a bit of money per fund per GP and can, in effect, become a new type of Series A firm. This is the theory. It remains to be seen if more than just a few can make this transition, as the models at seed versus Series A are obviously quite different.

    Stay the Course as Lone Wolf

    While it may sound traditional to turn a good micro VC fund into a more traditional venture franchise, creating a strong general partnership is not a simple, check-the-box activity. Noting the difficulty, some micro VCs have opted to stay as solo operators longer than LPs had imagined. (See Manu Kumar.) Some, of course, continue to outperform and earn the right to manage more money per fund (if they choose to). In this instance, the LPs aren’t able to invest more and more of their funds into the GP. In the same way a large VC fund may look for opportunities to increase their ownership in a great company in their portfolio in order to make its own economics work, a large LP will often have a similar desire.

    Differentiate and Evolve

    Just as investors may have “app fatigue” or “food delivery service” fatigue, LPs pitched by micro VC funds have their own flavor of fatigue. As a way to cut through the noise, many of them drill into what differentiates a GP they’re considering an investment in. This can nudge micro VCs to differentiate on the basis of sector (hardware, Bitcoin, etc.), or geography (focusing in emergent areas outside the Valley especially), or stage (pre-seed vs seed, etc.), and more. And the success of Y Combinator and the potential for more steady budgets for an accelerator or incubator could encourage more to let go of the traditional fund model altogether.

    I know these choices because I have been faced with them. The LPs rightly ask these questions and conduct references to determine which way the micro VC wants to go. But the truth is that, just like most at seed don’t know how well a company will do at the very early stages, most of them also don’t know what the optimal path to take is. This can lead to an awkward discussion, where LPs may want or need to hear certain things to “check the box” in their processes versus having the raw discussion about what is working and what doesn’t. The truth is that most people don’t know, and in this market, which is changing year to year, the main value in these smaller funds is that their inherent nimbleness by virtue of being small gives them the right level of flexibility to adapt to a dynamic, ever-changing environment.


StrictlyVC on Twitter