Monthly Archives: April 2016

StrictlyVC: April 29, 2016

You perhaps thought we forgot you this fine Friday. We did not! (Busy day.)

Hope you have a terrific weekend, everyone. See you soon.:)

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Top News in the A.M.

TiVo, whose name became synonymous with the act of recording live television shows, is being acquired by Rovi for about $1.1 billion, the companies announced this morning. Dealbook has more here.

Fitbit just won a ruling that invalidated the last of the Jawbone patents that were the subject of a dispute at the U.S. International Trade Commission.

LinkedIn surprised Wall Street yesterday with better-than-expected first quarter results. TechCrunch has more here.

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Handcuffed to Uber

Plenty of people would give everything to be an early employee at seven-year-old Uber. But Uber employees who’ve been with the ride-share company for at least a few years have discovered a considerable downside to their ride with the transportation juggernaut. They can’t afford to quit. Startup employees have to exercise their options within 90 days of leaving a company or else lose them and at Uber, that cost is simply too high.

A quick scan of LinkedIn for former employees underscores the point. Of Uber’s roughly 6,700 employees, only a tiny fraction have left, and in most cases, those hires weren’t around long enough to be worrying about vested options.

Employees of privately held companies have long wrestled with this issue. (We wrote about it herelast summer.) With valuations of many privately held tech companies having soared so dramatically in recent years, the amount of capital needed to buy employee options has escalated at an unprecedented pace for employees at a variety of places.

Uber appears to be the most extreme example ever, however. In a completely hypothetical example, let’s say an early, top Uber engineer was given .5 percent of the company. Now let’s say this person was awarded options in 2011, when Uber raised $11 million in Series A funding at a reported $60 million valuation. His ownership stake at the time would have been $300,000. Yet today, that same stake (undiluted) would now be worth $300 million at Uber’s reported current post-money valuation of $60 billion. That’s a paper gain of $299,700,000.

It’s very hard to cry about that, it’s true. But there is bad news: at a 40 percent tax rate for short-term gains, if the engineer opted to leave Uber, he’d confront a tax bill of $119,880,000, not including that earlier $300,000 needed to exercise the options. And leaving Uber would start the clock. He’d have just 90 days to come up with the $300,000, and he’d have to come up with the rest of the money for the much larger tax bill by the next April 15.

Maybe Uber will be publicly traded by then. Maybe it won’t.

Some highly valued companies have tried to ease this issue for employees by allowing them to sell some of their sales to preapproved secondary sellers at certain points. Not so Uber, whichamended its bylaws in 2013 to restrict unapproved secondary sales. Not only does it not allow employees to sell their shares to secondary buyers, it also won’t allow them to use services like those offered by 137 Ventures, which makes loans to founders and early employees, using their stock as collateral. (Snapchat, Dropbox, and Airbnb have similar policies.)

Our sense is that the company doesn’t mess around, either. Four secondary players have told us of employees who’ve tried to find ways around Uber’s regulations, only to be stymied. “We’ve been approached by big groups of early employees, and I know a lot has been written about loans or hypothetical products to get around its policies,” says one source. “But Uber’s position is that if it learns [of a sale or loan] that goes around its share-transfer restrictions, there will be consequences.”

It may seem uncharitable on some level, but it’s very much by design, according to insiders, who say Uber CEO Travis Kalanick has two primary motivations for keeping his company’s shares on lockdown.

More here.

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New Fundings

Cardiac Insight, an eight-year-old, Kirkland, Wa.-based company that makes advanced cardiac and respiratory sensing and computing technologies, has raised $2.5 million in Series C funding from undisclosed backers. More here.

Slantrange, a nearly three-year-old, San Diego, Ca.-based company that develops aerial remote sensing and analytics technology for customers in agriculture, has raised $5 million in Series A funding led by The Investor Group. More here.

Stance, a 6.5-year-old, San Clemente, Ca..-based lifestyle apparel company, has raised $30 million in Series D funding led by Mercato Partners. Earlier backers August Capital, Kleiner Perkins Caufield Byers, Menlo Ventures,Shasta Ventures and Sherpa Capital also joined the round. Beehive Startups has more here.

VividCortex, a four-year-old, Charlottesville, Va.-based database performance monitoring company, has raised $4.5 million in Series A funding led by New Enterprise Associates, with participation from Battery Ventures.

World View Enterprises, a three-year-old Tucson, Az.-based space tourism company spun off from Paragon Space Development Corp., has raised $15 million in Series B funding led by Canaan Partners, with participation fromNorwest Venture Partners, Tencent, Moment Ventures and Base Ventures. TechCrunch has more here.

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New Funds

Mayfield, the 46-year-old Sand Hill Road firm, has raised $525 million across two new funds, including a $400 million early-stage firm and a $125 million fund that will be used to support those of its portfolio companies that gain traction and need later-stage funding. Mayfield has raised 14 early-stage funds previously. It closed its last fund with $365 million in 2012. More here.

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People

Reports in the Russian and tech press today that Google tried to acquire the Telegram messaging app last year for $1 billion have been firmly rebutted by Telegram founder Pavel Durov. More here.

Carl Icahn has sold his 45.8 million Apple shares since the start of the year, telling CNBC yesterday that he’s concerned about China’s policies regarding the technology giant. More here.

Investor Chris Sacca spoke at a conference yesterday, telling his interviewer that there’s a “greed case for diversity.” More here.

Bloomberg unmasks the men behind Zero Hedge, Wall Street’s renegade blog.

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Essential Reads

Venmo, the hugely popular peer-to-peer payment service owned by PayPal, is under investigation by the Federal Trade Commission over “deceptive or unfair practices.” The Verge has more here.

Fiat is reportedly in the late stage of talks with Alphabet‘s self-driving car division about a technology partnership. The WSJ has more here.

SpaceX, the space exploration firm founded by Elon Musk, is planning to send an unmanned spacecraft to Mars by 2018.

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Detours

Hippos devouring watermelons.

When the landlord is a friend.

The downside of Nest cams.

Before you avenge your father’s death, please leave a positive Yelp review for my secret dojo.

—–

Retail Therapy

People really seem to like this grill disguised as a garbage can. (Just remarking.)


Handcuffed to Uber

uber-cuffsPlenty of people would give everything to be an early employee at seven-year-old Uber. But Uber employees who’ve been with the ride-share company for at least a few years have discovered a considerable downside to their ride with the transportation juggernaut. They can’t afford to quit. Startup employees have to exercise their options within 90 days of leaving a company or else lose them and at Uber, that cost is simply too high.

A quick scan of LinkedIn for former employees underscores the point. Of Uber’s roughly 6,700 employees, only a tiny fraction have left, and in most cases, those hires weren’t around long enough to be worrying about vested options.

Employees of privately held companies have long wrestled with this issue. (We wrote about it here last summer.) With valuations of many privately held tech companies having soared so dramatically in recent years, the amount of capital needed to buy employee options has escalated at an unprecedented pace for employees at a variety of places.

Uber appears to be the most extreme example ever, however. In a completely hypothetical example, let’s say an early, top Uber engineer was given .5 percent of the company. Now let’s say this person was awarded options in 2011, when Uber raised $11 million in Series A funding at a reported $60 million valuation. His ownership stake at the time would have been $300,000. Yet today, that same stake (undiluted) would now be worth $300 million at Uber’s reported current post-money valuation of $60 billion. That’s a paper gain of $299,700,000.

It’s very hard to cry about that, it’s true. But there is bad news: at a 40 percent tax rate for short-term gains, if the engineer opted to leave Uber, he’d confront a tax bill of $119,880,000, not including that earlier $300,000 needed to exercise the options. And leaving Uber would start the clock. He’d have just 90 days to come up with the $300,000, and he’d have to come up with the rest of the money for the much larger tax bill by the next April 15.

Maybe Uber will be publicly traded by then. Maybe it won’t.

Some highly valued companies have tried to ease this issue for employees by allowing them to sell some of their sales to preapproved secondary sellers at certain points. Not so Uber, which amended its bylaws in 2013 to restrict unapproved secondary sales. Not only does it not allow employees to sell their shares to secondary buyers, it also won’t allow them to use services like those offered by 137 Ventures, which makes loans to founders and early employees, using their stock as collateral. (Snapchat, Dropbox, and Airbnb have similar policies.)

Our sense is that the company doesn’t mess around, either. Four secondary players have told us of employees who’ve tried to find ways around Uber’s regulations, only to be stymied. “We’ve been approached by big groups of early employees, and I know a lot has been written about loans or hypothetical products to get around its policies,” says one source. “But Uber’s position is that if it learns [of a sale or loan] that goes around its share-transfer restrictions, there will be consequences.”

It may seem uncharitable on some level, but it’s very much by design, according to insiders, who say Uber CEO Travis Kalanick has two primary motivations for keeping his company’s shares on lockdown.

More here.

(Photo: Bryce Durbin)


StrictlyVC: April 28, 2016

Hi, happy Thursday, everyone!

—–

Top News in the A.M.

It’s official. Comcast announced this morning that it will spend $3.8 billion to acquire DreamWorks Animation.

Facebook hosted an earnings call yesterday, revealing surging revenue as its increasingly popular mobile app and push into live video continued to attract new advertisers.

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This Silicon Valley VC Says Chinese Investors are Joining Series A Deals, and They’re Playing “Hardball”

As a venture investor for the last 20 years, George Zachary has witnessed plenty of trends develop and fizzle. Yesterday, we talked with him about what he’s seeing right now. One of the newest wrinkles he noted is a growing number of Chinese investors who’ve grown aggressive about getting into Series A deals, and who seem to be playing by their own rules.

Our chat with Zachary — a general partner atCRV who has led the venture firm into bets on Twitter, Yammer and Udacity, among others — has been edited for length.

You’re investing in seed and Series A deals. Are you not concerning yourself with what’s happening in the later-stage and public markets? That seems to be a common refrain for early-stage investors.

You definitely have to worry about whether your company can be financed later on, no matter what everyone says. In fact, a lot of Series A companies that have to do an extension of the Series A are raising at lower valuations. One of our founders has done two startups before, but valuations in the space where he’s operating all went down 50 percent, so he’s just accepting that he’ll have to raise his (extension) round with a lot more dilution than he wanted. It is what it is.

How much have valuations come down, and where are you seeing them hit the hardest?

Well, for celebrity founders, they are staying high.We’re doing a celebrity-founder deal now that has a high price tag, and everyone wants into it. For repeat founders with a good exit the last time, the price is always going to be high, plus or minus 10 percent. This particular team is at concept stage. We’re basically handing them a near-blank check.

But valuations are down elsewhere. The average thing coming out of Y Combinator is probably a half to three-quarters of what it was [in terms of valuation in recent years]. The average seed-stage deal is half.

I should mention that for celebrity founders, research supports that if they’re operating in the same space [as their last company], they have a higher rate of success [than other people]. If they move from databases to clean tech or from cell towers to social networks, they usually don’t do super well.

According to CrunchBase, CRV was involved in at least 27 financings last year. Its data shows just four deals in 2016. Is the firm waiting for the market to sort itself out?

Not explicitly. We’ve committed to three things in the last month that are in the docs stage.

Docs are taking longer because there are new investors coming in, and they want more stuff in their terms. These are newer investors, often foreign investors, who are basically saying: “I want senior preference to [a company’s earlier] investors,” and that’s adding two or three weeks as they usually ask right as the docs are closing.

Wait, what’s happening? Who are these new investors, and how prevalent is this? When you say foreign, do you mean mostly from China? Obviously, a lot of Chinese investors are looking to invest more money in the U.S.

They’re almost all from China, and they want all of their preferences to be senior to everyone else’s. What’s happening is, since they know the startup’s financials, they just wait it out. By that point, we’ve already signed a term sheet and turned off a lot of other people who wanted to invest. These things never come up in the term sheet phase but later in the docs. They’ll say, “We did our diligence, and we need XYZ to invest.”

More here.

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New Fundings

Ionic, a four-year-old, Madison, Wi.-based cross-platform suite that says it enables developers to write once and deploy native-quality experiences across numerous platforms, has raised $8.5 million in Series A funding led by General Catalyst Partners. More here.

Levyx, a three-year-old, Irvine, Ca.-based high-speed data processing technology company, has raised $5.4 million in Series A funding led by the Chicago-based venture firm OCA Ventures. Other backers include Amino Capital, Sumavision USA Corp., and individual investors. More here.

Poncho, a three-year-old, New York-based personalized weather-forecasting service, has raised $2 million in seed funding led by Lerer Hippeau Ventures. Other participants in the round include Greycroft Partners, Comcast Ventures, Venture51 Capital Partners, RRE Ventures, Broadway Video Ventures, Ore Ventures,  and Betaworks, the New York start-up studio where Poncho was incubated. Numerous former Wall Street Journal executives also joined the financing, including Gordon Crovitz. More here.

SpaceVR, a year-old, San Jose, Ca.-based platform for creating cinematic, live, virtual space tourism, has raised $1.25 million in seed funding led by Shanda Group, with participation from Skywood Capital. More here.

Xola, a five-year-old, San Francisco-based software platform that manages booking and marketing for tour providers, has raised $5 million in Series A funding led by Rakuten Travel, which is Japan’s largest online travel agency. TechCrunch has more here.

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New Funds

Menlo Ventures, the 40-year-old, Sand Hill Road venture firm, has raised a new, $250 million “special opportunities fund,” says a spokeswoman. (The SEC filing is here.) The idea: to address a comparative dearth of capital for startups that are looking for Series B and C funding, now that non-traditional players like Fidelity and BlackRock are investing less actively in privately held startups. Menlo closed its most recent early-stage fund in 2015 with $400 million in commitments. More here.

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Exits

Abbott agreed today to acquire St. Jude Medical for $25 billion, bringing together two manufacturers of devices for cardiovascular disease. Dealbook has more here.

Stemcentrx, an eight-year-old, South San Francisco-based company developing disease-specific cancer treatments, is being acquired by cancer drugmaker AbbVie in a transaction that values the company at up to $10.2 billion. The deal is a part stock, part cash transaction that includes $4 billion in milestone-based payouts over the next several years. It represents a huge win for Peter Thiel’s Founders Fund, which had invested $300 million in the company (more than than it has poured into any other portfolio company). The firm is calling it its largest exit to date.

Textura, a company that makes cloud-based contract and payment management software for the construction industry and which went public in 2013, is being acquired by Oracle for $663 million in cash, net of Textura’s existing cash. TechCrunch has more here.

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People

Jake Chapman, previously a partner at Sazze Partners, a young, early-stage firm in Campbell, Ca., has left to launch a new, seed-stage firm, Gelt Venture Capital. More here.

Online travel giant Priceline Group just announced that CEO Darren Huston is resigning after an investigation found he had a personal relationship with an employee that violated the company’s code of conduct. More here.

London’s Balderton Capital has promoted long-standing general partnerBernard Liautaud, who joined the firm in mid-2008, to the newly created role of managing partner. More here.

Facebook is adding a new class of stock that will help keep cofounder and CEOMark Zuckerberg in control. More here.
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Data

According to a new McKinsey study, the “forces that have driven exceptional investment returns over the past 30 years are weakening, and even reversing. It may be time for investors to lower their expectations.” More here.

Everything you’ve ever wanted to know about Latin America’s venture scene, including its five-year outlook (courtesy of LAVCA).

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Essential Reads

Yahoo’s $8 billion black hole.

A Snapchat filter that invites users show off their speed while taking a selfie is being blamed for a serious car accident that left a man with traumatic brain injuries after being struck by someone going over 100 miles per hour. More here.

—–

Detours

Should you hug your dog?

Uber Ex,” a rom-com spec script.

This is the best news ever, says every out-of-shape journalist on the planet.

Favorite tweet of the week.

—–

Retail Therapy

Aether jackets, for handsome guys with boats (is what we’re picking up here).


This Silicon Valley VC Says Chinese Investors are Joining Series A Deals, and They’re Playing “Hardball”

Screen Shot 2016-04-27 at 1.30.49 PMAs a venture investor for the last 20 years, George Zachary has witnessed plenty of trends develop and fizzle. Yesterday, we talked with him about what he’s seeing right now. One of the newest wrinkles he noted is a growing number of Chinese investors who’ve grown aggressive about getting into Series A deals, and who seem to be playing by their own rules.

Our chat with Zachary — a general partner at CRV who has led the venture firm into bets on Twitter, Yammer and Udacity, among others — has been edited for length.

You’re investing in seed and Series A deals. Are you not concerning yourself with what’s happening in the later-stage and public markets? That seems to be a common refrain for early-stage investors.

You definitely have to worry about whether your company can be financed later on, no matter what everyone says. In fact, a lot of Series A companies that have to do an extension of the Series A are raising at lower valuations. One of our founders has done two startups before, but valuations in the space where he’s operating all went down 50 percent, so he’s just accepting that he’ll have to raise his (extension) round with a lot more dilution than he wanted. It is what it is.

How much have valuations come down, and where are you seeing them hit the hardest?

Well, for celebrity founders, they are staying high.We’re doing a celebrity-founder deal now that has a high price tag, and everyone wants into it. For repeat founders with a good exit the last time, the price is always going to be high, plus or minus 10 percent. This particular team is at concept stage. We’re basically handing them a near-blank check.

But valuations are down elsewhere. The average thing coming out of Y Combinator is probably a half to three-quarters of what it was [in terms of valuation in recent years]. The average seed-stage deal is half.

I should mention that for celebrity founders, research supports that if they’re operating in the same space [as their last company], they have a higher rate of success [than other people]. If they move from databases to clean tech or from cell towers to social networks, they usually don’t do super well.

According to CrunchBase, CRV was involved in at least 27 financings last year. Its data shows just four deals in 2016. Is the firm waiting for the market to sort itself out?

Not explicitly. We’ve committed to three things in the last month that are in the docs stage.

Docs are taking longer because there are new investors coming in, and they want more stuff in their terms. These are newer investors, often foreign investors, who are basically saying: “I want senior preference to [a company’s earlier] investors,” and that’s adding two or three weeks as they usually ask right as the docs are closing.

Wait, what’s happening? Who are these new investors, and how prevalent is this? When you say foreign, do you mean mostly from China? Obviously, a lot of Chinese investors are looking to invest more money in the U.S.

They’re almost all from China, and they want all of their preferences to be senior to everyone else’s. What’s happening is, since they know the startup’s financials, they just wait it out. By that point, we’ve already signed a term sheet and turned off a lot of other people who wanted to invest. These things never come up in the term sheet phase but later in the docs. They’ll say, “We did our diligence, and we need XYZ to invest.”

More here.


StrictlyVC: April 27, 2016

Halfway there! Hope you have a great Wednesday, everyone.

Top News in the A.M.

Reportedly, the FBI doesn’t plan to tell Apple how it cracked a San Bernardino, Ca., terrorist’s phone, leaving Apple in the dark on a security vulnerability on some iPhone models. The WSJ has more here.

In separate news, Apple‘s streak of 51 consecutive quarters of uninterrupted sales growth is over — and its expansion may not resume until late this year. Bloomberg has more here.

Twitter now has revenue problems, it revealed yesterday during an earnings call (after which its stock tanked). Recode has more here.

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It’s Not Just Uber: Carnegie Mellon’s Computer Science Dean on the School’s Poaching Problem

Andrew Moore was a professor of computer science and robotics at Carnegie Mellon University for a dozen years when Google hired him away in 2006 to lead some of its efforts around ad targeting and fraud prevention.

CMU lured Moore back in 2014, making him the dean of its computer science school. But he still understands well what goes through his colleagues’ minds when industry comes calling, and he says the battle to keep them in academia grows fiercer by the year.

Earlier today, we talked with Moore about Uber, which famously raided the school’s robotics department a year ago, poaching 40 of its researchers and scientists. We also talked about how Moore entices people to stay, and the newest new thing his 2,000-student school is focused on right now. Our chat has been edited for length.

Sorry to start with a question you’re surely asked too often, but just how big a hit did the school take when Uber recruited away some of your professors and researchers?

This kind of thing happens from time to time, especially in fast-growing areas where academia and industry are advancing things all the time. In January 2015, Uber hired away four faculty and about 35 technical staff to start its Advanced Technologies Center in Pittsburgh. By the school’s standards, this is one of many examples where our faculty disappear for a while into industry. It happened to me. Usually, every year, between five and 15 faculty members take a leave of absence for one or two or up to four years. Some never come back. Most do.

The perception was that this was a significant wave, though.

And that public perception is what really hurts. The truth is we have about 40 faculty and four took a leave of absence for a while to work for Uber. Meanwhile, this is such a growth industry that we’ve hired 17 new faculty in the past year, about half in robotics and half in machine learning. It’s frustrating. We’re trying to find space for new robotics people, not suffering from a lack of them.

What’s the school’s relationship with Uber like today? Is there one?

More here.

—–

New Fundings

BitFlyer, a two-year-old, Japan-based bitcoin exchange, has raised $27 million in Series C funding led by SBI Investment, with participation from earlier backer Venture Labo Investments. Coindesk has more here.

BlueVine, a nearly three-year-old, Palo Alto, Ca.-based company providing fast financing to small businesses, has raised an undisclosed amount of capital from Citi Ventures. More here.

CareOnGo, a nine-month-old, New Delhi, India-based chain of co-branded online pharmacies, has raised an undisclosed amount in pre-Series funding from Farooq Oomerbhoy of FAO Ventures and a group of other investors. VCCircle has more here.

ClearTax, a five-year-old, New Delhi, India-based startup that helps customers file their income tax returns electronically in India, has raised $1.3 million in seed funding, including from Max Levchin (this is the PayPal co-founder’s first investment in India), Scott Banister, Neeraj Arora, Naval Ravikant, and Ruchi Sanghvi. TechCrunch has more here.

Desktop Metal, a year-old, Lexington, Ma.-based commercial metal 3D printing startup led by A123 founder Ric Fulop, has raised $33.8 million in new funding per an SEC filing first flagged by Fortune. Fortune says the round values the company at more than $100 million and involves earlier backers Kleiner Perkins Caufield & Byers, Lux Capital, New Enterprise Associates, Data Collective, and Founder Collective. More here.

Disruptive Technologies, a 2.5-year-old, Bergen, Norway-based developer of wireless sensors, has raised roughly $6.2 million in funding from Ubon Partners. More here.

Global Fashion Group, a five-year-old, Berlin-based online fashion business, has raised at least €300 million ($340 million) in new funding, including  €100 million from Rocket Internet, which incubated the business. Other investors include Kinnevik and Access Industries. It’s a significant down round, notes TechCrunch, which says the company is now valued at roughly $1.1 billion, compared with its $3.45 billion valuation last year. More here.

Immunio, a three-year-old, Montreal-based company that aims to protect its customers’ web applications against attackers, has raised $5 million in Series A funding led by White Star Capital. More here.

RayVio, a four-year-old, Hayward, Ca.-based company that makes ultraviolet LED technology for point-of-use water disinfection and other health and hygiene applications, has raised $26 million in new funding co-led by IPV Capital andTsing Capital. More here.

Relevant e-solutions, a nearly two-year-old, Gurgaon, India-based company that operates the fashion discovery app Roposo, has raised $5 million in additional Series B funding from Bertelsmann India Investments. Earlier investors in the now $20 million round include Tiger Global Management. The Hindu has more here.

Seclore, a five-year-old, Mountain View, Ca.-based company focused on enterprise digital rights management, has raised $12 million in Series B funding from Helion Ventures, VentureEast, Sistema Asia Fund, and India Alternatives. FinSMEs has more here.

SnappyData, a year-old, Portland, Ore.-based real-time analytics platform, has raised $3.7 million in Series A funding from Pivotal Software, GE Digital andGTD Capital. More here.

TaskEasy, a 4.5-year-old, Salt Lake City-based online, on-demand services company aiming to make it easy to price, order and manage exterior maintenance anywhere in the U.S., has raised $12 million in Series B funding led by Delta Electronics Capital. Other participants include Moderne Ventures, MTD Products, and earlier backers Grotech Ventures, Access Venture Partners and Kickstart Fund. More here.

Vivint, a 19-year-old, Provo, Ut.-based home security, home automation, and energy management services company, has raised $100 million in strategic funding co-led by Peter Thiel and Solamere Capital, a venture firm cofounded by Mitt and Tagg Romney. (Vivint has long used what’s today considered an unusual sales technique; it puts to work former Mormon missionaries, who go door-to-door selling its solar and home automation products.) Note that the Blackstone Group purchased Vivint in 2012 for $2 billion and still owns the company. TechCrunch has more here.

Wongnai, a nearly six-year-old, Bangkok, Thailand-based restaurant and beauty business review site, has raised an undisclosed amount of Series B funding from Intouch Holdings. Tech in Asia has more here.

—–

Exits

The well-funded online lending company Affirm has acquired Sweep, an app-based personal finance tool that had raised an undisclosed amount of funding, including from Kapor Capital. Terms of the deal aren’t being disclosed. TechCrunch has more here.

Comcast is reportedly in talks to buy DreamWorks Animation SKG for more than $3 billion in a deal that could make the cable giant a rival to Walt Disney. The WSJ has the story here.

Spotify, the streaming media platform, has acquired CrowdAlbum, a company that aggregates photos and videos from music events that have been shared on social media. Terms of the deal haven’t been disclosed. CrowdAlbum had raised just $100,000. TechCrunch has more here.

—–

People

Arianna Huffington, The Huffington Post co-founder, is joining the board of Uber to bring “emotional intelligence” to the the San Francisco-based transportation network. CNN has more here.

Someone is giving venture capitalist Vinod Khosla bad advice.

Chris Price, formerly a senior vice president iwth the healthcare advisory firm ADVI Health, has joined Oak HC/FT as a venture partner.  More here.

Yahoo has reached a deal with the activist hedge fund Starboard Value to give it four seats on the Yahoo board, including one for Starboard CEO, Jeffrey Smith. Other appointees include an investment banker, a media executive, and the CEO of a patent troll. TechCrunch explains why here.

—–

Essential Reads

Witness the VC firms sitting on the biggest paper gains, care of Pitchbook.

All new mobile phones sold in India will need to have a panic button that enables users to make emergency calls from 2017. Mashable has more here.

Better sprint outside. Now Uber can ditch you if you’re just two minutes late for your ride. TechCrunch has more here.

—–

Detours

Anthony Weiner practices apologizing in a new documentary about his doomed mayoral run.

Inside the downfall of Tinsley Mortimer.

“Snowden,” the official trailer.

—–

Retail Therapy

Dyson invested four years and $71 million to create its newest product, and it’s . . . a hair dryer.


It’s Not Just Uber: Carnegie Mellon’s Computer Science Dean on the School’s Poaching Problem

Screen Shot 2016-04-26 at 1.45.07 PMAndrew Moore was a professor of computer science and robotics at Carnegie Mellon University for a dozen years when Google hired him away in 2006 to lead some of its efforts around ad targeting and fraud prevention.

CMU lured Moore back in 2014, making him the dean of its computer science school. But he still understands well what goes through his colleagues’ minds when industry comes calling, and he says the battle to keep them in academia grows fiercer by the year.

Earlier today, we talked with Moore about Uber, which famously raided the school’s robotics department a year ago, poaching 40 of its researchers and scientists. We also talked about how Moore entices people to stay, and the newest new thing his 2,000-student school is focused on right now. Our chat has been edited for length.

Sorry to start with a question you’re surely asked too often, but just how big a hit did the school take when Uber recruited away some of your professors and researchers?

This kind of thing happens from time to time, especially in fast-growing areas where academia and industry are advancing things all the time. In January 2015, Uber hired away four faculty and about 35 technical staff to start its Advanced Technologies Center in Pittsburgh. By the school’s standards, this is one of many examples where our faculty disappear for a while into industry. It happened to me. Usually, every year, between five and 15 faculty members take a leave of absence for one or two or up to four years. Some never come back. Most do.

The perception was that this was a significant wave, though.

And that public perception is what really hurts. The truth is we have about 40 faculty and four took a leave of absence for a while to work for Uber. Meanwhile, this is such a growth industry that we’ve hired 17 new faculty in the past year, about half in robotics and half in machine learning. It’s frustrating. We’re trying to find space for new robotics people, not suffering from a lack of them.

What’s the school’s relationship with Uber like today? Is there one?

More here.


StrictlyVC: April 26, 2016

Happy Tuesday, everyone!

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Top News in the A.M.

Later today, Apple is expected to post its first quarterly revenue decline since 2003. Recode has more here.

Twitter‘s earnings are coming, too. The WSJ has what to watch for here.

Google, Ford, and Uber just created a giant lobbying group for self-driving cars. The Verge has more here.

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Cyan Banister Has a New Startup and It’s Looking for Seed Funding

Cyan Banister realized long ago that Zivity, a subscription-based online community of artistic glamour and pin-up photography that she founded in 2007, was never going to be a highly profitable endeavor. That’s okay with her, too.

In an interview last week, Banister — known for the many angel investments she and husband Scott Banister have made over the years and more newly for her role as a partner at Founders Fund — told us Zivity was “always growing, but never at a crazy rate.”

Indeed, nine years after it was created, it has amassed 3,000 subscribers who pay the site on average $250 a year to access its various photo sets.

Now, Banister and Zivity’s longtime general manager-turned-CEO, Nadya Lev, think they’ve struck on a more lucrative opportunity that can not only shine a light on the creative class but help artists get paid, too. Their new company is called ThankRoll, and it’s looking for $1.5 million in seed funding to see how far it can get over the next 18 months.

It could make for an interesting bet. ThankRoll is essentially a service that offers a convenient way for fans of artists, blogs and others to support those products and services through a white-label widget that appears on the artists’ or blogs’ site. Fans just enter their credit card information; they can cancel their pledge any time they like.

More here.

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New Fundings

Auro Robotics, a year-old, San Francisco-based company that’s building driverless shuttles for campuses (which have their own, rather than state or federal, regulations), has raised $2 million in Series A funding led by Motus Ventures, with participation from Rothenberg Ventures. More here.

Kasisto, a three-year-old, Burlingame, Ca.-based SRI spinoff that provides virtual personal assistants to banks (they use them to communicate with their customers), has raised an undisclosed amount of strategic funding from Singapore’s DBS Bank. More here.

LaunchPad Recruits, a 4.5-year-old, London-based company that makes data and video software for hiring, has raised $2.3 million in Series A funding from Sussex Place Ventures and Edenred Capital Partners, among others. More here.

Lendix, a 1.5-year-old, Paris-based peer-to-peer lending platform, has raised $13.5 million in funding from CNP Assurances, Matmut, Zencap AM and earlier backers Partech Ventures, Decaux Frères InvestissementsSycomore Factory and Weber Investissement. TechCrunch has more here.

Remitly, a five-year-old, Seattle-based remittance service, has raised $38.5 million in Series C funding led by Stripes Group, with participation from Vulcan Capital and earlier backers DFJ, DN Capital, Bezos ExpeditionsTrilogy Equity Partners, and several unnamed investors. The company has now raised $61 million altogether. TechCrunch has more here.

SparkCognition, a three-year-old, Austin, Tex.-based “cognitive” security analytics company, has raised $6 million in Series B funding from CME Ventures, Verizon Ventures and earlier backers The Entrepreneurs’ Fund and Alameda Ventures. More here.

StoryStream, a five-year-old, London-based content platform helps marketers combine user generated and brand content, has raised $2.6 million in Series A funding led by MMC Ventures. TechCrunch has more here.

Tado, a five-year-old, Munich, Germany-based maker of smart thermostat and AC control products, has raised $23 million in fresh funding  led by Inven Capital, the venture capital arm of the Čez Group, a multinational energy conglomerate based in the Czech Republic. The company has now raised $57 million altogether. TechCrunch has more here.

TranServ, a 5.5-year-old, Mumbai, India-based mobile payments company, has raised $15 million in Series C funding led by IDFC Spice Fund and Micromax Informatics, with participation from earlier backers Nirvana and Faering Capital India. TechCrunch has more here.

Trov, a four-year-old, Danville, Ca.-based on-demand insurance platform that lets users buy insurance for specific products for a specific amount of time, has raised $25.5 million in Series C funding led by Oak HC/FT, with participation from Suncorp Group, Guidewire, and earlier backers Anthemis Group. TechCrunch has more here.

UrbanStems, a two-year-old, Washington, D.C.-based on-demand flower delivery service, has raised $6.8 million in Series A funding led by SWaN & Legend Venture Partners, with investments from Middleland CapitalNextGen Venture Partners, Interplay Ventures, and Sagamore VenturesMore here.

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New Funds

Finistere Ventures and the International Farming Corp. have teamed up to create an agriculture-focused venture capital fund called Willow Hill Ventures. More here.

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IPOs

The biggest IPO so far of this year could well be Red Rock Resort‘s upcoming offering on Friday, and brothers Fran and Lorenzo Fertitta, respectively CEO and director of the casino operator, stand to take home the jackpot. Bloomberg has more here.

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Exits

Nokia, once the world’s biggest mobile phone maker, is now looking to build out its health technology business, acquiring Withings, a French company that makes  smart scales, activity trackers, and other health gadgets. Nokia is paying $192 million; Withings had raised just less than $34 million from investors, including from BPIFrance, Idinvest, Ventech and 360 Capital Partners. TechCrunch has more here.

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People

New York-based Expa Studios has appointed Eric Friedman as general manager of its newly launched incubator arm Expa Labs, which will provide select companies with $500,000 in funding. Friedman formerly held biz dev positions at Foursquare, as well as worked as an analyst at Union Square Ventures. TechCrunch has more here.

Here’s how much interns make at Apple, Google and Facebook.

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Jobs

Health Catalyst Capital, a year-old venture firm, is looking to bring aboard a vice president. The job is in Manhattan.

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Data

According to Pitchbook, dating back to 2010, these five firms are the most active seed investors: SV Angel (with 242 seed fundings), Kima Ventures (215), Andreessen Horowitz (146), GV (135), and Lerer Hippeau Ventures (134).

——

Essential Reads

Tech company delistings could top IPOs this year, according to one M&A advisory firm.

Why Goldman Sachs is launching an online bank.

—–

Detours

Clay Tarver, the co-executive producer of HBO’s “Silicon Valley,” on Dick Costolo: “I would hire him as a writer.”

MondriPong, the classiest video game ever.

—–

Retail Therapy

Take a braincation with Melomind.


Cyan Banister Has a New Startup, and It’s Looking for Seed Funding

Screen Shot 2016-04-25 at 1.09.33 PMCyan Banister realized long ago that Zivity, a subscription-based online community of artistic glamour and pin-up photography that she founded in 2007, was never going to be a highly profitable endeavor. That’s okay with her, too.

In an interview last week, Banister — known for the many angel investments she and husband Scott Banister have made over the years and more newly for her role as a partner at Founders Fund — told us Zivity was “always growing, but never at a crazy rate.”

Indeed, nine years after it was created, it has amassed 3,000 subscribers who pay the site on average $250 a year to access its various photo sets.

Now, Banister and Zivity’s longtime general manager-turned-CEO, Nadya Lev, think they’ve struck on a more lucrative opportunity that can not only shine a light on the creative class but help artists get paid, too. Their new company is called ThankRoll, and it’s looking for $1.5 million in seed funding to see how far it can get over the next 18 months.

It could make for an interesting bet. ThankRoll is essentially a service that offers a convenient way for fans of artists, blogs and others to support those products and services through a white-label widget that appears on the artists’ or blogs’ site. Fans just enter their credit card information; they can cancel their pledge any time they like.

More here.


StrictlyVC: April 25, 2016

Hi, everyone! Hope you had a terrific weekend.

Sorry you’re receiving this a bit on the later side; our email service provider was working through some technical difficulties that surfaced just as we were hitting “send” around an hour ago.

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Top News in the A.M.

Apple is reportedly working on adding cell-network connectivity and a faster processor to its next-generation Watch. The WSJ has more here.

Google is forming a startup incubator within Google dubbed “Area 120” that will be overseen by long-time Google executives Don Harrison and Bradley Horowitz, according to The Information. More here.

Chinese search giant Baidu has formed a team dedicated to its self-driving car efforts in Silicon Valley, taking its autonomous car ambitions to Google’s home turf. The Verge has more here.

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The Next New Thing: Women VCs

The venture landscape changes fast. Ten years ago, few would have predicted the ubiquity of micro funds or the rise of Andreessen Horowitz or the very existence of a platform like AngelList that enables people with enough connections to become pop-up VCs.

Few — though not most — see what’s coming next, too, and that’s women VCs, taking their place alongside men, in equal, or nearly equal, numbers. In fact, we’d argue that the shift will represent the biggest opportunity over the next decade.

It may be hard to believe, given the wealth of attention paid to the low numbers of women in the industry and the obstacles they’re having to overcome. But the signs of change are everywhere if you’re paying close enough attention.

Women now make up 60 percent of college graduates, and many more of them are graduating with tech-friendly degrees. (Women are exceeding at elite institutions particularly, and now account for one-third of Stanford’s undergraduate engineering students, as well as one-third of Stanford’s graduate engineering students.)

Though women are making slow inroads at venture firms — according to CrunchBase data published last week,  just 7 percent of the partners are women at the top 100 venture firms —  women are increasingly finding paths around today’s guard.

They represent 12 percent of investing partners at corporate venture firms — a percentage likely to grow because of heightened interest in how tech companies fare when it comes to diversity. “We believe it’s a missed opportunity if we aren’t an active participant” in funding women- and minority-led companies and funds,” says Janey Hoe, VP of Cisco’s 40-person investments unit.

More, over the last three years, 16 percent of newly launched venture and micro-venture firms had at least one female founder, shows CrunchBase data.

Ch-ch-ch-ch-changes

So what’s happening? As VC Jon Callaghan of True Ventures noted during a panel discussion in San Francisco last week, Moore’s law has played a starring role. As costs have fallen and made entrepreneurship accessible globally, more people are coming into venture capital.

Monique Woodard, a longtime entrepreneur and more newly a venture partner at 500 Startups, credits her own path to the democratization of information brought about by social media platforms, as well as the many public insights into the industry that VCs like Fred Wilson and Brad Feld have contributed over time. “You suddenly have this library around venture capital and thought leadership that didn’t exist before,” said Woodard, speaking on the same panel.

It’s also the case that women — an expanding number of whom are founding startups, as well as rising through the ranks of other companies — have more role models in VC than they did a decade ago.

Of course, none of these trends is brand-spanking new. So why, you may be wondering, is now suddenly the tipping point? Because the ethical, business and financial reasons for change are finally poised to overtake the industry’s inertia.

More here.

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New Fundings

Aerojet Rocketdyne, a Sacramento, Ca.-based aerospace company, has landed a $67 million contract from NASA to develop an advanced Solar Electric Propulsion (SEP) system for future deep-space missions. The propulsion system could be used on robotic missions to an asteroid and in other missions related to NASA’s Journey to Mars program. TechCrunch has more here.

Augmedix, a four-year-old, San Francisco-based Google Glass startup whose platform enables doctors to collect, enter and recall patient data in real-time, has raised $17 million in funding from five of the biggest healthcare providers in the U.S.: Sutter Health, Dignity Health, Catholic Health InitiativesTriHealth and a fifth company that’s going unnamed for now.The company has now raised $40 million to date. TechCrunch has more here.

Enjoy, two-year-old, Beijing, China-based mobile app for dining deals at high-end restaurants, has raised $30 million in Series C funding led by the private equity firm China Media Capital, with participation from Costone Venture Capital. DealStreetAsia has more here.

Helium, a three-year-old San Francisco-based smart sensor startup, has raised $20 million in Series B funding led by GV, with participation from Khosla Ventures, FirstMark Capital and Munich RE/Hartford Steam Boiler Ventures. Forbes has more here.

Kamcord, a four-year-old, San Francisco-based mobile game live streaming platform, has raised $10 million in Series C funding led by Time Warner, with participation from earlier backers Tencent, TransLink Capital, XG VenturesPlug & Play Ventures and Wargaming. TechCrunch has more here.

Sirin Labs, a three-year-old, Schaffhausen, Switzerland-based high-end, ultra secure smartphone manufacturer, has raised a $72 million round of funding from Singulariteam founder Moshe Hogeg, Kazakh businessman Kenges Rakishev, and the Chinese social networking service Renren. TechCrunch has more here.

Sysdig, a three-year-old, Davis, Ca.-based startup that sells full-suite monitoring, alerting and troubleshooting software designed to support distributed, containerized environments, has raised $15 million in Series B funding from Accel Partners and Bain Capital Ventures. Silicon Angle has more here.

TULIU.com, a seven-year-old, China-based land information database that integrates information like land area, prices and development trends, as well as provides farmers with land-value evaluation services, has raised $23 million in Series B funding led by Shanda Capital,  Foyo Culture & Entertainment, and Matrix Partners. DealStreetAsia has more here.

Unlockd, a 1.5-year-old, New York-based ad startup that serves ads to a phone customer after he or she has unlocked their phone in exchange for discounts on their phone bill, has raised $12 million in Series A funding, including from earlier investors PLC Ventures and Lachlan Murdoch. The company has now raised roughly $17 million altogether. TechCrunch has more here.

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New Funds

Yahoo Japan and East Ventures, a pan-Asian venture capital firm, are teaming up to create a new accelerator in Tokyo called Code Republic that’s more than a little reminiscent of Y Combinator. Tech In Asia has more here.

Chinese outdoor advertising firm Focus Media is teaming up with Hong Kong-based private equity firm FountainVest Partners to launch a $400 million fund to invest in sports companies in China and overseas. China Money Network has more here.

Hikma Pharmaceuticals, a Amman, Jordan-based pharmaceutical company, is launching Hikma Ventures, a $30 million venture capital fund focused on the digital health tech. The fund’s primary focus is on, but not limited to, startups in Amman. StepFeed has more here.

The Thai government will provide THB20 billion (US$570 million) of funding to startups in the country, it just announced late last week. DealStreetAsia has more here.

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IPOs

Lianjia, a Beijing-based real estate agency service, is reportedly preparing for an IPO in China, Hong Kong or the U.S.;  just two weeks ago, the platform raised a stunning $926 million in Series B funding led by Huasheng Capital. DealStreetAsia has more here. (And, from a story in the WSJ a year ago, a look at China’s deal activity in the property services sector that includes HomeLink, which is another name for Lianjia.)

It’s too early to know if SecureWorks‘s IPO was a success or failure, but it’s worth noting that it closed below its opening price on its first day of trading Friday.

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Exits

One of the world’s largest children’s mobile app makers, Toca Boca, whose studios have produced apps totaling over 140 million downloads, has been acquired. The company had originally operated like a startup within the 200-year old Swedish publishing firm Bonnier, but has now been bought up by Spin Master, a children’s entertainment company. TechCrunch has more here.

Zalora, the fashion-focused e-commerce site backed by Rocket Internet, is selling its businesses in Thailand and Vietnam to retail giant Central Group, according to multiple TechCrunch sources. More here.

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People

Rapper and record producer Nasir Jones (“Nas”) loves makng venture investments through his fund, QueensBridge Venture Partners,  “But I can’t lie,” he tells the Daily Beast. “That stuff has gotten in the way of my music.” More here.

The New York Times is preparing to lay off a few hundred staffers in the second half of the year, the New York Post is reporting. More here.

PepperTap, a 1.5-year-old, Gurgaon, India-based startup that was aiming to become India’s largest and fastest grocery delivery service, has shut down that business and switched to e-commerce logistics, laying off 150 workers in the process. The company is backed by Sequoia Capital and Snapdeal, among others. TechCrunch has more here.

Udacity’s founder Sebastian Thrun is stepping down as CEO, the company announced on Friday. Vishal Makhijani, the company’s COO. will be Udacity’s new CEO.Thrun will remain as president and chairman of Udacity and continue to work full-time at the company. Fortune has more here.

LeEco’s billionaire CEO Jia Yueting says Apple is outdated. More here from CNBC.

——

Jobs

Microsoft is looking to hire a director of business development. The job is in Palo Alto, Ca.

——

Data

Esports will generate $500 million in revenue this year, which is a 43 percent increase from 2015, according to a new report by PwC. PwC also conducted a major survey of the esports audience, with surprising results. For example, it found that women were more likely to describe themselves as involved in esports than men —  22 percent of them, compared to 18 percent of men surveyed. The Daily Dot has the story here.

—–

Essential Reads

Inside of the world’s most secretive phone factories.

Why cities aren’t ready for the driverless car.

Yik Yak is attempting a comeback with the launch of private chat.

—–

Detours

The Guardian takes a peek into the San Francisco Museum of Modern Art before its long-awaited reopening.

—–

Retail Therapy

Now you can prepare beer from home, without all the jugs and tubes and thermometers and what not.


The Next New Thing: Women VCs

women-vcsThe venture landscape changes fast. Ten years ago, few would have predicted the ubiquity of micro funds or the rise of Andreessen Horowitz or the very existence of a platform like AngelList that enables people with enough connections to become pop-up VCs.

Few — though not most — see what’s coming next, too, and that’s women VCs, taking their place alongside men, in equal, or nearly equal, numbers. In fact, we’d argue that the shift will represent the biggest opportunity over the next decade.

It may be hard to believe, given the wealth of attention paid to the low numbers of women in the industry and the obstacles they’re having to overcome. But the signs of change are everywhere if you’re paying close enough attention.

Women now make up 60 percent of college graduates, and many more of them are graduating with tech-friendly degrees. (Women are exceeding at elite institutions particularly, and now account for one-third of Stanford’s undergraduate engineering students, as well as one-third of Stanford’s graduate engineering students.)

Though women are making slow inroads at venture firms — according to CrunchBase data published last week,  just 7 percent of the partners are women at the top 100 venture firms —  women are increasingly finding paths around today’s guard.

They represent 12 percent of investing partners at corporate venture firms — a percentage likely to grow because of heightened interest in how tech companies fare when it comes to diversity. “We believe it’s a missed opportunity if we aren’t an active participant” in funding women- and minority-led companies and funds,” says Janey Hoe, VP of Cisco’s 40-person investments unit.

More, over the last three years, 16 percent of newly launched venture and micro-venture firms had at least one female founder, shows CrunchBase data.

Ch-ch-ch-ch-changes

So what’s happening? As VC Jon Callaghan of True Ventures noted during a panel discussion in San Francisco last week, Moore’s law has played a starring role. As costs have fallen and made entrepreneurship accessible globally, more people are coming into venture capital.

Monique Woodard, a longtime entrepreneur and more newly a venture partner at 500 Startups, credits her own path to the democratization of information brought about by social media platforms, as well as the many public insights into the industry that VCs like Fred Wilson and Brad Feld have contributed over time. “You suddenly have this library around venture capital and thought leadership that didn’t exist before,” said Woodard, speaking on the same panel.

It’s also the case that women — an expanding number of whom are founding startups, as well as rising through the ranks of other companies — have more role models in VC than they did a decade ago.

Of course, none of these trends is brand-spanking new. So why, you may be wondering, is now suddenly the tipping point? Because the ethical, business and financial reasons for change are finally poised to overtake the industry’s inertia.

More here.

(Image: Bryce Durbin)