Top News in the A.M.
The FBI, newly expert at unlocking iPhones, has offered its assistance in unlocking an iPhone and iPod for a prosecutor in Arkansas, the Associated Press reports. More here.
Is Tony Fadell in Nest’s Way?
Last week, we witnessed something fairly remarkable. A major Alphabet executive — Nest Labs CEO Tony Fadell — publicly shamed the cofounder and employees of Dropcam, the connected camera company that Nest had acquired in 2014 for $555 million.
In an article in The Information, Fadell said that he didn’t think Dropcam cofounder and CEO Greg Duffy had “earned” the right to report to him directly. Fadell also explained away an exodus of Dropcam staffers by suggesting they were subpar. “A lot of the employees were not as good as we hoped,” he told The Information. It was “a very small team and unfortunately it wasn’t a very experienced team.”
Fadell may have been reacting to comments by Duffy, who painted a highly unflattering portrait of Fadell in the same article. However, Fadell’s comments and his poor performance underscore what an ill fit Fadell is for Alphabet and why Alphabet needs new leadership at Nest.
It wasn’t supposed to be like this, of course. Nest was acquired by Google for $3.2 billion in January 2014, a feat that earned Fadell plenty of accolades. Worried about competition and in awe of Fadell, who’d created the iPod as an Apple SVP, Duffy concluded that selling was his smartest play when Nest came knocking that spring.
Despite what seemed like a handsome payday for everyone involved with Dropcam, the bet soon looked like a poor one.
As we’d reported here in November 2014, not only did Duffy’s beloved VP of marketing almost immediately leave Nest over an apparent culture clash, but numerous employees we interviewed, along with scathing write-ups by former employees on Glassdoor, pointed surprisingly to trouble.
“Everything revolves around the CEO,” wrote one Glassdoor reviewer at the time. “It’s a dangerous mix of cult of personality and Stockholm syndrome. Comments like ‘[Fadell is] the next Steve Jobs are not uncommon, while people proudly say things like ‘I’m used to Tony screaming at me.’”
It wasn’t just the different management styles of Fadell and Duffy, whose organization was one-eighth the size of Nest and who was well-liked by his employees. There was suddenly an inability to get anything meaningful done. One Nest employee described to me a “huge meeting culture, to the point where anyone at the director level or up spends their entire day in meetings, many of them duplicative meetings about the same subject, over and over to the point where a lot of people have complained.”
Things remain much the same 16 months later, suggests The Information, whose report says Nest’s culture of micromanagement has more recently led the firm to plaster its offices with the phrase “Step Up” to ostensibly encourage lower-level employees to take more initiative.
Airware, a five-year-old, San Francisco-based company that used to sell drone operating systems but is now selling drone hardware, the software to control them, and cloud services for related data, has raised $30 million in Series C funding led by Next World Capital. Other participants include Andreessen Horowitz, Kleiner Perkins Caufield & Byers, and former CIsco CEO John Chambers, who’s joining the company’s board. TechCrunch has more here.
Garena, a seven-year-old, Singapore-based company that makes mobile gaming, e-commerce, and payment apps, has raised $170 million in Series D funding, at a reported $3.75 billion valuation. The funding was led by Khazanah Nasional Berhad, the Malaysian government’s strategic investment fund. Earlier investors in the company include General Atlantic, the Ontario Teachers’ Pension Plan, and Keytone Ventures. The company has now raised $500 million altogether. The WSJ has more here.
ICEBRG, a 1.5-year-old, Seattle-based stealth-mode enterprise network security startup, has raised $10 million in Series A funding led by Pelion Venture Partners, with participation from earlier backer Madrona Venture Group and other unnamed institutional and individual investors. More here(though not much more).
Juicero.com, a three-year-old, Bay Area-based food tech startup whose countertop device cold presses juice out of “packs” of already prepped fruit and veggies, has raised $70 million in Series B funding led by Artis Ventures. The company’s other Series A and B investors include Kleiner Perkins Caufield & Byers, GV, Thrive Capital, Campbell Soup Company, Two Sigma Ventures, DBL Partners, First Beverage Group, Acre Venture Partners, and others. TechCrunch has the story here.
Mashable, an 11-year-old, New York-based digital media publisher, has raised $15 million in new funding led by Turner, with participation from Time Warner Investments, Updata Partners and several other, unnamed investors. Mashable’s valuation wasn’t disclosed. The WSJ has more here.
Scentbird, a two-year-old, New York-based startup that lets users try luxury perfumes for a month before they buy them, has raised $2.8 million in funding from Eclipse Ventures, Vaizra Investments, Ludlow Ventures, and SGH Capital. The company has now raised $3.8 million altogether. VentureBeat hasmore here.
Zavante Therapeutics, a year-old, San Diego, Ca.-based biopharmaceutical company at work on an antibiotic to treat multidrug-resistant pathogens, has raised $45 million in Series A funding, consisting of $35 million from new investors and $10 million from the conversion of outstanding convertible notes. Frazier Healthcare Partners and Longitude Capital were co-leads on the deal; Aisling Capital participated. More here.
IBM has acquired Bluewolf Group, a 16-year-old, San Francisco-based consulting company that focuses on helping businesses use Salesforce and other cloud software applications. Terms of the deal are disclosed, but Recode sources peg the purchase price at slightly more than $200 million. More here.
Biotechnology VC Steven Burill has agreed to pay nearly $5.8 million to settle SEC charges that he stole investor money to pay for vacations in St. Bart’s and Paris, Tiffany jewelry, private jets and other expenses. The sum includes interest atop funds he siphoned from investors for personal use, and a $1 million civil fine, the SEC says. CNBC has more here.
Longtime Kleiner Perkins partner and part Golden State Warriors owner Joe Jacob just jinxed the NBA team, telling the New York Times that its success is rooted in the owners’ masterful planning. “We’ve crushed [the competition] on the basketball court, and we’re going to for years because of the way we’ve built this team . . . We’re light-years ahead of probably every other team in structure, in planning, in how we’re going to go about things . . . We’re going to be a handful for the rest of the N.B.A. to deal with for a long time.” Sigh. Doomed. (Great piece.)
Jay Z is showing signs of buyer’s remorse, reports Bloomberg. One year after buying the music-streaming service Tidal for $56 million, he’s saying the Norwegian media company that previously owned the service inflated its subscriber numbers.
Fidelity has just published the newest carrying values for its privately held stock, and Fortune’s Dan Primack is on top of it. Some of the lastest changes he has documented include: Blue Apron (up 13.47 percent), Pronutria Biosciences (up 98 percent, amazingly, possibly because of this), SpaceX (up 8.23 percent), Airbnb (up 17.85 percent), Honest Co. (up 13.84 percent) and Snapchat (up a whopping 62.3 percent; guess Fidelity likes the company’s new upgrades).
Some of those companies that saw markdowns include: Dropbox (down 19.94 percent), Intarcia Therapeutics (down 20.45 percent), Blue Bottle (down 5.21 percent), Nutanix (down 10.52 percent), Taboola (down 9.88 percent), Turn (down 15.29 percent), MongoDB (down 17.66 percent), Domo (down 29.17 percent), Dataminr (down 6.36 percent), Appirio (down 18.08 percent), 23andMe (down 6.37 percent), Delphix (down 11.66 percent), Handy Technologies (down 20.74 percent), CloudFlare (down 9.74 percent), Cloudera (down 37.54 percent), and Twilio (down 12.56 percent).
Speaking of Nest Labs, it isn’t hitting its revenue targets, and Recode predicts things could grow worse by year end.
Tesla Model 3 mania is reaching a peak, as growing lines of people plunk down money for a car about which they know nothing.
Hold on to your hats: Chipotle is now going to make burgers, too.
Dyson’s newest air purifier.
Shark aquarium bedroom. (Note: No selfies after dark.)