Hi, all, happy Thursday.:)
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Top News in the A.M.
Line, the mobile messaging app from Japan, went public today in a dual Japan-U.S. IPO that’s expected to be the largest of a tech company this year. Here’s what you need to know about the company. Meanwhile, here’s how it’s doing so far on the NYSE.
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DCM Just Raised a $500 Million Fund
DCM Ventures, an early stage venture firm, with offices in Menlo Park, Ca.; China; and Japan, has just closed its eighth early-stage fund, DCM VIII, with $500 million.
The fund came together on the heels of two other funds that DCM has raised in the last 18 months, including a $170 million “Turbo Fund” that DCM is using to invest in growth-stage companies (that it mostly but not exclusively has previously funded), and a $100 million “A Fund,” which is a healthy-size seed-stage fund that DCM is using to fund mobile and emerging platforms.
Altogether, DCM is now managing more than $3 billion. That’s a lot of money, even for a firm that’s been around since 1996. But here’s what DCM can boast that most venture firms in recent years cannot: It has also returned a lot of money to its investors — $1.5 billion over the last three years, in fact.
Last week, we chatted with firm co-founder and general partner David Chao about how DCM pulled off this hat trick. Our chat has been edited for length.
What’s the mandate of this new, $500 million fund?
It hasn’t really changed. Trying to get 15 to 25 percent of Series A rounds in the U.S. and Asia has been our bread and butter for the last 20 years.
And your A Fund, which closed last year — why is it necessary to run that separately?
With the advent of angel rounds and seed rounds and convertible notes, we felt we could be more bold and experimental with the A Fund. For example, a lot of game companies aren’t the greatest profile for a typical venture fund. It’s a hit-or-miss business — almost like Hollywood movies. We also focus on new platforms. So when we did some of our first VR deals and drone deals, we did it out of our first A Fund [which closed in 2011], and we’ve done more VR and AI deals out of our second A Fund already. So it’s a higher risk fund.
It’s also high reward, seemingly. That first fund invested in Kakao Talk, a cross-platform mobile messaging application that took off.
Its first round was [valued at] $100 million [premoney], so it wasn’t a typical main fund bet. [Ed: Kakao went public in 2014, and its valuation continued to soar. Though competition from LINE has dampened its growth, Kakao is still valued at $6.4 billion currently.]
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New Fundings
GSV, a merchant bank in Chicago, is hoping to raised upwards of $250 million for a venture fund, shows a new SEC filing. The bank’s venture arm was formed 10 years ago and co-invests in mid- to late-stage deals across a spectrum of sectors, from biotech to energy to information technology. According to its site, it has stakes in Instacart, Palantir, and Pinterest, among others.
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New Funds
Amazon Web Services has acquired Cloud9, a six-year-old, San Francisco-based startup that has built an integrated development environment (IDE) for web and mobile developers to collaborate together. Terms of the deal weren’t disclosed. According to CrunchBase, Cloud9 had raised $5.5 million from investors, including Accel Partners and Balderton Capital. TechCrunch has more here.
Toy giant Hasbro is acquiring Boulder Media, a 16-year-old, Dublin, Ireland-based animation studio, for an undisclosed amount. Marketwatch has more here.
China’s Tencent is acquiring a controlling stake in the music streaming company China Music Corp. for roughly $2.7 billion, creating a dominant competitor in China’s online music market. The WSJ has the story here.
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Exits
Amazon Web Services has acquired Cloud9, a six-year-old, San Francisco-based startup that has built an integrated development environment (IDE) for web and mobile developers to collaborate together. Terms of the deal weren’t disclosed. According to CrunchBase, Cloud9 had raised $5.5 million from investors, including Accel Partners and Balderton Capital. TechCrunch hasmore here.
Toy giant Hasbro is acquiring Boulder Media, a 16-year-old, Dublin, Ireland-based animation studio, for an undisclosed amount. Marketwatch has more here.
China’s Tencent is acquiring a controlling stake in the music streaming company China Music Corp. for roughly $2.7 billion, creating a dominant competitor in China’s online music market. The WSJ has the story here.
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People
VC Jim Breyer just joined the board of Blackstone.
Apple dealmaker Eddy Cue reveals what he learned about Hollywood from Steve Jobs, why TV distribution is broken, and to whom he turns for advice.
Billionaire investor Peter Thiel will be speaking at the Republican National Convention in Cleveland next week. Recode has more here. Meanwhile, TechCrunch takes a look at where Thiel and Donald Trump agree and disagree.
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Essential Reads
Twitter is doubling down on live-streaming with a new partnership with Pac-12 university sports to broadcast its content.
Consumer Reports just called on Tesla to disable hands-free operation until its system can be made safer.
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Detours
Don’t drive and Pokemon.
Kids explain the internet.
How giving a memorable job interview is like dating.
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Retail Therapy
Nest is finally making an outdoor camera and it ships for $199 this fall.