• Tesla’s Former VP of Production Just Became a VC

    Screen Shot 2016-07-19 at 6.34.59 PMGreg Reichow, who in May left his post as Tesla’s vice president of production (and reportedly as one of its highest-paid executives), has joined Eclipse Ventures as an investor.

    If the Eclipse brand isn’t entirely familiar, it may be soon, given its growing star power. Venture geeks might recall that Eclipse was originally part of Formation 8, a firm that has since disbanded but that, before doing so, raised a $125 million fund that was designed to invest exclusively in early-stage hardware companies. (Its original name was F8 Hardware Fund. Among its limited partners is Flex, the publicly traded contract design and manufacturing company formerly known as Flextronics.)

    Former F8 partner Lior Susan now manages Eclipse, with a team that includes not only Reichow but longtime Sequoia Capital partner Pierre Lamond, who’d been an F8 advisor and joined Eclipse as a full-time partner last year.

    It’s been active, too. The firm has already invested in 27 companies, including making an early bet on the computational photography startup Light, which last week announced $30 million in fresh funding led by GV.

    According to a new SEC filing, Eclipse is also raising a new, $125 million fund.

    More here.

  • StrictlyVC: July 14, 2016

    Hi, all, happy Thursday.:)

    —–

    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.]

    More here.

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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.

    —–

    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.

    —–

    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.

    —–

    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.

    —–

    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.

    —–

    Detours

    Don’t drive and Pokemon.

    Kids explain the internet.

    How giving a memorable job interview is like dating.

    —–

    Retail Therapy

    Nest is finally making an outdoor camera and it ships for $199 this fall.

  • StrictlyVC: July 13, 2016

    Hi, happy Wednesday, everyone!

    We’re back in San Francisco tomorrow, but we wanted to note that beginning this Monday, the popular and talented Semil Shah — investor, writer, father, horologist — will be taking over SVC’s daily column for a couple of weeks as we dial back for a bit of family time. He has some great interviews with numerous VCs and founders lined up, so stay tuned.:)

    —-

    Top News in the A.M.

    The Dow Jones Industrial Average and S&P 500 both closed at all-time highs yesterday. Marketwatch has more here.

    —–

    Magic Leap Says Product Coming Out “Hopefully Soonish”

    Anyone hoping that Magic Leap would share exact plans today about when it will debut its “mixed reality” technology was probably a little disappointed. At a Fortune conference in Aspen this afternoon, Magic Leap founder and CEO Rony Abovitz and company CMO Brian Wallace called the company’s products “very real” and “not a research project anymore.” They also seemed to hint that they’ll release their tech this fall. But they stopping short from explicitly saying so.

    Said Abovitz of the now 600-person company, which operates out of a former Motorola factory in Fort Lauderdale, Fla., “We have production lines that look like aircraft carriers with class 100cleanrooms [which feature controlled levels of contamination]. That’s running right now. We’re debugging our high-volume production line. It’s [being] made in the U.S., this summer. So we’re in that go mode, and hopefully soonish, the public will see [our products].

    Magic Leap has raised $1.4 billion from investors at this point, including Alibaba, Andreessen Horowitz, and Google. In fact, Google CEO Sundar Pichai sits on the company’s board. (It also counts director Peter Jackson as an advisory board member.)

    Asked what’s so expensive, Abovitz — whose last company sold for $1.65 billion a few years ago — noted that Magic Leap is “building a full-stack computing company,” from its chip designs to sensors to software to much of its content. “We took on the whole problem, including the manufacturing [because] we wanted to deliver something that never existed before and there was no way to do it unless we created everything from scratch.”

    The company’s technology, as both described by Abovitz and Wallace, certainly sounds nothing short of revolutionary, even while it has competitors in Microsoft’s HoloLens headset and Meta, another maker of an augmented reality headset.

    More here.

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    New Fundings

    Appthority, a five-year-old, San Francisco-based app risk management service, has raised $17 million in Series B funding led by Trident Capital Cybersecurity, with participation from U.S. Venture Partners, VenrockBlue Coat Systems and Knollwood Investment Advisory. More here.

    Bay Dynamics, a 15-year-old, San Francisco-based maker of cyber-risk analytics software, has raised $23 million in Series B funding led by Carrick Capital Partners, with participation from Comcast Ventures. The company has now raised $31 million altogether. eWeek has more here.

    FiveAI, a year-old U.K.-based startup that’s building AI-driven software to help accelerate the development of autonomous vehicles, has raised $2.7 million in funding led by Amadeus Capital Partners, with participation from Spring Partners and Notion Capital. TechCrunch has more here.

    Shyft Technologies, a year-old, Seattle-based company whose mobile app connects shift workers based on their employer and location so they trade and cover shifts, has raised $1.5 million in seed funding from Madrona Venture Group and numerous angel investors. Bloomberg has more here.

    SirionLabs, a four-year-old, Gurgaon, India and Troy, Mi.-based company that uses tech to help companies manage their contracts and relationships with suppliers, has raised $12.25 million in Series B funding led by Sequoia India, with participation from QualGro ASEAN Fund and Canopy Ventures. The company has now raised $16 million altogether. More here.

    True Fit, a six-year-old, Woburn, Ma.-based company that partners with big retailers like Nordstrom, Macy’s and Kate Spade to help online customers order the right size and style for their measurements, has raised $25 million in funding led by Intel Capital, with participation from earlier backers Jump Capital and Signal Peak Ventures. TechCrunch has more here.

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    New Funds

    Fontinalis Partners, a seven-year-old, Detroit and Boston-based venture capital firm, has closed its second fund with $100 million. The firm was cofounded by Bill Ford, the executive chairman of Ford Motor Co., and it has been designed from the start to expressly fund next-generation mobility companies. Some of its newest bets include Elementum, a four-year-old, Mountain View, Ca.-based cloud supply chain platform; nuTonomy, a three-year-old, Cambridge, Ma.-based company that makes software for self-driving cars; and TransLoc, a two-year-old, Durham, N.C.-based transportation app company whose products include a live regional transit map and a bus tracking mobile app. Fontinalis has now raised $165 million in committed capital altogether. More here.

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    IPOs

    Line, the Japanese mobile messaging app company, is seeing bids of 15 percent above its IPO price ahead of its market debut. Bloomberg has more here.

    —–

    Exits

    Google has made another small acquisition to help it continue building out its latest efforts in social apps. The search and Android giant has hired the team behind Kifi, a startup that was building extensions to collect and search links shared in social apps. Terms of the deal aren’t being disclosed. TechCrunch has more here.

    —–

    People

    Skully co-founders Marcus and Mitch Weller have reportedly been kicked out of the company by investors. Skully has raised $14.95 million from two investments and an Indiegogo campaign over the last two years. More here.

    Hyperloop One, the futuristic transportation company backed by $92 million in funding, looks like it could be mired in lawsuits for the foreseeable future. The The startup was cofounded by the venture capitalist Shervin Pishevar and Brogan Bambrogan, an early employee at SpaceX. But a couple weeks ago, Bambrogan abruptly left the company. Yesterday, the world learned that Bambrogan has filed a restraining order against the company’s former head of legal, Afshin Pishevar (who happens to be Shervin’s brother), alleging Pishevar left a noose at his desk, among other terribleness. Bambrogan and other employees are also suing the company, saying it has been “strangled by mismanagement.” You can scan the entire lawsuit here.

    Vishal Lugani, who spent the last 3.5 years as a senior associate at Greycroft Partners in L.A.,  is moving to San Francisco to joins Aspect Ventures as an investor.

    —–

    Essential Reads

    Tesla‘s biggest Wall Street fan — Adam Jonas of Morgan Stanley — think he’s worked out Elon Musk’s master plan. Bloomberg has more here.

    Vine, Twitter’s three-year-old short-form video service, is no longer growing, and most of its top executives have left, reports Recode.

    —–

    Detours

    Detroit-made bicycles are taking over bike-share programs.

    Forty-four-and-a-half years later, the FBI is finally giving up on the famed DB Cooper case.

    —–

    Retail Therapy

    Good news, bad news: a portable, collapsible fire hammock.

  • Magic Leap Says It Will Debut Its Product “Hopefully Soonish”

    Screen Shot 2016-07-16 at 9.23.39 PMAnyone hoping that Magic Leap would share exact plans today about when it will debut its “mixed reality” technology was probably a little disappointed. At a Fortune conference in Aspen this afternoon, Magic Leap founder and CEO Rony Abovitz and company CMO Brian Wallace called the company’s products “very real” and “not a research project anymore.” They also seemed to hint that they’ll release their tech this fall. But they stopping short from explicitly saying so.

    Said Abovitz of the now 600-person company, which operates out of a former Motorola factory in Fort Lauderdale, Fla., “We have production lines that look like aircraft carriers with class 100 cleanrooms [which feature controlled levels of contamination]. That’s running right now. We’re debugging our high-volume production line. It’s [being] made in the U.S., this summer. So we’re in that go mode, and hopefully soonish, the public will see [our products].

    Magic Leap has raised $1.4 billion from investors at this point, including Alibaba, Andreessen Horowitz, and Google. In fact, Google CEO Sundar Pichai sits on the company’s board. (It also counts director Peter Jackson as an advisory board member.)

    Asked what’s so expensive, Abovitz — whose last company sold for $1.65 billion a few years ago — noted that Magic Leap is “building a full-stack computing company,” from its chip designs to sensors to software to much of its content. “We took on the whole problem, including the manufacturing [because] we wanted to deliver something that never existed before and there was no way to do it unless we created everything from scratch.”

    The company’s technology, as both described by Abovitz and Wallace, certainly sounds nothing short of revolutionary, even while it has competitors in Microsoft’s HoloLens headset and Meta, another maker of an augmented reality headset.

    More here.

  • StrictlyVC: July 12, 2016

    Hi, happy Tuesday, everyone! We’re in ridiculously beautiful Aspen for a couple of days to catch Pokemon attend a Fortune conference. Having fun here; we’re also a little exhausted.:)

    Btw, if you’re here, too, and want to meet up, let us know. We won’t be quite as crazed today as yesterday.

    —–

    Top News in the A.M.

    Now a third Tesla crash is being blamed on Autopilot. Elektrek has more here.

    —–

    Who, Us? VCs Blame Banks for Messaging to Startups

    Despite all the capital that venture firms have managed to raise in the first and second quarters of this year, venture capitalists at an investor panel at Fortune’s Brainstorm conference this morning said that early-stage valuations are softening, reality is “setting in” for unicorn companies that are too richly valued to be acquired and too immature to go public, and that there’s much more focus on revenue than in recent years.

    The VCs also blamed bankers on their messaging to founders, which, until recently, was to focus on growth at all costs.

    When it comes to very early-stage valuations, Floodgate cofounder Ann Miura-Ko said she thinks her firm is seeing more “willingness by entrepreneurs to take much lower valuations than what their initial expectations were” for two reasons. One is increasing conservativeness on the part of venture capitalists. The other, she said, is “fear for the next round of financing. They’ve already heard from other entrepreneurs that the next round of financing is going to be really difficult.”

    In terms of falling valuations for later-stage companies, general partner Roger Lee of Battery Ventures said they’re all but inevitable, given that there’s been one “truly notable” tech IPO in the U.S. so far in 2017.  As he noted, a new category of investors had emerged — including hedge funds and mutual funds — to fund these companies’ later stage funding rounds based on the assumption that there would be a brisk IPO market. Absent one, these companies now need to “focus on the fundamentals” to prove that they’re worth the valuations they were assigned.

    Of course the big question, and one posed by Brainstorm co-chair Dan Primack, is why companies weren’t focusing on the fundamentals from the start. “Is it the [founders’] fault or yours,” he asked the VCs, including Spark Capital general partner Megan Quinn, who readily acknowledged that there was “certainly a point in time in the Valley when investors were funding growth above all else.” Because “public markets were rewarding it?” Primack asked. “Yes,” said Quinn, “exactly.”

    It’s an observation that Jeff Fagnan, a founder of Accomplice (formerly the tech group at Atlas Venture) agreed with wholeheartedly. VCs’ focus on growth was “definitely driven by the public market,” he told those gathered. “I remember being in a couple of IPO bakeoffs, and these bankers would always focus on [growth] . . . And they said, ‘You don’t really need to worry about profit. Just grow. This is the story that everybody wants to buy.’”

    More here.

    —–

    New Fundings

    3scan, a five-year-old, San Francisco-based computational pathology platform company, has raised $14 million in Series B funding co-led by Lux Capital and Data Collective, with participation from Dolby Family Ventures, OS FundComet Labs and Breakout Ventures. TechCrunch has more here.

    Codecademy, a five-year-old, New York-based online coding school with 16 million registered users, has raised $30 million in new funding led by Naspers Ventures, with participation from Union Square Ventures, Flybridge Capital Partners, Index Ventures and Sir Richard Branson. The company has now raised $42.5 million altogether. TechCrunch has more here.

    CornerJob, a year-old, Barcelona, Spain-based mobile jobs marketplace, has raised $25 million in Series B funding led by Northzone, with participation from e.ventures. TechCrunch has more here.

    Freshly, a four-year-old, New York-based company that delivers healthy meals for $11 per meal, has raised $21 million in Series B funding led by Insight Venture Partners, with participation from previous investors Highland Capital Partners and White Star Capital. TechCrunch has more here.

    Paktor, a three-year-old, Singapore-based dating app that rivals Tinder in Southeast Asia, has raised $10 million in fresh capital led by YJ Capital, the corporate venture firm belonging to Yahoo Capital. Other participants include Global Grand Leisure, Golden Equator Capital, Sebrina Holdings and earlier backers Vertex Ventures, MNC Media Group, Majuven and Convergence Ventures. The company has now raised $22 million altogether. TechCrunch has more here.

    RedKix, a nearly two-year-old, San Mateo, Ca.-based startup that is combining email with chat, has raised $17 in seed(!) funding, including from Salesforce Ventures, Wicklow Capital, SG VC, and individual investors, including Oren Zeev. TechCrunch has more here.

    Universal Avenue, a two-year-old, Stockholm, Sweden-headquartered startup that lets companies access a local sales force on demand, has raised $10 million in Series A funding led by Eight Roads, the proprietary investment arm of Fidelity International. Earlier investors Northzone and MOOR also joined the round. TechCrunch has more here.

    —–

    New Funds

    Veteran Silicon Valley investor Jim Breyer and Chinese firm IDG Capital Partners have raised one of the largest venture-capital funds in China despite concerns that the market for later-stage startups is overheated. The WSJ has more here.

    —–

    IPOs

    WeWork CEO Adam Neumann, who was interviewed on stage with his wife and co-founder Rebekah Paltrow Neumann yesterday, hinted an IPO may be in the offing. The company has been valued by its investors at $17 billion. Fortune has more here.

    —–

    People

    Five-year-old mobile events and conferences company DoubleDutch announced yesterday that it will be laying off 55 of its employees as a part of a company-wide restructuring. The company has raised more than $78 million in funding to power its mobile tools which allow event organizers to create dedicated app experiences and easily share information with attendees. TechCrunch has more here.

    Yesterday afternoon, before he took the stage at the Fortune’s Brainstorm conference, we sat down with GV CEO Bill Maris in a billowing white tent on the campus of the Aspen Institute, where the conference is being held. We talked about how Brexit impacts GV’s European strategy. (You may recall it has an office in London.) We also asked Maris about some of GV’s newest bets, its biggest bet of all time (Uber), and the decision of one of GV’s highest-profile investors, Rich Miner, to leave the group. More here.

    —–

    Essential Reads

    Google couldn’t score LinkedIn’s business. But it’s getting LinkedIn’s real estate. Recode has more here.

    With new tech, the United Nations is seeking to end hunger Silicon Valley-style.

    —–

    Detours

    The richest generation in U.S. history just keeps getting richer.

    How to negotiate with a liar.

    Britain is getting a new leader, but Larry, the Downing Street cat, is staying put.

    —–

    Retail Therapy

    Smell like a fig candle everywhere you go, if you dare.

  • Who Us? VCs Blame Bankers for Emphasizing Growth Over Revenue to Startups

    gordon geekDespite all the capital that venture firms have managed to raise in the first and second quarters of this year, venture capitalists at an investor panel at Fortune’s Brainstorm conference this morning said that early-stage valuations are softening, reality is “setting in” for unicorn companies that are too richly valued to be acquired and too immature to go public, and that there’s much more focus on revenue than in recent years.

    The VCs also blamed bankers on their messaging to founders, which, until recently, was to focus on growth at all costs.

    When it comes to very early-stage valuations, Floodgate cofounder Ann Miura-Ko said she thinks her firm is seeing more “willingness by entrepreneurs to take much lower valuations than what their initial expectations were” for two reasons. One is increasing conservativeness on the part of venture capitalists. The other, she said, is “fear for the next round of financing. They’ve already heard from other entrepreneurs that the next round of financing is going to be really difficult.”

    In terms of falling valuations for later-stage companies, general partner Roger Lee of Battery Ventures said they’re all but inevitable, given that there’s been one “truly notable” tech IPO in the U.S. so far in 2017.  As he noted, a new category of investors had emerged — including hedge funds and mutual funds — to fund these companies’ later stage funding rounds based on the assumption that there would be a brisk IPO market. Absent one, these companies now need to “focus on the fundamentals” to prove that they’re worth the valuations they were assigned.

    Of course the big question, and one posed by Brainstorm co-chair Dan Primack, is why companies weren’t focusing on the fundamentals from the start. “Is it the [founders’] fault or yours,” he asked the VCs, including Spark Capital general partner Megan Quinn, who readily acknowledged that there was “certainly a point in time in the Valley when investors were funding growth above all else.” Because “public markets were rewarding it?” Primack asked. “Yes,” said Quinn, “exactly.”

    It’s an observation that Jeff Fagnan, a founder of Accomplice (formerly the tech group at Atlas Venture) agreed with wholeheartedly. VCs’ focus on growth was “definitely driven by the public market,” he told those gathered. “I remember being in a couple of IPO bakeoffs, and these bankers would always focus on [growth] . . . And they said, ‘You don’t really need to worry about profit. Just grow. This is the story that everybody wants to buy.’”

    More here.

  • StrictlyVC: July 8, 2016

    Love dem short work weeks! Hoping you have a wonderful weekend, everyone.

    Quick mention: We leave insanely early on Monday for Fortune’s Brainstorm conference in Aspen, so we won’t have a chance to send out the newsletter; we’ll be back with a good story or two for you on Tuesday.:)

    —–

    Top News in the A.M.

    It actually happened. Elizabeth Holmes, chief executive of Theranos, has been banned by U.S. regulators from owning or operating a medical laboratory for at least two years.

    The Dallas police force used a bomb-defusing robot equipped with an explosive device to kill a shooting suspect last night, police chief David Brown revealed today at a press conference. Bomb-defusing robots have been used by police forces in the past, but this may be the first time one has been use to kill a person. More here.

    —–

    Where Today’s Tech Can, And Can’t, Replace Humans

    This morning, McKinsey & Co. is releasing a new look at the impact automation is likely to have across various sectors of the economy and, ultimately, the workplace. Its findings are based on analysis of 2,000-plus work activities across more than 800 occupations and includes data from the U.S. Bureau of Labor Statistics.

    The good news, says the report, is that automation will “eliminate very few occupations entirely in the next decade.” It adds that automation will eventually affect “portions of almost all jobs to a greater or lesser degree.”

    Whether you see this as a good or bad thing could depend on how much of your job involves physical activity or operating machinery.

    For example, if even current technologies were broadly adopted, says McKinsey, fully 78 percent of “predictable physical activities” across manufacturing, retailing, and food service and accommodations could be automated. The study notes that working on an assembly line is a “highly predictable” physical activity, whereas forestry or raising outdoor animals is much less so. Either way, as tech grows more advanced, expect that percentage to rise.

    What else could be far more automated if current tech was adopted more widely? Plenty of so-called white collar occupations, particularly those that involve collecting and processing data. And it’s not just entry level workers who will be impacted, notes McKinsey. For example, it notes that “stock traders and investment bankers live off their wits, yet about 50 percent of the overall time [in their field] is devoted to collecting and processing data . . .”

    Ditto insurance sales agents. McKinsey’s estimate for how much of these jobs could be automated: about 43 percent of workers’ time.

    More here.

    —–

    New Fundings

    Airwallex, a seven-month-old, Melbourne, Australia-based startup that specializes in cross-border transactions, has raised $3 million in seed funding led by Chinese investment firm Gobi Partners. TechCrunch has more here.

    SmartNews, a four-year-old, Tokyo, Japan-based news aggregation app, has raised $38 million in Series D funding led by the Development Bank of Japan, with SMBC Venture Capital and Japan Co-Invest L.P. participating. The company has now raised $90 million altogether. TechCrunch has more here.

    Uber, the seven-year-old, San Francisco-based ride-share giant, has raised $1.15 billion from a new high-yield loan, according to the WSJ. The company has now raised more than $15 billion in debt and equity. More here.

    —–

    Exits

    The videoconferencing company Polycom has abandoned plans to sell itself to the Canadian telecommunications company Mitel and is instead selling for $2 billion to the private equity firm Siris Capital. That’s a 14 percent premium over Mitel’s offer. Bloomberg has more here.

    Google is getting deeper into the tech side of the video and broadcasting business. The company yesterday announced that it has acquired Anvato, a platform for encoding, editing, publishing and distribution video across platforms. More here.

    The six-year-old, New York-based media valuation platform Integral Ad Science is unveiling some new steps to combat ad fraudsters, including the acquisition of a bot detection company called Swarm. TechCrunch has more here.

    —–

    People

    LinkedIn is selling to Microsoft because it couldn’t keep pace with the world’s biggest tech companies, cofounder and executive chairman Reid Hoffman told CNBC yesterday. More here.

    —–

    Essential Reads

    Facebook is shying from substantive policy questions in the aftermath of a gruesome but important Facebook Live video. Buzzfeed has more here.

    The IRS is suing Facebook over asset transfers to Ireland. Fortune has more here.

    Aaaand, Facebook Messenger is adding end-to-end encryption in a bid to become your primary messaging app. TechCrunch has more here.

    —–

    Detours

    1001 blistering future summers.

    How silence benefits the brain.

    —–

    Retail Therapy

    Supreme x Nike Air Force 1 Low Premium 08 NRG.

  • Bain Capital Ventures Raises $600 Million (and Another Giant Fund is Born)

    Screen Shot 2016-07-09 at 8.13.34 AMIt’s starting to happen like clockwork.

    Firms are closing new funds almost exactly 24 months to the date from their last fund closing. The newest example? Bain Capital Ventures (BCV), which this morning announced a new, $600 million fund.

    It last closed two funds — a $650 million early-stage vehicle, and a $200 million co-investment fund to back maturing BCV investments — in June 2014.

    Other venture firms to close fast follow-on funds this year include Accel Partners, Andreessen Horowitz, Founders Fund, Lightspeed Venture Partners, Kleiner Perkins Caufield & Byers and General Catalyst Partners.

    BCV is the venture arm of the private equity behemoth Bain Capital, which was founded in 1984. The 15-year-old unit opened its first Bay Area office five years ago, planting a flag in Palo Alto; soon, it’s moving into an even bigger office in San Francisco.

    It has eight managing directors — including Ajay Agarwal, who leads its West Coast team — and one partner. According to Agarwal, who joined BCV 13 years ago, it used to be that “90 percent of our team was on the East Coast, in Boston and New York, and 10 percent was here, but it’s about 50/50 at this point.”

    BCV primarily backs enterprise-focused software companies, though it invests “opportunistically” in consumer-facing businesses, too, says Agarwal. Two examples are Rent the Runway and Jet.com.

    The firm says that half of what it does is early stage and the other half is growth stage. It also says it’s run very separately from Bain Capital, though Agarwal has told us in the past that “those connections into companies [from Bain’s broader network] is massive.” When the robotics company Kiva had “six terms sheets and was trying to determine who to pick,” he’d said, “we introduced the company to the head of distribution at Staples.” It helped seal the deal. (Kiva went on to sell to Amazon in 2012 for $775 million.)

    BCV’s newest early-stage fund is slightly smaller than its last. Asked about that, the firm says it targeted what it thinks is the “appropriate fund size for our strategy in the current market environment.”

    Asked why it didn’t raise another co-investment vehicle this time around, it says it still has capital to deploy from that $200 million fund it closed it 2014. It also said it isn’t quite done investing its previous early-stage fund.

    That’s not uncommon either, these days.

    As notes an institutional investor at a university endowment with whom we spoke recently, “Every one of our GPs has come back in the last 12 months, with the exception of one guy. VCs are accelerating their fundraising partly because they have nice marks and want to get ahead of any market cyclicality.” (Read: downturn.)

    “Partly, too, they see their GP brethren coming in and they know that [the institutional investors who fund venture firms] only have so many dollars. And you want to be at the front of the queue, not the back of it.”

    More here.

  • StrictlyVC: July 7, 2016

    It’s Thursday, woot!

    —–

    Top News in the A.M.

    Apple just dropped to fifth place in China’s smartphone market.

    —–

    (Some) LPs Speak Up

    Venture capital used to be such an insular, under-the-radar industry that entrepreneur-investor Marc Andreessen has said that he’d never heard the term before arriving in the Bay Area in 1994. He’s hardly alone. It wasn’t until the mid- to late-1990s, during the dot.com boom, that the world became acquainted with what venture capitalists do. And it wasn’t until after venture capitalists Fred Wilson and Brad Feld began publishing insights about their work roughly 12 years ago that the art of VC blogging began to border on competitive sport.

    The exercise has paid off for many investors. Among those to actively raise their profiles (and presumably, increase their deal flow) through blogging are Jason Lemkin, whose new venture fund we covered here; Hunter Walk of Homebrew; and Mark Suster of Upfront Ventures. (CB Insights has a longer rundown of VC bloggers here.)

    Institutional investors, the money behind the VCs’ money, have not followed suit, though there’s reason to think the industry is thinking more about outreach at long last. Indeed, though these limited partners (LPs) have largely remained mum, not sharing much about their selection process, not blogging, and not talking publicly with reporters, a few signals suggest a change may be afoot, including recent feedback from one investor from a mid-size university endowment, who recently shared on background that he’s been asked to raise his profile.

    The reason, simply: competition. As you may have noticed, a smaller group of so-called top-tier venture funds now manages more of the money flowing into venture capital than ever before. Still, these firms can only responsibly manage so much, which puts pressure on LPs who want stakes in those venture funds.

    Perhaps because of uncertainty about the market, LPs are also less interested in brand-new funds right now than in the second or third funds of micro-venture firms that are starting to prove themselves. Forerunner Ventures, which has tripled the amount of money it is managing in the last four years, is just the latest example. These managers, too, can only make room for so many LPs.

    Then there’s foreign money. More specifically, there’s more of it than ever to compete with. Take Peakview,  which is the investment advisory arm of Shengjing Group and the largest global fund of funds in China. Its U.S.-based managing partner told this reporter in March that Peakview has millions of dollars to invest in U.S. venture firms. To curry favor with them, it’s promising to help their portfolio companies bridge networking gaps between the U.S. and China.

    More here.

    —–

    New Fundings

    BevSpot, a two-year-old, Boston-based software platform that enables mobile bar management, has raised $11 million in Series B funding led by earlier backer Bain Capital Ventures. The company has now raised $19 million altogether. BostInno has more here.

    Black Swan Data, a five-year-old, London-based data science startup that analyzes consumer behavior using public and private data, has raised £6.2 million ($8 million) in Series B funding led by Albion Ventures, with participation from Blackstone and Mitsui. TechCrunch has more here.

    Brillen.de, a four-year-old, Wildau, Germany-based online business that sells its own eyewear, has raised €45 million ($49 million) in its first round of funding from Technology Crossover Ventures. TechCrunch has more here.

    Light, a three-year-old, Palo Alto, Ca.-based computational photography startup, has raised $30 million in Series C funding led by GV. Forbes has more here.

    NextVR, a six-year-old, Laguna Beach, Ca.-based startup that develops and delivers video capture technology for live and recorded experience, has raised $20 million from a Chinese investment firm as a part of an upcoming Series B raise. The money is reportedly a quarter of the Series B round; Variety reported earlier this week that the company is looking to raise $80 million altogether, at an $800 million valuation. More here.

    Pixie, a five-year-old, Los Altos, Ca.-based company whose guitar-pick-like bluetooth beacons make it harder for users to lose their stuff, is raising a $25 million round of funding, according to a new SEC form that shows it has raised $16.6 million toward that end. According to CrunchBase, the company previously raised $6 million from investors, including Spark Capital and Cedar Fund. The Verge wrote about the company last year.

    Post-Quantum, a seven-year-old, U.K.-based company that has developed an encryption system designed to safeguard quantum computers from hackers, has raised £8 million ($10.3 million) in Series A funding from VMS Investment Group and AM Partners. TechCrunch has more here.

    Yuntongxun, a three-year-old, Beijing, China-based corporate cloud communications service company, has raised $70 million in Series C funding led by earlier backer Sequoia Capital, with participation from TBP Capital. TechCrunch has more here.

    Zingle, a six-year-old, Carlsbad, Ca.-based platform that enables businesses to communicate with customers via texting and other mobile messaging channels, has raised $3 million in equity, shows an SEC filing. Tnooz reported this past spring that the startup recently landed Hyatt as a client. More here.

    —–

    Exits

    Security giant Avast is acquiring fellow Czech-based antivirus software makerAVG for $25 per share in cash, in a transaction that will total around $1.3 billion. TechCrunch has more here.

    —–

    People

    Android co-creator and longtime GV general partner Rich Miner is leaving the investing unit to launch an education-focused company within Google, reports Fortune. Miner says he doesn’t know exactly what he’s building yet but it sounds like he already has the “big vision” of it in mind. A GV spokeswoman wrote us separately that though Miner will no longer be leading any deals for GV, he will “remain active with many of his board commitments.”

    Elon Musk is still duking it out with Fortune over whether Telsa should have disclosed sooner an investigation into a crash involving one of its cars. (See our column yesterday if you’re coming to this story late.)

    In a blog post this morning, Microsoft CEO Satya Nadella announced that long-time COO Kevin Turner is leaving after 11 years at the company. Meanwhile, Citadel Securities has announced this morning that Turner is joining as CEO. TechCrunch has more here.

    —–

    Essential Reads

    Germany’s digital entrepreneurs are not only convinced that London is finished but also believe they are poised to wrest its crown as Europe’s fintech center. The Financial Times has more here.

    Erm. Whoever acquires Yahoo might have to pay Mozilla annual payments of $375 million through 2019 if it doesn’t think the buyer is one it wants to work with. Recode has the story here.

    —–

    Detours

    What becomes of the brokenhearted’s stuff.

    Twenty beautiful modern staircases.

    The rise of hip-hop producer Mike Will.

    —–

    Retail Therapy

    BikeBlock. So simple, a monkey could use it.

  • (Some) LPs Speak Up

    IMG_1919 (1)Venture capital used to be such an insular, under-the-radar industry that entrepreneur-investor Marc Andreessen has said that he’d never heard the term before arriving in the Bay Area in 1994. He’s hardly alone. It wasn’t until the mid- to late-1990s, during the dot.com boom, that the world became acquainted with what venture capitalists do. And it wasn’t until after venture capitalists Fred Wilson and Brad Feld began publishing insights about their work roughly 12 years ago that the art of VC blogging began to border on competitive sport.

    The exercise has paid off for many investors. Among those to actively raise their profiles (and presumably, increase their deal flow) through blogging are Jason Lemkin, whose new venture fund we covered here; Hunter Walk of Homebrew; and Mark Suster of Upfront Ventures. (CB Insights has a longer rundown of VC bloggers here.)

    Institutional investors, the money behind the VCs’ money, have not followed suit, though there’s reason to think the industry is thinking more about outreach at long last. Indeed, though these limited partners (LPs) have largely remained mum, not sharing much about their selection process, not blogging, and not talking publicly with reporters, a few signals suggest a change may be afoot, including recent feedback from one investor from a mid-size university endowment, who recently shared on background that he’s been asked to raise his profile.

    The reason, simply: competition. As you may have noticed, a smaller group of so-called top-tier venture funds now manages more of the money flowing into venture capital than ever before. Still, these firms can only responsibly manage so much, which puts pressure on LPs who want stakes in those venture funds.

    Perhaps because of uncertainty about the market, LPs are also less interested in brand-new funds right now than in the second or third funds of micro-venture firms that are starting to prove themselves. Forerunner Ventures, which has tripled the amount of money it is managing in the last four years, is just the latest example. These managers, too, can only make room for so many LPs.

    Then there’s foreign money. More specifically, there’s more of it than ever to compete with. Take Peakview,  which is the investment advisory arm of Shengjing Group and the largest global fund of funds in China. Its U.S.-based managing partner told this reporter in March that Peakview has millions of dollars to invest in U.S. venture firms. To curry favor with them, it’s promising to help their portfolio companies bridge networking gaps between the U.S. and China.

    More here.


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