• StrictlyVC: August 12, 2016

    Hi, all! We’re racing off to test-drive some go-karts for TechCrunch. We’ll have some more for you on the company — a Tony Fadell production — soon. In the meantime, enjoy your Friday and we’ll see you back here Monday.:)

    —–

    Top News in the A.M.

    The Dow, S&P 500 and Nasdaq all hit new closing highs yesterday, bolstered by a rebound in oil prices and new data showing the labor market remains solid. It’s the first time all three indicies have set new closing marks on the same day since New Year’s Eve of 1999. More here.

    —–

    Both Trump and Clinton are Taking on Carried Interest, So Why Are VCs All “Meh”

    During every U.S. presidential election season, at least one candidate vows to repeal carried interestdeductions. Meanwhile, venture capitalists do their part and argue against it. The issue is near and dear to their hearts because carried interest treats investment partners’ salary as an investment and not income, taxing it at long-term capital gains rates and not as ordinary income (which is taxed more heavily). Many VCs also believe they deserve the tax break for taking risks and holding on to assets for what often becomes many years on end.

    The National Venture Capital Association, which represents venture firms’ interests, is very much atop the issue again this election season. It issued a statement earlier today calling Democratic presidential nominee Hillary Clinton “misguided” after she presented an economic plan at a manufacturing company in Warren, Michigan that called for the repeal of carried interest. The NVCA also published a release on Monday, after Republican nominee Donald Trump presented a plan in Detroit that similarly suggests doing away with carried interest. It would “threaten [the] entrepreneurial ecosystem,” said the NVCA.

    Still, you aren’t seeing much outrage on the part of individual VCs, and we have a few theories as to why.

    Let’s start with Trump, whose tax plans have even top academics confused by what, exactly, he is proposing. (“It’s very hard to figure it out,” said Harvard Business School professor Josh Lerner when we called him earlier this week to discuss it.)

    Part of the problem: While Trump is proposing ending the taxation of carried interest at long term capital gains rates (which are currently around 23.8 percent), and instead proposing it be taxed at 33 percent, which is the highest marginal tax bracket in his plan, Trump has thrown a separate wrench into the works. Specifically, he has said he wants a new 15 percent business tax for members of partnerships and other pass-through business entities.

    This might give VCs reason to cheer, except that the tax is so low that pretty much every business in the U.S. would restructure itself into a pass-through business if it came to fruition, quickly destroying the economy. (Kansas passed a similar law in 2012. Now Bill Self, the head coach of the University of Kansas’ men’s basketball team, who reportedly makes more than $2.75 million a year, pays almost no income tax because he receives the bulk of his annual compensation through an LLC.)

    A Washington, D.C., tax specialist who asked not to be named calls it “not remotely practical when you consider the deficit challenges going forward. In fact, I don’t see any way for what [Trump] is proposing to be put into place.

    More here.

    —–

    New Fundings

    Atomo Diagnostics, a six-year-old, Sydney, Australia-based diagnostic device maker, has raised roughly $3.5 million from investors, including the New York-based outfit Global Health Investment Fund. More here.

    MiningLamp, a two-year-old, Beijing, China-based company that provides customized big data solutions to its customers, has raised $30 million in Series B funding from Sequoia Capital China, with participation from Share Capital, Surfilter Network Technology and earlier backer Heaven-Sent Capital Management Group. China Money Network has more here.

    Smooch, a 10-month-old, San Francisco-based company that facilitates customer conversations over multiple messaging and communication platforms, has $10 million CAD ($7.7 million) in seed funding co-led by Real Ventures and iNovia Capital, with participation from TA Associates and Smooch’s founders.

    UpGuard, a four-year-old, Mountain View, Ca.-based cyber security company, has raised $17 million in Series B funding co-led by Pelion Venture Partners and Square Peg Capital. More here.

    Zenoti, a six-year-old, Seattle-based cloud-management platform focused on helping salons run their businesses, has raised $15 million in a fresh funding led by Norwest Venture Partners. TechCrunch has more here.

    —–

    Exits

    The company formerly known as Silicon Graphics has been acquired by Hewlett Packard Enterprise for around $275 million. TechCrunch has more here.

    —–

    Jobs

    Oculus, the virtual reality company owned by Facebook, is looking to hire a business development manager. The job is in Menlo Park, Ca.

    —–

    Essential Reads

    A new report from the World Economic Forum predicts that the underlying technology introduced by the virtual currency Bitcoin will come to occupy a central place in the global financial system. It’s one of the strongest endorsements yet for the technology. Dealbook has more here.

    —-

    Detours

    Some people get all the luck.

    A wireless hack that can unlock 100 million Volkswagens.

    Photobombed by a squirrel. (Troublemaker.)

    —–

    Retail Therapy

    Sold.

    Connie

  • Both Trump and Clinton are Taking on Carried Interest, So Why Don’t VCs Care?

    mo moneyDuring every U.S. presidential election season, at least one candidate vows to repeal carried interest deductions. Meanwhile, venture capitalists do their part and argue against it. The issue is near and dear to their hearts because carried interest treats investment partners’ salary as an investment and not income, taxing it at long-term capital gains rates and not as ordinary income (which is taxed more heavily). Many VCs also believe they deserve the tax break for taking risks and holding on to assets for what often becomes many years on end.

    The National Venture Capital Association, which represents venture firms’ interests, is very much atop the issue again this election season. It issued a statement earlier today calling Democratic presidential nominee Hillary Clinton “misguided” after she presented an economic plan at a manufacturing company in Warren, Michigan that called for the repeal of carried interest. The NVCA also published a release on Monday, after Republican nominee Donald Trump presented a plan in Detroit that similarly suggests doing away with carried interest. It would “threaten [the] entrepreneurial ecosystem,” said the NVCA.

    Still, you aren’t seeing much outrage on the part of individual VCs, and we have a few theories as to why.

    Let’s start with Trump, whose tax plans have even top academics confused by what, exactly, he is proposing. (“It’s very hard to figure it out,” said Harvard Business School professor Josh Lerner when we called him earlier this week to discuss it.)

    Part of the problem: While Trump is proposing ending the taxation of carried interest at long term capital gains rates (which are currently around 23.8 percent), and instead proposing it be taxed at 33 percent, which is the highest marginal tax bracket in his plan, Trump has thrown a separate wrench into the works. Specifically, he has said he wants a new 15 percent business tax for members of partnerships and other pass-through business entities.

    This might give VCs reason to cheer, except that the tax is so low that pretty much every business in the U.S. would restructure itself into a pass-through business if it came to fruition, quickly destroying the economy. (Kansas passed a similar law in 2012. Now Bill Self, the head coach of the University of Kansas’ men’s basketball team, who reportedly makes more than $2.75 million a year, pays almost no income tax because he receives the bulk of his annual compensation through an LLC.)

    A Washington, D.C., tax specialist who asked not to be named calls it “not remotely practical when you consider the deficit challenges going forward. In fact, I don’t see any way for what [Trump] is proposing to be put into place. It’s so far to go from here to there as to render [his plan] little more than an aspirational blueprint.”

    More here.

    Connie

    , , ,

  • StrictlyVC: August 11, 2016

    Hi, everyone, happy Thursday!

    —–

    Top News in the A.M.

    Alibaba just announced record growth in the second quarter, as its Chinese retail marketplaces surged and revenue from its users on mobile overtook that of desktops for the first time. More here.

    Russian antitrust officials just fined Google $6.8 million, a relatively small penalty that nevertheless represents the latest in a growing list of global regulatory problems for the search giant. More here.

    —–

    Bill Maris Parts Ways with GV

    Bill Maris, who founded GV (formerly known as Google Ventures) in 2009, is leaving the unit at the end of this week, according to a new report from Recode.

    Maris, a neuroscience student at Middlebury who cofounded an early web hosting company before joining Google, is reportedly being replaced by David Krane.

    Krane is a managing partner at GV; he joined the venture arm in 2010, after spending nearly 10 years as Google’s director of global communications and public affairs.

    This is quite a bombshell, and, as Recode notes, comes on the heels of a string of other recent, high-profile departures within Alphabet, parent company to GV and several other units.

    Android cofounder Rich Miner recently left GV to start an education project within Google.

    Alphabet also recently parted ways with Tony Fadell, the cofounder of Nest Labs (acquired by Google for $3.2 billion in early 2014), and several executives at Google’s self-driving car unit, including CTO Chris Urmson.

    Maris wielded a tremendous amount of power at GV, which, as he told this editor in an on-stage interview in February, currently invests $500 million a year.

    Not everyone realizes that despite GV’s bench of investors, every decision fell to Maris.

    As he explained the process during that sit-down: “[A]ll the investment decisions I make, going into a company or when and how to come out of it, is in collaboration with the partner who brings [the deal] forward. So we talk about all the opportunities as a team and everyone is invited to that discussion – not just the investing partners. And we don’t take a vote. It’s not like a democracy in any way. But everyone knows where people stand and we try and give each other good advice, and at the end of the day, the person who brings it forward and I decide whether to move forward or not.”

    Asked why GV wasn’t run more democratically, he told me, ” I have no idea, because I’ve never worked as a venture capitalist before. I masquerade as one now . .  . But basically it started out with just me. The buck stops with me. So if we succeed, credit all goes to the team. If we fail, the blame should fall all on me; that’s how management should work.”

    Whether that top-down process will change now remains to be seen.

    More here.

    —–

    New Fundings

    Accolade, a nine-year-old, Plymouth Meeting, Pa.-based on-demand healthcare concierge for employers, health plans, and health systems, has raised more than $70 million in Series E funding led by Andreessen Horowitz, with participation from Madrona Venture Group. Business Insider has more here.

    Bynder, a 3.5-year-old, Amsterdam and Boston-based company that develops marketing software, has raised $22.3 million in Series A funding from Insight Venture Partners. More here.

    CareSkore, a two-year-old, Mountain View, Ca.-based startup whose predictive analytics platform aims to help healthcare organizations better manage their patient populations, has raised $4.5 million in seed funding. Backers includeStorm Ventures, Cota Capital, Rising Tide Fund, Liquid 2 Ventures, and Y Combinator (whose program CareSkore passed through). TechCrunch has more here.

    Glovo, a four-year-Barcelona, Spain-based company that operates a local on-demand delivery service similar to Postmates in the U.S., has raised €5 million ($5.6 million) in Series A funding from Antai Venture Builder, Spain’s Seaya Ventures, Entreé Capital, Caixa Capital Risk, and Bonsai Venture Capital, along with numerous previous investors. TechCrunch has more here.

    iFood, a five-old, São Paulo, Brazil-based on-demand food delivery company, has raised $30 million in new funding from earlier backers Movile and JUST EAT. TechCrunch has more here.

    InnovAccer, a four-year-old, Berkeley, Ca.-based research acceleration company, has raised $15.6 million in funding led by Westbridge Capital Partners. TechCrunch has more here.

    Refinery29, a 12-year-old, New York-based fashion and style website, has raised $45 million in fresh funding led by Time Warner’s Turner unit, with participation from Scripps Networks Interactive. Recode says the funding was pegged to a valuation of about $500 million. More here.

    Yroo, a two-year-old, Dublin, Ireland-based  shopping search engine, has raised $11 million in seed-stage funding from unnamed individual investors who have ties to the retail space in the United States, Canada and Europe, it says.More here.

    Zenoti, a six-year-old, Mercer Island, Wa.-based cloud-based management platform, has raised $15 million in Series B funding led by Norwest Venture Partners, with participation from returning investor Accel Partners. The outlet e27 has more here.

    —–

    New Funds

    Not exactly a new fund, but: Toyota Research Institute, a Toyota R&D organization headquartered in Silicon Valley, is providing $22 million over four years in an initial research grant with the University of Michigan. The funding is earmarked for artificial intelligence research specifically. More here.

    —–

    Exits

    The Flex Company, a young, Y Combinator-backed startup, has acquired Softcup, a 20-year-old, Venice, Ca.-based maker of a flexible menstrual disc, for an undisclosed amount. TechCrunch has more here.

    Microsoft has acquired Beam, a Seattle-based interactive game streaming service that lets viewers play along with streamers as they watch. (Its CEO also happens to be a teenager.) You can see Beam’s technology is action here. More on the acquisition here.

    The privately held data analytics company Palantir has acquired five-year-old data visualization startup Silk for an undisclosed amount. The deal is being characterized as an acqui-hire. Silk had raised three small rounds totaling $3.66 million from New Enterprise Associates and others between 2011 and 2013. Palantir has reportedly raised around $2.3 billion to date. TechCrunch has more here.

    —–

    People

    Arianna Huffington, who co-founded the Huffington Post 11 years ago, says she will be leaving the company in the coming weeks to focus on a soon-to-launch startup dedicated to issues of health and wellness. The WSJ has more here.

    Yahoo’s Marissa Mayer on selling a company while trying to turn it around.

    How Adeo Ressi‘s Expansive Ventures completely unraveled, in Fortune.

    Nick Triantos is joining Ignition Partners as a venture partner. Triantos was most recently a managing director at SRI International.

    —–

    Jobs

    Hearst Health Ventures is looking to hire an associate to focus on health care IT and IT-enabled health care services. The job is in San Francisco.

    —–

    Essential Reads

    Airbnb wants its homeowner hosts to do much more than provide accommodations to visitors, according to a new report in The Information. It says a program rolling out in November will encourage hosts to make more money by recommending restaurants or giving tours around neighborhoods for their visitors and even for locals. More here. (Subscribers only.)

    —–

    Detours

    Self-service checkouts can turn shoppers into thieves, says a new study.

    Your dog is secretly kind of a selfish jerk, says another study.

    This 16-year-old is making millions selling rare sneakers.

    Michael Phelps won his 12th individual Olympic gold medal this week. The last time an Olympian did that was oh, just 2,168 years ago.

    —–

    Retail Therapy

    Voice-transforming karaoke machine, when you’re serious about pretending you’re a pop star.

    Connie

  • Bill Maris Parts Ways with GV

    Screen Shot 2016-08-19 at 9.31.12 PMBill Maris, who founded GV (formerly known as Google Ventures) in 2009, is leaving the unit at the end of this week, according to a new report from Recode.

    Maris, a neuroscience student at Middlebury who cofounded an early web hosting company before joining Google, is reportedly being replaced by David Krane.

    Krane is a managing partner at GV; he joined the venture arm in 2010, after spending nearly 10 years as Google’s director of global communications and public affairs.

    This is quite a bombshell, and, as Recode notes, comes on the heels of a string of other recent, high-profile departures within Alphabet, parent company to GV and several other units.

    Android cofounder Rich Miner recently left GV to start an education project within Google.

    Alphabet also recently parted ways with Tony Fadell, the cofounder of Nest Labs (acquired by Google for $3.2 billion in early 2014), and several executives at Google’s self-driving car unit, including CTO Chris Urmson.

    Maris wielded a tremendous amount of power at GV, which, as he told this editor in an on-stage interview in February, currently invests $500 million a year.

    Not everyone realizes that despite GV’s bench of investors, every decision fell to Maris.

    As he explained the process during that sit-down: “[A]ll the investment decisions I make, going into a company or when and how to come out of it, is in collaboration with the partner who brings [the deal] forward. So we talk about all the opportunities as a team and everyone is invited to that discussion – not just the investing partners. And we don’t take a vote. It’s not like a democracy in any way. But everyone knows where people stand and we try and give each other good advice, and at the end of the day, the person who brings it forward and I decide whether to move forward or not.”

    Asked why GV wasn’t run more democratically, he told me, ” I have no idea, because I’ve never worked as a venture capitalist before. I masquerade as one now . .  . But basically it started out with just me. The buck stops with me. So if we succeed, credit all goes to the team. If we fail, the blame should fall all on me; that’s how management should work.”

    Whether that top-down process will change now remains to be seen.

    More here.

    (Pictured:Bill Maris at a StrictlyVC event in February. Photo courtesy of Brittany M. Powell.)

    Connie

    ,

  • StrictlyVC: August 10, 2016

    Happy Wednesday, everyone! Judging from your autoresponders, half of you are maxing and relaxing somewhere this week; hope you’re enjoying it.:)

    —–

    Top News in the A.M.

    Tesla said this morning that one of its cars has crashed in Beijing while in “Autopilot” mode, with the driver contending that its sales staff sold the feature as “self-driving,” overplaying its actual capabilities. Reuters has more here.

    —–

    For Ambitious AltSchool, It’s Time for Phase Two

    Much has been written about the ambitions of AltSchool, a San Francisco-based startup that’s aiming to change the way that school children learn. Its big idea, broadly, is that personalized learning is far more effective than the standardized education that most students are stuck with today.

    As important, personalized learning is scalable, believes AltSchool, which operates seven small private schools – five of them in San Francisco, one in Palo Alto, and one in Brooklyn – and, sorry to disappoint some of you, doesn’t intend to open many more. Instead, after several years of working closely with its kindergarten-through-eighth-grade students and iterating on its personalized learning approach, it’s gearing up to license its findings to other schools that want to embrace more individualized techniques but don’t have $133 million to test what works and what doesn’t. (That’s how much AltSchool has raised so far from its investors).

    The 160-person company, which describes itself as very much in the “building phase,” aims to raise more over the next couple of years, too. We talked earlier today with founder and CEO (and former Googler) Max Ventilla to get the full update. Our chat has been edited for length and clarity.

    More here.

    —–

    New Funds

    AceBot.ai, a year-old, San Jose, Ca.-based company whose chat application augments the workplace messaging platform Slack, has raised $650,000 in seed round funding from Accel Partners. More here.

    Alafair Biosciences, a five-year-old, Austin, Tex.-based medical device company focused on internal wound healing, has raised $2 million in Series A funding led by ATP Fund, with participation from UT Horizon Fund and others. More here.

    Baker, a two-year-old, Denver-based startup that makes customer relationship management software for marijuana dispensaries, has raised $1.6 million in seed funding led by Buddy Media’s Michael Lazerow, with participation fromBase Ventures, XG Ventures, 500 Startups, Poseidon Asset Management and the co-founders of Superfly, the organizers behind music festivals like Outside Lands and Bonnaroo. TechCrunch has more here.

    Carvana, a 5.5-year-old, Phoenix, Az.-based online used car marketplace, has raised $160 million in Series C funding from undisclosed “new and existing” institutional investors. TechCrunch has more here.

    FullContact, a six-year-old, Denver-based connected contact management platform for professionals and enterprises, has raised $25 million in fresh funding led by Foundry Group, with participation from Baird Capital, Shea Ventures and Blue Note. The company has now raised just less than $45 million altogether. TechCrunch has more here.

    Interactions, a 12-year-old, Franklin, Ma.-based virtual assistant company that’s bolstered by its natural language processing technology, has raised $56 million in new funding led Revolution Growth, NewSpring Capital and Comcast Ventures, with additional funding from existing investors. TechCrunch has more here.

    Memebox, a 4.5-year-old, San Francisco-based e-commerce platform that sells Korean beauty products, has raised $66 million in Series C funding led byFormation Group, with participation from Goodwater Capital and Pejman Mar Ventures. TechCrunch has more here.

    TVSquared, a four-year-old, Edinburgh, Scotland-based company that sells measurement and optimization services to TV advertisers, has raised $3 million in funding from a group of investors that includes West Coast Capital. Multichannel News has more here.

    Viridis Learning, a seven-year-old, New York-based data analytics firm that matches college students with employers, has raised $3.2 million in Series A funding led by Thayer Ventures, with participation from University Ventures, Lumina Foundation, and NVC Investments. EdSurge has more here.

    —–

    Exits

    Disney is paying $1 billion for a 33 percent stake in BAMTech, a video streaming platform created by Major League Baseball. Recode has more on its plans here.

    Intel is paying $400 million to acquire two-year-old Nervana Systems, a startup at work on a customized chip for machine learning applications. It’s seemingly a nice return for backers, who’d provided the company with $24.4 million in funding. Steve Jurvetson of DFJ and Shahin Farshchi of Lux Capital wrote about the deal here and here.

    General Assembly, a New York-based education company, has acquired Bitmaker, a nearly four-year-old, Toronto, Ontario-based tech and design accelerator, for undisclosed terms. According to CrunchBase, Bitmaker had raised an undisclosed amount of seed funding. VentureBeat has more here.

    —–

    People

    The accidental millionaire in Jet.com’s sale to Wal-Mart.

    —–

    Jobs

    Adams Street Partners is looking to hire two associates for its venture capital/private equity teams. One hire will be in Chicago; another will work in Menlo Park, Ca.

    —–

    Data

    Apple‘s App Store shows no signs of slowing down; on the contrary, it’s set to feature a stunning five million apps by 2020, with games leading the way. TechCrunch has more here.

    CB Insights just released a 64-page report that looks at what’s been happening on the corporate venture capital front so far in 2016. Among its findings: corporate VCs participated in $8.6 billion across 376 deals in U.S.-based companies in the first half of 2016, a 14 percent drop in deals when compared with the same period last year. You can download its free report here.

    —–

    Essential Reads

    Alibaba is expected to show a 48 percent rise in first-quarter income when it reports its latest financials tomorrow, yet investor skepticism is high. The WSJ has more here.

    Apple is preparing the first significant overhaul of its MacBook Pro laptop line in over four years, according to Bloomberg. More here.

    Come on, Snapchat.

    —–

    Detours

    The weird ways people have been fired from “SNL.”

    Michael Phelps versus himself.

    The rise of investment bank Jefferies.

    —–

    Retail Therapy

    Designer Tom Ford’s Santa Fe ranch. Giddyap!

    Connie

  • For Ambitious AltSchool, It’s Time for Phase Two

    Much has been written about the ambitions of AltSchool, a San Francisco-based startup that’s aiming to change the way that school children learn. Its big idea, broadly, is that personalized learning is far more effective than the standardized education that most students are stuck with today.

    As important, personalized learning is scalable, believes AltSchool, which operates seven small private schools – five of them in San Francisco, one in Palo Alto, and one in Brooklyn – and, sorry to disappoint some of you, doesn’t intend to open many more. Instead, after several years of working closely with its kindergarten-through-eighth-grade students and iterating on its personalized learning approach, it’s gearing up to license its findings to other schools that want to embrace more individualized techniques but don’t have $133 million to test what works and what doesn’t. (That’s how much AltSchool has raised so far from its investors).

    The 160-person company, which describes itself as very much in the “building phase,” aims to raise more over the next couple of years, too. We talked earlier today with founder and CEO (and former Googler) Max Ventilla to get the full update. Our chat has been edited for length and clarity.

    Screen Shot 2016-08-09 at 6.36.56 PM.pngYou’re opening another of your own schools in Lower Manhattan this fall, and another in Chicago early next year. But after that, you’ll be more focused on partnering with other new and existing schools. Is that right?

    We’ll continue to run our lab schools with an emphasis on learning in a full-stack way and advancing a new model for how schools can educate children. That approach and the platform that we use to support our own schools is what we’re [using to] partner with other schools, and you’ll see the first of those partnerships in September 2017.

    Are these private or public schools or some combination of both?

    To start, they’ll be pretty similar [to AltSchool]: small, independent, private schools – schools that adhere to the idea that student agency is critically important. We’re starting in an admittedly easier setting. Private schools have less regulations and fewer constraints on their resources, [but it’s an opportunity] to prove the model works, then to incrementally expand the model to more and more schools. So the first wave will look like the schools we’ve been running successfully [ourselves], then by 2018, maybe you’ll see newer, progressive charter schools [adopt our approach] then maybe just progressive schools.

    If you keep improving the model and the gains compound and schools benefit from other schools in the network, it stops being about AltSchool trying to stitch things together. We do believe on a five-year time scale, it starts to be relevant for some smaller-district public schools; it may be 15 years before urban school districts benefit from anything we’ve built.

    Are there any partnerships you can announce?

    We’ll have a formal announcement at the end of September, but we’re pretty far along with a few schools that either already exist or are opening.

    AltSchool prides itself on employing equal numbers of educators, operators, and engineers who actively help the educators mark and measure what’s working and what isn’t. But a New Yorker piece published earlier this year noted that data-related privacy concerns could hamper the adoption of your software by public schools.

    More here.

    Connie

    ,

  • StrictlyVC: August 9, 2016

    Tuesday!

    —–

    Top News in the A.M.

    Twilio late yesterday reported second-quarter revenue of $64.5 million, up 70 percent from the year earlier period. That beat consensus estimates and sent its shares soaring. More here.

    Meanwhile, beleaguered LendingClub revealed that its losses widened to $81.4 million in the second quarter, compared with $4.1 million a year ago. More here.

    —–

    Valuations Wilt

    A year ago, startup valuations hit a 12-year peak as the numbers of companies joining the billion-dollar-plus club soared.

    Today, those numbers are looking far more run of the mill. So suggests a new survey published by law firm Fenwick & West, which analyzed the venture financings of 195 Silicon Valley-based companies over the second quarter to draw its conclusions.

    Among the survey’s findings: up rounds — in which a startup’s price per share increases over its previous funding round — are down slightly. Specifically, in the second quarter, they exceeded down rounds 74 percent to 13 percent, compared with the first quarter of 2016, when up rounds exceeded down rounds 78 percent to 11 percent. (The other funding rounds were flat.)

    Valuations also dropped, and pretty dramatically. The average percentage change in the share price of companies funded during the quarter showed a 40 percent price increase for the quarter, but that’s down from the 53 percent jump in price that startups saw in the first quarter and the lowest amount since the third quarter of 2010.  Meanwhile, the median price increase of financings in the first quarter was 31 percent, down from 36 percent in the first quarter.

    “It’s not like things are so horrible now,” says attorney Barry Kramer, who co-authored the survey. “But this is the third straight quarter of weakening valuations. They’ve fallen a great deal from where they were a year ago. And the question is: where do we go from here?”

    Kramer warns against drawing comparisons to the downturns of 2002 and 2008.

    (More here.)

    —–

    New Funds

    Cybrary, a 1.5-year-old, Greenbelt, Md.-based online cyber security training curriculum company, has raised $1.3 million in seed funding led by Arthur Ventures and Ron Gula, founder and chairman of Tenable Network Security. Earlier investors also joined the round, including Inner Loop Capital. More here.

    Emotech, a two-year-old, London-based company that’s building a personality-adapting AI-powered robot assistant called Olly, has raised more than $10 million in Series A funding led by Lightning Capital (a new, Shanghai-based firm), with participation from Alliance Capital. TechCrunch has more here.

    Engagio, a 1.5-year-old, San Mateo, Ca.-based maker of marketing automation software, has raised $22 million in Series B funding led by Norwest Venture Partners, with participation from FirstMark Capital and Storm Ventures. CMS Wire has more here.

    Kepler Communications, a year-old, Toronto-based startup that’s aiming to enable real-time communications access to other spacecraft by developing a constellation of data relaying satellites, has raised $5 million in seed funding from IA Ventures, Liquid 2 Ventures, TechStars, Globalive Capital, BDC, along with angel investors. TechCrunch has more here.

    Koko, a two-year-old, New York-based cognitive therapy tech startup, has raised $2.5 million in Series A funding from Omidyar Network and Union Square Ventures. Fast Company has more here.

    Kwippit, a two-year-old, Denver-based image-amplified messaging app, has raised $2.5 million in seed funding from Wildcat Capital Management and FirstMark Capital venture partner Dave Leyrer. More here.

    Farmers Business Network, a two-year-old, San Carlos, Ca.-based social network and data-sharing platform for farmers, has raised $20 million in new venture funding led by Acre Venture Partners, a food and agriculture specialized fund, with participation from GV, Kleiner Perkins Caufield & Byers, and DBL Partners. The company has now raised $44 million altogether. TechCrunch has more here.

    Finexio, a year-old, San Mateo, Ca.-based business-to-business payment network, has raised $1 million in seed funding from Loeb.nyc and numerous angel investors. More here.

    FinTecSystems, a two-year-old, Munich-based company that sells data and analysis to the financial services industry, has raised an undisclosed amount of Series A funding that it describes as in the “seven-figure range.” Littlerock and Ventech led the round, with participation from return backers MenschDanke Capital and Heilemann Ventures. More here.

    Iconic Therapeutics, a 14-year-old, South San Francisco, Ca.-based clinical stage biopharma company that’s trying to develop and commercialize immunoconjugate proteins that trigger the immune system to destroy invader cells, has added $10 million to close its Series C funding with $48.5 million. Investors in the round include new investor Xeraya Capital, which joins MPM Capital, HBM Healthcare Investments, H.I.G. BioHealth Partners, Lundbeckfonden Ventures, Cormorant Asset Management, and Osage University Partners. More here.

    Innoviz Technologies, a months-old, Israel-based autonomous driving tools startup, has raised $9 million in Series A funding from co-founder Zohar Zisapel, along with Israeli VC firms Vertex Venture Capital, Magma Venture Partners, Amiti Ventures and local car retail company Delek Motors. TechCrunch has more here.

    MapR Technologies, a seven-year-old, San Jose, Ca.-based enterprise-grade, big data platform, has raised a fresh $50 million in funding led by Future Fund, Australia’s sovereign wealth fund. Earlier backers also joined the round, including Google Capital, Lightspeed Venture Partners, Mayfield Fund, New Enterprise Associates, Qualcomm Ventures, and Redpoint Ventures. TechCrunch has more here.

    NextVR, a six-year-old, Laguna Beach, Ca.-based live virtual reality broadcast technology, has raised $80 million in Series B funding from SoftBank, VMS Investments Group, Founder H Fund and Spectrum 28. Variety has more here.

    OfferUp, a five-year-old, Bellevue, Wa.-based startup that allows users to buy and sell items through its mobile app, is in talks to raise $120 million in a round led by Warburg Pincus, says the WSJ.

    Socius, a three-year-old, Berlin-based platform that’s helping digital publishers to tell stories using social media, has raised $400,000 in seed funding from 500 Startups and Raa Invest. TechCrunch has more here.

    Woundtech, a 17-year-old, Fort Lauderdale, Fla.-based startup that brings wound care to patients, has raised $40 million in funding from Aldrich Capital Partners. More here.

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    Exits

    Randstad Holdings, an Amsterdam-based human resources and recruitment specialist, is acquiring the publicly traded job-hunting portal Monster Worldwide for $429 million in cash. TechCrunch has more here.

    —–

    People

    Amazon founder and CEO Jeff Bezos has taken $1.42 billion of his money off the table in the last three months, including a record sale of $757 million last week. Very worth noting: Amazon’s stock has risen 14 percent during the same period. Fortune has more here.

    A former bookkeeper for Skully — a startup that had promised consumers a motorcycle helmet using augmented reality and is now filing for bankruptcy — is suing founders Marcus and Mitch Weller, saying they used funding for the company as their “personal piggy banks.” She also says they fired her for wanting to blow the whistle on them. More, including the full lawsuit, here.

    —–

    Jobs

    Redpoint Ventures, the early-stage venture firm, is looking to add an associate to its early-stage consumer investing team. The job is in the Bay Area.

    —–

    Data

    The rich are getting richer, and fast. A new Wealth-X report says there are now 2,473 total billionaires in the world who represent a combined wealth of $7.7 trillion. Those figures are up 6.4 percent and 5.4 percent, respectively, since 2014. More here.

    —–

    Essential Reads

    Facebook has found a way to block ad blockers.

    GM is putting its acquisition of self-driving car startup Cruise to good use, trialling its tech on public roads in Scottsdale, Arizona, using Chevy Bolt all-electric cars. TechCrunch has more here.

    It’s baaack. Fisker Automotive, the electric car company that tanked after tearing through $139 million in federal loans from the Department of Energy, is being revived in China as Karma Automotive. Fortune has more here.

    Twitter, which is San Francisco’s second-largest tech employer but whose user growth has stalled, just listed over 183,000 square feet for sublease at its San Francisco headquarters. The San Francisco Business Times has the story here.

    —–

    Detours

    Just about 3 percent of the 11 million containers that arrive at U.S. ports are screened with X-rays, despite the security risks they could pose. (Wait, what?) More here. H/T: Significant Digits.

    —–

    Retail Therapy

    Paris wall mural.

    Connie

  • Valuations Wilt

    A year ago, startup valuations hit a 12-year peak as the numbers of companies joining the billion-dollar-plus club soared.

    Screen Shot 2016-08-19 at 8.23.50 PMToday, those numbers are looking far more run of the mill. So suggests a new survey published by law firm Fenwick & West, which analyzed the venture financings of 195 Silicon Valley-based companies over the second quarter to draw its conclusions.

    Among the survey’s findings: up rounds — in which a startup’s price per share increases over its previous funding round — are down slightly. Specifically, in the second quarter, they exceeded down rounds 74 percent to 13 percent, compared with the first quarter of 2016, when up rounds exceeded down rounds 78 percent to 11 percent. (The other funding rounds were flat.)

    Valuations also dropped, and pretty dramatically. The average percentage change in the share price of companies funded during the quarter showed a 40 percent price increase for the quarter, but that’s down from the 53 percent jump in price that startups saw in the first quarter and the lowest amount since the third quarter of 2010.  Meanwhile, the median price increase of financings in the first quarter was 31 percent, down from 36 percent in the first quarter.

    “It’s not like things are so horrible now,” says attorney Barry Kramer, who co-authored the survey. “But this is the third straight quarter of weakening valuations. They’ve fallen a great deal from where they were a year ago. And the question is: where do we go from here?”

    Kramer warns against drawing comparisons to the downturns of 2002 and 2008.

    (More here.)

    Connie

  • StrictlyVC: August 8, 2016

    Hello, dear readers! We flew back last night, and boy are our arms tired. (Hyuck, hyuck.) We didn’t have time to write a column, but we’ll have more for you tomorrow. Hope you had a fun weekend!

    —–

    Top News in the A.M.

    It’s official. Wal-Mart Stores said today that it’s buying year-old online retailer Jet.com for about $3.3 billion in a deal that will help it to better compete with Amazon.com and other online retailers. Jet co-founder and CEO Marc Lore will continue to run Jet, as well as Walmart’s U.S. e-commerce operations after the acquisition closes, according to Recode.

    —–

    New Fundings

    Airbnb, the eight-year-old, San Francisco-based room-rental platform, is raising $850 million at a valuation of $30 billion. The company was valued at $25.6 billion last July. TechCrunch has more here.

    Aligned TeleHealth, a four-year-old, L.A.-based telehealth healthcare company, has raised $12 million in Series A funding from SV Life Sciences. More here.

    Alodokter, a two-year-old, Jakarta, Indonesia-based health information portal, has raised $2.5 million in Series A funding led by Golden Gate Ventures, with participation from earlier backers 500 Startups and entrepreneur Lim Dershing. The outlet e27 has more here.

    ByBox, a 16-year-old, Oxfordshire, U.K.-based field service engineer logistics and supply chain technology solutions company, has raised £37.5 million ($48.9 million) in funding from LDC. More here.

    CharityStars, a three-year-old, Milan, Italy-based online charity auction platform, has raised €2 million ($2.2 million) in Series A funding led by 360 Capital Partners, with participation from A.S. Roma soccer player Stephan El Sharaawy and LastMinute Group CEO Fabio Cannavale. TechCrunch has more here.

    Cleave Biosciences, a six-year-old, Burlingame, Ca.-based biopharmaceutical company that’s developing therapies to treat cancer, has raised $37 million in Series B financing from Celgene, Nextech Invest and Arcus Ventures, along with earlier investors, including 5AM Ventures, Clarus Ventures, New Enterprise Associates, Orbimed Advisors, U.S. Venture Partners, Astellas Venture Management and Osage University Partners. FierceBiotech has more here.

    Columbia Asia, a 22-year-old, Bangalore, India-based company that’s focused on serving Asia’s growing middle class with more modern multispecialty hospitals that are located close to where patients live and work, has raised $101 million in funding from Mitsui & Co. The Times of India has more here.

    Funding Societies, a year-old, Singapore-based marketplace lending startup, has raised $7.5 million in Series A funding led by Sequoia India. TechCrunch has more here.

    Honor, a two-year-old, San Francisco-based startup focused on home care for older adults, has raised $42 million in Series B funding led by Thrive Capital, with participation from 8VC, Andreessen Horowitz, and Syno Capital. The company has now raised $62 million altogether. Business Insider has more here.

    Igenomix, a five-year-old, Valencia, Spain-based in-vitro fertilization genetic testing company, has raised an undisclosed amount of growth funding led by Charme Capital Partners, with participation from Aleph Capital, Graham Snudden, and Amadeus Capital Partners. More here.

    Kaltura, a nine-year-old, New York-based open-source video platform that enhances websites with customized video, photo, and audio functionalities, has raised $50 million in new funding from Goldman Sachs’s private capital investing group. Dealbook has more here.

    Lophius Biosciences, an eight-year-old, Regensburg, Germany-based biotech company focused on the development of T cell-based diagnostic systems for early diagnosis and immunomonitoring in the fields of transplantation, infectious and autoimmune diseases, has raised €4.25 million ($4.7 million) in funding.VRD led the round, with participation from Bayern Capital, Wolf Biotech and WIC. More here.

    Numares, a 12-year-old, Regensburg, Germany-based company engaged in commercial NMR-analytics, developing products for medical research, diagnosis and therapy monitoring, has raised €2 million ($2.2 million) in new financing, including from Bayern Capital. FinSMEs has more here.

    TheWaveVR, a months-old, Austin, Tex.-based startup that aims to bring virtual reality to music performances, has raised $2.5 million in seed funding from KPCB Edge, Presence Capital, Rothenberg Ventures, RRE Ventures,The VR Fund, Seedcamp, and angel investors. TechCrunch has more here.

    TruRating, a three-year-old, London-based point-of-sale customer feedback platform, has raised £9.5 million ($12.6 million) in Series A funding led by Sandaire, an international investment office for families and foundations. TechCrunch has more here.

    Vestaron Corporation, a 15-year-old, Kalamazoo, Mi.-based biological insecticide company, has raised $18 million in Series D funding from Pangaea Ventures, Anterra Capital, Cultivian Sandbox Ventures, and Open Prairie Ventures.

    —–

    IPOs

    LoopUp, a 13-year-old, London-based conference calling startup, will raise $11.7 million in an IPO on the London AIM. Tech.eu has more here.

    —–

    Exits

    Apple has acquired Turi, a three-year-old, Seattle-based machine learning platform for developers and data scientists, for roughly $200 million. According to CrunchBase, Turi had raised $25.3 million from Madrona Venture Group, New Enterprise Partners, Opus Capital and Vulcan Capital. TechCrunch has more here.

    Bridgepoint Development Capital is acquiring Cruise.co.uk, a U.K.-based online travel agent serving its local ocean cruise market, for £52 million ($67.8 million). The nine-year-old, 170-person company was originally part of Carnival Corporation; Risk Capital Partners is the seller.

    Dentsu Aegis Network, a subsidiary of Dentsu, will acquire a majority stake in Merkle, a 45-year-old, Columbia, Md.-based data marketing company that had raised $123.5 million in funding from investors, including Technology Crossover Ventures. According to the WSJ, the deal has an enterprise value of $1.5 billion. More here.

    Facebook has acquired the team from Eyegroove, a nearly three-year-old, San Francisco-based mobile video startup that had raised $3.5 million from investors, including renowned investor Roger McNamee. TechCrunch has more here.

    Google has acquired Orbitera, a five-year-old, West Hollywood, Ca.-based company that has developed a platform for buying and selling cloud-based software. Terms of the deal haven’t been disclosed. Last year, Orbitera raised $2 million in seed funding from Resolute Ventures. TechCrunch has more here.

    After 12 years of being a private, family-owned business, headphone maker V-Moda is being acquired by the electronic musical instrument manufacturer Roland. The Verge has more here.
    —–

    People

    The Washington Post shines a spotlight on Carmen Chang and Connie Chan, two “China whisperers” who help get the big deals done in Silicon Valley.

    Politico executive Peter Cherukuri is leaving the company to become president and chief innovation officer for growing tech startup incubator 1776. HuffPo has more here.

    Entrepreneur and investor Blake Krikorian passed away suddenly last week, the apparent victim of a heart attack. Krikorian was 48. We’d last talked with him in 2014 and, like many in the Bay Area, we’re very saddened by the news. Recode has more here.

    —–

    Essential Reads

    Japan’s Fair Trade Commission has raided Amazon’s local office on suspicion of pressuring retailers to offer products on more favorable conditions than on rival sites.

    When every company is a tech company, does the label matter?

    —–

    Detours

    Donald Trump meets Futurama.

    What abandoned Olympic venues around the world look like now.

    Cupping has its Olympic moment.

    —–

    Retail Therapy

    The not-so-invisible Invisible Backpack.

    Connie

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