StrictlyVC: October 17, 2016

Hi, everyone, hope you had a terrific weekend — happy Monday.:)

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Top News in the A.M.

Apple just scaled down its titanic plans to take down Detroit. Bloomberg explains what’s going on here.

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The SEC Gets the Case It’s Been Waiting for in Silicon Valley

Not so long ago, Theranos was flying high, its claims that it was upending the medical diagnostics business largely accepted by the public. Behind the scenes, however, some employees were growing wary of those claims, with at least one eventually reaching out to regulators to report the company’s failure to report its questionable test results.

A stinging series of articles by the Wall Street Journal soon followed, and in recent months, the government agency that oversees U.S. labs has banned founder and CEO Elizabeth Holmes from operating a blood-testing laboratory for two years, and Theranos has shuttered its clinical labs and wellness centers. To make matters worse, company was last week slapped with a lawsuit by one of its biggest investors, which claims that Theranos knowingly lied to it.

It’s a nearly ideal scenario for the SEC, which is investigating Theranos and widely expected to use a case against it to expand its mandate into Silicon Valley’s startup ecosystem. The truth is while the SEC has long been viewed as a force in the public markets, it also has the authority to chase after private companies that engage in any “act or omission resulting in fraud or deceit in connection with the purchase or sale of any security.” And lately, Wall Street’s top cop is finding Silicon Valley too high-profile a target to resist.

“If you’re only raising couple million bucks, everyone expects your huffing and puffing,” says one San Francisco-based securities attorney. “But if you’re raising hundreds of millions to billions of dollars, why would the SEC ignore that when they’re auditing the financials of some piddly company that’s raising $50 million in an IPO?”

Much more here.

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New Fundings

Aramisauto, a 15-year-old, Arcueil, France-based online used-car marketplace, has raised an undisclosed amount of strategic funding from PSA Group, a French auto company whose brands include Peugeot and Citroën. More here.

CloudLex, a 20-month-old, New York-based legal tech startup, has raised $3.7 million in Series A funding led by Aligned Partners. More here.

Hyper Anna, a nine-month-old, Sydney, Australia-based startup behind an AI-powered data analyst, has raised $1.25 million in venture capital funding from Westpac’s venture capital arm, Reinventure, and AirTree Ventures. More here.

KodaCloud, a 2.5-year-old, Campbell, Ca.-based cloud network-as-a-service company, has raised $10 million in Series A funding from Comcast Ventures, Celtic House Venture Partners and Voyager Capital. More here.

Prelude, a 1.5-year-old, Atlanta, Ga.-based company focused on providing proactive fertility care, has partnered with two other regional organizations — My Egg Bank North America and the fertility treatment center Reproductive Biology Associates — and with Spanish entepreneur Martín Varsavsky (who previously founded Fon), and garnered a commitment of up to $200 million from the private equity firm Lee Equity Partners for its collective efforts. More here.

Snapsheet, a six-year-old, Chicago, Il.-based startup that makes a smartphone app to speed up collision-repair estimates for auto insurers, has raised $20 million in Series C funding led by F-Prime Capital and IA Capital Group, with strategic participation from Liberty Mutual Strategic Ventures, Intact Ventures and a USAA subsidiary. Crain’s Chicago Business has more here.

Zipwhip, a nine-year-old, Seattle-based cloud texting company whose platform enables existing mobile, landline, and toll free numbers to send and receive text messages from any connected device, has raised $9 million in  Series B funding led by Voyager Capital. Other participants include Microsoft Ventures, the regional telecom GCI, and Inteliquent, an interconnection partner for communications service providers. TechCrunch has more here.

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New Funds

A Paris-based group of entrepreneurs and operators has raised a $165 million debut fund for their year-old venture firm, Daphni. The outfit plans to target seed and Series A round opportunities in startups with “European DNA but international ambition.” More here.

K Fund, a young, Madrid-based seed-stage venture firm that plans to invest in Spanish startups that also have an international outlook, has raised a a €50 million ($55 million) fund. More here.

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Exits

Cisco is acquiring Worklife, a two-year-old, San Francisco-based web and mobile app meant to boost productivity. The company passed through Y Combinator in late 2015, so raised at least $120,000 in funding; Cisco is paying an undisclosed amount for the company. TechCrunch has more here.

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People

Elon Musk just pushed back an “unexpected product” announcement he’d planned to make today. More here.

Peter Thiel reportedly just donated $1.25 million to Donald Trump’s presidential campaign. It’s a tiny drop in the bucket for Thiel, which has many speculating why he bothered (face-saving measure?) and whether it will further hamper his reputation in Silicon Valley.

People in Silicon Valley are usually fairly reticent publicly about U.S. presidential elections. Not this time.

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Essential Reads

End to end” private offerings for companies.

In China, property frenzy, fake divorces, and a bloating bubble.

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Detours

SNL takes on Honda’s humanoids.

The latest celebrity fashion: cyberbullying.

The greatest race pass this year.

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Retail Therapy

Tangle-proof earbud wrap. A little late in coming, but we’ll take it.



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