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Top News in the A.M.
Twitter is planning hundreds more job cuts as soon as this week, says Bloomberg.
IPO Pro Lise Buyer on What You Need to Go Public in the Next Six Months
Last week, I sat down with IPO pro Lise Buyer to talk about the Bay Area ecosystem for a Sirius XM radio show that’s broadcast from Wharton’s San Francisco campus.
Buyer was the host and I was the guest, but because the IPO market is top of mind for so many in the startup industry right now, I asked if I could turn the table for a few minutes on Buyer, who is best known for helping to architect Google’s 2004 IPO and for the IPO advisory firm she founded in 2007, Class V Group. She shared whether she thinks the IPO market will pick up substantially next year, and what it takes right now to become a publicly traded company.
We’ve seen eight IPOs in the last six weeks.
After the first six months of the year, we’re on track to have a pretty average year in terms of IPOs; there’s momentum.
But we’re heading into the final months of the year — an election year.
I think IPOs are going to grind to a halt temporarily in November, even leading up to November, pretty much starting [this] week, because everyone is afraid of the election, and markets don’t like uncertainty, and whatever you think of the candidates, one of them is a little less predictable than the other. And should Donald Trump be elected president, I’d expect the markets to express some . . . I’ll be kind and say, wicked bad indigestion. And I don’t think anyone wants to take their company public in the middle of that.
Do you think the companies that have gone out in recent months are solid? Do you expect their share prices to hold?
Are these solid companies? Yes. Do I expect [their share prices] to say where they’re trading? We’ll see. A number of them did very small deals, and they did very small deals because no one was quite sure of how the market would be. So if you have a product to sell and you’re not sure of what kind of price you could get, [you start with little inventory].
Twilio did a $150 million IPO in June, and they recently announced a $450 million follow-on offering. When they announced that, their share price [fell]; then they announced that they’d had a terrific quarter, and the stock is recovering. It’s a supply-and-demand issue.
When did we start to see these smaller floats, and is it something you recommend to clients? Is it a good trend, a bad trend?
We’ve seen this periodically for years. It used to be that you sold 10 to 20 percent of your shares in an IPO but LinkedIn only sold 8 percent of its shares. Valuations are low, so companies are smart to take advantage of the [demand created from] limited supply. Also, why sell for a low price and take the incremental dilution? The best path is to prove the company can function effectively as a public company, and once investors are convinced that the risk isn’t that great and that the company understands the ramifications [of being publicly traded], do a higher-value secondary.
Which you can do before a 180-day lock-up, correct?
Investment banks have the ability to release the lock-up early. So you have to get your bank’s approval to do it, which basically means that you agree to use the same banks [that underwrote your IPO]. So we’ve seen them not infrequently after four months in those cases where the company has met expectations and its stock has performed well. If a company’s shares aren’t trading above its IPO price, you won’t see an early lock-up.
What are bankers telling startups right now? Do they need to be profitable?
AEVI, a five-year-old, Reykjavík, Iceland-based payment transactions startup and marketplace for B2B apps and services, has raised €10 million ($10.9 million) in new funding from Adveq. More here.
Baffle, a two-year-old, Santa Clara, Ca.-based end-to-end encryption platform, has raised $3 million in funding led by True Ventures. More here.
Clarifai, a three-year-old, New York-based startup that lets developers tag metadata to photos in such a way that the company algorithmically learns what kinds of objects are in photos, has raised $30 million in new funding led by Menlo Ventures, with participation from earlier backers Union Square Ventures, Lux Capital, Qualcomm Ventures, and Osage University Partners. TechCrunch has more here.
Dataiku, a three-year-old, Paris-based startup that helps data scientists and data analysts manage and extract insights from huge data sets, has raised $14 million in Series funding led by FirstMark Capital, with participation from previous investors. TechCrunch has more here.
Hixme, a two-year-old, Agoura Hills, Ca.-based startup that uses information about employees and their family members to present them with health insurance plan options and customized benefit options, has raised $14.1 million in Series B funding led by Propel Venture Partners. Other participants in the round include Transamerica Ventures, Rosemark Capital, and earlier backer Kleiner, Perkins, Caufield & Byers. The company has now raised $26.6 million altogether. More here.
InContext Solutions, a seven-year-old, Chicago-based developer of 3D virtual technology that helps retailers visualize what their store shelves will look like in a simulated store, has raised $15.2 million in funding co-led by Intel Capital and return backer Beringea. VentureBeat has more here.
Industry, a two-year-old, San Diego, Ca.-based job site for the hospitality sector, has raised $2.3 million in seed funding from a “stealth VC fund on Sand Hill Road,” with participation from our previous individual investors. Vator has more here.
K4Connect, a three-year-old, Raleigh, N.C.-based startup whose software platform integrates disparate smart devices into a single system and is specifically tailored for seniors and individuals living with disabilities, has raised $8 million in Series A funding. Intel Capital led the round and was joined by Traverse Venture Partners and a unit of Reinsurance Group of America. More here.
KredX, a two-year-old, Bangalore, India-based company that connects small and mid-size companies with investors who are willing to buy their unpaid receivables, has raised roughly $6 million in Series A funding led by Sequoia Capital India, with participation from earlier backer Prime Venture Partners. The Economic Times has more here.
Lively, a year-old, New York-based direct-to-consumer lingerie startup, has raised $4 million in seed funding led by GGV Capital, with participation from Gelmart International, an intimate apparel manufacturer, and individual investors. TechCrunch has more here.
OpenDataSoft, a five-year-old, Paris-based SaaS platform that makes it easier for other companies and developers to take advantage of a customer’s data for reuse in other services, has raised $5.4 million in Series A funding from Aster Capital and Salesforce Ventures, with participation from Ader Finance and earlier backer Aurinvest. TechCrunch has more here.
Paxata, a 4.5-year-old, Redwood City, Ca.-based platform built to help analysts turn raw data into ready data for analytics, has raised $33.5 million in new funding led by Intel Capital, with participation from Microsoft Ventures, Cisco Systems, Deutsche Telekom Capital Partners, AirTree Partners and earlier investors Accel Partners, In-Q-Tel and Singapore’s EDBI. Silicon Valley Business Journal has more here.
Uplevel Security, a two-year-old, New York-based incident response and threat Intelligence platform founded by Roselle Safran, a former branch chief for cybersecurity operations at the White House, has raised $2.5 million in seed funding from First Round Capital and Aspect Ventures, along with a host of individual angel investors. TechCrunch has more here.
Verse, a year-old San Francisco-based payments company that’s aiming to become the Venmo of Europe (it also has an office in Barcelona), has raised $8.3 million in Series A funding led by Greycroft Partners. Other participants include Spark Capital and eVentures. TechCrunch has more here.
As its IPO quiet period came to a close, Nutanix was welcomed with several positive analyst reports initiating coverage with buy ratings or equivalents, though it hasn’t helped the stock, which is trending downward after big jumps the first two days after its Sept. 30 IPO. Investors Business Daily has more here.
Google has acquired Eyefluence, a three-year-old, Milpitas, Ca.-based eye-tracking technology company, for undisclosed terms. CrunchBase shows Eyefluence had raised $21.6 million in funding from investors, including Motorola Solutions Venture Capital, Jazz Venture Partners, Intel Capital, NHN Investment and Dolby Family Ventures. TechCrunch has more here.
Marc Andreessen at Startup School (video).
Redpoint Ventures has brought aboard two associates: Medha Agarwal has joined the firm’s early-stage consumer team, after stints as a student investor with Rough Draft Ventures and as a summer associate at Javelin Venture Partners. Jamin Ball will be focusing on early growth opportunities. Ball was formerly an investment banking analyst at Morgan Stanley.
Krishna Yeshwant, the part-time physician who leads GV’s life sciences and health investment team, talks with MedCity News about the kind of consumer wearable company that would win its support.
This self-driving truck’s first mission: a beer run.
Google is getting into the whiteboard business.
After years of awarding Tesla high marks, Consumer Reports has now decided that it’s among the least reliable car companies in America.
Chad McQueen talks about his famous dad.
Rules for living with roommates.
A $17 million townhouse in West Village.