It is Thursday! [Warm up, tumble, one hand cartwheel.] Hope you’re having a great day, everyone.
Top News in the A.M.
About ten hours after it began employing self-driving cars to pick up customers in San Francisco, Uber was yesterday ordered by state regulators to stop using the cars in California, at least until Uber secures the necessary permit issued by the state to allow companies to test autonomous vehicles on public roads. More here.
What That New Fed Rate Increase Means for Venture-Backed Startups
The Federal Reserve yesterday raised its benchmark interest rate to a range of 0.5 percent to 0.75 percent, up from 0.25 percent to 0.5 percent. People in the business of venture-backed startups were paying attention, too, and not because of the new range, which is still super low by historical standards. It’s what the move augurs – even higher interest rates in 2017 – that interests them.
Why does it matter? Well, if you’ve founded, or invest in, early-stage startups, it probably doesn’t – yet. Enough investment capital has been raised in the last 12 to 24 months to insulate young companies and early-stage investors for some time to come. “If you’re investing behind two women and a cat, it makes no matter what the Fed is doing,” says Venky Ganesan, a managing director at the early-stage venture firm Menlo Ventures.
“There’s still a lot of money in the system that needs to go somewhere,” adds Bradley Tusk, a political strategist and investor who notes that investors began bulking up on capital earlier this year, partly in anticipation of rising interest rates.
Still, for later-stage investors and companies, the story could prove starkly different.
In recent years, operating in a near zero interest rate environment, investors who might have otherwise parked their assets in bonds and other fixed income securities began looking elsewhere for returns. Startups within spitting distance of a public offering became a popular place to dump some of that money. “People forget how unusual that is,” says David Golden, a managing partner at Revolution Ventures who worked earlier in his career as a JPMorgan exec. “The fact that capital has been so cheap is partly what has fueled the sea change in early-stage valuations since the financial crisis. Cheap equity means that you can raise millions of dollars without having to give up very much of your company.”
As capital becomes more expensive, those “bargains are going to start to retreat.”
Amino Apps, a five-year-old, New York-based startup aiming to reinvent online forums for the mobile world, has raised $19.2 million in Series B funding led by GV, with participation from Venrock, Union Square Ventures and Box Group, as well as new backers Time Warner Investments and Goodwater Capital. TechCrunch has more here.
Databricks, a three-year-old, San Francisco-based machine learning and analytics platform that was founded out of the UC Berkeley AMPLab, has raised $60 million in Series C funding led by New Enterprise Associates, with participation from earlier backer Andreessen Horowitz. The company has now raised $107.5 million altogether. More here.
ExplainEverything, a six-year-old, Wroclaw, Poland-based that produces a digital whiteboard that enables users to display and share drawings, texts, equations and more, has raised $3.7 million in funding from Credo Ventures, RTAventures, and New Europe Ventures. TechCrunch has more here.
Goldfinch Bio, an 18-month-old, Boston-based startup that aims to apply precision medicine to kidney disease by combining biology and genetics and which was incubated by Third Rock Ventures, has raised $55 million in Series A funding from Third Rock for its launch. MedCity News has more here.
Hopper, a nine-year-old, Montreal-based airfare prediction app, has raised $82 million CAD ($61.2 million) in Series C funding led by the North American pension fund manager Caisse de dépôt et placement du Québec. Earlier backers also joined the round, including Brightspark Ventures, Accomplice, OMERS, Investissement Québec and BDC Capital IT Venture Fund. The company has now raised around $77 million altogether. TechCrunch has more here.
HyperScience, a three-year-old, New York-based startup that applies artificial intelligence to data processing to make its customers’ lives easier, has raised $18 million in Series A funding from FirstMark Capital and Felicis Ventures, with participation from earlier backers Third Kind Ventures, AME Cloud Ventures, Slow Ventures, Box Group, and Acequia Capital. More here.
Kreditech, a 4.5-year-old, Hamburg, Germany-based online lender that builds credit histories based on big data analytics, has raised $10.4 million in new funding from Rakuten, the Japan-based e-commerce giant. Reportedly, the round has yet to close. TechCrunch has more here.
OWHealth, a months-old, Wilmington, De.-based company whose Flo app helps women track and predict their menstrual cycles, ovulation, and fertility, has raised $1 million in seed round funding led by Flint Capital along with the Haxus Venture Fund. TechCrunch has more here.
Qineqt, a three-year-old, New York-based company developing a financial data platform for investment managers, has raised $1.3 million in Series A funding from two unnamed private investors, it says. Founder Nadir Khan previously ran a hedge fund called Timescape Global Capital Management, which he co-founded after working as a trader and analyst at SAC Capital. More here.
Zola, a three-year-old, New York-based online wedding registry for engaged couples, has raised $25 million in Series C funding led by Lightspeed Venture Partners. TechCrunch has more here.
Alven Capital, a 16-year-old, Paris-based early-stage venture capital firm, has closed on €250 million ($260.3 million) in commitments for its fifth fund. FinSMEs has more here.
GoAhead Ventures, a 1.5-year-old, Menlo Park, Ca.-based early-stage venture firm founded by two 23-year-old Stanford graduates, has raised $55 million for its debut fund. Cofounder Phil Brady graduated last year from Stanford with a degree in management science engineering. While a student, he worked part-time on the deal team of Andreessen Horowitz. Cofounder Clancey Stahr, another management science engineering grad, previously worked as a principal at ZenShin Capital Partners. The firm’s central theme is to fund entrepreneurs coming out of — you guessed it — Stanford. More here.
China’s Meitu, whose photo gives its users the power to create idealized versions of their real-world selves and share them with others, has completed an IPO in Hong Kong, “long a gateway for Chinese companies seeking foreign money,” notes Dealbook. More here.
Salesforce has acquired Redwood City, Ca.-based Twin Prime, a five-year-old startup that helps mobile apps perform better and which had raised $9.5 million, according to CrunchBase. Its backers include DFJ and True Ventures. Terms of the deal aren’t being disclosed. Silicon Valley Business Journal has more here (sub required).
Berlin-based Delivery Hero is selling its U.K. business, which operates as hungryhouse, to rival Just Eat for around $251 million in cash, plus another $50 million in milestone payments. Just Eat is also acquiring SkipTheDishes, a delivery startup in Canada, for $83 million, to expand its position there. TechCrunch has more on the reshuffling here.
Verizon is reportedly considering killing its deal to buy Yahoo. Bloomberg has the story here.
Magic Leap’s VP of public relations and government affairs, Andy Fouché, has left the company to join a stealth startup led by Android cofounder Andy Rubin. Last month, its VP of marketing left for the same startup. Recode has more here.
Thirteen pictures of tech CEOs at yesterday’s exclusive tech summit with Trump, three of his children, and his son-in-law.
Sapphire Ventures has just promoted four of its colleagues: Rajeev Dham, who joined the firm from Silver Lake in 2013, is now a principal; Phil Orr, who joined in 2015 from an analyst gig at Qatalyst Partners, is now a senior associate; Shruti Tournatory, who joined in 2014 following stints at SAP and Saleforce, is now VP of market development; and Laura Moir, who joined in 2015 from a clinical health company called Medrio, is now a marketing manager.
McClatchy, the publicly traded publishing company, is looking to hire an investment associate to focus on its portfolio of investments. The job is in Washington, D.C.
Good news: Facebook is now going to flag and make fake news less visible with the help of outside fact checkers.
How America’s diet has changed over the decades.
Netpicks: Everything coming to and disappearing from Netflix in January.
The worst year ever, until next year.
Washabelle, a new machine washable, dryable mattress. If you have young kids or a stinky, lovable dog, you will appreciate the utter genius of this product.