Great to see a few of you in Palo Alto last night.
Top News in the A.M.
Snap‘s IPO shares soared a little too high yesterday for some brokerage firms. Two downgraded the stock yesterday and a third, London-based Atlantic Equities, downgraded the company today, warning that its valuation may be “unsustainable.” Wrote an equity analyst in his research note: “At current levels, the stock is trading at a premium to Facebook after normalizing for engagement levels. This seems unsustainable given Snap’s unproven monetization potential, structurally lower profitability, and likely challenges in materially reaccelerating user growth.” CNBC has more here.
NexGen Venture Partners Just Raised $22 Million — from 83 Investors
NextGen Venture Partners, a young, Washington, D.C.-based venture firm that’s quarterbacked by a handful of investors but fueled financially by a network of hundreds of part-time investors who help with its portfolio, has raised $22 million for its debut fund. (This if you don’t count a $1 million pool of capital that it raised from its network in 2015.)
We had a quick chat with Jon Bassett, one of the firm’s five partners, late last week to talk about what NextGen is trying to create. That conversation has been edited for length.
NextGen evolved from a group of angel investors, correct? Was this a formal investor group that’s just been renamed?
We began as a group of young entrepreneurs based in Washington who agreed to support our companies regardless of whether we personally invested. Over time, we had friends in New York City who wanted to expand this idea, and from there NextGen began to take shape. Now, it’s a rapidly growing group of over 650 people who continue to give us an edge in sourcing, diligence, and portfolio support.
Did all of them contribute to this new $22 million fund?
We have 83 LPs in our fund. A large number of them are also our venture partners who invested relatively small dollars. Our anchor LP is Brown Advisory, a $60 billion asset management firm that spun out of the former investment bank Alex. Brown. We also have high-net-worth investors from Dell, Carlyle, and T Rowe Price.
Eighty-three LPs is a lot of LPs to manage. Do you think in the future that you’re likely to seek out bigger checks from fewer investors?
We plan to raise larger dedicated funds over time with bigger check writers, but it’s important we maintain what makes our model so unique. Our strength in deal flow and portfolio support comes from our venture partners. Also, we [do and will] continue to create SPVs where our venture partners have the opportunity to invest alongside our funds.
Do investors in your network get any special rights or privileges if they more actively help your portfolio companies than other investors in the network?
Bobo’s Oat Bars, a 12-year-old, Boulder, Co.-based producer of baked oat bars, has raised $8 million in Series A funding led by Boulder Investment Group Reprise, with participation from Range Light. The Denver Business Journal has more here.
Boragen, a months-old, Durham, N.C.-based synthetic chemistry platform focused on developing fungicides for agriculture, has raised $10 million in Series A funding. Investors include Alexandria Venture Investments, ARCH Venture Partners, Bayer, the Bill & Melinda Gates Foundation, Elanco Animal Health, Flagship Pioneering, Hatteras Venture Partners, Mountain Group Capital, Pappas Capital and Syngenta Ventures. AgFunder News has more here.
C3 IoT, an eight-year-old, Redwood City, Ca.-based enterprise software developer, has raised an undisclosed amount in Series E funding at a $1.4 billion pre-money valuation. Breyer Capital led the round, and was joined by TPG, Sutter Hill, Wildcat Venture Partners, Pat House, and founder and CEO Thomas Siebel. More here.
Examity, a 3.5-year-old, Needham, Ma.-based company that manages proctoring and identify verification for online testing, has raised $21 million in funding from University Ventures and Inherent Group. Boston Business Journal has more here.
Grail, a year-old, Menlo Park, Ca.-based developer of blood tests to detect cancer at its earliest stages, has raised $900 million in Series B funding. ARCH Venture Partners led the round, with participation from Johnson & Johnson Innovation, Bristol-Myers Squibb, Merck, Celgene, Tencent, Amazon, McKesson and Varian Medical Systems. (It’s probably no coincidence that the company announced its funding a few hours after did its competitor, Freenome, which we’d written about here.)
Hedvig, a 4.5-year-old, Santa Clara, Ca.-based software-defined storage platform company, has raised $21.5 million in Series C funding. Investors include Singapore-based EDBI and Hewlett Packard Pathfinder, Atlantic Bridge Ventures, and earlier backers True Ventures and Vertex Ventures. The company has now raised $52 million altogether. More here.
Lucy, a year-old, San Francisco-based platform that provides support to employees from their early pregnancy through their baby’s first year, has raised $2.25 million in seed funding co-led by Forerunner Ventures and Felicis Ventures. Forbes has more here.
Nearpod, a 4.5-year-old, Hallandale, Fla.-based mobile app that enables teachers to create and share interactive multimedia presentations with their students, has raised $21 million in Series B funding led by Insight Venture Partners. Earlier investors Reach Capital, GSV Acceleration, Krillion Ventures and AGP Miami also joined the round. TechCrunch has more here.
OpenRent, a London-based online realtor, has raised £4.4 million ($5.4 million) in new funding from Global Founders Capital. TechCrunch has more here.
Surefire Medical, an eight-year-old, Westminster, Co.-based company that develops infusion systems for the interventional radiology market, has raised $12.8 million in Series D funding led by ORI Healthcare Fund, with participation from earlier backers. FinSMEs has more here.
(Other) New Funds
Next Coast Ventures, a 1.5-year-old, Austin, Tex.-based venture capital firm that looks to invest in “software-powered, full-stack business models,” has closed its debut fund with $85 million in commitments from institutional investors, funds of funds, and family offices. The amount makes the fund one of the largest in Austin in the last three years, says the firm. More here.
Ribbit Capital, a nearly five-year-old, Palo Alto, Ca.-based venture firm that focuses on fintech, is looking to raise $300 million for its fourth fund, shows an SEC filing. Ribbit closed its third fund with $220 million in 2015. More here.
Sofinnova Partners, a Paris-based venture capital and private equity firm, has raised €106 million ($112 million) in commitments for Sofinnova Industrial Biotech, an industrial biotech fund that will focus on renewable chemistry and synthetic biology. FinSMES has more here.
Symantec, the publicly traded digital security company, has launched a cybersecurity-focused corporate venture unit called Symantec Ventures. CRN has more here.
The venture-backed cryptocurrency exchange Kraken yesterday announced that it has brought market portal Cryptowatch — a site that provides real-time market information and trading services — into the fold. CoinDesk describes the deal as an acqui-hire. More here.
Publicly traded Palo Alto Networks acquired LightCyber, a 5.5-year-old Israeli cybersecurity company, for $105 million. According to CrunchBase, LightCyber had raised roughly $36 million in venture funding, including from Access Industries and Battery Ventures. The Register has more here.
Richard Branson is starting a new venture dedicated to launching small satellites into space.
Former U.S. vice president, Apple board member, and sometimes venture capitalist Al Gore is starting to screen his new documentary, “An Inconvenient Sequel: Truth to Power.” Yesterday, at one such screening, Apple CEO Tim Cook made a speech to introduce the film. You can see that clip here.
Snap cofounder Evan Spiegel on how he’s feeling after his historic IPO.
Yikes. Another female software engineer at Uber has outlined her unhappy experience at the company. Specifically, she alleges she faced sexism from a female manager.
Verizon is looking to hire a corporate development manager. The job is in Basking Ridge, N.J.
U.S. consumers now spend five solid hours a day on mobile devices.
NBCUniversal invested $500 million in Snap during its IPO yesterday. TechCrunch has more here.
Amazon plans to release new Alexa devices that can make phone calls and work as intercoms, says Recode.
Palantir is reportedly providing the surveillance system to carry out the new administration’s raids on undocumented immigrants’ families. The Intercept has more here.
How to read more books when you never have time.
Retirees’ advice to the young.
Four lavish beach estates for deep-pocketed spring breakers.