Hi, everyone, happy Tuesday. There’s so much news breaking today; we’re still trying to catch up on all of it(!).
Top News in the A.M.
The controversial organization Wikileaks just released a trove of alleged C.I.A. hacking documents that it says describes sophisticated software tools used to break into smartphones, computers and Internet-connected televisions. Wikileaks says the agency was even able to bypass encryption on popular phone and messaging services like Signal, WhatsApp, Telegram, and Confide (whose CEO is coming to our next StrictlyVC event in May and will presumably have plenty to say about this). The New York Times has more here.
Snap shares are tumbling again today.
Lemnos Lands $50 Million for Fund Three
Lemnos, a seed-stage, hardware-focused venture firm in San Francisco, is today announcing the close of its third and newest fund, with $50 million in commitments.
It’s a proud moment for cofounder Jeremy Conrad, whose pitch for Lemnos wasn’t met with a lot of enthusiasm when the firm was founded in 2011 but whose passion for hardware now resonates with plenty of investors.
Successful outcomes for hardware companies like Fitbit, Square, Oculus, and GoPro have helped, despite rocky moments for each. But perhaps even more appealing to investors are two tweaks that Lemnos is making to its model. For one thing, the firm, which has been running an incubator program since the outset, is dropping that operation to focus exclusively on operating as a venture firm. “We felt that as a bigger firm, when you’re writing bigger checks, it’s a different model,” says Conrad. (Lemnos closed its second fund with $20 million in 2014.)
The outfit is also expanding its mandate to invest in both startups with a hardware component and software companies that are developing a particular technology that will be used in a hardware device. Think a computer vision software startup looking to sell to robotics companies.
As for check sizes, those will be changing, too, as you might imagine. Whereas the firm began writing $50,000 to $100,000 checks to startups back in 2011, it might now start off with a check that’s $100,000, but it has money to invest up to $1.5 million in a $3 million round.
To date, Lemnos — operated by Conrad, cofounder Helen Zelman, and partner Eric Klein — has invested in roughly 40 companies.
It has just two small exits under its belt so far: the fleet management startup Local Motion, which sold to Zipcar for undisclosed terms in 2015; and Sproutling, maker of a smart monitor for babies, which was acquired by Mattel last year, again for undisclosed terms.
Still, Lemnos has stakes in a number of companies worth watching.
Bigo Live, a year-old, Singapore-based social video streaming app (akin to Periscope) that has taken Southeast Asia by storm, has raised an undisclosed amount of Series C funding from Ping An Overseas Holdings. The round reportedly brings the company’s total funding to $180 million and its valuation to more than $400 million. Tech in Asia has more here.
Confluent, the 2.5-year-old, Palo Alto, Ca.-based principal commercial entity behind the Apache Kafka streaming data platform, has raised $50 million in Series C funding led by Sequoia Capital, with participation from previous investors Benchmark and Index Ventures. ZDNet has more here.
Current, a new, Takoma Park, Md.-based company that’s making a debit card for kids, has raised $3.6 million in seed funding led by Expa and Human Ventures, with participation from Future Perfect Ventures and others. (This is apparently seen as fertile territory. We recently featured another company, Greenlight, going after the same market.) TechCrunch has more on Current here.
Epicrop, a 3.5-year-old, Lincoln, Neb.-based agtech company that’s developing epigenetic technology to improve crop yields, has added capital from TechAccel, a Kansas City-based venture development company, to its Series A. The round now stands at $3.2 million and includes funding from North Forty Ventures, Nelnet, Speedway Properties and Allen & Company. AgFunder News has more here.
Function of Beauty, a 1.5-year-old, Stamford, Ct.-based startup that creates personalized shampoos and conditioners, has raised $9.5 million in Series A funding led by GGV Capital, with participation from Y Combinator. TechCrunch has more here.
iflix, a three-year-old, Kuala Lumpur-based Netflix-like service that covers Southeast Asia and other emerging markets, has raised $90 million in new funding from the international cable firm Liberty Global, the Middle East and Africa-focused operator Zain, and earlier backers Sky, Catcha Group and EMC. TechCrunch has more here.
Peerspace, a 3.5-year-old, San Francisco-based online marketplace for “unique and undiscovered” locations, has raised $11 million in funding from Foundation Capital, Mitsui Fudosan, Carthona Capital and Red Bridge Partners. The company has now raised $18 million altogether. VentureBeat has more here.
Serial entrepreneur Justin Kan, best known for co-founding Twitch, Justin.tv and Socialcam, has left his position as a partner at Y Combinator to start his own startup incubator program. The venture is called Zero-F, for zero to funding. “I joined YC to recover from the brain damage of starting companies,” he told TechCrunch yesterday. “But I want to get back more towards what I like doing, which is starting companies.” More here.
Oak HC/FT Partners, a growth equity firm that spun out of Oak Investment Partners in 2014, is reportedly raising a second, $500 million fund. The firm’s first $500 million fund closed in June 2014. The priorities for that fund were growth-stage, revenue-generating companies in health IT and fintech that had established a position in the market. MedCity News has more here.
Notation Capital, a two-year-old, Brooklyn-based seed-stage venture fund, is looking to raise up to $25 million for its second fund, shows an SEC filing. StrictlyVC talked with Notation last year about life as a young, pre-seed East Coast fund.
AWS, Amazon’s cloud computing arm, has acquired Thinkbox Software, a six-year-old company that develops production tools for media design and content creation that are aimed at people in the video and wider visual media industries. Thinkbox appears to have been bootstrapped. Terms of the deal aren’t being disclosed. TechCrunch has more here.
CA Technologies is acquiring 11-year-old, Burlington, Ma.-based application security testing company Veracode for $614 million in cash, the companies announced yesterday. According to CrunchBase, Verde had raised roughly $114 million from investors, including Wellington Management and Meritech Capital Partners. (In more recent years, some secondary shares were acquired by Founders Circle Capital, too.) The Boston Globe has more here.
GIF-finding platform Giphy last week revealed a new line of business offering artist-created stickers in Apple’s iMessage app. TechCrunch has since learned that Giphy had quietly acquired imoji — a three-year-old startup with a popular platform for creators to build and distribute custom-made stickers and emoji to the messaging masses — to fuel this initiative. Terms of the deal haven’t been learned, but according to CrunchBase, imoji had raised $2 million from Goodwater Capital and longtime investor Joe Lacob. More here.
Hewlett Packard Enterprise Co. is acquiring a publicly traded maker of so-called flash storage systems, Nimble Storage, for about $1 billion in cash, a 41 percent premium to Nimble’s roughly $700 million market value as of Monday’s close of trading. The WSJ has the story here.
Streaming music service Spotify has acquired a year-old company called Sonalytic, maker of an audio detection technology that can identify songs, mixed content, and audio clips. (It can also track copyright-protected material.) Terms of the deal weren’t disclosed. Sonalytic had emerged from the London-based incubator Imperial Create Lab, though it isn’t clear whether it raised much in the way of outside funding. TechCrunch has more here.
How the world’s richest doctor gave away millions — then steered the cash back to his company: STAT with an unflattering profile of Dr. Patrick Soon-Shiong.
Well, Amazon’s First Amendment fight was short-lived.
Yesterday, IBM and Salesforce announced a sweeping tie-up that will see the two giants integrate their artificial intelligence platforms, along with some of their software and services. Fortune has more here.
The ambitious transportation company Hyperloop One released images today of its development site in Nevada, saying that its first public trial of the full-scale system will take place in the first half of this year. Seemingly, the biggest test will be around braking. In a shorter trial last May, a test vehicle ended its run by crashing into a sand pile.
Pinterest will now let you search for products using any image you find online — without visiting Pinterest.
Alec Baldwin says his Trump impression won’t last much longer. (Nuts.)
Eight words the royal family never uses.
The curse of the Bahia emerald.
Quite an ad for a USB port(!).