Hi, all! Quick mention: we’re racing off the airport this morning, as we gear up for TechCrunch Disrupt NY, taking place this coming Monday through Wednesday.
Note that the newsletter might be a little skimpier than usual for the next week as these shows are very fun and also insanely hectic.
For what it’s worth, TC has an amazing line-up, and it’s live-streaming all interviews (on Facebook, too). Among its many speakers: baseball legend Derek Jeter, singer Pharrell Williams, SoFi’s Michael Cagney, and Tyler Haney of the fast-growing lifestyle brand Outdoor Voices. We’ll also be on stage for a few interviews that we’ll either link to or write about next week, assuming we don’t trip on stage or some other horribleness befalls us. (Heh, ahem.)
More soon — happy Thursday, everyone.:)
Top News in the A.M.
Snap missed analysts’ forecasts by a wide margin in the first three months of this year, it revealed yesterday. Shareholders weren’t happy. CEO Evan Spiegel sounded unconcerned, however.
It’s beginning to look like Uber is facing a very steep uphill battle in the Europe.
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Lightspeed’s Co-founders on Their 17-Year-Long ‘Overnight’ Success Story
Lightspeed Venture Partners is having quite a year, between the sale of AppDynamics to Cisco for $3.7 billion on the eve of its IPO (Lightspeed wrote its first check); to the March sale of publicly traded Nimble Storage to Hewlett Packard Enterprise for just north of $1 billion in cash; to the IPO of the enterprise software company MuleSoft in March (the company is now valued at $2.8 billion); to the March IPO of the consumer tech company Snap, which is is valued at more than $20 billion, despite a terrible earnings call earlier today that drove its shares into a nosedive. (Lightspeed famously wrote the company its first check and remains its second largest outside shareholder.)
Other exits look to be coming up fast, too. According to Bloomberg, for example, men’s retailer Bonobos is in talks with Walmart. Meanwhile, the personal styling service Stitch Fix is reportedly weighing an IPO.
Success is nothing new for Lightspeed, though its recent string of hits has certainly helped cement its status as one of Silicon Valley’s most elite firms. To learn a little more about the firm’s earliest days, how exactly it helps startups, and whether it thinks the pace of innovation right now can keep up with the amount of capital flooding the market, investor Semil Shah of the seed-stage firm Haystack sat down with Lightspeed co-founders Ravi Mhatre and Barry Eggers at a StrictlyVC event late last week. You can check out a bit of video from that sit-down below. Here are other outtakes from the conversation that you might find interesting. Their chat has been edited for length and clarity.
SS: When you started Lightspeed, what was the mood like in the Valley?
BE: The year was 1856. [Audience laughs.] It was the early 2000s. We were sort of in the middle of the venture desert, for those of you who were there. We’d gotten out of the bubble, and we were all waiting to see what was next, and it was a long wait. And that’s where we sort of looked around and realized most of the people we’d known who were doing Series A deals had either closed shop or gone through a generational transition or just weren’t around any more and there was a big vacuum for Series A deals. That’s when we said, hey, we need to go and stake out that real estate, so that’s what we did.
SS: You were raising a first-time fund, though you had some venture experience. Presumably that helped?
RM: Barry and I and Peter [Nieh] and Chris [Schaepe] — we’d all known each other to some degree before. We’d all gone to school [at Stanford] around the same time. When we went to fundraise, I remember it was a little scary. We didn’t have a salary. We’d all done a little venture but not a lot. And there wasn’t as much venture capital firm formation as there is now, so we spent a lot of time meeting with LPs and they spent a lot of time looking at the four of us. [They wanted to know that we were] likely to stick together because it takes a long time to build a platform and a brand.
People spent a lot of time trying to figure that out about the four of us. Retrospectively, I’d say, almost 20 years later, [we were a good bet]. All four of us, we’re still working with each other. When we get mad, we might go and wrestle each other. But by and large, we’re working together and [are very much a team].
New Fundings
Clover Health, a three-year-old, San Francisco-based insurance startup that uses data science for preventative health care, has raised $130 million in new funding from GV and other investors, according to Bloomberg The new round reportedly values the company at $1.2 billion. More here.
Ontruck, a year-old, Madrid-based startup that has built an “on-demand logistics platform” to connect businesses directly with road freight carriers, has raised $10 million in Series A funding. The round was co-led by Atomico and Idinvest, with participation from earlier investors Point Nine Capital, La Famiglia, and Samaipata Ventures. TechCrunch has more here.
Sun Basket, a three-year-old, San Francisco-based meal kit startup with a focus on healthful recipes and organic ingredients, has raised $9 million in Series C-2 funding led by Unilever Ventures, with Baseline Ventures and Founders Circle Capital participating. The investment brings the startup’s total funding to $52 million. TechCrunch has more here.
Twiggle, a three-year-old, Tel Aviv-headquartered startup focused on simplifying product searches online, has raised $15 million led by MizMaa Ventures and Korea Investment Partners. The round brings the company’s funding to $33 million. TechCrunch has more here.
Vivid Vision, a three-year-old, San Francisco-based medical technology company applying virtual reality to the field of vision care, has raised $2.2 million dollars in seed funding led by SoftTech VC, with particiipation from The Venture Reality Fund, CRCM Ventures, SOS Ventures, Anorak Ventures, and Liquid 2 Ventures, a seed-stage venture capital firm co-founded by former NFL quarterback Joe Montana. More here.
New Funds
SignalFire, a four-year-old, San Francisco-based investment firm that touts data-focused investing as its competitive edge, has closed on $330 million in commitments across two funds, one of which focuses on seed and early-stage deals, and another that does growth investing. The firm had closed its debut fund with $53 million. The WSJ has more here.
Exits
Verizon is acquiring Straight Path Communications, a publicly traded wireless spectrum holder, for about $3.1 billion, after beating rival AT&T in an intense bidding. Why all the fuss? Because Straight Path holds licenses to use high-frequency radio waves that some engineers think could form the backbone of next-generation networks, explains the WSJ.
Cisco is paying $125 million to acquire MindMeld, a six-year-old, San Francisco-based startup that helps businesses to build conversational interfaces with cloud-based services, the companies announced this morning. MindMeld had raised $15.4 million in financing from GV, Greylock Partners, Bessemer Venture Partners and Intel Capital, among others. TechCrunch has more here.
Craftsy, a seven-year-old, Denver-based online destination for crafting enthusiasts, has sold to Comcast NBCUniversal for undisclosed terms. According to Crunchbase, the company had raised $106 million from investors, including Stripes Group and Adams Street Partners. The Hollywood Reporter has more here.
Google has acquired a 6.5-year-old VR game studio called Owlchemy for undisclosed terms. The company had raised $5 million in seed funding from Capital Factory, Qualcomm Ventures, Colopl VR Fund, HTC and The Venture Reality Fund. TechCrunch has more here.
People
Josh Mandel-Brehm is joining the venture firm Polaris Partners as an entrepreneur-in-residence, Mandel-Brehm previously held various business development and strategy positions at the publicly traded biotech company Biogen.
Data
Good news for VCs: So-called tourist investors — hedge funds, mutual funds, private equity investors — put just $12 billion to work in startups in the first quarter of this year, a decline of 42 percent from the year prior, according to PitchBook Data. More here.
Essential Reads
Uber, already dealing with a litany of crises, could also be facing an exodus of key talent, according to Recode, whose sources say some of the company’s engineers are looking to get out, owing in part to a lawsuit brought by rival Alphabet. More here.
Watch out Nest Labs. Andy Rubin is backing a new, smart camera startup that’s poised to give the Nest Cam a run for its money.
Amazon has apparently been blocking the price-crawling bots of competitors like Wal-Mart, making it difficult, if not impossible, to match the company’s ever-changing prices.
Detours
The Economist interviews Donald Trump, and the transcript is really something else.
According to the American Academy of Facial Plastic and Reconstructive Surgery, 42 percent of patients seek cosmetic procedures “to look better in selfies.” (!!)
Eek. Borrower fraud in U.S. auto loans is approaching levels seen in mortgages during last decade’s housing bubble, and it could potentially could ripple through the economy.
Retail Therapy
In Toronto, one of the city’s most expensive properties is up for sale. Here’s what $36 million gets you.