StrictlyVC: July 27, 2017

Thursday!

Thanks so much to those of you who picked up tickets earlier this week to our next StrictlyVC event, coming up Wednesday evening, September 27, at the always gorgeous Autodesk Gallery in downtown San Francisco.

We have more great news about the night: Megan Quinn and Jules Maltz, general partners at Spark Capital and IVP, respectively, have joined the program to dish on what metrics a company needs to land growth-stage funding right now, as well has how their work has changed. (With a changing cast of “tourist” investors and longer paths to exit, the landscape is shifting, and so are the term sheets.)

They join cryptocurrency banker Stan Miroshnik, who’ll be talking ICOs, how they impact VCs, and whether or not they’re here to stay (in light of increased SEC interest), and LPs Michael Kim and Beezer Clarkson, both of whom write checks to some of the best-known venture firms in the world and who have plenty of thoughts about the current ecosystem.

We’re not done quite yet(!). If want to a great overview of what’s happening in the startup world, do come. Seats are available here.

Top News in the A.M.

Slack is raising about $250 million in a funding round co-led by SoftBank Group. According to TechCrunch, early investor Accel Partners and other earlier investors are also participating in the round.

WeWork is making a big move to win the co-working market in China after it announced the creation of a standalone WeWork China business, backed by $500 million from earlier backers SoftBank and Hony Capital. The capital follows two other ginormous rounds this year: a $760 million round and an earlier $300 million round. More here.

For good measure, here’s a running list of every company that has so far been the beneficiary of Softbank‘s largess, courtesy of its $93 billion Vision Fund.

Twitter just reported a lower-than-expected number of monthly active users in its second-quarter earnings release; its shares have fallen roughly 13 percent since.

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In the Murky World of ICOs, This Young Founder Aims to Lead the Way

When it comes to initial coin offerings, or ICOs, there’s plainly a lot that investors still don’t understand. Though start-ups and founders have raised more than $1 billion so far 2017 by selling customized virtual currencies to anyone willing to buy them, it’s been unclear whether and which tokens might eventually be categorized as securities; how ICOs impact startups’ valuations; and who, if anyone, might regulate such offerings.

Yesterday, the SEC finally spoke up, saying it has concluded that at least some virtual currencies should be considered securities and made subject to federal securities laws. It suggested that not every token should or will be defined as a security but rather that determinations will be made on a case-by-case basis, depending on “facts and circumstances . . .”

Still, the world of ICOs could use a bit more structure, according to Juan Benet, the founder of Protocol Labs, a venture-backed company that’s building a decentralized storage marketplace called Filecoin and that also worked with AngelList this year to create CoinList, a platform that’s promising a more structured way for founders to raise money for their token-based networks. The (sizable) catch: the investors buying into the projects on CoinList must be accredited.

Benet has reason to think that bar won’t slow down ICO sales too drastically. To wit, Filecoin will become the first project launched on CoinList, and demand is such that Benet has already pushed the date of the ICO back twice to ensure that all goes smoothly. (Unlike with many ICOs, Filecoin, whose offering goes live on August 7, is also capping the sale, though it isn’t letting investors know where that cap is until after the sale is completed.)

We talked with Benet earlier today to better understand what he’s up to, and why he thinks Filecoin’s ICO could serve as a model for future founders. Our chat has been edited for length.

The SEC basically put everyone on watch this week. Do you see that as good or bad news?

I think more clarity is great, and we did expect it. I think a lot of people misunderstood what [the agency] said to mean that all tokens will be regulated, when what it said is that some tokens could be securities. Every token has different properties, and whether they’re securities depend on those properties. If a token acts like equity, for example, it’s probably something like a security. Other tokens, like Ethereum and Bitcoin, are more like commodities, so the SEC hasn’t gone after those.

More here.

New Fundings

ActionStreamer, a two-year-old, Cincinnati, Oh.-based startup whose wearable “hatcams” and “helmetcams” generate video footage for sale to leagues and media companies, has raised $1.88 million in seed funding led by CincyTech, with participation from Vine Street VenturesMore here.

Big Switch Networks, a seven-year-old, Santa Clara, Ca.-based data center networking technologies company, has raised $30.7 million in new funding. Investors include Dell Technologies CapitalSilverlake WatermanIndex VenturesMorgenthaler VenturesMSD CapitalRedpoint VenturesKhosla Ventures, and Intel Capital. CRN has more here.

BrandTotal, a year-old, Tel Aviv, Israel-based platform that helps its clients reverse-engineer their competitors’ so-called dark marketing  efforts, has raised $2 million in seed funding led by Gilot Capital Partners, with participation from KDC Media FundMore here.

Brolly, a year-old, U.K.-based AI-driven insurance advisory application, has raised £1 million ($1.3 million) in seed funding co-led by Valar Ventures and Pi Labs, with participation from Entrepreneur First. TechCrunch has more here.

Callsign, a six-year-old, London-based AI-based authentication platform that powers adaptive access control for enterprises (verifying that people are who they say based on a touchscreen swipe), has raised $35 million in Series A funding co-led by Accel Partners and PTB Ventures. Other participants in the round include Allegis Capital and NightDragon Security. TechCrunch has more here.

Cleo, a two-year-old, London-based digital assistant that helps manage finances, has raised £2 million ($2.6 million) in funding. LocalGlobe led the round, with participation from Niklas ZennströmEntrepreneur First, and Jason Goodman, the founder of advertising agency Albion. TechCrunch has more here.

Complexa, a nine-year-old, Pittsburgh, Pa.-based clinical stage biopharmaceutical company at work on treatments for inflammatory and fibrosis related diseases, has raised $62 million in Series C funding. New Enterprise Associates and Pfizer Venture Investments led the round; other participants include Edmond de Rothschild Investment Partners and HBM Healthcare Investments.

Cool Cousin, a two-year-old, London-based social networking-driven travel app, has raised $2 million in seed funding led by the Elevator Fund. TechCrunch has more here.

Cyrus Biotechnology, a three-year-old, Seattle-based company that sells easy-to-use computational protein engineering software, raised $8 million in Series A funding led by Trinity Ventures, with participation from OrbiMed AdvisorsSpringRock Ventures, and W Fund. GeekWire has more here.

FabHotels.com, a three-year-old, Gurgaon, India-based aggregator for hotel rooms, has raised $25 million in Series B funding led by Goldman Sachs, with participation from Accel Partners. The Economic Times has more here.

FilterEasy, a five-year-old, Raleigh, N.C.-based startup that delivers air filters to homes on a subscription basis, has raised $6.9 million in Series B funding led by Arsenal Venture Partners. Other investors in the round include the NC State Endowment FundBonaventure CapitalCofounders CapitalIDEA Fund PartnersJohn Replogle, and Triangle Angel PartnersMore here.

GearLaunch, a three-year-old, San Francisco-based ecommerce platform that promises to help its retailer customers with everything they need to sell products, from manufacturing to customer service, has raised $4.8 million in Series A funding led by Hunt Technology VenturesMore here.

Inceptus Medical, a six-year-old, Aliso Viejo, Ca.-based medical device incubator, has raised $4.5 million in Series B funding for one of its spin-outs, Okami Medical, a developer of heart disease devices. Investors include Inceptus’s board of directors and U.S. Venture Partners. The Orange County Register has more here.

Kezar Life Sciences, a two-year-old, South San Francisco-based biopharmaceutical company that’s developing small molecule therapeutics, has raised $50 million in Series B funding. Cormorant Asset Management and Morningside Venture led the round, with participation from Cowen Healthcare InvestmentsPappas VenturesQiming Venture PartnersBay City CapitalEcoR1 CapitalOmega Funds and Aju IB Investment. FierceBiotech has more here.

Liulishuo, a five-year-old, Shanghai, China-based language learning company, has raised roughly $100 million in Series C funding co-led by China Media Capital and Wu Capital. Other participants in the round include Trustbridge PartnersIDG Capital, GGV CapitalCherubic Ventures, and Hearst Ventures. China Money Network has more here.

Loftsmart, a two-year-old, New York-based marketplace for student rental properties, has raised $2.75 million in funding led by Tribeca Venture Partners. The company has now raised $5 million altogether. Bloomberg has more here.

Marqeta, a seven-year-old, Oakland, Ca.-based debit and credit card processing startup, has raised $25 million in Series D funding led by Visa, with participation from CreditEase and previous investors Commerce Ventures83 NorthGranite VenturesIA Capital, and CommerzVentures. TechCrunch has more here.

Megacool, a two-year-old, San Francisco-based mobile game tech startup, has raised $1.5 million in seed funding led by Alliance VentureMore here.

Peer5, a five-year-old, Palo Alto, Ca.-based startup that helps publishers stream video to large audiences, has raised $2.5 million in seed funding. The Y Combinator alum raised the funding from FundersClubOriza VenturesTank Hill VenturesLeorsa Group, and several individual investors. TechCrunch has more here.

PreciThera, a year-old, Montreal-based precision medicine company that’s designing biological therapeutics for the treatment of orphan bone diseases, has raised $29 million in Series A financing. Investors in the round include Sanderling VenturesArix BioscienceFonds de solidarité FTQCTI Life Sciences and Emerillon CapitalMore here.

Rodeo Therapeutics, a Seattle-based developer of small-molecule therapies to promote regeneration and repair of multiple tissue types, has raised $5.9 million in Series A funding from a long list of investors. They include AbbVie VenturesAlexandria Venture InvestmentsARCH Venture PartnersEli Lilly and CompanyJohnson & Johnson InnovationWatson FundWRF Capital and WuXi AppTec. GeekWire has more here.

Sebacia, a seven-year-old, Duluth, Ga.-based dermatology and aesthetics company whose acne treatment is already available in Europe and is currently in trials in the U.S., has raised $20 million in Series D funding. Versant VenturesDomain AssociatesAccuitive Medical Ventures and Partners Healthcare Innovation Fund led the round, with participation from Salem Partners. The company also secured $16 million in debt from Hercules Capital. FierceBiotech has more here.

Toast, a four-year-old, Boston-based restaurant technology platform whose software enables restaurants to take meal orders and payments electronically, has raised a stunning $101 million in funding led by Lead Edge Capital and Generation Investment Management (a firm chaired by Al Gore). Earlier investors also joined the round, including Bessemer Venture Partners. Xconomy has more here.

Within, a three-year-old, Venice, Ca.-based virtual reality film company founded by renowned music video director Chris Milk, has raised $40 million in Series B funding co-led by Temasek and Emerson Collective, with participation from WPPMACRO VenturesAndreessen Horowitz21st Century Fox and Raine Ventures. Variety has more here.

Also Sponsored By . . .

Draper University, a residential entrepreneurship bootcamp founded by Tim Draper, is accepting applications for its Fall Hero Training Class, a seven-week residential program located in downtown San Mateo that allows students to develop a product and pitch to 80+ investors. Our next class kicks off September 11th; two blockchain companies, Qtum.org and Bitclave.com, have pledged to give crypto tokens to those who apply, as well as those who attend the program.

The program looks for entrepreneurially minded founders who run pre-seed companies who are between the ages of 18 and 28. Draper University has launched 280+ startups that have raised $50M+, and a number of them have since been acquired. Apply by August 11th at draperuniversity.com/application.

New Funds

Gigafund, a new fund created by Founders Fund cofounder Luke Nosek and venture partner Stephen Oskoui, is looking to raise up to $100 million for debut fund, reports Axios. More here.

LiveOak Venture Partners, a five-year-old, Austin, Tex.-based venture capital firm, is looking to raise up to $110 million for its second fund, shows an SEC filing. The firm closed its debut fund with $109 million in 2014.

Northern Light Venture Capital, a 12-year-old venture firm with numerous offices through China, is looking to raise $390 million for its fifth fund, shows an SEC filing. The firm focuses on tech and consumer service companies.

TenOneTen Ventures, a six-year-old, L.A.-based seed-stage venture firm, is raising up to $50 million for its second fund, shows an SEC filing. The firm had closed its debut fund with $18 million in 2015.

IPOs

Redfin, the Seattle-based real estate brokerage company, has finalized the terms for its IPO, revealing plans to sell 9.2 million share at between $12 and $14 a share. More here.

Sienna Biopharmaceuticals, a Westlake Village, Ca.-based clinical-stage biotech company that’s developing medical dermatology products, raised $65 million by offering 4.3 million units at $15 a share last night. The company’s shares began trading on Nasdaq today are are currently priced around $20.

Exits

Snapdeal, the India-based shopping site giant, has accepted Flipkart‘s revised takeover offer of up to $950 million. More here.

Nasdaq is acquiring Sybenetix, a six-year-old, London-based company that makes market surveillance and compliance monitoring software. Financial terms weren’t disclosed. More here.

Publicly traded telecommunications company Mitel is acquiring publicly traded rival ShoreTel for $430 million. Combining the two companies catapults Mitel to number two in the Unified Communications as a Service (UCaaS) market, according to the company. Mitel’s shares are already up slightly on the news. TechCrunch has more here.

RealtyShares, a four-year-old, San Francisco-based online marketplace for real estate investing, has acquired rival Acquire Real Estate, a three-year-old, Boston-based company that had raised $6 million from investors, shows Crunchbase. Terms were not disclosed. RealtyShares has raised at least $35 million from investors, including Union Square VenturesGeneral Catalyst Partners, and Menlo Ventures. CrowdFund Insider has more here.

Stripe has acquired Payable, a San Francisco-based tax and contractor payments service provider. Financial terms weren’t disclosed. According to TechCrunch, Payable had raised $2.1 million from investors, including General Catalyst PartnersLerer Hippeau VenturesSherpa CapitalHaystack, and Freestyle Capital. TechCrunch has more here.

People

Jeff Bezos is now the richest man in the world.

On the eve of its IPO, Redfin says its co-founder, David Eraker, is threatening litigation against the company over one of its pending patent applications.

Per Axios, VC Ben Nasarin has left Canvas Ventures less than two years after joining as a general partner. Nasarin was an active seed investor before joining the firm and Canvas says he left to “pursue a platform where seed is a more significant part of the investment mix.”

Michael Sippey, who’d spent two years as vice president of product at Twitter, then launched a now defunct texting app, has joined Medium as its head of product.

Yancey Strickler, cofounder and CEO of Kickstarter, says he’s stepping downfrom the crowdfunding giant later this year and that a search for his replacement is in motion.

Jobs

Oath is looking to add a senior analyst to its corporate development team. The job is in New York. Email Jonathan Lee: joslee@oath.com.

Essential Reads

The first known attempt at creating genetically modified human embryos in the United States has been carried out by a team of researchers in Portland, Oregon. Technology Review has the story here.

Detours

How to read your alumni magazine.

Simple grilling recipes from top chefs.

Retail Therapy

Battle Ball Arena. (Battle balls sold separately.)



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