Happy Wednesday!
Top News
| Y Combinator is expanding to China after a year or two of dropping hints about such plans. Toward that end, it announced the hiring last night of former Microsoft and Baidu executive Qi Lu, who will develop a standalone startup program that runs on Chinese soil. TechCrunch has more here. Uber just reported its second quarter financials, showing a slight slowdown in net revenue and bookings growth. It also said losses widened from the previous quarter. TechCrunch has more here. It’s official: Goldman Sachs is (now) advising Tesla on its bid to go private, says Business Insider. In the meantime, the S.E.C. has reportedly subpoenaed Tesla over the issue. |
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| Catching Up with Startup Whisperer (and Wealthfront CEO) Andy Rachleff |
| Andy Rachleff, who cofounded the venture firm Benchmark back in 1995 and has more recently been leading the wealth management firm Wealthfront and teaching at Stanford, is widely sought out for his startup advice. It has become harder to come by, though, given the demands on Rachleff’s time. Most notably, Rachleff has had to dial back his work at Stanford to one course during one quarter of the year — a class that we can only guess is heavily oversubscribed by students. That doesn’t mean he doesn’t enjoy the work. Right now, he’s helping two longtime friends, AppDynamics cofounder Jyoti Bansal and VC John Vrionis, with a new kind of accelerator program they are launching today (more on that here). In a quick call to discuss that program earlier this week, he also fielded a few questions from us about the current state of early-stage startup investing and how founders can best navigate it. We asked him, for example, about how a glut of seed-stage investment has impacted the way that startups are raising money — often in pre-seed, then seed, then post-seed rounds, before raising Series A funding. We wondered if, nomenclature aside, he felt things had changed fundamentally. As it turns out, he does not. “While the structure and characters involved are very different than 10 years ago, the steps you need to go through are no different,” said Rachleff. “The whole point is to understand what an investor at the next round expects. You have to determine whether or not you’re ready [for that next meeting], and try to achieve product-market fit as fast as possible before you get to it.” Indeed, Rachleff suggested that he thinks it unwise for founders to raise seed rounds serially. “When companies raise seed funding, [that money] is to prove the dogs want to eat the dog food. If they can’t [prove that], and they have to ask for more seed funding,” the startup becomes “less compelling” to later investors. We asked him about some of the biggest mistakes that founders make, and he said that many of these center on who founders approach for funding, how they pace the rate at which they approach investors, and how, exactly, they pitch their startups. On that last point, said Rachleff, “People think data is a way to compel people, but it’s the story that compels people, and that has never changed, whether you’re talking about political campaigns or business presentations.” More here. |
| New Fundings |
| AuditBoard, a four-year-old, L.A.-based maker of risk and compliance software for large businesses, has raised $40 million in Series B funding led by Battery Ventures. TechCrunch has more here. AxiaMed, a five-year-old, Santa Barbara, Ca.-based healthcare payments tech company, has raised $12.4 million led by Health Enterprise Partners. More here. BabelBark, a 2.5-year-old, Newton, Ma.-based online platform that connects pets with pet care businesses (from veterinarians to groomers to boarding kennels), has raised $2.8 million in additional Series A funding that pushes its original Series A round to $4.5 million altogether. The company has yet to disclose any of its investors. More here. Backbone PLM, a four-year-old, Boulder, Co.-based, cloud-based, collaborative platform that enables brands to streamline the product development process, has raised $8 million in Series A funding led by Signal Peak Ventures, with participation from Grotech Ventures, Spider Capital, Novel TMT Ventures, Beanstalk Ventures, Brainchild Holdings and Peterson Ventures. More here. BioBeats, a six-year-old, London-based company that sells a well-being course and app, has raised £2.4 million (roughly $3 million) from Oxford Sciences Innovation, White Cloud and IQ Capital. More here. Blueberry Therapeutics, a seven-year-old, Cheshire, England-based drug discovery and development company that’s developing nanomedicines for difficult-to-treat skin and nail infections, has raised £10 million ($12.7 million) in Series B funding, including from China Medical Venture Investment, a wholly owned subsidiary of China Medical System Holdings, and A&B Company. More here. Bugworks Research, a 4.5-year-old, Bengaluru, India-based antibiotics developer, has raised $9 million in Series A funding led by UTEC Japan, with participation from Acquipharma Holdings and 3ONE4 Capital. More here. Concourse Global, a year-old, Brooklyn, N.Y.-based educational tech company, has raised $2 million in seed funding led by Colle Capital, with participation from A-Star Education and Third Kind VC. More here. Karma, a 2.5-year-old, Stockholm, Sweden-based startup that offers a marketplace to let local restaurants and grocery offer unsold food at a discount, has raised $12 million in Series A funding. Swedish investment firm Kinnevik led the round, with participation from Bessemer Venture Partners, appliance manufacturer Electrolux, and previous backer VC firm e.ventures. It brings total funding to $18 million. TechCrunch has more here. MoneyLion, a five-year-old, New York-based online consumer lending and savings app aimed at the middle class, has raised $29 million in Series B-1 funding, according to an SEC filing that shows a $40 million target and was first flagged by Axios. Last year the company raised a $42 million Series B round led by Edison Partners. More here. Progressa, a five-year-old, Vancouver, Canada-based fintech company that says it’s leveraging big data to improve lending outcomes for sub-prime consumers, has raised $84 million in Series B funding co-led by Gravitas Securities and Canaccord Genuity. More here. Raw Fury, a three-year-old, Stockholm, Sweden-based indie game maker, has raised $5.5 million in Series A funding from Nordisk Film Games, a subdivision of the Danish film and entertainment company. VentureBeat has more here. RevJet, a four-year-old, San Carlos, Ca.-based marketing platform, has raised $21 million in Series A funding led by Nautic Partners. More here. Twistlock, a three-year-old, Portland, Ore.-based startup focused on securing cloud-native environments, has raised $33 million in Series C funding led byICONIQ Capital, with participation from YL Ventures, TenEleven, Rally Ventures, Polaris Partners and Dell Technologies Capital. TechCrunch has more here. Ubiquity6, a year-old, San Francisco-based AR platform capable of creating a massively shared augmented reality experience that persists through time, has raised $27 million in Series B funding led by Benchmark and Index Ventures. More here. Vogo, a two-year-old, Bengaluru, India-based scooter-sharing start-up, has raised roughly $7 million in Series A funding led by ANI Technologies and Hero MotoCorp chairman Pawan Munjal, according to LiveMint. Matrix Partners India, Stellaris Venture and angel investors also participated in the funding round. More here. |
| New Funds |
| Foundation Capital, the 23-year-old, Menlo Park, Ca.-based venture firm, is raising $350 million for its ninth flagship fund, shows an SEC filing. Foundation had closed its eighth fund with $325 million in late 2015. More here. Matrix Partners, the 41-year-old venture firm headquartered in San Francisco, has raised $300 million for a third India-focused venture-capital fund, according to a new SEC filing. Matrix had launched its first India fund in Mumbai in 2006. More here. |
| Exits |
| Coinbase wants to be the “Facebook Connect for crypto,” notes TechCrunch, explaining why the company has just acquired Distributed Systems, a startup founded last year that was building identity standard for decentralized apps called the Clear Protocol. Much more here. City National Bank has acquired Exactuals, a seven-year-old, L.A.-based maker of SaaS software that enables complex payments in the entertainment industry (it manages residuals and royalties, for example). City National had joined a $10 million round of funding for the company last year. Terms of the deal aren’t being disclosed. More here. |
| IPOs |
| Bitmain Technologies, the world’s biggest producer of cryptocurrency mining chips, is planning a Hong Kong IPO that could raise as much as $3 billion, people with knowledge of the matter said. The Beijing-based company, whose 32-year-old co-founder Jihan Wu is one of the most powerful players in crypto, plans to file a listing application with the Hong Kong stock exchange as early as September, according to Bloomberg. More here. |
| People |
| Nigel Eccles created the fantasy sports site FanDuel back in 2009, and when it was acquired by European gambling company Paddy Power Betfair earlier this year, FanDuel was valued at $465 million. Eccles didn’t see a dime, though, and now he’s suing. Twitter last night temporarily restricted the account of InfoWars’s Alex Jones in a move that limits the account’s functionality without suspending it. WhatsApp cofounder Jan Koum said he was leaving Facebook in April, but he has reportedly been making periodic appearances in the office to secure his stock rewards. Some members of Tesla‘s board of directors are reportedly hiring lawyers to protect themselves from being sued over CEO Elon Musk’s tweets about taking the company private. |
| Data |
| Uber has been spending between $125 million and $200 million a quarter on its self-driving car unit over the past 18 months, says The Information, saying that that’s equivalent to between 15 percent and 30 percent of the company’s quarterly losses. Uber has invested at least $2 billion in the unit over the past three years, some of the company’s (seemingly frustrated) investors tell the outlet. More here. |
| Essential Reads |
| Apple could launch augmented reality glasses in 2020, and its own Apple car in 2023, predicts a securities analyst with strong track record. Amazon reportedly wants to turn its Twitch online hangout for avid gamers into a broader video service à la Youtube. Tencent, Asia’s most valuable tech firm, just delivered a surprise drop in profit on account of lower investment gains, breaking a growth streak that stretches back more than a decade. More on what’s happening here. |
| Detours |
| For much of this century’s first two decades, there has been at least one Rihanna song on the pop charts. What it takes to hold your breath for 24 minutes. |
| Retail Therapy |
| Pelican Elite Cooler. It’s “certified bear proof.” (Take that, Coleman.) |