• NFX Guild Just Graduated 16 Startups: Here They Are

    nfx-guild-logo-bigThe Bay Area accelerator NFX Guild presented 16 companies to a crowded room of 200 investors down on Sand Hill Road yesterday, and the room was reportedly very energized.

    Little wonder. NFX was founded by seasoned entrepreneurs and operators James Currier, Stan Chudnovsky and Gigi Levy Weiss. Its companies are referred to the outfit by a network of 42 scouts — some of them investors, many of them entrepreneurs, and a fair number who work double-time as angel investors. (No company can enter into the program without being routed through them.)

    Even more attractive to investors, presumably: These startups are centered around fully formed ideas by the time they hit NFX. Indeed, fully 13 of the 16 companies that presented today had already raised funding, and some were started by pretty big wheels. Wheelwell, for example, a Houzz-like platform automotive parts, accessories and services, was cofounded by the person who established Apple’s Mac Genius service in Apple’s retail stores. Meanwhile, the CEO of Outdoorsy has already led two public companies.

    Companies admitted by NFX are given $120,000, along with 30 hours of programming, mentoring, and introductions to investors. NFX in turn gets 7 percent of their company. (If they’ve already raised more than $750,000, NFX asks for 5 percent.)

    Today’s batch represents NFX’s second class, and the companies are still meeting with VCs, so it’s probably not too late to kick the tires if you’re an investor — or check out your newest peers if you’re a founder. You can check them out right here.

    Connie

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  • The Fascinating Rise of E-Commerce App Wish

    untitled-3620Last week, toward the end of a StrictlyVC event in San Francisco, GGV Capital managing director Hans Tung took the stage to interview one of his portfolio CEOs, Peter Szulczewski of Wish. With an increasingly boisterous crowd as their background, Tung managed to ferret out lots of fascinating information from the highly personable Szulczewski, who looked very much the part of busy founder. (Blood-shot eyes, rumpled clothing.)

    We’d been eager to learn more about Wish — a fast-growing e-commerce mobile app that has raised roughly $600 million from investors — particularly because Szulczewski hasn’t talked often with the press or shared much hard information about the company. He did last week, though, including telling the crowd that Wish now has “hundreds of millions of users,” that it saw “single-digit billions of dollars” in gross merchandise volume, and seemingly confirming rumors that the company has seen interest (if not concrete acquisition offers) from Alibaba and Amazon.

    If you’re interested in e-commerce or want to understand merchants in China particularly, this is a must-read.

    More here.

    Connie

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  • Online Travel Platform KimKim Brings Back the Travel Agent

    Screen Shot 2016-02-26 at 10.11.56 PMSometimes, there can be a little too much disruption. So goes the thesis of Joost Schreve, the former head of mobile for TripAdvisor, who left the company last November and started his own startup, KimKim, in December.

    The nascent company — newly seed-funded with $1 million from investors, including NFX Guild — is catering to the presumably many people who no long want to plan their next vacation by scouring the web. Its simple, secret weapon? Good old-fashioned travel agents, who talk online with customers via a conversational interface.

    We talked with Schreve earlier this morning to learn more about what he’s developing at his four-person, Palo Alto, Ca.-based company. Our conversation has been lightly edited for length.

    You left TripAdvisor — where you worked after selling it your startup in 2011 — expressly to start this new thing. What wasn’t TripAdvisor doing that you think you can?

    TripAdvisor and many sites like it have a lot of information, so users have to do a lot of filtering and comparing and it becomes a very painful process, especially for trips that are complex or longer. The average consumer goes to 38 different sites, according to an Expedia study, and they spend more than 10 hours [researching these more involved trips].

    The difference between this painful process and a nice process is one person who is unbiased and can help you.

    We are talking, of course, of the long-maligned travel agent. But how do you convince people that these online agents are unbiased and not getting kickbacks for their recommendations? Wasn’t that part of the problem to begin with?

    More here.

    Connie

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  • Jana Raises $57M to Bring Unrestricted Access to the World

    Screen Shot 2016-02-17 at 8.14.22 PMNathan Eagle was a Fulbright scholar from MIT, teaching at the University of Nairobi, when he had his “aha moment.”

    Specifically, Eagle was teaching a mobile phone programming curriculum at the school when he and his students built an SMS system that enabled rural nurses to text information about low blood supply levels to centralized blood banks. (Earlier, the nurses depended on someone who drove from hospital to hospital, reporting back who needed what.)

    The system earned Eagle praise and a photo in the local papers. Unfortunately, the nurses almost immediately stopped using the system. The reason: the onerous costs of text messaging. “I didn’t realize it at the time, but I was basically asking them to take a pay cut,” says Eagle.

    Indeed, in many countries, including India, Brazil, and Indonesia, one of the main barriers to connectivity is the crippling cost of data. Facebook reminded the world of this problem when its India-focused Free Basics program — designed to offer free Internet access to certain sites only — was recently banned by India’s telecom regulator, which ruled that the practice of charging different prices to different customers is not acceptable.

    Now, Facebook’s fumble looks well-timed for Eagle’s company, Jana, which has been quietly providing free, unrestricted Internet access in emerging markets.

    How it works: through an Android app by Jana called mCent, users must first agree to immersive advertising experiences, like spending five to 10 minutes using Amazon’s app in exchange for 20 to 50 megabytes of data.

    Another advertising client of Jana’s, the popular, India-based music streaming service Saavn, gives customers 10 free songs that they can listen to any time they want. The idea is to give those users a sense that their phone is much more than a two-way communication device; it’s a music player, too.

    More here.

    Connie

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  • RobinHealth Enters the Online Pharmacy Race

    Screen Shot 2016-02-17 at 7.08.41 AMYou’ve probably noticed; on-demand pharmacy services are springing up like daisies. New York-based Zipdrug, for example, is an online app that processes customers’ payments and dispatches messengers to pick up their medicine for a $10 delivery service fee. The company has so far raised more than $2.6 millionin seed funding from Notation Capital, Lux Capital, and Collaborative Fund, among others.

    A better-funded upstart is PillPack, a full-service pharmacy that delivers pre-sorted pills packaged individually on a tape-dispenser-like roll to customers every two weeks. It has mostly operated as online platform, but after raising$50 million last year led by CRV, it’s opening small brick and mortar locations, too, where patients can consult with licensed pharmacists — and more people can learn of the company.

    Online pharmacy ScriptDash formed around the same opportunity last spring.

    None are stopping yet another new entrant from gearing up to compete with them. Instead, RobinHealth — a 10-month-old, San Francisco-based startup — has already raised an undisclosed amount of seed funding and is preparing to pitch investors at the March 1, invite-only demo day of NFX Guild, a Bay Area accelerator program that graduated its first batch of startups last summer. (We’ve written about NFX here.)

    Unsurprisingly, perhaps, RobinHealth says that it’s different.

    More here.

    Connie

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  • Venture-Backed Fundrise Fires CFO, Citing Extortion Scheme

    Screen Shot 2016-02-18 at 9.20.10 PMIt’s strange days for Fundrise, a Washington, D.C.-based, venture-backed crowdfunding platform that allows a range of investors to fund commercial real estate projects.

    Yesterday, The Real Deal, an outlet that covers New York real estate news, turned up an SEC filing which states that Fundrise has fired its mortgage REIT’s chief financial officer and treasurer Michael McCord, citing an attempt by McCord to extort more than $1 million from the company.

    “Exhibit one” listed in the filing is a letter to Fundrise’s backers that reads: “Strategic Investors & Advisors, I am saddened to have to inform you that an employee of our company has engaged in what we believe to be an attempt to extort over $1M from the company. As part of this, he claims the company acted inappropriately concerning two real estate deals. Though we believe there is no merit to his claims, we take any allegation with the utmost seriousness.

    As a result, we have engaged a third-party financial audit firm to conduct a thorough investigation concerning his allegations. We are pursuing all appropriate and precautionary steps to protect our investors and our organization.

    Furthermore, we are contacting the appropriate law enforcement agency to report what we believe to be his criminal behavior.”

    The letter was presumably authored by Fundrise cofounder and CEO Benjamin Miller, who, according to the same SEC filing, is taking on the role of interim CFO and treasurer in addition to his other responsibilities.

    Miller did not respond to requests for comment today.

    Several investors didn’t respond to requests for comment; another called the development “concerning,” and said his team would be “tracking it more closely.”

    Asked about the accusation, McCord told us last night that the “current narrative” is “baseless and a pathetic deflection attempt from the real story by Fundrise.” He declined to comment further.

    More here.

    Connie

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  • IfOnly Raises $10.25M for Its “Experiences” Marketplace

    Screen Shot 2016-02-08 at 6.53.31 AMIt used to be hard to take IfOnly very seriously. The 3.5-year-old, San Francisco-based company service has always serviced customers looking for unusual experiences, but they seemed out of reach for most, like the (expensive) chance to cook with famed chef Thomas Keller. That the company was inspired by the wealthy friends of founder and CEO Trevor Traina — people looking to have “incredible experiences,” as Traina told Vanity Fair in a 2013 story about San Francisco society — added to the impression that IfOnly was aimed squarely at the 1 percent.

    But Traina, who has founded four companies previously and managed to sell all of them, has big ambitions to serve more than the very monied.

    In fact, a long list of investors has provided IfOnly with $10.25 million in Series B funding to help it evolve beyond an “experiences marketplace” for clients like Madonna to a platform through which local experts can market and sell their services. Want to learn how to make a macchiato from the best coffee bar in your neighborhood? You might find the opportunity on IfOnly. Interested in a basketball lesson from a former NBA pro? He might be marketing his services on IfOnly, too.

    Traina says in earnest that the addressable market his 60-employee company is chasing is $225 billion. He cites as proof surveys that suggest millennials in particular are more interested in experiences than past generations. (One such study in 2014, conducted by Harris Poll on behalf of the online ticket company Eventbrite, reported that 72 percent of respondents wanted to increase their spending on experiences in the coming year.)

    “They’re never going to buy a car,” says Traina of millennials. “They don’t care about furniture. But they’re on social media channels, where it’s not fun to post about a belt but it is fun to [post a picture, saying], “Check me out backstage.” In fact, says Traina, he believes there’s an “eBay-sized business here. Everyone wants experiences and no one is really offering it to them.”

    It’s not so ridiculous.

    More here.

    Connie

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  • Zach Sims of Codecademy on (Still) Not Charging Users

    Zach SimsThough the four-year-old online platform Codecademy now teaches employable tech skills to 25 million users around the globe, it still doesn’t charge for its services, some early testing notwithstanding. The company is choosing instead to remain focused on growth before introducing what CEO Zach Sims describes as a “prosumer” business.

    In today’s market, that’s an unusual stance to maintain. It’s even more unusual because Codecademy has raised just $12.5 million over the years, a small sum by the standards of most online learning platforms. The six-year-old, San Francisco-based online learning and teaching marketplace Udemy, for example, has raised $113 million to date.

    In a sit-down in Davos, we asked Sims about Codecademy’s strategy; whether he’s feeling nervous about waiting so long to charge (or else raise more capital); and if Codecademy might eventually branch into the seemingly lucrative business of coding boot camps.

    More here.

    Connie

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  • New Relic’s CEO on the Joys of Not Being a “Unicorn”

    lewis_cirneLew Cirne, founder and CEO of the seven-year-old software analytics companyNew Relic, has a lot for which to be thankful. Near the very top of his list? The fact that New Relic went public a year ago, after raising roughly $214 million from investors. (Its market cap is currently $1.78 billion.)

    We talked yesterday about what’s keeping so many other companies from doing the same. Our chat has been edited for length.

    You’re a big believer in going public. At the same time, you sold your first company, Wily Technology, for $375 million in 2006 to CA Technologies.

    A big part of why Wily didn’t have the characteristics to endure as a public company was that we were able to land big deals, but there was a high degree of variability to it.

    That’s not true at New Relic?

    The founding idea of New Relic was about building something that could endure as a public company, that would do well in hot and cold markets. We wanted to be geared toward making good decisions even under the obligation of reporting financials every 90 days. So I wanted a 100-percent subscription business. I was focused on high gross margins; ours are 80 percent. We also focused on establishing a broad customer base of both small and big customers, so no one customer would have disproportionate sway [over our financial health].

    Most traditional enterprise companies, the way they do financials depends on huge deals that almost always close in last five days of quarter, and there’s a lot of risk in them, so in order to succeed in a predictable way, they wind up prioritizing the big deal over product integrity and strategic direction.

    Is New Relic profitable or has it ever been?

    We’re not yet profitable, but have a very good handle on our growth versus profitability. You can invest more for growth or dial back for profitability, and we feel like we’ve always had good control over that dial.

    Presumably, your public shareholders understand that story.

    The shareholders I talk with understand that we’re a growth company. For example, the average New Relic customer spends 38 percent more than the average customer spent a year ago because we’ve invested in new products that they’re buying more of.

    Shareholders obviously ask how we think about growth versus profitability, but we don’t see pushback [because] we think it makes more sense to invest in new growth than to slow down and be a more profitable, smaller company.

    How much of your time is spent with shareholders? An oft-cited excuse for remaining private is that they’re a huge distraction.

    More here.

    Connie

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  • TrialPay Cofounder Back with Fractional Home Ownership Startup

    Screen Shot 2015-11-25 at 5.43.24 PMPoint — an 11-month-old, Palo Alto-based home equity marketplace that plans to take people’s homes and make them completely liquid, divisible and tradable by letting owners sell fractional equity in them — is raising funding, shows a new SEC filing.

    It’s a fascinating concept that we think has only been tried in the past with vacation rentals by high-end developers, including Four Seasons and Ritz-Carlton.

    Point was co-founded by Eddie Lim, who co-founded the e-commerce payment platform TrialPay, which Visa acquired in 2013 for undisclosed terms.

    Don’t be surprised to see Andreessen Horowitz lead or participate in this round. In August, the Sand Hill Road firm brought aboard another TrialPay co-founder (and Lim’s fellow Harvard classmate), Alex Rampell, as a general partner to focus on financial tech startups.

    More here.

    Connie

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