• Spaceflight Industries Just Raised $25 Million, Led by Mithril

    Screen Shot 2016-06-24 at 7.58.33 PMSpaceflight Industries, a startup whose overarching goal is providing affordable, high-resolution images of earth, just raised $25 million in Series B funding led by Mithril Capital Management.

    Previous investors RRE Venture Capital, Vulcan Capital and Razor’s Edge Ventures also joined the round; it brings total funding for the seven-year-old, Seattle-based company to $53.5 million.

    Spaceflight joins a small but growing number of outfits turning geospatial data culled from satellite imagery into actionable, and lucrative, insights. Ambitiously, it has a three-pronged business strategy, too.

    First, working with companies like Planet Labs, Spire, and Planetary Resources, among others, Spaceflight helps organize these customers’ payloads, ensuring that their satellites get into space as seamlessly as possible. (It essentially arranges for ride-share launches for dozens of small satellites at a time.)

    According to the company, it has already organized the launch of 81 satellites, including by buying excess capacity on SpaceX rockets, along with Soyuz, PSLV, Dnepr, and Antares rockets. And Spaceflight has another 135 satellites scheduled to take space flights through 2018 via partnerships with a wide range of companies, Virgin Galactic and Orbital ATK among them.

    Spaceflight takes the business seriously enough that it purchased an entire SpaceX Falcon 9 rocket and plans to expand its services beyond ride-share launches, beginning late next year.

    But there’s more. In addition to getting other companies’ satellites into space, Spaceflight’s much bigger business — called BlackSky —  involves selling the satellite imagery of its customers to anyone willing to pay for it. A government might want to see whether an opposing army is beyond a hill, for example, or a humanitarian organization might want to measure the effects of deforestation. Unlike Orbital Insight, which uses machine learning to make sense of satellite imagery (then publishes its findings for customers), BlackSky largely wants to provide easy access to the images at unprecedented price points.

    More here.

    Connie

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  • Talking Kleiner 3.0 with Its New Consumer Investing Partner

    Screen Shot 2016-06-16 at 5.01.01 PMKleiner Perkins has been through the wringer since the go-go dot-com days of the late 1990s. After making a bundle on Google, the storied venture firm raised too much money from investors and grew too ambitious in scope before dramatically retrenching a few years ago — but not before being hit with one of the highest-profile lawsuits in venture industry. (It won the case, which centered on gender discrimination, but it took a beating in the process.)

    To restore its former glory, the firm is largely transformed from the firm it was a dozen years ago. For starters, it has undergone some major casting changes. Only one of its five general partners — Ted Schlein, who leads Kleiner’s investments in security and some of its enterprise investments — has been with the firm throughout all the tumult, having joined the firm 20 years ago. Meanwhile, Beth Seidenberg, who focuses on everything from life science to digital health, joined Kleiner in 2005; Wen Hsieh, who focuses on enterprise and hardware deals, joined in 2006; Mike Abbott joined in 2011 to focus largely on enterprise deals; and Eric Feng, a former CTO for both Hulu and Flipboard, joined last October to lead the firm’s consumer investing.

    Kleiner, which is currently raising $1.3 billion across two new funds, has also taken a page from the playbook of Benchmark and some other smaller partnerships, and its partners now enjoy equal partner economics. (Kleiner has also five associate partners, as well as a separate growth investing group.)

    To get better insight into the firm and how it operates today — as well as where it’s shopping — we talked yesterday with Feng. Our chat has been edited for length.

    More here.

    Connie

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  • Propeller, a New Venture Outfit, Tries a New Fundraising Approach

    shutterstock_379870894There’s been no shortage of disruption in the venture industry over the last decade of so, yet someone is always trying to introduce a new way of doing things.

    Among the latest is Propeller, a six-month-old outfit that’s hoping to entice family offices and sovereign wealth funds to invest in four new but distinct funds at once. One will focus on IoT investments; a second will focus on insurance-related investments; a third fund will focus on fin tech more broadly; and a fourth intends to invest in women-led businesses.

    Each of the funds is a standalone entity in terms of their economics. Carried interest, or the fund managers’ share in future profits, will not be shared across the funds. Management fees will mostly accrue to each fund, too, though every fund manager will pay into parent company Propeller to cover their shared resources, including marketing and back office support.

    None of the people leading the funds has extensive venture capital experience, though they do have relevant operational experience.

    Propeller’s insurance fund, for example, is being managed by Antonio Derossi, who has spent time as a senior VP at Allianz Group and been COO of Fireman’s Fund Insurance Company. Its IoT fund is headed up by Eitan Bienstock, who has worked in telecommunications, for a tech incubator in Australia, and briefly, for a corporate venture unit. The women-focused fund, called Shatter, is being led by Shelly Kapoor Collins, who’s long run her own boutique advisory firm in Silicon Valley and who served as vice chair of a public service project at the Wilson Center in Washington that had her advocating for STEM education and women’s entrepreneurship around the world.

    Of Propeller’s structure, founder Cam Yuill says simply that the “data shows that funds that are highly specialized in sectors provide the best returns, and that underlines our thesis.”

    Maybe. Specialized funds have certainly been an emerging trend over the last five to 10 years, with hundreds of so-called micro VC funds springing into existence. But many have had to specialize in order to attract capital as the field has grown crowded; the jury is still largely out regarding their performance.

    As for why Propeller is raising four funds simultaneously instead of serially, Yuill — who worked briefly as a VC at the seed-stage fund Structure Capital, is an angel investor, and who has been an operator at a variety of tech companies since the late ‘90s – says to “think of it like a fund of funds, except that we aren’t charging [our limited partners] double the fees.”

    More here.

    Featured Image: ALEJIK/SHUTTERSTOCK

    Connie

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  • SoftTechVC Goes Big with Two New Funds Totaling $150 Million

    2015SoftTechVC4036_CMasterWOClaire_cropBack in January, we told you that SoftTech VC, a San Francisco-based seed-stage fund founded 11 years ago by investor Jeff Clavier, had promoted two of its senior investors to full partners: Andy McLoughlin and Stephanie Palmeri. The move seemed geared to bolster the firm during a time when it was out seeking more capital from its own investors.

    Fast forward to today, and SoftTech is announcing that it has raised $100 million for its fifth and newest seed-stage fund. The firm has also gathered up another $50 million in capital commitments for a “breakout” fund that it will use expressly to invest in between 12 to 15 deals involving its successful portfolio companies. (Palmeri notes that the firm will never lead these deals but rather join them as follow-on investors.)

    The funds effectively double the amount of money that SoftTech has been actively managing. Its last fund closed with $85 million. Its second-to-last fund closed with $55 million.

    That limited partners were willing to write the firm larger checks isn’t a big surprise. SoftTech saw its biggest exit ever when the wearable fitness company Fitbit went public a year ago. It was a seed and Series A investor in the company, alongside True Ventures, another early-stage San Francisco venture firm.

    Others of SoftTech’s most recent exits include Gnip, a data company that was acquired by Twitter for $134 million in 2014; Brightroll, a video ad platform acquired by Yahoo for $640 million in 2014; and LiveRamp, a maker of data onboarding software that was acquired by data management firm Acxiom for $310 million in 2014.

    In a call with Clavier and Palmeri yesterday, both suggested that little will change at SoftTech, despite that it’s managing more money than in past years. The firm will still aim to secure between 7 percent and 10 percent ownership of the companies it funds. Initial checks — of between $750,000 and $1 million — will remain unchanged in size, though the firm is likely to invest in a few more companies this time around.

    More here.

    Connie

  • The Truth About Due Diligence

    Board-agendaThere’s an expression in venture capital. It’s called the “Oh, shit” board meeting. “That’s when you learn all sorts of things that you wish you’d known after writing a company that first check,” says general partner David Hornik of August Capital.

    It’s easy to imagine that they’ve been happening regularly across the startup industry. The pace of funding in recent years has been feverish, giving investors less time than ever to assess the startups they’re funding. That once-celebrated companies like the blood testing outfit Theranos, and the wireless charging company uBeam, are seemingly fighting for their lives raises plenty of questions, too.

    A recent Vanity Fair piece blamed Silicon Valley media for the rise of certain companies. Meanwhile, a story published earlier this week in Fast Company suggested a culture of spin is at the root of the problem. As one founder told the outlet, “Being honest in Silicon Valley is like being the one member of an Olympic team that isn’t on steroids.”

    Of course, none of us would likely have heard of Theranos or uBeam if not for investors, who’ve given the companies $686 million and $25 million, respectively. Were these backers overly optimistic? Did they get duped? Were they even paying attention? It’s easy to wag our fingers as we wait to see how these narratives unfold, but here’s the truth: due diligence only goes so far. While some may think it a scientific process that insulates venture firms from bad investments, due diligence is a surprisingly imperfect process with plenty of limitations.

    “If you’re looking for a black or white answer in doing diligence, it’ll be a fail,” says Matt Murphy, a former Kleiner Perkins Caufield & Byers partner who joined Menlo Ventures a year ago as a managing director. “You’re usually dealing with shades of gray.”

    More here.

    Connie

  • Naspers Plants a Flag in the U.S. with a New Venture Group

    Screen Shot 2016-05-22 at 4.59.51 PMNaspers, the 101-year-old, internet and entertainment group, is finally planting a flag in the U.S., establishing a Naspers Ventures unit that will operate largely out of San Francisco.

    The 30,000-person company, which is based in Cape Town, South Africa and tends to focus on less developed markets, including Latin America, Africa, India and even Russia, said its decision to come to the U.S., owes to a few factors.

    The first is organizational. Though Naspers is one of the most active investors in the world – it committed $1.5 billion to companies last year, including Avito, an online classified ads company in Moscow — the company has created smaller operating companies around certain sectors where it has a wealth of bets. Some of those sectors and bets include e-commerce (Flipkart), online retail (Allegro), online classifieds (including Mail.ru and OLX), social networking (Tencent), and payments (PayU).

    “We’ve gotten well-represented in those areas,” says Naspers CEO Bob van Dijk. “But we also realized that to prepare for our next phase of growth, we want to be focused on other, new consumer needs that are being transformed by tech.” And to do it via a dedicated ventures unit.

    Indeed, this morning, Naspers Ventures is announcing it has led a $15 million Series B investment in the social learning network Brainly — a deal that represents the first ed tech investment for Naspers. (Seven-year-old Brainly was founded in Kraków, Poland and now has a second office in New York.)

    More here.

    Connie

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  • HP Rolls Out a New Venture Arm

    20150903_HP_Garage-103There’s a new corporate venture arm in town.

    Roughly six months after Hewlett-Packard finalized its division into two companies — Hewlett Packard Enterprise, which focuses on servers, storage, networking and security; and HP Inc., which continues to sell PCs and printers — the latter is introducing a new venture unit called HP Tech Ventures.

    The eight-person team, which ultimately reports up to HP’s CTO Shane Wall, is being led by Andrew Bolwell, who has spent the last 16 years with HP and has held the title of chief disruptor for the last few of them.

    Among his colleagues and cofounders are Irit Hillel, based in Israel, and Vitaly Golomb, who is based alongside Bolwell in Palo Alto.

    In a brief meeting in New York yesterday, Bolwell gave us a few details about HP Tech Ventures’ plans. The idea is to focus primarily on seed and Series A deals that serve HP Inc. strategically. The team will focus on five areas, including: 3D printing and the broader ecosystem that supports it; immersive experiences, including both augmented reality and virtual reality; smart machines, including home and commercial robots; and the Internet of Things.

    More here.

    Connie

  • Cyan Banister Has a New Startup, and It’s Looking for Seed Funding

    Screen Shot 2016-04-25 at 1.09.33 PMCyan Banister realized long ago that Zivity, a subscription-based online community of artistic glamour and pin-up photography that she founded in 2007, was never going to be a highly profitable endeavor. That’s okay with her, too.

    In an interview last week, Banister — known for the many angel investments she and husband Scott Banister have made over the years and more newly for her role as a partner at Founders Fund — told us Zivity was “always growing, but never at a crazy rate.”

    Indeed, nine years after it was created, it has amassed 3,000 subscribers who pay the site on average $250 a year to access its various photo sets.

    Now, Banister and Zivity’s longtime general manager-turned-CEO, Nadya Lev, think they’ve struck on a more lucrative opportunity that can not only shine a light on the creative class but help artists get paid, too. Their new company is called ThankRoll, and it’s looking for $1.5 million in seed funding to see how far it can get over the next 18 months.

    It could make for an interesting bet. ThankRoll is essentially a service that offers a convenient way for fans of artists, blogs and others to support those products and services through a white-label widget that appears on the artists’ or blogs’ site. Fans just enter their credit card information; they can cancel their pledge any time they like.

    More here.

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  • Longtime Facebook VP Mike Vernal Joins Sequoia Capital

    Screen Shot 2016-04-18 at 3.11.56 PMMike Vernal, a Facebook VP who has spent the last eight-plus years at the company, most recently leading its search, profile, local and developer platform product groups, is leaving the company to become a venture capitalist at Sequoia Capital.

    Before joining Facebook, Vernal spent nearly six years at Microsoft, first as a product manager and later as a development lead.

    The Harvard grad (two degrees) wrote in a tweet yesterday afternoon that “Facebook is an exceptional company with amazing people. Thank you to Mark and everyone at @facebook for the past eight years. I’ll miss you.”

    Vernal joins 10 other partners in Sequoia’s Menlo Park office.

    One of those partners is Bryan Schreier, who joined Sequoia in 2008 after being a senior director at Google. In an email provided to us by a Sequoia spokesman, Schreier writes, “You don’t recruit people like Mike. They choose you and we are thrilled to have him join.”

    Schreier says the firm got to know Vernal through his work fostering startups when he was leading Facebook’s platform initiatives. “His experience scaling engineering, product, and design teams at Facebook will be invaluable to Sequoia founders working to build similarly transformative companies.”

    Like all Sequoia partners, Vernal is expected to be something of a generalist, but it’s likely he’ll be focusing on consumer and developer tech to start.

    Sequoia recently parted ways with another longtime partner, Michael Goguen, when it was revealed that he was being accused of breach of contract in one of the more explosive lawsuits to hit Silicon Valley in a while.

    More here.

    Connie

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  • GGV Just Raised $1.2 Billion; Here’s How It’s Going to Spend It

    0121_IMG_1847Back in February, we told you GGV Capital was raising a more than a billion dollars from its investors.

    This morning, the 16-year-old, cross-border venture firm is making it official. The final tally, says GGV, is $1.2 billion, including a $675 million main fund; a $225 million “Plus” fund to back its most promising companies as they mature; a $250 million “Discovery” fund that will focus largely on seed-stage opportunities in China; and a side, $50 million “Entrepreneurs” fund that consists largely of company founders as LPs and that will invest pro rata across the funds.

    The firm has a lot of moolah to invest, in other words. To find out out where GGV plans to shop, we talked yesterday with managing directors Glenn Solomon and Jeff Richards, who are based in Menlo Park, but who travel to the firm’s Beijing and Shanghai offices frequently.

    Aside from the amount you’ve raised, it looks like what’s newest here is your first dedicated seed-stage fund, 80 percent of which you intend to invest in China. You’ve always made bets of all sizes in China; why break this part of your business into a separate fund?

    GS: Over the last five years, more than 70 percent of our investments have been Series B or earlier and many of them have been in China. But we thought the opportunity in China to do [seed] deals is really strong for us given our work on the ground and the entrepreneurial community that we’ve built up in China.

    Is it fair to say this is largely a marketing tactic so entrepreneurs will be clearer about your intentions in China? 

    GS: I was having dinner in Beijing with a CEO who we’ve backed in the past and in whose newest company we invested at the Series B, and when I told him about our plans to raise Discovery, he said, “Had I known you guys were doing seed investing, I would have called you first.”

    Don’t underestimate how important [messaging] is. Also, for our limited partners, having a separate vehicle helps them look at our seed investing activity and judge how we’re doing [versus when it’s lumped in with later-stage bets].

    How is competition at the seed level in China?

    More here.

    Connie

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