Boris Wertz

Happy Thursday, everyone! (Web visitors, here’s an easier-to-read version of this morning’s email here. You might also just go ahead and sign-up.)

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Top News in the A.M.

Apple is more than doubling its stores in China, CEO Tim Cook announced this morning.

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Boris Wertz Raises a New, Much Bigger, Fund

Version One Ventures, the Vancouver-based fund of entrepreneur-turned-investor Boris Wertz, is taking the wraps off a $35 million early-stage fund today. That’s nearly twice the size of Wertz’s $20 million debut fund, closed in early 2012. Northleaf Venture Catalyst Fund and BDC Capital are the new fund’s anchor investors.

As you might imagine, the extra capital will allow Wertz to write bigger checks. In a call yesterday, he said he now plans to make initial investments of between $500,000 and $750,000, up from $250,000 to $300,000, a shift that should allow him to lead more deals. The bigger pool should also enable Wertz to pour more follow-on funding into Version One’s existing portfolio, which right now includes the online cosmetics company Julep; the business intelligence platform Mattermark; and Kinnek, an online platform that brings together small businesses with suppliers.

All told, said Wertz, he plans to invest his second fund in 20 to 25 companies. I asked him what else he’s planning for, particularly amid what feel like big shifts in the market.

Congratulations on the your new fund. That’s quite a jump up in size.

Thank you. We set out to raise $30 million and probably could have raised $40 million but didn’t want to make it larger. I’m still the single investing partner, and we think a good benchmark is $30 million to $35 million per partner, which is what you see at comparable funds like Floodgate.

You say the collective value of Version One’s portfolio is now $600 million. Recognizing it’s early days, have any companies exited yet?

No, angel investments I made prior to [creating Version One] have [been acquired] like Flurry [sold to Yahoo], but one rocket ship in our portfolio – [a consumer marketplace] that has raised an A and B round – hasn’t even announced [itself publicly yet].

More companies are waiting on their funding announcements. Why do you think that is?

We have two companies in our portfolio that have raised [capital] and never announced. The entrepreneurs feel that they’re on to something and want to get solid traction and a head start before telling anybody else. It makes sense, especially if you have a product where you aren’t going to acquire users on StrictlyVC or TechCrunch and don’t need [the press] for branding purposes.

You live in Vancouver but invest all around North America, including Silicon Valley. What are you seeing in terms of seed-stage valuations right now?

Two-thirds to three-quarters of our deals are outside the Valley – in Seattle, Toronto, and New York. And those ecosystems have never gotten that crazy. But there’s definitely a little insecurity in the market, which is good, given that seed-stage valuations have continued to creep up over the last three or four years. I think we’re seeing a healthy correction of expectations on the part of both investors and entrepreneurs. Things can’t always go in one direction.

When we last talked, in May, you were spending more time looking into digital healthcare, government “2.0” and bitcoin. Have you made any related bets yet?

We have one digital healthcare investment, [Figure 1, a crowdsourced medical image library for health care professionals that VersionOne invested in last December], but the challenge in [backing another] is that it has blown up crazily in terms of valuations. Look at the on-demand doctor space. There are at least eight players, all of which were well-funded at crazy valuations. [The sector] ran away pretty quickly.

As for bitcoin, we believe in the long-term potential, but we’re still forming an investing thesis around when is the right moment to invest.

It must be challenging. I’m amazed by how many seriously smart people are divided over bitcoin.

I’m in the middle. The technical platform is beautiful, and a decentralized system to record ownership makes a lot of sense for a lot of use cases. I think the real problem is that right now, there isn’t a killer use case. Payments in North America aren’t broken. I can use credit and debit cards or cash or PayPal. So people need to start focusing more on international payments and remittances, where bitcoin does make sense. The challenge is how to get into the markets that could use it the most – Brazil, Vietnam, Nigeria – and make it easy to spread. And there’s no clear path [to doing that], though we do believe some entrepreneurs will eventually figure it out.

A prominent institutional LP recently said that right now could be an especially bad time to start investing a new fund based on traditional market cycles. Is that a concern of yours?

Yes, there are cycles, but nobody can really predict them. You can only make your best investments given the environment and stay disciplined around valuations and your investment thesis and not get carried away by hype. The reality is that some vintages of funds will do better than others based on waves of new innovations or when valuations were really low. But it’s hard to predict beforehand and say 2014 or 2015 will be a terrible year for venture funds. Who knows? Timing and luck are involved in all of it, but if you focus on fundamentals and support your companies for the long term, you can hopefully smooth out your returns over time.

New Fundings

Boostable, a year-old, San Francisco-based company that makes advertising easier for sellers on marketplaces, has raised $3.2 million in Series A funding from Morado Ventures, Omidyar Network, and earlier investor SV Angel. The company, a Y Combinator alum, had previously raised $500,000. TechCrunch has more here.

Flint, a three-year-old, Redwood City, Ca.-based mobile payment service, has raised $9.4 million in Series C funding led by Verizon Ventures, with participation from Peninsula Ventures and earlier backers Digicel, Storm Ventures and True Ventures. The company has now raised $20.4 million altogether, shows Crunchbase.

Fortress Risk Management, a four-year-old, South Glastonbury, Ct.-based company that sells antifraud technology to community banks and credit unions, has raised $3.5 million from investors, including Advantage Capital Connecticut Partners, Black Dragon Capital and the Connecticut Department of Economic and Community Development.

Gamma Medica, a 17-year-old, Salem, N.H.-based maker of an FDA-cleared dual-headed digital imaging system, has raised $6.5 million in growth capital financing from the specialty finance company Hercules Technology Growth Capital, along with $5 million from earlier investor Psilos Group. The company has raised at least $27.5 million to date, shows Crunchbase.

Glamsquad, a 10-month-old, New York-based on-demand beauty services business, has raised $7 million in Series A funding led by SoftBank Capital, with AOL’s BBG Fund, Lerer Hippeau Ventures and Montage Ventures, participating. Business Insider has more here.

HMicro, a six-year-old, Los Altos, Calif.-based semiconductor company that makes products for medical, industrial and connected home devices, has raised $5.5 million in Series B funding from investors, including Reddy Capital Partners and Seraph Group.

iCapital Network, a 1.5-year-old, New York-based online marketplace that connects institutional investors with alternative investment fund managers, has raised $9.25 million in funding led by a consortium of partners led by Credit Suisse’s Private Fund Group.

InSilixa, a 3.5-year-old, Sunnyvale, Calif.-based developer of a molecular diagnostics platform, has raised $13 million in funding from PointGuard Ventures and Morningside Group.

Kespry, a year-old, Menlo Park, Ca.-based maker of drones for commercial applications, has raised $10 million in Series A financing led by Lightspeed Venture Partners. The company had previously raised an undisclosed amount of funding from Chmod Ventures.

Moov, a year-old, Mountain View-based maker of a fitness tracker that can reconstruct users’ movements, helping them improve their form (theoretically), has raised $2 million in Series A funding led by the China-based venture firm Banyan Capital. Moov had earlier raised $1 million via a crowdfunding campaign. More here.

Mozido, a nine-year-old, Austin, Tx.-based company aiming to provide mobile financial, retail and marketing services to the millions of people without established banking relationships, has raised a whopping $185 million as part of a planned $400 million Series B round. The funding comes from MasterCard, Wellington Management, H.R.H. Sheikh Nahyan of UAE, and Tiger Management chairman and CEO Julian Robertson. Mozido has raised roughly $265 million in capital over the last 12 months and $307 million altogether thus far, shows Crunchbase.

Playstudios, a three-year-old, Las Vegas-based maker of casual games for social platforms, has raised $20 million in Series C funding led by Jafco Ventures. Other, unnamed earlier investors also participated. The company has raised at least $28.7 million to date, shows Crunchbase.

Quartet Medicine, a year-old, Cambridge, Ma.-based company that aims to develop treatments for chronic pain and inflammation, has raised $17 million in Series A funding led by Atlas Venture, with Novartis Venture Funds, Pfizer Venture Investment and Partners Innovation Fund joining the round.

Reputation Institute, a 17-year-old, New York-based research and advisory organization focused on corporate reputation, has raised an undisclosed amount of funding from earlier investor Catalyst Investors.

Urban Airship, a five-year-old, Portland, Or.-based company that makes so-called mobile relationship management software that allows marketers to more easily delive messages to their connected customers, has raised $12.1 million in Series D funding from earlier investors True Ventures, Foundry Group, and August Capital. The company has now raised $58.7 million altogether.

YieldMo, a two-year-old, New York-based mobile ad startup, has raised $10 million in funding led by Timer Warner Investments, with participation from earlier backers Google Ventures and Union Square Ventures. The company has raised $22.1 million altogether.

YouAppi, a three-year-old, Ra’anana, Israel-based company that makes engagement, acquisition and retention software for publishers and mobile apps, has raised $3 million in Series A funding from Glilot Capital Partners, 2B Angels and Flint Capital. The company has now raised $5 million to date.

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New Funds

Maverick Capital, the 21-year-old, New York-based hedge fund firm, plans to launch its first venture-capital fund on Jan. 1, according to WSJ. Maverick was founded by Lee Ainslie, one of numerous prominent “Tiger Cubs” who worked for Julian Robertson’s Tiger Management earlier in his career. Tiger, along with Coatue Management, are among a growing number of hedge funds to jump into active startup investing in recent years.

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People

California’s privacy laws have saved Kleiner Perkins Caufield & Byers firm from having to release potentially embarrassing information about former partner Ajit Nazre, in a discrimination lawsuit by a former partner Ellen Pao, reports Reuters. A judge ruled KPCB will be able to keep private any other harassment complaints about Nazre, partly because producing such complaints would hurt the privacy rights of other Kleiner employees.

Sean Jacobsohn has joined Norwest Venture Partners as a principal. Jacobsohn was previously a venture partner at Emergence Capital Partners and, earlier, a vice president at the cloud collaboration company Hightail. In related news, Norwest, on Sand Hill Road, is now opening a San Francisco office.

Jon Sakoda, who joined New Enterprise Associates in 2006 and co-manages the firm’s seed investment program, has been promoted from partner to general partner at the firm. Before joining NEA, Sakoda had cofounded the enterprise instant messaging company IMlogic, acquired by Symantec Corporation. StrictlyVC had talked signaling risk with Sakoda over lunch last month.

Facebook CEO Mark Zuckerberg famously assigns himself annual self-improvement goals. In 2010, it was to learn to Mandarin, and judging by a 30-minute question-and-answer session yesterday at Tsinghua University in Beijing — which Zuckerberg did entirely in Mandarin — that year paid off. (Unsurprisingly, there’s still room for improvement. The Asia editor ofForeign Policy later characterized Zuckerberg’s Mandarin as “roughly at the level of someone who studied for two years in college, which means he can communicate like an articulate seven year-old with a mouth full of marbles.)

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Job Listings

Castlight Health, the six-year-old, newly public company whose online application provides employees with personalized shopping tools for healthcare benefits, is looking for a VP of corporate development in San Francisco. (It’s probably worth mentioning that the company’s shares have been dropping like a spent rocket since its March IPO, but think of the upside.)

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Essential Reads

Have we reached peak Google?

Wired delves into Twitter’s audacious plan to infiltrate all your apps.

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Detours

The latest in luxury travel: Moving in.

A 26-year-old woman from Sichuan Province in China spent an entire week at KFC lamenting her failed relationship. Said the woman, “I hadn’t planned on staying there long, I just wanted some chicken wings.”

Don DeLillo, the author of “White Noise,” reviews Taylor Swift, the artist of “White Noise.”

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Retail Therapy

Now you can be the most fashion-forward lumberjack in the forest.

Hemingwrite. We will take two, please.

Good Friday morning, everyone. Hope you enjoy your weekend, and to all the moms out there, we wish you a very happy Mother’s Day!

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Top News in the A.M.

Here comes the Netflix price hike.

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The Itinerant Investor: Boris Wertz

Boris Wertz made headlines last week when he joined Andreessen Horowitz as a board partner, a role the powerhouse venture firm has extended to half a dozen outside investors who sit on select boards on its behalf and share some of their deal flow. (Others of the firm’s board partners include former Microsoft executive Steven Sinofsky, investor Shana Fisher of High Line Venture Partners in New York, and Zillow CEO Spencer Rascoff.)

Wertz isn’t the kind of person you see in TechCrunch every day, but top investors know him well. The German-born Vancouver resident founded Version One Ventures, a $20 million early-stage venture firm, and Wertz is forever traversing North America to find deals. Over the last two years, he has invested in 18 companies, including the crowdfunding platform Indiegogo; Tindie, often described as an Etsy for electronics; and the venture capital data platform Mattermark. To learn where he might shop next (digital healthcare, government 2.0, bitcoin) and more, I sat down with Wertz earlier this week. Our chat has been edited for length.

You’re a former entrepreneur who sold your company to another company that sold to Amazon. How did you then break into venture investing?

[By] doing a little angel investing — in New York, in Vancouver. I did 35 angel deals on my own. I also spent a month with Union Square Ventures [in New York] and another month with First Round Capital in San Francisco and learned from those guys.

Just two startups in your portfolio are from Vancouver, where you live. Why?

In Vancouver, there were a lot of interesting companies [coming out of the area] three or four years ago, including Clio (which makes Web-based tools for law firms), Indochino (which makes custom-made clothes for men), and Hootsuite (the social media management platform), but it isn’t consistent. Sometimes, we’ll see a lot of interesting companies emerge over a year or two, then maybe not much.

How do you explain the inconsistency?

I think you lose a lot of the most ambitious people to the Valley.

Where else are you scouting out deals primarily?

San Francisco, New York, Toronto, and Waterloo feel like the four big markets [to watch] and are where I spend most of my time.

Waterloo seems to be taking off. How would you describe what’s happening there?

[University of Waterloo] has always been a very strong engineering university. When you look at where the top tech companies hire outside of the Valley, Waterloo is always one of the top [destinations]. But now, people are becoming more entrepreneurial, too. In the last Y Combinator batch, for example, I think four or five startups came from Waterloo.

What was the tipping point?

A lot of people says its [Research in Motion, based in Waterloo], but I don’t think anchor companies alone can do that. Think about Amazon, where there’s a very entrepreneurial culture, along with lots of people with money and great technical talent, yet where you haven’t seen so many startups come out of the company.

I think sometimes it’s just a phase, where you get lucky for three or four years. There’s just no ecosystem [that reinforces entrepreneurship] like the Valley.

Do you think Canadian VC will ever rebound? The industry is so much smaller than 10 years ago.

I don’t think of it so much as Canada versus the U.S. as I do the Valley versus second-tier ecosystems. Seattle and Portland share the same challenges as Vancouver and Toronto, which is that for any VC that’s regionally focused, subpar returns [are inevitable]. Every VC needs to be thesis driven.

Have you changed your thesis at all? And when will you be in the market again?

Overall, things are going really well. Any changes would involve optimizing around the edges, so having a little more [to invest] in follow on rounds and [to write bigger] initial checks now that a seed round under $1.5 million is almost unheard of. And there will be a second fund – hopefully! – in 2015.

New Fundings

AdYapper, a four-year-old, Chicago Heights, Il.-based whose technology tracks display and mobile ads, partly to determine consumer sentiment, has raised has raised $1 million in new funding from angel investors. An alum of the TechStars‘s accelerator program, AdYapper has raised $2.2 million to date.

Arcadia Biosciences, a 12-year-old, Davis, Ca.-based agricultural biotechnology company that makes a variety of products, including salt tolerant plants, has raised $33 million in Series D funding led by Mandala Capital Limited, an agribusiness-focused private equity fund in India. Earlier investors, including CMEA Capital, BASF Venture Capital, and Saints Capital, also participated in the round, which brings the company’s total funding to roughly $70 million.

Bitpay, a three-year-old, Atlanta, Ga.-based platform that processes payments in Bitcoin for merchants, is raising $30 million at a roughly $160 million valuation in a round led by Index Ventures, with Virgin Group founder Richard Branson and Yahoo co-founder Jerry Yang participating, reports TechCrunch. Founders Fund had led a $2 million seed round in the company last year.

Counsyl, a 5.5-year-old, San Francisco-based technology company whose saliva-based test promises to identify more than 100 serious genetic diseases, has raised $28 million in Series D financing. Rosemont Seneca Technology Partners and Goldman Sachs Asset Managementled the round. The company has raised at least $32.9 million to date, shows Crunchbase. (Notably, it was also cofounded by Balaji Srinivasan, who became the newest general partner of Andreessen Horowitz in December.)

Dubset Media, a 5.5-year-old, New York-based company that operates an open API platform specifically designed for royalty-based streaming of DJ content, has raised an undisclosed amount of Series B funding. The round was led by Rhapsody International, parent company of leading streaming music services Rhapsody and Napster.

EndoGastric Solutions, a 12-year-old, San Mateo, Ca.-based device company whose flagship product is used to treat gastrointestinal diseases in a minimally invasive way, has closed $30 million in Series G funding. Investors in the round included Advanced Technology Ventures, Canaan Partners, Chicago Growth Partners, De Novo Ventures, Foundation Medical Partners, Oakwood Medical Investors and Radius Ventures. The company has raised $156 million to date, shows Crunchbase.

FieldLens, a 2.5-year-old, New York-based company whose project management application targets the construction industry, has raised $8 million in Series A funding led by OpenView Venture Partners. Other participants in the round included Softbank Capital, High Peaks Venture Partners, Lerer Ventures, Contour Venture Partners, Borealis Ventures and NYC Seed. FieldLens has raised $12.2 million altogether.

ImaginAb, a 6.5-year-old, L.A-based company that clinically manages cancer and autoimmune diseases via molecular imaging by re-engineering antibodies into small proteins, has raised $21 million in Series B funding led by return investor Mérieux Développement, a healthcare investment firm in Lyon, France. Other earlier backers, including Cycad Group, Nextech Invest and Novartis Venture Funds, also participated in the round.

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New Funds

Emerald Hill Capital Partners, a nine-year-old, Hong Kong-based Asian fund of funds, has raised its third fund at just over $400 million to largely invest in Chinese, Indian and Southeast Asian private equity firms. Asian Venture Capital Journal has more here.

GGV Capital, 13-year-old, expansion-stage venture firm, with offices on Sand Hill Road and in Shanghai, has raised a new, $622 million fund, according to an SEC filing first spied by Fortune. According to the filing, the first sale was closed on April 23 and the fund is now closed. StrictlyVC talked with GGV managing partner Glenn Solomon about the firm’s U.S.-China strategy — and its ties to Alibaba in particular — earlier this year.

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Exits

Perhaps you’ve heard: Beats Electronics, the streaming music and headphone company, is reportedly about to become part of Apple in a $3.2 billion dollar deal. Much more here.

Lettuce, a two-year-old, Venice, Ca.-based company that had developed an order management system with a mobile sales app to help businesses capture, track, and process orders anywhere in real time, has been acquired by Intuit for $30 million in cash, according to PandoDaily. According to Crunchbase, Lettuce had raised $3.3 million from Crosscut Ventures, Baroda Ventures, Double M Partners, 500 Startups, Zelkova Ventures, Launchpad LA and Telegraph Hill Capital.

Spendship, a year-old, Nashville-based developer of a mobile loyalty program, has been acquired by Moontoast, a six-year-old, Nashville-based analytics platform that helps brands better understand their fans. Terms of the deal weren’t disclosed, but Spendship doesn’t appear to have raised outside capital. Moontoast, meanwhile, has raised $16.3 million from investors, including the Martin Companies, an investment firm in (yes) Nashville.

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People

Former Vice President Al Gore is now “Romney rich,” reports Bloomberg. Half his fortune came from the sale of CurrentTV to Al Jazeera Satellite Network; the other half has largely come by “leveraging his aura as a technology seer,” including as an Apple board member, advising Google before its 2004 IPO, and as a partner at Kleiner Perkins Caufield & Byers.

Billionaire venture capitalist Vinod Khosla will have to appear in court to testify about blocking public access to the popular surf spot Martin’s Beach, alongside land that Khosla purchased in 2008. Khosla’s attorneys had argued that he’s a “non-party” to a lawsuit filed by the Surfrider Foundation over the access closure; a San Mateo judge ruled otherwise yesterday.

San Francisco may be home to a new celebrity soon, or one highly creative real estate agent is at work. According to the local magazine 7×7, pop-country superstar Taylor Swift is circling an enormous Presidio Heights mansion acquired by CNet cofounder Halsey Minor roughly eight years ago. The property, for which he paid $25 million, is falling apart and has long sat on the market; it’s currently priced at $18 million.

Yesterday, Cameron and Tyler Winklevoss disclosed in a regulatory filing that they’ve chosen to list their Bitcoin exchange-traded fund, the Winklevoss Bitcoin Trust, on Nasdaq. “The fact that the S.E.C. has allowed the S-1 to progress this far is an indication that it may actually happen,” Wedbush Securities analyst Gil Luria tells Dealbook.

Atomico, the London-based venture firm founded by Skype co-founderNiklas Zennstrom, is suing former employee Pogos Saiadian and consultant Wouter Gort, alleging they quietly diverted potential Atomico investments to a venture firm that the two were building called Greyhound Capital. Among the investments the duo allegedly kept for themselves, after earlier representing themselves as Atomico investors: Homejoy, a cleaning service; the online retailer Dollar Shave Club; and Taxibeat, an app-based transportation service. Sarah McBride of Reuters has the story.

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Job Listings

RRE Ventures is hiring an analyst in New York.

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Happenings

Founder Showcase kicks off next Thursday morning at the Microsoft Campus in Mountain View, Ca. Featured speakers include Mitch Kapor of Kapor Capital, Mike Maples of Floodgate, and Thomas Korte of AngelPad. More info here. (Click on the ad above for a 20 percent discount.)

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Data

CB Insights takes a quick look at Google Ventures‘s largest financings to date.

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Essential Reads

Square turned dollars into data. Now it’ll turn that data into gold.

Silicon Valley startups are trying to eat JPMorgan‘s lunch. The banking giant’s response is to poach talent from Silicon Valley.

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Detours

Why mothers and daughters fight.

ESPN’S top draft analysts workshop your short story.

Missed connections for a-holes: “At a bar celebrating my friend’s birthday in midtown. You were wearing Google Glass. I tried to mouth, ‘You look like a moron.’ Did you record that?”

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Retail Therapy

Cinema placemats.

Black Dragon Reversible Smoking Jacket.

Suit pajamas. [Drops mic.]