James Proud

Sense, a New Sleep Tracker with a Kickstarter Campaign, Has Raised at Least $10.5 Million from Investors

James Proud, a former Thiel Fellow who sold his first company, is back with a new company and sleep-tracking product called Sense that’s “part-Nest thermostat, part-Fitbit,” as Forbes describes it.

In its original story, Forbes makes the company sound bootstrapped, saying Proud “seeded the company with earnings from selling his first startup,” and that the company’s “unmanufactured product” is now “subject to the whims of backers on Kickstarter,” where it launched a campaign this morning.

If that’s true it’s a little odd, given that Hello, the parent company of Sense, raised at least $10.5 million from 44 investors as part of an $18 million round back in January. So shows an SEC filing we’d stumbled across earlier this year.

Maybe the company used up that capital to develop the company’s slick prototype. Hello hasn’t yet responded to a request for more information this afternoon. [Update below.]

Even if it was short the $100,000 it needed to ship its product, it seems like it would have made sense to disclose the funding to Forbes. Instead, I did, asking the Forbes reporter in a tweet if the company was bootstrapped and sending him a link to its Form D. He later thanked me and updated the story, writing that “Forbes uncovered documents that Hello Inc. raised funds prior to launching its Kickstarter campaign. Details on that fundraising round have been included in the above story.”

Forbes added elsewhere that “Proud did not discuss Hello’s previous fundraising and was only willing to talk about Kickstarter.”

Forbes wasn’t the only outlet that didn’t report on Hello’s backing. The Verge, Buzzfeed, The Next Web, Ubergizmo and others to write about the device and its Kickstarter campaign, didn’t mention anything about it, either. TechCrunch meanwhile reported that Proud “didn’t disclose external venture funding, but you could assume there’s probably some significant round given that they’ve been working secretly on the product for about a year.”

For what it’s worth, I think it’s smart for venture-backed startups to test out their products on Kickstarter and other crowdfunding platforms. But if those companies want to turn to the public for support, they should be up front about their financing situations, both with reporters and with the people who might contribute to their campaigns.

Kickstarter may not insist on knowing about its customers’ balance sheets. (I’m still waiting to hear back from the company about whether publicly traded or venture-backed companies need to provide it — or campaign contributors — with salient information about their financial picture.)

I happen to care, though. Maybe it isn’t sporting of me, but if a company is going to go to such great lengths to tell people its creation story, why leave out something so significant?

UPDATE: Last night, Proud wrote me on Twitter that “always when asked about funding, simply said we’re not talking about it right now, but acknowledged we had raised money.” He then added, “[T]oo many companies launch with a focus that *isn’t* product. I did not want that to be the case for us.” Kickstarter has also responded to my questions this morning, saying that neither venture-backed nor publicly traded companies need to provide disclosures to potential campaign donors.

StrictlyVC: May 12, 2014

Good morning, everyone! Hope you had a terrific weekend.

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Top News in the A.M.

Faced with pressure from Google and other corners of the tech world, FCC Chair Tom Wheeler is revising his proposed rules to allow Internet service providers to charge content companies like Google for faster access into U.S. homes, reports the WSJ. Doubtful it goes far enough to appease critics, however. He’s reportedly “sticking to the same basic approach but will include language that would make clear that the FCC will scrutinize the deals to make sure that the broadband providers don’t unfairly put nonpaying companies’ content at a disadvantage . . .”

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When One Hello Just Isn’t Enough

Orkut Buyukkokten, the Turkish Google engineer who is best known for building Google’s early social network, also named Orkut, has left the company after nearly 12 years to co-found Hello, a still-stealth social network that’s been flying under the radar for the last three months — though likely not for much longer.

Buyukkokten hasn’t yet responded to an interview request sent yesterday afternoon, but Hello’s site describes Hello as a “one-of-a-kind community of users who celebrate friendship, imagination, self-expression, and authentic engagement in a safe environment.” It goes on to encourage users to “[e]ngage in targeted social exploration and content sharing with fascinating connections that relate to the diverse parts of your personality.”

StrictlyVC is still trying to learn more, including who has funded Hello, but its ties to Google run strong. Apart from Buyukkokten, the startup’s domain, Hello.com, was long owned by Google, which had used it for an early, Snapchat-like photo sharing service called Hello that it shuttered in 2008. Google held on to the domain until last month, when it reportedlytransferred Hello.com to John Murphy, Hello’s co-founder and chief technology officer. Murphy, like Buyukkokten, also spent roughly a dozen years as a software engineer and manager at Google. (One of the only other employees listed on LinkedIn as working at Hello, Benjamin Douglass, is also a former Google engineer.)

Meanwhile, in January, a San Francisco-based company called Hello quietly raised $10.5 million from 44 investors, according to an SEC filing that shows a target of $18.2 million. The one individual listed on the filing is James Proud, a South London native who arrived in San Francisco several years ago by way of the Thiel Fellowship program, a two-year fellowship for applicants under age 20. As a Thiel Fellow, Proud developed and sold his startup, GigLocator, which aggregated live music listings, for an undisclosed amount in 2012.

Is it just a coincidence that two companies with ties to powerful Silicon Valley nodes would both be operating in stealth mode less than fifty miles away from each other? Perhaps. After all, this is Silicon Valley, where entrepreneurs routinely operate in their own little worlds. And more to the point, StrictlyVC can’t tie them together as of this writing. (We reached out to Proud and Murphy for comment, but to no avail.)

Whether these companies are connected or not, one thing is certain: Buyukkokten’s Hello seems ready to raise its public profile. This past Saturday night, sources tell me that Buyukkokten bused 200 people from San Francisco down to Hello’s Palo Alto headquarters for a launch party. If it was anything like Buyukkokten’s past affairs, we may be reading about it soon on Gawker, too.

New Fundings

iZettle, a four-year-old, Stockholm-based mobile payments company that’s been compared to a European version of Square, has raised $55 million in new funding led by Zouk Capital, with participation from two other new investors, Dawn Capital and Intel Capital. Earlier investors Creandum, Greylock Partners, Index Ventures, Northzone and SEB Venture Capital also participated in the round, reports TechCrunch. Altogether, the company has raised roughly $100 million, including from American Express, MasterCard and Banco Santander.

Pure Life Renal, a year-old, Hollywood, Fla.-based dialysis company, has raised $20 million in Series A funding from Montreux Equity Partners, Noro-Moseley Partners and Hamilton Lane.

Send Anywhere, a two-year-old, Seoul-based company whose app enables users to directly share content peer-to-peer between devices (without the content being saved to the cloud first), has raised $1 million in seed funding led by SaeMin Ahn, a managing partner at Rakuten Ventures. Other participants, reports TechCrunch, include Andrew McGlinchey, Andy Warner, and two Korean angel investors.

Shakr Media, a 3.5-year-old, Seoul, Korea-based that combines a marketplace of more than 150 motion graphics video styles with its drag-and-drop video creator technology, has raised $3 million in Series A funding led by Posco Venture Capital. Other investors in the round included the Korean government and 500 Startups.

Talkspace, a 1.5-year-old, New York-based online platform that connects people with professional and licensed therapists on demand, has raised $2.5 million in seed funding from Spark Capital and Softbank. The WSJ has more here.

Wochit, a two-year-old, New York-based cloud-based video creation platform that creates quick, affordable video new clips for its customers by mixing licensed photos with reports written by major media companies, has raised $11. 2 million in new funding. The round was led by Marker. Earlier investors Cedar Fund, Greycroft Partners, and Redpoint Ventures also participated in the financing, which brings Wochit’s total capital raised to $16 million.

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New Funds

Math Venture Partners, a new, Chicago-based outfit, is hoping to raise a $25 million debut fund, shows an SEC filing that was first flagged by VentureSource. Mark Achler and Troy Henikoff are listed as directors. Achler spent the last year as a partner at StrategyLab, a consultancy; earlier, he was a senior VP at Redbox, a 12-year-old startup that has created a network of self-service kiosks. Henikoff is the managing director of Techstars Chicago and cofounded the summer accelerator program Excelerate Labs.

United Ventures, a Milan-based venture firm, is about to close its debut fund with at 60 million euros ($82.5 million), VentureWire reported Friday. The firm was created last year through a merger of two venture firms Annapurna Ventures, a seed-stage firm founded by former Google execMassimiliano Magrini, and Jupiter Venture Capital, a firm that was founded by Paolo Gesess, formerly the CEO of a finance company. Jupiter, founded in 2000, had specialized in early- to late-stage investments. Some of United’s LPs include Fondo Italiano di Investimento, Fondazione Banco di Sardegna, Fondazione Cassa di Risparmio di Lucca, Banca Sella and Banca Patrimoni.

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IPOs

Nasdaq this year looks to become home to many more IPOs of Israeli firms than in 2013, the stock exchange’s vice chairman said yesterday. More here.

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Exits

Ginger Software, a 6.5-year-old, Lexington, Ma.-based natural language processing startup that was founded in Israel, has been acquired by Intel in a deal reported to be up to $30 million. Ginger had raised at least $11.7 million from investors, including Harbor Pacific Capital, Horizons Ventures, and Vaizra Investments, shows Crunchbase.

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People

Marc Andreessen: Timeline colonialist.

Doug Bowman, Twitter‘s company’s creative director, announced in a tweet on Friday that he’s leaving the company after a little more than five years. (He did not tweet about where he is next headed, alas.) Bowman had joined Twitter from Google, where, according to his LinkedIn profile, he led a company-wide project to redefine Google’s visual brand experience. Earlier Bowman had founded his own design consultation agency called Stopdesign.

Nine years ago, Daniel Lurie, the stepson of the late Levi Strauss & Co. executive Peter Haas, created a San Francisco-based nonprofit called Tipping Point that redirects everything it raises to roughly 45 Bay Area nonprofits that provide shelter, jobs, and education. In some great news for the city, last Thursday Tipping Point raised a record amount — $12 million — at its annual charitable event, which has become a must-attend for big wheels in the tech industry. The San Francisco Chronicle has pictures of the evening’s many attendees, including Apple designer Sir Jony Ive, Jawbone founder Hosain Rahman, Zynga cofounder Mark Pincus, and News Corp. founder Rupert Murdoch, who was the guest of Kleiner Perkins Caufield & Byers’s partner Juliet de Baubigny.

Some Twitter insiders, including CEO Dick Costolo and cofounders Jack Dorsey and Ev Williams, had pledged to hold on to their shares past when Twitter’s lockup expired last Tuesday as a way to signal their confidence in the company. Twitter COO Ali Rowghani, however, decided not to wait indefinitely, selling 300,000 shares last week for a profit of about $9.9 million, notes Bloomberg. Rowghani still holds about 990,000 shares, according to an SEC filing.

David Sacks knows a thing or two about acquisitions and he apparently doesn’t think much of Apple‘s reported plans to buy Beats Electronics. Indeed, in response to reports that Beats cofounders Dr. Dre and Jimmy Iovine will become senior execs at Apple, Sacks, the founder and CEO of Yammer (which sold to Microsoft) and former COO of PayPal (sold to eBay), tweeted, “How is tech’s most valuable company also its dumbest?” He then added, “I really like my Beats, but headphones are rapidly getting commoditized. No strategic value here.” BusinessInsider has more here.

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Job Listings

Safeguard Scientifics, the publicly traded, Wayne, Pa.-company that provides growth capital to companies in all kinds of fields, is looking for an associate. (It’s a two-year, pre-MBA gig.)

For StrictlyVC’s India-based readers, Contrarian Drishti Partners, an India-focused, early-stage venture fund, is looking for an investment associate in Mumbai.

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Happenings

VentureBeat’s second Databeat event is coming up in San Francisco, May 19 and 20. More information here.

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Data

The first quarter of the year is the worst time of year to raise a seed round, according to Tomasz Tunguz of Redpoint Ventures. Here’s why.

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Essential Reads

Thirty million people use this social network, and most people still haven’t heard of it.

After Beats, what’s next on Apple’s shopping list?

Young bankers fed up with 90-hour work weeks are moving to startups in droves, suggests a new Bloomberg report.

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Detours

How we grew so tall.

The slow-motion making of a tattoo.

For years, Kenny G’s saxophone instrumental “Going Home” has been
piped into shopping malls, schools, train stations and gyms in China
as a signal to the public that it is time, indeed, to go.

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Retail Therapy

Ten incredible customer motorcycles.

Crayon sculptures.

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A New Startup by Orkut Buyukkokten (Yes, that Orkut)

Orkut Buyukkokten, the Turkish engineer who is best known for building Google’s early social network, also named Orkut, has left the company after nearly 12 years to co-found Hello, a still-stealth social network that’s been flying under the radar for the last three months — though likely not for much longer.

StrictlyVC is still trying to learn more, including who has funded Hello, but its ties to Google run strong. Apart from Buyukkokten, the startup’s domain, Hello.com, was long owned by Google, which had used it for an early, Snapchat-like photo sharing service called Hello that it shuttered in 2008. Google held on to the domain until last month, when it reportedly transferred Hello.com to John Murphy, Hello’s co-founder and chief technology officer. Murphy, like Buyukkokten, also spent roughly a dozen years as a software engineer and manager at Google. (One of the only other employees listed on LinkedIn as working at Hello, Benjamin Douglass, is also a former Google engineer.)