Hi, everyone. Semil Shah here, filling in with a shortened version of StrictlyVC while Connie is out for a couple of weeks. If you’d like to talk about today’s column or anything else, you can find me on Twitter at @semil.
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Top News in the A.M.
Cyber security researcher Ruben Santamarta says he has figured out how to hack the satellite communications equipment on passenger jets through their WiFi and inflight entertainment systems, reports Reuters.
The U.S. government is meanwhile moving closer to formal rules that ban in-flight cellphone calls.
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Where NextView Ventures is Shopping Now
Lee Hower was an early employee of PayPal and LinkedIn’s very first director of corporate development before joining the field of venture capital in 2005. His first stop was as a principal and venture partner at Point Judith Capital. In 2010, he cofounded Boston-based NextView Ventures, whose many bets include Taskrabbit, the popular marketplace that enables users to outsource their chores, and ThredUp, a consignment marketplace that just closed on $23 million in new funding last week. We exchanged emails last week about NextView’s newest fund, and what’s capturing Hower’s attention right now.
NextView recently raised its second fund. What were your biggest learnings from your debut fund?
Yes, we recently raised our second fund, [closing on] $40 million. Our team, model, and strategy are all the same, but we’re typically the lead or co-lead investor in seed rounds [now], and the size of these rounds is a little larger today than when we started in 2010. Back then, they were often $1 million or under, but we’ve seen them average between $1.4 million and $1.5 million now, and $2 million-plus isn’t uncommon.
We’ll fund the same number of companies, but we can continue to lead these slightly larger rounds with initial investments and also have a little extra follow-on capital.
You and your partners are quite public in blogging and tweeting from the Boston ecosystem. What other investors at the seed stage in Boston would you encourage founders and other investors to follow and keep an eye on?
Founder Collective, Atlas Venture, Spark Capital, and General Catalyst Partners.
Is NextView anticipating doing more deals on the East Coast versus doing them in the Boston area?
We’ve focused on the East Coast since we started, though we’ll invest throughout the U.S. Our first fund was a little less than one-half Boston, about one-third New York, and about 15 to 20 percent “other.” When we invest outside the East Coast, it’s typically founders we’ve had a long relationship with, a sector we know particularly well, or a company that’s been transplanted. For example, ThredUp started in Boston but moved to San Francisco. We expect the geographic mix to stay about the same for our second fund, which we started investing in the first quarter. We’ve made six investments to date; four are in Boston and two are in New York.
Aside from the web and mobile, what platforms are you and NextView most excited about right now and why?
We’re looking at blockchain stuff like a number of other investors are. We also like wacky stuff. One of our new investments (unannounced) is literally rethinking mass transit with a blank canvas. Our portfolio is split roughly 50 percent consumer and 50 percent [business-to-business] companies, and at the heart of each one is internet-enabled software. We take a pretty long view, though, and believe web and mobile have a long way to run. If you look at most of the truly transformational (at a civilization level) platform shifts — electricity, automobile, microprocessor, etc. — the innovation plays out over many decades, not just a few years. The internet will be the same.
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New Fundings
Bitglass, a 1.5-year-old, Campbell, Ca.-based cloud security software maker, has raised $25 million in Series B funding, including from an unnamed bank and SingTel Innov8, the venture investing arm of SingTel Group. The company has raised $35 million to date. Other investors in the company include Norwest Venture Partners and New Enterprise Associates.
Gliacure, a three-year-old, Middleton, Wi.-based company whose small molecule drug focuses on glial cells to treat Alzheimer’s disease, has raised $5.8 million in Series B funding from undisclosed backers. The company had previously raised $2.75 million in Series A funding. MedCity News has more here.
Rebiotix, a three-year-old, Roseville, Mn.-based biotechnology company that aims to help change the way gastrointestinal diseases are treated by using the human micro biome, has raised $25 million in Series B funding from undisclosed investors. The company has raised at least $27.8 million altogether, shows Crunchbase.
Smaato, a nine-year-old, San Francisco-based exchange for mobile ads, has raised $25 million in funding led by Singapore Press Holdings, with participation from Aeris Capital and EDBI. The company has raised $47 million to date. Dealbook has more here.
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Exits
Mdotlabs, a 1.5-year-old, Madison, Wi.-based company that provides information to advertisers about bots, click farms, and other fraudulent clicks that can account for up to 50 percent of a digital ad campaign, has been acquired by ComScore for an undisclosed amount. ZDNet hasmore here. The company had raised at least $1.3 million in seed funding from Chicago Ventures; Great Oaks Venture Capital; and Ray Zemon, the founder of the fashion retailer Shopbop.
Perfect Market, a seven-year-old, Pasadena, Ca.-based company that sells digital publishing software designed to drive engagement, has been acquired by the content recommendation startup Taboola, reports TechCrunch. According to Crunchbase, Perfect Market had raised $30.6 million from investors, including Idealab, Tribune Company, Trinity Ventures, Rustic Canyon Partners, and Square 1 Bank. Taboola, a seven-year-old, New York-based company, has meanwhile raised $40 million from investors, including Pitango Venture Capital, Marker, WGI Group, and Evergreen Venture Partners.
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People
The 17 highest-paid CEOs in tech.
The new kind of worker needed to make “instant” delivery possible.
Musa Tariq, the former social media chief for both Nike and Burberry, has been hired by Apple as its digital marketing director. The outlet 9to5mac has the story here.
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Job Listings
OpenView Venture Partners is looking for a business development analyst. The job is in Boston.
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Data
Corporate venture capital arms invested nearly $5 billion in startups across the first half of this year. That’s up roughly 45 percent from a year ago and highest level since the go-go dot com days, reports VentureWire.
Today, Pitchbook takes a look those U.S. venture funds that raised between $500 billion and a billion dollars in 2005. (Just seven funds meet the criteria.) The top performers based on IRR are Austin Ventures IX, Clarus Life Sciences I, and Columbia Capital Equity Partners IV. The seven funds’ median IRR is 6 percent.
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Essential Reads
BMW has unveiled its answer to Tesla‘s supercharger network.
Extracting audio from visual information. (More on this here.)
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Detours
Hedge funds run by women outperform those run by men, and investors have taken notice.
For 150 years, the New York Times has been doing its best to define slang terms to readers, often to hilarious effect.
The gangster’s guide to upward mobility.
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Retail Therapy
An alarm clock that wakes you up with a fresh pot of coffee. Yes, it’s ridiculous, but you can have steaming hot coffee right there.
The SureFire Luminox Wristlight. It’s a watch and wrist-mounted light. (Your inner MacGyver will thank you.)
