Good morning, dear readers. We’re having delivery issues again suddenly (sigh). If your spam folder ate your issue of StrictlyVC yesterday, here it is.
Hope you have a wonderful weekend!
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Top News in the A.M.
Europe’s highest court recently decided that its citizens could ask search engines to delete search results about themselves. Now Google has set up a way for people to make such requests, reports Re/code. Its “right to be forgotten” form is here.
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NatureBox shows why VCs are Tripping Over Each Other to Back Food-Delivery Startups
Venture capitalists have seemingly gone bananas over food startups. According to VentureSource, in the last 14 months, 15 companies that deliver restaurant meals have been funded; meanwhile another 11 startups that sell general food products were funded last year – an industry record.
Are investors overdoing it? Perhaps, though a peek into the business ofNatureBox, a two-year-old, San Carlos, Ca.-based snack-delivery company that has raised $28 million to date, highlights the opportunity they’re chasing. Earlier this week, I spoke with CEO Gautam Gupta, a former investor with General Catalyst (which is among NatureBox’s backers), about his 60-person company. Our chat has been edited for length.
How fast is NatureBox growing?
I started the company with a friend of mine from college two-and-a-half years ago. That first year, we shipped 50,000 [boxes of snacks to customers]. Last year, we shipped a million and we’re on track to triple that this year.
Who, and where, are your customers?
We have customers in all 50 states. We do skew toward a female audience. The largest segment is moms looking to find healthier options for their family and school lunches. Half of our customers are on the coasts; the other 50 percent are in the Midwest, where people don’t have access to Whole Foods or Trader Joe’s.
How much are they paying for their Naturebox deliveries?
We have three different offerings, so $20, $30, or $50 a month [based on how much you’re ordering]. You can choose the items yourself, from 120 different options in our catalog, or we can select them for you.
From where are you shipping the products?
We work directly with almond and fruit growers across the country to source the ingredients. We then have a network of contract manufacturers who work on the product across the country and who send the product to our two fulfillment centers in California. We’re also about to launch an Indiana-based fulfillment center, which is a big undertaking for us and will enable us to get our boxes to our East Coast and Midwest customers much faster.
What convinced you that this was a big opportunity?
The traditional model, through retail stores, really involves a fight for shelf space, with [food companies] having to develop products based on the retail calendar. What we’ve done is take a product development cycle that’s one to three years and condensed it to the point where an idea can be made into a product that’s in customers’ hands in two or three months. More, as soon as it reaches that customer, we’re getting feedback about what they like and don’t like to eat and what makes products more or less successful — data that drives the business [forward].
What have you learned about your customers so far?
We’ve learned how important the aspect of familiarity is to a new product. We have four or five flavors of wheat fig bars available to customers on our site, for example, because the taste is very similar to Fig Newton [cookies], though our products are made of whole grain and without any fructose syrup.
You spent eight years, working at General Catalyst. Do you think VCs are beginning to plug too much money into me-too food startups?
From an investors’ standpoint, the industry we’re going after is a trillion dollar market. It’s one of the last industries to be disrupted by the Internet.
Will you be back in the market in 2014?
We’ve had a lot of folks reaching out to us and have a lot of options. We’re kind of heads down, building the business, but if it continues to grow and we’re in a good position, it’s [possible].
New Fundings
GrabTaxi, a young, Singapore-based taxi-calling app, has raised $15 million in Series B funding led by GGV Capital. Qunar also participated in the round, along with earlier investor Vertex Venture Holdings, which had led GrabTaxi’s $10 million-plus Series A round.
Grove Labs, a year-old, Somerville, Ma.-based company that’s planning to sell indoor gardening kits to consumers so they might grow their own, fresh food year round, has raised $2.05 million in seed funding, reports the WSJ. Upfront Ventures led the round, along with Felicis Ventures and Gary Vaynerchuk’s Vayner RSE. Other participants in the funding includedGalvanize Ventures, Timothy Ferriss, and Ferriss’s AngelList syndicate.
Hipmunk, a four-year-old, San Francisco-based startup whose travel search site and apps aim to help people book their travel faster and more efficiently, has raised $20 million in Series C funding from Oak Investment Partners. The company has now received $40.2 million from investors, including Webb Investment Network, Ignition Partners, Institutional Venture Partners, SV Angel and numerous individuals, among them Rich Barton, Erik Blachford, Paul Buchheit, and Matt Mullenweg.
Lucid Software, a five-year-old, Draper, Ut.-based company that makes a suite of graphical web applications and design apps, has raised $5 million in fresh funding led by Kickstart Seed Fund. Grayhawk Capital also participated in the round, which brings the company’s total funding to $6 million, shows Crunchbase.
Nix Hydra, a two-year-old, L.A.-based female-focused mobile gaming startup, has raised $5 million from Foundry Group, with participation from Buddy Media co-founder Mike Lazerow and other individuals. The company had previously raised $615,000 from seed investors.
Qeexo, a 20-month-old, San Jose, Ca.-based mobile software startup that enables devices to respond differently based on which part of the finger is being used for input, has raised $2.3 million in Series A funding led by Sierra Ventures.
RiskIQ, a five-year-old, San Francisco-based startup whose software continuously analyzes its customers’ web and mobile assets to detect malware, fraud and brand infringements, has raised $25 million in Series B funding led by Battery Ventures, with Summit Partners participating. The company has raised roughly $35 million to date.
Survios, a year-old, L.A.-based technology platform that’s bringing full body motion technology into virtual reality games and other immersive tech, has raised $4 million in Series A funding led by Shasta Ventures. Other participants in the round included Felicis Ventures and World Innovation Lab.
Tarsa Therapeutics, a five-year-old, Philadelphia, Pa.-based company that makes an oral calcitonin tablet to treat postmenopausal osteoporosis, has raised $7 million as a second tranche of a Series B round that Tarsa announced in May 2012. All of Tarsa’s earlier investors participated in the financing, including Foresite Capital, MVM Life Science Partners,Quaker Partners and Novo A/S. The company has raised at least $111 million to date, shows Crunchbase.
Trifacta, a 2.5-year-old, San Francisco-based company that’s developing productivity platforms that make raw data easier to analyze, has raised $25 million in funding led by Ignition Partners. Earlier investors Greylock Partners and Accel Partners also participated in the round. The company had raised $12 million just six months ago led by Greylock and Accel. Altogether, investors, including XSeed Capital and Data Collective, have provided the company with $41.3 million.
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New Funds
Double M Partners, a 2.5-year-old, L.A.-based firm, has raised $8 million for a new, second fund, according to an SEC filing that shows a $10 million target. Double M invests in Southern California-based Internet, media and communications startups. One of the outfit’s newest portfolio companies is Connectivity, a Burbank, Ca.-based business intelligence software company that raised $6.4 million in Series A funding in April, including from Rincon Venture Partners and Greycroft Partners. Double M was founded by former investment banker Mark Mullen (thus the “double M”).
Epidarex Capital, an early-stage life science and health tech venture fund with offices in the U.K.; Bethesda, Md.; and Tokyo, Japan, has closed on approximately $80 million for a new fund dedicated to U.K. startups, particularly university spin-outs. The firm’s LPs include King’s College London, Eli Lilly and Co., European Investment Fund, Scottish Enterprise and Strathclyde Pension Fund. The Telegraph has much more here.
There’s a new SEC filing for a San Francisco-based fund called Palma Investments that has raised roughly $70 million from 10 parties and has ties to David Lee of SV Angel, who’s listed as the managing member of the fund. Asked for information about the filing, which lists a UPS office as its street address, Lee said he couldn’t comment. Most likely, the fund is a side vehicle that SV Angel used to lead Pinterest‘s $200 million Series F round earlier this month.
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Exits
Cognitive Match, a five-year-old, New York-based display ad and predictive targeting platform, is being acquired by direct competitor Magnetic, a nearly six-year-old, New York-based company, for undisclosed terms. Cognitive raised a total of $10.2 million from investors, including Dawn Capital, Meridian Venture Partners, and Seraphin Partners. Magnetic has raised $15.3 million from investors, including NYC Seed, Neu Venture Capital, Edison Ventures, IA Ventures, Charles River Ventures, and Founder Collective.
HelloWallet, a five-year-old, Washington, D.C.-based web and mobile app that provides financial and holistic help for employees based on their salary and benefits package, has been acquired by the research company Morningstar for $52.5 million, reports InTheCapital. HelloWallet had raised $16.2 million from investors, including Revolution, TD Fund, Grotech and Morningstar itself.
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People
Former Microsoft CEO Steve Ballmer has won the bidding for the NBA’s L.A. Clippers franchise with a $2 billion offer, elbowing out two groups, including one that included media mogul David Geffen. The sale agreement stipulates that Ballmer not move the team to Seattle.
Foursquare’s chief operator officer, Evan Cohen, as well as its longtime head of business development, Holger Luedorf, are leaving the company in the coming weeks, reports Re/code. Cohen says he was “running low on gas, frankly, and it made sense for me to hand the baton off to a fresh new executive.” Matrix Partners’s entrepreneur-in-residence Jeffrey Glueck will become the company’s new COO.
Wael Ghonim, an Egyptian-born Google employee who helped spark the country’s uprising in 2011, has joined Google Ventures as an entrepreneur-in-residence. The 33-year-old joined the unit late last year but Google waited on him to work out “visa issues” before going public with his role. Fortune has much more here.
Harmonix, a 19-year-old, Cambridge, Ma.-based game maker has laid off 37 employees as part of a restructuring, reports VentureBeat. Harmonix, best known for its games “Rock Band” and “Guitar Hero,” is also replacing CEO Alex Rigopulos with Steve Janiak, the company’s head of publishing and business operations. Rigopulos will take up the title of chief creative officer.
Popular technology reporter Mike Isaac is leaving Re/code for the New York Times, he announced yesterday, a move that will involve not only jumping to a new outlet, but also relocating from the Bay Area to Brooklyn. Isaac, says the Times, will be allowed to keep his Charmin bear avatar on Twitter.
Earlier this week, investor Vinod Khosla lost a battle in his ongoing fight with the Surfrider Foundation over whether the public is owed access to Martin’s Beach, outside a $40 million property in San Mateo, Ca., that Khosla owns. On Wednesday, legislation aimed at upholding access to California beaches passed the California State Senate floor and is now headed to the Assembly. If it passes the Legislature, Khosla will have until Jan. 1, 2016, to broker a deal. The state could otherwise use eminent domain to acquire a portion of the property to reopen or create a new public access road. The San Mateo Daily Journal has more here.
Mark Zuckerberg and wife Priscilla Chan announced yesterday in the San Jose Mercury News that they’re making a “$120 million commitment to support efforts to improve education for underserved communities in the Bay Area.” In his editorial, Zuckerberg suggested that, contrary to a recent New Yorker piece, his $100 million gift to the Newark, N.J. school system is beginning to show results. “For our next project,” writes Zuckerberg, “we’re investing in our local community.”
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Job Listings
Gilt Groupe is looking for a business development director in New York.
Proofpoint is looking for a vice president of business development in Sunnyvale, Ca.
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Data
Venture capital finally outperformed the DJIA, Nasdaq and S&P 500 in the fourth quarter of last year, according to the National Venture Capital Association‘s newest performance index. Even better, 10-year venture returns (9.7 percent) slightly outpaced the indices, which returned 7.2 percent (DJIA), 7.6 percent (Nasdaq) and 7.4 percent (S&P 500). Venture funds are still trailing the public exchanges over the last 1-, 3-, and 5-year periods. (Sniff.) More here.
The 20 most valuable enterprise tech companies in the world — for now.
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Essential Reads
A smartwatch is coming from Microsoft, unexpectedly.
At long last, someone has produced a great calendar app for Android and the Web, reports The Verge.
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Detours
Twenty-seven of the best Google doodles.
How to tell someone’s age, when all you know is her name.
America’s ‘It’ School? It’s 2,700 miles from Harvard.
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Retail Therapy
Smart soccer balls.
You can never have too much storage, are we right?
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