Monthly Archives: September 2013
Here, I’ll try to share some of the things I had to learn the hard way so that for whoever wishes to enter into angel investor, there’s some work cut out for them.
Note: this is something I am still learning along the way so please do correct me if I got it wrong
Everybody has their own philosophy (or simply put, whatever makes them tick). Here I’m sharing some of mine:
- Investor base – I only invest in companies along with other high profile investors (which would allow the company to have great access for future business development if or when required)
- Winning formula – I invest in companies with a winning angle (either by a special algorithm, patent protection, lack of competition etc). User traction is important but is not the only factor
- Profitability – Having sheer user numbers is meaningless since a company could spend more money on performance marketing. A clear path to profitability is way more important (and how marketing turns into revenue)
- Valuation – I am ok with high valuation but it has to have some sort of support to it.
- Region – Most people invest in regions they are close to / understand well. I only invest in US startups but increasingly consider European and Asian ones (yet to do my first one)
- Management team – Some people insist of having the management team having successfully exited at least 1-2 startups. For me, I don’t have much of this restriction – as long as they aren’t straight off from college / business school.
The key here is to stick with the rules you set for yourself here. There would be occasions where you see investment opportunities which meets 4 or 5 out of 6 of the criteria, and you are really debating whether to break the rule just this once or not. (And don’t kid yourself, it happens more often than you think!). Rule of thumb is – never break / twist rules you set for yourself to meet one investment opportunity. Better ones will always present themselves further down the line.
There are a couple of terminologies used which you would frequently see: Capital raise, pre-money and post-money valuation.
- Capital raise: the total amount a company is raising in a particular fundraising round
- Pre-money valuation: the value (equity value) placed on a company before adding the capital being raised
- Post-money valuation: Pre-money + capital raise
You would constantly see a company quoting a pre-money valuation in any given round as a basis, simply because pre-money valuation would stay the same while you continue to build up the amount you are raising, and to prevent re-calculation / re-drafting of termsheets if you quote a post-money valuation.
Type of security
There are two ways one could invest in a startup – Straight equity or convertible note. From many perspectives there are lots of differences, which I’ll try to layout a few.
1. Convertible note: Essentially a company is issuing a debt to investors, with the upside of converting to equity shares upon a few pre-determined conditions. Typical financial terms to look for include
- Principal amount: The amount you are subscribing to in that particular convertible note
- Interest rate: An accrued interest payment, calculated from the date of signature of the convertible note until the conversion of the note into equity secuirities
- Equity cap: Different styles of convertible notes would call them slightly differently, but essentially this is the maximum pre-money valuation of your particular conversion, whereas the Series A priced round could be converting at the same time at a higher pre-money valuation. This matters particularly when you expect the Series A pre-money valuation is significantly ABOVE than the equity cap quoted here.
Discount rate: In case the Series A pre-money valuation is BELOW equity cap amount stated, then the pre-money valuation for the convertible note holder would be the pre-money stated by the Series A lead investor, less the discount rate stated here.
- Expiry date: If the company does not raise an equity round on or before the expiry date, the convertible note is automatically converted (unless with written consent from both ends to forfeit the conversion and company agrees to pay investors back in debt holdings)
2. Equity round: Much less terms to look for (Pre-money valuation, capital raise) etc, but there are much more non-financial terms to look for within an SPA (share purchase agreement), e.g. voting rights, board seats, right-of-first-refusal (ROFR), right-of-first-offer (ROFO), and any other terms to protect minority shareholders investing into the company. The SPA can be a handful to read, spanning some 60-80 pages of legal languages. There would also be preference shares terms, as well as a money cap (e.g. 2x / 3x invested capital)
A convertible note is very popular in US for multiple reasons
- Timing and legal issues: Drafting a convertible note purchase agreement is very fast, usually taking a few hours based on set templates. An SPA, however, could take days for the company attorney to draft, and another few days for investors to review and comment. If more than one investor(s) have edits on SPA, that could go on for much longer, and adding to due diligence period, an equity round takes months from termsheet to closing.
- Valuation: Placing a pre-money valuation at such early stage could be difficult. If too high then there isn’t enough risk-reward benefit for angel investors; too low then the founders risk selling too much at early stage. The convertible note is a “time buffer” which allows both parties to leave the valuation issue to the Series A lead investor, after proper due diligence and analysis.
- Equity cap gain: Usually when convertible note investors subscribe to the note, there is a good expectation of the company leading to a Series A equity round within a short period of time (6-12 months). There would also be an expectation that the equity cap amount is significantly low enough that, upon a Series A conversion, would allow the angel investors have a much lower pre-money valuation than the Series A investors. Effectively, their price per share is much lower
- Security: If an angel investor subscribes to an equity round pre-Series A, they get common shares. If a convertible note holder convert as Series A, all investors get Series A preference shares pari passu. There is downside protection to preference shareholders, and if upon a sale / IPO of the company that the asset is higher than the money cap, then all preference shareholders will elect to convert to common shares (i.e. upside is the same)
Usually a convertible note has a minimum commitment of $25k (although there are occasions where startups might accept smaller commitments). If you only have a few thousands to space, AngelList’s Invest Online function could be another option (although as I stated previously, I personally don’t prefer it)
Hopefully after the above, you’re equipped with the basics to understand how to do angel investments!
- Swiftype, a Y Combinator-backed startup that creates a smarter search engine for websites, has raised $7.5m led by NEA, with angel investors participating. The startup previously raised $1.7m in seed funding from Andreessen Horowitz, NEA, Kleiner Perkins Caufield & Byers, Ignition, CrunchFund and angel investors. NEA partner Jon Sakoda will join Swiftype’s Board of Directors as part of the financing. Currently, the company’s API and developer tools power more than 200m queries per month, up more than 20x in the past year. Swiftype is used by 100,000 sites including Best Buy, Twitch, Twilio, and Asana.
- Good Eggs, the startup that brings farmers markets online, has closed an $8.5m Series A round from Sequoia Capital with participation from Harrison Metal and others. Sequoia partner Bryan Schreier will join the Good Eggs Board of Directors. Its current investors also include Baseline Ventures, Collaborative Fund, Westly Group, Correlation Ventures, New Island Capital, Max Ventilla and Mitch Kapor.
- Online ski marketplace Liftopia, which previously focused on offering skiers discounted lift tickets, has raised $5m in new funding. This round, technically a Series D, was led by Industry Ventures, and saw participation from a number of other new investors including Salesforce CEO Mark Benioff, Yelp CEO Jeremy Stoppelmen, and Zillow CEO and co-founder of Hotwire Spencer Rascoff, Walter Winshall, Thayer Ventures, and ru-Net. Existing investors First Round Capital, Erik Blachford (former CEO of Expedia and IAC Travel), Lowercase Capital (Chris Sacca), and SK ventures (Paul Kedrosky) also joined in. Last year, Liftopia booked 1.2 percent of all skier visits in North America, but some individual resorts did 45 percent of their business online during the same period. Now, they’ve told Liftopia want to do as much of 60 percent of their ticket sales online in the upcoming season.
- Ministry of Supply, a company which creates high performance business wear, raised an additional $1.1m in seed financing from a handful of venture capitalists and angels. The round was led by Zappos CEO Tony Hsieh’s Vegas Tech Fund, with participation from SK Ventures and angels like Boston Red Sox pitcher Craig Breslow and Kevin Henrikson.
- VictorOps, a company building the first Vertical Collaboration Platform (VCP) designed to enable software operations teams – Ops, DevOps and TechOps – to solve problems regardless of physical location, connected device, or time of day, has raised $6.5m for its platform that adds a bit of the Twitter lifestyle for the DevOps pro, that person who fills a role somewhere between the IT and developer world. The Series A financing was led by Costanoa Venture Capital with participation from Foundry Group, the lead investor in the company’s 2012 seed round.
- Mobile deal-finding app Shopular raises $6.4m Series A round, led by Sequoia Capital. Sequoia’s Tim Lee will also join Shopular’s board of directors. The startup had previously raised a seed round from Y Combinator and other angel investors, including Adam D’Angelo.
- MakeSpace, a Dropbox for real life storage, raised $1.3m from Upfront Ventures, Lowercase Capital, High Peaks Venture Partners, and Collaborative Fund.
- JumpCam, a free mobile app that makes it easy to create collaborative videos with friends and family, raised $2.7m in a Series A round led by Trinity Ventures and Google Ventures.
- Eniac Ventures is announcing its second fund to invest in mobile startups. The new fund is $12.9m, significantly larger than the first $1.6m fund. The company plans to use the new fund to continue to back mobile-first ideas in the adtech, consumer, enterprise and commerce industries. Eniac, which was founded by Hadley Harris, Nihal Mehta, Vic Singh and Tim Young, is focused solely on making small seed stage investments in mobile startups. Previously the the average size of the investment was around $25,000 to $100,000, but the new fund will allow for bigger checks, in the $200,000 to $300,000 range with money for follow-on rounds. Since 2010, Eniac has backed 42 early stage mobile investments with six exits. Investments include LocalResponse, OnSwipe, Localytics, Tempo AI, MindSnacks, Fondu (acquired by Airbnb), Instinctive (acquired by Soundcloud) and MetaResolver (acquired by Millennial Media). which almost tripled Eniac’s investment in less than a year. The total value of first fund has increased 2x from the initial investment. Eniac is also announcing some of the investments it has already made out of the fund, including BioBeats, Boxed, Glide, Just Sing It, Reactor, RapCommerce, and Vistar Media.
- Burner, an app offering users disposable phone numbers which they could use to protect their privacy, announced $2m in new funding, led by Founder Collective and Venrock. Other investors in the round include TenOneTen, run by L.A. angels Gil Elbaz and David Waxman. David Frankel of Founder Collective and Marissa Campise of Venrock will also now join Burner’s board. Previously, the company had raised angel funding from 500 Startups, David Cohen, Ted Rheingold, and others, bringing Burner’s total raise to date to approximately $2.5m.
- Neurotrack, a technology provider which can diagnose Alzheimer’s Disease up to six years before symptoms occur, closed a $2m round of funding led by Founders Fund and Social+Capital.
- Academia.edu, a social networking platform for researchers, raised $11.1m in funding led by Khosla Ventures, with participation from previous investors like Spark Capital and True Ventures. Khosla’s newest partner Ben Ling joins the company’s board.
- LeadPages, a Minneapolis company that provides HTML 5 templates for contact pages, webinar pages, sales lead and other types of landing pages that customers use to improve leads and get better conversions, has received a $5m Series A investment from the Foundry Group. Arthur Ventures also participated in the round. The funding will help the company expand its service that provides customers with landing page templates powered by a data analytics engine that traditionally only a company like Google has been able to enjoy.
- subscription-based fashion commerce site JustFab with 35m users, raised $40m in a Series C round of funding. This latest round was led by Shining Capital of Hong Kong, with participation from existing investors Matrix Partners, Rho Ventures, Technology Crossover Ventures (TCV) and Intelligent Beauty. The Series C comes a little over a year after JustFab closed a $76m round, also with the aim of using the investment to expand its footprint and product line-up beyond its mainline offering of footwear for women. The company has now raised some $149m in total.
- Semantic search engine Unsilo raised $1m from Danish incubator Oei and Scale Capital, a small VC firm co-headquartered in the U.S. (Palo Alto) and Denmark.
- Social events application platform DoubleDutch raised $10m in Series C funding in an oversubscribed round led in large part by Byron Deeter of Bessemer Venture Partners, who will now join the company’s board. Previous investors from DoubleDutch’s A and B rounds, Floodgate Fund, Bullpen Capital and others also participated. The funding comes at a time when DoubleDutch has moved to singularly focus on developing its mobile event technology, while abandoning its other products including a fairly popular mobile CRM application known as Hive.
- Gyft, a company building a digital platform to bring the plastic gift card industry to both web and mobile, has raised $5m in Series A funding in a round led by Karlin Ventures, with participation from A-Grade Investments, Chamath Palihapitiya’s Social + Capital Partnership, Hass Portman and Yammer founder David Sacks. The company previously raised $1.25m in seed funding from Google Ventures, Founder Collective, and 500 Startups.
- DJ app edjing – which is available for iOS, Android, Amazon’s mobile platform, and Windows — has raised $2.5m in funding led by Entrepreneur Venture, with participation from Deezer founder, Daniel Marhely, who also joins the French startup’s Advisory Board. The startup says it will use the new funding to speed up its international development, noting that the North American and Asian markets account for 30% and 20% of the application’s market respectively, and will be a key focus going forward.
- Urban Compass, the young New York startup that emerged from stealth mode in May with a home rentals platform and accompanying hyperlocal social network, has closed a Series A round of funding totalling $20m. The new investment values the company at $150m. Urban Compass is also announcing some extra, strategic investors in the form of Advance Publications, the parent of Conde Nast; and Marc Benioff, the founder and CEO of Salesforce.com. Existing, disclosed investors from Urban Compass’s $8m seed round, including Founders Fund, Thrive Capital, .406 Ventures and others, also participated in the Series A.
- Prosper, a peer-to-peer lending platform, has raised an additional $25m. The round was led by Sequoia, a longtime investor in the company, with participation from BlackRock. Including the new funds, Prosper has accepted a total of $119.9m in outside money.
- A New York-based imaging startup, called Biodigital, emerged early last year with Animate, map and display the human body in 3-D through any browser. With traction slowly mounting and the scope for Biodigital’s technology beginning to expand, the startup announced that it is taking on $4m in series A financing, led by FirstMark Capital, with participation from NYU Venture Fund and a handful of angel investors.
- The editorial beauty website Into The Gloss has raised $2m in venture capital funding led by Forerunner and Lerer Ventures, along with several angel investors.
- Practice Fusion, a company which provides a free, web-based EMR system to physicians, announced a $70m Series D investment, led by Kleiner Perkins Caufield & Byers (KPCB) and institutional investors OrbiMed Advisors and Deerfield Management Company. The startup’s existing investors, including Artis Ventures, Morgenthaler Ventures and Felicis Ventures also contributed to the round, which brings its total capital to $134m. With Bloomberg reporting that this new round values the company in the ballpark of $700m, Practice Fusion has become one of the largest digital health startups of this new generation. The company’s growth has compounded since raising $34m in series C back in June of 2012.
- Simplee, a company which allows healthcare providers to engage patients as consumers and transform payment into a trusted, self-service experience, raised $10m in Series B financing, in an investment led by Heritage Group. The company’s existing investors, Social+Capital and Greylock IL, also contributed to the round, bringing its total investment to just under $18m. Simplee is tracking and managing more than $3 billion in patient medical expenses and now processes “tens ofms” in patient payments each year.
- Zoom, the Santa Clara-based cloud video conferencing startup that last raised $6m in January, has raised another $6.5m in a Series B round of funding that has just closed. The new round is led by Facebook, Waze and Siri investor Horizons Ventures Hong Kong, and included existing investors Patrick Soon-Shiong and former Yahoo! CEO and co-founder Jerry Yang. Zoom is now just over two years old, and in that time it has managed to attract 4,500 business customers, and over 3m participants.
- FormaFina, e-commerce startup which sells curated, limited-run collections of decor products in Argentina and Brazil, has raised a seed round of $1.4m to anchor itself in the Brazilian market. FormaFina’s investors include Redpoint eVentures — a Silicon Valley fund dedicated solely to Brazilian startups — IG Angels, El Paso Advisors, Start Capital, 500 Startups, and Plug&Play. Several angel investors also participated in the round, including baby.com.br co-founder In Hsieh and Hans Hickler, formerly the head of DHL US.
- C9, a Revenue Performance company which helps organizations analyze and optimize revenue across marketing, sales, service and support, raised $12m in funding for its platform that helps customers forecast sales revenues. The Series D round was led by existing investors Mayfield Fund, InterWest Partners and Leapfrog Ventures. The company has raised a total of $40m. Its analytics platform helps companies gain insights through historical trends. It looks at what deals are not going to close or what is wrong with deals starting at the beginning of the quarter to help companies focus on the most important accounts or determine how to improve the sales process.
- AngelList, one of the Valley’s most powerful fundraising channels for early-stage startups, just picked up $24m of its own. Google Ventures participated as one of the leads along with Atlas Ventures, a firm that’s supported AngelList through its early years. On top of that, there are another 100 or so investors involved. While not confirmed by the company, we hear the valuation was about $150m. . The company estimates that it has facilitated around $200m in investments, with $186m through introductions and $14m through a new, more direct “invest online” product. They have about 21,000 investors on the platform and 1,300 companies have successfully raised funding on it.
- Snaps!, a mobile app that allows fans of a brand community to place branded virtual content into their photos and seamlessly share their creations, or “Snaps”, across their favorite social networks, raised an angel investment of $2.25m, with a notable group of investors backing it including S2K; Ben Barokas, the co-founder of Admeld (acquired by Google for $400m) who is now GM of marketplace development for Google; and Jonathan Carson, Vevo’s chief revenue officer. Carson is now also Snaps’ chairman of the board, along with another new appointment, Andy Levitt as president. Other illustrious investors in this round include Michael Kassan of MediaLink; Mike Katz (ex-Yahoo); Leo Hindery Jr. (ex-AT&T); Bill Lohse (ex-Ziff Davis Publishing); Digital Capital Advisors; Dolgen Ventures; and Lucas Point Ventures. Prior to today, Snaps raised $1.1m in April 2011 under its previous name, GoldRun, from investors including Jeremy Zimmer of United Talent Agency and Ed Matthias of the Carlyle Group.
- Palantir, the big data company that has counted the NSA, the FBI and the CIA among its clientele, is raising up to $196.5m in growth capital, according to an SEC filing. The company declined to say who the new funding was from. The round is also not finalized yet. Morgan Stanley is managing the deal, according to the filing. Forbes reported last month that a round could value the company at between $5 and 8 billion.
- Shyp, a startup allowing door to door delivery for eBay sellers, raised $2.1m in seed funding. $1.35M of it came from more traditional fundraising sources (Lead by Hunter Walk’s Homebrew and Sherpa Ventures, backed by a bevy of Angels). Tim Ferriss privately raised $500k of it from his own contacts. Some of the investors in that chunk include Antonio J. Gracias (Board of Directors on both SpaceX/Tesla) and Daymond John (FUBU founder, and one of the Shark Tank sharks). The remaining $250K, which is what they set aside to raise through general solicitation on AngelList. A user opens the Shyp app and snap a picture of the item you’d like to be sent away. This picture is sent out to Shyp’s network of contracted employees (which they call “Shyp Heroes”), any of whom can then elect to pick up the package. They show up at your location, grab the item, put it in a padded bag, and take it back to be packed and shipped. If you’re shipping one item, they charge you the amount that UPS or FedEx would charge, plus a $5 pickup fee. If you send two or more separate items, they waive the fee. Packaging costs are included, and each item is insured at up to $10,000 from the second it leaves your house.
- Flipboard has raised $50 million in new funding, in a round led by Rizvi Traverse Management and Goldman Sachs. The new funding puts the valuation of the Silicon Valley startup that makes the popular social reading service at $800 million. In addition, current investors, including venture firms Kleiner Perkins and Index Ventures, are also participating, while Insight Venture Partners is taking an even larger stake in Flipboard.
- Hamburg-based Minubo, which offers Business Intelligence as a Service, a central “Data Hub” hosted in the cloud that pulls in an online retailer’s various data-points to present a holistic view of their analytics to enable them to make “better, data-driven decisions”, raised a €1m seed round from a host of backers including the pan-European accelerator Seedcamp, and VCs Tola Capital, and High Tech Gruenderfonds, along with a group of prominent angel investors including Stephan Schambach (founder of Demandware and Intershop), Alexander Brühl (former Senior Partner at Atlas Venture), Mirko Caspar, Dirk Graber and Christian Luhmann (founders of Mister Spex), Hubertus Bessau, Philipp Kraiss and Max Wittrock (founders of Mymuesli.com), and Dominik Gyllensvärd.
- Pin-Digital, a Barcelona-based startup that created PinSex and PinGay, says that it has raised $800,000 in funding. The funding includes his own money, along with undisclosed angel investors. He admitted that he has faced “resistance” from traditional investors, but he said the company is exploring other models, such as trading media (i.e., promotional ad space) for equity.
- Location-based photo and video discovery platform Tapastreet, closed a $500,000 seed round. The funding comes from Kernel Capital through the Bank of Ireland Seed and Early Stage Equity Fund, and Enterprise Ireland. Founded in 2012 by ex-Intel engineer Joe Mitchell and ex-Googler Dave Johnson, the Irish startup offers an Android and iOS app that aggregates publicly available photos and videos from various social media, based on location.
- Belgium-based big data startup NGDATA, which also has offices in New York and San Francisco, has closed a $3.3m funding round, led by Capricorn Venture Partners. Existing investors also participated, including Sniper Investments and unnamed angel investors. The new funding brings NGDATA’s total raised to date to $5.8m, after a $2.5m round last October.
- Mobile and desktop casual-game development studio Total Eclipse announced a $580,000 (€430,000) financing round led by Openfund, along with participating angel investors. Total Eclipse plans to use the fund to supercharge its platform in casual gaming, hiring, and launching new games.
- Tel Aviv-based SimilarGroup, makers of an online web measurement tool called SimilarWeb, announced an additional $3.5m in funding, and the launch of its paid service, SimilarWeb Pro. The new funding, an extension of SimilarGroup’s Series B, comes from angel investor Lord David Alliance, chairman of N Brown Group, a clothing catalog retailer, and includes participation from previous investors, Moshe Lichtman and Docor International. To date, SimilarGroup has raised $7m in total outside funding.
- Spanish startup Mobincube has closed a €700,000/$946,000 seed round for its drag and drop, web-based app builder which lets non-developers build their own mobile apps using a series of templates. The round was led by early stage VC firm Inveready. Others investors include the VC arm of Spanish commercial bank, bankinter – which has previously invested in PayPal, one of the third party services Mobincube integrates into its offering – and angel crowdfunding platform The Crowd Angel.
- Tel Aviv-based Visualead, a platform that lets any business quickly embed QR codes into any design or advertisement in just a few simple steps, raised $1.6m in Series A funding. The new round was led by Kaedan Capital and Entrée Capital. Visualead has now raised a total of $2.35m. The company first launched in January, offering a self-serve platform for small and medium businesses. It says the platform is now used by 200,000 SMBs, who create 30,000 campaigns every month.
- London-based startup Dattch, a Pinterest-inspired dating app for gay women, closed a £100,000/$160,000 angel/small seed round, with three angel investors — including Yannick Pons and Andy Phillips. That investment bolsters the €40,000 invested by Wayra as part of its incubator program, where Dattch will remain until January.
- Singapore app maker MyHero raises $10M Series A for its stock market trading gamification app, TradeHero. Investors in the round are Kleiner Perkins Caufield Byers China fund (KPCB China) and IPV Capital. TradeHero users start out with $100,000 in virtual cash to spend, choosing which and how much stock to ‘buy’ — there are no live trades going on here, it’s a simulation — and getting to see whether their trading decisions would have panned out IRL because the app follows actual market movements. TradeHero was actually incubated out of TNF Ventures, taking in a seed round of around $500,000-$600,000 about a year ago, with backing from Singapore’s National Research Foundation. Landing such large follow-on funding will allow it to ramp up its marketing efforts on several fronts including targeting user-acquisition effects at markets such as the U.S. and Europe which it hasn’t really had the “firepower” to focus on to-date. It’s also planning to translate the app into more languages to help grow its reach further.
- Hotel booking app HotelQuickly has raised a series A round of HKD$9m (about $1.16m USD). Investors include Boon Hwee Koh, the former chairman of Singtel and Singapore Airlines. The startup will use the funding for product development and to expand further through the Asia Pacific region, where it currently operates in 11 countries.
Mergers & Acquisitions
- eBay has acquired online marketplace for men’s shopping Bureau of Trade. Founder Michael Phillips Moskowitz is joining the eBay Marketplaces team, where his focus will be on helping eBay improve its personalization efforts. Terms of the deal were not disclosed, but it was an all-cash deal and an “acceptable” and positive (if not stellar), outcome for Bureau of Trade’s investors. The startup had raised $1.2m in seed funding in a round led by Foundation Capital, with contributions from Founder Collective, FF Angel, Courtney Holt on behalf of the Techfellows Fund, and other angel investors.
- Ford Motors today is announcing the acquisition of Livio Radio, a maker of a platform for in-car apps, with a focus on audio and music services. This is the car-maker’s first technology acquisition in 13 years. The Ferndale, MI-based startup, now a subsidiary of Ford’s Global Technologies Group, will continue to operate under the original name. Neither party has disclosed the terms of the deal, only stating that Ford paid less than $10m for the in-vehicle app maker. Exact terms of the deal was not disclosed. Mascarenas indicated that the whole deal cost less than $10m and funds were provided solely by Ford Global Technologies Group. Myine Electronics, LLC, doing business under the name Livio Radio, had raised $2.15m in two funding rounds.
- Ebay’s PayPal has acquired Chicago-based payments gateway Braintree, in an all-cash deal worth $800m. Braintree was on the block, with Square and PayPal both in acquisition talks for the company. Braintree, which had raised $69m in outside funding from Accel, NEA, RRE, Greycroft and others, was founded in 2007. Braintree essentially powers and automates online payments for merchants and companies online. Braintree is now seeing $12 billion in payments annually, with over $4 billion of that on mobile. The service is used by a number of startups and tech companies, including Airbnb, Fab, LivingSocial, Uber, Twilio, GitHub and others.
- Automattic, the parent company of WordPress.com, has acquired file-sharing service Cloudup, which launched in beta in June. The acquisition will help Automattic improve two features of WordPress.com in particular: the media library used for uploading visual content and post editing to give multiple users the ability to edit at one time. Cloudup, which has accumulated around 10,000 active users since June, will continue to be available independently of WordPress.com. Automattic will continue running it and adding new features, and the service will soon be open to the public.
- Content discovery service StumbleUpon is announcing that it has acquired 5by, a video startup based in Montreal. The financial terms of the deal aren’t disclosed, but the companies say the entire six-person 5by team will be moving to San Francisco to work out of StumbleUpon’s headquarters, where it will continue to develop 5by as a standalone product. StumbleUpon now has the freedom to look at these kinds of deals because revenue is doing well (it was $30m last year and projected to be $35m to $40m this year) and the company is profitable, which is what it was aiming for when it laid off 30 percent of staff and restructured the team earlier this year.
- Montreal-based Lagoa has acquired in-browser 3D editor 3DTin. The company announced its acquisition on its blog. 3DTin is used for 3D model and 3D printing. The details of the acquisition are undisclosed.
- Health advice portal VitaPortal, which raised a $2m Series A last October from Prostor Capital and Esther Dyson, has merged with ZdorovieOnline.ru, a smaller medical platform and electronic medical records portal, backed by Runa Capital. The pair said they are hoping to create the single largest entity in Russian’s online health services space. Currently VitaPortal has more than 700,000 registered users of its health services but they said investor forecasts factoring in the merger suggest they can increase this figure to 5m users next year. The merger also brings new money to the table, from ZdorovieOnline investors, in order to ”maintain the balance of shares” in the new entity, and to fund the development of “a number of additional services”. A total of $1.35m is being invested as Series B funding into VitaPortal, with $1m coming from Runa Capital and $350,000 from Aleksey Kandikov, founder of Zdorovie Online.
- Digital Chocolate, a gaming company from original EA founder Trip Hawkins, has sold its 46-person Barcelona studio to France’s Ubisoft. The sale comes just months after the company closed down its Helsinki office. The company has been downsizing for more than a year, with layoffs and Hawkins stepping down in 2012 to form a new educational gaming company. It’s another tough chapter for the 10-year-old company, which has raised at least $55m to date in four separate venture rounds.
- HTC has sold its remaining stake in Beats Electronics for $265m. The deal is expected to close in the fourth quarter. By selling beck the 24.84 percent stake in Beats, HTC stands to gain a NT$2.52 billion ($85m) pretax profit. Beats will also repay a $150m promissory note, plus accrued interest. HTC originally purchased 50.1 of Beats in 2011, but sold half of that stack in mid-2012, which reportedly resulted in a net loss of about $4.8m for the Taiwanese gadget maker.
- Alibaba Group has acquired Kanbox, the personal cloud storage service sometimes referred to as “the Dropbox of China.” This marks Alibaba Group’s first personal cloud storage acquisition as the company focuses on expanding its range of consumer-focused cloud computing products. The acquisition price was undisclosed. Launched in early 2011, Kanbox raised a Series B round of $20m that year led by DCM with SIG China participating. Kanbox has more than 15m users who use the service to upload, download and sync files through their devices. About 20% of users access Kanbox through their mobile devices and Alibaba could use it to build a service similar to Apple’s iCloud, enabling customers to access their content and media across different platforms.
- Rampersand, a new firm looking to invest in Australian startups and provide them with advice on sales, marketing, and PR, raised a $6m fund.
Source: Company disclosure, mergermarket, TechCrunch, The Next Web, TechNode
- M-commerce vendor known as Branding Brand which powers the mobile e-commerce sites and apps for more than 200 of the top retailers worldwide, announced a $9.5m Series B led by existing investor Insight Venture Partners, and includes repeat investment from CrunchFund and Lead Edge Capital. It also includes participation from new investor eBay Enterprise. This brings Branding Brand’s total funding to date to $17m. Today, the company sees nearly $1 billion in transactions running through its platform, up from $60m in 2011.
- Social analytics startup Unmetric is announcing that it has raised $5.5m in Series B funding. The new round was led by JAFCO Asia with participation from previous investor Nexus Venture Partners. Unmetric has now raised a total of $8.7m. Unmetric says it will use the funding for global expansion, as well as adding even more social networks to its system.
- Plaid, a startup that describes itself as “the modern API for banking data”, has raised $2.8m led by Spark Capital, with participation from Google Ventures, New Enterprise Associates, Felicis Ventures, and Homebrew Capital (the new seed fund from former Googlers Hunter Walk and Satya Patel). The startup is currently in private beta, and initial clients have used the API for accounting, automated taxes, and expense management applications
- Deliv, a Palo Alto based same-day delivery startup, announced a $6.85m series A investment. Upfront Ventures and RPM Ventures, who have previously funded retailers including Costco, Office Depot, and Starbucks, led the investment round in Deliv, whose technology integrates directly into the retailer’s e-commerce properties allowing customers to select the same-day delivery option at the time of checkout.
- Gigya, a company which enables the world’s largest brands, including Pepsi, Verizon and ABC to understand and connect more closely with today’s mobile and socially connected consumers, closed a $25m funding round, led by Greenspring Associates with contributions from the company’s existing investors, including Benchmark Capital, Mayfield Fund, DAG Ventures and Advance Publications. The new round brings Gigya’s total funding to $70m and the company’s valuation has doubled since its last funding round — its $15m financing which closed last June.
- Cinegif, an Austin-based startup that makes it easy for companies to create GIFs for use in marketing campaigns, has raised $500,000 in funding from Texas angel investors including the Baylor Angel Network, the Houston Angel Network and its related Texas Halo Fund. The angel round will be used by Cinegif to accelerate sales and marketing for its cloud-based GIF marketing platform.
- Apttus, a service native to Salesforce.com that helps manage contracts from the time a buyer expresses interest in a product to the actual collection of revenues from the sale, has raised $37m for its platform that automates the “quote to cash” (CQT) process within Salesforce.com. The funding came from K1 Capital, ICONIQ Capital and Salesforce.com.
- CyanogenMod, a customized, aftermarket firmware distribution for several Android devices, raised $7m in funding raised by Benchmark Capital to turn what has been a hobby project into a real business pioneering a direct-to-consumer route for delivering a mobile OS.
- StrongLoop has raised $8m in Series A funding for its backend-as-a-service (MBaaS) that uses Node.js as a platform for developing mobile apps in the cloud or in the data center. The funding came from Shasta Ventures and Ignition Partners, bringing StrongLoop’s total funding to $9m. The company provides a mobile API tier as a way for developers to get access to backend data for their apps.
- Snapguide, the crowdsourced, how-to app founded by a veteran from Yahoo Pipes and another from Google’s Chrome business, announced another $3m raise from existing investors (they include Atlas Venture, Index, SV Angel, CrunchFund (Disclaimer: Michael Arrington, founder of TC, runs CrunchFund) and Dave Morin’s Slow Ventures). The funding takes the total raised to date by Snapguide to $10m.
- Blue Jeans Network, a video conferencing company that plays nicely with other services, is announcing that it has raised $50m in new funding. The round doubles the amount that Blue Jeans had previously raised, and it was led by Battery Ventures, with participation from previous investors Accel Partners, New Enterprise Associates, and Norwest Ventures Partners.
- Mobile app analytics and market intelligence service App Annie announced $15m in Series C funding, led by Sequoia Capital, with participation from existing investors IDG Capital Partners, Greycroft Partners, e.Ventures, and Infinity Venture Partners. The funding also sees two new additions to App Annie’s board, including Sequoia Capital Partner Tim Lee, and Greycroft’s Alan Gould, CEO of uSamp, and founder of IAG Research, which sold to Nielsen.
- Pipedrive, the SaaS to help small to medium size companies manage and increase sales, has raised a further $2.4m in funding, bringing the total raised by the company to $3.4m. The new investment, described as an “extended seed round”, was co-led by Rembrandt Venture Partners, and Storm Ventures, with participation from existing backer TMT Investments, and a group of angel investors including Taavet Hinrikus (co-founder of Transferwise), Ott Kaukver (VP Engineering of Twilio), Rain Rannu (co-founder of Fortumo), and Tytus Michalski (Managing Director of Fresco Capital Advisors).
- Bright, a startup that is betting that data science and machine learning algorithms will be central to hiring and finding jobs, is announcing $14m in Series B funding from Toba Capital and Passport Capital. The startup previously raised $6m in funding in 2011. The new funding will go to bulking up the startup’s data science team.
- Stackdriver, a monitoring service for cloud-based applications, announced that it has raised a $10m Series B round led by Flybridge Capital Partners, with participation by existing investor Bain Capital Ventures and a number of angel investors. Last year, the Boston-based company raised a $5m Series A round.
- Bugsnag, a service that captures errors, crashes and exceptions in real-time from web, mobile and desktop applications, helping app developers to understand and resolve them as fast as possible, is announcing $1.4m in seed funding in a round led by Matrix Partners. Others participating in the round include angels with cloud and SaaS experience, like Slicehost founder and TechStars Cloud director Jason Seats, and Huddle founder Andy McLoughlin.
- San Francisco-based startup Distill who builds hiring tools to maximize the interview process as well as rethinking the optimal ways to screen candidates announced a $1.3m in funding in a round with Felicis Ventures, China’s Innovation Works and DN Capital. The company has built a video interviewing and scheduling service that makes it easy to vet candidates and their problem solving abilities side-by-side.
- Goldbely, the startup that delivers signature foods from regional establishments to hungry people throughout the United States, just closed on a $3m seed funding round led by Intel Capital with the participation of Y Combinator (the Silicon Valley startup incubator from which it launched this past February), 500 Startups, Dave McClure, Tim Draper, ACE & Company, and FundersClub. The new cash will be used to further expand Goldbely’s operations nationwide.
- Stitch Labs, the startup founded in 2011 to help small and medium-sized businesses manage their sales operations, has raised $3.5m in Series A financing. Greg Sands of Costanoa Ventures led the round, with participation from True Ventures and Greg Waldorf, the founding investor in eHarmony. In February 2012, Stitch Labs raised a seed round of $1m led by True Ventures.
- PubNub, a provider of APIs that publishers, developers and others can use to implement messaging and other social services on apps and websites, has picked up an $11 million round of funding that it will use to add more services to its network and build out its sales and marketing operations. This Series B round was led by Scale Venture Partners and included participation from existing investors Relay Ventures and TiE Angles, and takes the total raised by the company to $15.5 million. As part of the investment, ScaleVP’s Andy Vitus is joining PubNub’s board.
- FuzeBox, which provides online collaboration and communication tools, has raised $26 million in Series B funding. Led by Hermes Growth Partners and joined by existing investors Index Ventures, Khosla Ventures and Insight Venture Partners, this brings the company’s total funding to $46 million.
- Dafiti, a Rocket Internet-backed fashion commerce site based out of Brazil, is announcing a new investment of $70 million to continue building out its business. It comes from the Ontario Teachers’ Pension Plan (OTPP), a Canadian investment fund that has made other notable tech investments, including a $400 million round in Chinese e-commerce site 360Buy.com. It takes total funding for Dafiti to $225 million, and puts OTPP among the company’s biggest shareholders, with others including JPMorgan and Quadrant Capital Advisors.
- PushPage, a personal homepage platform that offers users an online presence where they can publicize their likes and interests through a series of interview-like questions, announced a $1.7 million in seed funding. Investors in the startup’s seed round include: Rose Park Advisors, Bob Pittman (CEO Clear Channel, founder MTV), Irving Azoff (former CEO/chairman Live Nation), Scott Sperling (President THL Partners), Lance Kalish and Ido Leffler (YesToCarrots founders), John Kim (founder, DirectDigital), Howard Wolk (president Cross Country Group) and Meridian Capital.
- Upworthy, the media site aiming to make videos with a message go viral, has raised $8 million in Series A funding led by Spark Capital, an early investor in Tumblr and Twitter, along with Catamount Ventures, Uprising, and the Knight Foundation.
- Convo, a company providing enterprise private social network, raised $5m from MorgenThaler.
- New York based Zipments, a same-day delivery marketplace that connects retailers with couriers, has closed a $2.25 million seed round to further build out its product and expand to new cities. It’s facing increasing competition from consumer-focused San Francisco delivery heavyweights such as TaskRabbit and Postmates, the latter of which recently raised $5 million to muscle into New York. FirstMark Capital and Huron River Ventures led the seed investment in Zipments, which also included The Windquest Group, New York City Economic Development Corporation, Chicago Ventures, as well as Robert Safrata, CEO of Novex Couriers, one of Canada’s local same-day couriers.
- Yesware, the leading email productivity service for salespeople, announced that it has secured USD 13.5m in Series B funding. The round was led by Battery Ventures, with existing investors Google Ventures, Foundry Group, IDG Ventures, and Golden Venture Partners all participating. In total, Yesware has now raised a total of USD 18.5m. The new funds will be used to accelerate the company’s continued growth and platform expansion efforts.
- Visage, the SaaS enterprise mobility management (EMM) solution announced a strategic investment by Concur, the global leader in integrated travel and expense management, through the Concur Perfect Trip™ Fund.
- UK startup NewVoiceMedia is announcing a new round of $35m to build out its business applying this idea to the world of call centers. This Series C round is led by a new investor, Bessemer Venture Partners, along with participation from existing investors Highland Capital Partners Europe, Eden Ventures and Notion Capital. It’s the second round of funding announced by NVM this year, after a $20M Series B round in January. It brings the total raised by the company to $61.3m.
- Swiss company builder Centralway is opening a new seed and early stage investment arm that will invest $50m per year into 20 to 30 startups — including both small seed-stage investment and larger Series A rounds. The newly formed Centralway Ventures, which will be headquartered in London’s Somerset House, is making its first investment in YC- and Google Ventures-backed Buttercoin: a Bitcoin startup that is looking to disrupt the international remittances market by leveraging the decentralised digital cryptocurrency to shrink cross-border transaction costs.
- Smallrivers, the Swiss startup behind news curation platform Paper.li, has raised further funding: $2m from Debioinvestment, and Polytech Ventures (co-founded by the Swiss Federal Institute of Technologies where SmallRivers is based), along with existing investors/shareholders, including Kima Ventures, and various European angels, as well as co-founder Edouard Lambelet. The new capital, which brings total funding to date to $7m, will be used to consolidate revenue growth, with the aim to break even in the coming year, and deploy what Paper.li is describing as a new “semantic analysis engine” that will offer curators additional content discovery and filtering capabilities to make it even easier to build their own online newspapers. To date, Paper.li claims 3.7 million monthly users who are curating over 50 million articles daily, in 7 languages.
- Barcelona-based Restalo, an online restaurant reservation service similar to OpenTable, has raised a $10 million Series B round from Seaya Ventures, and existing investor Active Venture Partners. Having previously raised $1.3 million in 2011, this takes the total funding to date to $11.3 million. Founded in 2009, Restalo offers real-time online restaurant reservations for diners, and a cloud-based reservation and guest management solution for restaurants. It claims 1 million active users, and 8,000 restaurants on its platform, as well as 200 partner sites, including brands such as TimeOut, and TripAdvisor.
- Withlocals, a peer-to-peer marketplace for locals to offer travellers various experiences, such as tours, home dining, and other local activities, has raised $500,000 in funding from startup builder and backer Greenhouse Group. The Netherlands-founded startup will use the investment to launch out of beta this fall and, curiously, target Southeast Asia — a move it says differentiates itself from U.S. competitor Vayable.
- REWE Group, the German retail and travel entity, has acquired a minority stake in domestic online furniture retailer Home24. The acquisition was made through a capital increase. Financial terms of the deal were not given.
- Cinemacraft, a startup that wants to replace static video thumbnails with its interactive Videograms, has raised a $1.5 million strategic funding round from investors NTT DoCoMo, Turner Broadcasting’s Media Camp and 500 Startups. Combined with an earlier seed round of $500,000 from 500 Startups and angel investors, this brings Cinemacraft’s total funding raised to date to $2 million.
- Mobile karaoke app Maichang reportedly received 15 million yuan ($2.44 million) of Services A Financing from Touch Wood. Maichang has around 8 million registered users and 700,000 daily active users, disclosed Liu. Similar domestic companies are Changba, Karaoke Master and Audiocn.
- Credit card management app Kaniu has raised a combined 10 million dollars in two rounds, in December 2012 and earlier this year, respectively, from Sequoia China. Feidee, developer of Kaniu, was initially financed by Kingdee, a Hong Kong-listed enterprise financial software developer and the former employer of core members of Feidee founding team. Before Kaniu, the company developed a personal finance app Suishouji which claims it has 60 million users.
Mergers & Acquisitions
- GoDaddy has acquired Afternic, a specialist in aftermarket domain sales (reselling domain names that are already owned). Afternic was owned by NameMedia, and GoDaddy says it is also acquiring SmartName, a domain parking service, as well as NameFind, essentially a name generator, from the same group. Terms of the deal were not disclosed but GoDaddy notes that the company has turnovers of around $1m per week in aftermarket domain sales. GoDaddy notes that the acquisition will enable over 100 registrars (including 18 of the top-20) to offer aftermarket domain names directly to their customers.
- Montreal-based Lagoa has acquired in-browser 3D editor 3DTin. The company announced its acquisition on its blog. 3DTin is used for 3D model and 3D printing. The details of the acquisition are undisclosed.
- Hoppit, a search engine that lets you find restaurants based on their atmosphere, today announced that it has been acquired by the “lifestage media” company XO Group (formerly known as “The Knot”). Hoppit will join XO Group’s lineup of wedding- and marriage-related brands, including The Knot, The Nest, The Bump, WeddingChannel.com and GiftRegistry360.com. Hoppit launched its service publicly in early 2012 and took about $500,000 in seed funding from a diverse group of investors, including Aimee Higgins, Earl Tucker III, Phil Landler, Graham Smith and Dziedzic.
- File-sharing company Hightail (formerly YouSendIt), has acquired startup AdeptCloud, a file sharing and collaboration company focused on security, control and privacy. Financial terms of the deal were not disclosed. AdeptCloud had raised $700,000 in outside funding.
- Splunk has acquired BugSense, a mobile analytics platform used by developers to improve app performance and improve quality. Terms of the deal were not disclosed. The transaction is expected to close during Splunk’s 2014 fiscal third quarter, which ends in October. BugSense, founded in 2011, provides analytics from machine data it collects to understand how apps are performing on mobile devices, the quality of the apps and for collecting data to do better troubleshooting. It works on Android, iOS and Windows Phone through its software developer kit, giving developers access to data analytics from hundreds of millions of mobile devices that it manages from its scalable cloud platform.
- After raising nearly $20 million and becoming one of the most downloaded mobile apps but failing to find real revenue, Bump Technologies has been acquired by Google. Its app Bump lets you physically tap phones together to share contact info and more, and it will stay open for download. Terms of the acquisition weren’t disclosed but was rumoured to be around $35m.
- Celerity, a business acceleration consultancy that delivers enterprise web and mobile, business transformation and IT talent solutions, has acquired 3PC Media, a Pittsburgh-based digital agency specializing in mobile application development, user interface design and strategic branding.
- PlentyOfFish, the Vancouver, British Columbia-based online dating site, is acquiring FastLife, the Toronto, Ontario-based speed dating and singles event company. FastLife holds more than 2,400 events a year, with more than 60,000 urban professional singles in attendance. These events have generated annual revenue of more than USD 2.5m.
- Groupon announced the acquisition of SideTour, a marketplace that helps people discover, book and host great local activities. Terms of the deal were not disclosed. SideTour has raised USD 4m in funding to date. SideTour handpicks a growing selection of unique, hosted events that connect customers with qualified experts who help them discover more about their cities and the things they’re passionate about.
- Network Merchants, LLC, a leading provider of e-commerce payment gateways and value-added services, announced today that Bregal Sagemount has made a significant growth investment in the company. The existing management team, led by Chief Executive Officer Jim McKenzie, will continue to run the business. Network Merchants provides a comprehensive suite of gateway and security features, distributed exclusively through a channel of over 400 affiliate partners that serve more than 60,000 merchants worldwide.
- Artemis Energy Holdings announced that it has entered into a definitive agreement to acquire LinkMyFan.com. LinkMyFan.com is an online social networking platform that allows members to post an array of content on the Link My Fan open platform to increase the reach of the content posted throughout the world.
- Madrid-based Hot Hotels has acquired local rival ReallyLateBooking. Terms of the deal remain undisclosed. ReallyLateBooking was an early entrant into the last minute hotel booking app space in Europe, having been founded in July 2011. Its mobile apps has been downloaded more than 300,000 times.
- Conduit, the Israeli-based browser-toolbar and mobile startup estimated to be worth some $1.4 billion, has confirmed it is merging with Perion Network. Conduit’s Client Connect business and Perion will combine in an all-stock transaction. Perion’s current market cap is $153 million. The combination creates a search distribution company generating $367 million in revenue and $109 million in EBITDA for the 12 months ended June 30, 2013. The newly combined Perion operation represents more than 260,000 publisher and content partners. The price for the transaction was not disclosed, and the transaction is effectively a reverse takeover.
- Groupe 3SI has accepted a bid to acquire its B2C e-commerce activities and e-commerce services from Otto Group, the world’s second-largest e-commerce business.
- Sohu, Sogou and Tencent jointly announced a strategic investment. Tencent will invest $448 million for 36.5% of Sogou and let the latter merge its own search service Soso. Tencent’s stake in Sogou will be increased to 40% later, according to the announcement. Sogou developed the most popular Chinese Input Method service Sogou Pinyin. It recorded $50 million in revenue in Q213, up 64% YoY. Search, browser start-up page ads and related services contributed $46 million, up 61% YoY.
Source: Company disclosure, mergermarket, TechCrunch, The Next Web, TechNode
How I got into angel investing? – Part 1
My first investment
I’ve been asked many times – what is a junior investment banker with next to no money doing in the startup investment space? I ask myself that very question all the time, while I stand humbly on level 1 looking upwards at the internet veterans who I am tagging along in the same rounds in my investments.
Bottom line is – angel investing is fun. There’s a lot you could learn from doing it.
I started my journey back in May 2012. There’s a company I’ve seen with some press coverage called Superfly. It’s a beautifully designed online travel metasearch engine, coupled with personal itinerary and loyalty membership information. It’s very similar to Mile Wise (and kudos to Yahoo! for taking them offline). CEO is Jonathan Meiri. First time I saw this on TechCrunch I thought it was a brilliant idea, and I see great future for them. For some reason, I thought it might be an even better idea if I knew the CEO so that if / when they raise money I want to be first to know about it and be able to put some money in. So, after some semi-stalking on LinkedIn I found his profile and sent him a message to introduce myself and to learn more about the company.
I later learned that Bill Smith as well as Jeff Clarke are both angel investors in this little company – quite an impressive investor base considering its Israeli-origin and early stage. After scrambling a lot through my savings account, I finally found some money to do it.
Coming from a completely different background, reading the termsheet wasn’t easy. Thanks to Thomas from MoFo, he taught me some of the basics here which would later become the foundation of my learning.
I finally signed and returned the termsheet to JM and shortly after wired over the money. I know I’ll have to sit on this for 3-5 years, with no liquidity and a very high chance of kissing it goodbye. But it felt right. It’s money I’m not using for a while, and could open a lot of doors in the online travel space for me.
I went about putting this on my LinkedIn profile and stated that I’m an angel investor in Superfly – a move which opened up quite a can of worms (in a positive way) for me.
…To be continued
- Latin America’s first insurance product comparison site ComparaOnline announced an $11m Series B on September 4. Ribbit Capital, a venture fund in Palo Alto dedicated exclusively to financial businesses, led the round, with founder Micky Malta joining the board. Kaszek Ventures re-upped for the Series B, and Rise Capital, an emerging market fund led by Tiger Capital veteran Nazar Yasin, joined late in the negotiations to finish out the round.
- Insightly has raised $10m for its CRM service that integrates with Gmail, Outlook, Office 365 and other services. Emergence Capital Partners, Sozo Ventures and TrueBridge Capital Partners participated in the Series B round led by Matt Holleran, founder and managing director of Cloud Apps Management. Insightly has now raised a total of $13m. The company, which serves more than 184,000 customers in 100 countries, will use the funding to localize the service, hire new employees and extend marketing to its international markets.
- The Temnos Content Intelligence platform enables you to extract the wealth of metadata that exists about your unstructured text-based media. In addition, valuable metacontent can be generated from the text to further optimize its usability and value. Temnos announced that it has raised $1.25m in funding. Temnos’ angel investors aren’t being disclosed.
- YouTube network Maker Studios just closed out its Series C funding round, bringing on an additional $26m from a wide range of international investors. The funding will bring the full amount of the round to $62m, and brings total funding to date to $70m. The second tranche of the financing came from investors that include Canal+, Astro, SingTel Innov8, Lakestar, Northgate Capital, and existing investors. Others that have invested include Time Warner Ventures, Upfront Ventures, Greycroft Partners, Maker executive chairman Ynon Kreiz, Downey Ventures, Elisabeth Murdoch, FUEL: M+C, Daher Capital, and producer Jon Landau. Maker now gets about 4 billion video views per month, or about 1 billion each week. When Maker raised the first part of its Series C round in December, the company had half as many views with 2 billion per month. It has more than 60,000 channels and more than 260m subscribers.
- FiscalNote, a startup that helps businesses stay up-to-date with state and local legislation, is announcing that it has raised $1.2m in seed funding from investor Mark Cuban, New Enterprise Associates, and First Round Capital’s Dorm Room Fund. FiscalNote is currently conducting a closed beta test with a group of customers that it says includes legal and marketing departments within Fortune 500 companies, national advocacy groups, and financial institutions.
- Social media management and marketing platform MarketMeSuite has landed a new strategic investment of $1.25m from Talus Holdings, a media technology holding company. The Cambridge, Massachusetts-based startup says the new funding is earmarked for adding new functionality to its platform, marketing, and customer service and support as MarketMeSuite seeks to speed up its growth and increase its paid customer base. This latest round brings the total MarketMeSuite has raised over the past 13 months to $2.25m. In August 2012, MarketMeSuite received $1.1m in a round led by Boston-area VC Jeffrey McCormick, founder of Saturn Partners, shortly after it relocated to Massachusetts from Norwich, U.K.
- Mobile payment and loyalty platform startup Yoyo has raised $1.2m in a seed round to launch a platform designed to create a faster, simpler way to buy goods, via a mobile app, which also combines with an automatic loyalty point collection system. Yoyo was founded in 2013 by a team of entrepreneurs drawn from the ranks of Visa, Paypal and Barclaycard, including Alain Falys, co-founder of OB10, the world’s largest e-invoicing business; Dave Nicholson, co-founder of Zopa (a peer-to-peer lending platform in the UK); and Michael Rolph, who ran merchant acquisition teams at Paypal, BarclayCard and First Data. Investors include Mathias Entenmann (former Head of Paypal International and ex CEO of Payback), the founders of early stage investment vehicle Firestartr (Chipper Boulas, Alain Falys, Anil Hansjee, Richard Muirhead), and former executives from Barclaycard, Worldpay, Visa, First Data and Western Union.
- Mood-based free streaming music service Songza has raised a $4.7m funding round, their second since they closed $2m in 2011. Songza did not name a lead for the round, the investors for which include Amazon, William Morris Endeavor, Lerer Ventures, Deep Fork Capital, Metamorphic Ventures, Troy Carter, Scooter Braun, Gary Vaynerchuk, Geoff Judge, and Nicole Junkermann. With this latest round, Songza will be scaling its sales team and developing its native advertising, having recently hired a dedicated brand manager.
- AppDirect has raised $9m and is announcing the purchase of Standing Cloud, a Foundry Group investment. iNovIa Capital led the Series B investment, which brings the app marketplace’s total investment to $20.8m. The Standing Cloud technology packages apps for use with cloud services to ease the complexity of deploying and managing apps. AppDirect has the capability to use APIs to integrate third-party apps. With Standing Cloud, AppDirect will be able to offer a way to actually package apps and manage the orchestration into different marketplaces.
- TapInfluence, a company that connects marketers with bloggers and other online influencers, is announcing that it has raised $5m in Series B funding. The round was existing investor Grotech Ventures and new investor Access Venture Partners, with Access’ Kirk Holland joining the TapInfluence board of directors. The company was initially launched as BlogFrog, which offered a social platform for “mommy bloggers,” but over time it shifted its focus to connecting those bloggers with advertisers.
- Outline, a startup which builds public policy simulators for city and state governments, raised a $850,000 seed round, with the largest chunk of that sum provided by the Knight Foundation. Outline’s first customer will be the State of Massachusetts, though that deal remains in contractual discussion. It will likely become cashflow positive following that first agreement. Currently composed of a team of five, Outline is looking to hire three to five more, mostly designers and economists.
- Nexon has made a 20% strategic investment in former Zynga COO John Schappert’s new startup Shiver Entertainment, Inc. They didn’t disclose the size of the deal, which will see Nexon take an equity stake in the company in exchange for exclusive global publishing rights to Shiver’s upcoming games. Nexon’s CFO Owen Mahoney will also get a role on Shiver’s board of directors.
- LevelEleven, a developer of gamification apps, has raised $2m from Detroit Venture Partners, Hyde Park Venture Partners, Salesforce.com and a group of investors, including two professional athletes. The company will use the funding to build out its service designed for salespeople. The company’s flagship app, Compete, drives competition between sales people through contests that are built and deployed by sales managers. It’s the No. 1 gamification app on the Salesforce.com platform. Compete was originally called Contest Builder, but the company re-branded it last May with an update and new user interface.
- Freestyle.VC, the micro-VC firm founded by serial entrepreneurs Josh Felser and Dave Samuel, has raised $40m for its second fund. The firm’s inaugural fund, raised in 2011, totaled $27m. Along with the new fund, Samuel and Felser are announcing the expansion of the firm with the addition of SimpleHoney co-founder Joyce Kim as venture principal. Traditionally, Freestyle.VC focuses primarily on seed, and prefers to lead in these rounds (the firm leads in 80 percent of the rounds they participate in). Investments range from $500,000 to $800,000. Felser and Samuel are known be the most active investor a startup will have in the beginning stages of its inception. Freestyle will sometimes follow-on in startup rounds for Series A, but won’t lead. The firm now counts 43 investments that include About.me, Byliner, Chartbeat, AdStage.io, and others.
- Rocket Internet, the Samwer brothers’ Germany-based e-commerce startup factory, has announced that it’s brought iMENA Holdings on as a partner and investor in Foodpanda’s Hellofood Middle Eastern operation. Specifically, iMENA is investing $8m in the online take-out ordering service — capital that will be used to expand the service in the region, beyond Saudi Arabia where it currently operates locally.
- CrowdStrike has raised $30m in a Series B round led by Accel Venture Partners for its security technology to identify advanced threats and put adversaries more on the defensive. Founding investor Warbug Pincus also participated in the funding. The company was founded by former McAffee CTO George Kurtz and Dmitri Alperovitch, who was previously vice president of advanced threat research, also at McAfee. Its Falcon platform is designed to monitor a company’s data to detect zero-day threats and prevent the damage that can come from targeted attacks. It identifies malware and learns the attributes of attackers which it uses to develop a range of responses to raise the cost and risk to the adversary.
- The E-commerce startup eCommHub of Atlanta, Georgia, has received a $2.6m Series A round from a group of investors which includes United Parcel Service Inc., Sigma Prime Ventures of Boston, Massachusetts, and Mosley Ventures of Atlanta. The company enables e-tailers that don’t maintain their own inventories to track their stock. eCommHub’s service allows small retailers to compete better with major players like Amazon.
- Numbrs, the mobile-first banking app founded out of Swiss company builder Centralway, has raised a further $3.8m from its parent — money that will be ring-fenced for a planned U.S. launch early next year. In addition, the young startup is opening a New York office for which it’s hiring a marketing team. The new investment adds to the original $7.7m put into Numbrs by Centralway to continue making headway in Germany.
- Dayima, a menstruation period tracking app, received tens ofm dollars in Series B financing from Sequoia Capital and Series A investor Bertelsmann. The company’s founder Chai Ke confirmed that all the investment procedures will be nailed down within 45 days. The capital will be invested in improving service quality and strengthening technology team, especially talent with professional gynecological knowledge. At the same time, Dayima will increase investments in marketing and branding. Dayima predicts period cycles based on past patterns, offering health tips on avoiding cramps and pre-menstrual syndromes, and links to online forum where users can exchange their experiences. The app has recorded 18m registered users and 1.9m daily active users since its launch in January 2012.
Mergers & Acquisitions
- MoPub, a startup that helps mobile publishers manage their ad inventory, has been acquired by Twitter, giving the social network another route into building its advertising business, specifically on mobile platforms. Both MoPub and Twitter have now confirmed the deal, but not the price. Rumour places the purchase price at $350m in stock. MoPub will continue to work with multiple publishers under its new owner, opening up the possibilities of how Twitter intends to grow its own position in the world of mobile advertising. The deal is a significant acquisition for Twitter specifically by running advertising across its platform in the form of promoted Tweets, ad retargeting services and more. Twitter’s acquisition of the mobile advertising company MoPub valued Twitter at $20 per share, and the transaction implies a $10.5bn valuation for Twitter.
- Livefyre, a commenting platform used by TechCrunch and other websites, is announcing that it has acquired social curation startup Storify. The financial terms of the deal were not disclosed, but Livefyre says the five-person Storify team will be joining the company, bringing its headcount to 91. Livefyre raised a $15m round in February, bringing its total funding to more than $20m. Storify, meanwhile, raised around $2m from Khosla Ventures, Promus Ventures, and others.
- Desire2Learn, the Ontario-based makers of one of the largest Learning Management Systems (LMS) is announcing that it has acquired Knowillage Systems, the creators of an adaptive learning and analytics engine that aims to help teachers improve student performance. LeaP, Knowillage’s adaptive learning engine, enables teachers to personalize the learning path for their students using natural language processing techniques and analytics to understand where students are struggling with the material at hand. While there are many learning analytics options on the market today, the Vancouver-based company differentiates its service by then enabling teachers to provide the right tools and content to address the areas where they’re struggling.
- AppMakr, the San Francisco, California-based mobile app builder, has been acquired by the Singapore-based mobile app builder Infinite Monkeys. Infinite Monkeys co-founder Jay Shapiro confirmed the deal and said the combined company would serve more than 500,000 publishers worldwide. Infinite Monkeys charges $9 per month for an ad-free platform. The deal consideration was not disclosed. Shapiro added that the deal may also assist in raising venture capital funds for the company in the future.
- Nouveau Holdings Ltd has entered into an agreement to acquire B3Square1, which is expected to close within the next 60 days. B3Square1, an online gaming company and the operator of Play31.net, plans to release to the public in Q4 2013, its second game of skill, PlayGin.net. B3Sq, intends to capitalize on the popularity of Gin Rummy. It is one of the most popular Rummy games played in the US. There arems of rummy players worldwide today.
- Conference Hound, a San Francisco-based conference discovery platform, announced the acquisition of OnTrade, a Miami-based lead generation and deal marketplace for the B2B sector of the travel and trade show industry. The combined company will provide Conference Hound members access to exclusive deals from conferences, trade shows, exhibitors and hospitality providers. Total funding to date for the combined companies is $1.7m (seed stage).
- Intel has acquired natural language processing startup Indisys. The terms of the deal have not been disclosed, but it is reportedly “north” of €20m ($26m). Indisys is a developer of natural language recognition technology, but also Siri-like intelligent assistant (IA) interfaces so that people can interact with it. Pictured here is “Maya,” one of its creations. Other clients like Boeing have been using Indisys’ technology for a project called Atlantis, to create interfaces to control unmanned vehicles.
- Fring, an early startup that focused on creating group messaging and video calling apps for mobile phones, competing against the likes of Skype and WhatsApp, has been sold to Genband, a provider of services like IP gateways and billing and other services to mobile, fixed and cable carriers. Terms of the deal have not been officially disclosed, but we have heard from a source that the price was $50m. Israel-based Fring, which had raised around $30m from investors including Pitango, North Bridge and Veritas. Texas-based Genband, meanwhile, had raised a huge $343m round of funding from One Equity Partners, Sevin Rosen Funds, and Venrock in January of this year; this is its first acquisition since news of that raise broke.
- Groupon announced that it’s acquired Madrid, Spain-based Blink, a last minute hotel booking app that competes with the likes of the heavily backed HotelTonight, and Hot Hotels, also headquartered in Spain. Terms of the deal remain undisclosed. Available as an Android and iOS, Blink follows along the same lines as its competitors, offering a selection of last minute deals each day to help fill partner hotel’s inventory, while also passing on significant savings to customers. It currently works with more than 2,000 hotel partners in Eight European countries. Blink, which will be rebranded “Blink by Groupon”, will continue to operate as a separate entity, to bolster its Groupon Getaways travel business.
- Moto, the German operator of the online car trading portal Autoda.de, has been acquired by its domestic rival MeinAuto retroactively from 1 August 2013. Financial terms of the deal were not disclosed.
- Online retailer getgoods.de has acquired all the shares in pauldirekt, the shopping club for men. With this, the company has secured access to more than 1.2m customers with e-commerce experience. The parties to the deal have agreed to maintain confidence as to the purchase price. Pauldirekt is the leading German shopping club targeted at male online buyers. In limited campaigns, the company offers brand items in the fields of professional technology, clothes, entertainment and lifestyle with substantial price reductions of up to 70%.
- Schibsted Media Group has agreed to acquire the personal finance market place Compricer.se. Compricer will be a part of Schibsted Tillväxtmedier, and is a good strategic fit with the existing portfolio of fast growing personal finance oriented online companies in the unit. Schibsted will pay SEK 135m (EUR 15m) for 100% of the shares in Compricer, where operating profit in 2013 is expected to be around SEK 12-13m. There will be further payments if the performance of Compricer exceeds certain thresholds in 2014 and 2015.
- Skyscanner, a UK-based online flight portal, has acquired Fogg, the Spanish intelligent hotel search engine. Financial details were not disclosed.
- Recruit Co., the Japan-based HR and recruitment site giant that has long been gearing up for an IPO, is on the acquisition trail again, just a month after buying NuGrid in India and a year after its acquisition of Indeed.com. According to sources close to the situation, it has made a $400m offer for Freelancer.com, an online portal that connects people with short-contract jobs. Morgan Stanley, which previously advised Indeed.com on its sale to Recruit Co, is also the advisor on this deal. It’s understood that Recruit Co approached Freelancer.com, who is now considering the deal, and this is the second, higher offer that has been put on the table. Outsourcing website Freelancer.com allows professionals to bid on project work such as web design, application development, and article writing. It says it has 8.8m registered users and that $1.2 billion worth of projects have been completed through its platform. The startup was founded in Australia, but Freelancer.com has a global presence listing a large outsourcing workforce in North America, South East Asia, and the subcontinent.
- Yun Yun, a social search founded by former Google China executives in early 2012, has reportedly been acquired by Sina and would be merged into Sina Weibo. Liu Jun, lead of Yun Yun and former head of Google China’s Chinese-language search, has left the company and joined Baidu, the largest search service in China. Yun Yun’s offerings include general search, real-time search, image search and a social network. The social network was suspended one month ago. As it began with offering search results indexed from Chinese micro-blogging services, Yun Yun had reached partnership with Sina Weibo in late 2012. Mr. Liu also disclosed the company had received investment from Sina.
- Wirecard Group is disclosing another M&A transaction in Asia. With this acquisition, Wirecard will be expanding its operating business in Malaysia. Wirecard will be also extending its offering of contactless payment solutions in the East Asian region. Wirecard has agreed to purchase all shares in three companies of the Korvac Group (founded in 1999). These consist of Singapore based PaymentLink Pte. Ltd., and two subsidiaries in Malaysia and Singapore. With more than 24,000 acceptance points, PaymentLink operates one of the largest payment networks for local contactless payment cards. The considerations in connection with this transaction comprise cash payments (all converted into Euro) in an amount of approx. €26.1m and earn out-components of up to approx. €4.8m, dependent on the operational profit (EBITDA) of the acquired group in the years 2013 and 2014.
- Endurance International Group Holdings Inc, a Burlington, Massachusetts-based provider of cloud-based solutions for small and medium-sized businesses said that it has acquired the India-based Directi, according to Endurance’s filing with the US Securities and Exchange Commission for an initial public offering worth $400m.
PDF download: Internet weekly update – 2013-09-16
Source: Company disclosure, mergermarket, TechCrunch, The Next Web, TechNode