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October 30, 2020
We have a frighteningly good(?) new StrictlyVC Download episode for you with Steve Case, the AOL cofounder and founder of the 15-year-old investing juggernaut Revolution in Washington, D.C. We talked with Case about the internet protections that date back to AOL, what a Biden presidency could mean for startups, and why VCs aren't using Zoom to extend their networks. He also shared the trends he's following that other people are not. We enjoyed talking with him; hope you enjoy it, too.
Thanks very much to Web Summit for sponsoring this week's show. Web Summit is coming up virtually this year, December 2nd through December 4th. (We'll be on hand to talk with Eduardo Saverin, Marcelo Claure, and Stacy Brown-Philpot, among others. ) You can learn more here.
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Pilot, a San Francisco-based startup, raised a $40 million Series B from Index Ventures and Stripe in 2019 to help founders get their finances right. Get the financial expertise to grow with Pilot bookkeeping, tax, and CFO services. StrictlyVC readers get 20% off their first 6 months of bookkeeping.
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How to Raise a Venture Fund If You're Not Already Rich
For years -- decades, even -- there was little question about whether you could become a venture capitalist if you weren't comfortable financially. You couldn't. The people and institutions that invest in venture funds want to know that fund managers have their own "skin in the game," so they've long required a sizable check from the investor's own pocket before jumping aboard. Think 2% to 3% of the fund's total assets, which often equates to millions of dollars.
In fact, five years ago, I wrote that the real obstacle to becoming a venture capitalist has less to do with gender than with financial inequality. I focused then on women, who are paid less (especially Black and Hispanic women), and who possess less wealth. But the same is true of anyone of lesser means.
Thankfully, things are changing, with more ways to help aspiring VCs raise that initial capital commitment. None of these approaches can guarantee success in raising a fund, but they're paths that other VCs have effectively used when starting out.
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Massive Fundings
Conductor, a 23-year-old, Sao Paulo, Brazil-based company that provides payments services and software to companies including fintech businesses and retailers, has raised $150 million new funding led by Viking Global Investors. Its CEO tells Reuters the round will probably be the company's last before it pursues an IPO in the US. More here.
Big-But-Not-Crazy-Big Fundings
Clarity AI, a four-year-old, New York-based rating agency and tech company whose software helps investors optimize the societal impact of their investment portfolios, has raised $15 million in funding. Deutsche Börse and Mundi Ventures invested. More here.
CodeSandbox, a 3.5-year-old, Amsterdam-based web development platform that helps teams to prototype, build and host applications, has raised $12.7 million in Series A funding. EQT Ventures led the round, joined by Kleiner Perkins, Arches Capital, and Vercel cofounder Guillermo Rauch. VentureBeat has more here.
Onfleet, a five-year-old, San Francisco-based company that makes delivery management software, has raised $14 million in Series A funding led by Kennet Partners. Freight Waves has more here.
WiTricity, a 13-year-old, Watertown, Ma.-based company long focused on wireless charging for electric vehicles, has raised $34 million in funding led by Stage 1 Ventures, with added participation from Mitsubishi. More here.
Smaller Fundings
Agora Systems, a two-year-old, Bay Area-based streamlining the materials supply chain for commercial trade contractors, has raised $7 million in Series A funding led by 8VC, with participation from Tishman Speyer, Suffolk Construction, Kevin Hartz, Abstract Ventures, and BoxGroup. More here.
Curve Health, a six-month-old, New York-based data analytics, health information exchange and telemedicine platform founded by one of the cofounders of Call9, has raised $6 million in seed funding. Lightspeed Venture Partners led the round, joined by Vituity, Westway Capital, Correlation Ventures, Kapor Capital, Rosecliff Venture Partners, and The Fund.
Fertifa, a year-old, London-based fertility-focused workplace benefits platform, has raised £1 million ($1.3 million) in seed funding from Passion Capital and numerous angel investors. TechCrunch has more here.
Lucidum, a 10-month-old, San Jose, Ca.-based cloud asset discovery startup that was founded by the former head of data science at Splunk, raised $4 million in seed funding from GGV Capital and SVCI. More here.
RealBlocks, a 1.5-year-old, New York-based platform that promises greater access to alternative assets to registered investment advisors, raised $7 million in Series A funding. Crosslink Capital led the round. More here.
Sinai Technologies, a nearly three-year-old, San Francisco-based decarbonization software platform, has raised $3.8 million in seed funding led by Afore Capital, with participation from Abstract Ventures and Coelius Capital. ZDNet has more here.
Skael, a 4.5-year-old, San Francisco-based startup that says it that helps connect disparate applications, data sources and documents to voice and text communication channels, has raised $4.1 million in seed funding. Investors include Bonfire Ventures, Daher Capital, Backend Capital, RIDE Ventures, StratMinds VC, and Buffalo Ventures. More here.
Teampay, a four-year-old, New York-based spend management platform that aims to give employers control and visibility over employee spending, has raised $5 million in extended Series A funding one year after closing a $4 million round. The fresh capital comes from Fin Venture Capital, with added participation from earlier backers Crosscut, Tribe Capital and Precursor Ventures. TechCrunch has more here.
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New Funds
German venture firm Holtzbrinck Ventures has raised a new €535 million fund to invest in digital businesses across Germany and Europe — and to back companies it has missed when they come to raise Series B and C rounds. The firm will also adopt a new name: HV Capital. Sifted has more here.
GGV Capital, the 20-year-old, cross-border fund with offices in California and China, is raising $2.5 billion for a series of new funds, including its eighth flagship fund, show new SEC filings. More here.
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Exits
Publicly traded Alliance Data Systems a Columbus, Oh., company that provides co-branded and private-label credit cardsagreed to buy Bread, a New York-based company that sells customized financing software for brands (to offer their own customers so they can pay in installments, etc.), for $450 million in cash and stock. Bread had raised around $74 million from Kinnevik, Bessemer Venture Partners, Menlo Ventures, RRE Ventures, Colle Capital Partners, and Cue Ball. Pymnts has more here.
Credit Karma is reportedly in talks to sell its tax-preparation business to Square, a move meant to head off potential antitrust objections to the personal-finance portal’s pending $7.1 billion sale to TurboTax maker Intuit. The WSJ has the story here.
Insider, the Axel Springer-owned parent company of Business Insider, has agreed to buy a majority stake in Morning Brew, a media startup that focuses on business newsletters and podcasts, at a $75 million valuation. Axios has more here.
Nestlé USA just announced that it has acquired Freshly for $1.5 billion — $950 million plus potential earn-outs of up to $550 million based on future growth. Founded in 2015, Freshly is a New York City-based startup that offers healthy meals delivered to users' doorsteps each week. It had raised $107 million in venture funding, including from Highland Capital Partners, White Star Capital, Insight Venture Partners and Nestlé itself. TechCrunch has more here.
Global fitness giant Under Armour announced this morning that it will be selling MyFitnessPal to investment firm Francisco Partners for $345 million, five and a half years after acquiring it for $475 million. The company also announced that it will be winding down the Endomondo platform which it also acquired at the same time for $85 million. TechCrunch has more here.
AT&T is in late-stage talks to sell the anime streaming service Crunchyroll to Sony for $957 million, according to the Nikkei, which says the deal could catapult the company into a global battle with the likes of Netflix. More here.
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Going Public
Roughly one year after WeWork cofounder Adam Neumann was forced out of the company, the coworking outfit is on track to turn profitable next year and will revisit plans for an IPO when that happens, new CEO Sandeep Mathrani told a small group of reporters in India earlier this week. He says the business is bouncing back “100%” in certain Asian markets, including China, South Korea and Singapore. Bloomberg has the story here.
According to Reuters, retail investors have placed bids for a record $3 trillion(!) of shares in Ant Group dual listing -- which is roughly equivalent to Britain’s gross domestic product, notes the outlet. More here.
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Essential Reads
TikTok has won another battle in its fight against the Trump administration’s ban of its video-sharing app in the U.S. -- or, more accurately in this case, the TikTok creators who use the app to engage with their million-plus followers. TechCrunch has more here.
Airbnb says it's creating an endowment fund to help support its hosts as it prepares for an IPO. In a statement earlier today, it said it will place 9.2 million shares into the endowment and hosts will be able to apply for grants from the fund once its value tops $1 billion. The program will “give hosts a seat at the table, and an opportunity to take part in our company’s success." Bloomberg has more here.
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Retail Therapy
The 39 best new luxury hotels to visit in 2021. (We are choosing to remain optimistic.)
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