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February 26, 2021
Friday! Hope you have a terrific weekend, dear readers. Before you go, if you're trying to figure out why the crypto collectibles market just went bonkers, check out this week's StrictlyVC Download with special guest David Pakman, a longtime general partner at Venrock whose many interests include Bitcoin and whose many bets include Dapper Labs, a company with its own blockchain and a lot of apparent momentum at the moment. We found the conversation really instructive and you might, too.
Giant thanks to this week's podcast sponsor, NordVPN, the virtual private network provider that protects all your important data, which is especially important when you're using public WiFi and working from the road (which you will definitely do again!). Go to https://nordvpn.com/strictlyvc, or use code strictlyvc to get a discounted two-year plan plus one additional month.
More Monday.:)
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Top News
The U.S. Food and Drug Administration said tonight that it will “rapidly work” to authorize a Johnson & Johnson single-shot coronavirus vaccine -- possibly as soon as tomorrow -- shortly after an expert committee unanimously recommended the vaccine. It will be the third coronavirus vaccine in the United States and the first to require a single shot. The Washington Post has more here.
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What the NFT? VC David Pakman Dumbs Down the Intensifying Digital Collectibles Frenzy
Non-fungible tokens have been around for two years, but these NFTs, one-of-one digital items on the Ethereum and other blockchains, are suddenly becoming a more popular way to collect visual art primarily, whether it's an animated cat or an NBA clip or virtual furniture.
"Suddenly" is hardly an overstatement. According to the outlet Cointelegraph, during the second half of last year, $9 million worth of NFT goods sold to buyers; during one 24-hour window earlier this week, $60 million worth of digital goods were sold.
What's going on? A thorough New York Times piece on the trend earlier this week likely fueled new interest, along with a separate piece in Esquire about the artist Beeple, a Wisconsin dad whose digital drawings, which he has created every single day for the last 13 years, began selling like hotcakes in December. If you need further evidence of a tipping point (and it is ample right now), consider that the work of Beeple, whose real name is Mike Winkelmann, was just made available through Christie's. It's the venerable auction house's first sale of exclusively digital work.
To better understand the market and why it's blowing up in real time, we talked with David Pakman, a former internet entrepreneur who joined the venture firm Venrock a dozen years ago and began tracking Bitcoin soon after, even mining the cryptocurrency at his Bay Area home beginning in 2015. ("People would come over and see racks of computers, and it was like, 'It's sort of hard to explain.'")
Perhaps it's no surprise that he also became convinced early on of the promise of NFTs, persuading Venrock to lead the $15 million Series A round for a young startup, Dapper Labs, when its primary offering was CryptoKitties, limited-edition digital cats that can be bought and bred with cryptocurrency.
While the concept baffled some at the time, Pakman has long seen the day when Dapper's offerings will be far more extensive, and indeed, a recent Dapper deal with the NBA to sell collectible highlight clips has already attracted so much interest that Dapper is reportedly right now raising $250 million in new funding at a post-money valuation of $2 billion. While Pakman declined to confirm or correct that figure, he did answer our other questions in a chat that's been edited here for length and clarity.
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Kraken, the nine-year-old, San Francisco-based cryptocurrency exchange, is raising new funding at a valuation north of $10 billion, says Bloomberg, noting that it more than double the valuation that the company was assigned in 2019, when it last raised a round of funding ($13 million). According to Bloomberg's source, the outfit is in discussions with Fidelity, Tribe Capital and General Atlantic, among others, and its valuation could soar past $20 billion depending on demand. More here.
Stori, a two-year-old, Mexico City, Mexico-based credit card startup, has raised $32.5 million in Series B funding. Lightspeed Venture Partners led the round, joined by earlier investors Vision Plus Capital, BAI Capital and Source Code Capital. TechCrunch has more here.
Big-But-Not-Crazy-Big Fundings
HYAS, a nearly six-year-old, Victoria, British Columbia-based cyberattack interception company, has raised $16 million in funding led by S3 Ventures, with participation from Uncorrelated Ventures, Tightline Holdings, Cyber Mentor Fund, Dcode Capital and insiders M12, Startup Capital Ventures and 205 Capital. VentureBeat has more here.
Supplant, a four-year-old, Cambridge, U.K.-based company that's making sugars from the waste materials of plants other than sugarcane (it was formerly known as Cambridge Glycoscience), has raised $15 million in Series A funding in a round that brings its total funding to $24 million. Felicis Ventures led the financing, joined by Coatue, EQT, Khosla Ventures, and Y Combinator. TechCrunch has more here.
Torch, a nearly four-year-old, San Francisco-based, cloud-based leadership development platform intended to assist managers in planning and access leadership training and development courses, has raised $25 million in Series B funding led by Obvious Ventures, with participation from earlier backers Norwest Venture Partners and Initialized Capital. Business Insider has more here.
Smaller Fundings
DataJoy, a nine-month-old, Bay Area-based startup that helps SaaS companies track their financial data, has raised $6 million in seed funding. Foundation Capital led, joined by Quarry VC, Partech Partners, IGSB, Bow Capital and SVB. TechCrunch has more here.
First Boulevard, an eight-month-old, Kansas City, Ms.-based digital bank targeting the Black community, has just raised $5 million in seed funding from Barclays, Anthemis, and a group of angel investors, including actress Gabrielle Union, John Buttrick of Union Square Ventures, and AutoZone CFO Jamere Jackson. TechCrunch has more here.
Levitate, a three-year-old, Raleigh, N.C.-based marketing platform, has raised $8 million in Series B funding from earlier investors, including Tippet Venture Partners and Bull City Venture Partners. The company has now raised $20 million altogether. AIThority has more here.
Memmo.me, a two-year-old, Stockholm, Sweden-based platform that invites users to pay for personalized celebrity videos as Cameo does here in the U.S., has raised $10 million in Series A funding led by Left Lane Capital. TechCrunch has more here.
Newness, a two-year-old, Bay Area-based startup co-founded by former Twitch employees, has raised $3.5 million in a Sequoia-led seed round for its live-streaming platform aimed at beauty creators and their fan communities. Other investors in the round include Cowboy Ventures, Upside Partnership, Dream Machine, Index Ventures, and numerous individual investors. TechCrunch has more here.
Thingtesting, a three-year-old social e-commerce and discovery platform that promises its users unbiased recommendations so they can better assess all the new DTC products out there, has raised $2 million in funding led by Forerunner Ventures. The company was founded by Jenny Gyllander, a former CMO of Slush and former VC. The company had previously raised $300,000 in pre-seed funding in 2019. More here.
TradeCafe, a nearly six-year-old, Toronto-headquartered company offering an online platform for the trade of protein commodities like meat, dairy, soybeans, and legumes, has raised $10 million CAD from Toronto's Round13 Capital. The company has now raised $43 million CAD altogether. More here.
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New Funds
Chevron's investment arm has launched a $300 million fund that will focus on low-carbon technology. Chevron Technology Ventures's Future Energy Fund II builds on the momentum of its first Future Energy Fund, which kicked off in 2018 with a $100 million capital commitment and invested in more than 10 companies specializing in niches like carbon capture, emerging mobility, and energy storage. This newest fund is the eighth created by Chevron Technology Ventures since its formation in 1999. InnovationMap has the story here.
Foresite Capital, a 10-year-old, San Francisco, Ca.-based healthcare and life sciences investment firm, has closed its fifth flagship fund and an opportunity-type fund for later stage investments with $969 million in capital commitments across both vehicles. TechCrunch has more here.
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Exits
Aurora, the nearly four-year-old, Mountain View, Ca.-based autonomous vehicle company that recently closed its acquisition of Uber’s self-driving subsidiary, has snapped up another startup. This time, it's buying OURS Technology, the second lidar startup it has acquired in less than two years. TechCrunch has more here.
Atlassian, the publicly traded maker of collaboration software for companies, said today it is acquiring Chartio, an 11-year-old, San Francisco-based company, to add a new data analysis and visualization component to the Atlassian family of products. The companies did not share a purchase price. Chartio had raised roughly $8 million from investors, according to Pitchbook data. TechCrunch has more here.
Brandwatch, a 13-year-old, East Sussex, England-based digital consumer intelligence company that allowing users to analyze and utilize conversations from across the web and social media, has been acquired by Cision, best known for its media monitoring and media contact database services, for $450 million, in a combined cash and stock deal. According to Crunchbase, Brandwatch had raised roughly $65 million over the years. TechCrunch has more here.
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Going Public
On average, companies going public with little revenue perform poorly, reports the WSJ. Jay Ritter, the University of Florida finance professor who has studied public stock listings for decades, found that the shares of tech companies going public with annual sales or less than $50 million underperform the market by 28% over the first three years of trading. The median annual sales for tech companies completing a SPAC deal since the start of 2020 is $48 million, notes the Journal. More here.
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People
Newark Venture Partners, a Newark, N.J.-based seed-stage venture firm, has brought aboard Vaughn Crowe as a managing partner. Crowe had spent the previous 15 years with the family office Wesray Social Investments.
Vasant Kamath has joined Tech Square Ventures in Atlanta as its newest general partner. Kamath joins from Primus Capital, a later-stage investment firm; before that, he was managing investments for Cox Enterprises.
Lightspeed Venture Partners is in the middle of bringing aboard Paul Murphy, a Northzone investor to beef up its burgeoning European practice, says TechCrunch. More here.
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