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God, we love Fridays so much. (And also Serena Williams.)
Hope you have a terrific weekend, all. Before we leave, we have a fresh-baked StrictlyVC Download for you with a featured guest who you might not yet know but perhaps should: Kevin Novak.
Novak is interesting for a host of reasons, not least because was the seventh engineer hired by Uber and eventually the company's head of data science under then-CEO Travis Kalanick. (He was also largely responsible for the surge pricing that Uber introduced back in 2016. Novak says the Wall Street crowd loves him for it, while readily acknowledging that everyone else . . feels less enthusiastic about this revelation.)
Novak has been actively investing his startups since those days; now he launched his own venture firm, too, called Rackhouse Venture Capital.
We talked with Novak this morning about his time at Uber, including its terrible, horrible, no good, very bad 2017 (he left late that year) and the early days of its (since-sold) self-driving unit. He also talked with us about who is backing his new fund, how he helps startups, and where he's finding some of his portfolio companies. (Unsurprisingly, he says that having hired the first 100 data scientists at Uber has been helpful in terms of deal flow.)
Giant thanks to TechCrunch for partnering with us on this episode. If you're either launching or looking to grow your startup, do check out TC Early Stage 2021: Marketing & Fundraising, happening on July 8 and 9. Register before next Friday and get your ticket for just $25(!) with promo code STRICTLYVC at techcrunch.com/earlystage.
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Top News
Tesla's leading battery supplier is no longer a Tesla shareholder. As reports the WSJ, Panasonic Corp. said today it has sold its entire stake in Tesla for about $3.6 billion. The move highlights the more arm’s-length relationship that has developed between the Japanese battery maker and the American electric-vehicle maker, which has started working with other battery manufacturers in recent years. More here.
Virgin Galactic announced today that the Federal Aviation Administration granted the company the license it needs to fly passengers on future spaceflights, a key hurdle as the venture completes development testing, notes CNBC. The outlet also notes that the stock soared afterward (despite that the company’s promised beginning of commercial service has been bumped back numerous times, most recently from the middle of this year to early 2022).
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Another U.S. Investor -- Activant Capital -- Is Opening an Office in Europe as the Continent Heats Up
Earlier this week, we caught up with Steve Sarracino the founder of the growth-equity firm Activant Capital in Greenwich. We'd last talked with Sarracino back in early April of last year, as people around the world were being forced into their homes by the pandemic, and his firm was just closing its third fund with $257 million in capital commitments.
As we learned this time around, Activant, which tends to invest in e-commerce infrastructure and payments companies, is now (according to an SEC filing), nearing a close on a fourth fund that has targeted $425 million. It has also -- like a growing number of other U.S. firms -- just opened a new European office in Berlin, headed by Max Mayer, a former investor with Global Founders Capital.
We talked a bit about Activant's growing interest in Europe and what underlies it. We also talked about the velocity of deal-making right now and what Sarracino makes of one of the hottest trends of the year: the many roll-ups of third-party sellers on Amazon. Excerpts from that conversation follow, edited lightly for length.
How long have you been investing in Europe?
A long time. We'd invested in Hybris [an e-commerce company that was acquired by SAP in 2013 for $1.5 billion]. We're also investors in NewMarket [a six-year-old, Berlin- and Boston-based SaaS company that was founded by serial entrepreneur Stephan Schambach, who also founded Demandware].
We go back and forth to London all the time; it's easy from the East Coast. But the continent is a different story. You really need to have a presence on the ground there.
Why make the move now?
There was always a lot of technical talent there -- I think there are two times the number of STEM graduates in Europe as in the U.S. The challenge before was that the venture community was smaller -- it takes a vibrant early-stage community to create later-stage opportunities. Europe was also missing middle management. In L.A. or New York or Boston, you can pull strong SVPs or even C-level execs out of Facebook and Amazon, but there wasn't the same level of big companies there, and that has changed. They're all [in Europe] now. So you've now got the technical talent, [sufficient] venture [dollars] and management.
Are there other advantages? Are valuations any better in Europe or is Tiger Global driving up the numbers there, too?
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Massive Fundings
Tonkean, a 5.5-year-old, San Francisco-based startup selling a no-code automation platform to automate workflows, has raised $50 million in Series B funding. Accel led the round, joined by earlier backer Lightspeed Ventures, which led the company's $24 million Series A last year. TechCrunch has more here.
VRChat, a seven-year-old, San Francisco-based social virtual reality platform that invites users to create, publish, and explore virtual worlds with other users, has raised $80 million in Series D funding led by Anthos Capital, with Makers Fund, GFR Fund and others participating. Upload VR has more here.
Big-But-Not-Crazy-Big Fundings
Edge Delta, a three-year-old, Seattle-based startup that is building a modern distributed monitoring stack that is competing directly with industry heavyweights like Splunk, New Relic and Datadog, has raised $15 million in Series A funding led by Menlo Ventures and Tim Tully, the former CTO of Splunk. TechCrunch has more here.
Env0, a three-year-old, Sunnyvale, Ca.-based maker of self-service cloud management software, has raised $17 million in Series A funding from the company's seed-stage backers M12, Boldstart Ventures, Grove Ventures and Crescendo Ventures. TechCrunch has more here.
Paceline, a two-year-old, Mill Valley, Ca.-based fitness rewards platform, has raised $29.5 million in Series A funding. Acrew Capital led the round, joined by Mubadala Capital Ventures and earlier investors. The WSJ has more here.
Recycle Track Systems, a seven-year-old, New York-based "environmentally focused" waste and recycling management company, has raised $35 million in Series C funding. Citi Impact Fund led the round, joined by Edison Partners, Cue Ball Capital, Greenspring Associates, Gaingels and the Partnership for New York City. More here.
RoadSync, a six-year-old, Atlanta, Ga.-based digital payment platform payment processing company that's focused around streamlining payments for warehouses, freight handlers and repair/tow merchants specifically, has raised $30 million in Series B funding. Tiger Global led the round, joined by Gaingels and earlier backers Base10 Partners and Hyde Park Venture Partners. Crunchbase News has more here.
Strand Therapeutics, a four-year-old, Cambridge, Ma.-based biotech startup that's attempting to use synthetic mRNA to fight tumors, has raised $52 million in Series A funding co-led by Redmile Group, BeiGene and Camford Capital, with added participation from Playground Global and ANRI. Forbes has more here.
Smaller Fundings
August, a one-year-old, New York based company creating biodegradable period care products for GenZ, has raised $1.95 million in seed funding led by Hannah Grey VC, with participation from Bullish, xFactor Ventures, and individual investors affiliated with Glossier, Refinery29, Lively and more. WWD has more here.
Happs, a three-year-old, L.A.-based app that lets creators stream live video simultaneously across social platforms, has raised $4.7 million in seed funding from Bullpen Capital, Crosslink Capital, Goodwater Capital and Corazon, among others. TechCrunch has more here.
Mercuryo, a three-year-old, London-based startup that has built a cross-border payments network, has raised $7.5 million in a Series A round of funding led by Target Global. The company has now raised $10 million altogether. TechCrunch has more here.
Moth+Flame, a six-year-old, New York-based VR training tech startup, has raised $2.5 million in seed funding led by Bee Partners. Road to VR has more here.
Ryte, a nine-year-old, Munich, Germany-based startup that measures website carbon footprints, says it raised €8.5 million earlier this year co-led by Bayern Kapital and Octopus Investments. TechCrunch has more here.
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New Funds
Morgan Creek Digital, the digital asset investment business of Morgan Creek Capital Management, says it has held an $80 million first close for its third venture fund focused on blockchain technology and digital assets, which is targeting $400 million. Most of the capital committed to date ($66 million) has come from the Fairfax Employees' Retirement System and Fairfax County Police Officers Retirement System. More here.
Watheeq Financial Services, a Saudi Arabia-based investment management and financial advisory company, is launching a venture arm with 100 million Saudi riyals ($26.7 million) for its debut fund. Watheeq PropTech VC fund will invest in property technology start-ups in the kingdom and in the region. The National has more here.
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Exits
Amazon’s cloud-computing business has acquired Wickr, an encrypted messaging platform used by government agencies and enterprises, the company announced earlier today. Terms of the deal weren’t disclosed. The announcement comes as Amazon Web Services looks to pick up more government business, notes CNBC. Wickr had raised $73 million from investors, including Breyer Capital and Alsop Louie Partners, according to Crunchbase. More here.
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People
137 Ventures has promoted two members of its team: James Pardee, who joined the outfit as an analyst in 2017, has been promoted to principal; Christian Garrett, who joined in 2019 as the firm's head of platform, has also been promoted to principal. More here.
Digital designer and artist Mike Winkelmann (Beeple), is opening up, revealing that he’s had a rocky entrée into the art establishment.
David Haber has joined Andreessen Horowitz as its first New York-based general partner after logging three years with Goldman Sachs as a VP. Haber earlier founded and led an online lending startup, Bond Street, and spent two years as an associate with Spark Capital. More here.
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Detours
David Dobrik was the king of YouTube. Then he went too far.
This tribute to Conan O'Brien got to us. (We're still so grateful for the opportunity to talk with him last fall on behalf of TechCrunch; we were terrified and he made it a breeze.)
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Retail Therapy
Build your own human skeleton. Perfect for the budding scientist/serial killer.
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