Dow Jones Mail - VentureWire, Monday, January 27, 2014
VentureWire, Monday, January 27, 2014
;
TOP STORIES
Working on IPO 'To Do' List, LendingClub Looks for VP
of Investor Relations
LendingClub Corp., a fast-growing startup that connects lenders to borrowers, is looking for
a vice president of investor relations as it checks off items on its IPO to-do list. Read More >
Accellion Targets Box, Dropbox on Secure File Sharing
Dragon Innovation Launches 'Million Dollar Challenge' With Promise of Seed
Funding
Union Square Hits Upsized Mark
TigerText Raises $21M Series B for Secure Doctor-Texting Network
NEW MONEY
VC FUND NEWS
TigerText Raises $21M Series
B for Secure Doctor-Texting
Network
Dragon Innovation Launches
'Million Dollar Challenge'
With Promise of Seed
Funding
Doctors use some of the most
sophisticated machines the world has
ever produced when it comes to saving
lives, from magnetic resonance imaging
machines to laser-based surgical tools to
implantable gadgets with microchips built
in.
A rewards-based crowdfunding site that
started out as a kind of specialized
Kickstarter for hardware,
DragonInnovation.com, now has a seed
fund for breakaway projects.
Union Square Hits Upsized Mark
file:///C|/Users/whitet/Desktop/VentureWireJanuary272014.html[12/11/2014 8:23:08 PM]
Dow Jones Mail - VentureWire, Monday, January 27, 2014
European Utility E.ON Backs AutoGrid
in $12.75M Series C
Singularity University to Raise $50M
Fund
Music-Sharing Service SoundCloud
Raises New Funds at $700M Valuation
Ecosystem Integrity Fund Targets $50M
for Second Fund
India's Snapdeal Looks to Join $1
Billion Club
LiveOps Raises $30M in Debt Funding,
Acquires UserEvents
Google Glass Broadcaster CrowdOptic
Picks Up Debt Funding
Serra Ventures Gathers $7.4M Toward
$30M Second Fund
View All >
COMPANY INDEX
Beringea Backs Durable Touchscreen
Maker UICO
Roundup of Form D Regulatory Filings-Jan. 24
View All >
Companies mentioned in this issue
Accellion
AutoGrid Systems
Care.com
CrowdOptic
E.ON
Jasper Infotech
LendingClub
Liquidnet
LiveOps
Nasdaq OMX Group
Nasdaq Private Market
NEW PRODUCTS
Accellion Targets Box,
Dropbox on Secure File
Sharing
Led by Box Inc. and
Dropbox Inc., tech
vendors with software
that lets employees
share and collaborate
on files have raised hundreds of millions
of dollars at high valuations. Box, most
recently valued at $2 billion, and Dropbox,
valued at nearly $10 billion, are also
considered as candidates for IPOs.
SecondMarket
SharesPost
Singularity University
Snapdeal
SoundCloud
TigerText
Tutorspree
UICO
UserEvents
WyzAnt
View All >
M&A/IPO NEWS
Working on IPO 'To Do' List,
LendingClub Looks for VP of
INVESTOR INDEX
INDUSTRY NEWS
Investors mentioned in this issue
Kleiner Perkins Disavows
file:///C|/Users/whitet/Desktop/VentureWireJanuary272014.html[12/11/2014 8:23:08 PM]
Dow Jones Mail - VentureWire, Monday, January 27, 2014
Investor Relations
Founder's Letter Comparing
Outrage Against Rich to Nazi
View of Jews
LendingClub Corp., a
fast-growing startup
that connects lenders to borrowers, is
looking for a vice president of investor
relations as it checks off items on its IPO
to-do list.
Family-Care Marketplace Provider
Care.com Rises 43% in Public Debut
Beringea
Chernin Group
Comerica Bank
Credit Suisse
Dragon Innovation
Easton Capital
Ecosystem Integrity Fund
Nasdaq Wants to Plant IPO Seeds With
Private-Share Market
In IPO Market, Care.com CEO Is
Among a Few Women in Charge
View All >
A top Silicon Valley venture capital firm on
Saturday disavowed the statements from
one of its founders comparing growing
anger toward the rich in the United States
to Nazi Germany's singling out of Jews in
the 1930s.
WyzAnt Begins Acquisition Spree,
Acquires Tutorspree
Accel
Digital Companies Eye Mideast Startup
Cheer
View All >
Foundation Capital
GGV Capital
Hyde Park Angels
Index Ventures
Institutional Venture Partners
LIFESCIENCE
TigerText Raises $21M Series
B for Secure Doctor-Texting
Network
Intel Capital
Kleiner Perkins Caufield & Byers
Lere Ventures
New Leaf Ventures
New Science Ventures
OrbiMed Advisors
Plymouth Venture Partners
Reed Elsevier Ventures
Riverwood Capital
Sequoia Partners
Serra Ventures
Shasta Ventures
Silicon Valley Bank
Telus Ventures
Union Square Ventures
Voyager Capital
Doctors use some of the most
sophisticated machines the world has
ever produced when it comes to saving
lives, from magnetic resonance imaging
machines to laser-based surgical tools to
implantable gadgets with microchips built
in.
file:///C|/Users/whitet/Desktop/VentureWireJanuary272014.html[12/11/2014 8:23:08 PM]
VENTURE CAPITAL DISPATCH
VIDEO: Is Bitcoin a Smart
Investment? Only If it Completely
Changes, Venture Investor Says
Zoran Basich | January 24,2014 11:06 PM
Dow Jones Mail - VentureWire, Monday, January 27, 2014
GMT
In IPO Market, Care.com CEO Is
Among a Few Women in Charge
Roundup of Form D Regulatory Filings
(Life Sciences)--Jan. 24
Clinical Development News, Jan. 20-24
View All >
India’s Snapdeal Looks to Join $1
Billion Club
Greg Bensinger | January 24,2014 09:47
PM GMT
VIDEO: Startup Valuations Have
Grown 'High by Any Measure' in Last
Year
Zoran Basich | January 24,2014 08:54 PM
GMT
Mayfield's Ursheet Parikh On
Success, Failure and The Next Big
Thing
Deborah Gage | January 24,2014 08:41 PM
GMT
Music-Sharing Service SoundCloud
Raises New Funds at $700 Million
Valuation
Douglas MacMillan | January 24,2014 08:16
PM GMT
TOP STORIES
Back To Top | Read Online
Working on IPO 'To Do' List, LendingClub Looks for VP of Investor Relations
By Yuliya Chernova | San Francisco
LendingClub Corp., a fast-growing startup that connects lenders to borrowers, is looking for a vice president of investor relations as
it checks off items on its IPO to-do list.
"The target date for being ready [to go public] is May or June of this year," said Renaud Laplanche, the San Francisco company's
founder and chief executive.
The company was valued at $2.3 billion in the latest transaction of its shares, when DST Global and Coatue Management LLC
invested $57 million in a secondary deal in October, Mr. Laplanche said. The company also added Google Inc. as an investor
earlier last year, also through a secondary deal.
The idea behind an IPO for Lending Club is not so much to raise capital as to make more consumers aware of the company's
services.
"A public offering would be another opportunity...to raise the visibility, drive awareness and credibility of the company," Mr.
Laplanche said.
The company, which started operations in 2007, allows consumers to obtain loans at typically lower rates than they get from banks
and credit card companies. Loans are offered to groups of investors who crowdfund the deal online. Lending Club keeps costs low
in part by conducting its operations online.
Financially, Lending Club has many of the attributes that enabled others to go public. It closed 2013 with revenue of about $98
million, Mr. Laplanche said. For the nine months ended Sept. 30, 2013, it had net income of $4.5 million on $65.5 million in revenue
in audited results.
The company operates in a huge market of consumer lending and is planning to start offering small-business loans this quarter.
More than $2.1 billion in loans were issued on its platform last year, the CEO said, up from $750 million in 2012.
file:///C|/Users/whitet/Desktop/VentureWireJanuary272014.html[12/11/2014 8:23:08 PM]
Dow Jones Mail - VentureWire, Monday, January 27, 2014
Mr. Laplanche said the company created a checklist of items near the end of 2012 that it had to complete in order to be prepared
for an IPO, setting a goal of being ready within 18 months.
He said the company has made good progress toward that goal. It tripled the size of its finance team, for example, which improved
its financial controls and financial planning. The company also hired Deloitte, a Big Four accounting firm, as its auditor.
It also started going through the exercise of preparing quarterly results and communicating them. The company has long been filing
10-Q forms with the Securities and Exchange Commission.
Lending Club is also interviewing people to handle its investor relations duties. "We'll be hiring a person to manage investor
relations in the next few months," Mr. Laplanche said.
The company still hasn't hired bankers, Mr. Laplanche said. An IPO would clearly only happen if the market conditions allow for it,
he said.
Through Sept. 30, 2013, Lending Club raised about $103.2 million in preferred equity financing, it said in an SEC filing. Its largest
investor is Norwest Venture Partners, according to Mr. Laplanche. Others include Bay Partners, Canaan Partners, Foundation
Capital, Gold Hill Capital, Kleiner Perkins Caufield & Byers, Morgenthaler Ventures, SVB Financial Group, Thomvest Ventures and
Union Square Ventures.
https://www.lendingclub.com
Write to Yuliya Chernova at [email protected]. Follow her on Twitter at @ychernova
Back To Top | Read Online
Accellion Targets Box, Dropbox on Secure File Sharing
By Deborah Gage | Palo Alto, Calif.
Led by Box Inc. and Dropbox Inc., tech vendors with software that lets employees share and collaborate on files have raised
hundreds of millions of dollars at high valuations. Box, most recently valued at $2 billion, and Dropbox, valued at nearly $10 billion,
are also considered as candidates for IPOs.
Now a survivor of the dot-com bust, Accellion Inc., has made its way back into the newest boom.
Accellion on Tuesday launches its new product, called kiteworks, which uses technology designed with the idea that employees'
most important devices are now mobile, and that they need to be able to securely share files from both inside and outside of their
companies and across mobile and non-mobile devices.
Accellion is now valued at about $500 million, according to a person familiar with the situation, and is considering an IPO in a
couple of years.
The company's software integrates with Microsoft SharePoint and EMC Corp.'s Documentum--two older but still widely used
corporate content management systems--and lets users create and edit Microsoft Office documents on an interface that's easy to
use.
But the critical feature is security, according to Accellion Chief Financial Officer Glen Segal, who says kiteworks has a three-tiered
architecture to protect customers' data that the company discovered resembles an architecture that was designed by a large bank
after it suffered a security breach.
"Getting to the data is three orders of magnitude harder," Mr. Segal said.
Accellion is a dot-com survivor that started in Singapore in 1999--it was a cloud storage company that was able to replicate storage
from Singapore to London or New York so users in those places could access the data as if it were local, according to Chief
Executive Yorgen Edholm.
After the dot-com bust, Accellion was recapitalized, but its technology continued to evolve. The company last raised money in late
2011, taking total funding to about $35 million, and has been cash-flow positive for several years, serving corporate customers who
are concerned enough about security that they want the option of running software on a private cloud. Customers include Procter &
Gamble, Kaiser Permanente and NASA.
Unlike Box and Dropbox, Accellion has avoided giving away software, which has enabled the company to escape what Mr. Edholm
file:///C|/Users/whitet/Desktop/VentureWireJanuary272014.html[12/11/2014 8:23:08 PM]
Dow Jones Mail - VentureWire, Monday, January 27, 2014
calls the financial drag of supporting freemium customers "with a lot of storage and bandwidth and data costs."
"Every other company that you know in this space is primarily servicing either consumers or small and medium businesses, with a
couple of marquee enterprise accounts," said Riverwood Capital Partner Jeff Parks. Riverwood Capital took part in the 2011
financing and is Accellion's most recent investor.
Accellion isn't the only file-sharing company that's pitching itself to corporate customers as more security-conscious than its
competitors. Watchdox Inc. and Egnyte Inc., which are both venture-backed, also make this pitch, and new startups continue to
launch.
One of them, CirroScope Inc., emerged this week and is raising money to secure data on public cloud apps including Box,
Salesforce, Google Drive and Microsoft's Yammer.
CirroScope Chief Executive Vikrant Karvir, who presented his company Thursday at the Alchemist Accelerator Demo Day in Santa
Clara, Calif., cited four recent incidents where confidential corporate data was exposed in each of those applications because of
user error.
"Users are the weakest link," Mr. Karvir said.
Nearly 100% of customers renew their Accellion licenses, according to Mr. Edholm, who adds that as mobile devices keep getting
more capable, security will become more important.
"I always thought cameras on mobile devices were something teenagers had fun with," he said, "but we're seeing large customers
come to us and say, you need to wrap the camera so we can take pictures securely…so they can't leak out."
http://accellion.com
Write to Deborah Gage at [email protected]. Follow her on Twitter at @deborahgage
Back To Top | Read Online
Dragon Innovation Launches 'Million Dollar Challenge' With Promise of Seed Funding
By Lora Kolodny | Cambridge, Mass.
A rewards-based crowdfunding site that started out as a kind of specialized Kickstarter for hardware, DragonInnovation.com, now
has a seed fund for breakaway projects.
As of Monday, Dragon Innovation Inc. is promising automatic seed funding of $100,000 in convertible debt financing to any
hardware team that raises a million dollars on its platform for a new product, Chief Executive Scott N. Miller told VentureWire.
"We have always been in the business of helping entrepreneurs build successful companies and to do that in hardware they need a
team that can execute, a great product, people to buy it and capital. We got our start helping them build the product, but now we
can offer them the capital, too," the CEO said.
The "Dragon Million Dollar Challenge" is one of many signs of rising interest in hardware deals by startup investors of every stripe,
from strategic and corporate venture groups, to accelerators, seed and traditional venture firms.
In the fourth quarter of 2013 venture capitalists put $150 million into Nest Labs Inc., a maker of smart home devices including
thermostats and smoke detectors. According to DJX VentureSource, that was the third-largest deal of the quarter.
Investors realized one of the largest exits in recent memory, when Google Inc. purchased Nest Labs for $3.2 billion just one month
later. That result has ratcheted up interest in hardware businesses, no doubt, says Mr. Miller.
But as a long-time engineer and mentor to hardware makers, he claims Dragon Innovation is offering seed funding to startups to
ensure their success as a business, long term, not just to put Dragon's name on their cap tables.
The seed money Dragon offers is optional for DragonInnovation.com users who raise $1 million or more, he pointed out.
Hardware startups that hit it big with backers--like Pebble Technology Corp., OUYA Inc. and Oculus VR Inc.--should be free to
focus on business operations, not "a VC roadshow," after they complete a successful crowdfunding campaign, Mr. Miller believes.
The CEO explained, "Money raised through a rewards-based platform is really about pre-sales. It buys your team inventory, tooling
and goes to pay for various manufacturing services. But that may not leave you headroom for hiring team members, or supporting
file:///C|/Users/whitet/Desktop/VentureWireJanuary272014.html[12/11/2014 8:23:08 PM]
Dow Jones Mail - VentureWire, Monday, January 27, 2014
yourself if things shift around and you have to quit your day job, or something."
The seed capital Dragon Innovations plans to invest in hardware hits on its own site will come from its own coffers. The company
makes revenue from various consulting services including hardware design, manufacturing and its crowdfunding platform.
The Dragon Million Dollar Challenge also illustrates how competitive the crowdfunding scene has become at large. Scores of
donations-, rewards- and equity-based crowdfunding sites have launched since Indiegogo and Kickstarter established the market in
the U.S.
A Dragon Innovation investor, Seth Levine with Foundry Group in Boulder, Colo., views the company's challenge as a "differentiator
and really smart marketing," he said.
He expects Dragon Innovation to do up to 12 deals under its new program in the next year. But if more than a dozen companies
could raise $1 million each on Dragon's site, he said, finding more seed capital to invest in them would be easy, and a good
problem to have.
http://www.dragoninnovation.com
Write to Lora Kolodny at [email protected]. Follow her on Twitter at @lorakolodny
Back To Top | Read Online
Union Square Hits Upsized Mark
By Michael Wursthorn | New York
Union Square Ventures wanted more and got it.
The New York venture firm raised a pair of funds totaling $350 million this month, gathering $175 million apiece for USV 2014 LP,
the firm's fourth early-stage fund, and USV Opportunity 2014 LP, its second late-stage pool, said a person with knowledge of the
matter. Originally Union Square sought $300 million altogether, but the fund was significantly oversubscribed, the person added.
A Union Square executive didn't return messages seeking comment Friday.
Fortune magazine earlier reported news of the fundraise.
Even though it bumped up the funds' sizes, Union Square didn't seek much more than what it last raised. Previously, the firm
collected $200 million for its third early-stage fund, USV 2012 LP, and $165 million for the first late-stage pool.
The firm didn't look to drastically increase the size of the funds because early- and late-stage deals require smaller investments,
according to investment documents viewed by Dow Jones. Early-stage fund investments out of Fund III averaged $4 million each,
while the opportunities vehicle was $11 million apiece.
Founded in 2003, Union Square has earned its place as a hot shop among venture investors thanks to early bets on social media
powerhouses Twitter Inc. and Tumblr Inc., among others.
Twitter floated on the New York Stock Exchange in November, giving Union Square an initial valuation of $723.8 million on the
firm's stake--a number that has only gone up since then thanks to a rising share price.
Tumblr, meanwhile, saw a valuation of 27 times invested cost on Tumblr after the blogging platform was sold to Yahoo Inc. for $1.1
billion earlier this year, the documents said.
Union Square's latest limited partner base includes the Los Angeles County Employees Retirement Association and the Oregon
Investment Council, according to documents from the respective pension systems.
http://www.usv.com
Write to Michael Wursthorn at [email protected]. Follow him on Twitter at @4BetterOrWurst
Back To Top | Read Online
TigerText Raises $21M Series B for Secure Doctor-Texting Network
file:///C|/Users/whitet/Desktop/VentureWireJanuary272014.html[12/11/2014 8:23:08 PM]
Dow Jones Mail - VentureWire, Monday, January 27, 2014
By Timothy Hay | Santa Monica, Calif.
Doctors use some of the most sophisticated machines the world has ever produced when it comes to saving lives, from magnetic
resonance imaging machines to laser-based surgical tools to implantable gadgets with microchips built in.
But they use pagers and fax machines when they communicate with one another, as e-mailing and texting have been deemed too
risky when it comes to sensitive information about patients.
A number of startups are trying to bring doctors and nurses into the modern age of mobile communications, which means
promising a secure network that can deliver clinical information to smartphones and tablets.
One such company, Santa Monica, Calif.-based TigerText Inc., has raised a $21 million Series B round to broaden its list of
customers and add features to its program that will make it more of a one-stop-shop for medical professionals, the company said.
The company offers an application for iOS and Android devices that is meant to be downloaded by hospital administrators, Chief
Executive Brad Brooks said. The administrator, who pays TigerText a subscription fee, then asks hospital staff to join the network.
The network--which also includes nurses and other staff--is a secure communications channel that lets health-care workers textmessage one another during the workday.
The Series B was provided by new investor Shasta Ventures, joined by newcomers OrbiMed Advisors, Reed Elsevier Ventures and
Telus Ventures, Mr. Brooks said. Existing investors Easton Capital, New Leaf Ventures and New Science Ventures joined in the
funding, he added.
The company previously raised $12.5 million in various funding events, Mr. Brooks said. Valuation was not disclosed.
Sean Flynn, a partner with lead investor Shasta Ventures, said that TigerText has "Found the recipe for customer acquisition, and
the cost of acquiring new customers and is ready to throw fuel on the fire."
"There can be a leader in this space, and TigerText is making a play to become the dominant player," Mr. Flynn said.
The company's app-based system--which does not require a hardware installation--is in use in 3,000 facilities today, the CEO said.
Helping doctors communicate in a more modern fashion is a hot area of health-related information technology, and TigerText will
face rivals that range from established telecom providers to startups with software-based systems.
One particularly fierce rival will likely be secure-communications provider Doximity Inc., a startup with more than $27 million in
backing from Morgenthaler, Emergence Capital and InterWest Partners. The company calls itself a "vertical social network" for
doctors, and recently announced it has more than 250,000 active users.
TigerText will differentiate by having a network that is also open to nurses and medical assistants, meaning it can be more useful
for matters of daily workflow, the CEO said.
Quantia Inc., a startup offering a cloud-based system that lets doctors securely communicate with other players involved in healthcare delivery--like insurance companies and pharmacies--is backed by Safeguard Scientifics and Fuse Capital.
Telus Ventures, which is a new investor in TigerText and is the investment division of Canadian telecom Telus Corp., previously
invested in Get Real Health Inc., another startup offering a communications network for doctors, information from the firm said.
http://www.tigertext.com/
Write to Timothy Hay at [email protected]
NEW MONEY
Back To Top | Read Online
TigerText Raises $21M Series B for Secure Doctor-Texting Network
By Timothy Hay | Santa Monica, Calif.
Doctors use some of the most sophisticated machines the world has ever produced when it comes to saving lives, from magnetic
resonance imaging machines to laser-based surgical tools to implantable gadgets with microchips built in.
file:///C|/Users/whitet/Desktop/VentureWireJanuary272014.html[12/11/2014 8:23:08 PM]
Dow Jones Mail - VentureWire, Monday, January 27, 2014
But they use pagers and fax machines when they communicate with one another, as e-mailing and texting have been deemed too
risky when it comes to sensitive information about patients.
A number of startups are trying to bring doctors and nurses into the modern age of mobile communications, which means
promising a secure network that can deliver clinical information to smartphones and tablets.
One such company, Santa Monica, Calif.-based TigerText Inc., has raised a $21 million Series B round to broaden its list of
customers and add features to its program that will make it more of a one-stop-shop for medical professionals, the company said.
The company offers an application for iOS and Android devices that is meant to be downloaded by hospital administrators, Chief
Executive Brad Brooks said. The administrator, who pays TigerText a subscription fee, then asks hospital staff to join the network.
The network--which also includes nurses and other staff--is a secure communications channel that lets health-care workers textmessage one another during the workday.
The Series B was provided by new investor Shasta Ventures, joined by newcomers OrbiMed Advisors, Reed Elsevier Ventures and
Telus Ventures, Mr. Brooks said. Existing investors Easton Capital, New Leaf Ventures and New Science Ventures joined in the
funding, he added.
The company previously raised $12.5 million in various funding events, Mr. Brooks said. Valuation was not disclosed.
Sean Flynn, a partner with lead investor Shasta Ventures, said that TigerText has "Found the recipe for customer acquisition, and
the cost of acquiring new customers and is ready to throw fuel on the fire."
"There can be a leader in this space, and TigerText is making a play to become the dominant player," Mr. Flynn said.
The company's app-based system--which does not require a hardware installation--is in use in 3,000 facilities today, the CEO said.
Helping doctors communicate in a more modern fashion is a hot area of health-related information technology, and TigerText will
face rivals that range from established telecom providers to startups with software-based systems.
One particularly fierce rival will likely be secure-communications provider Doximity Inc., a startup with more than $27 million in
backing from Morgenthaler, Emergence Capital and InterWest Partners. The company calls itself a "vertical social network" for
doctors, and recently announced it has more than 250,000 active users.
TigerText will differentiate by having a network that is also open to nurses and medical assistants, meaning it can be more useful
for matters of daily workflow, the CEO said.
Quantia Inc., a startup offering a cloud-based system that lets doctors securely communicate with other players involved in healthcare delivery--like insurance companies and pharmacies--is backed by Safeguard Scientifics and Fuse Capital.
Telus Ventures, which is a new investor in TigerText and is the investment division of Canadian telecom Telus Corp., previously
invested in Get Real Health Inc., another startup offering a communications network for doctors, information from the firm said.
http://www.tigertext.com/
Write to Timothy Hay at [email protected]
Back To Top | Read Online
European Utility E.ON Backs AutoGrid in $12.75M Series C
By Yuliya Chernova | Redwood Shores, Calif.
AutoGrid Systems Inc. raised $12.75 million in funding from major European utility E.ON SE, among others, as it plans to open up
its software, which gathers and analyzes energy data, for licensing to others.
"Unlike other companies that want to do everything themselves, we are opening up our software to third-party developers, utilities,
IT integrators, or vendors, who can build on top of the underlying framework and get it to market faster and more cost effectively,"
said Amit Narayan, chief executive and founder of AutoGrid.
The Redwood Shores, Calif.-based startup was created in 2011 to deal with the huge influx of smart meters and other datatransmitting devices on the electrical grid. That influx, combined with competition among energy providers in deregulated markets
file:///C|/Users/whitet/Desktop/VentureWireJanuary272014.html[12/11/2014 8:23:08 PM]
Dow Jones Mail - VentureWire, Monday, January 27, 2014
like Texas, as well as in other countries, created an opportunity to make use of the data for utilities to become more competitive,
said Dr. Narayan.
Dr. Narayan was previously founder and CEO of Berkeley Design Automation Inc., an executive with Magma Design Automation
Inc., and has served as director of smart grid research at Stanford University.
The Series C investment, closed in January, included funding from a North American utility, which Dr. Narayan declined to name, as
well as from existing investors Foundation Capital and Voyager Capital.
E.ON, a huge utility whose annual revenue exceeds 130 billion euros, invested out of its recently created ventures unit, which
counts another U.S. company in its portfolio, fuel-cell maker Bloom Energy Corp.
AutoGrid had other term sheets, said Dr. Narayan, but decided to take money from strategic investors. E.ON is already a customer
and the companies will be using AutoGrid's software in a variety of ways on its grid.
The valuation was "significantly up from the last round we did," said Dr. Narayan. The company previously raised $9 million,
including a Series B round in the fall of 2012.
AutoGrid's software can process huge amounts of data from a variety of different devices, over different networks, and can then
analyze the data and also control devices on the electric grid with machine-to-machine communications. AutoGrid currently
processes signals from about six million utility meters, said Dr. Narayan. In total in the U.S., there are more than 37 million smart
meters, according to the U.S. Energy Information Administration.
AutoGrid started out with implementing one use for its software. It got 10 customers to implement its software as a service to run
programs that lower consumer use of electricity when needed. Such programs are called demand-response. Its largest deployment
was with Oklahoma Gas and Electric.
But the company sees many other applications, like energy-cost optimization for industrial energy consumers, as well as theft
protection for utilities, said Dr. Narayan.
AutoGrid's other customers include Austin Energy, City of Palo Alto Utilities, Silver Spring Networks Inc., NTT DATA Corp. and
Schneider Electric SA.
The company will use the funding to continue development, as well as expand sales and marketing, and the support of its current
customers, said the CEO.
http://www.auto-grid.com
Wirte to Yuliya Chernova at [email protected]. Follow her on Twitter at @ychernova.
Back To Top | Read Online
Music-Sharing Service SoundCloud Raises New Funds at $700M Valuation
By Douglas MacMillan | Berlin
SoundCloud Ltd., the site for uploading and sharing music, has raised a new round of funding valuing the company at about $700
million, according to a person familiar with the deal.
The Berlin-based startup received more than $60 million from Institutional Venture Partners and Chernin Group, said the person.
The round closed last October but hasn't been announced or reported. Previous investors, including Kleiner Perkins Caufield &
Byers, GGV Capital, Index Ventures and Union Square Ventures, also participated.
SoundCloud, unlike competing music services Spotify and Rdio, lets amateur musicians upload their own songs and remixes of
popular artists. New users get two free hours of uploads, and pay monthly or annual subscriptions of up to $135 a year for
unlimited uploads as well as analytics tools for promoting tracks to users on the site. Users upload about 12 hours of audio every
minute, according to the company.
In addition to the YouTube-like community of aspiring artists on the site, professional musicians including Nine Inch Nails and
Beyonce, as well as media brands like Comedy Central have used the site to debut exclusive content.
Founded by Swedish entrepreneurs Alex Ljung and Eric Wahlforss in 2007, SoundCloud has expanded to five offices around the
world, including London, New York, San Francisco and Sofia, Bulgaria.
file:///C|/Users/whitet/Desktop/VentureWireJanuary272014.html[12/11/2014 8:23:08 PM]
Dow Jones Mail - VentureWire, Monday, January 27, 2014
Another European music startup, Spotify, was valued at more than $4 billion in a November financing.
IVP, which backs companies with established user bases or business models, also recently invested in Snapchat Inc., Supercell
Oy, TuneIn Inc. and DropCam Inc.
http://soundcloud.com
Write to Douglas MacMillan at [email protected]
Back To Top | Read Online
India's Snapdeal Looks to Join $1 Billion Club
By Greg Bensinger | New Delhi
Snapdeal.com, a New Delhi-based e-commerce site, is in the process of raising a $100 million funding round that could give it a
valuation of $750 million to $1 billion, according to a person familiar with the situation.
Snapdeal operates a marketplace similar to eBay Inc.'s, though it is primarily for businesses, rather than individual sellers. EBay led
a $50 million investment in Snapdeal in June that at the time valued the company at around $250 million, and the two companies
have been sharing listings across their two sites.
Credit Suisse is leading the funding round, the person said.
With more than 20 million users, Snapdeal is prepping for a possible initial public offering in the U.S. within the next year and is on
a pace to reach $500 million in sales in its fiscal year ending in March, said a spokesman. The Indian e-commerce market is
expected to grow to $22 billion within the next five years, from about $3 billion today, according to investment bank CLSA.
Snapdeal previously raised funds from a broad group of venture capital firms, including Bessemer Venture Partners, Intel Capital
and Nexus Venture Partners, among others. Intel Capital is participating in the current round of fundraising, according to a person
familiar with the firm's plans.
Reaching a $1 billion valuation would catapult Snapdeal in a group that includes Coupons.com Inc. and Gilt Groupe Inc. Still, it is
far behind Chinese juggernaut Alibaba, which analysts are expecting to IPO at $70 billion or more later this year.
The Snapdeal spokesman declined to comment on the company's fundraising activities and an eBay spokeswoman also declined to
comment.
Snapdeal, also known as Jasper Infotech Pvt. Ltd., has been protected from competition from Amazon.com Inc. and Wal-Mart
Stores Inc. because of rules that prohibit foreign firms from selling directly to consumers in India. However, the Trade Ministry there
is mulling a change that could open up more direct-to-consumer sales.
http://snapdeal.com
Write to Greg Bensinger at [email protected]
Back To Top | Read Online
LiveOps Raises $30M in Debt Funding, Acquires UserEvents
Redwood City, Calif.
LiveOps Inc., a provider of cloud contact center software and outsourced customer services, has closed a $30 million round of debt
funding from Comerica Bank, according to a news release.
The Redwood City, Calif., company also said it acquired UserEvents Inc., a Fredericton, New Brunswick, company developing a
routing engine that can aggregate and process events on social, Web, mobile or voice channels. Businesses can use the software
to gain insight into their customers' buying and service intentions, LiveOps said. Financial terms of the acquisition weren't disclosed
in a separate news release. The employees of UserEvents join LiveOps.
In conjunction with the debt financing, LiveOps formed two separate subsidiaries for cloud contact center software and on-demand
agent services, called LiveOps Cloud Platform LLC and LiveOps Agent Services LLC, respectively. Chief Executive Marty Beard
file:///C|/Users/whitet/Desktop/VentureWireJanuary272014.html[12/11/2014 8:23:08 PM]
Dow Jones Mail - VentureWire, Monday, January 27, 2014
becomes chairman, the company said. The company's agent-services division currently handles more than 70 million interactions a
year on behalf of more than 250 clients.
LiveOps said its new debt funding will be used for growth and to capture market share in customer service.
In 2007 LiveOps announced a $28 million Series C round led by Benchmark Capital, joined by CMEA Ventures and Menlo
Ventures.
http://liveops.com
http://userevents.com
Back To Top | Read Online
Google Glass Broadcaster CrowdOptic Picks Up Debt Funding
San Francisco
CrowdOptic Inc., a company that aims to crowdsource visual footage for live events, announced debt funding from Silicon Valley
Bank and others in order to ramp up sales and marketing of its software.
The San Francisco company develops software which detects where Google Glass and wearables are aiming and broadcasts live
streaming video to stadium scoreboards, fans' smartphones and live television. It's in use by sports teams including Stanford
Athletics and the Sacramento Kings.
The debt financing came from Silicon Valley Bank and other existing investors, according to a news release.
The company plans to use the funding to offer its software "off the shelf" and to bring on enterprise customers, it said.
CrowdOptic secured debt funding twice from Silicon Valley Bank in 2012. Other investors have include Acorn Fund, Bowman
Capital and individual investors, according to VentureWire records.
http://crowdoptic.com
Back To Top | Read Online
Beringea Backs Durable Touchscreen Maker UICO
Elmhurst, Ill.
UICO LLC, a manufacturer of durable touchscreen technology, has received an undisclosed amount of financing from private equity
firm Beringea LLC.
Joining the funding were existing investors Hyde Park Angels and Plymouth Venture Partners. Further details of the investment
weren't disclosed in a news release.
The Elmhurst, Ill., startup makes touchscreens it says can be used with gloves and can withstand temperature extremes, rough
handling and moisture. UICO says its technology is used in automotive, medical, military and marine applications, among others.
UICO said it nearly tripled production last year and the investment will support its hiring plans and working capital needs as it
produce larger volumes of product.
Hyde Park Angels led a second round of funding for the company in 2009, according to VentureWire archives.
http://uico.com
Back To Top | Read Online
Roundup of Form D Regulatory Filings--Jan. 24
By Zachary Cole | Washington
file:///C|/Users/whitet/Desktop/VentureWireJanuary272014.html[12/11/2014 8:23:08 PM]
Dow Jones Mail - VentureWire, Monday, January 27, 2014
(The following is a roundup of selected companies that have revealed securities sales in recent Form D regulatory filings. These
companies are required to file a Form D notification within 15 days after the first sale of securities in an offering, which could
indicate fundraising, acquisitions or other securities activity. The filings don't list the recipients of the securities being offered.
However, they do list board members, so in cases where new investors have surfaced, we'll report them below.)
Cayenne Medical Inc., Scottsdale, Ariz., which markets products in knee ligament reconstruction and meniscal repair, has sold
$190,000 of a $390,000 equity round in connection with a business combination transaction. In June 2012, the company closed an
$8 million venture loan package from NXT Capital's Venture Finance Group and Silicon Valley Bank. Fletcher Spaght Ventures,
Investor Growth Capital, MB Venture Partners and Split Rock Partners are also investors in Cayenne.
MobileIron Inc., Mountain View, Calif., which manages and protects mobile devices for corporate customers, has increased the size
of a Series F equity round to $59.8 million. VentureWire reported in October 2013 that the company had raised a $48 million round
from China Broadband Capital Partners, Foundation Capital, Institutional Venture Partners, Northgate Capital, Norwest Venture
Partners, Sequoia Capital, SingTel Innov8, Storm Ventures and UMC Capital.
Moderna Therapeutics Inc., Cambridge, Mass., provider of a technology for developing new types of drugs called messenger RNA
therapies, has increased the amount of an equity round to $135 million. The company raised $110 million in funding in November
2013. Flagship Ventures is a backer in the company.
Next Step Living Inc., Boston, which performs residential energy assessment and upgrade services, has issued $2.8 million in debt
and rights. Two earlier filings going back to December 2012 showed the company issuing $18.2 million in equity and $3.2 million in
debt. Next Step is backed by investors including Black Coral Capital, the Clean Energy Venture Group, the Massachusetts Green
Energy Fund, VantagePoint Capital Partners and the Windquest Group.
Silicon Space Technology Corp., Austin, Texas, which seeks to eliminate the effect of radiation on semiconductors, has sold $1.6
million toward a possible $6.8 million Series C equity round. The company has also increased the size of a debt, rights and
securities offering to $3.3 million, according to a separate filing. A February 2013 filing showed the company issuing $500,000 of a
$900,000 offering. New Science Ventures counts Silicon Space in its portfolio.
StreamLink Software Inc., Cleveland, a provider of management software to nonprofits, has upped the size of an equity round to
$3.6 million and has sold all but $500,000 of the funding. An April 2013 filing showed the company selling half of a $3 million round.
StreamLink is included in the portfolio of North Coast Angel Fund.
http://www.cayennemedical.com
http://www.mobileiron.com
http://www.nextstepliving.com
http://www.siliconspacetech.com
http://www.streamlinksoftware.com
http://www.modernatx.com
M&A/IPO NEWS
Back To Top | Read Online
Working on IPO 'To Do' List, LendingClub Looks for VP of Investor Relations
By Yuliya Chernova | San Francisco
LendingClub Corp., a fast-growing startup that connects lenders to borrowers, is looking for a vice president of investor relations as
it checks off items on its IPO to-do list.
"The target date for being ready [to go public] is May or June of this year," said Renaud Laplanche, the San Francisco company's
founder and chief executive.
The company was valued at $2.3 billion in the latest transaction of its shares, when DST Global and Coatue Management LLC
invested $57 million in a secondary deal in October, Mr. Laplanche said. The company also added Google Inc. as an investor
file:///C|/Users/whitet/Desktop/VentureWireJanuary272014.html[12/11/2014 8:23:08 PM]
Dow Jones Mail - VentureWire, Monday, January 27, 2014
earlier last year, also through a secondary deal.
The idea behind an IPO for Lending Club is not so much to raise capital as to make more consumers aware of the company's
services.
"A public offering would be another opportunity...to raise the visibility, drive awareness and credibility of the company," Mr.
Laplanche said.
The company, which started operations in 2007, allows consumers to obtain loans at typically lower rates than they get from banks
and credit card companies. Loans are offered to groups of investors who crowdfund the deal online. Lending Club keeps costs low
in part by conducting its operations online.
Financially, Lending Club has many of the attributes that enabled others to go public. It closed 2013 with revenue of about $98
million, Mr. Laplanche said. For the nine months ended Sept. 30, 2013, it had net income of $4.5 million on $65.5 million in revenue
in audited results.
The company operates in a huge market of consumer lending and is planning to start offering small-business loans this quarter.
More than $2.1 billion in loans were issued on its platform last year, the CEO said, up from $750 million in 2012.
Mr. Laplanche said the company created a checklist of items near the end of 2012 that it had to complete in order to be prepared
for an IPO, setting a goal of being ready within 18 months.
He said the company has made good progress toward that goal. It tripled the size of its finance team, for example, which improved
its financial controls and financial planning. The company also hired Deloitte, a Big Four accounting firm, as its auditor.
It also started going through the exercise of preparing quarterly results and communicating them. The company has long been filing
10-Q forms with the Securities and Exchange Commission.
Lending Club is also interviewing people to handle its investor relations duties. "We'll be hiring a person to manage investor
relations in the next few months," Mr. Laplanche said.
The company still hasn't hired bankers, Mr. Laplanche said. An IPO would clearly only happen if the market conditions allow for it,
he said.
Through Sept. 30, 2013, Lending Club raised about $103.2 million in preferred equity financing, it said in an SEC filing. Its largest
investor is Norwest Venture Partners, according to Mr. Laplanche. Others include Bay Partners, Canaan Partners, Foundation
Capital, Gold Hill Capital, Kleiner Perkins Caufield & Byers, Morgenthaler Ventures, SVB Financial Group, Thomvest Ventures and
Union Square Ventures.
https://www.lendingclub.com
Write to Yuliya Chernova at [email protected]. Follow her on Twitter at @ychernova
Back To Top | Read Online
Family-Care Marketplace Provider Care.com Rises 43% in Public Debut
By William Tremain | Waltham, Mass.
Shares of Care.com Inc. surged in the company's public debut Friday despite a down day for the broader stock market, with the
Dow Jones Industrial Average declining nearly 2%.
Care.com, which provides an online marketplace for finding and managing family care, rose $7.30, or 43%, to close at $24.30. The
Waltham, Mass., company, which trades on the New York Stock Exchange as CRCM, is worth about $722.8 million as of Friday's
close.
On Thursday Care.com priced its initial public offering of 5.4 million shares at $17, higher than previously expected.
Principal backers of Care.com include Matrix Partners, Trinity Ventures, New Enterprise Associates, Institutional Venture Partners
and USAA, according to a recent IPO prospectus. Their respective stakes are 18%, 12%, 11%, 8.4% and 7.6%.
The company has more than 9.7 million members, consisting of about 5.2 million families and 4.5 million caregivers. Families can
use Care.com to find people to provide child care, senior care, pet care and housekeeping, among other services. More than
600,000 employer-sponsored families use Care.com's service.
file:///C|/Users/whitet/Desktop/VentureWireJanuary272014.html[12/11/2014 8:23:08 PM]
Dow Jones Mail - VentureWire, Monday, January 27, 2014
Care.com isn't profitable. In the nine months ended Sept. 28, it posted a net loss of $24.7 million and revenue which rose 81% to
$59 million, compared with the prior-year period when it reported a net loss of $17.9 million on revenue of $32.6 million. Selling and
marketing expenses rose 57% to $43.9 million in the nine months ended Sept. 28, compared with $27.9 million in the similar period
the year before.
http://care.com
Write to William Tremain at [email protected]. Follow him on Twitter at @wtremain_wsj
Back To Top | Read Online
WyzAnt Begins Acquisition Spree, Acquires Tutorspree
By Lizette Chapman | Chicago
Fresh from securing a $21.5 million growth round from Accel Partners, private tutoring marketplace WyzAnt Inc. has purchased
Tutorspree Inc. in what it expects to be the first of several acquisitions.
The Chicago-based startup acquired assets from its former competitor, including its IP and customer lists, for an undisclosed sum.
Tutorspree, a Y Combinator graduate, had raised $1.8 million from the likes of Lerer Ventures and Sequoia Capital before ceasing
operations last year.
"We get tens of thousands of tutors and students with this," said WyzAnt founder and Chief Executive Andrew Geant. "Their
customer list and code base… all the IT is ours now."
Mr. Geant said the WyzAnt team is still reviewing much of the IP and has not yet determined how to make best use of it.
WyzAnt told VentureWire last month it was growing at 120% annually and doing $100 million in gross sales annually. More than
500,000 tutors and 1 million students have enrolled in the nine-year-old matching service which also handles payment processing,
scheduling and reviews.
Mr. Geant told VentureWire he is considering additional acquisitions to build out the platform with other learning resources and
expand both sides of the marketplace.
"This is a lot about driving volume," he said.
The company currently employs 70 people with plans to expand to 120 or so during 2014.
TechCrunch earlier reported news of the acquisition.
http://www.wyzant.com/
Email Lizette Chapman at [email protected]. Follow her on Twitter at @zettewil
Back To Top | Read Online
In IPO Market, Care.com CEO Is Among a Few Women in Charge
By Telis Demos and Douglas MacMillan | Waltham, Mass.
As a female, Filipino-American entrepreneur and CEO, Sheila Lirio Marcelo doesn't fit most corner-office stereotypes.
When her company, Care.com Inc., began trading Friday following its initial public offering, Ms. Marcelo joined another small club:
Just 3% of companies that went public in the U.S. between 1996 and 2013 had women chief executives, according to sociologist
Martin Kenney and economist Donald Patton at the University of California, Davis.
The figures haven't changed much recently. Last year, 82 "emerging-growth" companies went public, the most since 2007. But only
two--Marrone Bio Innovations Inc. and Veracyte Inc.--had women CEOs, according to Messrs. Kenney and Patton, who updated
their study for The Wall Street Journal.
Mr. Kenney suggests the dearth of women-led IPOs could reflect the underrepresentation of women among venture capitalists and
file:///C|/Users/whitet/Desktop/VentureWireJanuary272014.html[12/11/2014 8:23:08 PM]
Dow Jones Mail - VentureWire, Monday, January 27, 2014
as founders of venture-backed companies. In a 2011 census by the National Venture Capital Association and DJX VentureSource,
11% of venture-capital investors were women.
"It's not necessarily that there's some sort of discrimination, but rather structural factors," said Mr. Kenney, a professor of
community and regional development. The study excludes blank-check shell companies, real-estate investment trusts, companies
founded more than 30 years ago, and spinoffs of larger companies.
Shares of Care.com closed up 43% Friday, from the IPO price of $17. The offering priced above its initially proposed range of $14
to $16 a share, raising $91 million for the company.
Women are scarce in U.S. corporate executive suites, and even scarcer at technology companies, the source of many IPOs. Law
firm Fenwick & West recently found that 11.5% of top executives in top publicly traded Silicon Valley firms are women, compared
with 14.7% at companies in the S&P 100.
Women are underrepresented in the board room of many IPOs as well. Neither Facebook Inc., the biggest IPO of 2012, nor Twitter
Inc., the biggest technology IPO of 2013, had a woman on its board at the time of the IPO. Facebook has since added two women
to its board, Twitter one.
"The deck is rigged against [women] at all levels," said Vivek Wadhwa, fellow at the Stanford University Rock Center for Corporate
Governance. "Women don't get to hob nob with the board members. So the trust never builds," he said.
Curiously, women CEOs are more prevalent before and after an IPO than around the time of an initial offering. A study by
VentureSource last year found women CEOs at 6.5% of privately owned, venture-capital-backed companies--the pool from which
most IPOs emerge. Among companies in the S&P 500 index, 24, or almost 5%, are led by women, according to S&P Capital IQ.
Selina Lo, CEO of networking-equipment maker Ruckus Wireless Inc. before, during and after its 2012 IPO, says that there are few
women present in the IPO process.
"In my segment, it is extremely male dominated. You really don't find that many female executives, and primarily it starts with the
venture community being predominantly male," said Ms. Lo, who was also a senior executive at Alteon WebSystems Inc. during its
1999 IPO. Alteon was acquired the following year by Nortel Networks Corp. for more than $7 billion.
A forthcoming research paper suggests investor bias may be a factor. Researchers at the University of Utah's David Eccles School
of Business presented M.B.A. students with public-offering prospectuses of the same company, but changed the gender of the
CEO.
The students were four times as likely to recommend an investment in a company with a male CEO. The paper is to be published in
a coming issue of the Journal of Management.
During the long road to an IPO, "a series of unconscious biases kills it for some women," says Lyda Bigelow, lead author of the
study.
At Care.com, an online marketplace for nannies and other at-home caregivers, Ms. Marcelo is a public face for the company and
an advocate for women in business. She left her role as entrepreneur-in-residence at Matrix Partners in 2006 to start the company.
She has expanded the service to 9.7 million members, many of whom pay a monthly, quarterly or annual subscription to find and
solicit care givers. Care.com doesn't disclose how many customers pay for the service.
Ms. Marcelo in an interview Friday said, "All along the line there are certainly challenges for women." She added: "A lot of people
face different types of challenges, whether it's color or age, and it's about mustering that extra strength to have that conviction and
passion to do what you love."
http://investors.care.com/
LIFESCIENCE
Back To Top | Read Online
TigerText Raises $21M Series B for Secure Doctor-Texting Network
By Timothy Hay | Santa Monica, Calif.
Doctors use some of the most sophisticated machines the world has ever produced when it comes to saving lives, from magnetic
file:///C|/Users/whitet/Desktop/VentureWireJanuary272014.html[12/11/2014 8:23:08 PM]
Dow Jones Mail - VentureWire, Monday, January 27, 2014
resonance imaging machines to laser-based surgical tools to implantable gadgets with microchips built in.
But they use pagers and fax machines when they communicate with one another, as e-mailing and texting have been deemed too
risky when it comes to sensitive information about patients.
A number of startups are trying to bring doctors and nurses into the modern age of mobile communications, which means
promising a secure network that can deliver clinical information to smartphones and tablets.
One such company, Santa Monica, Calif.-based TigerText Inc., has raised a $21 million Series B round to broaden its list of
customers and add features to its program that will make it more of a one-stop-shop for medical professionals, the company said.
The company offers an application for iOS and Android devices that is meant to be downloaded by hospital administrators, Chief
Executive Brad Brooks said. The administrator, who pays TigerText a subscription fee, then asks hospital staff to join the network.
The network--which also includes nurses and other staff--is a secure communications channel that lets health-care workers textmessage one another during the workday.
The Series B was provided by new investor Shasta Ventures, joined by newcomers OrbiMed Advisors, Reed Elsevier Ventures and
Telus Ventures, Mr. Brooks said. Existing investors Easton Capital, New Leaf Ventures and New Science Ventures joined in the
funding, he added.
The company previously raised $12.5 million in various funding events, Mr. Brooks said. Valuation was not disclosed.
Sean Flynn, a partner with lead investor Shasta Ventures, said that TigerText has "Found the recipe for customer acquisition, and
the cost of acquiring new customers and is ready to throw fuel on the fire."
"There can be a leader in this space, and TigerText is making a play to become the dominant player," Mr. Flynn said.
The company's app-based system--which does not require a hardware installation--is in use in 3,000 facilities today, the CEO said.
Helping doctors communicate in a more modern fashion is a hot area of health-related information technology, and TigerText will
face rivals that range from established telecom providers to startups with software-based systems.
One particularly fierce rival will likely be secure-communications provider Doximity Inc., a startup with more than $27 million in
backing from Morgenthaler, Emergence Capital and InterWest Partners. The company calls itself a "vertical social network" for
doctors, and recently announced it has more than 250,000 active users.
TigerText will differentiate by having a network that is also open to nurses and medical assistants, meaning it can be more useful
for matters of daily workflow, the CEO said.
Quantia Inc., a startup offering a cloud-based system that lets doctors securely communicate with other players involved in healthcare delivery--like insurance companies and pharmacies--is backed by Safeguard Scientifics and Fuse Capital.
Telus Ventures, which is a new investor in TigerText and is the investment division of Canadian telecom Telus Corp., previously
invested in Get Real Health Inc., another startup offering a communications network for doctors, information from the firm said.
http://www.tigertext.com/
Write to Timothy Hay at [email protected]
Back To Top | Read Online
In IPO Market, Care.com CEO Is Among a Few Women in Charge
By Telis Demos and Douglas MacMillan | Waltham, Mass.
As a female, Filipino-American entrepreneur and CEO, Sheila Lirio Marcelo doesn't fit most corner-office stereotypes.
When her company, Care.com Inc., began trading Friday following its initial public offering, Ms. Marcelo joined another small club:
Just 3% of companies that went public in the U.S. between 1996 and 2013 had women chief executives, according to sociologist
Martin Kenney and economist Donald Patton at the University of California, Davis.
The figures haven't changed much recently. Last year, 82 "emerging-growth" companies went public, the most since 2007. But only
two--Marrone Bio Innovations Inc. and Veracyte Inc.--had women CEOs, according to Messrs. Kenney and Patton, who updated
file:///C|/Users/whitet/Desktop/VentureWireJanuary272014.html[12/11/2014 8:23:08 PM]
Dow Jones Mail - VentureWire, Monday, January 27, 2014
their study for The Wall Street Journal.
Mr. Kenney suggests the dearth of women-led IPOs could reflect the underrepresentation of women among venture capitalists and
as founders of venture-backed companies. In a 2011 census by the National Venture Capital Association and DJX VentureSource,
11% of venture-capital investors were women.
"It's not necessarily that there's some sort of discrimination, but rather structural factors," said Mr. Kenney, a professor of
community and regional development. The study excludes blank-check shell companies, real-estate investment trusts, companies
founded more than 30 years ago, and spinoffs of larger companies.
Shares of Care.com closed up 43% Friday, from the IPO price of $17. The offering priced above its initially proposed range of $14
to $16 a share, raising $91 million for the company.
Women are scarce in U.S. corporate executive suites, and even scarcer at technology companies, the source of many IPOs. Law
firm Fenwick & West recently found that 11.5% of top executives in top publicly traded Silicon Valley firms are women, compared
with 14.7% at companies in the S&P 100.
Women are underrepresented in the board room of many IPOs as well. Neither Facebook Inc., the biggest IPO of 2012, nor Twitter
Inc., the biggest technology IPO of 2013, had a woman on its board at the time of the IPO. Facebook has since added two women
to its board, Twitter one.
"The deck is rigged against [women] at all levels," said Vivek Wadhwa, fellow at the Stanford University Rock Center for Corporate
Governance. "Women don't get to hob nob with the board members. So the trust never builds," he said.
Curiously, women CEOs are more prevalent before and after an IPO than around the time of an initial offering. A study by
VentureSource last year found women CEOs at 6.5% of privately owned, venture-capital-backed companies--the pool from which
most IPOs emerge. Among companies in the S&P 500 index, 24, or almost 5%, are led by women, according to S&P Capital IQ.
Selina Lo, CEO of networking-equipment maker Ruckus Wireless Inc. before, during and after its 2012 IPO, says that there are few
women present in the IPO process.
"In my segment, it is extremely male dominated. You really don't find that many female executives, and primarily it starts with the
venture community being predominantly male," said Ms. Lo, who was also a senior executive at Alteon WebSystems Inc. during its
1999 IPO. Alteon was acquired the following year by Nortel Networks Corp. for more than $7 billion.
A forthcoming research paper suggests investor bias may be a factor. Researchers at the University of Utah's David Eccles School
of Business presented M.B.A. students with public-offering prospectuses of the same company, but changed the gender of the
CEO.
The students were four times as likely to recommend an investment in a company with a male CEO. The paper is to be published in
a coming issue of the Journal of Management.
During the long road to an IPO, "a series of unconscious biases kills it for some women," says Lyda Bigelow, lead author of the
study.
At Care.com, an online marketplace for nannies and other at-home caregivers, Ms. Marcelo is a public face for the company and
an advocate for women in business. She left her role as entrepreneur-in-residence at Matrix Partners in 2006 to start the company.
She has expanded the service to 9.7 million members, many of whom pay a monthly, quarterly or annual subscription to find and
solicit care givers. Care.com doesn't disclose how many customers pay for the service.
Ms. Marcelo in an interview Friday said, "All along the line there are certainly challenges for women." She added: "A lot of people
face different types of challenges, whether it's color or age, and it's about mustering that extra strength to have that conviction and
passion to do what you love."
http://investors.care.com/
Back To Top | Read Online
Roundup of Form D Regulatory Filings (Life Sciences)--Jan. 24
By Zachary Cole | Washington
(The following is a roundup of selected companies that have revealed securities sales in recent Form D regulatory filings. These
file:///C|/Users/whitet/Desktop/VentureWireJanuary272014.html[12/11/2014 8:23:08 PM]
Dow Jones Mail - VentureWire, Monday, January 27, 2014
companies are required to file a Form D notification within 15 days after the first sale of securities in an offering, which could
indicate fundraising, acquisitions or other securities activity. The filings don't list the recipients of the securities being offered.
However, they do list board members, so in cases where new investors have surfaced, we'll report them below.)
Cayenne Medical Inc., Scottsdale, Ariz., which markets products in knee ligament reconstruction and meniscal repair, has sold
$190,000 of a $390,000 equity round in connection with a business combination transaction. In June 2012, the company closed an
$8 million venture loan package from NXT Capital's Venture Finance Group and Silicon Valley Bank. Fletcher Spaght Ventures,
Investor Growth Capital, MB Venture Partners and Split Rock Partners are also investors in Cayenne.
Moderna Therapeutics Inc., Cambridge, Mass., provider of a technology for developing new types of drugs called messenger RNA
therapies, has increased the amount of an equity round to $135 million. The company raised $110 million in funding in November
2013. Flagship Ventures is a backer in the company.
http://www.cayennemedical.com
http://www.modernatx.com
Back To Top | Read Online
Clinical Development News, Jan. 20-24
By Zachary Cole | New York
The following is a list of clinical development news from private and public companies during the week of Jan. 20-24.
Private companies:
Cortice Biosciences Inc., New York, has initiated a Phase I study of its TPI 287 for the treatment of Alzheimer's disease.
Kolltan Pharmaceuticals Inc., New Haven, Conn., has treated the first cancer patient in a Phase I trial of its KTN3379.
Miltenyi Biotec Inc., Auburn, Calif., said its CliniMACS CD34 Reagent System received approval from the Food and Drug
Administration for the prevention of graft-versus-host disease in patients with acute myeloid leukemia.
Novocure, Haifa, Israel, has enrolled the first subject in a study of its NovoTTF Therapy plus Gemcitabine for the treatment of
advanced pancreatic adenocarcinoma.
Prosonix Ltd., Oxford, U.K., said its PSX1002 improved lung function versus placebo in patients with chronic obstructive pulmonary
disease, the primary endpoint of a Phase II study.
Scioderm LLC, Durham, N.C., said its SD-101, for the treatment of epidermolysis bullosa, received orphan drug designation from
the European Commission.
Public companies:
Aegerion Pharmaceuticals Inc., Cambridge, Mass., said its Juxtapid received approval in Mexico for the treatment of homozygous
familial hypercholesterolemia.
Aeolus Pharmaceuticals Inc., Mission Viejo, Calif., said its AEOL 10150, for the treatment of acute radiation syndrome, was granted
orphan drug designation by the Food and Drug Administration.
Alexion Pharmaceuticals Inc., Cheshire, Conn., said its Soliris (eculizumab), for the prevention of delayed graft function in renal
transplant patients, received orphan drug designation by the Food and Drug Administration.
Alnylam Pharmaceuticals Inc., Cambridge, Mass., has initiated a Phase I trial of its subcutaneously administered ALN-AT3 for the
treatment of hemophilia and rare bleeding disorders.
AMAG Pharmaceuticals Inc., Lexington, Mass., said the Food and Drug Administration has rejected its application for the expanded
indication of its Feraheme (ferumoxytol) injection to include all adult iron deficiency anemia patients who have failed or cannot
tolerate oral iron treatment.
Apricus Biosciences Inc., San Diego, said its Vitaros was granted national phase approval for the treatment of erectile dysfunction
in Belgium.
file:///C|/Users/whitet/Desktop/VentureWireJanuary272014.html[12/11/2014 8:23:08 PM]
Dow Jones Mail - VentureWire, Monday, January 27, 2014
AstraZeneca PLC, London, and Bristol-Myers Squibb Co., New York, said that Xigduo was granted marketing authorization by the
European Commission for the treatment of Type 2 diabetes.
BioLineRx Ltd., Jerusalem, said that BL-8040, its stem cell mobilization treatment, received orphan drug designation from the U.S.
Food and Drug Administration.
Endo Pharmaceuticals Inc., Malvern, Pa., and BioDelivery Sciences International Inc., Raleigh, N.C., said that BEMA
buprenorphine demonstrated significantly improved chronic pain relief compared to placebo among opioid naive patients with
chronic pain in a Phase III study.
Evoke Pharma Inc., Solana Beach, Calif., said that intranasal delivery of its Metoclopramide was more effective than the oral tablet
formulation of the drug in diabetic patients with symptoms of gastroparesis in a Phase IIb study.
Galectin Therapeutics Inc., Norcross, Ga., said its GR-MD-02 significantly reduced hyaluronic acid in an animal model of
nonalcoholic steatohepatitis with fibrosis, according to preclinical study data.
Hi-Tech Pharmacal Co., Amityville, N.Y., said its Bromfenac Ophthalmic Solution, 0.09% (Once-A-Day) received final approval from
the Food and Drug Administration for the treatment of postoperative inflammation and reduction of ocular pain in patients who have
undergone cataract surgery.
Merrimack Pharmaceuticals Inc., Cambridge, Mass., has commenced a Phase I trial of its MM-398 in patients with pediatric solid
tumors.
Novartis AG, Basel, Switzerland, said that RLX030 (serelaxin), its acute heart failure drug, received a negative opinion from the
European Medicines Agency's Committee for Medicinal Products for Human Use.
Patrys Ltd., Melbourne, Australia, said significantly higher survival was observed among gastric cancer patients who had
undergone gastric resection surgery and were treated with its PAT-SC1, according to 10-year follow-up data.
Perrigo Co., Allegan, Mich., said that Repaglinide tablets, its generic equivalent to Prandin tablets, received approval from the Food
and Drug Administration for the improvement of glycemic control in adults with Type 2 diabetes mellitus.
Pfizer Inc., New York, said its ALO-02, for the treatment of chronic lower back pain, met the primary efficacy endpoint in a Phase 3
study.
Pluristem Therapeutics Inc., Haifa, Israel, said its PLacental eXpanded cells were safe and statistical significance was achieved for
the primary efficacy endpoint of a Phase I/II study in total hip replacement patients.
PTC Therapeutics Inc., South Plainfield, N.J., said its Ataluren, for the treatment of Duchenne muscular dystrophy, received a
negative opinion from the Committee for Medicinal Products for Human Use of the European Medicines Agency.
Roche, Basel, Switzerland, said that adding its Bitopertin (RG1678) to antipsychotic therapy did not significantly reduce negative
symptoms of schizophrenia at 24 weeks compared to placebo in two Phase III trials.
Starpharma Holdings Ltd., Melbourne, Australia, received approval to conduct at Phase I study of its dendrimer-enhanced
docetaxel (Taxotere) chemotherapeutic product.
Teva Pharmaceutical Industries Ltd., Petach Tikva, Israel, and Active Biotech AB, Lund, Sweden, said that Nerventra (laquinimod),
for the treatment of multiple sclerosis, received a negative opinion from the Committee for Medicinal Products for Human Use of the
European Medicines Agency.
TherapeuticsMD Inc., Boca Raton, Fla., has initiated a Phase III study of its TX 12-002-HR for the treatment of secondary
amenorrhea.
VC FUND NEWS
Back To Top | Read Online
Dragon Innovation Launches 'Million Dollar Challenge' With Promise of Seed Funding
By Lora Kolodny | Cambridge, Mass.
file:///C|/Users/whitet/Desktop/VentureWireJanuary272014.html[12/11/2014 8:23:08 PM]
Dow Jones Mail - VentureWire, Monday, January 27, 2014
A rewards-based crowdfunding site that started out as a kind of specialized Kickstarter for hardware, DragonInnovation.com, now
has a seed fund for breakaway projects.
As of Monday, Dragon Innovation Inc. is promising automatic seed funding of $100,000 in convertible debt financing to any
hardware team that raises a million dollars on its platform for a new product, Chief Executive Scott N. Miller told VentureWire.
"We have always been in the business of helping entrepreneurs build successful companies and to do that in hardware they need a
team that can execute, a great product, people to buy it and capital. We got our start helping them build the product, but now we
can offer them the capital, too," the CEO said.
The "Dragon Million Dollar Challenge" is one of many signs of rising interest in hardware deals by startup investors of every stripe,
from strategic and corporate venture groups, to accelerators, seed and traditional venture firms.
In the fourth quarter of 2013 venture capitalists put $150 million into Nest Labs Inc., a maker of smart home devices including
thermostats and smoke detectors. According to DJX VentureSource, that was the third-largest deal of the quarter.
Investors realized one of the largest exits in recent memory, when Google Inc. purchased Nest Labs for $3.2 billion just one month
later. That result has ratcheted up interest in hardware businesses, no doubt, says Mr. Miller.
But as a long-time engineer and mentor to hardware makers, he claims Dragon Innovation is offering seed funding to startups to
ensure their success as a business, long term, not just to put Dragon's name on their cap tables.
The seed money Dragon offers is optional for DragonInnovation.com users who raise $1 million or more, he pointed out.
Hardware startups that hit it big with backers--like Pebble Technology Corp., OUYA Inc. and Oculus VR Inc.--should be free to
focus on business operations, not "a VC roadshow," after they complete a successful crowdfunding campaign, Mr. Miller believes.
The CEO explained, "Money raised through a rewards-based platform is really about pre-sales. It buys your team inventory, tooling
and goes to pay for various manufacturing services. But that may not leave you headroom for hiring team members, or supporting
yourself if things shift around and you have to quit your day job, or something."
The seed capital Dragon Innovations plans to invest in hardware hits on its own site will come from its own coffers. The company
makes revenue from various consulting services including hardware design, manufacturing and its crowdfunding platform.
The Dragon Million Dollar Challenge also illustrates how competitive the crowdfunding scene has become at large. Scores of
donations-, rewards- and equity-based crowdfunding sites have launched since Indiegogo and Kickstarter established the market in
the U.S.
A Dragon Innovation investor, Seth Levine with Foundry Group in Boulder, Colo., views the company's challenge as a "differentiator
and really smart marketing," he said.
He expects Dragon Innovation to do up to 12 deals under its new program in the next year. But if more than a dozen companies
could raise $1 million each on Dragon's site, he said, finding more seed capital to invest in them would be easy, and a good
problem to have.
http://www.dragoninnovation.com
Write to Lora Kolodny at [email protected]. Follow her on Twitter at @lorakolodny
Back To Top | Read Online
Union Square Hits Upsized Mark
By Michael Wursthorn | New York
Union Square Ventures wanted more and got it.
The New York venture firm raised a pair of funds totaling $350 million this month, gathering $175 million apiece for USV 2014 LP,
the firm's fourth early-stage fund, and USV Opportunity 2014 LP, its second late-stage pool, said a person with knowledge of the
matter. Originally Union Square sought $300 million altogether, but the fund was significantly oversubscribed, the person added.
A Union Square executive didn't return messages seeking comment Friday.
Fortune magazine earlier reported news of the fundraise.
file:///C|/Users/whitet/Desktop/VentureWireJanuary272014.html[12/11/2014 8:23:08 PM]
Dow Jones Mail - VentureWire, Monday, January 27, 2014
Even though it bumped up the funds' sizes, Union Square didn't seek much more than what it last raised. Previously, the firm
collected $200 million for its third early-stage fund, USV 2012 LP, and $165 million for the first late-stage pool.
The firm didn't look to drastically increase the size of the funds because early- and late-stage deals require smaller investments,
according to investment documents viewed by Dow Jones. Early-stage fund investments out of Fund III averaged $4 million each,
while the opportunities vehicle was $11 million apiece.
Founded in 2003, Union Square has earned its place as a hot shop among venture investors thanks to early bets on social media
powerhouses Twitter Inc. and Tumblr Inc., among others.
Twitter floated on the New York Stock Exchange in November, giving Union Square an initial valuation of $723.8 million on the
firm's stake--a number that has only gone up since then thanks to a rising share price.
Tumblr, meanwhile, saw a valuation of 27 times invested cost on Tumblr after the blogging platform was sold to Yahoo Inc. for $1.1
billion earlier this year, the documents said.
Union Square's latest limited partner base includes the Los Angeles County Employees Retirement Association and the Oregon
Investment Council, according to documents from the respective pension systems.
http://www.usv.com
Write to Michael Wursthorn at [email protected]. Follow him on Twitter at @4BetterOrWurst
Back To Top | Read Online
Singularity University to Raise $50M Fund
By Lizette Chapman | San Francisco
The Singularity University is known for cultivating big ideas in technology. Now the education center and accelerator is raising a
venture fund to back them.
The six-year-old group, which promotes what it calls "exponential technologies" that have a multiplier effect on solving global
problems, will begin raising a venture fund in the second quarter, according to Sandy Miller, SU's co-chair of entrepreneurship and
managing director in charge of new venture development.
"The details of the fund haven't been finalized," said Ms. Miller. The amount "is in the range of $50 million."
She declined to provide details on typical investment size, deal flow or whether target LPs would come from the corporate, venture,
public or other arenas.
Since futurist Ray Kurzweil and X Prize founder Peter Diamandis co-founded the university in 2008, the Silicon Valley-based hub of
inventors and corporate leaders has expanded its education and startup programs to have a global reach.
Companies that have emerged from its labs program specialize in everything from robotics and nanotechnology to synthetic biology
and artificial intelligence. Most focus on solving major world problems like poverty, energy, security, education and global health.
"We have people in the market already developing these technologies and they are really making a difference. Hopefully, a fund will
[further] fuel these activities," said Ms. Miller.
GigaOm earlier reported news of the new fund.
http://singularityu.org/
Write to Lizette Chapman at [email protected]. Follow her on Twitter at @zettewil
Back To Top | Read Online
Ecosystem Integrity Fund Targets $50M for Second Fund
San Francisco
file:///C|/Users/whitet/Desktop/VentureWireJanuary272014.html[12/11/2014 8:23:08 PM]
Dow Jones Mail - VentureWire, Monday, January 27, 2014
Sustainability-focused venture investor Ecosystem Integrity Fund is looking to raise up to $50 million for its second fund,
Ecosystem Integrity Fund II LP, according to a regulatory filing.
The San Francisco firm seeks to invest in companies and projects that reduce or ameliorate threats to ecosystem integrity, such as
land fragmentation and conversion, depletion of productive capacity and contamination of land, air and water, according to its
website.
Ecosystem Integrity manages $20 million in its first fund, Ecosystem Integrity Fund I, according to its website. The firm had targeted
$30 million for that fund in 2011 and closed on $19.5 million in September 2013, according to regulatory filings.
The firm primarily invests in "more capital-efficient opportunities than the typical clean technology fund," according to its website.
Representative investments include pine tree producer Cellfor Inc., organic beverage maker Kevita Inc. and waste-to-energy power
company Synova LLC.
http://www.ecosystemintegrity.com
Back To Top | Read Online
Serra Ventures Gathers $7.4M Toward $30M Second Fund
Champaign, Ill.
Venture firm Serra Ventures has raised $7.4 million toward its second fund, Serra Capital II LP, to back U.S. technology companies
across multiple life stages, according to a regulatory filing. The fund has a $30 million target, the filing said.
Based in Champaign, Ill., the firm plans to focus the fund's investments on information technology, devices and instrumentation,
and materials and agricultural technology, according to its website.
As a risk-management strategy, Serra also plans to make investments across U.S. seed-stage, emerging, growth and late-stage
companies.
According to information on its website, Serra planned a formal launch of Serra Capital II for September 2013, and expected to
complete the fundraising process in September 2014.
Serra's first fund, Serra Capital I LP, held a first close in early October 2010. A regulatory filing later that month showed the
company raising $3.1 million of a targeted $15 million for the vehicle.
Serra made 24 funding commitments to portfolio companies from Fund I, according to its website, across the information
technology and software, life-sciences, clean-technology and agricultural technology sectors.
The firm's investments have included life-sciences imaging company Phi Optics Inc., specialized wheelchair wheel maker
IntelliWheels Inc. and interactive videoconferencing startup Nuvixa Inc.
The firm's President and Chief Executive Tim Hoerr, a principal with Fund II, was co-founder and former CEO of iCyt Mission
Technology Inc., a bio-instrument company that was acquired by Sony Corp. in late 2009.
http://www.serraventures.com
NEW PRODUCTS
Back To Top | Read Online
Accellion Targets Box, Dropbox on Secure File Sharing
By Deborah Gage | Palo Alto, Calif.
Led by Box Inc. and Dropbox Inc., tech vendors with software that lets employees share and collaborate on files have raised
hundreds of millions of dollars at high valuations. Box, most recently valued at $2 billion, and Dropbox, valued at nearly $10 billion,
are also considered as candidates for IPOs.
Now a survivor of the dot-com bust, Accellion Inc., has made its way back into the newest boom.
file:///C|/Users/whitet/Desktop/VentureWireJanuary272014.html[12/11/2014 8:23:08 PM]
Dow Jones Mail - VentureWire, Monday, January 27, 2014
Accellion on Tuesday launches its new product, called kiteworks, which uses technology designed with the idea that employees'
most important devices are now mobile, and that they need to be able to securely share files from both inside and outside of their
companies and across mobile and non-mobile devices.
Accellion is now valued at about $500 million, according to a person familiar with the situation, and is considering an IPO in a
couple of years.
The company's software integrates with Microsoft SharePoint and EMC Corp.'s Documentum--two older but still widely used
corporate content management systems--and lets users create and edit Microsoft Office documents on an interface that's easy to
use.
But the critical feature is security, according to Accellion Chief Financial Officer Glen Segal, who says kiteworks has a three-tiered
architecture to protect customers' data that the company discovered resembles an architecture that was designed by a large bank
after it suffered a security breach.
"Getting to the data is three orders of magnitude harder," Mr. Segal said.
Accellion is a dot-com survivor that started in Singapore in 1999--it was a cloud storage company that was able to replicate storage
from Singapore to London or New York so users in those places could access the data as if it were local, according to Chief
Executive Yorgen Edholm.
After the dot-com bust, Accellion was recapitalized, but its technology continued to evolve. The company last raised money in late
2011, taking total funding to about $35 million, and has been cash-flow positive for several years, serving corporate customers who
are concerned enough about security that they want the option of running software on a private cloud. Customers include Procter &
Gamble, Kaiser Permanente and NASA.
Unlike Box and Dropbox, Accellion has avoided giving away software, which has enabled the company to escape what Mr. Edholm
calls the financial drag of supporting freemium customers "with a lot of storage and bandwidth and data costs."
"Every other company that you know in this space is primarily servicing either consumers or small and medium businesses, with a
couple of marquee enterprise accounts," said Riverwood Capital Partner Jeff Parks. Riverwood Capital took part in the 2011
financing and is Accellion's most recent investor.
Accellion isn't the only file-sharing company that's pitching itself to corporate customers as more security-conscious than its
competitors. Watchdox Inc. and Egnyte Inc., which are both venture-backed, also make this pitch, and new startups continue to
launch.
One of them, CirroScope Inc., emerged this week and is raising money to secure data on public cloud apps including Box,
Salesforce, Google Drive and Microsoft's Yammer.
CirroScope Chief Executive Vikrant Karvir, who presented his company Thursday at the Alchemist Accelerator Demo Day in Santa
Clara, Calif., cited four recent incidents where confidential corporate data was exposed in each of those applications because of
user error.
"Users are the weakest link," Mr. Karvir said.
Nearly 100% of customers renew their Accellion licenses, according to Mr. Edholm, who adds that as mobile devices keep getting
more capable, security will become more important.
"I always thought cameras on mobile devices were something teenagers had fun with," he said, "but we're seeing large customers
come to us and say, you need to wrap the camera so we can take pictures securely…so they can't leak out."
http://accellion.com
Write to Deborah Gage at [email protected]. Follow her on Twitter at @deborahgage
INDUSTRY NEWS
Back To Top | Read Online
Kleiner Perkins Disavows Founder's Letter Comparing Outrage Against Rich to Nazi View of
Jews
file:///C|/Users/whitet/Desktop/VentureWireJanuary272014.html[12/11/2014 8:23:08 PM]
Dow Jones Mail - VentureWire, Monday, January 27, 2014
By Jeff Elder | San Francisco
A top Silicon Valley venture capital firm on Saturday disavowed the statements from one of its founders comparing growing anger
toward the rich in the United States to Nazi Germany's singling out of Jews in the 1930s.
In a letter to the editor that appeared in the opinion pages of Saturday's Wall Street Journal, Tom Perkins, a venture funding
pioneer and co-founder of Kleiner Perkins Caufield & Byers, wrote:
"Writing from the epicenter of progressive thought, San Francisco, I would call attention to the parallels of fascist Nazi Germany to
its war on its 'one percent,' namely its Jews, to the progressive war on the American one percent, namely the 'rich.'"
He closed the letter with more comparisons to the Nazis' rise to power:
"This is a very dangerous drift in our American thinking. Kristallnacht was unthinkable in 1930; is its descendent 'progressive'
radicalism unthinkable now?"
(This story was published by The Wall Street Journal Online's Digits blog at http://blogs.wsj.com/digits/)
After several hours of heated criticism on Twitter and coverage on several major websites, Kleiner Perkins tweeted Saturday
afternoon: "Tom Perkins has not been involved in KPCB in years. We were shocked by his views expressed today in the WSJ and
do not agree."
Mr. Perkins was still listed as a partner emeritus on the firm's website Saturday.
A Kleiner Perkins spokeswoman told the Journal in an email that the tweet is the company's formal statement on the matter.
In his letter, Mr. Perkins also objected to "libelous and cruel attacks" against "our number-one celebrity, the author Danielle Steel."
Mr. Perkins and Ms. Steel were married from 1998 to 2002.
Mr. Perkins' letter comes amid growing class tensions, including high-profile confrontations between affordable-housing and other
activists and the expanding workforce of tech companies, whose affluence has helped drive up housing costs in the Bay Area. Tech
workers, and the corporate shuttle buses that transport them from San Francisco south to large companies such as Google, have
been the object of numerous protests, as the buses have become a symbol of gentrification to many. Last week protesters
reportedly lined up outside a Google executive's Berkeley home before confronting shuttle buses. Prior incidents included a window
of one of the buses being broken in Oakland, and other confrontations in San Francisco. Mr. Perkins mentioned the shuttle protests
in his letter.
San Francisco has responded to protesters' complaints about the shuttle buses with a plan to levy a small tax on their use of city
bus stops. Protesters blasted the proposed tax as inconsequential in a public hearing this week in San Francisco, but the city
moved forward with the pilot program.
http://www.kpcb.com
Back To Top | Read Online
Nasdaq Wants to Plant IPO Seeds With Private-Share Market
By Bradley Hope, Francesco Guerrera and Telis Demos | New York
In the fight to win initial public offerings, Nasdaq OMX Group Inc. is betting longer relationships with private companies will yield a
larger slice of the listings pie.
The company is preparing to launch Nasdaq Private Market LLC, a new, San Francisco-based exchange for trading shares in
private companies, after clearing a key regulatory hurdle earlier this month. The effort is a joint venture with SharesPost Inc., which
operates a similar, but smaller, platform.
The Financial Industry Regulatory Authority, Wall Street's self-funded watchdog, approved the new brokerage unit Jan. 15,
according to a firm profile on Finra's website.
Nasdaq is expected to soon file paperwork with the Securities and Exchange Commission to operate a related alternative trading
system, which would allow them to begin trading as soon as 20 days later.
file:///C|/Users/whitet/Desktop/VentureWireJanuary272014.html[12/11/2014 8:23:08 PM]
Dow Jones Mail - VentureWire, Monday, January 27, 2014
Nasdaq Private Market is the company's latest attempt to break into pre-IPO trading. Nasdaq was part of a consortium with major
banks that launched a platform for trading privately placed shares in 2007 called Portal Alliance, but it failed to take off. Similarly,
Goldman Sachs Group Inc. set up a private marketplace in 2007 but shelved it in 2011 because of a lack of trading.
SecondMarket Inc., founded by Barry Silbert, has facilitated trading in private shares since 2009. A similar market has been run
since 2011 by Liquidnet, which operates alternative trading venues such as dark pools, where shares trade anonymously.
The challenge that has plagued such secondary markets in the past is a lack of liquidity and wavering interest from private
companies, especially at times like now, when demand for IPOs is strong.
Nasdaq is betting it can differentiate its new project by offering corporate services to companies that have decided to hold off on
going public. Nasdaq also is planning to sign up broker-dealers, who will handle trading on behalf of their clients. SecondMarket is
hired by companies to facilitate and organize trading.
In addition to being able to interact with potential investors in a marketplace, Nasdaq Private Market will offer a range of services
for private companies, such as handling disclosures to approved investors and administering employee stock plans.
Nasdaq OMX, the market's parent company, also will offer public-relations tools and other services. With all this, Nasdaq is hoping
companies involved with Nasdaq Private Market will opt for a Nasdaq listing when they choose to go public.
"We saw a tremendous opportunity to provide real support to private companies, and if they do decide to go public, we hope we
have demonstrated that Nasdaq is a trusted partner," said Nelson Griggs, the head of new listings at Nasdaq, in an interview
Thursday.
Nasdaq's identity has long been tied to public offerings by technology companies. But it suffered a reputational blow when it
mishandled the Facebook Inc. IPO in 2012.
Last year, Nasdaq lost out in the perennial competition with the New York Stock Exchange to land the most IPOs of technology and
Internet companies, the first such defeat in 19 years.
NYSE Euronext, a unit of IntercontinentalExchange Group Inc., hosted 25 tech and Internet IPOs in 2013, while Nasdaq held 23,
according to Dealogic.
Nasdaq's U.S. listings revenue was essentially flat at $43 million in the third quarter versus the same period in 2012.
Only five more technology companies listed in the U.S. in 2013 versus 2012, while the number of IPOs across all sectors grew by
more than 85, according to Dealogic.
This is despite a number of technology companies already achieving billion-dollar valuations privately, making them natural
candidates for listings.
"Just as bankers are trying to have dialogue with [emerging-growth tech companies] sooner, the exchanges are looking to initiate
dialogue with management earlier," said J.D. Moriarty, who leads technology IPOs for Bank of AmericaMerrill Lynch.
During a conference last December, Robert Greifeld, Nasdaq's chief executive, highlighted the role of the JOBS Act in allowing
companies to remain private longer.
The 2012 law lets companies stay private until they have 2,000 shareholders, compared with old regulations that required
companies to begin publicly disclosing information after reaching 500 shareholders.
"There literally are thousands of companies that are good companies that are not on the path to go public, and we're going to build
a market just for them that's coming out in 2014," Mr. Greifeld said at the conference.
One of the key appeals of staying private is avoiding the annual reporting and third-party audit requirements from the SEC.
However, Nasdaq Private Market says it will vet companies before allowing them to sign up for private share trading.
Unlike in public markets, private companies will have the ability to tightly control trading on Nasdaq Private Market. All transactions
must be approved by the company; they can stop transactions or arrange sales whenever they like.
Companies are waiting longer to go public than they did during the Internet IPO boom. In 1999, when more than 270 venturecapital-backed companies went public, the median company had been around for four years when it went public, according to
figures compiled by Jay Ritter, professor of finance at the University of Florida.
Last year, when just 76 venture-backed companies listed, the median age was 12 years, the figures showed.
file:///C|/Users/whitet/Desktop/VentureWireJanuary272014.html[12/11/2014 8:23:08 PM]
Dow Jones Mail - VentureWire, Monday, January 27, 2014
However, an improving IPO market has lowered the need for some companies to wait longer, said Byron Deeter, a Menlo Park,
Calif.-based partner at venture-capital firm Bessemer Venture Partners, whose most recent fund for investing in young companies
raised $1.6 billion.
Write to Bradley Hope at [email protected], Francesco Guerrera at [email protected] and Telis Demos at
[email protected]
Back To Top | Read Online
Digital Companies Eye Mideast Startup Cheer
By Rory Jones | Dubai
A new digital startup incubator-come-accelerator is set to launch in Dubai, offering a twist for the aspiring entrepreneur.
Afkar.me, which means "ideas" in Arabic, plans to stump up $20,000 and offer a number of other services in return for no equity in
the startup. Yes, that's right--entrepreneurs can get $20,000 and give up no equity in the business.
What Afkar does take is a percentage of revenues once the startup begins earning some income, while it also has first right of
funding after the program has finished.
(This story was published by The Wall Street Journal Online's Middle East Real Time blog at http://blogs.wsj.com/middleeast/)
"It's in our interest that the idea turns into a business as soon as possible," explained Juan Jose De La Torre, vice president of
strategy, technology and operations at Intigral, the digital media company that is running Afkar.
Intigral's goal is to unearth some digital startups that can be partly incorporated into the company's portfolio of applications,
advertising and marketing businesses, IPTV and content distributions teams.
The digital company, which is a joint venture between Saudi Telecom Company and All Asia Networks, will offer startups a pool of
mentors from around the region and in-house training classes with external partners, such as consultants Oliver Wyman and public
relations agency Ketchum. It will also help the entrepreneurs hit the ground running once they have finished the program by
providing the company's marketing and sales teams free of charge.
Intigral is not the only digital company in the Middle East to launch an accelerator program. Digital agencies are wising up to the
fact that their products and services marry nicely with the needs of nascent startups and entrepreneurs. What's more, setting up
accelerators helps digital companies and creative agencies to tap into the pulse of the technology market and potentially eventually
benefit from tech behemoths of the future.
Juice Labs in Cairo is in the process of picking its first Egyptian startups for a six-month scheme supported by small digital creative
agency ThePlanet. It will take a 10% equity stake in the startups for an investment of between $15,000 and $22,000.
"The startups will benefit from the resources we have and the expertise we have," said Noha Mahmoud, who is coordinating the
Juice Labs program.
Both Juice Labs and Afkar are in the process of picking startups to join their inaugural accelerators. Juice Labs is open to only
Egyptians, while Afkar has received 70 applications from 18 countries, including Portugal, Brazil and France, and its program will
be run alternatively in three-month stints in Riyadh and Dubai.
Copyright © 2014 Dow Jones & Company, Inc. All Rights Reserved.
1211 Avenue of the Americas, New York, NY, 10032
This publication is intended to provide factual information, but its accuracy cannot be guaranteed. Dow Jones is not a registered
investment adviser, and under no circumstances shall any of the information provided be construed as a buy or sell
recommendation or investment advice of any kind.
Terms of Service: This issue delivered to: &FirstName; &LastName;, and is intended for the sole use of that subscriber. This
file:///C|/Users/whitet/Desktop/VentureWireJanuary272014.html[12/11/2014 8:23:08 PM]
Dow Jones Mail - VentureWire, Monday, January 27, 2014
subscription is subject to the usage agreement you agreed to upon subscription and may not be forwarded, copied or redistributed. It may not be reproduced, saved, or otherwise copied into a database without the prior written consent of Dow Jones.
Contact: Customer Support | Sales | Contact Editors | Reprint Service | 1-800-DOWJONES (369-5663)
To manage email deliveries from Venturewire, visit the Preferences Center.
file:///C|/Users/whitet/Desktop/VentureWireJanuary272014.html[12/11/2014 8:23:08 PM]