VENTURE CAPITAL MARKET OVERVIEW, ISSUE 26 (FEBRUARY, 23 – MARCH, 1)

Accents of venture entrepreneurship are moving towards Asian region: new US-backed venture fund started its work in South Korea, Indian startup market shows small growth. In USA corporations continue acquiring SMB searching for technologies and talents.

M&A. Twilio Acquires Two-Factor Authentication Service Authy

Twilio announced that it has acquired Authy, a Y Combinator-backed startup that offers two-factor authentication services to end users, developers and enterprises. The two companies declined to disclose the financial details of the transaction.

Authy says that about 6,000 sites currently use its service to protect their users. These include Coinbase, MercadoLibre and CloudFlare. The service only recently raised a major funding round and brought on Marc Boroditsky, an experienced entrepreneur and the former vice president of Identity and Access at Oracle, as the company’s president and COO.

Twilio CEO Jeff Lawson tells that the entire Authy team will join his company effective immediately.

For the time being, very little will change for current Authy customers. Twilio’s users, however, will soon be able to profit from the integration between the two services. A number of Twilio customers, after all, have already built their own two-factor authentication services that use Twilio’s SMS and voice services.

Authy’s investors, who put about $3.8 million into the company, include the likes of Salesforce.com, Box Founder Aaron Levie, Sam Yagan, CrunchFund, Startcaps Ventures, Idealab, Winklevoss Capital and AngelList.

M&A. Google Acquires Facebook Marketing Startup Toro

Toro, a startup that helps developers promote their apps on Facebook, announced that it’s been acquired by Google.

The company was originally known as Red Hot Labs, and it’s led by Amitt Mahajan and Joel Poloney. They previously co-founded MyMiniLife, which played a key role in the creation of FarmVille (and was acquired by Zynga).

The company’s aim was to make launching and optimizing a Facebook ad campaign as easy as possible for mobile app developers by automatically creating and testing “hundreds of variants” for each campaign.

In its announcement, Toro writes that joining Google will give team members access to more resources and distribution, allowing them to “continue our mission of making the lives of app developers easier.”

The announcement does not disclose the financial terms of the deal. Toro had raised $1.5 million in funding from investors, including Andreessen Horowitz, Greylock Partners, SV Angel, General Catalyst, Keith Rabois, Chris Dixon, Bill Tai and Guitar Hero co-creators Charles Huang and Kai Huang.

A Google spokesperson confirmed the news and said Toro will be joining the mobile ads team.

M&A. Visa Announces Acquisition Of TrialPay

Visa announced that it’s planning to acquire Mountain View-based TrialPay, an e-commerce payment platform which sits in between payments and advertising, providing consumers with an alternative way to pay for items by agreeing to take advantage of another merchant’s offer. For example, in mobile applications, TrialPay allows gamers to unlock premium content by agreeing to sign up for free trials of other services, or download other applications.

Deal terms are not being disclosed, but Visa says the acquisition is expected to close in fiscal Q3 2015.

To date, TrialPay had raised nearly $56 million in outside investment, including a $40 million Series C in 2012 from Index Ventures, Battery Ventures, DFJ Growth, Transmedia Capital, Greylock Partners, DFJ and others.

According to the data published on its website, TrialPay reaches 500 million users, and has a network of 20,000 merchants in 180 countries worldwide, with 3,000 offers available. Some of its better known clients include Disney, Facebook, GAP, NFL, Hulu and EA.

STARTUP. Hiring SaaS Platform Workable Raises Another $5M

Workable has secured $5 million in additional funding from its existing investors, including Greylock Israel (which has since become 83North) and Greece-based seed investors Openfund. Workable enables smaller companies to post to multiple jobs boards, review candidates and schedule interviews.

Originally from Greece but now based in Boston, Workable claims to be attracting 300 new companies every month. Customers include other startups such as Conversocial, TransferWise and Vend. CEO Nikos Moraitakis says the company gives smaller firms the chance to compete for talent against larger ones.

Last coverage for the company was in 2014 when they took on $1.5 million in funding.

STARTUP. Webdata Solutions Raises $4.5M

Leipzig, Germany-based Webdata Solutions is another startup playing in the retail intelligence space. The company, founded in 2012 as a spin-off from a Leipzig University research project, provides a big data-based service, called Blackbee, that crawls the web in real-time to enable retailers and manufacturers to keep a better tab on competitors and take action accordingly.

To continue to develop its product offering and for further international expansion, the German startup has closed a €4 million funding round (~$4.5m) led by Paris-based VC Seventure Partners. Others participating in the round include Senovo, and b-to-v Partners, along with previous investor TGFS.

Webdata Solutions’ Blackbee service is currently available in Germany, Austria, Switzerland, Italy and Turkey. UK is up next, with other European markets and the U.S. planned in the future.

INVESTMENT. Kaspersky Labs Launches Online Bootcamp

More signs that security is rising up the investment agenda: another security-focused accelerator program has launched, hoping to put a clutch of security startups through their paces — this one with backing from veteran security firm Kaspersky Labs, via its educational arm Kaspersky Academy.

The Security Startup Challenge (SSC), as it’s being called (it’s part accelerator, part startup competition), also has Mangrove Capital Partners and Russian VC firm, the ABRT Fund, putting money behind it.

VC firms are clearly eyeing up a fattening security pie. Kaspersky points to CB Insights data which tracked a 36 per cent increase in related financing last year, to a full year spend of $2.39BN, specifically covering Internet monitoring and security, mobile security and management, and data and network security. The analyst firm notes a further $141 million has been invested in those areas already this year.

The incentive here is for Kaspersky to get proximity to new business ideas, and the participating VC firms to improve their security-related deal flow — given they can always step in and invest in any of the early stage businesses that catch their eye.

INVESTMENT. 500 Startups Launches A $15M Korea-Focused Fund Called 500 Kimchi

With its extremely high smartphone penetration rate, speedy broadband connections, and advanced economy, South Korea is one of the richest breeding grounds for tech innovation in Asia. 500 Startups, which has already made several investments in Korean companies, is digging deeper into the country with the launch of 500 Kimchi, a $15 million fund that will focus on mobile companies.

Korean startups also have the benefit of strong financial support from the government. The Korean government has said it plans to put $3.7 billion into fledging tech companies through grants and other programs over the next three years, which makes it the country that offers the most per-capita backing to startups in the world.

500 Kimchi will be managed by investing partner Tim Chae, who says the fund’s goal is to not only provide promising startups with seed funding, but also bring them to the attention of other Silicon Valley investors.

Chae points out that even though South Korea is a relatively small country with a population of just 50 million, its startup industry has already spawned several unicorns, including online retailer Coupang and messaging app Kakao. Both managed to achieve billion-dollar valuations even though they operate almost solely in Korea.

STARTUP. India’s HomeLane Raises $4.5M Series A Led By Sequoia Capital

After several years of stagnant growth, India’s housing market is set for a recovery that may create new opportunities for startups. One of those companies is HomeLane, which just raised a $4.5 million Series A led by Sequoia Capital with participation from Aarin Capital.

HomeLane helps property owners furnish and install fixtures in their new apartments and houses. The company, which launched six months ago in Bengaluru, will use the new capital to expand to ten new cities, improve its technology, and market its services.

Founders Rama Harinath and Srikanth Iyer say that their startup differentiates by offering a one-stop shop (it sells everything from fitted kitchens and wardrobes to entertainment units and shoe racks) and providing guaranteed on-time delivery and after-sale services to help homeowners finish projects.

The site allows property owners to upload floor plans, which are reviewed by interior designers who provide product suggestions, price quotes, and 3D pictures of how furnishings and fixtures will look after they are installed.

Founders claim that HomeLane is currently growing 100 percent month-on-month and is on track to achieve a $2 million monthly run rate by the middle of this year.