VENTURE CAPITAL MARKET OVERVIEW, ISSUE 31 (MARCH, 30 – APRIL, 5)
Social networks came out to be the most active palyers of the venture capital market – Twitter and LinkedIn made few M&A deals. Few deals for infrastructure widening, newcomer to the Unicorn Club – so are the results of the past week.
M&A. Twitter Acquired tenXer
Social network Twitter has long been under fire for some of its internal issues when it comes to products and how engineers work to develop and improve them. Now it’s made an acquisition that could help it improve things on that front. TechCrunch has confirmed that Twitter has acquired and will close TenXer, a platform for developers and engineers to work together better. We have confirmed the acquisition directly with tenXer CEO and co-founder Jeff Ma. And from another very good source we have also confirmed that the price was for under $50 million (we are working on getting a more accurate number).
“We will be shutting down tenXer and continuing our work within Twitter,” Ma told over the phone. “We are excited to apply what we’ve learned in the last three years to a world-class engineering organization.” After that he clammed up and referred everyone to Twitter.
M&A. LinkedIn Buys Refresh.io To Add Predictive Insights To Its Products
LinkedIn, the social network for professionals with nearly 350 million users, has been making a push into the area of anticipatory computing, where it predicts what kind of information you need to know, when you need it. Today comes the latest development in that strategy: The company has acquired and will be closing down Refresh.io, a startup and iOS app of the same name that surfaces insights about people in your networks right before you meet them.
Terms of the deal are not being disclosed, but it is a talent and technology acquisition. Refresh.io had raised about $10 million from CRV, Redpoint, Foundation Capital and Haystack.
The main app will be closing down on April 15 and the company will not be taking any new sign-ups. Twelve of the current team of 15 (14 full time and one contractor) are joining LinkedIn in Mountain View to work on incorporating the tech they have developed into various LinkedIn products.
M&A. Mobile Authentication Startup Toopher Acquired By Salesforce
Cloud computing giant Salesforce has acquired Toopher, an Austin, Texas-based security software startup. The news was announced on Toopher’s site and confirmed to TechCrunch by Salesforce. Terms of the deal were undisclosed.
According to Toopher’s post, the company has stopped selling its products as its team prepares to join Salesforce.
Toopher, which raised $3 million in funding according to CrunchBase, makes two-factor authentication that checks a user’s location, among other factors, before allowing him or her to log-in or perform other security-sensitive actions on their smartphones.
The acquisition of Toopher can help Salesforce build its suite of security tools, which includes OpenID Connect and Login Flows.
M&A. Sony Is Buying OnLive’s Patents And Other Tech
A final coda to the opera that has been OnLive — the cloud gaming company that was once estimated to be worth $1.8 billion but, saddled with debt, went through a dramatic round of layoffs before a surprise sale for $4.8 million. Sony Computer Entertainment is now buying various assets of the company, including 140 U.S. and international patents for cloud gaming services. Meanwhile, Onlive itself will be closing its operations on April 30. As of today, the company is not renewing any subscriptions.
Specifically, OnLive says that the OnLive Game Service, OnLive Desktop and SL Go (Second Life) will all be available until April 30. But, “After today’s date, no further subscription renewals will be charged for any of these services. Users whose subscriptions renewed on or after March 28 will be refunded,” the company writes in a statement. “Following the termination of the company’s services and related products, OnLive will engage in an orderly wind-down of the company and cease operations.” It’s not mentioned but it sounds like CloudLift Enterprise is also included in this closure.
At one time, OnLive’s patent portfolio alone was estimated to be worth hundreds of millions of dollars, although it’s anyone’s guess whether the company was able to achieve that price because terms of the deal with Sony are not being disclosed.
STARTUP. SMM Company Raises $46M And Joined “Unicorn Club”
Sprinklr announced that it has raised $46 million in new funding, at what it says is a valuation of more than $1 billion.
The round was led by existing investors Battery Ventures, Intel Capital, and Iconiq Capital and brings the company’s total funding to $123.5 million. Sprinklr’s last funding of $40 million was announced just under a year ago.
The company is also officially launching its Experience Cloud, a platform that connects its existing social media management tools (with capabilities like publishing, advertising, and analytics) with what Mark Curtis, the company’s general manager of brand advocacy, called the “first-party experience” — namely, building communities and forums on your own website.
Experience Cloud allows to build a website with drag-and-drop social widgets easily. However, the key piece that Curtis emphasized wasn’t the website builder, but rather the way that Sprinklr can then connect customer data across “all the different touch points that make up the brand experience.”
STARTUP. Drifty Grabs $2.6 Million For Mobile App Platform Ionic
Drifty, a company that has been making it possible for web developers to build and publish native mobile applications that can then be published to the major app stores, including Apple’s iTunes, Amazon’s Appstore and Google Play, has now raised an additional $2.6 million led by Lightbank in Chicago. The new funding comes after the startup has seen significant uptake of developers turning to its platform, ranging from individuals up to Fortune 50 enterprises.
Also participating in the round were Founder Collective in Cambridge, as well as previous investors Arthur Ventures, who last year funded Drifty’s $1 million seed round.
Drifty was originally founded in 2012 by CTO Ben Sperry and CEO Max Lynch, whose backgrounds included developing MMORPG games. They realized that there was a big opportunity in cross-platform mobile development, which would allow web developers to leverage their own expertise in order to build for the world of native mobile applications, using technologies they were already familiar with like HTML, CSS and AngularJS.
Since launching its Ionic Open Source Mobile SDK a little over a year ago, developers have created 500,000 apps, some portion of which (likely in the tens of thousands) have been published to the top mobile application stores. The project also has over 15,000 stars on GitHub and has risen to become one of the top 40 most popular projects worldwide. 084The Ionic SDK is installed over 100,000 times per month, and that number is continuing to increase, the company says.
STARTUP. Sensai Raises $900K To Help Data Scientists Query Unstructured Data
Data analysis often involves looking at a large set of pretty uniform, well-structured data. But as companies continue to gather more electronic documents in all kinds of forms (and formats), those traditional techniques don’t work anymore. Companies like Palantir and IBM (with Watson) are now making it easier for data scientists and technical users to query unstructured textual information and the newest player in this field is Sensai, which is officially coming out of stealth and launching today.
The company announced that it has raised $900,000 in seed funding from Andreessen Horowitz, Formation8, Chris Kelly, ValueStream Labs and others. The company got its start at big data incubator Data Elite and plans to raise a Series A round later this year.
Sensai says it will beat its competitors on price (subscriptions start at about $5,000 per month but can be customized based on customers’ needs), but also by making it easier for data scientists to use it (even when they are not “hard core,” as the company points out). Unlike other platforms, Sensai is also focused on unstructured data and argues that most other players “are only dealing with proprietary, structured (more perfect) data.”
Without actually using the system, it’s impossible to know if these claims hold true, but Sensai has already signed up Siemens, the financial services company UBS, and asset management firm WorldQuant as early customers. Siemens is using the service for IT auditing while UBS is using it for its Evidence Lab surveys.
INVESTMENT. London’s Startups Hit A High Of $682M In VC Funding In Q1 2015
A new report says that London chalked up a record $682.5 million of investment in the first three months of this year, a rise of 66 percent on a year ago and busting through the previous record of $411.62 million, set in Q4 of last year.
At the current rate, investments in London startups are on track to break past $2 billion this year.
The figures, tracked by London & Partners, the mayor of London’s business development group, also speak to how out of balance the tech economy is in the U.K. That $682.5 million makes up 80 percent of all VC investment in the U.K. for Q1 ($856.7 million).
But they also point to the imbalance in the marketplace over a wider geography. In 2014, London startups attracted $1.35 billion in investment. In comparison, the National Venture Capital Association says that U.S.-based Internet companies took $11.9 billion of VC money in the year, while U.S.-based software companies attracted $19.8 billion in investment — both all-time highs.
In other words, if London is leading tech investment in European startups, Europe still has a very long way to go before getting anywhere close to the size of the U.S. market for tech, both in terms of businesses and those willing to back them.
Still, the market has come a long way when you consider that in 2010, London startups raised a mere $101 million.
INVESTMENT. Partech Doubles Down On Seed With New $65 Million Seed Fund
The Paris-based venture capital firm Partech Ventures is announced a new $65 million (€60 million) seed fund called Partech Entrepreneur II.
“This is the biggest dedicated seed fund in Europe focused on digital startups,” told Partech General Partner Romain Lavault. “We plan to invest in 70 startups, representing around one investment per month in the Silicon Valley, one per month in France, and one per month in other European countries”.
Partech Entrepreneur I was a $32 million seed fund with a bigger focus on French startups. 18 months and 30 investments later, Partech will only do follow-up rounds with this fund from now on.
For the next fund, the team is growing a bit. Boris Golden and Otto Birnbaum are joining as principals in Paris and Berlin, while Jai Choi will be a venture partner based in San Francisco. Partech will invest between €300,000 and €1 million at the seed stage.
Lavault told a bit about the limited partners behind this new fund. 60 successful French entrepreneurs invested a bit of their own money, such as Eric Carreel, Marc Rougier and Olivier Goy — 10 of them already invested in Partech Entrepreneur I. But this time, a few corporate LPs also invested in the fund, such as Carrefour, Edenred, Groupama, Ingenico and Renault.
The plan is to invest in 70 different startups over the next two- to two-and-a-half years and keep the rest of the fund for follow-up rounds for a couple of years after that.
INVESTMENT. JD.com Launches Crowdfunding Site For Startups
China’s largest e-commerce companies are eager to leverage their millions of users and hoards of data for new projects. For example, Alibaba’s other businesses include healthcare management, financial services, and cloud data. Now JD.com, its smaller but still formidable rival, is branching out into crowdfunding for startups.
JD.com, which filled 689 million orders last year, has launched JD Equity Crowdfunding platform to help startups secure capital. The project is an offshoot of Coufenzi, the crowdfunding site JD.com opened last July.
Like Kickstarter, Coufenzi allows users to contribute funds toward individual projects and products. So far, projects on Coufenzi have raised a total of about $45 million.
JD Equity Crowdfunding, on the other hand, is designed for entrepreneurs who need to find early-stage investors. The site isn’t the first startup crowdfunding site in China, but with JD.com’s resources, it claims to already be the largest. Its competitors include CTQuan, which has raised $4 million in venture capital backing and uses a model similar to AngelList.
INVESTMENT. Freestyle Capital Locks Down $60M For Its Third Fund
Freestyle Capital, a venture shop based in California, has locked down a $60 million third fund. The new infusion brings the firm’s total capital raised to $126 million. In addition to its new traunch, Freestyle has brought Jenny Lefcourt into its ranks as its third partner.
The two founding Freestyle partners — Josh Felser and Dave Samuel — are regular judges at TechCrunch’s Disrupt conferences, making them familiar faces.