VENTURE CAPITAL MARKET OVERVIEW, ISSUE 43 (JUNE, 22 – 28)

M&A deals: Lyft-Leo, Spotify-Seed Scientific. Startups succeded: financial, agrocultural, delivery, digital marketing. News about new investment possibilities – from South Korea and France.

M&A. Lyft Acqui-Hires The Team From Messaging App Leo

Lyft has acqui-hired the team behind Leo, a disappearing messaging app for one-on-one or group conversations. Co-founders Carlos Whitt, Austin Broyles and Jisi Guo already started their new jobs at Lyft.

Lyft declined to disclose the terms of the deal, but Whitt, who’s startup raised $1.5 million from investors, told: “Our investors are happy with the acquisition.”

This is the ride-hailing platform’s fourth acquisition to date after Hitch, Rover and Cherry. It’s also one Lyft hopes will improve a number of features within the Lyft app around the customer experience, particularly with helping drivers find passengers.

Mobile location technology is something with which Whitt has some experience. He and Lyft’s CTO Chris Lambert worked together on Google’s mobile maps at one point. The two developed that little blue location dot you see on Google Maps.

M&A. Spotify Buys Beats’ Analytics Provider Seed Scientific

Spotify wants to own big data about bands. It acquired analytics firm Seed Scientific to forge a new Advanced Analytics unit tasked with understanding and improving how artists, listeners, and brands interact with its streaming music service.

Seed Scientific formerly served clients including Audi, Unilever, the United Nations, and importantly, Apple’s Beats Music. But with the acquisition, Spotify confirms it will exclusively get the startup’s services, pulling the data rug out from under Apple.

Seed Scientific’s whole team of around 20 will join Spotify in its New York office. The firm specialized in devising algorithms to understand information for commercial, public, and social sector clients. It offered data discovery, collection, science, and visualization services, identifying what data is relevant to a company, capturing it, analyzing it for actionable insights, and then making those concepts comprehensible to its clients.

A statement on the startup’s website reads: “Seed Scientific’s team and technology will now become the foundation of a new Advanced Analytics unit at Spotify that combines cutting-edge math, science, design, and engineering to craft insights, models, and tools with data.”

STARTUP. Credit Karma Has Raised $175M On A Valuation Of $3.5B

The rush of funding for fintech startups continues. Credit Karma — a platform that provides credit scores to users but also serves as a portal for people to search and apply for various financial services like loans, credit cards and insurance — has raised a round of funding of $175 million on a valuation of $3.5 billion.

Moreover, from what we understand the company is on track to file for an IPO within the next 1.5 years.

The funding comes from Tiger Global Management, Valinor Management and Viking Global Investors LP, and brings the total raised by Credit Karma to $368.5 million.

The company currently has more than 40 million consumer customers. Originally built as a site for users to keep up and manage their credit scores, it now covers a range of other services, with financial tools and a portal for applying for different kinds of products, from credit cards to insurance and of course loans. Behind the scenes it uses the larger trove of data that it collects to tailor and hone its services for users — but also to provide analytics for the companies that use Credit Karma as a platform to sell services.

STARTUP. Postmates Raises $80M, Valued At Almost $500M

On-demand service Postmates just closed an $80 million Series D round. The company told that the new funding values them at close to $500 million. The round was led by Tiger Global Management, and follows a $35 million round closed in February.

Bastian Lehmann, co-founder and CEO of Postmates, announced that the company has surpassed 2.5 million deliveries across 28 different markets. Lehmann also wrote that gross profit is on track to grow more than 10x in 2015 compared to the previous year.

Originally started as a courier service for “delivery from anywhere,” the company has recently formed partnerships with popular companies, such as Apple, Starbucks and Chipotle.

STARTUP. Dollar Shave Club Raises $75M To Fend Off Gillette And Harry’s

Dollar Shave Club, the subscription service for razors (and more!) has closed a $75 million Series D round at a pre-money valuation north of $500 million.

This funding comes less then a year after a $50 million Series C, and brings total fundraising to $148 million. Participants included existing investors like Venrock, TCV and Forerunner Ventures. Dragoneer Investment Group (an investor in Airbnb, Instacart and Wealthfront) also participated as a new investor.

Dollar Shave Club launched in 2012 with a now-famous viral video featuring founder and CEO Michael Dubin. The company quickly became known for its affordable blades, which run anywhere from three to nine bucks a month for a four-pack.

Recently expanding beyond razors into product lines like hair gel and shaving balm, this new funding will let the company continue to develop new products in the subscription space.

The subscription razor space has been heating up recently, with Gillette introducing the Gillette Shave Club, presumably as an attempt to reclaim some customers lost to subscription services like Dollar Shave Club. Harry’s, another subscription service for razors, has raised almost $200 million in the past year-and-a-half alone.

However, it seems that Dollar Shave Club may have had a nice head start. The company stated that the site is responsible for 13.3 percent of all razor sales in the U.S., and now has more than 2 million subscribers.

STARTUP. UK’s Yieldify Raises $11.5M From SoftBank And Google Ventures

London has emerged as a major hub for digital advertising and marketing, and one of its faster growing startups is getting some funding to go to the next level. Yieldify, a marketing tech business that has built software to improve and track on-site and email conversions — that is, for e-commerce businesses to keep people shopping, buying and generally interested instead of going somewhere else on the web — has raised $11.5 million.

And the investors in the Series A round are nearly as strategically important as the money itself: they are SoftBank Capital — one of the world’s biggest investors in e-commerce businesses — and Google Ventures.

Yieldify, which currently works with some 800 customers, has grown its revenues 480% in the last year, which makes it one of the fastest-growing SaaS businesses in Europe at the moment.

STARTUP. CropX Rakes In $9 Million To Help Farmers Grow More

As water levels in California drop to an all-time low, agriculture analytics startup CropX has developed a solution to help farmers optimize irrigation while keeping water usage to a minimum.

CropX uses a combination of three wireless sensors and a mobile app, which founder Isaac Bentwich calls the “Internet of Soil,” to determine exactly how much water needs to be applied to each part of the field.

It’s not — in a square-mile field, soil quality can vary widely, Bentwich explains. To solve this problem, CropX does a one-time analysis of each field, using publicly available data about the soil type and topography, and divides the land into irrigation zones.

CropX ships farmers three sensors, and the mobile app shows precisely where in the field to place them. The sensors, which are battery powered and last up to four years, send soil data to the cloud, and the app calculates the amount of water necessary to produce the maximum yield in each irrigation zone.

CropX is currently being used to power irrigation in 5,000 acres across a small number of farms in Missouri, Colorado and Kansas. With $9 million in Series A funding led by Finistere Ventures, Innovation Endeavors and GreenSoil Investments, they’ll be expanding their reach across the country.

INVESTMENT. Leading Seoul Accelerator SparkLabs Presents Its Fifth Startup Batch

With its high smartphone penetration rate, extremely speedy broadband, and government support, South Korea’s startup ecosystem is one of the most notable in Asia.

SparkLabs, one of Seoul’s top accelerators is hoping its fifth batch will produce new success stories (alumni include online beauty product retailer Memebox, another one of Korea’s top-funded startups).

The twelve companies that presented during its Demo Day include two security companies that have the potential to expand globally: Lockin, which wants to make it easier for developers to integrate cloud-based security into their Android apps, and Qubit Security, which operates a hacking detection platform called Plura to sniffs out attacks as soon as they happen.

On the consumer side, streaming site DropBeat wants to become the top source for electronic dance music, while Way, a device that helps users customize skincare regimens, has raised $105,000, more than twice its target, on Indiegogo.

Other companies include: LoanVi, a peer-to-peer lending platform and SparkLabs’ first investment in Vietnam; Genoplan, which uses genetic testing to customize fitness and nutrition programs; PiQuant, a food-tech startup that checks for melamine in milk and plans to target countries like China where food safety is a major concern; wearable products maker Leemyungsu Design Lab (its first product is a backpack for cyclists); Townus, a group-buying platform for university students; social network-based job recruiting platform Wanted Lab; holographic virtual reality developer DoubleMe; and Evain, which filters out spam and phishing phone calls.

Treeplanet, which participated in SparkLabs’ fourth class but showcased its product at that event, is a crowdfunding platform for reforestation projects.

INVESTMENT. Startup Studio eFounders Grabs $6 Million

French startup studio eFounders just raised $6 million from Fotolia co-founder Oleg Tscheltzoff to build its next batch of software-as-a-service startups. So far, eFounders is behind five startups that are now independent — Mailjet, Textmaster, Mention, Front and Aircall. Pressking has been sold, and two startups are in the works — Illustrio and Tipi.

With today’s funding round, the company expects to launch 6 new startups over the next 18 months. As always, eFounders will find a founding team and match them with the right idea. It will give them advice, best practice as well as internal tools.

“We’ve been flying a bit under the radar for the past 4 years and half, building our projects,” eFounders co-founder and CEO Thibaud Elzière told me. “For the past year, we’ve been working on building our foundation — we now have a platform, a process.”

Unlike Rocket Internet, eFounders focuses on SaaS startups and wants to carry a startup for up to 18 months. After this initial launch, the startup should be able to stand on its two feet. So far, it’s been working well for some startups, and moderately well for others — there has been quite a bit of turnover among startup founders.