VENTURE CAPITAL MARKET OVERVIEW, ISSUE 52 (AUGUST, 24 – 30)
Venture capital market is waking up after summer holidays: few M&A deals, few small rounds of investment securing, and one new really interesting social-financial initiative among business angel investors.
M&A. Zipcar Buys Fleet Management Startup Local Motion
Zipcar looks like it is boosting the enterprise side of its car sharing business after it acquired Local Motion, a five-year old fleet management startup, in an undisclosed deal.
Local Motion raised $6 million from Andreessen Horowitz in 2013, and it counts the VC firm’s former Microsoft exec Steven Sinofsky among its board members. The company’s premise was to bring many of the processes and efficiencies from the ‘shared economy’ into the enterprise space — for example, helping a company fleet to operate more like… Zipcar.
Zipcar didn’t say why it is buying the company, but it stands to reason that it will look to grow the enterprise-side of its business, and perhaps generally increase efficiencies on its platform, too. Local Motion founders John Stanfield and Clément Gires confirmed that the deal will see their team move over to Zipcar to work on fresh, undisclosed assignments.
Zipcar was of course itself acquired when rental giant Avis forked out $500 million to buy it in January 2013. Prior to its $6 million round, Local Motion had raised seed funding. It counts Lemnos Labs, Draper and Associates, Morado Venture Partners, VegasTechFund and AME Cloud Ventures among its roster of investors.
M&A. BlackRock Acquires Sequoia-Backed FutureAdvisor
BlackRock, the world’s largest asset manager, is acquiring FutureAdvisor, a five-year-old, San Francisco-based online financial advisory firm that aims to help people manage their investment accounts. According to the Financial Times, FutureAdvisor was picked up for between $150 million and $200 million.
The company had raised $21.5 million from investors. A Y Combinator alum, FutureAdvisor had first raised seed funding from high-profile angels like Keith Rabois and Jeremy Stoppelman before landing $5 million in Series A funding from Sequoia Capital in 2012. Last year, it raised $15.5 million in Series B funding led by Canvas Venture Fund. Its valuation at the time was a reported $75 million.
BlackRock says it doesn’t plan to target individual investors with the new acquisition; instead, it’s planning to use FutureAdvisor’s technology to enable banks and brokerage firms and the like to more seamlessly serve affluent investors.
FutureAdvisor was co-founded by Bo Lu and Jon Xu, both former program managers for Microsoft. The company employed roughly 55 40 people. According to a BlackRock spokeswoman, FutureAdvisor will operate as a standalone unit of BlackRock Solutions and the firm will continue to employee all of those people, including Lu and Xu, who will retain leadership of the unit.
M&A. Hortonworks Acquires Early Startup With Roots In NSA
Hortonworks, the big data company built on Hadoop, bought early-stage startup Onyara. The company, which launched at the end of last year, has its roots in the NSA.
The Onyara engineers worked at the NSA for 8 years helping to develop a technology that would later be known as Apache NiFi. The NSA released the technology to the open source community last year as part of the The NSA Technology Transfer Program.
Onyara launched at the end of last year with an undisclosed amount of seed funding.
M&A. Chic by Choice Acquires Its Berlin Competitior La Remia
Chic by Choice (CBC), a European startup which resembles RentTheRunway, has acquired its German competitor La Remia. Terms were undisclosed.
Anna Mangold and Claudia von Boeselager, the founders of La Remia, will stay on board as advisors. CBC’s aim is to disrupt inventory management and better monetize brands’ and retailers’ excess inventory.
While resembling its US counter-part in that is works in luxury rentals, CBC (which now operates in major markets in Europe) partners with merchants and brands to rent out luxury fashion. It’s backed by Faber Ventures and Portugal Ventures, with seed funding of €500,000, but is now raising a Series A round.
Founders Filipa Neto and Lara Vidreiro think there’s a “huge opportunity to offer Yield Management Solutions for end of season stock that reshapes the retail industry and boosts retailer’s revenues as a smarter alternative to discounting or outlets”.
STARTUP. Wuzzuf Secures Egypt’s Largest Funding Round, Led By European VCs
BasharSoft, the startup behind leading Egyptian recruiting platform Wuzzuf, has spent the last 5 years surviving the turmoil of Egypt’s recent history. But it’s come through that to become a rare-commodity: An Egyptian company that has raised significant European VC cash. It’s just closed a Series A of $1.7 million from Sweden-based Vostok New Ventures and UK-based Piton Capital, in addition to previous investment from 500 Startups and Endure Capital. It’s probably fair to say that raising $1.7m in Egypt is closer to raising a $7m+ round in the US, to put that in context.
This also means that this is the probably the largest fund-raising round in Egypt for a very long time (obviously, there just isn’t that much historical data). This is also Vostok and Piton’s first investment in Egypt and also the Middle East.
It’s also been a story that has run in parallel which huge changes in the country, not least the Arab Spring, and the recent turmoil. BasharSoft launched its first job site in Jan 2011 – one week before the Egyptian revolution, and then had to bootstrap for 3 years until reaching positive cash flow in 2013 and getting seed investment in 2014 from 500 Startups. The company almost shut down twice during that time.
Although it’s flagship platform is Wuzzuf, which now process, over 2 million job applications resulting in more than 40,000 people getting hired at 5,000+ companies, the company is also building recruitment platforms regionally.
STARTUP. The U.K. Online Personal Styling Service For Men Scores $8M Series A
Using a mixture of algorithms and human stylists, London-based Thread works on the premise that a lot of men hate clothes shopping, however much they like stylish attire.
The online styling service claims 200,000 customers since it was founded in 2012 and has hit a significant funding milestone with the closure of an $8 million Series A round led by Balderton Capital.
Other notable investors include are a number of backers from the world of retail, Demis Hassabis and Mustafa Suleyman, co-founders of Google-owned DeepMind, the artificial intelligence startup the search giant acquired for over £400 million last year.
Thread says that the funds will be used to grow its customer base. The startup is also announcing that Terry Betts, who was previously part of the founding team at Mr. Porter and most recently Buying Director at Selfridges for its menswear division, will join Thread as Head of Business Development. In his new role he’ll be charged with expanding Thread’s industry partnerships, which already include number of fashion retailers and well-known brands.
STARTUP. A Service That Improves Online Post-Purchase Experiences Raises $10M
Narvar, a startup that enables companies to better engage with customers after online purchases, said it has raised $10 million.
Narvar provides companies with software that improves the post-purchase experience. That can include a better interface when it comes to shipping, more detailed text updates, and then of course options to return products and buy new ones. Those updates can even also be incredibly granular, down to where storms are halting packages, CEO Amit Sharma said. The goal, he said, is to make sure customers stick around instead of having to acquire new ones.
Narvar launched in 2010 and before this had raised $2 million in seed funding. It’s now raised $12 million total.
INVESTMENT. Female Funders Challenges 1,000 Women To Become Angel Investors
Looking to build a bridge over the technology industry’s (and the technology investment industry more specifically) chasm-sized gender gap, a group of successful women entrepreneurs, investors, and corporate executives have launched Female Funders — a site dedicated to providing women with the tools they need to begin angel investing.
The site’s launch comes with a challenge (and a hashtag — #FemaleFunders1000) that the group is issuing to women across the country to encourage them to start making angel investments.
They’ve set a goal of calling 1,000 new female angels to the negotiating table to make their initial angel investments. According to a report that the group cites from Forbes, only 20% of angel investors are women — and when the list of angel investors is narrowed to only technology angels, that number drops even further. AngelList reported recently that only 9% of their registered investors are women.
Female Funders is the brainchild of Katherine Hague, who sold her first company, ShopLocket, to PCH last year at the age of 23. Now she’s the VP of Community Engagement and Hackathons for PCH.