VENTURE CAPITAL MARKET REVIEW, ISSUE 17 (DECEMBER 22-28)
Christmas week is a traditionally calm period for venture capital market. Few pieces of news came from China where winter holidays will start few weeks later
M&A. Oracle Acquired Data As A Service Broker Datalogix
Oracle bought digital-marketing Data as a Service broker Datalogix. The move not only gives Oracle another cloud tool, it’s one that’s aimed directly at marketers, an area where Oracle is fighting hard with rival Salesforce.com and others for dominance.
The announcement did not include terms.
Datalogix gives Oracle a data-driven service, designed to help companies link consumer spending with online ad campaigns, a powerful combination because it can help digital marketers understand if their online ad campaigns are actually translating into offline buying.
Oracle surprised some people in its latest earnings report when it showed significant growth in its cloud computing business, announcing “cloud software-as-a-service (SaaS), platform-as-a-service (PaaS) and infrastructure-as-a-service (IaaS) revenue was up 45% to $516 million.”
Oracle could be coming to the realization that the future of its business is in the cloud. Consider that total revenue was up just 3 percent and hardware revenue was up just one percent. Up is better than down, of course, but the biggest growth area is clearly in the cloud.
And the cloud isn’t the only trend at play here. Oracle recognizes that data-driven marketing tools are going to be part of a big potential business opportunity moving forward, and Datalogix gives them an easy in into that market simply by writing a check.
Datalogix has 650 customers including 82 of the top 100 advertisers and 7 of 8 of the top digital media publishers. This is clearly a nice haul for Oracle, especially when you consider those customers include the likes of Ford and Kraft along with Facebook and Twitter.
The company was founded in 2002 and has pulled in $86.5M in funding to-date. Its last significant round of funding was May of last year when it received $40M in Series C money from Institutional Venture Partners and Wellington Management.
Datalogix headquarters are in Westminster, Colorado.
M&A. Datanyze Acquired LeadLedger
Sales startup Datanyze is announcing its first acquisition — it’s buying a similar service, LeadLedger.
On a broad level, Datanyze and LeadLedger basically promise customers the same thing — they’re trying to help salespeople find new leads, particularly by tracking which websites are using competitors’ products, as well as overall market share.
Datanyze’s director of marketing Sam Laber argued that the acquisition moves Datanyze closer to the goal that founder Ilya Semin laid out earlier, when Datanyze raised a $2 million seed round — namely, to become “the de facto lead generation solution for every technology provider.”
Semin described the acquisition as “a strategic move” that solidifies his company’s dominance, adding, “We also wanted to prevent our competitors from entering this space of technology tracking.”
In a blog post about the deal, LeadLedger says this will allow Datanyze to expand “its overall technology coverage, and in particular, its coverage of the advertising space.”
The financial terms were not disclosed, but Semin said Datanyze will be working to bring LeadLedger customers onboard. He also said that he’d wanted to hire the LeadLedger team, but they declined: “They explained to us that they wanted to move into a totally different direction.”
STARTUP. Social Cloud Storage Platform Hive.im Raises $500,000 In Seed Funding
Hive.im, which just came out of beta, is one of the latest entrants in the space of cloud storage, but it hopes to stand out by turning cloud storage into a social experience. In other words, you can share documents, videos, photos, and other files with other Hive.im users and explore their content without having to download anything, like a combination of Flickr, YouTube, and Scribd.
The company announced that it has raised $500,000 in seed funding from Bigcolors, German IT infrastructure company Link11 GmbH, and private angel investors.
The capital will be used to build Hive.im’s team in San Francisco (it also has offices in Hong Kong and Croatia), scale up its platform, and find strategic partners for mobile app development.
Hive.im, which had its beta launch in October, uses a freemium business model and makes money by charging for features like faster video playback and uncapped download and streaming speeds. It monetizes free accounts through targeted advertising, which Hive.im co-founder Thierry Lehartel says is based on data from social media accounts users sign-in with instead of the files they upload to the web app.
Though Hive.im’s model revolves around sharing and discovering content, Lehartel says the company also takes user privacy seriously. In addition to not analyzing files stored on the platform for data to use in advertising, Hive.im also hosts files in a DDOS-protected and secured data center in Germany that is operated by investor Link11 GmbH. Lehartel says the company chose Germany “for its data privacy laws, which are among the strictest in the world.”
Lehartel told that Hive.im decided to develop a social cloud storage platform because its competitors focus on backing up data and make it relatively complicated to share files.
STARTUP. Chinese Fashion And Lifestyle Site Yetang Raises $5M Led By DCM
Yetang, a Chinese site that sells fashion and lifestyle products by smaller brands and designers around the world, has raised $5 million led by DCM. While smaller e-commerce sites face plenty of competition from formidable rivals like Alibaba’s marketplace Taobao, Yetang co-founder Natasia Guo says her startup’s goal is to figure out how to make shopping more appealing than at other online stores.
In 2014, the first full year Yetang operated, it sold 110,000 products from 800 designers in 34 countries. Guo says its revenue grows 100 percent every three or four months. Yetang is currently focused on expanding within China, but 20 percent of its products are made by overseas designers, and it would like to increase that number.
Yetang will use its new capital (it has raised just under $6 million in total so far) to improve their site’s technology and make it faster for customer’s to access goods from designers and brands in other countries. Yetang will also make it easier for shoppers to discover products they are interested in from among the 30,000 different items that are currently available on the site.
As part of its new funding round, DCM China general partner Hurst Lin, who co-founded and served as chief operating officer at Sina Corp., will join Yetang’s board. Lin, who has previously worked with Chinese e-commerce companies like VipShop, 58.com, and Tuniu (all of which have gone public), can help Yetang figure out how to scale up, says Guo.
STARTUP. Ginger.io Adds $20 Million In Funding
Behavioral health analytics startup Ginger.io has added $20 million in Series B funding. This brings the total amount raised up to $28.2 million.
Ginger.io added Kaiser Permanente Ventures partner Dave Schulte to its board. This usually implies the new investor also led the round. Romulus Capital, Khosla Ventures and True Ventures participated in an earlier round of financing.
It’s also worth noting that Kaiser is a partner already, but having a more strategic relationship could help Ginger.io become more widely used in hospitals.
The startup also partners with several medical institutions, including UCSF, Massachusetts General Hospital, Brigham and Women’s Hospital, and McLean Hospital, Duke University, UC Davis and University of Nebraska Medical Center.
Ginger.io launched a grant-funded program to help low-income people suffering from depression in Utah earlier this year.
STARTUP. Biz2Credit Gets $250 Million Commitment
Lending startups Biz2Credit received a $250 million commitment from investment firm Direct Lending Investments.
Unlike OnDeck, which lends directly to small businesses, Biz2Credit acts as a service provider, vetting the viability of potential borrowers and then connecting them with lenders, like Direct Lending Investments, who provide the capital for the loans.
Once the loans are made, Biz2Credit handles all of the follow-up.
Founded by brothers Rohit and Ramit Arora, who immigrated to New York from India, Biz2Credit proves that there are still opportunities for first-generation entrepreneurs.
The brothers launched their business because of the things they saw first-hand among entrepreneurs trying to get started in the U.S. — men and women with little or no credit history or access to traditional sources of capital. Loans range between $25,000 and $500,000.
Despite their reticence, these borrowers represent a solid investment, Ramit says. Roughly 70 percent of the businesses receiving money on the platform have been in business for over three years and have more than $1 million in revenue. Borrowers range from warehouse operators to small retailers like restaurants and service businesses like hotels and motels.
The company expects to have roughly $80 million in revenue in 2015 and is looking to have an initial public offering by 2016.
Biz2Credit has 150 employees across offices in Delhi, New York, San Francisco and St. Louis and is backed by Nexus Venture Partners, a Menlo Park, Calif., and Mumbai-based investment firm.
INVESTMENT. Xiaomi Confirms It Raised $1.1B At $45B Valuation
Xiaomi, the fast-growing Chinese hardware company best known for its low-cost smartphones, confirmed that has raised $1.1 billion in new funding at a valuation of $45 billion. Xiaomi co-founder and president Bin Lin said the round was raised from investors including All-Stars Investment, DST, GIC, Hopu Fund, and Yunfeng Capital.
Its present valuation of $45 billion is a whopping increase over its previous valuation of $10 billion in August 2013, which Xiaomi director Hans Tung confirmed after its last funding announcement.
The company will likely use the capital to increase sales of its smartphones in its key growth markets of India, Southeast Asia, Brazil, and Mexico. In 2013, Xiaomi said it sold about 19 million phones, a number it hopes will more than double to 40 million units by the end of this year. In October, the company became the world’s third-largest smartphone vendor by shipment volume, according to both Strategy Analytics and IDC.
“This is an affirmation of Xiaomi’s stellar results in the four years, and heralds in a new phase for the company,” said Lin, adding that Xiaomi will unveil a new flagship device next month.