Tech Weekly Newsletter: Week of April 10, 2016

This week brought about more layoffs at companies that “over-hired,” but it does seem that we’re approaching some normalcy in the private market, which has been fairly manic in the last 6 months — swinging between total exuberance and “the sky is falling.” The other shoe will really drop and we can profess normalcy when we start to achieve some level of liquidity for tech companies and that seems to be coming as well with the likes of SecureWorks, BATS and Nutanix all filing the paperwork for an IPO, which all should happen in the coming few weeks. We’ve also seen a rebound from the 2015 IPO crop, which had been beaten down pretty badly, re-approaching the levels of their initial public offerings. How the new cohort of IPOs hold up will go a long way to getting back to some form of equilibrium, but the fact that some are stepping up is great to (finally) see. 

Have a great week all.

Last week, today

  • 3/31 – Missed this one last week, but Microsoft is actually open sourcing Xamarin and it will be included in every version of Video Studio. This will allow developers to build Android and iOS applications using .NET and C# for free (Computer Weekly)
  • 4/1 – Tech companies are choosing to kick the can down the road on going public, raising debt and delaying IPOs. Will be interesting to see who is bravest to make the move first. NYT has a story on it (NYT)
  • 4/1 – Red Swan Ventures, a seed stage venture firm in New York founded out of Andy Dunn’s (CEO of Bonobos) angel investing, has put future fundraising plans on hold (WSJ)
  • 4/4 – Blackstone is buying Indian IT outsourcer, MphasiS, from HP Enterprise for around $1.1B (Fortune)
  • 4/4 – BATS Global Markets, which tried to go public four years ago only to withdraw after technical glitches, is set to price its IPO at $17-19 a share for a valuation of around $1.7B.  It will list on its own exchange (NYT)
  • 4/4 – Salesforce is acquiring MetaMind, a general purpose machine learning platform designed to predict outcomes for language, vision and database tasks. Salesforce will use it to help “automate and personalize customer support, marketing automation and many other business processes.” The Company had raised $8M from Khosla and Marc Benioff (TechCrunch)
  • 4/4 – APTTUS is adding support for Microsoft Dynamics as it looks to expand beyond Salesforce following the acquisition of Steelbrick by CRM (TechCrunch)
  • 4/4 – Microsoft is rolling out a pilot program for Outlook Premium, which will include additional services like the ability to customize with more professional email addresses (ie. not Outlook, Hotmail etc.). It will apparently cost $3.99 per user per month (TechCrunch)
  • 4/4 – Nutanix* refiles paper work for IPO, revealing revenue for the 6m period ended Jan 31 of $190M, up from $102M a year before.  It appears that it will likely be the second tech IPO of the year behind Dell’sSecureWorks (Re/Code). Also CEO Dheeraj Pandey elected to forfeit $17.5M in RSUs last month and return them to the Company’s option pool (CNBC)
  • 4/4 – Networking company, Brocade, made a $1.5B bid for Ruckus Wireless, which represents a 40% premium over where the stock closed on Friday. Analysts believe there is the possibility another bidder like Ericsson, Nokia, CommScope or Juniper could emerge as well (Re/Code)
  • 4/4 – Daimler confirms Microsoft and Amazon are in talks to invest in the HERE mapping consortium (WSJ)
  • 4/4 – Forbes has an article on co-founder of Cloudera, Mike Olson, and the evolution of open-source and big data since Cloudera’s founding (Forbes)
  • 4/4 – WeWork is launching dorm room-style apartments in major cities called WeLive (Forbes)
  • 4/5 – In a slightly unexpected (although maybe genius?) move, Twitterhas won the rights to stream Thursday night football games, beating out Verizon, Yahoo and Amazon. Facebook reportedly dropped out of bidding last week. Apparently Twitter was not the high bidder at $10M for the entire package. Twitter shares rose slightly on the news (Re/Code)
  • 4/5 – onefinestay, a London-based short-term vacation rental company, has been acquired by AccorHotels for $169M.  This is almost $100M below the last post-money valuation according to Pitchbook, which had it pegged at $260M in June 2015 (NYT)
  • 4/5 – One of the founding partners of .406 Ventures, Larry Begley, is joining portfolio company CloudHealth as CFO (Business Wire)
  • 4/5 – WhatsApp is now fully encrypted as well, which impacts all of its 1B users. Wired has a detailed story of how it ended up here (Wired)
  • 4/5 – Cargomatic, an “Uber for truckers” that had raised an $8M Series A from Canaan Partners in January 2015, has laid off 50% of its staff (around 50-60 people) in the last few months (Business Insider
  • 4/5 – North Carolina is taking a beating over its recent transgender laws, most recently with PayPal withdrawing plans to open an operations center in Charlotte (Fortune)
  • 4/5 – Mirantis won a big contract over Red Hat to implement a OpenStack private cloud for VMware (TechCrunch)
  • 4/5 – Amazon acquired image analysis start-up, Orbeus, in fall of 2015, but it just leaked this week (Bloomberg)
  • 4/6 – Growth at Yik Yak, which raised $62M from Sequoia in November 2014 at a $400M valuation, appears to have stalled out.  The CTO Tom Chernetsky has left the Company and sources are telling TechCrunch that the business has had “zero significant growth in over a year, and (is) consistently miss(ing) its growth targets” (TechCrunch)
  • 4/5 – Ericsson acquires data center automation service, NodePrime,which had raised $7M from Menlo, NEA and Formation 8 among others (TechCrunch)
  • 4/5 – Bono’s private equity firm, Elevation Partners, is winding down, but the three investing members are planning to start a new venture calledNextEquity partners that will raise $100M (Bloomberg)
  • 4/5 – Jeff Bezos has published his letter to Amazon shareholders, where he defends its corporate culture and states that people self-select in or out of the Company (LA Times)
  • 4/6 – EMC is planning to sell its Documentum business (which it acquired for $1.7B in 2003 and is doing $600M in revenue with 30% profits) as the Dell deal moves along. A private equity firm is the likely buyer according to people close to the matter. Dell is also proceeding with the sale of Sonicwall and Quest (Bloomberg)
  • 4/6 – Nokia is planning massive layoffs (including 1,300 of 6,850 employees in Finland and 1,400 of 4,800 employees in Germany) as part of the strategy to cut €900M in operating costs (Fortune)
  • 4/7 – Amazon has named Andy Jassy the CEO of AWS and Jeff Wilkethe CEO of their consumer business (Re/Code)
  • 4/7 – After raising $15M from Turner last week, Mashable has announced that they are laying off 30 people, including its chief content and revenue officers, as the business pivots from hard news coverage to a focus on videos for the “digital culture” (Re/Code)
  • 4/7 – Yottaa, a Waltham-based cloud optimization platform that has raised $40M from firms like General Catalyst and Intel Capital, confirms that they have made layoffs (mostly in sales) after the Company “overinvested” (BostInno)
  • 4/8 – Yahoo gives another week for bidders, moving the deadline to April 18. According to Kara Swisher, Google, SoftBank and AT&T will likely not bid, while (still) Verizon will (Re/Code)
  • 4/8 – Marketo*’s stock jumped 12.8% on rumors from JMP Securities that the Company had given presentations to both Microsoft and SAP around a potential acquisition (JMP)

Earnings

  • 4/8 – SAP releases preliminary earnings (it will report full first quarter earnings on April 20th) and the Company reiterated earnings guidance for 2016.  Overall revenue was up 5%, but software licenses were down 13% as the Company continues its shift to more cloud subscription revenue. Operating profit was up 28% year-over-year (WSJ)

Financings

  • 4/4 – Comma.ai, a seven-month-old, San Francisco-based autonomous car kit startup, has raised $3.1 million led by Andreessen Horowitz
  • 4/4 – Reserve, a nearly two-year-old, New York-based restaurant reservation booking and payment app, has raised an undisclosed amount of  funding from Diageo Technology Ventures
  • 4/4 – Slack, the three-year-old, San Francisco-based cloud-based workplace collaboration software outfit, has raised $200 million in new funding at a $3.8 billion post-money valuation led by Thrive Capital
  • 4/5 – Flywheel, a 3.5-year-old, Omaha, Ne.-based WordPress hosting and management service, has raised $4 million in Series A funding led by Kansas City’s Five Elms Capital
  • 4/5 – Mintigo, a seven-year-old, San Mateo, Ca.-based predictive marketing analytics company, has raised $15 million in Series D funding led by earlier investor Sequoia Capital
  • 4/5 – Persado, a three-year-old, New York-based company whose software can write what the company calls “cognitive content,” meaning it primes readers to engage, has raised $30 million in new funding led byGoldman Sachs
  • 4/5 – Virool, a four-year-old, San Francisco-based video ad startup, has raised $12 million in Series A funding from Menlo Ventures
  • 4/6 – Anchore, a three-month-old, Santa Barbara, Ca.-based company at work on a solution for inspecting, tracking and securing software containers, has raised $2.5 million in seed funding from Menlo Venturesand e-ventures
  • 4/6 – Bright Health, a new, Minneapolis, Mn.-based tech-enabled consumer health insurance company founded by former UnitedHealth CEO Bob Sheehy, has raised $80 million in Series A funding co-led byBessemer Venture Partners and New Enterprise Associates
  • 4/6 – CrossChx, a four-year-old, Columbus, Oh.-based company whose primary product is a healthcare identity management system for patients, has raised $15 million in Series C funding from Khosla Ventures           
  • 4/6 – Finanzcheck, a 3.5-year-old, Hamburg, Germany-based consumer loans marketplace, has raised €33 million ($37.6 million) in Series C funding led by HarbourVest
  • 4/6 – Lola Travel, a 10-month-old, Boston-based travel app that matches customers with actual humans who dispense advice (it was co-founded by Paul English, who’d previously cofounded the travel-search company Kayak), has raised $19.7 million in Series A funding. Backers includingAccel Partners and General Catalyst Partners
  • 4/6 – Projector, a year-old, San Francisco-based still-in-private beta adaptive messaging and push notifications startup, has raised $4.5 million in seed funding led by Baseline Ventures
  • 4/7 – CloudOne, a 5.5-year-old, Fishers, Ind.-based company whose enterprise apps convert its customers’ IBM software into customized, on-demand SaaS services, has raised $9 million in Series E funding led byPlymouth Ventures
  • 4/7 – Clutter, a three-year-old, L.A.-based on-demand storage startup, has raised $20 million in Series B funding led by Sequoia Capital
  • 4/7 – Electric Imp, a five-year-old, Los Altos, Ca.-based IoT platform that says it securely connects devices to advanced cloud computing resources, has raised $21 million in Series C funding led by London-based Rampart Capital
  • 4/7 – Intercom, a five-year-old, San Francisco-based startup whose products cover everything from website chat to marketing to customer support, has raised $50 million in fresh funding led by Index Ventures
  • 4/7 – LiveSafe, a four-year-old Arlington, Va.-based mobile safety and security communications platform, has raised $5.25 million in Series B funding from an affiliate of Fred Smith
  • 4/7 – Luxe, a nearly three-year-old, San Francisco-based on-demand valet parking and car services company, has officially raised $50 million in Series B funding led by Hertz Global Holdings
  • 4/7 – RiskRecon, a year-old, Boston-based startup that helps companies make objective security assessments of third-party cloud vendors, has raised $3 million in seed funding led by General Catalyst Partners
  • 4/7 – Twiggle, a three-year-old, Tel Aviv, Israel-based company that collects data from the across the product web, organizes it, and make it actionable, has raised $12.5 million in Series A funding led by the Internet conglomerate Naspers
  • 4/7 – Veriflow, a three-year-old, Oakland, Ca.-based network breach and outage prevention startup, has raised $2.9 million in private and public funding from New Enterprise Associates
  • 4/8 – Globality, a year-old, Menlo Park, Ca.-based stealth-mode startup at work on a platform to facilitate cross-border trade, has raised $27.25 million in Series B funding from famous people like Al Gore.
  • 4/8 – KiteDesk, a four-year-old, Tampa, Fla.-based company that makes sales prospecting software, has raised $6 million in funding led byArmada Investment and Imlay Investments
  • 4/8 – Luka, a 2.5-year-old, San Francisco-based free iOS messaging app that features intuitive AI-powered bots that help users make dinner reservations, get news updates and more, has raised $4.42 million in Series A funding. The round was led by Sherpa Capital
  • 4/8 – RideCell, an eight-year-old, San Francisco-based fleet-automation software company that helps customers from college campuses to car companies manage their mobility services, has raised $11.7 million in Series A funding led by BMWi Ventures
  • 4/8 – x.ai, a 2.5-year-old, New York-based artificial intelligence company, has raised $23 million in new funding led by Two Sigma Ventures

Random Long Reads
Young Thug Is an ATLien (GQ) – Young Thug is the hottest up-and-coming name in the hip-hop industry today, most recently releasing the third installment of the Slime Season mixtape series to rave reviews two weeks back.  Kanye West has compared him to Bob Marley and said that he is “super inspiring” while Jack Dorsey has been equally complimentary.  And this is all before he has actually released an album. The 24 year-old, ATL-native is equal parts perplexing, wearing women’s clothes and going days without eating, and unapologetic, stating very clearly that he does not give a f*ck what anyone else thinks (and really actually meaning it). GQ has a fascinating profile on Thug as we continue through what should prove to be his year. 
 
The Voyeur’s Motel (New Yorker) – It has been quite the week for Gay Talese, one of the non-fiction literary icons of the last fifty years.  Last week, Talese gave a slightly incoherent (and certainly unsatisfying) answer to what female writers have inspired him during a Q&A session at Boston University.  This set off a week long Twitter bashing of the 84 year old Talese.  And then yesterday, Talese released a fascinating account of Gerald Foos, a motel operator that for decades watched and documented the bedroom activities of the people that stayed in his motel.  Foos cut a hole in the roof of the motel’s rooms, disguised it as a ventilator to monitor the guests and shared with Talese detailed written accounts of everything from normal couple sexual interactions to murders. It’s a fascinating read and while many things in the world may have moved past Talese, long-form journalism clearly hasn’t.  If that’s not enough to convince you to dive in, here’s the lede:
“I know a married man and father of two who bought a twenty-one-room motel near Denver many years ago in order to become its resident voyeur. With the assistance of his wife, he cut rectangular holes measuring six by fourteen inches in the ceilings of more than a dozen rooms. Then he covered the openings with louvred aluminum screens that looked like ventilation grilles but were actually observation vents that allowed him, while he knelt in the attic, to see his guests in the rooms below. He watched them for decades, while keeping an exhaustive written record of what he saw and heard. Never once, during all those years, was he caught.”
 
The inside story of how Amazon created Echo, the next billion-dollar business no one saw coming (Business Insider) – Business Insider digs deep into the story of how Amazon succeeded with its unusual product, Echo, and its voice operator, Alexa. For my part, I don’t fully understand the exact use case (and accordingly, don’t own one), but it seems to have resonated well with those that do own one. Innovating with new products is a tricky thing at any company and especially so at a mammoth one and after a series of hardware failures, Amazon seems to have nailed another success after the Kindle. How it came to be is an interesting account of innovation within Amazon.

 

*Battery portfolio company. For a list of all Battery portfolio companies, please click here.