Tech Weekly Newsletter: Week of April 4, 2016

Quick thoughts

One thing that has stood out to me over the last few weeks is the rise of Snapchat as more of a mainstream application for people of all ages. It’s weird that DJ Khaled may have been a leading force in getting here, but it’s only becoming more and more meaningful. The Company launched a number of new platform features this week that continue to build on what they’ve been doing for the last 18 months.

It feels like the Company is right now “crossing the chasm” into the mainstream. What it looked like when I first signed up however many years ago is almost completely irrelevant to what Snapchat is today. We’re still in the early days of this, but over the course of the next few months I think we’re going to see more use cases for people in the tech and venture ecosystem as a kind of next-generation Twitter. Mark Suster led this charge two months or so ago and, while it certainly feels a bit awkward to people that have been using it with just friends to date, it’s definitely where it is going. A long way coming for what used to be a sexting app. 

Ben Thompson with Stratechery has more thoughts on it here.

Last week, today 

  • 3/24 – No surprise to anyone that has eyes and follows the start-up ecosystem, but the Hedge Funds and Mutual Funds that were active participants over the last two years are no longer actively investing in private companies (Bloomberg) – Tweet
  • 3/28 – Pandora, which has been working with Morgan Stanley to explore a sale, is bringing back founder Tim Westergren as CEO (Bloomberg) –Tweet
  • 3/28 – Splunk* has hired Susan St. Ledger, who has been serving as CRO of the Marketing Cloud at Salesforce, as its new Chief Revenue Officer (Seeking Alpha)
  • 3/28 – Dell to sell Perot Systems to NTT Data of Japan for $3.1B. Dell bought the Company in 2009 for $3.9B (NYT)
  • 3/28 – The NYT has a detailed review of the Oculus Rift platform, which is long on potential, but still a ways out according to the review (NYT)
  • 3/28 – Mattermark has the data unpacking the rounds of recent tech layoffs (which shows it may actually be getting better as the markets stabilize a bit) (Mattermark) – Tweet
  • 3/28 – As the encryption debate continues to roll on domestically with FBI vs. Apple, a new debate is emerging in Europe following the Brussels attack (NYT)
  • 3/28 – I find their paywall unlikely to be sustainable, but tough to knock the reporting the Information does. They have unpacked the code inFacebook Messenger to reveal hints at what might be in store for the platform. What they uncovered was stuff that hinted at encrypted chat and in-store purchases (The Information – paywall)
  • 3/28 – Mike Smerklo (ex-CEO of ServiceSource) and Tom Ball (former GP at Austin Ventures) are launching an early stage venture firm calledNext Coast Ventures. It will be a $50M fund, focused mostly on start-ups in the Austin ecosystem (Fortune)
  • 3/28 – Oracle is seeking $9.3B in damages from Google over its use of Java on Android. $475M from “actual damages” and $8.8B from “profits apportioned to infringed Java copyrights” (PC World). Google “strongly disagrees” (Business Insider)
  • 3/28 – I don’t believe Chamath Palihapitiya’s statement at all that there were maggots in the early Facebook lunches. But like many of the things he says, it does make for a good headline.  He says that and other things here (Vanity Fair) – Tweet
  • 3/28 – So the FBI ended up being able to hack the Apple device used by the San Bernardino terrorist after all, which shelves this specific case, but obviously not the broader issue (Business Insider)
  • 3/29 – CEO of Uber, Travis Kalanick, indicates that he is “going to make sure (an IPO for Uber) happens as late as possible” (CNBC) – Tweet
  • 3/29 – Sundar Pinchai, CEO of Google, was paid $100.5M for his first year leading the Company.  He received a salary of $625K and $99.8M in restricted stock (Bloomberg)
  • 3/29 – SoundCloud has launched its premium service, which is called SoundCloud Go, and will cost $12.99 a month through the Apple store and $9.99 through their own application (The Verge)
  • 3/29 – SecureWorks, a security company acquired by Dell for $612M in 2011 and plans to IPO this year, updated its numbers for its fiscal year ended January 29.  Revenue rose 30% to $340M y/y while losses rose 88% to $72.4M (Re/Code)
  • 3/29 – Spotify has raised $1B in a convertible note from investors, including TPG, Dragoneer and clients of Goldman Sachs, with fairly onerous terms (from the WSJ): 
    • If Spotify goes public in the next year, TPG and Dragoneer will convert to a 20% discount to the IPO price. Each year following, the discount increases 2.5% every 6 months.
    • Spotify also agreed to pay annual interest on the debt that starts at 5% and increases by 1% every 6 months until it hits 10%
    • TPG and Dragonner are able to cash out their position as soon as 90 days after the IPO vs. the traditional 180 day lock-up
  • 3/29 – Nest is having a Zenefits week.  Dropcam founder, Greg Duffy, is just going in on the Company, now saying that it was a mistake to sell to the Company and that Fadell was “blatantly scapegoating” his team. This comes after Nest CEO Tony Fadell said “a lot of (Dropcam) employees were not as good as we hoped… unfortunately it wasn’t a very experienced team” (Business Insider).  It’s also way off of its revenue plans according to Re/Code with around $340M in revenue last year vs. plans of $500 (Re/Code) – Tweet
  • 3/30 – Pinterest has promoted Tim Kendall, who joined the Company in 2012 as head of product and took over monetization last year, to its newly created President position to help focus on international revenue as well (Fortune)
  • 3/30 – IBM is buying Salesforce consulting company Blue Wolf for a little over $200M (Re/Code)
  • 3/30 – Found this response to the early excerpts from Dan Lyons’ book on HubSpot that captures a lot of my sentiment. In the part I read, Lyons sounds out-of-touch and opportunistic in his pursuit of this book. Disappointing because he is clearly funny and a good writer, but the parts I’ve seen are very sensational and seem below what I’d expect (Fortune) – Tweet
  • 3/30 – AT&T is now looking to sell phones with the Cyanogen operating system, which utilizes some of open source Android, but is not affiliated with Google. A decently big deal (The Information – paywall)
  • 3/31 – Theranos stays in the news for all the wrong reasons. The federal government did a detailed report on the Company’s deficiencies and it is many and likely fatal (WSJ)
  • 3/31 – Uber is facing a price-fixing lawsuit (Fortune)
  • 3/31 – Developers are beginning to publicly complain about the lack of an app store / healthy ecosystem around Workday (The Information – paywall)
  • 3/31 – It’s been in the last few weeks that I’ve realized that we need to start viewing Snapchat as an important channel for business purposes. Snapchat is quickly making in-roads to be the WeChat of the US as well. Fortune has a rundown on the recent moves and the Company’s goals (Fortune)
  • 3/31 – John Doerr is moving into the role of Chairman of Kleiner Perkins, meaning he will not be a GP on any of the firms upcoming funds.  He indicates that he will take on a role of more of a player-coach with the young talent at Kleiner (Fortune)
  • 4/1 – Peter Thiel’s Mithril Capital is raising a $600M-$1B growth fund. This will be the second Thiel fund to recently raise money in the last bit after Founder’s Fund raised $1.3B a few weeks back (TechCrunch)
  • 4/2 – The co-founders of EdgeSpring (who have been very important to Salesforce’s Wave Analytics development) are leaving Salesforce (The Information – paywall).  No information on what their next stop is.
  • 4/3 – IBM is hiring former AOL President and more recently CEO of Web Advertising firm Razorfish, Bob Lord, as its Chief Digital Officer (AdExchanger)

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Earnings

  • 4/1 – BlackBerry continues its decline to non-existence.  The Company is attempting to leverage Google Android operating system, but sold only 600K devices in the most recent quarter. The stock declined 8.8%  after the announcement (NYT)

Financings

  • 3/29 – Betterment, a 7.5-year-old, New York-based startup that automates financial planning, has raised $100 million in Series E funding led by Sweden’s Kinnevik
  • 3/29 – Havenly, a two-year-old, Denver-based online interior design platform, has raised $5.8 million in additional Series A funding, bring the total round to $13.3 million. The round was led by Binary Capital
  • 3/29 – Homie, a two-year-old, Salt Lake City, Ut.-based online platform that helps users buy and sell their homes, has raised $3.76 million, shows a new SEC filing. Peak Ventures was involved
  • 3/29 – Hopper, a nine-year-old, Cambridge, Ma.-based company whose app tells travelers the best time to fly in order to find the best deals, has raised $16 million in growth funding led by BDC Capital IT Venture Fund.
  • 3/29 – Slice Labs, a six-month-old, New York-based startup that will offer insurance to on-demand workers and providers, has raised $3.9 million in seed funding from Horizon Ventures and XL Innovate
  • 3/30 – Asana, an eight-year-old, New York-based collaboration software startup cofounded by Facebook cofounder Dustin Moskovitz, has raised $50 million in Series C funding led by Y Combinator President Sam Altman
  • 3/30 – Branch, a year-old, San Francisco, and Nairobi, Kenya-based mobile-first digital bank for developing markets, has raised $9.2 million in Series A funding from Andreessen Horowitz, as well as seed investors Khosla Impact and 8VC
  • 3/30 – CockroachDB, a 1.5-year-old, New York-based open-database company that aims to keep the applications of its enterprise customers up and running, even when their data centers and cloud infrastructure suddenly go offline, has raised $20 million in Series A1 funding. The round was led by Index Ventures
  • 3/30 – Invoca, a nearly eight-year-old, Santa Barbara, Ca.-based call intelligence platform, has raised $30 million in Series D funding led byMorgan Stanley Alternative Investment Partners
  • 3/30 – MapD, a 2.5-year-old, San Francisco-based big data analytics platform, has raised $10 million in Series A funding led by Vanedge Capital
  • 3/30 – Planday, a 2.5-year-old, Copenhagen-based workforce management software company, has raised $14 million in Series B funding led by Idinvest
  • 3/31 – Airware, a five-year-old, San Francisco-based company that used to sell drone operating systems but is now selling drone hardware, the software to control them, and cloud services for related data, has raised $30 million in Series C funding led by Next World Capital
  • 3/31 – ICEBRG, a 1.5-year-old, Seattle-based stealth-mode enterprise network security startup, has raised $10 million in Series A funding led byPelion Venture Partners
  • 3/31 – Mashable, an 11-year-old, New York-based digital media publisher, has raised $15 million in new funding led by Turner
  • 3/31 – Scentbird, a two-year-old, New York-based startup that lets users try luxury perfumes for a month before they buy them, has raised $2.8 million in funding from Eclipse Ventures, Vaizra Investments, Ludlow Ventures, and SGH Capital
  • 4/1 – Abl Schools, an eight-month-old, San Francisco-based startup that’s developing cloud-based scheduling and resource allocation software for schools, has raised $4.5 million in funding led by the education-focused fund Owl Ventures
  • 4/1 – Blispay, a two-year-old, Baltimore, Md.-based startup that’s giving small and mid-size merchants a way to offer their customers financing plans, has raised $12.75 million in seed funding led by FirstMark Capital
  • 4/1 – Swanest, a 1.5-year-old, London-based online platform that’s helping self-directed investors to invest in the stock market online, has raised $10 million in seed funding from Andreessen Horowitz
  • 4/1 – TransLoc, a two-year-old, Durham, N.C.-based transportation app developer whose products include a live regional transit map and a bus tracking mobile app, has raised $8 million in funding co-led by SJF Ventures and Fontinalis Partners
  • 4/1 – Managed by Q, a service that handle all the extra responsibilities that come along with running an office, announced a $25 million Series B round from GV and Kapor Ventures
  • 4/1 – Slack, an enterprise collaboration platform, has raised $200B at $3.8B post in a round led by Thrive Capital, with participation from GGV, Comcast Ventures, and existing investors Accel, Index and Social Capital

Random, long reads
The Creative Apocalypse That Wasn’t (NYT) – An incredible look into what has changed (and what hasn’t) for the creative class since Napster was first created and Metallica sat before Congress.  People are paying less for direct music purchasing, but more for live music. Barnes and Noble died and the Kindle has taken off, but boutique bookstores are growing at a fast clip.  Superhero movies are dominating the box office and fewer movies are getting made by major studios, but independent studios are regularly producing Oscar quality content.  What does all of this mean for the creative class of people that make their money from music, television, movies and books?  A data driven view into how digital production and distribution has impacted the artists of this generation –Tweet
 
How Clinton’s Email Scandal Took Root (Washington Post) – A story that has been politicized in every which way – depending on what side of the aisle you sit it might be either fundamentally illegal and borderline treasonous or not a big deal, but either way understanding how we got here is interesting. The Washington Post unpacks a story that won’t be completely written for another few months.
 
Searching for Sundar Pichai (Buzzfeed) – Buzzfeed reporter Mat Honan spent several months across multiple countries with Google’s new CEO, Sundar Pichai, trying to understand what makes the man tick. The profile is certainly in-depth, but not super illuminating on who exactly Pichai is.  Or maybe, as the author concludes, that’s the answer itself – Pichai is an other-worldly intelligent mind that is not particularly interesting himself. Maybe that makes him interesting given where he’s risen to? Regardless, understanding him is important to understanding Google, which in turn is important to understanding the future of tech, so it’s certainly is worth a read.
 
What Happened When Venture Capitalists Took Over the Golden State Warriors (NYT) – I’m including this because it’s been a topic of discussion over the course of the last few days and it’s directly relevant to my world (and not because it’s a particularly interesting read).  There are a number of exaggerations from (former Kleiner Perkins venture capitalist and now Warriors owner) Joe Lacob throughout the piece – including Lacob saying that he “started 70 companies” (started and invested in are not the same) and taking credit for a lot of Warriors success.  Worth skimming through but certainly not doing any favors to perception of the venture ecosystem.

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

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