SparkLabs Global Technology and Internet Market Bi-Monthly Review 1109 2015

SparkLabs Global Ventures’ Technology and Internet Market Bi-Monthly Review November 9th, 2015

SparkLabs Global Ventures (http://www.sparklabsglobal.com) is a global seed-stage fund with partners in Silicon Valley, Chicago, London Tel Aviv, Singapore, and Seoul.

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Bi-monthly Highlights

Global Trends

• Global VC investments for 2015 have already passed 2014, but seed stage continues to fall While the latest numbers on global venture capital investments are mostly cheerful, they also hint at trouble on the horizon. According to the Q3 venture capital report released by CB Insights and KPMG, US$37.6 billion was raised in 1,799 deals. That’s compared to US$20.6 billion across 1,977 deals for the same period a year ago. Overall, global funding of VC-backed companies hit US$98.4 billion for the first nine months of 2015, compared to US$88.7 billion in all of 2014. But, at the current rate, the report projects that the total number of deals will fall short of last year. In other words, the biggest companies are getting even bigger deals. But if you’re looking for that initial funding, things are getting tougher. The report noted that the “number of mega-rounds” (more than US$100 million) hit 170 in 2015, including 68 in the third quarter. That is compared to just 28 in the same quarter a year ago. The result, of course, is more and more unicorns. In the last quarter, there were 23 new unicorns minted globally.

• Marketing tech funding picks up: US$3.8B in deals for Q3 (research)

Nearly US$3.8 billion in funding, acquisitions, and IPOs for over 80 marketing tech startups and over 250 VCs were tracked in Q3 of 2015 for these findings. Q3 was dynamic. We saw fewer investments overall but higher dollar amounts across the board than in Q2. We noticed more diverse funding partners and more investors overall than previous quarters. Fresh funding is keeping pace with acquisitions. There were 31 early A or seed stage investments and 24 acquisitions overall. This means for every consolidation, at least one brand new company popped up in its place. This is up from Q2 and could point to increased investor optimism moving forward. The most wholesale change from previous quarters was the rise of marketing operations platforms. The focus of marketing ops is to automate tasks and inform decision-making in marketing. Investors were choosier about where to put dollars in this category this quarter, though they spent nearly double the amount as in Q2. Marketing experiences tech, such as advertising technology, was down compared to Q2, though still a hot category overall.

• How subscription video on-demand services like Netflix are contributing to the demise of pay-TV The way viewers are watching TV is rapidly evolving. Every year, more viewers are ditching their expensive pay-TV subscriptions and opting instead for subscription video on-demand (SVOD) services like Netflix, Hulu, and Amazon Video, as well as premium services from HBO and Showtime. Whereas video streaming services have found favor with younger viewers in particular, an increasing portion of older subscribers also are leaving behind their pay-TV packages. Still, younger viewers watch four times as much video content online than older viewers. Netflix is the largest SVOD service and will continue to dominate the industry with an impressive original content lineup and aggressive expansion plans. Amazon is trying to compete with Netflix by investing significant resources in original content. Hulu is the third-largest SVOD service, but the only one to offer ad-supported membership tiers. Hulu has been the slowest to roll out original and exclusive content, but it has inked numerous deals in the past year to boost its content library. Pay-TV companies are responding to the rise of SVOD services by offering subscribers "skinny bundles" and their own streaming services.



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Asia Pacific China • Smart Bike Startup Yunmake Gets Series A From Xiaomi Founder’s Investment Firm

Yunmake, a Hangzhou-based smart bike maker, has raised a Series A led by Shunwei Capital, the investment firm led by Xiaomi chief executive officer Lei Jun. The company did not reveal the precise amount, but an article posted to Yunmake founder and CEO Qiu Yiwu’s Weibo said that the round is worth “tens of millions of RMB” (10 million RMB is equal to about US$1.6 million). Other participants include Foxconn, Qualcomm, ZhenFund, Ricebank, and Yinxinggu Capital. Shunwei and Ricebank are both returning investors, having contributed to Yunmake’s angel round last year. Yunmake makes foldable electric bikes, like the X1, that are battery-powered and connected to an app. While a Xiaomi representative declined to comment on potential collaborations with Yunmake, Shunwei’s (and, by extension, Lei Jun’s) interest in the company is notable because Xiaomi is busy building a hardware ecosystem that extends beyond its smartphones.

• Alibaba To Buy Out Chinese Video Site Youku Tudou In US$3.5 Billion Deal Alibaba, the New York Stock Exchange-listed Chinese e-commerce giant, is getting into video in a major way, after it announced plans to buy out Youku Tudou, one of China’s top YouTube-like services, in an all cash deal. Alibaba previously spent US$1.22 billion on an 18.3 percent stake in the video firm, which claims to serve 580 million users each month. Youku’s market cap is US$3.8 billion, and Alibaba intends to pay US$26.60 per share — a decent markup on the most recent closing share price of US$20.43. Alibaba confirmed on an analyst call that, taking into account the cash on Youku’s books, its total offering is worth around US$3.5 billion. If the acquisition is a success, Alibaba intends to take Youku private, according to a filing. Youku chairman and CEO Victor Koo will remain at the helm of the company. While Koo and other founding shareholders have given their blessing to the proposed deal, it is still subject to shareholder approval.

• Uber may have a new rival in China, as Yidao Yongche to raise US$700M Beijing (Paul Carste for Reuters) — China ride-hailing app Yidao Yongche said that a unit of Beijing-based technology company LeTV has agreed to invest US$700 million in the firm in return for a 70 percent stake. LeTV, which includes Shenzhen-listed Leshi Internet Information and Technology Corp Beijing, said it would acquire the stake, becoming the controlling shareholder, without disclosing the size of its investment. The market is fiercely competitive, with billions of dollars being invested to lure in riders with steep discounts and to subsidise the money earned by drivers. Yidao Yongche is a struggling company, facing up against larger, better-funded rivals like domestic ride-hailing market leader Didi Kuaidi, which is backed by Alibaba Group and Tencent among others, and U.S. firm Uber. The deal is part of LeTV’s expansion into the vehicle market. The company, which also develops Internet television and smartphones, said it has been working on an electric-vehicle project named super electric eco-system since December.

• Google throws funding at China partner for Android Wear Google isn’t done with China yet. Despite all its services being blocked in the country, Google revealed it has invested around US$65 million into Mobvoi, a Chinese startup that makes mobile voice-search apps and smartwatch software. Google and Mobvoi already have a budding friendship after the search engine giant picked the startup in September as its Chinese partner for Android Wear, Google’s smartwatch OS. That coincided with Motorola bringing a tweaked version of Android Wear to China to launch its Moto 360 watch. Mobvoi’s series C funding was confirmed, though the deal size is an estimation based on the startup revealing it has so far raised US$75 million since it started up.

• Travel activities startup Klook bags series A funding ahead of Southeast Asia push

Travel activities startup Klook announced that it has bagged US$5 million in series A funding from investors including Matrix Partners and China Growth Capital. Klook, based in Hong Kong, focuses on selling travel experiences and packages for tourist hotspots across Asia. That means everything from tickets for attractions to bespoke offerings like a supercar driving experience on Singapore’s F1 track, or a lesson in making kimchi in Seoul. Rather than doing flights or hotels, which is already a crowded market, the team is going after a newer sector where there’s no tech giant leading the way – although lots of other startups are trying the same thing. The Klook gang is now setting up an office in Singapore to be the regional headquarters for Southeast Asia. It already has offices in Shenzhen to cover mainland China as well as in Taipei for the Taiwan market.



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• Hong Kong Investor Buys 65% Of Russia’s Yota, Maker Of Dual-Screen Android Phones, For US$100M

Yota Devices, the Russian company that sells two-screened Android smartphones, has a new owner after shareholder Telconet Capital sold its majority 64.9 percent holding to Hong Kong-listed REX Global Entertainment for US$100 million, according to a regulatory filing. Yota caught the attention with a unique dual-screen smartphone which takes aim at the increasingly homogeneous design of phones by offering an e-ink screen on its reverse. Yota has offices in Germany, Canada, Finland, Singapore, and Russia, but it has previously said that China — where it has locations in Beijing, Shanghai and Shenzhen — is its most important focus. Given its interest in China, it makes some sense that Telconet Capital is selling to an Asian investor, albeit one that doesn’t have direct smartphone experience. REX Global Entertainment’s business interests include cruise ships, casinos, property, and even gamma ray irradiation services.

Korea • K-beauty startup Althea raises seed funding from 500 Startups

In the last few years, demand for Korean entertainment and beauty products has grown so much that we keep hearing the term “Korean wave.” One startup riding that wave, Althea, is taking aim at the Southeast Asian market. The ecommerce store announced it raised an undisclosed amount of seed funding from Silicon Valley venture capital firm 500 Startups. Althea will expand beyond its home market Korea into six countries – Singapore, Malaysia, Indonesia, Thailand, Vietnam, and the Philippines, co-founder Frank Kang tells Tech in Asia. Frank is an ecommerce veteran, having served as COO of Livingsocial Malaysia.

Japan • Japan’s Beenos founder Teru Sato and partner Hiro Maeda form new US$60M fund

The founder of Beenos, Teruhide Sato, who has been active in funding startups primarily in Asia recently established a new fund called Beenext. According to Beenext’s managing partner Teruhide Sato, Beenext’s funding target startups are not limited by region, business field, or funding rounds. Approaching their first close in July, Beenext’s first fund consisted of an investment plan with about 50% aimed at India, 30% to southeast Asia, and the last 20% for Japan and America. Additionally, on September 7th, it was announced that Beenos will be investing US$5,000,000 in Beenext. Hiro Maeda, who for a long time has been active in investments with Beenos and acceleration programs with Open Network Lab, will take the position of partner at Beenext.

• Japanese personal finance app locks in funding from Salesforce, 3 megabanks Moneytree, the Japanese app that’s all about helping people manage their spending, has raised an undisclosed amount of series A funding from investors, led by one of the world’s largest tech companies, Salesforce. The venture capital arms of Japan’s three big banks – Mizuho Bank, Bank of Tokyo-Mitsubishi UFJ, and Sumitomo Mitsui Banking Corporation – also participated in the round. The iPhone app links to users’ bank accounts and credit cards, allowing them to track in real time money that’s flowing in and out. It notifies users of large transactions, low balances, soon-to-expire loyalty points and miles, and upcoming bills to help them avoid unpleasant surprises. The app was created by Australian entrepreneur Paul Chapman and his co-founders Mark Makdad and Ross Sharrott. Chapman and his team will use the funds they just raised to grow Moneytree’s user base and get more partners for the company’s newly launched product, MT LINK, which is basically its API.

• Japan’s MoneyForward gets series C funding amid fintech boom Japanese startup MoneyForward revealed that it has secured JPY 1.6 billion (US$13.3 million) in series C funding. It comes amidst a boom in financial tech – aka, fintech – startups around the world. MoneyForward offers online tools that help people and companies manage their finances and expenses. Users can link all kinds of accounts – banks, credit cards, securities, etc – and get a dashboard with analytics that show the health of their wealth. It can even crunch a bunch of data and estimate your future financial trajectory. It’s not just a website – there are apps for iOS and Android too. The investors in this newest round are SBI Holdings, Shizuoka Bank, Yamaguchi Financial Group, Toho Bank, Fenox Venture Capital, Mitsubishi UFJ Trust and Banking Corporation, and Mitsui & Co. Naoya Kanesaka, MoneyForward’s CFO, says the service now has 2.5 million users on the personal finance product, while 400,000 users are on the enterprise-oriented cloud accounting side.

India



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• Lookup, A Chat App That Connects Retailers And Customers In India, Raises US$2.5M Lookup uses chat to connect users with merchants in their local area. The India-based company has raised a US$2.5 million Series A fund from a range of top investors, including Vinod Khosla’s personal fund Khosla Impact, Twitter co-founder Biz Stone, Narayana Murthy’s Catamaran Ventures and Global Founders Capital, the investment fund from the Samwer brothers who founded Rocket Internet. Lookup was started last December and it has racked up 1.2 million registered users on iOS and Android to date. Of that number, 250,000 are active each month, using the app to connect with some 70,000 merchants that are listed across three cities: Bangalore, Delhi and Mumbai. The company’s US$2.5 million Series A — which takes it to US$3 million in total financing — will be used to grow the service’s footprint and develop its product.

• Mobile-only revolution: price comparison app raises US$1 million Voodoo, a mobile-only price comparison app, raised US$1 million in seed funding from SAIF Partners. The digital assistant app compares prices across platforms and helps users find appropriate deals, coupons, and recommendations. It integrates with most ride-sharing and shopping apps, including Flipkart, Snapdeal, Amazon, FoodPanda, Zomato Order, Ola, and Uber. The startup was founded by Mohit Mittal and Vijay Reddy, two former employees of mobile recharge site Freecharge. Although many people have criticized the site’s attempt at a mobile-only revolution, supporters have explained that restricting consumer activity to a phone will ensure better data collection as well as allow apps to focus on using a phone’s internal hardware – like its camera – in order to provide a seamless experience.

• Gaana Takes Investment From Micromax To Get Ahead In India’s Music Streaming Race

Gaana, one of a posse of music streaming services aiming to make it big in India, has enlisted the help of Micromax, the country’s largest smartphone maker, to get ahead of the competition and reach its goal of 100 million users. The deal will see Micromax, an Android smartphone maker that previously caught the attention of Alibaba’s investment team, invest an undisclosed sum in Gaana. But, more importantly, the company will bundle Gaana’s music app on its devices. Micromax sells two million phones per month, that’s exposure that could vastly increase Gaana’s reach — which currently stands at 20 million active users and 30 million downloads to date. This isn’t just a pre-loading deal. Gaana is planning customized software integrations with Micromax hardware to make it more than just a ‘bloatware’ style app that is pre-installed to the disappointment of new phone owners.

• Hyperlocal delivery startup Opinio gets US$7M cash boost

Opinio, an on-demand delivery startup for hyperlocal businesses, raised US$7 million in its latest round of funding from Accel Partners, Sands Capital, and logistics company Delhivery. The CEO of Delhivery, Sahil Barura, has also joined Opinio’s board. Founded by Mayank Kumar and Lokesh Jangid, the startup raised US$1.3 million in seed funding earlier this year from Accel Partners, Tracxn, and other angel investors. In order to compete with other delivery startups, Opinio explains that its differentiator is its focus on technology. The startup equips merchants with an app that will help them locate and hire Opinio delivery workers. It also uses GPS to provide a real-time delivery tracker. The company currently operates in Bangalore, Delhi/NCR, and Hyderabad, and plans to increase its core team by at least 200 people.

• Attune Technologies Gets US$10M Series B To Expand Its Healthcare Software Beyond India Attune Technologies, a startup that makes cloud-based software for hospitals and labs, will tackle markets outside of India after scoring a US$10 million Series B round from Qualcomm Ventures and returning investor Norwest Venture Partners. This is the first investment from Qualcomm Ventures’ Strategic Venture Fund in India. Along with a US$6 million Series A that Attune Technologies raised in May from Norwest and angel funding, this brings the startup’s total venture funding so far to US$17 million. Founder Arvind Kumar says there is still plenty of room to grow in India, where Attune’s software currently handles 10 million patient records for 2,500 healthcare centers, but it also plans to launch soon in the Middle East, Southeast Asia, and Africa.

• Logistics startup Delhivery doubles down on Parcelled with US$5M series A funding Door-to-door courier service Parcelled raised a series A round of US$5 million. The round was led by Delhivery, an ecommerce logistics startup, and Tracxn Labs. The two also contributed an undisclosed amount toward Parcelled’s seed round. Parcelled conducts end-to-end delivery of package shipping and tracks the entire process from pickup to delivery. It works mostly with small ecommerce businesses, ecommerce returns, and gifting. This marks its third strategic investment after putting money into hyperlocal delivery service Opinio. Their first was in 2013 in offline



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cash collection network Gharpay. Delhivery raised a gigantic series D round of US$85 million from the likes of Tiger Global, Nexus Venture Partners, and Times Internet Ltd in May.

Indonesia • With fresh funding, Indonesian men’s fashion estore Maskoolin lives to fight another day

Men’s fashion ecommerce site Maskoolin announced a pre-series A funding round of an undisclosed amount. It’s based out of Jakarta and focuses on the Indonesian market. The new capital comes from Indra Djokosoetono, an owner and family member of Indonesia’s largest taxi company, Blue Bird Group. It’s one of the nation’s highest-profile family-owned conglomerates, which recently went public on the Indonesia Stock Exchange. Maskoolin was built in 2012 by entrepreneurs Ilham Syafrialdi, Errol Widhavian, Kristian Harahap, and Kemal Wiryawan. In February 2013, the startup grabbed seed funding from local venture capital firm Grupara.

• New marketplace gets seed funding ahead of secondhand smartphone boom

Indonesia-based used phone ecommerce site Laku6 announced a seed funding round of an undisclosed amount. It launched just two months ago. The investment was led by Singapore-based Golden Gate Ventures (GGV) and followed by several local angel investors including Andy Zain, managing director of local VC firm Mountain Kejora. “Laku6 is positioned for growth in emerging markets, where increasingly more people are looking to upgrade from their first basic smartphones to something better,” says GGV founding partner Jeffrey Paine. “Buying pre-owned is an affordable solution; it is a unique and untapped opportunity.”

• Indonesia’s foodtech firm Qraved gobbles up an US$8M series B Jakarta-based foodtech startup Qraved announced that it has closed a US$8 million series B round of funding co-led by US-based Richmond Global Ventures and Gobi Partners from Shanghai. New investor GWC participated in the round, as did existing backers Convergence Ventures, 500 Startups, Toivo Annus, and M&Y Partners. Qraved offers a restaurant directory, which covers more than 25,000 venues in Jakarta and Bali. The app combines venue search and discovery features, user generated reviews, ratings, and photos, as well as discount offers at participating restaurants. The fresh capital will go toward building out Qraved’s mobile and web apps with new features, expanding the firm in Indonesia, and of course, a marketing ramp-up.

Thailand • Golf booking app sinks funding as golf tourism booms in Thailand

Golfdigg, an app that offers last-minute golf deals in Thailand, has secured THB 23.83 million (roughly US$673,700) in funding from telecoms group Intouch through venture capital arm, Invent. Intouch runs AIS, the top telco in Thailand. Golfdigg allows users to book slots at golf courses across Thailand for lower rates than walk-in prices. Co-founder and CEO Bhurich Aksorntub says the app benefits local golfers as well as the growing number of golfing holidaymakers from around the world who can now play at courses that normally exceeded their budgets. The investment, which the startup received in full, brings its valuation to US$2.8 million, which is a a hundredfold increase from before. Golfdigg will use the funds from Intouch to acquire new customers and for marketing activities.

• Playlab unlocks US$5M funding to be top mobile gaming player in Southeast Asia

Bangkok-based mobile game development studio Playlab has secured US$5 million for its series B round. The investment came from Southeast Asia-focused venture capital firm Monk’s Hill Ventures. It’s the first external investment for the game developer, which has relied on self-funding and its own revenue so far. Playlab is primarily known for Juice Cubes, a puzzle game for iOS and Android in the vein of Candy Crush. Juice Cubes had over 20 million downloads with 1.5 million to 2 million active users per day back in May 2014. The company will use the funding to expand its operations in Southeast Asia and to further grow its footprint in Southeast Asia, hoping to become the “go-to partner” in the region.

Vietnam • Vietnamese baby estore Taembe drinks seed funding from Swiss sippy cup

Vietnamese online retailer and marketplace Taembe announced it closed a seed funding round of US$228,000 led by Swiss Founders Fund. The round was joined by Binh Tran, co-founder and former CTO of Klout, and Eddie Thai, a local startup advisor who spent time working with Fortune 500 companies and an international syndicate of angel



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investors. The site launched in April 2013. This year, Taembe and e-shopping discovery app Wiindi became the first Vietnamese startups to graduate from JFDI.Asia’s accelerator program. Taembe started out selling diapers and other baby products directly to customers and recently expanded its offering to include detergents and other home consumables. The business claims to be approaching profitability with monthly revenue growth of 20 percent this year.

Malaysia • With US$2M funding, cosmetics marketplace Hermo to expand further in Southeast Asia

Cosmetics and skincare marketplace Hermo has raised US$2 million in series A funding from venture capital firm Gobi Partners. Some of the money will go toward expanding into new markets beyond its home nation Malaysia and neighboring Singapore. Hermo received the funding in full. Founded in February 2012, Hermo sells premium and affordable beauty products for women. It features international brands, mainly Asian, and partners directly with brand owners and distributors.

Singapore • With Vietnam’s biggest taxi firm as customer, fintech startup gets funding to go regional

Mobile point-of-sale (MPOS) startup SoftPay Mobile has raised US$1 million for its series A round, the company. The round was led by Singapore-based venture capital firm Life.Sreda through its InspirAsia fintech accelerator. SoftPay is part of the accelerator’s current cohort of startups. The round was also joined by an undisclosed investor. SoftPay Mobile (not to be confused with the Hong Kong-based online marketplace for digital goods, or SoftTouch’s payment solution, or the Nigerian money transfer method) is registered in Singapore but is currently operating in Vietnam. It provides a MPOS reader that allows businesses to accept and process credit and debit card payments, much like US startup Square. In Vietnam, the startup works with companies such as taxi company Mai Linh Taxi, and various smaller businesses. With this funding, the startup will staff up in order to fuel its expansion to other Southeast Asian territories.

• Online grocery startup Honestbee raises US$15M from Silicon Valley to deliver the goods Online grocery delivery service Honestbee has raised US$15 million in a series A round. Silicon Valley investment firm Formation 8 led the round. The round was joined by Silicon Valley venture fund Pejman Mar Ventures, an investor in Dropbox and Lending Club, as well as Facebook, Amazon, and Google luminaries Gideon Yu, Owen Van Natta, and Steve Chen. Honestbee provides online grocery delivery within one hour of ordering, the company claims. It uses freelance shoppers who receive the order on their phone, purchase the groceries, and deliver them to your door. The company has partnerships in Singapore with supermarket chains NTUC Fairprice and Cold Storage, pet products retailer Pet Lovers Center, and specialty retailers like Gastronomia da Paolo, Crystal Wines, and Four Seasons Organic. The company is operating in Singapore and has just announced its Hong Kong launch. Plans include expansion to another six major cities by June 2016, it says. In the last eight months, it has staffed up to 100 people and continues to look for more hires.

• Singapore’s HRBoss gets US$2M for cloud and big data business tools Workforce planning analytics software startup HRBoss has announced it raised an investment round worth US$2 million. The round was led by Pacific & Orient Berhad, a Malaysia-based investment holdings and management services company. Singapore-based HRBoss launched in 2011 and uses big data and cloud computing to power its recruiting and workforce management software tools for businesses. The company currently operates three major products: ATS (Applicant Tracking System) recruiting software HiringBoss, workforce management platform EmployeeBoss, and recruitment agency software StaffingBoss. HRBoss has attracted some big-name brands to its products, like KFC, Nissan, Fitness First, Randstad, and Changi Airport Group. Its customers also include Singaporean government agencies such as the Monetary Authority of Singapore and the Economic Development Board, as well as major universities.

United States • AngelList gets US$400M from China’s CSC Venture Capital for early-stage startup investments



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Funding platform AngelList announced a deal with China-based private equity firm CSC Venture Capital that will see it birth a new US$400 million fund for early-stage startup investments. The deal is expected to be the “largest single pool of funds devoted to early-stage startups — ever,” The Wall Street Journal reported. Beyond that, it could also be the “largest-ever single investment by a Chinese private-equity firm in a U.S. fund.” CSC has more than US$12 billion under management, and just raised US$2 billion through a listing on China’s stock market in March. Prior to this deal, AngelList had raised a total of US$205 million — or about half the amount represented by the new funds. The platform brings together angel investors who band together to back early-stage startups in syndicates, typically not much larger than US$300,000 per round. According to the report, AngelList will inject about US$20 million from the new fund in the first year, moving up to US$50 million per year thereafter.

• Google, others help messaging startup Symphony raise US$100M Messaging startup Symphony said it had raised more than US$100 million in a new round of funding from investors including Google, Switzerland’s UBS Group AG and European venture capital firm Lakestar. Symphony’s chat service allows financial firms, corporate customers and individuals to put all of their digital communications on one centralized platform. The service is backed by Goldman Sachs Group Inc and other big Wall Street banks. Symphony said it will use the new capital to address demand and to speed up expansion of its global operations.

• Dell Buys EMC For US$67B In Largest Deal In Tech History Dell and partners MSD Partners and Silver Lake agreed to buy EMC for US$67 billion or US$33.15 a share. The two combined companies will make the Dell and EMC the world’s largest privately controlled, integrated technology company, according to a statement released by EMC. What makes this deal even more interesting is that Dell, with a valuation of around US$25 billion, was by far the smaller fish at approximately half the size of EMC. The biggest part of EMC by far is VMware, which was included in the deal and will continue to be a separately publicly traded company, but EMC will go private and become part of Dell ending the company’s long history as a publicly traded company. As expected, Dell will lead the newly formed organization and long-time EMC CEO Joe Tucci will retire. Tucci has put off retirement a couple of times because of problems finding a suitable successor. Michael Dell will run the combined organization.

• Big data security startup DataVisor takes on US$14.5M DataVisor, a startup whose founders spent years working on computer security at Microsoft Research, is announcing that it has raised US$14.5 million in new funding. Based on Apache Spark, DataVisor’s technology can analyze great quantities of activity logs — billions of events per hour — to identify fake or stolen accounts and prevent fraud, abuse, and spam. The startup will provide cloud software with a “threat intelligence console” and an application programming interface (API) to provide results of tests on its customers’ data, said chief executive Yinglian Xie. DataVisor started in December 2013 and its customers include Momo and Yelp. GSR and New Enterprise Associates both led the new round, which follows a seed round of an undisclosed size.

• Optimizely raises a fresh US$58M to expand content testing platform amid rapid growth Online testing platform Optimizely said it has raised a new US$58 million funding round, which it will use to support its rapid growth in the web and mobile content optimization space. The San Francisco-based company has become perhaps the best-known A/B testing platform for marketers, app developers, and publishers. Its customers use the platform to run comparisons of various content versions they present to users. The platform then returns analytics data showing which content worked best with various demographic groups. Its biggest customers include CNN (which uses Optimizely to see which of its headlines work best), Crate and Barrel, Intuit, Microsoft Store, Priceline, and Virgin America. The new Series C funding round was led by Index Ventures, with participation from Andreessen Horowitz, Bain Capital Ventures, Battery Ventures, Benchmark, Citi Ventures, Correlation Ventures, Danhua Capital, Pharus Capital Management, Salesforce Ventures, and Tenaya Capital. The round brings the company’s funding total to US$146 million.

• Bracket Computing raises US$46.4M from Fidelity, Goldman Sachs, Qualcomm, GE Bracket Computing, a startup with software that companies can use to securely run their applications and store data on public cloud infrastructure, announced a US$46.4 million round of funding. New investors Fidelity Management and Research Co. and Goldman Sachs are participating in the round. Bracket pushes Computing Cell technology with a lightweight hypervisor, or Metavisor, that’s meant to encrypt corporate data on clouds and unify management of virtual computing resources for applications on multiple clouds. Companies can use their existing IT policies with the Computing Cell. Customers include Blackstone, DIRECTV, GE, and Wells Fargo. In addition to Fidelity and



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Goldman Sachs, several other investors participated in the round, including Allegis Capital, Andreessen Horowitz, Artis Ventures, Columbus Nova Technology Partners, GE, Norwest Venture Partners, Qualcomm, and Sutter Hill Ventures. To date, Bracket has raised US$131.4 million. Plans call for hiring of additional software engineers and for further product development.

• Lending platform Kabbage raises US$135M to expand its technology

Kabbage, a small business lending platform, has just landed US$135 million in investor funding to give global businesses more access to its cash reserves. The new round of funding is supported by major industry players including ING, Santander InnoVentures, and Reverence Capital Partners, as well as China-based Yuan Capital, Japanese Recruit Strategic Partners, and Scotiabank in Canada. The company delivers verdicts on business and consumer loans in six minutes. Unlike other newfangled lending platforms, Kabbage is not a peer-to-peer lender; it’s a balance sheet lender. With the new funding, Kabbage plans to license its technology to banks and others, giving the company further opportunity to monetize its product. It also plans to expand internationally. In total, the company has raised over US$240 million in equity funding, plus an additional US$360 million in debt financing. Existing investors BlueRun Ventures, UPS Strategic Enterprise Fund, and Thomvest Ventures also contributed to the round.

• 23andMe raises US$115M to grow its DNA health test technology globally 23andMe has raised a substantial US$115 million in a series E round led by Fidelity Management and Research Company, with participation from new investors Casdin Capital, WuXi Healthcare Ventures, and Xfund, as well as existing investors such as Google Ventures. The personal genomics and biotechnology company was founded in 2006 by Linda Avey and Anne Wojcicki, wife of Google cofounder Sergey Brin. The Mountain View, Calif.-based company had already raised US$126 million prior to this announcement, and boasts a slew of big-name investors, including Google, Google Ventures, Sergey Brin, and Yuri Milner. The new funds will be used to “expand its operations and maximize the potential of its direct-to-consumer product in the U.S. and abroad,” 23andMe said in a press release. The company added that it will introduce a new user experience that includes carrier status reports by the end of 2015, alongside other new tools. The cash influx will also help it build new laboratory space for research.

• Ingress maker Niantic spins off from Google and raises up to US$30M from Pokémon and Nintendo Niantic, the Google-spawned company that created the popular mobile game Ingress, is spinning out on its own. It has raised up to US$30 million from Nintendo, the Pokémon Company Group, and Google. Niantic makes “real-world games,” or mobile titles that mix virtual gameplay with locations in the real world. Niantic has teamed up with Nintendo and the Pokémon Company to create Pokémon Go, where you can hunt for classic animated characters in real-world locations using your phone or a new device from Nintendo dubbed the Pokémon Go Plus. The deal is one of the most significant game company investments of the year, and it gives Niantic some very powerful allies. Also, the game will be one of the first to take Nintendo’s brands, which have been locked on Nintendo hardware in the past, into the new world of smartphones. As such, it is a strategic bet by Nintendo and The Pokémon Company to broaden their reach to the new audiences on mobile, which reaches more than a billion gamers. The new funding will be used to develop Pokémon Go, which is expected to debut on iOS and Google Play in 2016.

• OpenGov raises US$25M from Andreessen and others at US$100M+ valuation, Marc joins board OpenGov, aiming to transform how governments analyze and share financial data, has closed an “oversubscribed” US$25 million round from top-tier VC firms. The raise values the company worth of US$100 million, an individual familiar with the matter said. Andreessen Horowitz, Thrive Capital, Ashton Kutcher’s Sound Ventures, and Intuit’s Scott Cook, among others, participated in the round. With the new funds, Marc Andreessen will join the company’s board. Going forward, OpenGov plans to expand its staff and user-base. Prior to this round, the company had raised more than US$19 million — US$22 million according to crowdsourced data on CrunchBase.

• Y Combinator raises US$700M to keep funding YC startups as they mature

Y Combinator has raised US$700 million for a later-stage fund that will be run by now full-time partner Ali Rowghani. This new investment vehicle will be used to fund select companies well after they’ve graduated from Y Combinator’s accelerator program. Basically, the firm has decided it’s time to pick which of its startups will really succeed. Playing up the concept that it’s a founder-friendly organization, chief executive Sam Altman explains that he hopes to do the same with maturing companies that Y Combinator has done with early-stage startups. But Altman makes this clear: The fund will be focused on those specifically in the Y Combinator portfolio, not outside.



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• Ensighten raises US$53M to help companies manage sea of marketing data, vendors The whole idea behind the Ensighten platform is to provide an “open marketing platform” where its client companies can pull in many different kinds of first- and third-party personalization and targeting data. The company has also launched a real-time mobile app optimization and deployment platform, which is designed to help developers and brands amp up in-app purchases. Ensighten has some big customers, including Microsoft, HP, Home Depot, CDW, E-Trade, Fidelity, TD Bank, Symantec, and Viacom. And it’s signed up some big customers just this year, too, including Delta, Citibank, Coca-Cola, Colgate-Palmolive, Nationwide, PayPal, and SunTrust Bank. The new funding round, a combination of debt and equity, totals US$53 million, bringing the company’s funding total up to US$108.5 million. The round was led by existing investors Insight Venture Partners, Lead Edge Capital, Mack Capital, and Volition Capital, with Silicon Valley Bank participating.

• Collective Health takes US$81M from Google Ventures, others, to go nationwide

Collective Health said it’s taking a large new funding round from Google Ventures and others to offer its health insurance management platform to employers nationwide in 2016. The startup’s managed solution gives employers a way to enroll employees in health plans (this could mean an employer self-insured plan or a commercial plan) via an easy-to-use online interface. Further, Collective Health processes the claims employees submit to the plans once they enroll. The US$81 million funding round comes from first-time investor Google Ventures and existing investors NEA and Founders Fund, along with Maverick Capital, Redpoint Ventures, and RRE Ventures. Collective Health has so far raised US$119 million in venture funding, including a US$32 million round in March 2015.

• Cloud-Based IT Monitoring Software Numerify Raise US$37.5M Analytics provider for IT businesses, Numerify, announced that it closed a US$37.5 million series C funding round. Tenaya Capital led the round, while previous investors Sequoia Capital and Lightspeed Venture Partners followed. It’s easy enough for IT costs to get out of control. That’s where Numerify, a software service that helps large companies keep track of choke points and better manage their internal IT services, comes in. Numerify’s goal is to make IT more efficient by monitoring operations like support tickets, and ensure that the costs don’t spiral out of control and departments are still able to help employees in a timely manner. The investment will be used on expansion in the North American and European markets. Silicon Valley Bank and Four Rivers Group joined the round as well, which sets the company’s total funds to at least US$60 million.

• Former Google exec raises US$28M to start shipping his smart payment terminals Last year, Osama Bedier, former Google Wallet head and chief executive of Poynt, introduced what he deemed the future of payment terminals: a developer-friendly payment point of sale that accepts everything from Apple Pay to Samsung Pay, Android Pay, and chip-based credit cards. To deliver on the promise of the new payment terminal, Poynt needs to ramp up manufacturing. The company is announcing a series B round of US$28 million to help it build and ship terminals before the year is out. Growth equity fund Oak HC/FT led the round. Stanford-StartX Fund, Matrix Partners, Webb Investment Network, and Nyca Partners also contributed.

• Uber is raising another US$1 billion and could soon be worth US$70 billion Uber is raising another US$1 billion in new venture-capital financing in a deal that would value the car-hailing startup at between US$60 billion and US$70 billion. This round would come just three months after Uber raised US$1 billion for its China branch. It would also be Uber's eighth round in five years. Uber CEO Travis Kalanick said that the company was "nowhere near" going public. Those remarks came after Bill Gurley, superstar venture investor and Uber board member, warned startups not to stay private for too long. Uber is already said to be valued at more than US$50 billion, making it higher than Facebook's valuation at its last private round in 2011.

• Flex Logix raises US$7.4M to commercialize its clever flexible chip designs

Semiconductor startup Flex Logix Technologies has raised US$7.4 million to commercialize its technology for designing flexible semiconductor chips. Mountain View, California-based Flex Logix has come up with a way to design cores for field programmable gate arrays (FPGAs) that allows a chip to change its identity, even after it has been shipped. The financing round was led by dedicated hardware fund Eclipse Ventures (formerly the Formation 8 hardware fund) and included participation from founding investors Lux Capital and the Tate Family Trust. Shirish Sathaye of Formation 8 will join the Flex Logix board of directors.

• Chicago-based startup Uptake raises US$45M, reaches ‘unicorn’ valuation



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Data analytics startup Uptake announced that it raised a US$45 million round led by GreatPoint Ventures. With this new cash, the Chicago-based company is the latest non-Silicon Valley startup to reach the infamous “unicorn” status with an estimated US$1.1 billion valuation. New Enterprise Associates and Caterpillar — previous Uptake investors — also participated in this round.

• Deep learning startup Enlitic raises US$10M from radiology company Capitol Health

Enlitic, a startup using a type of artificial intelligence called deep learning to help radiologists do a better job of understanding medical images, announced a US$10 million round of funding. The money comes from Capitol Health Limited, a publicly traded company that provides diagnostic imaging services in clinics across Australia. Deep learning involves training artificial neural networks on large quantities of data — like several medical images — and then getting them to provide inferences about new data. Other startups offer deep learning tools, including Clarifai, Ersatz Labs, Metamind, Nervana Systems, and Skymind. To date Enlitic has raised US$15 million, including the US$2 million seed round announced last year.

• Alteryx closes a US$85M investment, valuation close to a billion

Data analytics startup Alteryx announced that it closed an US$85 million investment led by Iconiq Capital and Insight Venture Partners. The company’s valuation is “approaching US$1 billion,” quoting “a person briefed on the terms.” Alteryx has raised at least US$163 million to date.

• Luxury marketplace Paddle8 raises US$34M

Marketplace for art and luxury collectibles Paddle8 raised US$34M in its series C round, the startup announced. Paddle8, which says it has a “community of over 500,000 collectors from more than 90 countries,” said that the capital came from multiple angel investors, including international art dealer David Zwirner, who also became a Paddle8 board member. The luxury marketplace has a total of US$44 million in funds.

• This high-tech circus act just scored US$6.5 million in funding from Intel and Techstars

The modern traveling technological spectacle known as Two Bit Circus has scored US$6.5 million dollars in Series A funding. The group of investors, which include Intel Capital, were lead by Techstars Ventures and Foundry Group. Two Bit Circus is part performance art, part gadget symposium, a roaming exhibit that takes advantage of modern technology, science, and interactivity and morphs it into a live storytelling and educational experience. One of the group’s major projects under the Two Bit Circus umbrella, the Steam Carnival, has a gaming and virtual reality focus. A major focus of this round of funding will be to push the Steam Carnival concept into a national brand, while also bolstering its virtual reality and game development resources.

Europe • France’s Doctolib raises US$20.5M from Accel and BlaBlaCar founder to fuel European expansion

Doctolib, the Paris-based startup that helps patients find doctors and schedule appointments, has raised US$20.5 million to help it expand into six new European countries. Since launching, Doctolib has signed up 5,000 doctors and 100 clinics and is being used by 2 million patients every month. Stanislas Niox-Chateau, the company’s cofounder and current chief executive, said Doctolib wants to consolidate is leadership in France, as well as launch across Europe, with Germany, Spain and Italy high on the list of targets. In addition to fueling new growth, the latest investment demonstrates the kind of maturity that France’s boosters hope to see more of from its growing startup economy.

• Rakuten Backs Spanish And Latin American Taxi App Cabify Cabify, which claims to be the “leading private driver and taxi ride application” in Latin America and Spain, has raised US$12 million in Series B funding. Leading the round is Asian e-commerce and Internet services behemoth Rakuten — via the company’s Rakuten FinTech Fund — with participation from previous investor Seaya Ventures, amongst others. Cabify’s Series B brings total raised by the startup to US$26.5 million. Cabify says it will use the additional capital to expand operations in the 14 cities in which it operates throughout Spain, Chile, Peru, Colombia and Mexico. It also plans to open several new cities across Latin America. Seaya Ventures’ Michael Kleindl talked up Cabify as an example of a startup competing and winning against Uber despite being far less well-funded.



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• Salesforce Ventures plans to invest US$100M in European enterprise startups Salesforce announced that its venture capital arm will pump US$100 million into European startups over the next five years, the latest vote of confidence in the continent’s surging startup economy. Salesforce Ventures will primarily be focused on enterprise applications that have elements of cloud, mobile, and social. The company had already been investing in European companies, including CartoDB, Cloud9 IDE, CloudSense, NewVoiceMedia, Qubit, Universal Avenue and YOUR SL. The announcement by Salesforce comes just a few days after Cisco Systems pledged to increase its planned investments in France from US$113 million to US$226 million.

• Highland Europe Raises New US$379M(€332M) Fund To Fill The US$11M-33M(€10-30M) Growth Gap

Highland Europe, which pitches itself as a “growth-stage” technology investor, has raised a new €332 million (~US$379m) tech fund. ‘Highland Europe Technology Growth II’ will target startups in the internet, mobile and software space and who are at the “venture and growth-stage” with investments between €10m and €30m(US$11M-33M). “The partners aim to back sector-leading companies addressing large market opportunities either on a pan-Europe basis or globally,” says the London and Geneva based VC. Meanwhile, the VC firm’s ‘Highland Europe Technology Growth I’ fund, which launched in 2012, has invested in 15 technology companies to date. These are WeTransfer, AMCS, GetYourGuide, Outfittery, SocialPoint, Finanzcheck, TalentSoft, eGym, Intersec, NewVoiceMedia, Brandwatch, Matches Fashion, Jampp, LoveCrafts, and Malwarebytes.

• Deezer, A Rival To Spotify, Plans To Raise US$343M In French IPO French music-streaming service Deezer has announced that it plans to raise €300 million (US$343 million) in a public listing that will take place in its native France at the end of this month. The company, which competes with Spotify, Apple and others, filed for an IPO on the Paris-based stock exchange Euronext last month, and now it has confirmed further details about that listing. Deezer will create 8,241,758 new shares that it expects to be offered for between €36.40 and €49.24 per share. The company said on a call with investors that it estimates its valuation after the new capital could be between €884 million and €1.088 billion (between US$1 billion to US$1.24 billion). Deezer was founded in 2007 and it claims 6.3 million customers from across 180 countries, as of June 2015. The company said that, all going well, it plans to begin trading as ‘DZR’ on the Euronext from October 30.

• Red Hat Is Buying IT Automation Startup Ansible, For US$150M Open source giant Red Hat is making another acquisition to build out its enterprise IT portfolio: the company announced that it would buy Ansible, an IT automation solutions specialist that helps companies build and manage hybrid IT deployments across the cloud and on-premise solutions. A source very close to the deal tells us that the acquisition is in the works for a price of US$150 million. Officially, Red Hat is declining to disclose the price of the deal, which should close this month. The price is a great return considering that Ansible, based out of Santa Barbara and founded in 2013, had raised a mere US$6 million, mostly from Menlo Ventures and partner Doug Carlisle with e.ventures also an investor. Meanwhile, Red Hat went public back in 1999 and this is its 14th acquisition.

• Mobile App Intelligence And Analytics Startup Adjust Closes US$17M Round Led By Highland Europe Highland Europe has led a US$17 million round in mobile app intelligence and analytics startup Adjust. This brings total funding since being founded in 2012 to US$30 million. The Berlin-headquartered company (formerly known as Adeven) — which has additional offices in San Francisco, Istanbul, Beijing, Shanghai, Tokyo and Sydney — offers an open source SDK that enables app developers to track and analyse things like user acquisition, feature releases, and user lifetime cohorts. That data can then be used to better market their wares to users. Adjust says it will use the new capital to accelerate its product expansion, and further develop its ability to filter out fraudulent traffic, and support user-friendly advertising practices and privacy protection in mobile marketing.

• Naspers Buys Majority Stake In Russian Classifieds Site Avito For US$1.2B Naspers, the South African conglomerate that invested in China’s Tencent among others, is upping its stake in Russia-based Avito, the third largest classifieds site in the world, by way of a US$1.2 billion investment. The firm announced that it will increase its existing 17.4 percent ownership to a majority 67.9 holding through the acquisition of shares from existing investors. Avito claims more than 35 million monthly visitors, with over half of its traffic coming from mobile devices. The site, which has 32 million active listings and adds 500,000 new ones each day, supercharged its presence in Russia when it merged with Slando.ru and OLX.ru — two Naspers-backed rivals — in 2013. Naspers said this news will bolster its online classifieds business, which includes OLX in South America and



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mobile-focused startup Letgo in the U.S., with major growth predicted as online buying becomes increasingly mainstream in Russia.

• EU has pumped US$1.1B into startup funds so far this year The European Commission announced that it has invested US$1.1 billion into venture capital funds across the continent, since January. The massive figure is part of an ambitious program to accelerate the continent’s high-tech economy, something the EC believes is critical to dealing with the region’s stubborn unemployment. The funding highlights a key difference between European and U.S. economic policy. Europeans are clearly more comfortable with government taking a stronger role in catalyzing markets than are their counterparts in the U.S. The EC program is meant to address the chronic complaint from entrepreneurs that funding is far more difficult to raise in Europe than elsewhere. In many cases, those companies choose to move overseas in search of that funding, a talent drain the EC wants to stop.

• SimilarWeb raises US$25 million round SimilarWeb, a service that measures data from websites and apps to give market intelligence insights to competitors, announced that it raised US$25 million led by Naspers. Lord David Alliance also participated in the round that boosted SimilarWeb’s total funding to US$65 million.

Israel • Israeli Cybersecurity Firm Cybereason Raises US$59M Series C Led By SoftBank

Cybereason, a cybersecurity firm that specializes in thwarting major corporate cyber attacks, completed a US$59 million Series C round led by SoftBank Corp. This is just the company’s latest capital grab after raising a US$25 million Series B only four months ago. The company has raised US$88.6 million to date. With a scorecard of high-profile investors including Lockheed Martin and, now SoftBank, it’s apparent that the company is garnering some major enthusiasm behind its real-time threat-detection technologies. The SoftBank investment signifies a major markets expansion for the company, which grew out of Tel Aviv, founded by members of an elite Israeli intelligence agency cyber security unit, and is now headquartered in Boston. Cybereason CEO Lior Div detailed in a release that this partnership with SoftBank will allow his company to “maintain our agility and focus on innovation while leveraging the credibility, resources and experience that only industry giants bring to the table.”

• Music Download Site eMusic Gets Acquired Again, This Time By Israeli Media Startup TriPlay Yet more consolidation afoot in the world of digital music, and a new chapter for eMusic, one of the very first sites that let you download music in the form of MP3 files. The company has been acquired by TriPlay, a startup based out of Israel and NYC that operates various online media services, including MyMusicCloud. The companies say that the deal was a mix of cash and stock, with eMusic employees and services both coming over in the deal. eMusic has been around since 1998, and it was once one of the more popular digital music sites around. TriPlay, based in New York and Israel, is backed by US$16 million, including raising US$11 million from the Fortress Group earlier this year, and US$5 million led by Kazakh oligarch Kenges Rakishev, who also invested in Mobli and other startups. Terms of the deal have not been disclosed but we understand from sources that the deal is under US$26 million — less than the last publicly-disclosed price paid by Vivendi when eMusic acquired it in 2001.

• Sequoia leads US$15M investment for Israeli startup Signals Group Data analytics company Signals Group announced that it took in a US$15 million investment in a round led by Sequoia Capital. The Israeli startup also welcomed Sequoia’s partner Shmil Levy to its board.

• Security startup Cato Networks closes US$20M round Cato Networks, a Tel Aviv-based startup offering network security services, closed a US$20 million funding round, the company announced. U.S. Venture Partners‘ Steve Krausz and Aspect Ventures founder Theresia Gouw led the series A investment. Cato Networks was founded this year by Shlomo Kramer, and this is the first investment on record. The startup’s service is available in beta.

Documents

SparkLabs Global Technology and Internet Market Bi-Monthly Review 1109 2015