GigaOM » VCs

Urban Airship raises $25M to push its messaging message

Kevin Fitchard — Wed, 06 Feb 2013 15:47:22 +0000

In-app push messaging specialist Urban Airship bulked up its wallet with $25 million in new funds, raised from August Capital and its previous investors Foundry Group, Intel Capital, True Ventures and Verizon (see disclosures). The new round brings Airship’s total funding to $46.6 million.

The extra cash should come in handy if Airship plans to continue its acquisition spree of late. In December the Portland, Ore.,-based startup bought up fellow True Ventures company Tello so it could expand its marketing and branding business into Apple’s Passbook digital wallet. In October, Airship acquired SimpleGeo, adding a location-aware component to its push messaging platform. Though Airship didn’t mention anything about additional acquisitions, it did say it would use the funds to expand internationally.

Airship technology delivers the in-app and background push notifications for more than 20,000 brands with an app-store presence. Airship, for instance, powers the sports score and news updates across ESPN’s family of apps.

Disclosure: Urban Airship and Tello are both backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, Giga Omni Media. Om Malik, the founder of Giga Omni Media, is also a venture partner at True.

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Millions in funding? Thanks but no thanks, says Jimdo

David Meyer — Wed, 27 Jun 2012 16:30:06 +0000

Talk about counter-intuitive. While Germany’s startup community is eagerly awaiting a big exit or IPO to validate its growing status, one local success story — website tools firm Jimdo — says it’s rebuffed an eight-figure investment from a big venture firm on principle.

It doesn’t even sound like the “top-tier VC” was explicitly pushing Jimdo to ‘sell out’, but the company saw that goal as implicit in the very idea of taking venture funding.

Here’s what founders Matthias Henze, Fridtjof Detzner and Christian Springub had to say in a blog post:

By taking a venture round, you basically commit to an exit.

There are usually only two ways this can happen: a sale (to a big corporation like Google, Facebook, or Microsoft) or an IPO. Selling (out) to a big corporation is not an option for us. We’re building this company for the long run. We want to see Jimdo and everything it stands for as a proud and independent entity, not subsumed into some corporate behemoth.

And an IPO? Well, unless you’re an extraordinarily successful company like Apple or Google, publicly-traded and sustainable just don’t fit together. Shareholders’ interests are short-term, looking at the next quarter’s profits. But we believe that decisions made with the long view in mind are better for the business and the company’s bottom line.

We think long-term and walking away from venture capital means we keep the freedom to make decisions that way.”

That’s a really strong position to take. But does it make sense?

It’s not like Hamburg-based Jimdo has never taken in outside funding. Indeed, it has had €500,000 pumped into it over the years by angels and the notorious Samwer Brothers, via their European Founders Fund vehicle (they’re still investors, too). The company has even given up a big 30 percent stake to investors United Internet before, but bought it back because it didn’t want to “have to justify decisions to a board.”

And guess what, Jimdo is now pretty successful. It employs more than 100 people in Germany, France, Italy, Russia, China, Japan, the Netherlands, Spain and Poland and the U.S. (where co-founder Springub is based). And it’s “rapidly growing”, the founders say, off the back of good old revenues.

However, it’s number three in its sector, behind Wix and Weebly — both of which have tens of millions in VC funding. While Jimdo’s founders say their anti-VC reasoning is partly derived from the fact that they’re “not driven by material success”, they also acknowledge that it means having to fight harder — and longer.

The price of saying ‘no’

“The round would have given us the chance to become No. 1 in our market in the very near future,” they wrote. “We won’t be able to outspend our competitors on the marketing side… at least not right now. However, we believe that in the long run, the company with the best product and strongest core values will come out on top.”

The post was an idealistic one that in some ways stands as an interesting companion/counterpoint to that written by Silicon Valley vet Bill Davidow this week. Davidow’s excellent post was a critique not only of the tech industry’s eagerness to exploit its increasingly consumer-centric clientele, but also of a general trend of short-termism.

Both Davidow and Jimdo are essentially standing up for the concept of a long-term, solid business, but of course, Davidow’s a venture capitalist. He blames the newfound consumer focus for giving tech firms more leeway in shafting their customers, whereas Jimdo blames VCs themselves for encouraging such short-term, value-lite thinking.

There’s probably a grain of truth in both perspectives. Where this gets really tricky, though, is for companies like Gidsy that take the VC rounds but still maintain they’re never going to sell out. Is that just wishful thinking?

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Does Germany need its own Kickstarter or AngelList?

David Meyer — Mon, 12 Mar 2012 14:30:16 +0000

The German technology startup scene is heating up nicely, but it’s not quite there yet. That’s fair enough: the real energy has only been showing itself in the last year or two.

But how do you get investment in the next generation of services pumping? There’s local support for the earlier stages of venture money, but the reality is that your Soundclouds and Gidsys are looking overseas for serious capital. So where –- if anywhere -– do German VCs fit into the picture?

That’s a conversation that flared up over the weekend when VC Paul Jozefak called for German equivalents to creative fundraising platforms like Kickstarter and AngelList. It turned out to be a controversial suggestion.

Jozefak, a veteran of Neuhaus Partners and SAP’s Corporate Ventures fund, said that a VC-backed initiative of that kind would seed more companies, get more deals flowing and grow the ecosystem as a result. Also, if German VC funds are in there early, and if they work together on it, they might become more relevant to the successes emerging from Berlin and elsewhere, he said.

“Unfortunately, I still wouldn’t say that there’s a solid base of German VCs established. Ask any entrepreneur where they send their business plan first and it’s usually a UK-based fund (Index, Accel, Balderton) or even a U.S. investor (USV, Redpoint, Kleiner, etc). The German VCs remain Plan B,” Jozefak wrote.

Jozefak’s not calling for a clone of Kickstarter or AngelList, rather asking for people to try “coming up with creative, new financing initiatives” that achieve similar results in quickly seeding more startups. He sees this as a way of taking on “hungry young players” like Rocket Internet and Team Europe, which are incubators that have gone on to start their own funds, but that also pump out “copy-cats”.

While Kickstarter and AngelList have “completely thrown the [fundraising] model on its head”, he said, the sound coming from the German VC scene is “a big, fat sucking sound of nothingness”.

“So many international players have positioned themselves in Germany that the local VCs are being pushed aside and becoming fall-back options,” Jozefak told me. “[German] VCs all go it alone and forget the network effect of creating groups. Same goes for platforms. It’s difficult to get it started on its own. Were Kickstarter not financed by USV or weren’t some of the early angels on AngelList prominent guys from the Valley, they’d be nowhere or at least not as far….let’s put it that way.”

But Jozefak is a provocateur — he previously called for the establishment of a German VC ‘Old Boy’s Network’ — and his latest call has garnered a mixed reaction.

In an email conversation, entrepreneur and angel investor Christophe Maire (an early backer of Soundcloud, which went overseas for VC funding) told me there is indeed “a gap between early stage opportunities and the availability of local venture capital with the skill/attitude/experience comparable to USV, Redpoint, etc,” but something like AngelList would make no difference.

Maire said foreign VCs were getting the good deals because locals were generally too risk-averse and “somehow conditioned not to aim big”. And even if it’s foreign investors who do well out of Berlin firms, he said, that still “helps grow the ecosystem.”

Is organic best?

Ciaran O’Leary, a prominent local player with Earlybird Venture Capital, reckons VCs shouldn’t be in the business of starting these initiatives at all.

“I think for seed and angel [funding] we need strong organic initiatives that are supported but not driven by VCs,” O’Leary told me. “I am skeptical of purely VC-driven initiatives on seed programs. For example, Kickstarter was created and is driven by passionate entrepreneurs [then] backed by VCs – I don’t think VCs throwing money at an ‘initiative’ will create anything of similar value.”

O’Leary — who has also outlined his thoughts on how German venture can play the international game — pointed out that Earlybird is itself encouraging early-stage startups with a new seed program, starting at €250,000 a shot ($330,000), and planning syndication with overseas VCs. The idea is for Earlybird to lead in the seed and A rounds, and “syndicate with the Tier A of the US and UK” for the B and C rounds.

“[Overseas VCs] like working with a strong and like-minded VC on the ground. So it can be win-win and I’d say were right now piecing together three to four investments of that type,” O’Leary said, adding that Earlybird was also building an “active angel network” that will co-invest while also working alongside existing accelerators and incubators.

The only way is out

Of course, what’s really needed to validate the Berlin startup ecosystem is — as so many people have wistfully told me — high-profile cases of German companies being snapped up by big international names.

Rapid growth and quick sell-out are not the hallmarks of companies in a country where slow-and-steady, long-term businesses are the norm. But the Berlin startups are playing in a different kind of international game, and many if not all eyes are on the exit door.

“This is the one big thing missing in Berlin, despite very encouraging early signs,” O’Leary said. “But it will be two or three years before we see several big exits turbo-charging the seed scene.”

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Facebook’s IPO filing: ideas and implications

Mon, 06 Feb 2012 19:50:52 +0000

Gentlemen, start your engines. Facebook filed for its initial public offering on Feb. 1. Expectations are that in May it wants to raise $5 billion, which would make it the biggest tech IPO since Google’s in 2004. Valuations and timing may shift, but as Om says, Facebook will be doing the mother of all IPOs, with effects on hiring and acquisitions that will ripple throughout the startup and tech communities and at Facebook itself. This report outlines the myriad issues at play in such a big move, from examining how CEO Mark Zuckerberg wants to rewire the world to understanding the changing implications for the company’s infrastructure dependency. But no matter the angle, one thing is clear: The company’s filing has the potential to change the game for the tech industry. Companies mentioned in this report include Facebook, Zynga and Google. For a full list of companies, and to read the full report, sign up for a free trial.

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Startups pass on Silicon Valley to find their fortunes in New York

Ryan Kim — Fri, 03 Feb 2012 22:33:09 +0000

Though Silicon Valley has lured away plenty of startups, (cough, Facebook), New York is becoming a magnet of its own, attracting companies that want to build their businesses amid the bright lights of the big city. In the past couple of months, New York has drawn former San Francisco startup Qwiki, PlaceIQ from Colorado and recent 500 Startups graduate Snapette, which started in Boston before spending the past half of a year in Silicon Valley.

These are just a few recent transplants, but they show how New York increasingly makes sense as a headquarters for certain startups, especially those with ties to finance, fashion, media, retail, advertising and increasingly big data and location-based services. ConsumerBell relocated to New York from the Bay Area in May, and Take The Interview, which started in Boston, is moving as well. The relocations fuel the continuing momentum behind New York, which has eclipsed Boston in the number of VC deals and is now becoming a destination for big companies like Facebook, which announced an engineering campus in New York, and eBay, which bought Hunch and plans to build out a New York office.

Close to brands and retailers

I talked with Snapette founder Sarah Paiji about why she chose New York after building a lot of connections in Silicon Valley and Boston. She said despite the presence of Facebook and Google in the Bay Area, it made more sense to be near brands and retailers, which are mostly based in New York. Snapette, which recently moved into Dogpatch Labs, is a kind of Pinterest for the real world, with users’ supplying images of products that can be found in nearby shops.

Snapette co-founder Sarah Paiji

“We are about fashion and shopping. We want to drive foot traffic into local stores. We also take a lot of meetings with brands and retailers and we have over 30 boutique partners in New York. In Palo Alto, it just doesn’t make as much sense to stay,” Paiji said.

PlaceIQ, a Boulder, Colo., location startup, also announced a move to New York in December, saying it wanted to be closer to partners and customers and the general ecosystem. PlaceIQ has built a vast database of locations down to the block level that can be used by advertisers to better target consumers without tracking them individually.

New York has changed

Duncan McCall, the CEO and co-founder of PlaceIQ, said he had no interest in ever relocating to New York. But over the past year, after making a lot of visits to see customers, partners and company investor IA Ventures, he realized the city had changed and was now a logical home for his startup. And he was tired of traveling so much and saw the value of more face-to-face meetings. He just moved into a new temporary space in the past few days and is hunting for more-permanent digs.

“I previously spent some time in New York and I thought the technology business isn’t big enough, there’s not enough talent and there wasn’t a business around data. But that’s changed dramatically in New York,” McCall said. “Over the last year, it’s grown on me. The people and the investment scene are great and with the customers and ecosystem, it became obvious that if we want to maximize our chances, we have to be in New York.”

Qwiki's new SoHo headquarters

Qwiki, which helps produce multimedia information videos, announced its move in December and relocated into a hip SoHo space. CEO Doug Imbruce said in blog post that despite being known as a Silicon Valley company, the company saw New York as the place to become a medium for people to tell stories and share opinions. Qwiki needs to be close to where the most content was produced, and that’s New York, he said.

Local strengths

Not every company will be tempted to make the move. But these recent transplants show there is plenty of incentive to do so. With so much media and advertising here, a company like Qwiki can tap a lot of media partners as it pursues more publishing tools for users. Snapette is closely aligned with the fashion industry and revolves around location, something New York is becoming good at with Foursquare, Hyperpublic and LocalResponse. New York’s big data scene has also risen to the fore, building on the experience of the finance industry, which has long been involved in data. Now with venture funds like IA Ventures, which looks primarily at big data opportunities, there is more momentum in building data startups.

Paiji and McCall said the move to New York comes with trade-offs. Paiji said it is harder to find talent, and for a startup mostly made up of women, they get less attention from men now that they are away from testosterone-heavy Silicon Valley. And McCall said he doesn’t have ready access to skiing like he did in Colorado.

Not ready to topple Silicon Valley

SA 500 job fair

New York has also lost some startups, including Think Near, which moved to Los Angeles, and BankSimple, which moved to Portland. And many companies still flock to Silicon Valley to make their big break. The Valley still has an edge in investment dollars and talent and has a culture built around entrepreneurship that has flourished for decades, thanks to companies like Apple, Google, eBay, Facebook and others.

New York has to continue to build its startup culture and fix its talent crunch problems, which could be alleviated by a new applied sciences university and programs like the HackNY, the Turing Fellowship and SA500. But with more investors, incubators and startup infrastructure and companies moving in, New York is increasingly an appealing place. Will it topple Silicon Valley anytime soon? No, but it is showing that it is becoming a competitive tech destination for startups convinced that if they can make it there . . .

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After Solyndra: analyzing the solar industry

Ucilia Wang — Fri, 03 Feb 2012 20:44:10 +0000

Solar companies worldwide will remember 2011 as a dark time in their history. The failing of Solyndra symbolizes that market volatility, and 2012 no doubt started with trepidation. But as we have mentioned before on GigaOM Pro, the industry has survived nonetheless. This report analyzes the current state and future concerns of the solar industry, with a particular focus on the photovoltaic industry and the U.S. market. From the silicon companies to inverter manufacturers to government venture money, here is what to expect as the industry marches toward its uncertain future. Additional companies mentioned in this report include First Solar, Intel, NRG Energy and SunEdison. For a full list of companies, and to read the full report, sign up for a free trial.

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Crunchies tickets go on sale today

Nicole Solis — Tue, 13 Dec 2011 18:00:38 +0000

Updated. The first round of 200 tickets to the Crunchies go on sale today at 10 a.m. The Crunchies, the annual tech innovation awards show hosted by GigaOM, TechCrunch and VentureBeat, will be held January 31, 2012, at Louise M. Davies Symphony Hall in San Francisco.

Update: And the first batch is already sold out. We’ll post an announcement when the next round goes on sale.

After you get your ticket, make sure you nominate your favorite startup, angel investor and VC. Nominations close at midnight tonight. The finalists will be revealed in early January.

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Awe.sm nets $4M for social data monitoring platform

Colleen Taylor — Thu, 01 Dec 2011 08:00:24 +0000

Awe.sm has secured $4 million in funding led by the Foundry Group, the company will announce Thursday. The new investment round, which serves as the company’s Series A, also had participation from GRP Partners, Neu Venture Capital and kbs+p Ventures.

At the moment, Awe.sm is probably best known for its URL shortening service. But the San Francisco-based startup says it’s actually rooted in a deeper software platform attached to those shortened links that provides analytics tools for websites and apps to monitor social media activity about their properties. The company says it will use the new money to hire more staff and expand its data analytics offerings. It’s a smart move for Awe.sm to focus more on that side of its business, as Twitter launched its own URL shortening service this past summer.

While social media analytics and URL shortening are both pretty crowded spaces at the moment, Awe.sm has already established itself well in the 2.5 years its been in business: Among its hundreds of customers are Groupon and Playdom, according to the company.

In a statement released Thursday, GRP Partners’ Mark Suster explained his firm’s latest investment in Awe.sm thusly: “In a world where companies are mindlessly paying money for ‘Likes’ or ‘Followers’, we welcome the new era in which people will use awe.sm data to start spending their social media budgets on real metrics like customer conversions. I believe the end of the hyped phase of social media has begun.” That seems like something we can all root for.

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At last: VCs turn focus to Android apps

Colleen Taylor — Thu, 20 Oct 2011 18:43:55 +0000

For years, owners of Android phones have generally gotten the short end of the stick when it comes to having great apps. Many of the most buzzed-about mobile apps launch on iPhone first, and come to Android much later. Instagram, for instance, still has yet to debut in the Android market. But with Android device sales now making up almost half of all smartphone shipments in the United States, tech industry leaders are finally starting to see that the Android platform should be treated as more than just an afterthought.

Exhibit A: Venture capital firm DCM announced Thursday the first class of seven startups in its Android-focused fund, or “A-Fund.” The A-Fund is aimed at funding companies who focus on developing technologies and products for the Android ecosystem. The A-Fund is “stage-agnostic,” DCM says, meaning that it will back startups at all stages of growth from inception to full-fledged company.

A wide-open market

And DCM is not the only venture fund turning its attention to Android in a serious way. Kleiner Perkins partner Bing Gordon said in an on-stage conversation at Facebook’s f8 developer conference last month that even though developing apps for Apple’s iOS devices can be a cleaner experience, there’s a big market opportunity for serious Android developers:

“The world needs crazy people who are willing to try to define a curated Android experience, because it doesn’t seem that Google is going to do it. And there’s an awful lot of users out there.”

Larger companies have started to get savvy to the need for Android apps — notably, Yahoo’s Flickr division recently launched its new Instagram-like shoot-and-share mobile app on Android, not on iPhone. My colleague Ryan Kim highlighted how some innovative apps are starting on Android first now instead of iOS. It’s been a long time coming, but it’s looking like Android users may finally start to get the kind of top-rate apps iPhone users have enjoyed for years.

Here’s a list of the A-Fund’s new portfolio companies, and short descriptions of what they do:

Appia. Creators of a white-label mobile app store platform currently processing over one million downloads per day for operators, handset manufacturers, and other partners.

Billing Revolution. A mobile payments company that enables easy, fast, and secure payment transactions through their PCI-compliant Single-Click Checkout platform.

PapayaMobile. The leading Android mobile social gaming network in China and the U.S. with over 30 million users.

Happy Elements. A social game developer with the largest footprint on Facebook’s non-English market with 2.5 million active daily users, the second and third most popular games on Mixi in Japan, as well as the most popular game on Kaixin001 in China.

Kanbox. China’s leading cloud storage and sharing service provider.

Loki Studios. A company revolutionizing mobile gaming with location and environment-aware smartphone games, starting with their flagship monster battle game, Geomon.

Kakao Corp. Developer of KakaoTalk, an intuitive, cross-platform mobile messaging application with over 25 million users worldwide.

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Seed funded startups ripe for shakeout, VCs say

Colleen Taylor — Wed, 28 Sep 2011 00:50:43 +0000

Individual seed investors have been an increasingly powerful force in Silicon Valley’s startup funding landscape. But in an onstage conversation at GigaOM’s Mobilize conference in San Francisco Tuesday, two venture capital heavyweights said that while the VC industry has been shaken up by the increase of seed backers, the current environment will likely lead to a fall.

“There will be a day of reckoning, certainly. There are way too many companies getting seed funding,” said Maha Ibrahim, a partner at Canaan Partners. That’s because many of the companies receiving seed funding now are likely to have trouble raising larger amounts of money down the line, she said, since they’ve become used to the kind of terms that only seed investors can offer.

Nevertheless, at the early stages it’s hard for traditional venture capital firms to compete with groups of individual seed investors with a “willingness to put together a relatively large syndicate [of investors who invest in startups] at very favorable terms,” Kleiner Perkins partner Matt Murphy said.

In addition, Ibrahim said the fact that so many startups are content with seed funding may indicate a larger problem: A lack of the kind of ambition needed to really make a big impact on the tech world. “I’ve been disappointed most in the lack of companies coming in raising classic series A rounds,” she said. “The lack of entrepreneurs who want to go in and go big.”

Even if there is a day of reckoning on the horizon for some startups, both Ibrahim and Murphy said they generally expect the amount of mergers and acquisitions in the tech world to heat up in the months ahead. “We’re going to see a very rich M&A environment,” Murphy said. That’s something that will be good news for seed investors and traditional VCs alike.

Watch live streaming video from mobilize2011 at livestream.com

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