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Date: Wednesday, 30 Jul 2014 18:32

Seed funding

San Francisco-based gaming studio JuiceBox Games has raised a $2.5 million seed funding round led by Initial Capital. General Catalyst, Index Ventures and Maveron also participated. JuiceBox produces free-to-play mobile games and will use the funds to expand into international markets.

ThredUP, which allows users to buy and sell used clothing, has raised $23 million in a Series D funding round. Highland Capital, Redpoint Ventures, Trinity Ventures and individual investors participated. The company, which claims to offer customers up to 90% discounts on clothing, has raised $46 million in funding to date.

Series C

Epic Sciences, a biotech company that develops diagnostics to personalize and advance treatment of cancer, has raised a $30 million Series C round of funding. Investors included RusnanoMedInvest (RMI), Arcus Ventures, Domain Associates, Roche Venture Fund, and Pfizer Venture Investments. “Since our investment in the Series B, Epic has consistently expanded its commercial partnerships to develop new companion diagnostics, demonstrated the clinical utility of Epic’s technology across a broad range of cancers, extended the capabilities of the core technology platform and attracted top talent to thoughtfully advance the company,” said Kim Kamdar, Ph.D., partner at Domain Associates.

 

Funding

 

Stealthy e-commerce startup Jet has secured $55m in a round of funding led by New Enterprise Associates. Accel Partners, Bain Capital Ventures and MentorTec Ventures all participated. Little is known of Jet, although Crunchbase reports the company is based in Hoboken, New Jersey, has a team of 30 and is expected to launch next year.

 

Energy storage company Green Charge Networks has raised $56 million in a funding round led by K Road DG. Green Charge Networks will use the funds to finance installations in commercial accounts and schools. “K Road DG believes that Green Charge’s technology solutions respond directly to a global demand for intelligent energy storage,” William Kriegel, CEO of K Road DG, said in a statement.

Author: "Red Herring Editorial Team" Tags: "Global, Internet, Mobile, Startups, Top ..."
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Date: Wednesday, 30 Jul 2014 17:54

Twitter’s stock soared after the company posted better than expected earnings and user growth in its quarterly report. Shares in the social media company jumped as much as 35% in after-hours trading on Tuesday, following the most impressive quarterly earnings report since Twitter went public.

The San Francisco-based company now boasts 271 million monthly active users, a 16 million increase over the past three months. That 6.3% growth beat analyst estimates, with predictions polled by Bloomberg expecting an increase to just 267 million. Twitter’s monthly unique users grew 5.88% and 3.87% in the previous two quarters.

Part of the reason was undoubtedly the FIFA World Cup, which drew huge numbers of people to the service. Twitter CEO Dick Costolo said on an earnings conference call: “During the World Cup, we delivered the kind of events experience that I’ve wanted to see from us for some time.” Twitter revealed that during the tournament, more than 672 million tweets were sent by users, more than any other event in its history. In an interview with CNBC, Costolo also claimed product changes helped boost numbers.

Twitter also beat expectations on revenue and earnings per share. Revenue reached $312 million, comfortably beating analyst estimates of $283.07 million. And the company posted EPS of $0.02 versus the -$0.01 predicted by Wall Street. However, not disregarding stock based compensation and acquisition costs, Twitter made a net loss of $145 million, or $0.24 a share.

Although investors reacted extremely well to the earnings report, there are still some causes for concern. The spike in user numbers could be attributed almost entirely to the World Cup, which ran through June and July. It may well prove difficult for Twitter to maintain that growth rate without a major event such as the World Cup on the horizon. Also, the company is still not making money and its user numbers are dwarfed by that of its rival for advertising, Facebook, which boasts 1.32 billion monthly active users.

One of Twitter’s main focuses will be to try and engage more with the huge audience the social media platform attracts, but doesn’t necessarily draw in as users. These users are viewing Twitter and using it as a resource, but do not actually Tweet, log in or engage with the platform, and the company believes this larger audience is two or three times larger than its current user base. Costolo sees these ‘off network’ people as a huge opportunity going forward.

Mobile advertising revenue, which made up 81% of total sales, continues to increase, which provides further encouragement to investors. If Twitter can apply that successful to the wider off network audience, then perhaps the company will soon arrive in profit.

Author: "Red Herring Editorial Team" Tags: "Features, Global, Internet, Mobile, Soci..."
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Date: Tuesday, 29 Jul 2014 19:04

Series A

Kurbo Health, a mobile program to help people lose weight, has raised $5.8 million in Series A funding from Signia Venture Partners, Data Collective, Bessemer Venture Partners and Promus Ventures. The company’s platform offers services through its iOS app to help children and their families lose weight. The company plans to launch an Android version of the app in September.

Spire, a microsatellite company, has raised a Series A round worth $25 million and led by RRE Ventures. Moose Capital, Qihoo and Mitsui & Co. Global Investment also participated. The company, which was founded in 2012, will use the funds to continue building its fleet of low cost, small satellites which are used to collect data.

Series B

Red Herring Top 100 North America winner Bright Computing, a provider of cluster management software, has raised a $14.5 million Series B round co-led by DFJ and DFJ Espirit, with participation from Prime Ventures and ING Corporate Investments. Bright Computing was founded in 2009 and has partnered with Dell, Cisco, Cray, HP and other companies to bring its Bright Cluster Manager to their clients. The company will use the funds to continue investing in its technology, and expects to expand by adding partners around the world.

New York-based online jewelry retailer BaubleBar has raised $10 million in funding, in a Series B round led by Burch Creative Capital. Aspect Ventures, Triplepoint Ventures, Comcast Ventures, Accel Partners and Greycroft Partners also participated. The company will use the funds to support the growth of the business, and building on the company’s delivery and technology infrastructures. BaubleBar has previously raised $5.6 million in funding over two rounds.

Funding

Flipkart, the largest e-commerce website in India, has raised a gigantic $1 billion round of funding, led by Tiger Global and Naspers. Accel Partners, Morgan Stanley Investment Management, Sofina and Singapore wealth fund GIC also participated in the funding. Flipkart was founded in 2007 and has raised a total of $1.8 billion to date. The website attracts over 4 million daily visits and 22 million registered users, according to Crunchbase.

Israeli cyber security company, and Red Herring Top 100 Europe award winner, ThetaRay, has closed a $10 million investment round. The company, which offers software to detect anomalies in data, plans to use the funds to open a new office in the U.S., according to the Wall Street Journal. Existing investors General Electric Company, Jerusalem Venture Partners and Poalim Capital Markets Ltd. all participated.

Author: "Red Herring Editorial Team" Tags: "Features, Global, Internet, Mobile, Staf..."
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Date: Friday, 25 Jul 2014 22:24

IPO

Rumors that the Gilt Groupe is preparing for a fall IPO were fueled this week by news that the company underwent a significant reorganization, which saw CMO Lizzie Francis and VP Jyothi Rao leave and several other employees lose their jobs. The New York-based designer e-commerce platform with over 6 million users most recently raised funds from the private markets in 2011, when a $138 million Series E led by Draper Fisher Jurveston was followed by an investment of an undisclosed amount by GSV Capital (a securitized VC fund) a few months later, bringing total funding to $236 million. The company retained Goldman Sachs in February to lead the offering.

The German e-commerce investor and incubator Rocket Internet has embarked on a roadshow to raise money for a possible IPO via the Frankfurt Stock Exchange. Founded by three brothers, Oliver, Marc, and Alexander Samwer, Rocket Internet has nurtured companies that have been acquired by eBay, Groupon, and the News Corporation, the profits from which it has parlayed into substantial stakes of Facebook, LinkedIn, Zynga, and at one point over $1 billion of Groupon. The brothers have derisively been described as overseers of a “Clone Factory,” but with the firm hoping to raise as much as $4.71 billion, it appears that the characterization has done little to dampen expectations of continued financial success.

M&A

LinkedIn announced on Tuesday that it has agreed to acquire Bizo, a B2B advertising platform, for a reported $175 million. After being spun off by ZoomInfo in 2008, Bizo raised over $20 million from investors Bessemer Venture Partners, Venrock, and Crosslink Capital, and has worked closely with LinkedIn over the last few years as a member of its API Partner Program. “LinkedIn’s mission is to connect the world’s professionals to make them more productive and successful, while Bizo’s is to help B2B marketers get to the right people,” wrote Bizo CEO Russell Glass on the company’s website. “The combination of LinkedIn and Bizo greatly increases our ability to be the most effective platform for B2B marketers to reach their audiences, nurture prospects, and acquire customers.” LinkedIn may seek to use the acquisition to enhance the Sponsored Updates feature it introduced last July.

Reports on Thursday suggested that Google will pay $1 billion to acquire the videogame streaming forum Twitch. Twitch boasts over 50 million active monthly users who broadcast, watch, and chat about video games, watching a staggering 13 billion minutes of video per month. YouTube, meanwhile, which was acquired by Google in 2006 for $1.65 billion, streams 6 billion hours of video per month. Google is expected to use Twitch’s live streaming capabilities to augment the services it currently provides through YouTube.

The Twitch deal, however, was not the only splash Google made in the M&A landscape this week. The search giant also came to terms with drawElements, a Helsinki-based, Android-specific 3D graphics company for an undisclosed, eight-figure sum. The drawElements workforce will be incorporated into Google’s team of Android developers. Google is also expected to finalize the sale of its Motorola Mobility smartphone business to Lenovo, for $2.91 billion, by the end of the month.

Author: "Red Herring Editorial Team" Tags: "Internet, Startups, Top Stories"
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Date: Friday, 25 Jul 2014 18:23

Amazon announced a worse than expected loss for the second quarter of 2014 despite an increase in sales, as investments in a range of new products and services took their toll on profits.

The world’s largest online retailer posted a loss of $126 million, or $0.27 per share, which was wider than the $0.15 per share loss analysts had expected, according to data compiled by Bloomberg.

Revenues increased by a healthy 23% during the three-month period ending June 30, reaching a total of $19.34 billion, but this was matched by an identical increase in operating expenses, which now stand at $19.36 billion compared to $15.62 billion from the previous year.

During a conference call with analysts, Amazon CFO Tom Szkutak pointed to increased investment in its cloud computing service, known as AWS Amazon, as well as a recent price drop for AWS customers as reasons for higher costs in the quarter.

Other factors included a slowdown in international sales, which Szkutak blamed on Japan’s 3% tax hike on consumer goods which came into effect in April this year, as well as $100 million investment in original media content for Amazon Prime customers.

Traders punished the stock after the earnings announcement and Amazon shares fell by 11% in after hours trading on Thursday. Since the start of 2014 Amazon’s stock price has fallen by 10% as investors become increasingly frustrated by the firm’s perceived disregard for the bottom line.

The latest results were not a huge surprise for long-time Amazon watchers, few other companies are able to have multi-billion dollar revenues but still not make any profit. The reason is CEO Jeff Bezo’s strategy of consistently plowing revenue back into hardware and service development in order to build customer loyalty.

Over the last twelve months it has launched a set-top box for home video streaming, a wand-like device for grocery shopping from home, its own smartphone dubbed Amazon Fire, as well as music streaming service, a document-sharing service for businesses and a new e-book subscription platform.

While all these products have been great for consumers, Amazon’s expansion has been expensive for shareholders and the company began posting quarterly losses since 2012 when it posted a $274 million loss in the year’s third quarter.

By comparison the Chinese e-retailing giant Alibaba Group Holding Ltd, which is planning an upcoming initial public offering, revelled in a recent prospectus that its profit was $2.8 billion for the nine months ending December 31 with revenue of $6.5 billion. Amazon on the other hand earned $274 million for all of 2013 on sales of $74.5 billion.

The benefits of Amazon’s growth in new businesses will make it back to investors according to Szkutak. “We have a tremendous amount of opportunity…we’ll obviously be looking to get great returns on invested capital,” he said.

Whether investors are willing to wait until these investments pay off is another matter, particularly if Bezo keeps picking capital-intensive and highly competitive sectors such as smartphones to move into.

Author: "Red Herring Editorial Team" Tags: "Internet, Top Stories"
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Date: Friday, 25 Jul 2014 18:22

Seed funding

Fixed, a mobile app which allows users to protest parking tickets, has raised $1.2 million in seed funding from Y Combinator, Merus Capital and other angel investors. Users can upload a photo of a parking ticket and evidence of why it was not properly issued, and Fixed will take the case to the local government. The company charges 25% of the fine if the user is successful in the appeal. Fixed will use the funds to hire additional staff and increase marketing.

Series B

IT services provider iTOK, has raised $18 million in Series B funding, in a round led by ABS Capital Partners with participation from Signal Peak Ventures. Founded in 2004, iTOK provides IT customer support for small businesses and will use the new funds to expand its marketing efforts and bank new products. “Consumers and small businesses must navigate complex digital environments as our dependency on technology grows. They require sophisticated solutions and proactive service in order to have reliability and security,” said co-founder and CEO Seth Bailey.

Series D

NextNav, a location services provider, has raised a Series D funding round worth $70 million. New Enterprise Associates and Oak Investment Partners led the round, with participation from Columbia Capital, Telecom Ventures and Goldman Sachs. NextNav has raised nearly $100 since being founded in 2007 and will use the funds to improve its positioning network. The company specializes in providing locations services in urban environments and indoors.

Funding

Decision Lens, which provides resource optimization solutions, has completed a $6.5 million round of funding which included a $4.4 million Series A round led by Vision Thinkers and $2.1 million in debt. The company will use the funds to invest in product development, marketing and sales. “During 2014, Decision Lens has experienced its greatest revenue growth ever, and that can be attributed to our technology platform finally hitting its stride among large enterprises. They are witnessing first-hand how invaluable the solution can be for the future of their business,” said John Kealey, CEO of Decision Lens.

Author: "Red Herring Editorial Team" Tags: "Internet, Startups, Top Stories"
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Date: Thursday, 24 Jul 2014 18:55

Seed

VenueBook, a New York-based ticketing and venue platform, has raised $2 million in seed funding from investors including I2BF Global Ventures, Cayuga Ventures, MI Ventures and Kindler Capital. The company’s offering is aimed at venues and events planners and helps them manage bookings. VenueBook will use the funds to expand sales and marketing and further develop the mobile app.

Series A

Group project management platform Trello has raised a $10.3 million Series A round led by Index Ventures and Spark Capital. Trello, launched in 2011, provides a visual board to users to help them manage projects. The company will use the funds to spin out of its parent company Fog Creek Software.

Series B

Intigua, a Massachusetts-based IT management company, has raised a $10 million Series B round led by Intel Capital. Bassemer Venture Partners and Cedar Fund also participated in the round. Intigua was founded in 2010 and has raised $21 million to date. The company will use the latest funds to expand sales and marketing.

Funding

Red Herring North America Top 100 winner Hortonworks, which provides an open source software to develop, distribute and support Apache Hadoop platforms, has raised $50 million in funding from HP. As part of the two company’s new partnership, HP and Hortonworks are to integrate their engineering strategies, and increase collaboration. HP customers will now be able to deploy the Hortonworks Data Platform as the Hadoop component of HP HAVEn. HP will also work to certify HP Vertica with Apache Hadoop YARN, the architectural center of Hadoop 2.0. “The ability to understand data and put it to effective use is now more crucial than ever,” said Colin Mahony, general manager, HP Vertica. “Hortonworks has demonstrated outstanding dedication and expertise in addressing the business and technology needs of its customers within this new era of information and data, and we look forward to partnering with the Hortonworks team to deliver innovative big data solutions to our customers.”

Cloud and mobile commerce company Deem has completed a $50 million round of funding, led by Hony Capital. The company will use the funds to accelerate its network growth, expand globally and make acquisitions. Deem connects more than 17,000 buying organizations with hundreds of thousands of selling merchants and distribution partners, according to a company press release.

Author: "Red Herring Editorial Team" Tags: "Startups, Top Stories"
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Date: Thursday, 24 Jul 2014 16:39

Facebook stock reached an all time high on Wednesday, topping $75 a share after the company’s Q2 earnings report beat analyst expectations.

The social media giant reported $2.9 billion in revenue, surpassing projections of $2.8 billion by analysts. The company also posted $791 million in net income – an increase of 61% compared to the same period last year. Facebook has now beaten analyst estimates on earnings for the past nine quarters. Earnings per share came in at 42 cents, $.10 over analyst projections.

The Menlo Park, Calif.-based company impressed investors with its mobile revenue in particular. The $2.7 billion in earnings from mobile advertising represented 62% of the company’s overall ad revenue, up from 59% the previous quarter and 41% this time last year.

Facebook also reported encouraging numbers on mobile usage. The company now has 1.07 million active monthly mobile users, up from 1.01 million the quarter before. Together, these revelations should alleviate the concerns about a declining user base, especially among the sought after 13-17 year old and 18-25 year old demographics, which surfaced towards the end of last year.

Overall user numbers also impressed, with the service adding 40 million new monthly active users, increasing the size of the social network to 1.32 billion – nearly one fifth of the world’s population.

Facebook’s future success depends on its advertising, and the social media platform is looking to gain an edge over its main competitor Google. This has led the company to explore new ways of delivering corporate sponsored content. In a conference call, COO Sheryl Sandberg addressed this month’s acquisition of LiveRail, the world’s third-biggest video ad platform Facebook purchased for as much as $500 million. “We have a lot to do here,” she said, “but with LiveRail we’re investing in tools that can improve the relevance of video ads across the web.”

Meanwhile, the company believes that the more high-profile acquisitions like WhatsApp (which expects to be finalized by the end of the year), Oculus, and Instagram, alongside a number of internally developed tools, make the company well-positioned to continue its growth into the future.

“While we are excited about the long-term potential of our ads initiatives like Instagram, autoplay video and the Audience Network, we are still in the early days of building these businesses and expect their revenue contribution to remain small in the near term,” said CFO David Wehner.

CEO Mark Zuckerberg has been known to express ambivalence towards how the company’s performance is measured by shareholders, and in the earnings call he reacted with typical understatement to what is an extremely strong quarterly report. “We had a good second quarter,” he explained. “Our community has continued to grow, and we see a lot of opportunity ahead as we connect the rest of the world.”

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Date: Wednesday, 23 Jul 2014 16:36

Series A

Freshbooks, a cloud-based accounting software provider, has raised a Series A round worth $30 million, led by Oak Investment Partners. Atlas Venture and Georgian Partners also participated. Freshbooks has not previously raised funds since it was founded in 2003 and will use this investment to expand its team.

Series B

Commercial drone development and operation platform Airware has secured $25 million in Series B funding from Kleiner Perkins Caulfield & Byers. Airware was founded in 2011 in San Francisco and customizes hardware and software for drones used for commercial purposes from agriculture to construction. The company has raised over $40 million to date.

Series C

Chicago-based online lending company AvantCredit has raised a Series C round worth $75 million from Tiger Global Management. The company, founded in 2012, offers loans of up to $20,000 to borrowers who are unable to obtain a loan from a traditional bank. AvantCredit has raised over $100 million in funding to date.

Rong360.com, a Beijing, China-based private lending search provider, has raised $60 million in Series C financing, in a round led by a subsidiary of Singapore’s Temasek Holdings, Pavillion Capital Pet, according to reports. Existing investors Lightspeed Venture Partners, KPCB, Zero2IPO Ventures and Sequoia Capital all participated. Rong360.com was launched in 2011 and has previously received $30 million in funding last July.

Mobile games developer Social Point has raised $30 million in Series C funding led by Highland Capital Partners Europe. Existing investor Idinvest also participated. Social Point develops mobile games for both iOS and Android platforms, after initially only developing titles for Facebook. “The company has been profitable for the last seven consecutive quarters and is on pace to surpass $100M in revenue for this year,” said Andrés Bou, co-CEO of Social Point.

Restaurant reservation platform Quandoo has closed a Series C financing round worth $25 million. Pilton Capital and affiliates led the round, and Holtzbrinck Ventures, DN Capital, the Sixt family and Texas Atlantic Capital all participated. Quandoo intends to use the funds to expand through Europe and launch in APAC and Latin America.

Author: "Red Herring Editorial Team" Tags: "Startups, Top Stories"
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Date: Wednesday, 23 Jul 2014 00:52

Apple reported mixed quarterly earnings today, with increased iPhone sales, higher than expected net income and strong growth in gross margins offset by declining iPad sales and lower than expected revenue.

Apple reported $37.4 billion in revenue for Q3, down slightly from the $38 billion forecasted by analysts, but a 5.9% increase from the same period last year. Earnings per share stood at $1.28, boosted by the company’s stock repurchase program.

The Cupertino, California-based company sold 35.2 million iPhones in the three months ending June 28, an increase of 12.7% from the same period a year ago, but slightly below analyst expectations of 35.9 million units. Sales were particularly strong in the BRIC countries, with China alone seeing a 48% increase.

Sales of the iPad continued to be a cause for concern for Apple, dropping for the second straight quarter. Apple sold 13.28 million iPads in the last three months, down 9.2 % from the previous year and short of Wall Street expectations. iPads were still selling well in developing markets, with strong sales in the Middle East and China, but growth in those regions was more than offset by poor sales in developed markets such as the U.S.

Despite this, CEO Tim Cook was buoyant about the iPad’s performance. “In just over four years, we have now sold 225 million iPads, which is a larger number than anyone would have predicted at the time,” he said on a company conference call. “We still feel the category at the time is in its early days.”

Cook revealed that the iPad had an 85% share of the education market and a 99% share of Fortune 500 companies, however penetration in business is low: around 20%. This contrasts with the penetration of Apple notebooks in business, which is over 50%. Cook went on to state that this was part of the reason behind the recently announced IBM partnership. “We win if we can drive the penetration number from 20 to 60,” he said of the IBM deal. That would “make the walls shake.”

For the next quarter, Apple has forecast revenues in the range of $37-40 billion, a bigger gap than the company usually uses, suggesting that there is some uncertainty for the next three months. Apple sees gross margins between 37% and 38%, which would be similar to last year’s figure of 37%.

Despite Cook’s insistence that falling iPad sales do not worry Apple, two straight quarters of decline and falling performance in developed markets are surely causing some concern within the company. As smartphones become more powerful, it is feared that tablets will be squeezed into a niche position – not powerful enough to overthrow the laptop, and too big to beat a smartphone. Cook maintains that iPads will overtake PCs at some point, and perhaps that is why the only point of concern he raised was regarding the penetration among businesses. His solution to that is the partnership with IBM, but it remains to be seen whether this can revive the iPad.

Author: "Red Herring Editorial Team" Tags: "Features, Top Stories, Uncategorized"
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Date: Wednesday, 23 Jul 2014 00:46

Microsoft has reported an 18% increase in revenue for the fourth quarter of its financial year, but the cost of integrating Nokia’s handset business hurt profits.

The software heavyweight earned $23.4 billion in revenues during the last three months of the fiscal year, a 18% increase over the previous quarter’s results of $19.9 billion and just ahead of a consensus analyst estimate of $23 billion, according to a poll by Thomson Reuters.

Gains were helped by a doubling of revenues from its cloud business which includes Azure, Microsoft’s cloud platform, as well as an extra $2 billion added from the newly acquired Nokia.

“We are galvanized around our core as a productivity and platform company for the mobile-first and cloud-first world…I’m proud that our aggressive move to the cloud is paying off – our commercial cloud revenue doubled again this year to a $4.4 billion annual run rate,” said CEO Satya Nadella.

But Microsoft also revealed a nearly $700 million cost associated with its purchase of Swedish mobile phone manufacturer Nokia in April for a controversial figure of $7 billion. The company estimated that the Nokia operating loss worked out to around eight cents a share of net income, reducing total net income for the period to $4.6 billion or $0.55 per share, weaker than the $0.60 predicted by analysts polled by Bloomberg.

The drain on operating income from the Nokia deal is likely to last at least through the next fiscal year and help explain why the bulk of the 18,000 job cuts Microsoft announced last week will affect the Nokia side of the business and its manufacturing operations.

In better news, other sources of growth were Microsoft’s internet search engine Bing, which saw advertising revenue increase 40%, while the number of Microsoft Office 365 subscriptions increased 98% year-on-year to 5.6 million users.

Microsoft saw healthy growth in its most important market, enterprise software, which included a 14% rise in revenue from licences for older products like its database software SQL Server and Windows operating software for computer servers. The company also pointed to a boost in sales of software to small-and-medium-sized businesses, which historically have not been its main customers.

In a conference call to investors on Tuesday, Nadella outlined his renewed focus on cloud computing and a push to create a seamless user experience between desktops, tablets and mobile devices.

“We will streamline three operating systems into one system for all devices,” Nadella said Tuesday. “We will be relentless in our focus, everything we do starts with digital life and work experiences.”

This renewed focus will reassure investors who were worried the company was spending too much under previous CEO Steve Ballmer. After his first full quarter as CEO, Nadella’s vision of a mobile-first and cloud-first Microsoft seems to be working out.

Author: "Red Herring Editorial Team" Tags: "Features, Staff Picks"
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Date: Tuesday, 22 Jul 2014 17:39

A two-day hackathon next month is aiming to bring more information to North Koreans. Hack North Korea, held in San Francisco between August 2 and 3, is hosted by New York-based NGO the Human Rights Foundation (HRF), and will pair Silicon Valley experts with defectors from the east Asian state, which is widely considered the most closed society on Earth.

Defectors attending the event will include democracy activist Park Sang-hak, and Kang Chol-hwan, who penned the autobiographical book The Aquariums of Pyongyang about his life as a child prisoner.

Rather than aiming to hack sensitive data, the hackathon will brainstorm ways of smuggling information into North Korea. The nation of almost 25 million has no free press, and Internet activity is limited to a select few government officials.

HRF claims that it has had previous success launching balloons attached to Wikipedia-loaded USB sticks into North Korea, as well as information released in leaflets and shortwave radio broadcasts. But Alex Gladstein, the group’s director of institutional affairs, claims that much more could be achieved by harnessing the prowess of the Bay Area.

“Balloons are more symbolic; a lot of defectors had seen the balloons before,” says Gladstein. “But it would make it more effective if we could get some more metrics on them.”

The group has considered offline WikiReaders, he adds, “but you need an install. If you’re a student in Pyongyang why would you use that? We want to have more Autoplay, image-based software and stuff that’s more easily accessible.”

Gladstein stresses that the hackathon is not pledging to “change massive problems overnight,” but rather to open a dialogue between North Korean defectors and Silicon Valley. “Defector-led groups’ budgets total under $2 million,” he says. “That’s tiny. I think there’s a lot of room for policy-makers, businesses and governments to get involved.”

Gladstein adds that there have already been proven positive impacts from the HRF’s work. Most homes now have ‘secret televisions’, he claims, where families access information from outside the country. The group also says that a quarter of all North Koreans have listened to a foreign radio device.

We’re tapping into an existing, ongoing phenomenon,” says Gladstein. “The government is losing control of the way people are making financial investments and consuming culture. When that’s happening you can really make leveraged investments. It’s education, it’s learning.”

North Korea is governed by Kim Jong-un, 31, who succeeded his father, Kim Jong-il, in 2011. Last year the state raised tensions with a series of missile launches and fierce rhetoric, directed mainly at its southern neighbour and the United States. Most recently Kim has been attempting to negotiate with Seoul regarding its participation at this year’s Asian Games, which will be held in the southern city of Incheon in September and October.

North Korea, despite its perceived lack of technology, is active in cyber warfare. Last year a massive attack paralyzing South Korean banking and broadcasting systems was widely blamed on Pyongyang. Speaking after the attack Sun-Chul Kim, a South Korean cyber security expert, claimed that the North “employs up to 4,000 people dedicated to cyber conflict.”

Today North Korea launched a cooking website ‘for housewives’ called Korean Dishes, two years after it was initially announced.

Author: "Red Herring Editorial Team" Tags: "Global, Internet, Staff Picks"
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Date: Tuesday, 22 Jul 2014 17:14

Series A

SimpleReach, a content marketing startup, has raised a Series A round worth $9 million. MK Capital led the round, with participation from Atlas Venture, Village Ventures and High Peaks Venture Partners. SimpleReach was founded in 2010 and helps marketers and publishers effectively measure the value of content and adverts. The company will use the funds to expand the analytics tools it offers.

Series C

Intent Media, a marketing intelligence provider for the travel industry, has secured a $22.7 million Series C round led by Insight venture Partners. Existing investors Matrix Partners and Redpoint Ventures also participated. Intent Media, which counts Expedia, Lastminute.coma nd Travelocity among its customers, offers data-driven advertising products.

Series D

Cloud-based payment management company Taulia has raised a $27 million Series D round led by QuestMark Partners. Existing investors Trinity Ventures, Matrix Partners, Lakestar and DAG Ventures also participated. The San Francisco-based company was founded in 2009 and provides invoicing as a service to its customers. The firm has now raised $62 million to date.

Solexel, a solar panel manufacturer, has raised $31 million in Series D funding. Kleiner Perkins Caulfield & Byers, Technology Partners and DAG Ventures all participated in the round, which brings Solexel’s total funding to $200 million. The company will use the funds to begin commercial-scale module production.

Series E

Boulder, Denver based LogRhythm, a security intelligence and compliance company, has raised a $40 million Series E round of funding. Riverwood Capital led the funding, with participation from Piper Jaffray and existing investors Adams Street Partners, Access Venture Partners and members of LogRhythm senior management. LogRhythm will use the money for product development and customer service enhancements.

Funding

Application performance management and monitoring company AppDynamics has raised $120 million in equity and debt, at a valuation of more than $1 billion. The new funding was led by Battery Ventures, ClearBridge Investments and Sands Capital. Current investors Greylock Partners, Lightspeed Venture Partners, Kleiner Perkins Caulfield & Byers and Institutional Venture Partners also participated. Founded in 2008, AppDynamics will use the funds to accelerate sales and expand globally.  The company, which is targeting a future IPO according to reports, helps companies monitor their apps to enable efficient performance.

Author: "Red Herring Editorial Team" Tags: "Internet, Startups, Top Stories"
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Date: Tuesday, 22 Jul 2014 00:41

Netflix now has more than 50 million subscribers worldwide according to the company’s quarterly earnings report released today.

The content streaming website added 1.69 million users during the second quarter ending June 30, with 1.12 million new international subscribers and 570,000 additional U.S. members bringing the company’s total users to 50.05 million. Netflix beat its own forecast of 1.46 million new subscribers over the three month period.

The Los Gatos, California-based firm posted revenue of $1.34 billion and earnings per share of $1.15, meeting analysts’ estimates on the former but not the latter. Analysts polled by Thomson Reuters predicted per share profit of $1.16 and $1.34 billion in revenue. Netflix also reported net income of $71 million, more than double that of the same period last year. Shares in Netflix rose by 1% in after hours trading following the release of the numbers.

The second quarter of the year has traditionally been a slow one for Netflix’s subscription numbers. The company added 4 million new subscribers in the first quarter of 2014 and analysts predicted a more conservative figure for Q2. But the number of new users beat expectations despite the challenges of increased competition from the likes of Amazon, the popularity of the FIFA World Cup and a price increase of $1 extra per month for new users.

“I think we’ve seen the impact of the price change go through already,” Netflix CEO Reed Hastings said in a conference call. “[The effects are] pretty nominal, both in terms of acquisition and retention. We’re thrilled with that outcome.”

Hastings also revealed that the company was worried about the effects on viewing numbers around the world caused by the FIFA World Cup in Brazil. However, there was no drop off in growth rates even in the South American country hosting the event, he said.

With 36.24 million users in the U.S., Netflix has become the largest standalone subscription programming service in the country. Yet this expansion has come at a cost as the company has fought with internet service providers over who should pay for the bandwidth all those users require.

Earlier this year, Netflix reached agreements with Comcast and Verizon to pay for faster and more reliable access to the cable companies’ subscribers. However, a very public battle is still underway with the latter, and the partnership has yet to be implemented. The debate concerns the wider issue of net neutrality, in which some argue that internet service providers should not be able to prioritize certain bandwidth usage at the expense of others.

As Netflix’s subscriber base increases, so too could the ferocity of its arguments with broadband providers. Hastings urged the Federal Communications Commission to use merger conditions to introduce net neutrality regulations, adding that he’d hate to see “ISPs brown out or black out certain internet sites while they extract payments.”

For the current quarter, Netflix has projected per-share earnings of 89 cents, and expects to add 3.69 million subscribers, 2.3 million of which to be added internationally. As of close of trading on Monday, Netflix stock had risen 71% over the past 12 months.

Author: "Red Herring Editorial Team" Tags: "Features, Internet, Staff Picks"
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Date: Monday, 21 Jul 2014 22:11

Series A

The news that Yo has raised a Series A will do nothing to calm those fearing a tech bubble. The messaging app’s sole function is to send “Yo” back and forth between its users, but has secured $1.25 million in venture funding from Betaworks and Pete Cashmore (founder of Mashable). The financing values the company between $5 and $10 million, according to those familiar with the deal. Yo was founded by Mobli CEO Moshe Hogeg and is based in Israel. The app claims it currently facilitates 2 million “Yo’s” per day. While it is unclear what the app’s specific business strategy might be, it has been suggested that the application could be used for customer alerts.

The UK-based daily deal online furniture store Swoon Editions has raised £4 million ($6.8 million) from Octopus Investments and Index Ventures. The platform allows its subscribers to purchase boutique furniture directly from the producers before it has even been completed, dramatically reducing the need for warehouse space.

Series B

Threadflip, a peer-to-peer women’s shopping platform, has raised $13 million in Series B from Norwest Ventures and returning backers Baseline Ventures, First Round, and Shasta Ventures. The round brings the company’s total funding to $21.1 million. Threadflip is one of several companies attempting to become the chosen marketplace for Craigslist-type designer fashion. Competitors include Poshmark, Vinted, and Twice.

The parking reservation app, ParkWhiz, announced that it has raised $10 million from Jump Capital and existing investors Hyde Park Venture Partners, Alexis Ohanian (the Reddit co-founder who also became a partner at Y Combinator over the weekend), Amreesh Modi, and Henry Feinberg. ParkWhiz, which has now raised over $12 million, is joined by SpotHero as a venture-backed, Chicago-based parking startup.

Urban Compass, a New York-based real estate platform, has raised $40 million in Series B funding from Thrive Capital, Founders Fund, .406 Ventures, Advance Publications, Kenneth Chenault and Marc Benioff. Urban Compass has raised over $70 million to date and will use the funds to double its number of employees, currently 100. The company’s main focus is helping users buy and rent apartments in the New York market.

Funding

TradeBlock is the latest to benefit from Andreessen Horowitz’s bullish opinion of the cryptocurrency market. Incubated at Y Combinator but now operating out of New York, the company provides authoritative research, data, and analysis about developments in digital currency mining, markets, and regulation. Barry Sillbert, Devonshire Investors, and FinTech Collective joined a16z in the $2.8 million investment.

Author: "Red Herring Editorial Team" Tags: "Internet, Startups, Top Stories"
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Date: Saturday, 19 Jul 2014 00:05

Seed

Jobr, a job search platform, has raised $2 million in seed funding from Lerer Ventures,Redpoint Ventures, Eniac Ventures, Lowercase Capital, Tim Draper, and others. The Jobr app seeks to connect job seekers and employers through a Tinder style model of swiping either left or right. Jobr plans to use the new funds to hire staff and build out its platform.

Online translation service Unbabel has raised $1.5 million in seed funding from investors including Jared Fliesler of Matrix Partners, Kevin Rose of Google Ventures, FundersClub and Elad Gil. The company, which is backed by Y Combinator was launched in March and uses crowd translation and artificial intelligence to provide affordable translation services. Unbabel will use the funds to expand its engineering and marketing teams.

Series A

Workspace-as-a-service provider Workspot has raised a Series A round worth $6.5 million. Helion Ventures led the investment, while Translink Capital and Qualcomm Ventures both participated. Workspot was launched in April last year and has raised over $9 million to date. The company provides business applications for mobile workforces.

Funding

Vision Critical, a cloud-based customer intelligence platform, has raised $16 million in new funding from Georgian Partners, Northleaf Venture Catalyst Fund (NVCF) and Kensington Global Private Equity Fund. The Vancouver-based company previously raised $20 million in 2012 and counts John Deere, Banana Republic and Time Inc. among its customers.

Dough, which provides educational content on personal investing, has raised a $25 million round of funding from Technology Crossover Ventures.  The company will use the funds to hire more people to narrate videos and expand its offering internationally. The Chicago-based massively open online course (MOOC) site teaches people how to make investments.

Author: "Red Herring Editorial Team" Tags: "Features, Finance, Startups"
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Date: Saturday, 19 Jul 2014 00:04

Keep an Eye On

The Naver Corporation, a South Korean company that operates the popular messaging application Line, announced on Tuesday that it had filed its subsidiary with the Tokyo Stock Exchange for an IPO. Line boasts over 430 million users, many of whom live in Japan. Like its Chinese counterpart WeChat, Line relies on in-app purchases for most of its $500 million revenue. The terms and trading date have only been speculated about, but for some context, WhatsApp was bought earlier this year for $19 billion by Facebook when it claimed 500 million users and around $400 million in revenue. Viber, meanwhile, was bought in February by the Japanese online retailer Rakuten for $900 million with around 300 million users.

When General Electric divests part of its retail finance unit, Synchrony Financial, it could raise upwards of $3.5 billion in the IPO. Synchrony operates private-label credit cards for major retailers like Gap and Walmart. GE is expected to sell 125 million shares of Synchrony (15 percent of the company) within the $23-$26 price range. If sold in the middle, the company would be valued at $20.3 billion. The company announced its intentions with an SEC filing in March, but the announcement about the projected share price comes a month after GE agreed to buy the power and grid business of Alstom, a French industrials company, for $13.5 billion. The company reported a positive second quarter, with revenues of $36.2 billion (up 3% YoY) and net income of $3.5 billion (a 13% gain).

Now Trading

The video marketing company TubeMogul raised $44 million in its IPO on Thursday after selling 63 million shares at $7, less than half of what it expected to gain earlier in the week. On the first day of trading the stock surged at various times nearly 50%, to as high as $10.30, but share prices were originally set within the $11-$13 range. BofA Merrill Lynch, RBC Capital Markets, and Citigroup served as lead underwriters. It is trading on the Nasdaq under the ticker symbol TUBE. The company, which provides a platform for enterprises to optimize their video advertising, earned $57 million in revenue last year alongside a $7.4 million net loss.

M&A

LinkedIn announced on Tuesday that it had acquired Newsle, an application that aggregates news data into 140 character headlines. Newsle was founded in 2011 by Axel Hanson and Jonah Varon, who were Harvard undergraduates at the time. Writing on the company’s website, the two said: “We founded Newsle with a simple goal: to deliver news about the people who matter to you…LinkedIn is equally passionate about offering insights that can help professionals better do their jobs and will help us accelerate our efforts by making Newsle available to its members.” The company had raised over $2.5 million from backers Lerer Ventures, SV Angel, DFJ, and Bloomberg Beta, among others. The financial details of the acquisition were not announced, but it appears that the site will continue to operate independently.

Twitter acquired CardSpring, a platform that allows app developers to build applications for credit cards and other types of payment systems. The service will be kept open, but it is expected that Twitter will integrate it to allow enterprises to post deals on their Twitter accounts that could then be redeemed by users. With CardSpring, the credit card information it collects online is verified when the customer makes an in-store transaction, facilitating the time of online-offline transactions that many retailers are after. The announcement comes on the heels of news about Facebook’s increased interest in e-commerce. Also this week, Facebook introduced a Buy button to the mini-feed that allows users to buy advertised products directly from the site. CardSpring had raised $10 million from investors that included Greylock and Accel, but there is currently no word on how much Twitter paid.

Author: "Red Herring Editorial Team" Tags: "Global, Startups, Top Stories"
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Date: Friday, 18 Jul 2014 20:03

Google, Inc has reported modestly rising quarterly earnings for the second quarter of 2014. The tech giant earned $3.4 billion, or $4.99 per share, in the April-to-June period. The figures represent a slight increase on the $3.2 billion, or $4.77 per share, reported in the second quarter of last year.

“We are moving forward with great product momentum and are excited to continue providing amazing user experiences, with a view to the long term,” said Google CFO Patrick Pichette. Hardware sales were better than expected at $3.3 billion, while analysts have warned that continually-declining ad sales remain a strong concern for the firm.

Employee stock compensation was blamed for adjusted earnings that fell below analyst predictions for the third time in three quarters. Google has been on a hiring spree this year, adding another 4,300 employees to its wage bill. It now employs 52,000 people, which is still less than half that of tech rival Microsoft, which this week announced the culling of 18,000 jobs from its 127,000-strong workforce.

However one employee leaving the firm is chief business officer Nikesh Arora, who is stepping down after ten years in the role. He will become vice president of Japan’s SoftBank, in a move that has surprised industry insiders. Google CEO Larry Page was full of praise for his former charge, calling Arora a “tremendous leader, adviser and mentor to many Googlers – including me.

“We have learned a lot together, and had a lot of fun along the way,” added Page. Arora’s departure comes just days after Google added former Ford chief Alan Mulally to its board of directors.

“I expect to see a lot of movement at executive level at Google,” said Rob Enderle, principle analyst at the Enderle Group. “Arora would have wanted more influence, but he wasn’t rich enough to start up something new. It’s like an incubator, Google.”

This year has seen the Silicon Valley-headquartered company ramp up its pursuit of new technologies, piling investment into wearable browsers, driverless cars and robots. This quarter’s report “was expected,” added Enderle. “It shows that they’re focused on the future. It’s reasonable; nothing to run to the hills for.”

Enderle added that Google should be “very careful” about taking on government institutions in the future. The firm has been embroiled in a court case with the EU over privacy for several months.

Author: "Red Herring Editorial Team" Tags: "Features, Global, Internet, Mobile, Staf..."
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Date: Thursday, 17 Jul 2014 21:54

U.S. tech giant Microsoft is set to lay off 18,000 employees, according to an internal memo from its new CEO. Satya Nadella, who took over the reigns from longterm chief Steve Ballmer in February, admitted that Microsoft needs to be “leaner” alongside more streamlined rivals such as Apple and Google, Inc.

Nadella added that the biggest hit would be felt at Nokia, the communications firm Microsoft acquired for $7.2bn this April. The cuts – which represent 14 % of Microsoft’s 127,000-strong workforce, will include 12,500 Nokia factory and professional positions, half the number added to the payroll in April.

A total of 1,351 jobs will be lost in the U.S. city of Seattle, while another 1,000 are expected to go in Nokia’s home country of Finland, including the shuttering of its R&D facility in the northern city of Oulu. Microsoft operations in Beijing and San Diego will also be affected. The move represents the largest job loss since Microsoft’s founding in 1975.

“The first step to building the right organization for our ambitions is to realign our workforce,” wrote Nadella on Monday (July 14). The India-born chief promised more details when he announces Microsoft’s quarterly earnings on July 22.

The cull comes as little surprise to many in the industry. When April’s deal concluded, Microsoft claimed it would trim costs by $600 million per year within 18 months. Insiders have also pointed out Nokia’s lacklustre attempts to keep its foothold in the mobile market next to Apple’s iPhone and Google Inc.’s Android.

Ahead of April’s deal, Nokia’s chairman, founder and CEO Risto Siilasmaa admitted he had been suffering sleepless nights over the company’s financial losses.

In addition to the job losses, Sabella announced that Nokia’s Lumia product line will now run on Microsoft’s Windows OS, as opposed to an initial plan to run Google’s Android. “This builds on our success in the affordable smartphone space, and aligns with our focus on Windows Universal Apps,” he wrote.

Nadella, a Microsoft veteran who had helmed its cloud computing division before taking over from 14-year CEO Ballmer, thinks the Nokia acquisition was “a big mistake” according to Business Insider’s Steve Kovach, who adds that Nadella has been left to clean up Ballmer’s “mess”. Founder and chairman Bill Gates stressed that there is “no-one better” to lead Microsoft, in the wake of this week’s news.

The numbers appear to agree. Microsoft posted better-than-expected net profits of $5.7bn in April. At time of going to press its shares were stable at $44.53, after a yearly high of $45.30 yesterday. Nokia’s shares were also stable at $7.38, from a high of $8.18 in January.

Even without the job losses, Microsoft remains far behind the world’s largest private employer, American retailer Walmart, which counts some 2.1 million staff on its books.

Author: "Red Herring Editorial Team" Tags: "Features, Global, Internet, Software, St..."
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Date: Thursday, 17 Jul 2014 18:28

Seed

Open-source machine learning startup PredictionIO has raised $2.5 million in seed funding in a round led by Quest Venture Partners. Azure Capital Partners, CrunchFund, the StartX Fund and Kima Ventures all participated in the round. Prediction IO was founded last year and has created an open-source program which allows developers to add predictive features to applications.

Series A

Sensoria, a wearable technology developer, has raised a $5 million Series A round from Reply SpA. Reply will acquire a 20% stake in the company as part of the deal. Sensoria produces textile and traditional sensors that allow manufacturers to create clothes that can gather data biometrically. As part of the transaction Heapsylon, a Nevada limited liability company, will rename as Sensoria Inc., a Delaware corporation.

Stock media marketplace Pond5 has raised a Series A round worth $61 million. Accel Partners and Stripes Group led the funding into the company, which allows users to upload and sell video, music, photos and special effects. Pond5 will use the funds to build out its product and hire new staff.

Shyp, an on demand shipping startup, has raised $10 million in Series A funding. Shervin Pishevar and Scott Stanford’s SherpaVentures led the round. Shyp is an iPhone app that delivers users a simplified shipping process by working with all the major shipping companies. The company has previously raised $2.3 million in seed funding.

Series B

 

Capillary Technologies, a cloud-based retail customer engagement management provider, has secured a $14 million Series B round led by Sequoia Capital and Norwest venture Partners. The company previously raised $17 million in Series A financing in 2012. Capillary Technologies will use the most recent funds to grow its partnership ecosystem.

 

Series D

 

Funding Circle, a peer-to-peer lender based in London, has secured a $65 million Series D round led by Index Ventures. Accel Partners, Union Square Ventures and Ribbit Capital also participated. The company, founded in 2009, has now raised more than $123 million to date. Funding Circle connects small businesses with lenders through an online marketplace.

Author: "Red Herring Editorial Team" Tags: "Internet, Social, Software, Startups, To..."
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