This top Silicon Valley venture firm just made a contrarian move with its newest fund

In Silicon Valley, venture firms with a track record of success find themselves awash in money thanks to the growing number of institutions that want to invest more of their capital in tech. In March, an SEC filing showed that General Catalyst had closed a $1.375 billion fund, the biggest vehicle in its 18-year history. Battery Ventures also closed on two funds earlier this year that are the 35-year-old firm’s biggest to date. Sequoia Capital, meanwhile, is reportedly out raising $12 billion across a series of funds, a move that’s unprecedented for the firm — or any U.S.-based venture firm, for that matter.

Fifteen-year-old Emergence Capital could easily follow the same path. Emergence funds early stage ventures that are focused on enterprise and SaaS applications, and it does this very well. Its bets include the storage company Box (now public), the social networking company Yammer (sold for $1.2 billion to Microsoft in 2012), and Veeva Systems, the company that’s generally known for its customer relations software for the life sciences and pharmaceutical industries, though envious investors see Veeva as the company that produced a more than 300x return for Emergence when it went public in 2013. (Emergence had invested just $6.5 million in the outfit and owned 31 percent of it going into the IPO. It was also Veeva’s sole venture backer.)

Still, when it came time to raise its fifth fund, Emergence did not raise a billion-dollar fund, as it surely could have. Instead, the San Mateo, Ca., firm, which closed its fourth fund with $335 million in 2015, opted to increase the fund by 30 percent, closing its new vehicle this past Friday with $435 million.

We talked the other day with firm cofounder Jason Green, who is one of four general partners, about the firm’s trajectory. Specifically, we asked why — like almost every other firm in Silicon Valley — it didn’t close its newest fund with exponentially more in capital commitments than its last fund. The answer, said Green: “Our sweet spot is on early market fit, with a core team we can work around.” Because that hasn’t changed, neither has the size of the funds it raises, he said.

There have been some changes. In 2016, Emergence promoted Joe Floyd to partner three years after Floyd had joined the firm from Kaufman Fellows, which is a two-year development program for venture capitalists. As notably, cofounder Brian Jacobs will not be helping to invest this new fund. Asked if Jacobs is leaving to do crypto investing (a popular move at the moment), Green said Jacobs is moving “toward more philanthropic activities” instead.

Emergence, whose first investment was in Salesforce and whose other wins include the sale of ServiceMax to GE for $915 million in 2016 and Intacct’s sale to Sage Group for $850 million last year, only invests in five to seven new companies each year. Before we let Green go, we asked how the firm decides which handful of companies to pursue at any one time.

He said that Emergence is very “thematic oriented” and that it picks a couple of themes for every new fund then tries to find the best companies and founders within those themes. Though it has been SaaS and cloud and horizontal applications and industries from the outset, Green says that going forward, it plans to focus on a couple of related but more specific areas. The first of these he called “coaching networks,” which is another way of describing machine learning applied to the enterprise. Seattle-based Textio, for example, an Emergence portfolio company, uses AI-powered tools to augment business writing. Another portfolio company, Chorus, analyzes voice recordings of sales interactions to give sales teams real-time feedback about what’s working or not. Green says he sees these as “coaching networks” because they’re making people better at their jobs, rather than aiming to replace them.

Emergence is also focusing on the deskless workforce, meaning the 80 percent of the global workforce that doesn’t sit in front of a desk. It’s not a new trend, concedes Green, but he calls it “early innings,” with related technologies just “starting to infuse the operations of teams around the globe.” (An early investment in the fast-growing video conferencing company Zoom could probably be tucked into this category.)

Green dodged a question about what size checks the firm likes to write. He did say that like most traditional VCs, the firm looks to own 20 percent or more of the companies it backs, and it typically supports companies at the “Series A, all the way through” to an eventual exit.

Asked if Emergence allowed any new investors into its newest fund, Green said the firm “hand selected a handful of new LPs who we felt strongly were going to use the returns for good — foundations and endowments that we feel are doing really great work.”

It has “become more rare,” not raising a giant fund in today’s climate, Green said on our call. “It does take a lot of restraint. It’s very easy right now to raise lots of capital and spread your wings, and I’m proud that we’ve been able to maintain our focus and discipline.”

It “gets back to what you enjoy,” he continued. “We’re not just trying to place bets. We really do love getting our hands dirty.”

Beth Seidenberg of Kleiner Perkins is said to be leaving to start her own fund

Beth Seidenberg joined Kleiner Perkins 13 years ago to focus on life sciences for the storied venture firm. Now, according to a Recode report, she’s heading off to start her own life sciences venture fund in L.A. where she lives.

We’ve reached out to Kleiner and we’re awaiting more information. But the firm seemed to confirm the move to the outlet, reportedly noting that Seidenberg will continue to be a partner in Kleiner’s existing funds and stating that Kleiner remains committed to life sciences.

While the move is interesting from a firm perspective — Kleiner has undergone one transition after another over the last half dozen years, parting ways with at least 10 investors, including Trae Vassallo, Mike Abbott, Chi-Hua Chien, Matt Murphy, and Aileen Lee — it’s perhaps even more interesting as part of an ongoing change to the broader industry.

Whereas a decade or so ago, one held on to his or her role inside a venture fund by their fingernails if they had to, that’s no longer the case. While there are still a handful of firms that it would undoubtedly be hard to leave, it’s become easier for many VCs to abandon situations that no longer work for them for one reason or another. The reason: the volume of money flowing to the venture industry, along with platforms that help to amplify new brands, have made it easier than ever for someone with a track record to launch a venture firm of their own.

An almost surprising number of people to do so have worked formerly for Kleiner, which has yet to recover fully from a bruising battle with one of its former investors, Ellen Pao, after she famously sued the firm for gender discrimination in court.

Lee, for example, spent 13 years with Kleiner before leaving in 2012 to start her own seed-stage venture firm, Cowboy Ventures, and becoming one of the highest-profile women in the venture industry. Chien spent nearly seven years with Kleiner before spinning up his own firm in 2014 called Goodwater Capital; it’s already raising its third fund, shows an SEC filing.

Meanwhile, Trae Vassallo took the wraps off her own fund — cofounded with former General Catalyst partner Neil Sequeira — last year. Called Defy Ventures, it closed on $151 million for its debut effort.

While we don’t know yet why Seidenberg decided to leave Kleiner, we suspect she won’t have much trouble raising her own new fund, either. Life sciences investing has been soaring in recent years, thanks in part to advances in machine learning. More, by Seidenberg’s own telling, she has incubated eight companies at Kleiner and became the founding CEO of two of them. 

An all-cash deal of one of her cancer drug bets, Armo BIoSciences — which Eli Lily said just last week that it’s buying for $1.6 billion — should probably help, too.

 

Starting a robotics company out of school? Not so fast, suggest investors

Every once in a while, a college student or recent graduate dares to launch a robotics startup and . . . everything goes as well as could be expected. Such is the case, for example, with Alex Rodrigues and Brandon Moak, two former University of Waterloo students who worked on self-driving technologies together in college and formed their now venture-backed, self-driving truck company, Embark, instead of graduating. (Originally called Varden Labs, the startup’s trip through Y Combinator undoubtedly helped.)

Still, to capture the sustained interest of robotics investors, it helps to either have experience in a particular industry or to pull in someone, quickly, who does. That much was established yesterday at UC Berkeley, when three veteran investors — Renata Quintini of Lux Capital, Rob Coneybeer of Shasta Ventures, and Chris Evdemon of Sinovation Ventures — took the stage of a packed Zellerbach Hall to talk about where they’ve invested previously, and where they are shopping now.

Though the three expressed interest in a wide range of technologies and plenty of optimism about what’s to come, each lingered a bit on one point in particular, which was the difficulty robotics founders face who are completely unfamiliar with the particular industry they may hope to reshape with their innovation.

You can catch the entire interview below, but we  thought college students — and their professors and mentors — might want to pay particularly close attention to this concern if they’re thinking about hitting up investors in the not-too-distant future.

Quintini on how comfortable she and her colleagues at Lux are when it comes to backing recent college graduates:

What we care the most about what is your unique insight and what do you know about tackling a certain market or problem that’s not obvious or easy to replicate. In some cases, it’s very fair for someone right out of university who finds a technological breakthrough and . . . that breakthrough alone is understandable and comprehensible to the market and it’s a very backable company, and we’ve done that in the past.

But in some cases, and you’ve heard today, [CEO] Patrick [Sobalvarro] from Veo Robotics speak — and [Veo is] actually giving robotic arms perception sensors to allow people and robots to work together — all his insights came because he came from industry. He was at Rethink Robotics; he’s been in the robotics industry, selling to people who use robots as part of the manufacturing process. And so he actually understands the importance of safety and the selling of those systems to customers. Because he knew that, it made a big difference in how he approaches his go-to-market strategy and how he approaches building a product. And somebody who’s just thinking about, ‘Oh, let me figure out the technology and how to understand when a human is close or not’ and who didn’t think about the other angle wouldn’t be so successful or differentiated in our opinion.

Coneybeer sounded a similar tone. In fact, when asked if he felt there were other overlooked opportunities like that identified by Veo — which is refitting existing robotic arms, rather than trying to remake them from scratch — Coneybeer said the most attractive thing of all to him are startups in search of a problem that actually exists: 

What we’re very cognizant of is people who love robots and are trying to invent a market or invent a need and kind of force fit it, as opposed to people who understand a need and are using robotics as a tool to truly solve that need. That’s a really key differentiator.

We directed an entirely different question to Evdemon, about how Sinovation thinks about domestic versus industrial robots and whether it expects to commit more capital to one or the other. But Evdemon first took the time to note that the problem of founders who don’t know their industries is a very big one, and deserved more discussion:

Chiming in to what Renata and Rob were saying, you understated [the issue]. The majority of the teams that we are looking on both the consumer and industrial robot [worlds] at the moment are more of a technology trying to find a fit in the market, and that’s obviously a very big problem from a venture point of view.

We also see a lot of teams that are fresh out of school, usually a supervising professor with a couple of his or her PhD students having come across some kind of technological breakthrough in university and trying to commercialize that. But robotics are all about what sectors they are being applied to. An ag tech team that knows nothing about agriculture, or a security robot that has a team that’s come up with a great computer vision breakthrough around security issues but that has no idea how the security industry in the U.S. or other parts of the world is structured, is obviously not a good starting point — at least not from a business-minded point of view.

And all of these companies run across tremendous difficulty when it comes to sales. Complementary of teams and market fit [both, are] important for [students] who are thinking about such a move straight out of school.

Apple hit with lawsuit over the “completely reinvented” Macbook keyboard it rolled out back in 2015

A little more than three years ago, Apple announced a new MacBook with a “butterfly” keyboard that was 40 percent thinner and ostensibly four times more stable than the previous “scissor” mechanism that MacBooks employed.

The promise was to more evenly distribute pressure on each key. Not everyone loved this “reinvention,” however, and now, Apple is facing a class action lawsuit over it.

According to a complaint lodged in the Northern District Court of California yesterday and first spied by the folks over at AppleInsider, “thousands” of MacBook and MacBook Pro laptops produced in 2015 and 2016 experienced failure owing to dust or debris that rendered the machines useless. The complaint further alleges that Apple “continues to fail to disclose to consumers that the MacBook is defective, including when consumers bring their failed laptops into the ‘Genius Bar’ (the in-store support desk) at Apple stores to request technical support.”

It just not a lack of disclosures that’s problematic, the suit continues. Customers who think the issue will be covered by their warranties are sometimes in for an unpleasant surprise. As stated in the filing: “Although every MacBook comes with a one-year written warranty, Apple routinely refuses to honor its warranty obligations. Instead of fixing the keyboard problems, Apple advises MacBook owners to try self-help remedies that it knows will not result in a permanent repair. When Apple does agree to attempt a warranty repair, the repair is only temporary—a purportedly repaired MacBook fails again from the same keyboard problems. For consumers outside of the warranty period, Apple denies warranty service, and directs consumers to engage in paid repairs, which cost between $400 and $700. The keyboard defect in the MacBook is substantially certain to manifest.”

The lawsuit was filed on behalf of two users, ZIxuan Rao and Kyle Barbaro, and more broadly “on behalf of all others similarly situated.” It was brought by Girard Gibbs, a San Francisco-based law firm that has battled with Apple numerous times in the past, including filing a class-action suit centered on the iPod’s “diminishing battery capacity.” (Apple appears to have settled that one.)

We’ve reached out to Apple for comment.

Interestingly, AppleInsider appears to have provided the fodder for this new lawsuit, or some of it at least. Last month, the outlet reported findings of its own separate investigation into the problem after hearing enough anecdotes to support a deep dive. It says that after collecting service data for the first year of release for the 2014, 2015, and 2016 MacBook Pros, it concluded that —  excluding Touch Bar failures — the 2016 MacBook Pro keyboard has been failing its users twice as often in the first year of use as the 2014 or 2015 MacBook Pro models.

AppleInsider says it collected its data from “assorted Apple Genius Bars in the U.S.” that it has worked with for several years, as well as  Apple-authorized third-party repair shops.

The investigation clearly resonated with MacBook owners, because soon after, more than 17,000 people signed a Change.org petition demanding that Apple recall all MacBooks with butterfly switch keyboards.

That petition — which cites among others the highly regarded writer and UI designer John Gruber, who has called the keyboard “one of the biggest design screwups in Apple history” —  continues to gain steam, fueled possibly by news of the lawsuit. As of this writing, roughly 18,000 people have provided their signature.

A Modcloth cofounder just launched an invite-only cryptocurrency

Cryptocurrency is cool, but you know what’d be even cooler? If people used it to buy things.

That they don’t because it’s either not secure or hard to use is a problem that a growing number of founders is trying to tackle. Among them is Merit, a new digital currency that aims to be as simple to use as traditional payment apps like PayPal and Venmo and that officially launches today.

The idea is to make it easy enough for to use to split a bill, share the rent, or shop for clothing online, even for those who are completely crypto illiterate.

Naturally, Merit is facing a daunting uphill battle, but that isn’t dissuading its founder and CEO, Adil Wali, who previously cofounded the indie womenswear brand ModCloth. (To the chagrin of some of its customers, ModCloth sold to Walmart last year after several rounds of layoffs.) Wali has since started two more companies, and he’s clearly not afraid to see where an idea takes him.

This particular idea, which Wali and nine other full time employees are working on from Seattle, involves a few interesting facets that could potentially help the currency gain traction.

First and foremost, Merit says it’s removing barriers to entry to blockchain investments and payments by making the Merit cryptocurrency as easy to send as a tweet. Users can also sent the Merit cyptocurrency via different communication channels, whether SMS, WhatsApp, or email.

It’s invitation-only, which is a newer twist. How it will work: new Merits will  awarded based not only on proof-of-work, which is the norm more generally, but proof-of-growth, meaning that miners are increasing the size of the community. (In theory at least, this set-up encourages miners to both grow the network and keep it secure.)

Speaking of security, Wali says Merit is also creating a new kind of “vault” for users, one that eschews any kind of reliance on the kind of third parties that often centralizing users’ currencies today. (Hello, Coinbase.) A user could create a vault for his or her family, for example, one that only a family member could access through a passcode, and that has rate limits, so if anyone tries to hack into that account, that nefarious individual could only send, say, 100 Merit, before a family member was notified and able to reset the vault.

Also interesting, to us, is simply how Merit is structured, which is as a self-funded nonprofit. That’s partly so its currency can establish a value organically, versus through a valuation established by outside investors. In fact, Wali says he has personally invested $1 million into Merit to prove out that Merit’s software can work.

There are plenty of challenges it has to overcome if it hopes to see its software widely adopted — which is largely its reason for being.

At some point, for example, Merit will need to get listed on a cryptocurrency exchange (or many of them) in order to become truly liquid currency. Wali acknowledges that there’s no promise that that will happen, but sounds an optimistic tone, noting the “explosion in the number of exchanges” and offering that Merit will “work its way up that list, approaching the smaller exchanges first and, as the adoption of Merit grows, presenting a stronger case to go after bigger exchanges.”

Merit also needs retailers and other corporate partners to take it seriously enough to accept it, which will take time — perhaps a lot of it.

Wali acknowledges the issue, observing that “crypto has to go through this crawl-walk-run trajectory” as a way to explain why peer-to-peer transactions are the first way that people will use Merit. Assuming hat takes off, though, he believes that Merit will “talk more with merchants,” he says.

As Wali says he knows well from working in retail for more than a decade, “Retailers’ first question is always, ‘How many people use this?’ In this case they’ll want to know, ‘If I accept this payment method, what does this open up to me?'”

Says Wali, “I want to have a good answer for that.”

Golden Ventures has a new pot of new capital — $57 million — to invest largely in Canada

Golden Ventures, a seed-stage outfit with offices in Toronto and Waterloo, has closed it third and newest fund with $57.5 million ($72 million in Canadian dollars), up from the roughly $38 million ($50 million Canadian) that it raised for its second fund in 2014.

The firm — which invests roughly 60 percent of its capital across startups in Toronto, Kitchener, and Waterloo, and the remaining 40 percent across U.S. tech hubs like the Bay Area, New York and Boston — was originally founded in 2011 by Matt Golden, who’d previously been a partner with Blackberry Partners Fund.

Perhaps it’s no surprise then that Golden Ventures was initially focused on “mobile,” says Golden, though he says its early investments eventually led it to a lot of other business models, from SaaS to e-commerce to emerging technologies like AR and VR and even robotics.

In fact, the company has now invested in 42 companies across its three funds, including in Toronto-based Wattpad, an online story-sharing platform that recently raised $51 million in fresh funding led by Tencent Holdings; Toronto-based Ritual, whose app allows restaurant customers to order ahead for takeout food and counts Greylock Partners and Insight Venture Partners among its investors; and the Winnepeg-based food ordering company SkipTheDishes, which was acquired in late 2016 by bigger rival Just Eat, in the U.K.

As for the size of checks Golden Ventures is writing, Golden says first checks typically range from $500,000 to $1.2 million (in U.S. dollars), with reserves for follow-on rounds. He says this will remain the case even though the firm’s newest fund is about 45 percent bigger than its last one.

Golden also says that in exchange for the firm’s money, he and his colleagues expect between 5 and 15 percent ownership in a startup, depending on the “expected level of involvement, physical proximity to the company, and co-investor syndicate.”

Numerous U.S. firms see promise in what Golden Ventures is doing. Among its limited partners in the San Francisco-based fund of funds Cendana Capital, the Boston-based institutional investment firm HarbourVest, and the Boulder, Co., venture firm Foundry Group, which is pouring 25 percent of its current fund into other venture capital firms.

Foundry explained its interest in Golden this week by pointing to the strong startup community in the Toronto-to-Waterloo region, the presence of local universities like the University of Toronto and the University of Waterloo, and the local and regional government programs and accelerators that have been supporting local founders and, in the process, attracting international talent.

The last is especially probably attractive at time when other countries’ immigration policies, ahem, aren’t quite so favorable.

Pictured above: Golden Ventures’s team.

A life sciences firm run by a top VC and a cofounder of Alphabet’s life sciences arm, just raised its biggest fund yet

There’s no end to the number of fascinating devices and therapies being created right now in the fields of health and life sciences. The investors behind them are often pretty interesting, too, given the expertise needed to make informed bets on what are often completely unproven projects.

Such is the case with Foresite Capital, a seven-year-old, San Francisco-based outfit that just closed on $668 million for its fourth venture fund, its biggest pool of capital so far. (Its first funds closed with $100 million, $300 million, and $450 million, respectively.)

The firm was founded by Jim Tananbaum, who has started and sold healthcare companies and who earned the dubious distinction — courtesy of Bloomberg — of symbolizing what’s gone wrong with the Burning Man festival in recent years. (Months after Bloomberg described an elaborate camp he had built, Tananbaum, who in 2014 was elected to the board of the nonprofit that oversees the event, resigned.)

No doubt Tananbaum — who has both an MD and an MBA from Harvard — would prefer to be known for being named to Forbes’ Midas List of top venture capitalists for the last four years, thanks to a wide array of bets in Foresite’s portfolio. Some of these include Aimmune Therapeutics, whose treatment to protect children with food allergies is seeking FDA approval; Puma Biotech and Juno Therapeutics, both of which have gone recent public in recent years; and Intarcia Therapeutics, which makes a matchstick-size, diabetes-treating pump and was flying high two years ago, though it has more recently taken its lumps.

Foresite’s approach has impressed more than Forbes. Last year, Tananbaum also recruited recruited Vik Bajaj, who co-founded Alphabet’s life sciences arm Verily and was formerly the chief scientific officer of Grail, a well-funded company that’s developing a blood test to detect cancer in its earliest stages.

Bajaj — who’d earlier in his career spent seven years as a scientist with Lawrence Berkeley National Laboratory — presumably could have landed at another venture firm, a growing number of which are making life sciences investments. But he says Foresite’s 40-person team of largely researchers was one major draw. As Tananbaum describes it, the group tracks data “ranging from the technical to R&D to patient/payer information, analyzing how each company compares technically and whether they’re meeting a significant patient need and is sustainable.”

Says Bajaj of the multi-stage firm, whose checks range in size from $1 million, all the way to $50 million: “The amount of data to inform decisions in bio medical investing is enormous, from biological to preclinical and clinical data, to data about how products are going to be marketed and used and approved by regulators. Each of these features is associated with massive data sets, and you have to have a degree of scientific depth and rigor — and that’s the culture that  Jim set up here from the beginning.”

Foresite is managing by five general partner investors altogether. They write roughly a dozen checks each year, and generally target 10 percent ownership, say both men.

Some of Foresite’s other investments include the machine-learning drug R&D startup, insitro; Mindstrong, a mental health startup; and Denali Therapeutics, which is developing treatments for Alzheimer’s and Parkinson’s diseases and staged one of last year’s biggest biotech IPOs.

Why the tech industry should care about the farm bill, which is being drafted right now

For some food stamp recipients, 2018 could shape up to be a particularly aggravating year, including for one of the only startups trying to find ways to innovate on the ways that food stamps are delivered and managed.

It’s not something that’s talked about much in tech circles, but perhaps it should be, given that 42 million Americans rely on the more than 50-year-old, anti-hunger program behind the stamps — called the Supplemental Nutrition Assistance Program, or SNAP — for basic food assistance.

What’s the problem? It’s twofold essentially. First, let’s take a look at the farm bill, which subsidizes SNAP.

The farm bill, which got its start in 1933 as part of FDR’s New Deal legislation, expires and is updated and passed anew by Congress every five years, after which the sitting U.S. president signs it into law. The last bill was signed in February of 2014, so Congress is working on the next version now. But things aren’t looking very promising for SNAP recipients. Already, the first draft of the House Republicans’ farm bill, which passed through one committee, looks to cut $20 billion from the program over the next 10 years, potentially cutting off two million people in the process.

The cuts will be debated on the House floor beginning early next month, meaning it’s far from clear what happens from here. While Republicans argue they want to promote self-sufficiency (the cuts are expected to come via tightened work requirements), poverty experts see the proposal as chipping away at the already shrinking safety net for America’s most vulnerable. As an article about the bill in Vox notes, half of the 42 million people who are living below the poverty line and relying on SNAP for food assistance are children.

By now you might be wondering what startups have to do with any of this. Stick with us.

Propel, a four-year-old, Brooklyn-based company, makes software for low-income individuals. Its founder, Jimmy Chen, is a former Facebook manager who knows about need; he receive a full scholarship to Stanford based on it.

Propel is a for-profit enterprise. It has raised $5.2 million in outside funding, including from Andreessen Horowitz, the Omidyar Network, and the Center for Financial Services Innovation. It makes money through marketing. For example, though its app primarily helps food stamp recipients check their balances (something they’ve historically had to keep track of themselves or by calling an 800 number), Propel’s features also include coupons and notices about job opportunities, and it receives referrals fees from both food companies and employers for these services.

Still, the 11-person outfit remains rare in its focus on improving a public sector service, which is perhaps why more than 1 million people — or roughly 5 percent of SNAP participants — now actively use its technology. Indeed, the company’s app, which also enables users to create shopping lists, has grown its user base fourfold over the last eight months alone, largely via families telling other families.

Alas, Propel is newly in the crosshairs of a much bigger company that worries Propel is encroaching on its territory. Big government contractor Conduent — which runs the food stamp networks in roughly of all U.S. states — and which manages the database that Propel’s app relies on to help people check their accounts, keeps finding ways to cut off Propel’s access. It’s hamstringing Propel’s users in the process, some recently told the New York Times. (One young mother of two sons said she lost access to the time-saving app for a month.)

Conduent says it’s just protecting itself. In emailed replies to questions from the Times, Conduent said that Propel’s smartphone was launched “without the knowledge, input or consent from Conduent.” It further accused Propel of creating a “capacity ambush,” owing to its data requests. It said its measures were aimed to preventing the “unauthorized access to data — from Propel or any other unauthorized user.”

Chen calls it a misunderstanding. “We saw an opportunity for [the food stamp program] to be part of a modern financial product, to create digital tools that can reduce the stigma of poverty that people were experiencing at the cash register,” including by “creating a plastic card that they just swipe at the register” — like the rest of us.

Propel has taken a “fairly conservative approach to data” he adds. Because Propel is dealing with highly sensitive information, it doesn’t run data in the background of anyone’s phone, retrieving information only when someone opens the app, which he says users do seven times a month, on average.

Most important, says Chen, Propel isn’t trying to replace Conduent or any of a small number of other electronic benefit transfer (EBT) processors that make money via contracts with states. “We’re a direct-to-consumer software play that makes no money from the government and is not looking to [secure] government contracts. Instead of trying to displace them, we’re trying to work with them, and we think we can do it in a way that’s productive for all parties.”

Which takes us back to that farm bill.

If Conduent can’t be persuaded to see Propel’s side of the story, the startup — and others trying to help low-income Americans — may have no recourse, not unless Congress steps in. In fact, part of why the farm bill is reauthorized on a regular basis owes to changes in modern tech.

While lawmakers fight to see how much of its budget they can cut, they might also take into consideration stories like that of Propel, and well-meaning founders like Chen. Maybe they think a government contractor should be able to stamp out a company that it sees as competitive. We hope they do not. If they want to see more startups innovate on behalf of low-income Americans, they need to protect the companies doing the innovating.

Updating the farm bill to protect emerging and civic-minded technologies is at least one step in the right direction.

8VC has closed its second early-stage fund, seemingly with an eye on logistics and biotech

8VC, the early-stage, San Francisco-based venture firm founded in 2015 by serial entrepreneur Joe Lonsdale and four other general partners, has closed it second early-stage venture fund with $640 million in commitments, says one of its investors.

The fund comes roughly two years after the firm closed its debut fund with $425 million, along with a separate, $50 million seed fund. A couple of years ago, 8VC also quietly raised a late-stage “coinvest” fund that it closed with roughly $400 million in capital commitments, meaning its total assets under management are currently around $1.5 billion.

We’d talked with Lonsdale last year about 8VC, whose mantra is simply “The world is broken; let’s fix it.”

Already at that time, the firm had invested in Synthego, a genetic engineering startup that provides scientists with genetic material used in their CRISPR research, and Color Genomics, a company whose genetics services help its customers understand their risk for the most common hereditary cancers.

It also counts among its founding partners Kimmy Scotti, who has led investments in uBiome, Blink Health, and Honor Elder Care on its behalf.

Now the firm appears to be beefing up its focus on biotech. One clue toward this end: it now features a section at its site titled “Tackling the bio-IT wave,” where it lists eight areas of emerging technology that it’s tracking, and highlights seven of its related startup bets, including Mantra Bio. The startup describes itself as a deep data platform for the study of exosomes, which are small lipid vesicles — air- or fluid-filled cavities — that are excreted from cells and which deliver information that Mantra plans to use to come up with new drug therapies.

8VC also brought aboard as an advisor Andrew Witty, the former long-serving CEO of drug giant GlaxoSmithKline. (Witty is also a venture partner with the life sciences investment firm Hatteras Venture Partners.)

In the meantime, 8VC also seems to be focusing more on logistics. For example, another recent addition to its network of advisors is Chris Sultemeier, who’d previously spent 28 years at Walmart, leaving as its executive vice president of logistics in May of last year.

8VC also earlier this month co-invested in a deal with Schneider National, a publicly traded company that sells truckload, intermodal and logistics services. The two had partnered to invest in Platform Science, a company that says it’s creating an IoT system for the transportation industry.

Either way, the young venture firm looks to have built a strong portfolio to date, with other bets that include the highly valued mobile commerce app Wish, and the health insurance company Oscar, which just last month announced $165 million in new funding led by Founders Fund. The round also included Capital G, which is Alphabet’s growth-stage venture arm, and its life sciences business Verily.

Like every venture firm, 8VC has its more controversial bets, too, though undoubtedly the firm would defend them. Among the two that spring to mind are Hyperloop One and Blink. Hyperloop, which is trying to develop a high-speed transportation technology, was notoriously dysfunctional at its start and it remains unclear if the company can become a sustainable concern with the financial help of billionaire Richard Branson, whose Virgin Group became involved with the company last fall.

Blink, meanwhile, a company at work on a discount prescription service, has been embroiled in numerous lawsuits in its four-year history. Most recently, the firm filed suit against a pharmacy startup that it views as an “unlawful copycat scheme.”

Orchid Labs is in the process of raising $125 million for its surveillance-free layer atop the internet

Orchid Labs, a San Francisco-based startup that’s developing a a surveillance-free layer on top of the internet, has raised a bunch of funding, according to a newly processed SEC filing that shows the year-old startup has closed on $36.1 million. The money comes just five months after Orchid closed on a separate, $4.5 million in funding from investors, including Yes VC, cofounded by serial entrepreneurs Caterina Fake and Jyri Engeström.

Others of its earliest backers include Andreessen Horowitz, DFJ, MetaStable, Compound, Box Group, Blockchain Capital, and Sequoia Capital, according to its site.

The stated goal of the Orchid is to provide anonymized internet access to people across the globe, particularly individuals who live in countries with excessive government oversight of their browsing and shopping.

Part of the point also seems to be to insulate users from the many companies that now harvest and sell their data, including walled gardens like Facebook and other giants like AT&T.

In a word where one assumes the Cambridge Analytica scandal is merely the tip of the iceberg when it comes to data abuse, it’s easy to see the project’s appeal. So far, judging by the filing, the company has raised that $36.1 million via a SAFT agreement, an investment contract offered by cryptocurrency developers to accredited investors.

The filing shows that 42 individuals have participated to date. It shows a target of $125,595,882 million, however, and judging by how hot particular blockchain ideas are getting, and how quickly (see the Basis deal earlier this week), you can imagine more money will flow to the company if it hasn’t already. (That’s also an awfully specific target on its filing.)

We’ve reached out to the company for more information. If you want to learn more, you can also check out its white paper.

In the meantime, it’s worth noting that Orchid has five founders with varied and interesting backgrounds. They include Stephen Bell, who spent seven years as a managing director at Trilogy Ventures, shopping for opportunities in China, before returning to the states in 2015; Steve Waterhouse, long an investor with the digital currencies-focused firm Pantera Capital; former Ethereum Foundation developer Gustav Simonsson; software engineer Jay Freeman; and Brian Fox, who is credited with building the first interactive online banking software for Wells Fargo in 1995 and was first employee of the legendary programmer Richard Stallman’s Free Software Foundation, among other things.

Between the money involved, the mission, and the founders, this one looks like a Big Deal. Stay tuned.