Crypto firm Pantera Capital is looking to raise up to $175 million for a new venture fund

Pantera Capital, which has made its mark in recent years by investing early and often in a wide variety of digital assets, is looking to raise up to $175 million for its third venture fund — an enormous jump from the $25 million it deployed for its second venture fund and its $13 million debut venture fund, which it closed in 2013.

Firm partner Paul Veradittakit says the target amount is a “function of how fast the space is moving, the talent coming in, the opportunities, and the sizing of rounds. With more interesting later-stage investments [on our radar], too, we want to be flexible and able to move with the market.”

Whether the firm closes with $175 million or another number is an open question. A newly processed SEC filing shows it has so far rounded up more than $71 million in capital commitments from 90 investors, an amount that Veradittakit calls a “first close.”

Certainly, Pantera is accustomed to managing meaningful sums of money. In addition to its venture funds, which are structured like most traditional venture funds — they feature a 10-year investing period, similar economics, and involve good old-fashioned checks to startups in exchange for some amount of equity — the firm is also juggling three other strategies.

As we reported last year, one of its newest funds is a hedge fund that’s focused exclusively on initial coin offerings. As firm founder Dan Morehead told us at the time, Pantera buys pre-sale ICOs, “basically getting a discount to the ICO price by getting in early, when it’s just a team and a white paper.” Meanwhile, Morehead had added, “We help provide the right connections, whether in terms of marketing or recruiting or business development.

The vehicle is evergreen, says Veradittakit, meaning it has an indefinite fund life that lets investors come and go.

The other two other funds that Pantera currently oversees are also structured like hedge funds. One is a Bitcoin fund that has attracted plenty of investors over the years, and returned a lot to them, too, according to the calculations of Morehead. In fact, he wrote two weeks ago that the fund, launched five years ago, has enjoyed a lifetime return of 10,136.15 percent net of fees and expenses.

The very last fund invests in cryptocurrencies that are already trading on exchanges — an approach that includes machine learning to algorithmically invest in crypotcurrencies, as well as allows for some discretionary input by Pantera’s top brass, which includes Morehead, Veradittakit, and Joey Krug, who joined Pantera last year after cofounding the market forecasting startup Augur. (It went on to orchestrate the first ICO on the ethereum network.)

Explains Veradittakit of this last pool, it’s for “if you are’t sure that Bitcoin will remain the dominant cryptocurrency, or you’re interested in other use cases that may arise, or you just want to build a diversified portfolio of assets that have asymmetrical returns as bitcoin, or maybe return even more because they feature lower valuations.”

In some ways, the venture efforts of Pantera —   which employs 38 people altogether in San Francisco and Menlo Park, Ca. —  may be its most challenging given the nature of VC. Investors in the asset class are typically willing to wait a handful of years for a firm to produce returns; in Pantera’s case, because it is betting exclusively on ventures, tokens, and projects related to blockchain tech, digital currency, and crypto assets, some of those returns could potentially take even longer.

Veradittakit doesn’t sound concerned. Rattling off some of Pantera’s venture investments to date, including in BitStamp, Xapo, Ripple, and Circle, not to mention more recent investments in Chain, Abra, Veem Polychain, and Z Cash, he sounds more like a proud parent. Pantera has invested in “lots of wallets and exchanges focused around the world, in Coinbases of different geographies, in enterprise-related blockchain companies. More recently, we’ve funded everything from big data to decentralized application platforms.”

It’s still very early days, he acknowledges. But “in terms of returns, there will be companies that create something completely disruptive. There will be M&A [opportunities] more often and that [come together] more quickly than other companies.”

If everything goes as planned, Pantera will be there when they do, and it will have more resources to deploy than ever.

Catching up with startup advisor (and Wealthfront CEO) Andy Rachcleff

Andy Rachleff, who co-founded the venture firm Benchmark back in 1995 and has more recently been leading the wealth management firm Wealthfront and teaching at Stanford, is widely sought for his startup advice. It has become harder to come by, though, given the demands on Rachleff’s time. Most notably, Rachleff has had to dial back his work at Stanford to one course during one quarter of the year — a class that we can only guess is heavily oversubscribed by students.

That doesn’t mean he doesn’t enjoy the work. Right now, he’s helping two longtime friends, AppDynamics co-founder Jyoti Bansal and VC John Vrionis, with a new kind of accelerator program they are launching today (more on that here). In a quick call to discuss that program earlier this week, he also fielded a few questions from us about the current state of early-stage startup investing and how founders can best navigate it.

We asked him, for example, about how a glut of seed-stage investment has impacted the way that startups are raising money — often in pre-seed, then seed, then post-seed rounds, before raising Series A funding. We wondered if, nomenclature aside, he felt things had changed fundamentally.

As it turns out, he does not. “While the structure and characters involved are very different than 10 years ago, the steps you need to go through are no different,” said Rachleff. “The whole point is to understand what an investor at the next round expects. You have to determine whether or not you’re ready [for that next meeting], and try to achieve product-market fit as fast as possible before you get to it.” Indeed, Rachleff suggested that he thinks it unwise for founders to raise seed rounds serially. “When companies raise seed funding, [that money] is to prove the dogs want to eat the dog food. If they can’t [prove that], and they have to ask for more seed funding,” the startup becomes “less compelling” to later investors.

We asked him about some of the biggest mistakes that founders make, and he said that many of these center on who founders approach for funding, how they pace the rate at which they approach investors and how, exactly, they pitch their startups. On that last point, said Rachleff, “People think data is a way to compel people, but it’s the story that compels people, and that has never changed, whether you’re talking about political campaigns or business presentations.” (We asked for more details, but he half-kiddingly suggested that founders will need to hear about the importance of narratives via that aforementioned accelerator program.)

We also asked Rachleff about some now-famous research he prepared some time around 2006 that suggested that every year, about 15 U.S. startups are created that eventually reach $100 million in annual revenue. His point at the time was that VCs can only succeed by getting behind those companies. (It’s largely the premise around which the venture firm Andreessen Horowitz was launched, co-founder Marc Andreessen had told this editor when the firm’s first fund was getting off the ground back in 2009.)

We wondered: Is that number still 15 so many years later? Rachleff noted that he hasn’t updated his research, but he said he doesn’t “think it’s much bigger in the U.S. I do think the number is larger with Chinese companies, but here, I bet you it hasn’t changed or maybe it’s 20 companies each year that at some point reach $100 million in annual revenue.”

Before we jumped off the phone, Rachleff had a question for us: Why aren’t there more articles about seed-funded companies going out of business? (Maybe he thinks this would keep more people from pursuing half-baked ideas.)

“Thousand of companies are raising seed funding — 10 times the amount of companies that were starting with a Series A” during the go-go dot-com era of the late ’90s,” he said. “But when I ask investor friends what’s happening to them all, the best answer I get is that a small number of them are successful, a slightly larger portion get acqui-hired and the largest portion keeps raising money to keep the hope alive.”

Some of them “get to $1 million to $2 million in revenue to reach break-even,” Rachleff continued, but, alas, that’s no reason for celebration. If a startup has raised outside funding and “there’s no money to grow into a business, that’s a failure.”

Foundry Group quietly announces a big fat $750 million fund

Foundry Group, the Boulder, Colo.-based venture firm co-founded 11 years ago by startup whisperer Brad Feld, has raised a $750 million seventh fund to target early-stage and growth-stage companies, as well as to invest in other venture funds.

It sounds like — and is — a lot of money, though the firm notes that it encompasses all of its various investment strategies, whereas its last fund, a $500 million vehicle that it closed in 2016, was used to invest in other venture funds and growth-stage companies alone; Foundry was separately managing its early-stage bets in a different fund.

It’s a little confusing, but if you really want to know the details, Feld breaks them out in a post:

For historical reference, our early-stage funds (FG 2007, FG 2010, FG 2013, and FG 2016) are all $225 million in size. Our first early growth fund raised in 2013, Foundry Group Select, is also $225m in size. In 2016, when we raised Foundry Group Next, we approximately doubled the size of that fund to $500 million since 30% of it was going to be invested in partner funds and 70% in early growth. So, at the beginning of 2016, we effectively raised $725 million (FG 2016 and Foundry Group Next). Foundry Group Next 2018 is simply the combination of those two funds rounded up slightly.

Foundry was founded by Feld, Ryan McIntyre, Jason Mendelson and Seth Levine — “four equal partners,” as Feld describes them.

With this newest fund, he says, Foundry now has “seven equal partners,” meaning each receives the same amount of carry — or profits from the firm’s successful investments — no matter that three of the partners are newer to the table.

Foundry’s newer partners include Lindel Eakman, who joined in 2015 to help Foundry identify venture funds in which to invest. (Very meta, we know.) Eakman had previously spent 13 years with the University of Texas Investment Management Company (or UTIMCO), which was Foundry Group’s largest investor.

The firm last year also added Chris Moody, who’d been the CEO of Twitter data reseller Gnip before Twitter acquired the company in 2014 and made Moody a GM and VP of its data and enterprise business. (Foundry was an investor in Gnip.)

The firm’s newest partner is Jamey Sperans, who was as an early member and managing director of Morgan Stanley Alternative Investment Partners, where he served on the global investment and executive committees. Sperans, who joined earlier this year, has also founded five companies over the years.

In case you are wondering, yes, that is seven men. (Just remarking.)

Foundry has had at least 44 exits over the years, according to Crunchbase. Among its most recent wins: the email service provider SendGrid, which staged a successful IPO last November; and the 2015 IPO of Fitbit, the wearable device company, whose shares are trading at roughly $5.50 apiece right now but were as high as $47 in the months after the offering.

Among Foundry’s newest investments is Chowbotics, a four-year-old, Redwood City, Calif.-based company that makes a salad-making robot and raised $11 million in Series A-1 funding last month; and Sensu, a year-old, Portland, Ore.-based full-stack monitoring platform that raised $10 million in Series A funding back in April.

It has also re-upped in plenty of its portfolio companies in recent months, including Urban Airship, an eight-year-old, Portland, Ore.-based company behind a digital customer engagement platform. In June, it raised $25 million in Series F funding led by Foundry, which had also led the company’s Series B round in 2010.

Check out this first of its kind, direct-to-consumer urine-testing app with FDA clearance

Urinary tract infections are highly uncomfortable and distracting, and they are very common for women because of the female anatomy. In fact, according to the Mayo Clinic, many women experience more than one infection during their lifetimes.

Many of the afflicted try resolving the infection on their own — using heating pads, drinking more water, taking pain medications. But often, these infections become quickly more advanced, a doctor is called, an in-patient visit is made, and the whole terrible episode is only ended after a trip to the pharmacy for some antibiotics.

Until now, at least.

A young San Francisco-based startup called Scanwell Health just this week began selling directly to consumers the first and, for now, the only FDA-cleared urine testing app that allows someone to test their urine at home using a paper test strip and a camera phone. (Its app uses sophisticated color metrics to analyze the strip and determine what’s what.)

The kits are just $5. A call to Scanwell to confirm the results — it relies on outside physicians — will cost another $25. But that prescription service will also call in an order for antibiotics immediately if there’s an infection. (Users can also order the antibiotics, but it takes a couple of days for them to arrive.)

The startup — which has so far raised just $120,000 from Y Combinator — was founded by Stephen Chen, a Harvard MBA who has the kind of backstory that makes investors slobber.

Right out of school, he joined Teco Diagnostics, a now 33-year-old maker of in-vitro diagnostics and medical devices, first as an R&D manager and later as a GM. Using what he’d learned there, he left Teco in 2013 to create a separate company, Petnostics, which makes a urine test for pets that can help identify a range of issues, from diabetes to kidney stones to bacterial infections. He even pitched the company on the show “Shark Tank,” which was hosting open tryouts within distance of his home a couple of years ago, and he landed $300,000 in exchange for 20 percent of the company.

While the exposure was great, the terms were not, suggests Chen, who says he ultimately didn’t take the money. He didn’t need to, apparently. Petnostics is still a going concern and it has generated enough revenue to support the development of Scanwell, which Chen says was always part of his master plan. In fact, Chen started the FDA approval for Scanwell nearly three years ago. The reason: UTI testing for humans is a much bigger market, especially when factoring in the billions of dollars that are wasted on emergency room trips for UTIs each year. Though hard to fathom, a visit to the ER for the condition can cost a stunning $2,600.

What happens from now depends on how effectively Scanwell reaches its target market, but so far, it seems, so good.

Though the direct-to-consumer service will take some time (different states have different regulations around over-the-phone prescription services), people in California and select other states can use the service today. In the meantime, Scanwell is making its kits available on as many college campuses as possible, given UTIs tend to be prevalent at schools because students are sexually active.

The company is also looking to work more closely with insurance companies, arguing it can help them improve their own quality ratings by using Scanwell kits to reduce Medicare and other insurance payouts.

Not last, the four-person team is already working on other urine-based tests, including a test that identifies chronic kidney disease, and another test for cardiovascular diseases.

Says Chen, “Paper tests are so cheap. They can reach people through the mail. It’s kind of like when AOL used to send out a bunch of discs. We can work with health providers to work with their patient populations and reach them more effectively through home tests.”

Hopefully, they’ll agree with Chen. Certainly, as he notes, home access to diagnostics is “long overdue.”

BlockFi just gathered up $50 million to lend to bitcoin and ethereum holders who don’t want to cash out (yet)

Because cryptocurrency prices are almost comically volatile owing to challenges involved in valuing them, it’s hard to know when or why to sell.

Enter crypto-asset backed loans, around which a small but growing number of startups is beginning to spring up. The idea is to lend money to cryptocurrency holders who don’t want to offload their holdings but also don’t necessarily want so much of their assets tied up in cryptocurrencies.

Among these is Lendingblock, a London-based startup that enables holders of crypto assets to lend them out and accrue interest on their holdings. Other outfits — and we aren’t vouching for these so much as letting you know they exist — include CoinLoan, a 1.5-year-old outfit in Estonia that is itself trying to raise money through an initial coin offering; Nexo, a Switzerland-based platform powered by a Bulgarian consumer finance company called Credissimo; and SALT Lending, a Denver-based outfit that started crypto lending earlier this year, and recently told American Banker that it has already made just shy of $40 million in loans and has had no losses. (AB notes that the company’s founder, Blake Cohen, refers to himself at “The Blockchain Cowboy.”)

Still, it’s already looking like if there is one to watch in this new world, it might be BlockFi, a year-old, 12-person, New York-based non-bank lender that had raised roughly $1.5 million in seed funding earlier this year from ConsenSys Ventures, SoFi and Kenetic Capital, and just today quietly announced a massive infusion of capital — $52.5 million — led by Galaxy Digital Ventures, the digital currency and blockchain tech firm founded by famed investor Mike Novogratz.

Most of the capital — $50 million — will be used to loan to BlockFi’s customers. The rest — $2.5 million — is an equity investment in the company from Galaxy and earlier backers, including ConsenSys.

Founder Zac Prince comes from a background of consumer lending, having worked recently as a senior vice president with the company Cognical (now operating as Zibby). He’d also logged time as a vice president at the broker dealer Orchard Platform (since acquired by the lending company Kabbage).

As he told us of BlockFi’s origins earlier today, Prince started personally investing in crypto in early 2016 and also started attending related events. It was there that he “watched the crowd shift from purely computer scientists and anarchists to [also] VCs and bankers.”

As it happens, he was in the process of getting a loan for an investment property around the same time. instead of using a traditional bank, he decided to list his crypto holdings to see what would happen, and the response was overwhelming. It was, he says, a “lightbulb moment. I realized that there was no debt or credit outside of [person-to-person] margin lending on a few exchanges and I had the feeling that this was a big opportunity that I was well-suited to go after.”

Clearly, Novogratz agrees. So does former Bank of America managing director Rene van Kesteren, who ran a seven-person equity-structured financing business before joining BlockFi in May as its chief risk officer.

Currently, BlockFi allows investors to take out a loan as high as $10 million using either bitcoin or ethereum as collateral.

Prince wouldn’t say how much money the company has lent to its retail, corporate and institutional clients. He did offer that the number is “seven figures,” adding half-kiddingly that it “may be eight” figures by later today.

The writer whose book became “The Social Network” just sold another book about the Winklevoss twins

The title could just as easily be Sweet Justice.

The Boston-headquartered publishing house Little, Brown has agreed to publish a new book about Cameron and Tyler Winklevoss, who famously settled a 2008 lawsuit against their former Harvard classmate Mark Zuckerberg over Facebook’s earliest days, then made a much larger fortune with their settlement money by investing it in bitcoin.

According to the business magazine The Bookseller, the new opus, titled Bitcoin Billionaires, covers a lot of territory, from the brothers trying without success to raise a venture fund in Silicon Valley (no one wanted to upset Zuckerberg, is the claim) to first hearing about bitcoin on a jaunt to Ibiza, Spain. In fact, they reportedly wound up gathering up one percent of all the bitcoin in circulation during or around 2012. 

Whether the book is made into a movie remains to be seen, but it seems as likely as not, given that its author is fellow Harvard grad Ben Mezrich, who also authored “The Accidental Billionaires.”

That book was eventually adapted by Aaron Sorkin into the Academy Award-winning movie about Facebook’s origins, “The Social Network.” In fact, when Mezrich began pitching his newest effort to publishing houses in the spring, the New York Post reported on “buzz that there’s already a movie deal in the works for the planned book.”

In the meantime, the Winklevoss brothers are receiving some fresh attention in Fortune, which included them in a new “40 Under 40 List” that the outlet published this morning and which focuses on young movers and shakers at the “edge of finance and technology.” The reasoning behind their inclusion: the brothers, now 36, now run one of the world’s most influential crypto funds with their New York and L.A.-based firm Winklevoss Capital. They also oversee the three-year-old digital asset exchange Gemini, which they founded in 2015.

Eventbrite is reportedly going public in the second half of this year

Eventbrite, the 12-year-old, San Francisco-based event-planning company, has filed confidentially for an IPO and plans to go public later this year, according to a new report in the WSJ. The company’s lead underwriters are Goldman Sachs and JPMorgan Chase & Co., it says.

The offering must seem a long time in coming for Eventbrite founders Julia Hartz; her husband, Kevin Hartz; and the company’s technical cofounder and CTO, Renaud Visage.

Originally created for individuals wanting to host smaller events and private parties, but who faced few few options aside creating Excel spreadsheets — remember, the ticketing world formerly revolved around stadiums and major sporting events —  Eventbrite has grown steadily over the years into a corporate giant. It now powers ticketing for millions of events in more than 180 countries, and it has rung up more than $10 billion in cumulative tickets sales since its founding.

According to Forbes, in 2017, Eventbrite processed more than three million tickets per week to events, including conferences and festivals.

Part of the company’s growth has come through acquisitions. Last year, for example, Eventbrite acquired Ticketfly, a ticketing company that focused largely on the live entertainment industry and which had sold to the streaming music company Pandora in 2015 for a reported $335 million but Eventbrite was able to nab last year at the discounted price of $200 million.

Eventbrite has also made a broader international push in recent years, acquiring Ticketea, one of Spain’s leading ticketing providers, back in April, and acquiring Amsterdam-based Ticketscript back in January of last year. And those deals followed roughly half a dozen others.

Indeed, the company — which has raised roughly $330 over the years, including from Sequoia Capital, Tiger Global Management, and DAG Ventures  — has long been expected to go public, thanks in large part to its momentum, as well as its fairly turnkey and (we’d guess) lucrative business model.

Though we won’t see its numbers until closer to its IPO apparently, Eventbrite makes money off every transaction. For event organizers charging for ticket sales, Eventbrite’s fees vary by package, but one of its most popular packages collects 1 percent of the ticket price and $0.99 per paid ticket, plus another 3 percent for payment processing per transaction. It also sells a “professional package” wherein it collects 2.5 percent of the ticket price and $1.99 per paid ticket, plus a 3 percent payment processing fee per transaction. Last but not least, Eventbrite sells “premium package” with customized pricing.

Eventbrite is led by Julia Hartz, who took over the position of CEO in 2016, roughly six months after husband Kevin stepped down from his chief executive duties owing to a “non-life-threatening medical condition.” Until that point, Julia Hartz had primarily been tasked with overseeing marketing, customer support, sales, and human resources.

Both cofounders appeared earlier this month at the Allen & Co. Media and Technology Conference in Sun Valley, Idaho, an event that attracts many of the wealthiest and most powerful people in U.S. media, technology, and sports, and whose attendees are often on the cusp of taking their companies public — if they haven’t already.

When Eventbrite does complete its IPO, Hartz will join a tiny but growing list of female founders to steer their companies onto the public markets. Last October, when the mail-ordering clothing service Stitch Fix went public, its founder and CEO, Katrina Lake, became the first woman to take an internet company public in all of 2017.

Public shareholders got high today on Tilray, the first marijuana company to IPO on Nasdaq

Tilray, a five-year-old, British Columbia-based medical cannabis company that sells its products to patients, researchers, pharmacies and even governments, saw its shares get high (sorry) on the Nasdaq today, after the company priced 9 million shares at $17 apiece and watched them soar, closing at $22.39, a jump of slightly more than 32 percent.

The company raised $153 million in the offering, capital it will reportedly use in part to fuel its marijuana growing and processing facilities in Ontario.

It was a huge win for the cannabis industry, which has been growing like a weed (sorry again). Related startups attracted $593 million in funding last year, twice what they raised in 2016 and a meaningful jump from the $121 million invested in related startups in 2014, according to CB Insights. Among the different types of companies to garner investor dollars, shows CB Insights’ research, are: startups focused on research or distribution of medical marijuana products (as with Tilray); tools for ensuring compliance with state and federal marijuana laws; startups focused on payments for marijuana companies; startups collecting data and producing marketing insights about the industry; and companies creating novel strains and types of marijuana using new farming techniques.

Tilray’s performance today is also a very positive signal for Seattle-based Privateer Holdings, a private equity firm that owned 100 percent of the startup as it headed into its offering. In fact, Privateer’s CEO, Brendan Kennedy, is also the CEO of Tilray. (Cannabis companies are weird.)

Privateer has itself raised more than $200 million since its founding in 2010, including from Founders Fund and Subversive Capital, and it has used that capital to fund, acquire, and incubate companies. While it incubated Tilray, for example, it also owns Leafly, a large cannabis information resource that it acquired in 2011. Another of its portfolio companies is Marley Natural, a Bob Marley-branded cannabis line that it launched in partnership with the Marley’s estate and that sells a line of cannabis strains, smoking accessories, and even body care products.

It isn’t exactly clear how much Privateer had sunk into Tilray (we have a press request into the company). Tilray had announced C$60 million in Series A funding back in February, comprised of a “group of leading global institutional investors.” But according to its S-1, it was solely owned until today by Privateer.

What we do know: Tilray remains unprofitable, reporting a net loss of $7.8 million last year. The company also cannot sell its products in the U.S. market, given that marijuana remains illegal under federal law, despite that 30 states and Washington D.C. have legalized it in some form. The reason: the U.S. government classifies marijuana as a schedule 1 drug, meaning it’s considered to have no medical value and a high potential for abuse.

That could change, but as this Vox explainer makes clear, a review process for the current schedule would need to be initiated by either the secretary of health and human services or the attorney general, and current Attorney General Jeff Sessions despises marijuana, saying once that “Good people don’t smoke marijuana.

He seems to be among a dwindling minority. According to a Gallup Poll published last October, 64 percent of Americans favor legalization.

Worried about a slowdown? It already happened in 2016, says one new venture study

In today’s market, it’s hard to make sense of what’s what. Deals have grown incestuous for the first time, with outfits like GV investing alongside Uber last week — just months after its parent company, Alphabet, was at Uber’s throat. A $10 million-plus round of seed funding is no longer a joke. Venture firms continue to raise record-breaking amounts of money, despite what feels like creeping uncertainty about how much longer this go-go market can continue.

Unsurprisingly, there’s been some talk lately about deal flow and the possibility that some of the most well-regarded early-stage investors in the industry have quietly applied the brakes. But new analysis out of Wing, the 7.5-year-old, Silicon Valley venture firm co-founded by veteran VCs Peter Wagner and Gaurav Garg, draws a conclusion that might surprise nervous industry watchers: After tracking the investment activity of what Wing considers to be the 21 leading venture firms, it discovered that a pullback already happened . . . in 2016. In fact, Wagner, who oversaw the analysis, tells us there’s been so sign of a slowdown since then.

We caught up with Wagner last week to learn more about Wing’s analysis — and what might be causing some confusion in the industry right now.

TC: First, why do this kind of study right now?

PW: There’s been a lot of analysts and reporters and LPs and VCs asking us about our investment pace really, and I think it owes to talk of Benchmark and Union Square Ventures slowing down, so we thought we’d look at some parameters and see what’s going on.

TC: Why not just refer to industry-wide statistics? It seems like there are plenty of these.

PW: They’re kind of swamped with the data of less discriminating investors, though. You really want to focus on the signal, which is why we track what the 21 leading venture firms are doing, and in that analysis, we found no signs of a slowdown. We found instead that there was a peak of activity in 2013 and 2014, a pullback in 2016, and an uptick since.

And we cut it different ways. We removed international deals in China and India, because they have their own rhythm and can get frothy. We moved seed deals, given there’s been some major schizophrenia among venture firms who waded into seed deals, then pulled out. Even still, 2017 saw an increase in deals over 2016, which was the lowest year in terms of deal activity since 2010.

TC: These were first-time investments?

PW: Yes, and the reason is that follow-on rounds are dictated more by the operational needs of companies. Some could be running out of cash, for example, so it’s non-discretionary. If you want to look at sentiment, you have to look at first-time investments in isolation.

TC: Do you have 2018 data?

PW: We have partial data, of course, and we’ve annualized it to “predict” that 2018 numbers will be close to 2017. That is, if you buy the idea of projecting out, which I don’t really. Also, because you’re looking at a smaller batch of numbers, you’re on thin ice statistically. But for now, at least, we’re seeing a level of activity that was higher than 2016.

TC: You can see why things might be ticking along now: the tech IPO market, SoftBank’s massive Vision Fund, big tech companies getting bigger, which keeps the wheels turning. What happened in 2016? Uncertainly about the U.S. presidential election? Bill Gurley’s warnings that a reckoning was coming?

PW: I really don’t know that it was down so much versus that prior years were up. It was a more a reversion to the mean. The 2016 number still represents a pretty decent and sustainable pace for this industry.

TC: Based on your findings, would you guess a downturn is closer than further away? It seems inevitable, but I’ve thought this for the last three years.

PW: It’s a known unknown. We know there will be a change but we don’t know when or how deep it will be.

TC: Could things have possibly changed, given that everything is impacted by tech, that software is, in fact, eating the world? That’s obviously the bull case.

PW: It’s pretty darn mainstream, whether via digital transformation or just the massive disruption of massive industries buy digitally native competitors. I don’t know, is the answer. But it’s true. Tech isn’t a sideshow anymore.

Kindly Care scores $5.4 million to vet and place caregivers, then help families pay them correctly

There are roughly 45 million unpaid eldercare providers in the United States, according to the 2016 U.S. Census Bureau. It’s tough on these family caregivers, many of whom are working women who are also raising their own children.

There are alternatives. For example, there is no shortage of agencies willing to place a rotating cast of caregivers into the homes of the elderly, though they can be prohibitively expensive for many families. There are also upstarts trying to address the challenge — and opportunity — that an aging American population presents. One startup, Honor, places full-time employees in the homes of seniors with an eye on maintaining a consistent experience for the seniors with whom they work. Another, HomeHero, partners with hospitals to connect home care providers to patients. (It also has a mobile app that helps family members monitor the health of those under HomeHero’s care.)

Now, another startup in the space, three-year-old San Francisco-based Kindly Care, is taking more of a marketplace approach, pairing vetted caregivers with families who need them, then helping both sides manage their financial and tax arrangements by acting as their back-office provider.

The company, as with many similar companies, was born largely out of the need of its founder and CEO Igor Lebovic, a native of Croatia who’d moved to the U.S. to nab two aerospace engineering degrees, and never moved home, instead starting a company with a college co-founder. They later sold their startup to, then a property of The New York Times. But while it was a happy outcome for Lebovic, he worried about his parents, thousands of miles away, as the realization set in that he would likely never again be as available to them as he was when they lived in close proximity.

“Like a lot of people who leave their parents behind, it’s one of those things that I’ve wondered about over time. We don’t have a lot of plans for our parents, and there’s this guilt.”

Whether the 12-person company eventually expands into Europe at some point is a distant unknown, but Kindly Care seems to be resonating with caregivers in the U.S. According to Lebovic, more than 100,000 caregivers have registered with the platform in hopes of finding an assignment through it, and 20,000 people have been fully vetted and are now available to contact through the platform, ranging from people who specialize in memory care; to specialized nursing; to dressing, bathing and personal care; to transportation and more.

Based on their specific needs, families can then scan interviews and videos of caregivers in their area, and  settle on an hourly wage that’s acceptable on both sides. (Most families pay between $15 and $18 an hour, says Lebovic.) After that, Kindly Care essentially sets up a payroll for the family that ensures that payments and tax withholdings are compliant based on the state of operation.

What Kindly Care gets in exchange is a commission based on the dollars spent on its platform. Families who pay for live-in help are essentially paying the company 20 percent of the hourly wages they provide their caregivers; for caregivers who don’t live with their clients, Kindly Care takes a 25 percent cut.

It may sound steep, but Lebovic argues that it has to do a lot of heavy lifting on the front end to ensure that caregivers are who they say they are, and that they operate in a way that’s compliant with local labor laws. (All that help it provides on the administrative front is presumably pretty sticky, too.) Kindly Care is also more affordable than traditional live-in-care, he says, and it’s a much better alternative to posting an ad on Craigslist and hoping for the best.

Investors agree. Kindly Care just completed a $5.4 million Series A funding round led by Javelin Venture Partners, with participation from MHS Capital and Jackson Square Ventures . Altogether, the company has now raised $9.5 million.

Asked what Kindly Care will do with its fresh capital, Lebovic is clear. “Right now we’re geographically spread out across five states,” including California and Ohio. “Now, with the help of our new funding, we plan to expand to all 50.”