B2B Services, EdTech and IT Product Cos witness return of interest even as overall Venture Capital investments dip 32% in Jan-Mar’16

Venture Capital firms invested $242 million over 85 deals in India during the three months ending Mar 2016, data from the Venture Intelligence VC Deals Database shows. The investment activity by volume during Q1’16 is 32% lower compared to the same period in 2015 (which had witnessed 125 investments worth $471 million). The activity level was also 13% lower to the immediate previous quarter (

European tech funding was almost flat in Q1 2016

Europe Funding

The first quarter of 2016 has come to a close: European and Israeli startups raised €4.4 billion across 769 deals in Q1, including Spotify’s recent $1 billion debt round.

European and Israeli tech startups have raised €4.4 billion (about $5.01 billion) in funding in the first quarter of 2016, across 769 deals.

In both cases, these figures represent a 31% increase compared to Q4 2015, and a 46% and 66% year-on-year uplift, respectively.

That is, if you take into account Spotify’s recently announced – and massive – $1 billion debt round.

Have a look at the following two charts:

eu tech funding q12016

When you don’t count Spotify, the landscape changes significantly:

eu tech funding q1 2016

That’s right. Excluding Spotify’s latest, pre-IPO financing round, startups in the old continent raised a combined €3.5 billion, almost exactly the same amount as in the previous quarter (€3.4 billion), despite there being 183 more funding deals.

This means that the average size of European and Israeli tech funding deals has gone down in Q1 2016. Sans Spotify, the average deal in Europe in the first quarter of 2016 was only €4.6 million, compared to €5.8 million in Q4 2015 and €6.6 million in Q1 2015.

eu tech funding q1 2016

The reason behind this? An impressive increase in early-stage deals.

eu tech funding q12016

In Q1 2016, there were 534 deals smaller than €10 million (vs. just 379 in the previous quarter), proving that there’s plenty of early-stage capital across Europe. Growth and late-stage rounds didn’t see significant changes, with very similar levels compared to prior periods.

Leading the pack? France, with 134 deals (+123% QoQ, +306% YoY).

Note: the above analysis doesn’t include biotech and cleantech companies.

This post first appeared on Tech.eu.


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Developing the Venture Capital Model

Image via CrunchBaseNews broke yesterday of Sequoia Capital putting US$2m of funds into a joint project with Y-Combinator. While many commentators have focused on life in venture capital, most have ignored the strategic angle to the partnership.Y-Combinator and similar organisations take what is a ball of mud, clean and polish it and see whether there is a diamond in the middle.

Reddit change raises alarm about possible U.S. government spying

Reddit

(Reuters) – Digital privacy advocates and users of Reddit expressed their alarm on Friday over a change in the forum’s transparency report that suggested it may have been asked to give customer data to FBI investigators under a secretive government authority.

The annual report lists a variety of requests the site has received for information on users and for removal of content. On Thursday, Reddit deleted a paragraph known as a “warrant canary.”

The paragraph had said that Reddit had not been subject to national security letters, which are used by the FBI to conduct electronic surveillance without the need for court approval, or “any other classified request for user information.”

Privacy advocates have long contested the letters, saying they are not subject to sufficient judicial oversight or transparency safeguards.

Brett Max Kaufman, an attorney with the American Civil Liberties Union, said on Friday that authorities were possibly seeking the IP address, or an identifying number that corresponds to a specific computer, of an anonymous user on Reddit. Private messages between users could also be subject to search.

Reddit collects relatively little customer data that could be subject to a national security letter and useful for investigators, Kaufman said. Reddit does not require users to reveal their identities and stores less customer data overall compared to email or other social media such as Facebook, he said.

Edward Snowden, the former National Security Agency contractor who gave classified documents about U.S. spying to journalists in 2013, expressed concern on Twitter.

“Is dissent a threat to national security?” tweeted Snowden (@Snowden), whose leaks prompted a vigorous international debate about digital privacy and surveillance.

The leaks helped popularize the use of “warrant canaries” by tech firms eager to display resistance to government attempts to obtain access to user data.

“When you ask someone ‘Are you helping authorities in investigations?’ and they say ‘I’m not allowed to discuss that with you,’ I think the question has been answered,” wrote Reddit user khegiobridge.

National security letters are almost always accompanied by an open-ended gag order barring companies from disclosing the contents of the demand for customer data, making it difficult for firms to openly discuss how they handle the subpoenas.

That has led many companies to rely on somewhat vague warnings. Apple previously had a “warrant canary” but removed it in 2014.

“I’ve been advised not to say anything one way or the other,” Reddit Chief Executive Officer Steve Huffman, who goes by “spez” on the site, said in a thread discussing the change. “Even with the canaries, we’re treading a fine line.”

The FBI can use national security letters to compel Internet and telecommunications firms to hand over a wide range of customer data, including web browsing history and records of online purchases.

San Francisco-based Reddit did not respond to a request for comment. The Federal Bureau of Investigation did not respond to a request for comment.

National security letters have been available as a law enforcement tool since the 1970s, but their frequency and breadth expanded dramatically under the USA Patriot Act, which was passed shortly after the Sept. 11, 2001 attacks on the United States by Islamist militants.

Several thousand of the letters are now issued by the FBI every year. At one point more than 50,000 such letters were issued annually.

In 2014, Twitter sued the U.S. Department of Justice on grounds that the restrictions placed on its ability to reveal information about government surveillance orders violates free speech rights. Reddit and others have filed friend of the court briefs in Twitter’s lawsuit.

(Reporting by Dustin Volz; Additional reporting by Amy Tennery, Anjali Athavaley and Melissa Fares in New York; editing by Frances Kerry and Grant McCool)


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Reddit’s firing up a thread on the Panama Papers leak

Panama City Skyline The good folks at Reddit are already getting their Redditors fired up about the massive document dump we reported earlier this evening. There’s an official link to the trove of information that more than 200 journalists have been combing through for the better part of a year available here. And there’s an informational video available on YouTube on how to use the search tool that… Read More