Startup Roundup March 16, 2016

Are start-up prices falling faster than we thought?

Tech stocks have recouped a good chunk of their early year losses, but the damage in the private market has been done, so says the head of Salesforce Ventures.

The revenue multiples investors are paying for late-stage software investments have dropped by between one-third and 40 percent since the frothy days of 2015, said John Somorjai, executive vice president of corporate development at and the venture group.

Companies choosing to maximize their valuation instead of accepting prices at or below their previous rounds are often having to accept onerous terms that potentially give investors additional shares in the future. 

Alphabet’s GV and Cisco Fund Ex-HP Exec’s Startup Skyport Security – Fortune

Art Gilliland, former HP exec and current CEO of Skyport Systems, says he believes there are two types of computer network architectures that are important to the future of cybersecurity.

The first entails cloud access brokers, gatekeepers that manage the traffic flowing between cloud services and corporate networks, he says. (See Blue Coat, Netskope, Skyhigh Networks, Elastica, and Zscaler, for example.) And the second involves “microsegmentation,” a method of protection that divvies up a computer network and controls how its parts, or nodes, interact. 

Food delivery startup SpoonRocket, which raised $13.5M, shuts down | Ars Technica

On Tuesday, San Francisco-based on-demand food delivery SpoonRocket told customers that it had closed its doors over the weekend. The company’s closure is one of the latest signs that there’s been a financial slowdown in Silicon Valley. The startup offered a short list of relatively inexpensive food options (under $10) and could deliver them in under 10 minutes in many parts of the Bay Area.

“Despite our efforts, unfortunately, the downturn of market and lack of interest in on-demand companies like SpoonRocket from the venture community has forced us to shut down prematurely before we are able to grow into a viable business,” SpoonRocket wrote. 

Health-Tracking Startup Fails to Deliver on Its Ambitions

Building a wristband that can accurately and consistently measure activities like steps taken or biometrics like heart rate is difficult. There are all kinds of issues to take into account, like noise from arm movements, and the ways in which different skin tones or skin translucencies might impact measurements.

Perhaps no one knows this better than the founders of Quanttus.  The startup spent several years and millions of venture-capital dollars trying to develop a wrist-worn device that can measure blood pressure. Last week it released its first product, which is nowhere near realizing this dream: an iPhone app for tracking blood-pressure measurements. 

Accel Raises $2 Billion to Invest in Start-Ups – The New York Times

Even as Silicon Valley worries about falling start-up valuations and whether companies can go public, one of the most prominent venture capital firms here has reloaded its war chest for more investment opportunities.

Accel plans to announce on Tuesday that it has raised roughly $2 billion for its two newest investment funds: about $500 million for a classic venture capital fund and about $1.5 billion for a vehicle earmarked for later-stage “growth” investments.

The new fund-raising effort comes about two years after Accel raised its last venture and growth funds, which together amounted to just under $1.5 billion. 

Australia’s Prime Minister Announces Tax Breaks For Startups

Emphasizing his government’s approach to helping Australia’s tech industry, Australia’s prime minister promised new tax breaks for anyone investing in startups up to $200,000 per year. The new legislation will be introduced in parliament Wednesday.

“We have been from an economy that was fired up by the mining construction boom . . . but inevitably it was going to tail off so what comes next? What comes next is innovation,” Prime Minister Malcolm Turnbull told reporters at a press conference in Canberra on Tuesday.

Saying the country needed to diversify its economy once and for all, facilitating startup investment would pick up some economic slack for Australia. The mining industry down under is going through a boom expected to slow down soon. The Organization for Economic Cooperation and Development (OECD) consistently ranks the country at the bottom of its member states for business collaboration and R&D, according to Reuters

Government to promote India as investment destination for startups – The Economic Times

Government is preparing to launch a global campaign to hard sell India as attractive investment destination for startups and has invited proposals from creative agencies.

The campaign will be launched in global as well as domestic markets across the media – print, electronic and social.

“The objective of the campaign is to generate awareness about the investment opportunities and prospects of the country, startup action plan and to promote India as a preferred investment destination. 

HealthTap quietly acquires physician app startup Docphin | MobiHealthNews

Palo Alto-based health tech company HealthTap has quietly acquired Docphin, a startup that makes it easier for physicians to find and read medical research, for an undisclosed sum. Docphin was a member of Rock Health’s second accelerator class back in 2012 as well as StartUp Health’s second class of startups later that same year. The company, which was founded in 2010, never publicly announced a round of funding but it appears to have raised about $1.6 million mostly in its early years. Romulus Capital was among its backers. 

Israeli Startup Exits Don’t Deserve a Bad Rap – Business – Haaretz

“The exits we applaud today are a disaster for the State of Israel,” said Manuel Trajtenberg last week. Speaking at an investments conference, the Laborite Knesset member and former economic adviser to Prime Minister Benjamin Netanyahu sparked quite a protest in high-tech circles. “A handful of people grow rich by selling the future of the nation. High-tech isn’t a growth driver any more,” Trajtenberg added. 

Under Armour CEO to tech startups: ‘Go make the sale’ – Business Insider

Under Armour CEO Kevin Plank has one piece of advice for young entrepreneurs: Go make the sale.

For many young companies, especially in Silicon Valley, being unprofitable is considered a right of passage. Companies can burn through cash as they build a great product, and making money comes only after testing for a good fit. Twitter, one of the best examples, has been public for more than two years and has never been profitable.

Speaking at the festival South by Southwest (SXSW), Plank argued that profitability is one of the most undersold things in tech. At a tech conference the previous week, the Under Armour CEO watched as startup CEOs joked about the lack of profitability, and the crowd chuckled at it. 


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s