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Week In ReviewMy take on some notable PE and VC-related events and news in the past week. Questioning the Fanboy Fascination with Andreessen Horowitz In the last few weeks, I’ve friended an employee at Andreessen Horowitz http://a16z.com/ who I consider a smart guy and someone worth knowing and who always has smart tweets. By no fault of his own, he may be working at an overhyped firm. Or, at the very least, it’s a firm that has not yet generated the cash-on-cash returns that justify the amount of attention it has been getting. At least that was my takeaway from reading a story about the firm /88003/fanboy-fascination-is-andreessen-horowitz-overhyped/ from my colleague Connie Loizos, who took a look at the media frenzy surrounding Andreessen Horowitz since it was launched in mid-2009 with a $300 million fund. Connie talked to social psychologist Amy Cuddy of Harvard Business School http://drfd.hbs.edu/fit/public/facultyInfo.do?facInfo=ovr&facId=491042 who recently produced research suggesting that people are likely to see someone as competent if they’ve demonstrated expertise in just one area, even if they later display incompetence elsewhere. So whereas Andreessen and Horowitz are great technologists, the jury is still out on whether they’re investment geniuses. You be the judge on whether they’re overhyped. The post drew 17 responses, most of them in agreement with Connie's assessment. Reader Eric wrote: "Nice balanced article, Connie. It’s good to have at least one rational voice out there willing to do their own thinking, rather than simply serving up the pre-packaged PR flak that we seem to be getting from others. Kudos to Andreessen Horowitz for the savvy to tap the LP’s while they are enthusiastic for the unproven product, rather than waiting for the (possibly good, possibly bad) performance to manifest itself."
- 23andMe Secures More Than $22M In Series C Financing Round
23andMe Inc. closed its Series C financing round with more than $22 million. The round includes new investors, such as Johnson & Johnson Development Corp., in the California-based genetics company. Existing investors, including New Enterprise Associates and Google Ventures, also participated.
- KP, NEA and Venrock Were Most Active VCs in October
Three U.S. VCs tied for most active investor for October, according to preliminary data from Thomson Reuters (publisher of peHUB). Kleiner Perkins Caufield & Byers, New Enterprise Associates and Venrock Associates each backed five companies last month. Subscribers to peHUB sister publication Venture Capital Journal can see the entire Top 10 list here. http://www.vcjnews.com/pop-up.asp?sectioncode=&storycode=48301&seq=37&type=T
- Genetics Start-up 23andMe Inks $22 Million In Series C
Personal genetics company 23andMe has raised $22 million in a third round of venture capital financing. New investor Johnson & Johnson Development Corporation contributed, as did existing investors New Enterprise Associates and Google Ventures. Formed in 2006, Mountain View, Calif.-based 23andMe was co-founded Anne Wojcicki, the wife of Google founder Sergey Brin. The company provides genetic information services by analyzing customers’ DNA. The new financing is designed to help the company expand its research and development.
- Online Coupon Start-up Groupon Seeks Venture Financing
Daily coupon website Groupon is in fund-raising mode, seeking a round of venture capital that could value the start-up at as much as $3 billion, Reuters reported, citing Bloomberg News. Groupon, which sends members daily emails about coupons for products and services, will use the money to expand beyond the 230 cities where it currently operates. The company is currently backed by investors including Accel Partners and New Enterprise Associates.
- Amazon Pays $540 Million For Diapers.com
Amazon will pay between $540 million and $545 million for the parent company of Diapers.com, Reuters reported, citing media accounts. The deal comes as Amazon bolsters its baby care offerings: in September, it launched the "Amazon Mom" program which provides member incentives such as discounts on diapers and free shipping. Five-year-old Diapers.com is owned by Jersey City-based Quidsi. The company is financed by Accel Partners, Bessemer Venture Partners and New Enterprise Associates, among others, Reuters reported.
- Cleversafe Seals $31.4 Million in Series C Financing
Chicago-based cloud storage company Cleversafe has raised $31.4 million in an extended Series C funding round. Venture investors include Chicago-based OCA Ventures; Sunnyside, Calif.-based Motorola Ventures; and Menlo Park, Calif.-based New Enterprise Associates. The company will use the money in part to expand marketing of its dispersed storage platform.
- Care.com Secures $20 Million In Financing
Care.com Inc. closed a financing round with $20 million. Maryland-based New Enterprise Associates led the funding for the Waltham, Mass.-based company. Matrix Partners and Trinity Ventures are existing investors that participated in the round. Care.com is a Website that allow users to search for childcare, senior care, pet care and housekeeping service providers.