Big Fundraising Week for Slack, Patreon, TigerGraph, Others in Bay Area
[Updated 9/25/17, 1:38 pm. See below.] Silicon Valley companies, from big ones with millions of users to infant startups, rolled up some money from investors this week.
—San Francisco-based Slack, which offers shared messaging channels for workplace teams, raised $250 million to pad out its cash cushion from the $591 million the company had already raised, Bloomberg reported.
The big round was led by SoftBank Group Corp.’s Vision Fund—which pitched in more than half the money—joined by other investors including Accel, Bloomberg reported. The investment pegs Slack’s valuation at $5.1 billion. The SoftBank fund has raised nearly $100 billion this year, and its investment interests range from autonomous vehicles to drug discovery powered by data analytics.
(Interesting side note: On Monday night, SoftBank founder and CEO Masayoshi Son said the company’s huge investment fund is helping to drive human culture toward the Singularity, when artificial intelligence will exceed human brainpower. That poses some problems, Son said, because most blue collar jobs and many white collar jobs, will be converted into “metal collar” jobs done by sentient robots, the New York Times reported.
“What should we do if they replace many of our jobs?” Son said as he received an award in New York from the Appeal of Conscience Foundation, which encourages companies to join with religious organizations to provide moral leadership. “What is the value of our lives? We have to think once more, deeply.”)
Slack CEO Stewart Butterfield told Bloomberg he doesn’t anticipate an IPO before the end of 2018.
—But Roku is ready now. Roku, the streaming TV device seller and service provider, is hoping to raise as much as $219 million in its impending IPO, according to an updated SEC filing on Monday. If it reaches its targets, Roku’s valuation would exceed $1 billion, CNBC reported.
The Los Gatos, CA-based company is a pioneer in streaming video, but it now faces competition from tech giants Apple, Amazon, and Alphabet unit Google. Roku gleaned revenue of $398.6 million in 2016 from sales of its players, TV service subscriptions, and ads, but recorded a loss of $42.8 million. The company has raised more than $200 million in private financing rounds, according to TechCrunch.
—Former bandmates and Stanford classmates Carlos Cabrera and Jack Conte announced Monday that they raised a $60 million Series C for their brainchild, Patreon, an online hub that helps creative folks raise rent money—or much more. Patreon competes with YouTube and other monetization platforms that may give artists only about half of the ad revenues from their sites. Instead, Patreon offers a subscription model, and takes a 5 percent cut. The San Francisco startup says a million fans are subscribing to the work of podcasters, musicians, gaming creators, and others. Patreon had raised $47.1 million before the Series C, which was led by Thrive Capital, with participation from other prior investors Index, CRV, and Freestyle Capital, as well as new investor DFJ Growth, Recode reported.
—Two Bay area companies, seeking to amp up the intelligence of business processes, raised early financing rounds:
TigerGraph was in stealth mode in Redwood City, CA, until Tuesday, when it unveiled its graph database technology and announced a $31 million Series A financing round. In its quest for speed in mining vast amounts of data to answer complex questions, TigerGraph forsook the standard rows-and-columns structure of relational databases and created a graph database platform. This follows in the footsteps of Google’s Knowledge Graph and Neo’s technology, Neo4j. TigerGraph’s investors include Qiming VC, Baidu, Ant Financial, AME Cloud, Morado Ventures, Zod Nazem, Danhua Capital, and DCVC.
Incorta, a San Mateo, CA-based data analytics company, welcomed new investor Kleiner Perkins, which led a $15 million Series B financing round with participation by previous investor GV. Kleiner Perkins general partner Ted Schlein is joining the Incorta board. GV led Incorta’s $10 million Series B funding round in March.
Incorta’s software can ingest and analyze data from various sources, including relational databases, without the need to convert each data set into a compatible structure, the company says. This speeds up the analysis, Incorta says.
—EquitySim, a talent recruiting service that tries to even the odds for often-overlooked candidates for jobs in the financial sector, announced on Thursday it has raised $3.1 million in a seed financing round led by University Ventures, with participation by Peak Ventures and 500 FinTech. [An earlier version of this paragraph reported EquitySim’s written statement that it had raised a Series A financing round, which the company later corrected.]
The year-old startup offers students the chance to hone their investing skills through its market simulator, while it measures their engagement, their learning patterns, and many other traits. The method ferrets out top talent among underrepresented groups for employers such as J.P. Morgan and Goldman Sachs, the company says. Currently, financial firms focus on candidates from top-tier schools and their GPAs; more than three-quarters of newly hired financial analysts are men, and 65 percent are white, EquitySim says.