The venture firm Kleiner Perkins has enjoyed many iterations over its 47-year-old history. Today, in some ways, it kicks off its newest. According to a new SEC filing, the firm has just closed its eighteenth early-stage fund with $600 million in capital commitments It’s the first fund that Kleiner has announced since June 2016.
Investors are betting on a very different team than last time around. Specifically, they look to be placing much of their faith in Mamoon Hamid and Ilya Fushman.
Hamid, who today runs Kleiner with longtime general partner Ted Schlein, was recruited into Kleiner in August 2017, after being courted by the firm for more than a year. It was hoped all along that Hamid — who’d previously cofounded Social Capital with Chamath Palihapitiya and gotten to know Kleiner during early discussions about potentially merging the two firms — would lead the next generation of investors for the old-guard firm.
Hamid wasted little time, in fact, is bringing aboard the firm’s next hire, Ilya Fushman, formerly an Index Ventures investor and an early Dropbox executive who had known Hamid through co-investments in both Slack and Intercom. Their paths also overlapped as children, living in Frankfurt, Germany. Though they did not know each other at the time, the investors, says one source, have a “definite chemistry.”
The duo, along with Schlein; longtime partner Wen Hsieh; and Bucky Moore — a principal at Costanoa Ventures for the last few years who was brought into Kleiner last year as a principal and was just promoted to partner last month as a partner — make up the new face of Kleiner, along with three associates.
It’s almost a full reboot, marking a new chapter in a firm that has seen a number of them, beginning with the swaggering Tom Perkins, one of the firm’s namesakes, who, with cofounder Eugene Kleiner, closed the firm’s debut fund with $8 million.
There was, of course, the very long era in which John Doerr was the most prominent investor at the firm, running it with the likes of Vinod Khosla and betting on what are now the world’s biggest companies, including Google and Amazon.
Then came what could perhaps described as the firm’s dark ages, beginning with some overly zealous fundraising, followed by a number of niche funds that didn’t pan out as planned, and punctuated by the firm’s public battle with former partner Ellen Pao, who unsuccessfully sued the firm for gender harassment but managed to give its male-heavy team a black eye in the process.
When Mary Meeker, the star analyst who’d joined the firm eight years ago, disclosed last fall that she was leaving the firm along with the rest of Kleiner’s growth-stage investors, it caused even more head scratching despite that the split was painted as amicable by both sides.
But Kleiner is now barreling forward, and it clearly has the support of plenty of institutional investors despite so many changes. Gone from Kleiner’s most recent funds is not just Meeker but another of its long-serving female partners, Beth Seidenberg, a renowned healthcare investor who peeled off early last year to cofound her own venture firm. One of Seidenberg’s colleagues, Lynne Chou-O’Keefe, who had spent more than five years investing in healthcare on behalf of Kleiner, also left last year to create her own debut fund, Define Ventures. And they follow in the path of two earlier investing partners, Aileen Lee and Trae Vassallo, who’ve have gone on to create Cowboy Ventures and Defy Partners, respectively.
Other former Kleiner Perkins investors to helm their own funds include Chi-Hua Chien, who today runs the consumer-tech focused venture firm Goodwater Capital; and Brook Porter, David Mount, Benjamin Kortlang and Daniel Oross, who’d focused on green and sustainability-related tech for Kleiner and who also left last year, closing their own $350 million fund with Kleiner’s financial support as a limited partner.
Whether the new team can restore Kleiner to its perch at the top of the venture heap remains an open question. The investors weren’t made available to us today and we don’t know as of this writing what they plan to do differently with their early-stage strategy to set themselves apart. (Note: We’ll be talking with Hamid and Fushman at a small industry event in San Francisco next week and expect to have many more details on their plans going forward then.)
We do suspect that hiring a woman into the firm’s most senior ranks remains a priority for the firm, given that its senior ranks are made up entirely of men, which is not a great look in 2019.
We also know that expectations are high, given the popularity that Hamid and Fushman enjoy among founders. Said one Kleiner investor to the WSJ as the Meeker news was breaking last fall, “We’re watching a dismantling and rebuilding of a storied firm . . . I feel for the first time in probably a decade they’re starting to have a direction.”
Some of Kleiner’s most recent bets include Toss, a three-year-old, South Korean peer-to-peer digital wallet startup (started by a former dentist, interestingly), that raised $80 million at a $1.2 billion valuation co-led by Kleiner and Ribbit Capital in December.
It also participated in another later-stage deal, a $104 million Series E round last month for Looker, a six-year-old, Santa Cruz, Ca.-based data analytics platform.
And it wrote a follow-on check in November to AEye, a five-year-old, Pleasanton, Ca.-based robotics startup that’s developing lidar technology.
Of course, in VC, much happens behind the scenes, too. For its part, Kleiner is making more seed-stage bets than outsiders might realize. Indeed, according to one source close to the firm, it has written checks to roughly 30 nascent startups in the last year-plus.
Above: Mamoon Hamid
Respawn will premiere its ‘Star Wars’ game on April 13th
After years of work, Respawn is nearly ready to show what its Star Wars game is all about. Lucasfilm has announced that EA and Respawn will formally reveal Star Wars Jedi: Fallen Order at a Celebration Chicago panel on April 13th. The two are unsurprisingly shy about details, but you’ll meet a Padawan who survived Order 66 (the command to exterminate the Jedi) and experience what it’s like to live in an era where there are seemingly no Jedi left. You can expect “never-before-released” details of the game, Lucasfilm said, which isn’t hard when the game is largely a secret.
Spotify launches in India – TechCrunch
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Just for India, Spotify users who do not pay for a subscription can play any song on demand on mobile. There are also playlists for India and a “Starring…” feature that includes music from Bollywood movies.
“Not only will Spotify bring Indian artists to the world, we’ll also bring the world’s music to fans across India,” said Spotify CEO Daniel Ek.
This isn’t necessarily a precursor to some big action like breaking up a big company or imposing rules or anything like that. It seems more like a recognition that the FTC needs to be ready to move quickly and decisively in tech matters.
Against a backdrop of public backlash and looming federal regulations, the world’s biggest e-cigarette manufacturer has released video of the original thesis presentation that launched the company.
After years of prototypes, the age of foldables has finally arrived.
With the latest improvements, developers can use the machine to solve larger problems with fewer physical qubits — or larger problems in general.
Some thoughts from the former SVP of Walmart’s global e-commerce supply chain.
Cracks are starting to appear in Steam’s armor, threatening to make it the digital equivalent of GameStop — a once unassailable retail giant whose future became questionable when it didn’t successfully change with the times. (Extra Crunch subscription required.)
FTC ruling sees Musical.ly (TikTok) fined $5.7M for violating children’s privacy law, app updated with age gate – TechCrunch
A significant FTC ruling issued today will see video app TikTok fined $5.7 million for violating U.S. children’s privacy laws, and will impact how the app works for kids under the age of 13. In an app update being released today, all users will need to verify their age, and the under 13-year-olds will then be directed to a separate, more restricted in-app experience that protects their personal information and prevents them from publishing videos to TikTok .
In a bit of bad timing for the popular video app, the ruling comes on the same day that TikTok began promoting its new safety series designed to help keep its community informed of its privacy and safety tools.
The Federal Trade Commission had begun looking into TikTok back when it was known as Musical.ly, and the ruling itself is a settlement with Musical.ly.
The industry self-regulatory group Children’s Advertising Review Unit (CARU) had last spring referred Musical.ly to the FTC for violating U.S. children’s privacy law by collecting personal information for users under the age of 13 without parental consent. (The complaint, filed by the Department of Justice on behalf of the Commission, is here.)
But its regulatory issues followed it to its new home.
According to the U.S. children’s privacy law COPPA, operators of apps and websites aimed at young users under the age of 13 can’t collect personal data like email addresses, IP addresses, geolocation information or other identifiers without parental consent.
But the Musical.ly app required users to provide an email address, phone number, username, first and last name, a short biography and a profile picture, the FTC claims. The also app allowed users to interact with others by commenting on their videos and sending direct messages. In addition, user accounts were public by default, which meant that a child’s profile bio, username, picture and videos could be seen by other users, the FTC explained today in its press release.
It also noted that there were reports of adults trying to contact children in Musical.ly, and until October 2016 there was a feature that let others view nearby users within a 50-mile radius.
“The operators of Musical.ly—now known as TikTok—knew many children were using the app but they still failed to seek parental consent before collecting names, email addresses, and other personal information from users under the age of 13,” said FTC Chairman Joe Simons, in a statement. “This record penalty should be a reminder to all online services and websites that target children: We take enforcement of COPPA very seriously, and we will not tolerate companies that flagrantly ignore the law.”
COPPA law, of course, becomes a bit complex to implement for apps like TikTok that sit in a gray area between being oriented toward adults and being aimed at kids. Specifically, apps preferred by tweens and teens — like Snapchat, Instagram, YouTube and TikTok — are often clamored for by younger, under-13 kids, and parents often comply.
But some parents are caught off guard by these apps. The FTC says Musical.ly had fielded “thousands of complaints” from parents because their children under the age of 13 had created Musical.ly accounts.
In addition to the $5.7 million fine, the FTC settlement with Musical.ly includes an agreement that will impact how the TikTok app operates.
It says TikTok is now considered a “mixed audience” app, which means there needs to be an age gate implemented on the app. Instead of locking out under-13 users from the TikTok service, younger users will be directed to a different in-app experience that restricts TikTok from collecting the personal information prohibited by COPPA.
TikTok is also complying with the ruling by making significant changes to its app. It will now restrict under-13 kids from being able to film and publish their videos to the TikTok app. It will also take down all videos from kids under 13.
Instead, the under-13 crowd will only be able to like content and follow users. They will be able to create and save videos to their device — but not to the public TikTok network. Nor can they share videos on the app with their friends if they use TikTok via a private account.
As TikTok already has a large number of younger kids on its app, it will push an app update today that displays the new age gate to both new and existing users alike. Kids will then need to verify their birthday in order to be directed to the appropriate experience.
This is not likely going to have an impact on how many kids use TikTok, however. Kids today already know to lie to age pop-ups so they can enter a restricted app. That’s how they set up accounts on Facebook, Instagram, Snapchat and elsewhere.
However, the move at least puts TikTok on a level playing field with other “mixed audience” apps instead of allowing it to pretend U.S. children’s privacy laws do not exist.
TikTok reportedly has been installed a billion times worldwide, according to recent data from Sensor Tower. The company doesn’t publicly disclose its figures, but the FTC says since 2014, more than 200 million users had downloaded the Musical.ly app worldwide, with 65 million accounts registered in the United States.
The Commission vote to authorize the staff to refer the complaint to the Department of Justice and to approve the proposed consent decree was 5-0. Commissioner Rohit Chopra and Commissioner Rebecca Kelly Slaughter issued a separate statement, shared below:
The Federal Trade Commission’s action to crack down on the privacy practices of Musical.ly, now known as TikTok, is a major milestone for our Children’s Online Privacy Protection Act (COPPA) enforcement program. Agency staff uncovered disturbing practices, including collecting and exposing the location and other sensitive data of young children. In our view, these practices reflected the company’s willingness to pursue growth even at the expense of endangering children. The agency secured a record-setting civil penalty and deletion of ill-gotten data, as well as other remedies to stop this egregious conduct. This is a big win in the fight to protect children’s privacy.
This investigation began before the current Commission was in place. FTC investigations typically focus on individual accountability only in certain circumstances—and the effect has been that individuals at large companies have often avoided scrutiny. We should move away from this approach. Executives of big companies who call the shots as companies break the law should be held accountable.
When any company appears to have a made a business decision to violate or disregard the law, the Commission should identify and investigate those individuals who made or ratified that decision and evaluate whether to charge them. As we continue to pursue violations of law, we should prioritize uncovering the role of corporate officers and directors and hold accountable everyone who broke the law.
Critics gush over the spectacle and story of ‘Avengers: Endgame’
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Kamala Harris calls for third gender option on federal IDs
Treasury’s Mnuchin misses congressional deadline to hand over Trump tax returns
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- Critics gush over the spectacle and story of ‘Avengers: Endgame’
- ‘Jeopardy!’ champ breaks record, surpasses $1 million in shortest time ever
- Kamala Harris calls for third gender option on federal IDs
- Treasury’s Mnuchin misses congressional deadline to hand over Trump tax returns
- White House to fight Dems’ subpoena of ex-White House counsel Don McGahn
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