SparkLabs Global Ventures’ Technology and Internet Market Bi-Monthly Review August 13, 2014

Weekly Highlights

Global Trends • China’s mobile game market to grow a scorching 93% to $2.9B in 2014 The Chinese mobile-game market has exploded, with revenue expected to grow 93% to $2.9 billion in 2014, and that expansion should continue at a compound annual growth rate of 37.6% from 2013 to 2018. Niko Partners, an independent market researcher, estimates that 38% of Chinese mobile gamers will spend money in 2014. By 2018, the mobile-game market in China is expected to hit $7.7 billion in revenue. Casual offerings on Android devices should be the most popular in the market this year. The PC online-game market remains China’s largest sector with $14 billion in revenue expected in 2014. But mobile growth will erode the PC’s dominance. While China might seem like the land of riches in gaming, Niko warned that it’s important to understand Chinese players, their preferences, and behavior, as well as the complex distribution environment with more than 190 app stores. • Venture Funding Soars for Cybersecurity Startups In the first half of this year, firms put nearly US$900 million into US cybersecurity startups, nearly matching all of last year’s total dollars invested, and the sector was on pace to easily post the best mark in a decade. Recently, cybersecurity company Vectra Networks raised US$25 million in funding led by Accel Partners to detect and prioritize attacks in real time so customers can decide which ones to fight first. Bitglass also raised US$25 million for a service that sits between a company’s own computer network and the servers operated by an external cloud service.

• Already Backed With Millions, Startups Turn To Platforms For The Marketing These days crowdfunding platforms like Kickstarter and Indiegogo have become a key tool for more established startups and entrepreneurs trying to gauge reception for their products and find fervent support for their brands. While crowdfunding sites still feature plenty of bootstrapped proposals, they are also seeing an influx of projects from venture-backed companies, which are not necessarily partnering with these platforms for the funding. Since Indiegogo’s founding in 2008, CEO Slava Rubin noted that there has been an evolution in the types of projects listed on the site. These days there are more “expert” companies, businesses whose successes are contingent on garnering positive reaction and social currency by listing on the platform. Beyond the money, these companies can use their projects to understand the demographics of their buyers and build relationships with them. Kickstarter reaches 14 million people a month according to Quantcast. Market data and consumer traction is exactly what potential backers want to see and the startups will often see a boost in interest from new backers after listing on Indiegogo.

SparkLabs Global Ventures (http://www.sparklabsglobal.com) is a global seed-stage fund with partners in Silicon Valley, Chicago, London Tel Aviv, Singapore, and Seoul. 1 SparkLabs Global Ventures’ Technology and Internet Market Bi-Monthly Review August 13, 2014

Asia Pacific China • 500 Startups-backed travel startup, Jetbay wants to open up more of China to foreign tourists China-based startup, Jetbay, is the first mainland China-based startup to get accepted into US-based accelerator 500 Startups. When Jetbay launches – the current plan is for October – the site will have local travel and event listings, in English, at local prices for visitors to China. The cofounder James Tan explains that Jetbay is tackling the problem of discrepancy of information for foreign tourists and making it easier to get authentic local travel experiences. Jetbay is co-founded by Tan – who’s also a managing partner at QuestVC – and Michael Pan. The duo also co-founded Chinese daily deals site 55Tuan. The new travel startup has received funding from QuestVC as well as the financial input from 500 Startups that comes with being inducted into its program. • Baidu’s search engine reaches 500 million active users on mobile Baidu, China’s top search engine, released its Q2 earnings report. The financials were dull but the conference call with Baidu execs yielded some interesting user numbers and a few new milestones. According to Baidu CEO Robin Li, the company’s mobile revenue, which is largely comprised of mobile search revenue, accounts for 30 percent of their total revenue. Li also revealed that Baidu’s mobile search service grew to over 500 million monthly active users (MAUs) in June, which he attributed to a recently redesigned mobile search homepage, as well as to new content partnerships that result in more embedded information available at a glance in search results. The Mobile Baidu app reached 70 million daily active users. Baidu Maps surpassed 200 million MAUs for the first time. 130 million Android app downloads per day on the Baidu App Store and its sister site, 91 Wireless. Baidu’s consumer cloud storage service grew to “nearly 200 million registered users in Q2, from 160 million registered users in Q1.” Baidu’s CEO made no mention of losing more market share to arch-rival Qihoo (NYSE:QIHU) in the newest data from CNZZ for a search engine’s share of desktop PC page- views in China. • Financial product search engine, Rong360 secures $60M investment Founded in 2011, financial product search and comparison engine Rong360 received a US$60 million series C round of funding led by Pavillion Capital, followed by Sequoia, Lightspeed, and KPCB, according to 36kr. This latest round brings Rong360’s total funding to date to about US$100 million. 10% of Chinese netizens now invest in online banking products like Alibaba’s Yuebao fund and Baidu’s Jinrong, according to the latest CNNIC report. Online lending has also exploded: peer-to-peer lending sites have sprouted up across the country, while the country’s internet giants have started acquiring licenses to offer loans of their own. For many consumers, it’s tough to sift through and distinguish what are the best deals and which companies can be trusted to handle their money. That’s where financial product search and comparison engine Rong360 comes in. This latest round brings Rong360′s total funding to date to about US$100 million. The site lets users search and compare savings funds, mortgages, normal loans, P2P loans, credit cards, and more, aggregating the latest information possible from a wide range of sources – a total of 50,000 products from 10,000 banks and financial institutions. Rong360 has localized sites for 100 Chinese cities, and covers 200 cities in total. • Ronchang, which hopes to be the Uber of laundry in China, receives US$3.2M from Tencent China’s biggest Internet company, Tencent announced a US$3.2 million series A round of funding into an app- connected laundry service made by Laundromat chain Rongchang. Despite the relatively small round compared to Tencent’s other recent investments – like US$736 million into online classifieds site 58.com – Rongchang is no startup. The laundry chain has been a staple franchise in China for several years. The online service, dubbed Edaixi, currently gets about 1,000 orders per day, and plans to reach 10,000 per day within one year. Edaixi’s main service charges a flat RMB 99 (US$16) rate per each of its custom laundry bags, whereas most of its competitors only charge per piece of clothing. With aims of being a sort of Uber for laundry, Edaixi plans to create distribution units so a laundry courier can always pick up a customer’s laundry within 48 minutes. The company plans to use the funding to expand Edaixi’s coverage are both in Bejing and additional cities. Other online laundry services in China include Ganxike, Xiyigi, and WeWash. • Qualcomm launches $150M fund to support startups based in China

SparkLabs Global Ventures (http://www.sparklabsglobal.com) is a global seed-stage fund with partners in Silicon Valley, Chicago, London Tel Aviv, Singapore, and Seoul. 2 SparkLabs Global Ventures’ Technology and Internet Market Bi-Monthly Review August 13, 2014

Qualcomm, San Diego-based mobile chip manufacturer, established a US$150 million fund for startups based i China. In China, Qualcomm has been actively funding young companies for ten years, and currently boasts companies like phonemaker Xiaomi, mobile app makers Dolphin Browser, and Uber-esque limo-on-demand app Yongche among its roster of investments. Even though the component world might not directly tie up to the world of mobile software, Qualcomm nevertheless depends on the health of software companies in order to sustain its own business. The inaugural investments from the new fund, which Qualcomm states will be “advised and directed” by its Qualcomm Ventures arm, look as though they firmly face the domestic market, in contrast to global players Xiaomi and Dolphin. Cambridge Wow is an app that offers up English lessons and other tutorials for Chinese youngsters, and looks more or less like what you’d expect from an child’s education app. Boohee (bohewang), meanwhile, is a social network and ecommerce site centered around weight loss and nutrition. • 8 Securities raises $9M series B round, launches automated wealth management service 8 Securities, Hong-Kong based financial trading startup, raised US$9 million in series B round of funding led by investors Velocity Capital and Leitmotiv Private Equity with American and Chinese financial technology firms participating. Now managing US$760 million in customer assets, 8 Securities has shown strong growth since debuting in late 2011. The startup plans to use the fund to grow the customer base in Japan. 8 Securities is betting that growth will be accelerated by its latest products, a wealth management service called Automated Portfolio and a Social Trading Portal slated for release in early Fall. For the Automated Portfolio, Abdulla explains that users will take a short quiz to determine the goals, risk level, and expected length of their investment. Then, 8 Securities will be able to create a portfolio for the user, drawing on 16 global exchange traded funds. The minimum portfolio size is US$7,000 and the fee is only 0.5% (without tax) of the portfolio’s average value for the year. • Alibaba makes a big push into gaming with US$120M investment in US-based Kabam Chinese ecommerce titan Alibaba made another investment in an American company by pouring US$120 million in funding into Kabam, a developer of online and mobile games. The Wall Street Journal, which first reported this, says it also involves a deal for Alibaba to distribute Kabam’s games in China to users of its Taobao marketplace and Laiwang messaging app. The move signals Alibaba’s intent to challenge WeChat more strongly by incorporating social gaming into Laiwang, which has been struggling to gain traction. Kabam, which is aiming for US$550 million in revenue this year, will get a boost from new users in China. It will launch 10 games through Alibaba in the next three years. The studio specializes in games themed around medieval myths, like Kingdoms of Camelot and The Hobbit Kingdoms. Kabam is reportedly seeking to IPO later this year. Alibaba is also on course to list publicly this year. Alibaba’s IPO could top Facebook’s in size when it finally hits the stock tickers sometime this fall. Previous Alibaba investments in the US include Lyft and Shoprunner. • OnePlus to make its own Android ROM, moving away from CyanogenMod New Chinese smartphone maker OnePlus, which released its first flagship phone in May, will move its software engineering team from China to Taiwan where it will create its own Android ROM. Due to regulatory issues, Chinese phone makers never sell phones domestically with stock Android. Instead, they build on top of the open-source Android OS to create similar skins, called ROMs. OnePlus chose to use CyanogenMod for its first-ever phone, as does the company’s godfather, Oppo, on some of its smartphone models. In contrast, other up-and-coming smartphone manufacturers like Xiaomi, Smartisan, and Meitu all use their own in-house ROMs. Possible reason for moving away from CyanogenMod may be money because developing a ROM in house could cut costs in the long run. • Chinese carpool app gets $10M investment to offer cheap rides and reduce congestion Chinese carpooling app Haha Pinche (pinche means “carpool”) received US$10 million in series A investment led by Sequoia Capital, followed by Innovation Works, according to QQ Tech. Haha is not China’s first carpooling app, but it looks to be the most promising so far. Launched in January this year, Haha validates drivers, lets users schedule rides and make payments to the car owner. It is backed by a local national company, adding credibility to the startup’s relatively unknown brand name. Drivers sign up and input their vehicle details, route, and commute schedule. Passengers can then input where they want to go to and from, and are matched with potential drivers. As the Chinese middle class continues to grow, so does the number of drivers on the road. Chinese cities are some of the world’s most congested, with the average driving

SparkLabs Global Ventures (http://www.sparklabsglobal.com) is a global seed-stage fund with partners in Silicon Valley, Chicago, London Tel Aviv, Singapore, and Seoul. 3 SparkLabs Global Ventures’ Technology and Internet Market Bi-Monthly Review August 13, 2014

speed in Beijing crawling along at 7.5 miles per hour. China needs to get people off the roads, not only to relieve congestion, but to reduce emissions that cause severe pollution, and Haha hopes to be the solution. • Xiaomi Surpasses Samsung to Become Top Phone Maker in China Samsung is no longer the top phone manufacturer in China, thanks to a company that is still relatively unknown in the United States. Xiaomi distributed around 15 million phones in early 2014 while Samsung came up short at 13.2 million, according to research firm Canalys. The report notes that the number of Samsung phones bought in China dropped 15% during the last quarter, the first time the company dropped to second in China since 2011. According to Canalys research analyst, “this was helped by an anticipated, temporarily under-strength Samsung performance during the quarter” and as “Xiaomi has also executed on its strategy to grow volume shipments.” China has more mobile phone users than any other country China has more mobile phone users than any other country and makes up 37% of the global phone market. Due to its success at home, Xiaomi is looking to expand into other countries in the next year, including Mexico, Thailand, Indonesia, Russia and Turkey.

Korea • Seedstars Awards Krowdpop as South Korean Startup Winner Seedstars World (SSW) held its regional startup contest Seedstars Seoul at D.CAMP, a Seoul-based gathering space for venture companies made by members of the Korea Federation of Banks. Krowd Pop, a K-Pop concert service provider that uses crowdsourcing as its marketing tactic, won the first prize and will be invited to Geneva in February next year to compete with other regional winners. Innovative video advertisement service provider Easiaid received the second prize, and Chatting Cat took the third prize with its chatting application that provides language-conversion services. SSW was founded by Alisee de Tonnac and Pierre- Alain Masson with the goal to encourage competition among venture companies, contributing to the growth of new companies. In 2013, it held its first competition in 20 cities, which was a great success, with the final winner being Korea-based Flitto. • Korean Online Travel Site Zaiseoul Taps Chinese Outbound Tourism Industry with Localized Services Started as a travel magazine offering monthly insights to Chinese backpackers to South Korea, Zaiseoul is an online travelling site providing tourism services to Chinese clients with South Korea as their travelling destination, a popular place for Chinese travelers in recent years as the K-pop trend is in full swing in China. The tourism site offers quality contents on South Korean scenic spots, accommodations, shuttle buses, shopping centers, etc. to make tourists to travel like a local. It also partnered with Qunar to roll out a local travel guide matching service. The company just announced US$680K of Series A financing from Korean investor K CUBE VENTURES and the angel round was secured from Primer in 2013. The proceeds will be used to accelerate expansion in Chinese market, as well as to seek cooperation with Chinese IT companies and OTA sites. The South Korean startup plans to launch an app and improve operations of its WeChat official account in the second half of this year. Zaiseoul is co-founded by two Korean entrepreneurs in 2010. Given a primary focus on Chinese market, 35% of the company’s employees are Chinese, while most of the team members are either graduated from renewed Chinese universities or Chinese majors from Korean universities.

Japan • Line announces $100M fund just for mobile games, acquires 10% stake in Gumi Line announced it will create a US$100 million fund the tentatively title “Line Game Global Gateway” in September. The fund will be managed under the to-be-established Line Ventures. In addition, Line announced its acquisition of a 10 percent stake in leading game company Gumi. . After a fallow period, Gumi has been the darling of the game industry recently in part due to the runaway success of the game Brave Frontier. The terms of the deal were not disclosed but Gumi is expected to IPO later this year and reach a valuation of up to US$1 billion. CNet Japan reports that Gumi will start producing games for the Line platform by the end of 2014. Line is a gaming company just as much as it is a messaging company. The company announced its 490 million users have downloaded its games 410 million times, and in December 2013, App Annie placed it at the top spot for app publisher revenues, largely due to its prowess in gaming.

SparkLabs Global Ventures (http://www.sparklabsglobal.com) is a global seed-stage fund with partners in Silicon Valley, Chicago, London Tel Aviv, Singapore, and Seoul. 4 SparkLabs Global Ventures’ Technology and Internet Market Bi-Monthly Review August 13, 2014

• Exchange Corp. Launches Cardless Payment Service With $3.3M Series A The Japanese startup Exchange Corp. has launched a new up-front payment service for online retailers called Paidy as it closes on US$3.3 million in new financing. Launched by Russell Cummer, a former trader with Goldman Sachs in Japan, Exchange Corp. began as a peer-to-peer lending service in Tokyo, but is expanding to offer up-front payments as the market for those services begins to blossom in Asia. The pivot to Paidy takes advantage of the work that Exchange Corp. had already done to identify creditworthy borrowers, and couples it with a financing platform that has already loaned $15 million through its peer-to-peer network. The vision for replacing the credit card with an automated service that elides the plastic was convincing enough to rope in not just Arbor Ventures, but also CyberAgent Ventures and Recruit Strategic Partners. • Gree leads $36M investment in Japan’s SmartNews Popular news application SmartNews raised series B funding round led by Japanese social gaming giant Gree. Gree has not commented on the size of the investment but the SmartNews camp is saying the total is US$36 million. Though an enormous amount of digital ink has been spilled over rival news app Gunosy’s frequent trips to the funding trough, the Gree investment gives SmartNews a healthy war chest for the fight ahead. The two apps have similar download numbers – the funding announcement claimed SmartNews has exceeded four million downloads and, back in May, Gunosy told The Bridge it was about to hit four million. The investment offers insight into how Gree will use its new $100 million business development investment fund, which is separate from dedicated investment arm Gree Ventures. The fund is used for finding companies, which can build useful business relationships with Gree. Gree has a San Francisco office and the Gree spokesperson confirm that SmartNews will be eyeing an American expansion next. • Japanese photo sharing app Snapeee grabs $4M funding round Snapee, the photo-sharing app run by Mind Palette that debuted back in 2011, raised US$4 million in funding led by venture capital firms Global Brain, publishing giant Kodansha, and clean energy firm Energy and Environment Investment. The app allows users to decorate photos and then share the new pictures via social media. According to Snapeee planner Tetsuya Itoh, the app’s closest rivals would be fashion style sharing services like Iqon or Wear. The app has grown to eight million registered users and adds about 10,000 new accounts daily. Itoh confirmed that the app’s biggest market is Japan with about 1.8 million accounts, closely followed by Taiwan, which has roughly 1.4 million. The user-base is still overwhelmingly female and Itoh has hopes of furthering the company’s expansion into Thailand and Indonesia. Similar to Line, Snapeee now has certified channels for businesses and celebrities to expand their brands. Itoh also confirmed that the company is aiming to reach 10 million registered accounts worldwide, two million in Japan, by the end of the year.

Taiwan • NDC plans to launch five US$100m startup funds The National Development Council (NDC) plans to cooperate with local and foreign venture capital firms to establish five US$100 million funds to finance local startup companies. The project is included in the council’s “HeadStart Taiwan” project, which aims to create a favorable environment for local startups. The National Development Fund (NDF) is to invest 30 to 40 percent of the capital in each fund, Kuan said, adding that the fund plans to allow its venture capital partners to receive more than 60 to 70 percent of the profits that the funds post in the future. Meanwhile, the council also aims to ease regulations for domestic startups to change the par values of their shares. India • Data technology startup, SocialCops raises $320K from 500 Startups SocialCops, a data technology startup, raised US$320,000 in seed funding from 500 Startups, as well as individual investors Rajan Anandan, managing director of Google India, and Manoj Menon, managing director of Frost & Sullivan APAC. The startup is building a tool that will allow policy-makers, researchers, and journalists to collect, analyze, and visualize data about some of the most daunting social and governance issues in India. Here is how SocialCops works: data from the people on a variety of issues that affect their daily lives – from pot-holes on roads to teacher-attendance in government schools – is crowd-sourced via low-cost internet-enabled mobile phones. It also deploys field workers to remote areas with no mobile connectivity.

SparkLabs Global Ventures (http://www.sparklabsglobal.com) is a global seed-stage fund with partners in Silicon Valley, Chicago, London Tel Aviv, Singapore, and Seoul. 5 SparkLabs Global Ventures’ Technology and Internet Market Bi-Monthly Review August 13, 2014

From the large amounts of data collected, it mines insights, and ensures those reach decision-makers. Sometimes, the causes of problems like a higher number of crimes in a particular area aren’t obvious from just one set of data. But when you layer many parameters, the answers become evident. • Indian cloud telephony startup Knowlarity secures $16M funding from Sequoia, Mayfield Cloud telephony company Knowlarity Communications secured US$16 million in series B funding from Sequoia Capital and Mayfield. The Indian startup plans to use the funding to expand operations into Southeast Asia, and fuel research and development. Knowlarity’s cloud telephony services enable businesses to virtualize their phone systems. It provides a scalable phone platform that can handle over a million calls an hour. Knowlarity arms startups and small businesses with toll-free numbers, helps them manage business leads, coordinate sales teams across centers, and offers facilities like call-routing, call recording, and voicemail. Currently, it has two flagship products: SuperReceptionist, a hosted business phone system that allows you to record, route, forward, and track every call that your company makes or receives, and SmartIVR, a customized solution for all enterprise telephony needs. Founded in 2009 by two graduates from the Indian Institute of Technology (IIT) Kanpur, Ambarish Gupta and Pallav Pandey, using personal savings and borrowed cash worth US$2 million, Knowlarity currently claims to have over 6,500 paying customers in over 65 countries. Its clients range from mom-and-pop startups to companies like Pepsi, Zomato, and Medanta.

Malaysia • News Corp subsidiary buys $100M worth of shares in Malaysia’s iProperty In one of the largest investments ever made in a Southeast Asia-based Internet company, Malaysia-based Catcha Group announced that Melbourne-based online real estate ad company REA Group bought a 17.22 percent stake in Catcha Group’s portfolio company, iProperty Group, for US$100 million. The shares were acquired from SeLoger.com, operator of France’s largest property classifieds portal. The deal, which was made earlier on Monday, bumps iProperty’s value up to about US$600 million. It claims to be the most highly- valued publicly-traded Internet company in Southeast Asia. It also places REA Group, which is majority-owned by News Corp, as iProperty Group’s second largest shareholder, with Catcha Group remaining its largest shareholder. REA Group currently has a market cap of AU$6.22 billion (US$5.79 billion), making it one of the largest online property portal firms in the world. With the conclusion of this deal, Catcha Group now has a portfolio of online assets worth well in excess of US$1 billion. Their other portfolio companies include iCar Asia, Rev Asia Berhad, and iBuy Group. • MAD Incubator receives fresh funds, looking to open incubators across Southeast Asia Malaysia-based MAD Incubator secured an undisclosed sum of investment led by Singapore-based Start Up Nation’s Malaysian subsidiary, and joined by Kathrein Ventures. According to Anne Cheng, founder of Start Up Nation, the investment sum is sizable enough to aid in MAD Incubator’s plans to expand “very aggressively across Southeast Asia” in the coming years. Some of the new markets Start Up Nation plan to expand to include Myanmar, Jakarta, Brunei, the Philippines, and Thailand. The team intends to grow the number of incubators in these countries to reach out to more startups and entrepreneurs throughout the region. Prior to this, MAD Incubator and Start Up Nation had drawn up an agreement for collaboration back in 2013, and have been working closely since. Thus far, MAD Incubator has incubated more than 80 business ventures, and continues to support more than 200 companies through its BizStart program. It is also an MSC Status Accredited Incubator, meaning that it is officially recognized by the Malaysian government. To date, notable startups that have come out from MAD Incubator’s programs include dining reservation app TableApp, micro marketplace AfterFiv, and personalized date concierge LoveSprk.

Singapore • More than just a $15M gaming fund, Inflexion Point Capital wants to help game studios focus on creativity Singapore-based Inflexion Point Capital, or IPC, is looking to invest up to US$15 million in promising independent video game studios at an early stage, with initial seed investments of between US$100,000 and US$500,000 per studio. There is a lot of money going into the gaming industry. Most recently, mobile

SparkLabs Global Ventures (http://www.sparklabsglobal.com) is a global seed-stage fund with partners in Silicon Valley, Chicago, London Tel Aviv, Singapore, and Seoul. 6 SparkLabs Global Ventures’ Technology and Internet Market Bi-Monthly Review August 13, 2014

advertising network InMobi announced a US$25 million fund for indie game developers, while Tencent bought over a US$500 million stake in South Korea’s CJ Games. Alexander de Giorgio, COO of IPC, was quick to emphasize that IPC is more than just an investment fund – it is “a synthetic publisher co-creating independent video game studios”. The team is currently focusing on the Japanese mobile video game market, since it is one of the largest and most profitable markets at the moment. One of their senior board advisors is Kenji Inafune, CEO of Comcept and the former creative director at Capcom, who oversaw a string of hit games such as Mega Man, Resident Evil, Onimusha, Lost Planet, and Dead Rising, and is an outspoken critic of the current state of the Japanese gaming industry. Officially launching in August, IPC’s typical equity stake will range from 20 to 25 percent, and they are expecting to make up to three investments by the end of this year.

Thailand • Taamkru plans to fix Thailand’s ‘disgracefully bad’ education system, raises $620K Thailand-based education startup, Taamkru raised US$620,000 seed funding round led by Silicon Valley fund and accelerator 500 Startups. M&S Partners, IMJ Investment Partners, Ookbee, and Red Dot Ventures also invested this time. Taamkru, which translates to ‘ask the teacher’ in Thai, hopes to change education through its web and mobile apps, giving pre-schoolers a fun, gamified way to prepare for examinations in a manner that black-and-white paper workbooks can’t. Its platform also lets parents track their child’s performance and benchmark it against other kids in the nation. To market itself, the company has been organizing nationwide contests where children take a test that “provides parents with an accurate measure of the true analytical and reasoning ability of their child benchmarked against indicator data.” The competition has so far attracted 20,000 preschool applicants from Thailand and China. According to Taamkru CEO and co-founder Wicharn Manawanitjarern, the startup now sees 100,000 monthly active users across its web, iOS, and Android apps, 5,000 of them from Singapore. It began monetizing mainly through advertising on its website, but recently started offering in-app purchases in the form of extra assessment content. It plans to move into B2B sales (selling to schools) and revenue sharing arrangements with content creators through an online publishing marketplace for preschool workbooks. • Thai Fashion Site WearYouWant Raises $1.5M Series A Thailand should be a e-commerce company’s dream as it has a high mobile penetration rate (43% according to Nielsen) and social media networks like Instagram are particularly popular there. But e-commerce companies in Thailand still face the challenges like low credit card usage and limited logistics networks. WearYouWant, a fashion retail site, raised US$1.5 million in Series A funding to tackle those problems. The round was lead by Digital Media Partners (DMP), a venture firm that specializes in emerging markets, as well as Japanese e-marketing firm OPT SEA. Other investors include IMG Investment Partners and WearYouWant co-founder Julien Chalte. Founded by Chalte and Martin Toft Sorensen in 2011, WearYouWant currently carries 450 brands and 12,500 items, and claims “tens of thousands” of active customers. WearYouWant serves as a marketplace, allowing offline vendors to set up a shop and manage customer orders. Since credit card penetration in Thailand is low, WearYouWant allows customers to pay cash on delivery and works with two logistics companies, CJ Korea and KWC Logistics, to ship its orders. Despite months of political unrest in Thailand, WearYouWant says it has seen a triple-digit growth rate over the last six months.

United States • Moogsoft Raises $11.3M in Series B Funding to Help Enterprises Deliver Continuous Availability of Web-Scale IT Operations Moogsoft, the leader in collaborative situation management for web-scale IT operations closed an US$11.3 million Series B funding round led by new investor, Wing Venture Capital. Existing investors, including Redpoint Ventures, also participated in the round. Moogsoft plans to use the new investment to fuel continued technology innovation and geographic expansion. Moogsoft is offering a new type of a platform for ensuring the availability of today's continuous delivery applications and infrastructure. Its flagship product, Incident.MOOG, is used by web-scale service providers and enterprises to create collaborative situational awareness among IT Operations Management (ITOM) and IT Service Management (ITSM) teams.

SparkLabs Global Ventures (http://www.sparklabsglobal.com) is a global seed-stage fund with partners in Silicon Valley, Chicago, London Tel Aviv, Singapore, and Seoul. 7 SparkLabs Global Ventures’ Technology and Internet Market Bi-Monthly Review August 13, 2014

Incident.MOOG detects incidents as they unfold, reduces the noise without preset rules or models, creates contextualized situations and then orchestrates rapid restoral of business services. Moogsoft's founders are the original team behind IBM Tivoli Netcool and RiverSoft. • ‘Uber’ of mortgage lending, Privlo raises $3.8M Privlo, ‘Uber’ of mortgage lending raised US$3.8 million in seed funding from Spark Capital and QED Investors. Mortgage lending is still quite broken, especially after the crisis of the mid-to-late 2000s. By using various sets of data and proprietary software, Privlo finds people who might have been denied traditional mortgage financing, but who, according to its criteria, are still reliable candidates. It then issues them a loan, which they interact with through Privlo’s site. Privlo first underwrites the loan and then passes it on to an unnamed investor, which has committed $350 million to Privlo-issued loans. The idea came from founder and chief executive Michael Slavin’s experience in mortgage private equity, where he started to see dislocations in private lending capital in real estate. He founded Privlo, which actually first started in peer-to-peer lending, and after successfully booking $28 million in loans, it decided to shift from peer-to-peer to peer-to-business. The company plans on sticking to mortgage loans for the foreseeable future, although expanding beyond that could someday be a possibility • Vectra Networks detects cyber attacks in real time, raises $25M Vectra Networks, a security startup deeply connected to U.S. national security officials raised a new US$25 million in funding from Accel Partners and existing investors. Vectra calls itself “the leader in real-time detection of cyber attacks in progress” and specializes in enterprise network security. According to Vectra chief Hitesh Sheth, “the reality today is that every network is breached.” Vectra plays a reactive role in the security industry, aiming to catch breeches as they happen. Vectra has strong political ties: One of the startup’s advisors “is a Washington, D.C. collective, Rice Hadley Gates, a firm founded by former Secretary of State Condoleezza Rice, former National Security Advisor Stephen J. Hadley, and Dr. Robert Gates, Secretary of Defense in the Bush and Obama administrations. Non-founding member Jane Holl Lute was also the former Deputy Secretary of Homeland Security.” • Ad-tech player Rocket Fuel buys programmatic marketing company [x+1] Publicly traded advertising-technology company Rocket Fuel is paying US$230 million in cash and stock for [x+1], which has tools for doing programmatic marketing across multiple sites and devices. Rocket Fuel stock was down more than 23% after markets closed on Wednesday. Also according to tis earnings statement for the second quarter of this year, net loss was US$9.7 million, compared with a net loss of US$3.8 million in the second quarter of 2013. Rocket Fuel already offers programatic media-buying tools, but [x+1] offers a data management platform (DMP) that can take data from third-party sources into consideration alongside customers’ own data sources, in order to deliver ads to just the right audience. That area has proven interesting to enterprise software giant Oracle, which bought DMP provider BlueKai in February, reportedly for around $400 million. And Neustar bought Aggregate Knowledge for $119 million. New York-based [x+1] started in 1999 and announced a $17 million credit facility last year. • PagerDuty raises $27.2M to become your company’s monitor of monitors PagerDuty, a popular tool among developers and system administers, raised US$27.2 million in new funding. Sysadmins and others use PagerDuty to stay on top of alerts from several monitoring tools. Getting those kinds of alerts is often critical but if they’re not well managed, these alerts can lead to stress and confusion. The startup plans to use the fund for product development, in particular to stop what some customers have called alert fatigue, which implies being disturbed by too many non-issues. In addition, PagerDuty would like to give people context around the root cause of issues and draw correlations across issues. PagerDuty started in 2009. It claims thousands of customers including Adobe, Airbnb, Groupon, Intuit, Panasonic, and the University of California, San Francisco. To date the San Francisco-based startup has raised $39.8 million, including last year’s $10.7 million round. • Palantir buys mobile-development startup Propeller Palantir, a big data company that has worked with U.S. Army and other government customers, just bought itself a mobile-development startup called Propeller. This is the second Palantir acquisition this week. On its homepage, Propeller reps confirmed the deal but Palantir’s intention behind the purchase is unclear. Perhaps Palantir merely wants to bolster its mobile development capabilities in order to better meet the needs of its

SparkLabs Global Ventures (http://www.sparklabsglobal.com) is a global seed-stage fund with partners in Silicon Valley, Chicago, London Tel Aviv, Singapore, and Seoul. 8 SparkLabs Global Ventures’ Technology and Internet Market Bi-Monthly Review August 13, 2014

customers. That area lies far away from Palantir’s core strengths, which include analyzing lots of data at scale. Palantir’s acquisition earlier this week of Poptip, which boasted natural-language processing capabilities, seems more in line with Palantir’s business. Propeller, which lets people easily build native mobile apps, went through the StartX accelerator at Stanford University in fall 2012. The startup’s market has proven interesting to Microsoft and other companies. Investors include Andreessen Horowitz, Scott Banister, Foundation Capital, ffAngel, Ashton Kutcher, Max Levchin, Menlo Ventures, Jason Portnoy, Keith Rabois, and Rothenberg Ventures. • Felicis Ventures closes new $96M fund Felicis Ventures announced the close of its third round of US$96 million, a short four years after raising its first in 2010. As a fairly small firm and fund, Felicis is taking a focused approach to its investing, in particular looking for companies in what it calls the “reinvention of core markets” (security, mobile commerce, and intelligence) and in the “development of frontier areas” (drones, Bitcoin, and machine learning). Also instead of sticking to one investment stage, Felicis is keeping an open mind, as long as the opportunities are incredible, though it does tend to invest in the earlier stages. Felicis is also a founder-centric firm, meaning that it both looks for what it calls “iconic founders,” which it defines as having an incredibly strong vision, and who are building companies in the two areas above. Although Felicis has not started investing out of its new fund, its previous funds’ track record is impressive. Out of 120 investments, 50 have already been involved in acquisition deals or gone public, and its investments have a global reach, such as Canada’s Shopify or Finland’s Rovio. • With a fresh $25M, Bitglass is ready to protect enterprise cloud and mobile assets Founded in 2013 and based in California, Bitglass raised US$25 million in a second round of capital, bringing its total to $35 million. Bitglass deals with the panic-inducing reality of mobile- and cloud-based world by inserting itself between employees’ apps and your corporate servers, ensuring that every communication is monitored, encrypted, or redacted –whatever the IT policies require. With just 40 employees currently, Bitglass is planning to ramp up quickly, growing sales, marketing, and technology development functions. It is already generating revenue from subscription fees (typically $5 to $10 per user per month), and says that it has customers in “every major vertical industry,” although it won’t disclose how many customers it has. The funding comes from SingTel Innov8 (Innov8), a corporate investing subsidiary of the SingTel Group, a Singapore- and Australia-based telecommunications company. An unnamed “large global bank” is also participating, as are existing investors NEA and Norwest.

Europe • Beacon Platform Kontakt.io Raises $2M from Sunstone Capital “Bluetooth Low Energy and iBeacon are the building blocks of the next wave of computing,” says Max Niederhofer of the micro-location technology that lets your smartphone trigger events based on how close you are to a Beacon transmitter. Niederhofer’s VC firm, Sunstone Capital, closed a US$2 million investment in Kontakt.io, a Polish startup that offers its own Beacon platform, including the supply and customization of Beacon hardware, underpinned by an open API and SDKs for iOS and Android. The Kraków-based company, which counts Y Combinator alumni Estimote as a competitor, already boasts big-name customers such as Google, Facebook, Apple and Siemens, and says it plans to use the new capital to accelerate international expansion and evolve its product line. With the technology still pretty nascent and despite Apple throwing its might behind the concept, what Beacon’s ‘killer’ application will be is still open to debate. Retail is thought to be just the start — with Beacon transmitters enabling an app on your phone to detect when you enter a retail store or spend time in close proximity to a particular product and showing you relevant offers, for example. However, Niederhofer says other applications include security, home and office automation, care of patients, children and the elderly, asset and warehouse management, and indoor navigation. • Europe’s Bauer Media Sets Up Fund To Invest $134M In Startups Over 10 Years Few weeks ago, Google Ventures announced that it setting up shop in London as a hub for investing US$100 million all over Europe. Now another big fund of €100 million or circa $134 million has been established by local German media firm, Bauer Media. The fund will be invested in European digital businesses over the next

SparkLabs Global Ventures (http://www.sparklabsglobal.com) is a global seed-stage fund with partners in Silicon Valley, Chicago, London Tel Aviv, Singapore, and Seoul. 9 SparkLabs Global Ventures’ Technology and Internet Market Bi-Monthly Review August 13, 2014

ten years via a new VC arm, called Bauer Venture Partners (BVP). BVP is not limiting itself to particular sizes or stages of investments but says only that its focus will be “highly scalable business models in Europe”. The motivation for a media firm to be looking at startups is of course the omnipresent need to establish new revenue streams and maybe even figure out fixes for its own digitally disrupted media business models. Zooming out, longer-in-the-tooth European VC giants include Index, which recently raised a new early-stage $550 million fund for investments in Europe and Israel; Accel which closed a $475 million fund in March 2013 also mainly for Europe; and Balderton, which closed a $305 million Series A fund this April, exclusively earmarked for Europe.

Israel • Israeli Cyber StartUp ThetaRay Closes $10M Funding Round Israeli cyber security start-up ThetaRay Ltd., which makes software that detects anomalies in an organization’s data, closed a US$10 million investment round. Participants in the round included existing investors in the company—General Electric Company, Jerusalem Venture Partners and Poalim Capital Markets Ltd.—as well as new financial and strategic investors. The company plans to use the recent funding to open offices in the U.S. Founded in 2012, ThetaRay spun off from the mathematical research of the company’s founders— professor Amir Averbuch of Tel-Aviv University and Yale’s Ronald Coifman. The product, deployed on site or run off a cloud, is based on advanced mathematical algorithms that learn the “normal” behavior of a system, and flag anomalies, like a cyber-intrusion, when they occur. ThetaRay started out as one of the companies in Jerusalem Venture Partners startup incubator in Jerusalem. The company currently participates in Citigroup Global Markets Ltd.’s accelerator program in Israel, giving it access to some of Citibank’s data resources.

Australia • Maker Of $99 Lightbulbs, LIFX Gets $12M Series A From Sequoia Following $1.3M Crowdfunding Campaign LIFX, the company behind the $99 Wi-Fi enabled, multi-color LED light bulbs, raised US$12 million in Series A funding. The follows one of the most successful Kickstarter campaigns to date, snapping up $1.3 million in pledges of an original target of $100,000 in just six days at the end of 2013. LIFX is continuing to add to new features to the app, like preset moods and music activated settings, with a major overhaul to be launched soon. Light bulbs consume approximately 20% of electricity in homes around the world and LIFX aims to make them more efficient. The energy-efficient LIFX bulbs are designed to last around 25 years and can be screwed into standard lamps. You can dim and brighten, change the color to a choice of 15 million colors as well as a selection of white lights through the app. LIFX plans to use the capital to fund the next phase of its business. • Canva secures $3.6M funding to get more people using its online design tools Australia-based startup, Canva raised US$3.6 million in funding. Canva made headlines around the world in April this year when the small Australian startup recruited Guy Kawasaki, Apple’s former chief evangelist, to spread the word about its service. Canva is a site full of online tools for creating graphics and designs, aimed at marketers, bloggers, freelancers, and small business owners. It has a mix of free and premium elements and the option for online collaboration between several people. Canva recently introduced a plug-in that third- party sites can choose to install, allowing visitors to the site to use Canva to create graphics without having to go to the Canva website. It will appear as a button marked “design” on participating partner sites. The startup envisions this being used on a wide variety of sites that require people to make images, such as on an ecommerce marketplace.

SparkLabs Global Ventures (http://www.sparklabsglobal.com) is a global seed-stage fund with partners in Silicon Valley, Chicago, London Tel Aviv, Singapore, and Seoul. 10