Fred Destin

My latest investment: InspirationalStores lands €10M for high-end e-commerce

I am delighted to announce the closing of my latest investment, in the form of a €10M round of funding (along with existing investor OTC Asset Management) into an exciting e-commerce business by the name of InspirationalStores.  I am very bullish about this new addition to my online portfolio (which today includes DailyMotion, PriceMinister, Seatwave, Sporever or Zoopla).

For clients such as Laduree, Delvaux or Caviar Kaspia, Inspirational Stores offers a complete turnkey offering covering every aspect of e-commerce, together with a consumer experience that completely reflects and respects the brand ethos and universe. To date the company has announced no less than 12 customers and established itself as leader in this next wave of luxury and niche e-commerce. It is about to launch its UK operation to accompany the local development of Laduree, which has recently opened a spectacular new Tea Room at Harrods designed by Roxane Rodriguez, as an homage to the French “Art de vivre”  (yes, I am borrowing from the press release but, hey, I wrote it :-)).

Why do I find this attractive:

• IS really designed itself from the outset as the long-term strategic partner to its brand partners.  The partners can focus on what they are the best at (great products, great brands) whilst IS can focus on optimised online marketing, CRM, operations, logisitics etc.  Online complexity is increasing, particularly on the marketing side; it take specific expertise and talent which is getting harder to find in the market. 
• This is a good example of touchless e-commerce.  Hence the operating leverage remains attractive.  Low cost of customer acquisition (partly because the brands are known), low returns (because the consumers know the products they are buying already), but high average baskets and reasonable margins all make for a sound business model.
• The team are veterans / pioneers in their field.  Michel de Guilhermier and Martin Genot were the founders of Photoways, the leader in online photo finishing (led today by the reportedly brilliant Stan Laurent.  Martin and Michel are true entrepreneurs who can knock down doors like no-one else and are masters of their trade (business and commercial development, back-end and logistics).  But these guys also knew their shortcomings and how to build a better team, so they brought on Erik-Marie Bion (one of the best known online marketers in France and a great people manager, as in his last role as MD at HiMedia) and Bruno Emsellem (CTO of GridXpert, IndustrySuppliers etc) to put together a kickass team with a very broad talent set.
• We just, you know, got along.  It's all about the social contract !

 

<--- Erik-Marie Bion with the "I got Flair" French look on him

Anyone who knows e-commerce will tell you it's all about execution, execution and execution.  With this team behind the wheel I am very confident that we have the right kind of obsessive, ambitious, high-impact people to build a really exciting property.  I don't like my entrepreneurs to be wilting lilies and these guys certainly qualify as true proponents of the unique "suspension of disbelief" required to make these project fly.

As a quick aside I am also glad to be finally doing a deal with my friend Greg Revenu at Bryan Garnier.  An added bonus.

Real all about it too on Michel de Guilhermier's Blog who added some nice quotes from some of the company's CEOs (and could not help post before TC got their hands on the story :-)).

<--- A high end umbrella from Alexandra Sojfer epitomises the kind of brands Inspirational Stores want to work with: great, best of breed niche products

Now on Techcrunch too courtesy of Ouriel (about 10 minutes from communication to post -- wow !!) here

DailyMotion partners with Warner

Midem is known as a place to do business.  Our guys at DailyMotion proved that by closing a global agreement with Warner Music for the delivery of music videos on our site.  It's nice that our team closed their first deal with a major on sensible terms.

Call me high brow, but I have a vision of the very long tail for DailyMotion, with the incredible animation of Jiri Trnka alongside some unedited interview of Banksy.

So well done on the Warner deal to our boys and girls, and let's continue on the road to short-form content on demand, whatever it may be.

technorati tags:dailymotion, warner

Isilon goes public at nearly $800M market cap

 

Last  night saw the pricing of the Isilon IPO at $13 per share, also per Reuters. The company initially filed a rangebefore the roadshow, of $8.50  to $9.50 and refiled on Tuesday a new range of $11 to $12. Based on a strong oversubscription with many high quality buyers, we went to the  lucky $13 price. The IPO will raise $108 to $117 million in cash for the company  depending on how much of the green shoe is sold.  Atlas Venture's share will be  worth $191 million at the IPO price; we are the largest shareholder. The market will decide today where we go  from here when ISLN starts trading.

I wrote about Isilon before, which provides clustered storage systems designed for rich-media.  The best arms merchant to the digital revolution !

Technorati Tags: isilon, ipo, atlasventure

UMG sues MySpace and EMI agrees deal with Gotuit

We have two viewer-facing video initiatives here at Atlas, one being Gotuit Media and its portal Gotuit.com and the other being DailyMotion.  Good news landed on the public pages on Thursday with the announcement of the EMI - Gotuit licensing agreement.

Strikingly UMG announced a lawsuit against MySpace the next day.  The debate around MySpace seems to be that MySpace has been monetising a ton of pages that have historically contained copyrighted content.  I have looked at the DMCA in detail; the law is ambiguous and was not designed with UGC in mind, so this is not an easy one to predict.  I will be watching the outcome with interest !

Gotuit offers a nicely branded and protected experience to media owners because (a) its quality is very high and (b) there is no opportunity for the content to escape the site.  So whilst there is a definite downside in terms of viral spread and community leverage, Gotuit is in the business of building an alternative to television where copyrighted content feels safe.

You can read Techcrunch here.  Good things don't come to those who wait on Gotuit:

• Video access is very very fast
• You can browse the site whilst you watch the video
  
• Deep tagging features mean you can navigate straight to the right sequence

Some good reviews from TechnoBabble and Read/Write Web as well.

technorati tags:gotuit, dailymotion, emi, myspace, youtube, jeffandrews

Mascoma: Atlas Venture joins General Catalyst in cellulosic ethanol

Hemant has led the recent $30M round in Mascoma, a cellulosic ethanol developer.  PR here. My colleague Juergen Habichler has written a good post on this.  Hemant is an up-and-coming "young gun" in the Boston market (as per this Mass HighTech article); he is also involved with Advanced Electron Beams, one of our companies, alongside Jeff Fagnan.

technorati tags:mascoma, hemanttaneja, jefffagnan

Datapower: some acquisitions become great acquisitions

Short of an IPO, the best token of a success for a VC is an acquisition that becomes a great product line for the acquirer.  Whilst the pitfalls of acquiring startups are well known, it is a great source of satisfaction for the entrepreneurs and their backers to know that they have built a product and organisation that has legs and really helps the acquirer expand its business.  Whether customers keep buying is the real acid test, regardless of how hyped the market was and of the valuation achieved.

So my partner Jeff Fagnan was quite chuffed to see this article come out:

IBM: SOA appliances selling like 'gangbusters'

In October 2005 IBM acquired our portfolio company DataPower.  It looks like they made a wise move.  They made us happy but obviously bought well and are building further value.

Not all acquisitions in the computer industry work as well as the buyers and sellers hope, but IBM's purchase of DataPower's XML hardware accelerators, now re-branded as WebSphere DataPower SOA Appliances, seems to have justified last year's hype, scoring 40 new customer wins in the year's third fiscal quarter.

Jeff and Ron Schreiber, then at Seed Capital Partners, led the first round of fuding and backed Datapower's Eugene Kuznetsov.  After Jeff joined Atlas, he convinced us to re-invest in the company as lead on the Series C, and a good thing we did too !

For your mild amusement of the day, here is the old profile of Eugene on O'Reilly's XML.com:

Eugene Kuznetsov is the founder of DataPower Technology, a stealth-mode startup providing next-generation XML acceleration solutions. He was previously involved in three different optimized Java VM implementations, and led the Java JIT Compiler effort for the Macintosh version of the Microsoft Internet Explorer 4.0. It is not known what he does to relax.

technorati tags:datapower, jefffagnan, eugenekuznetsov, ibm

Miasole - our third cleantech deal

Jeff Andrews (pictured) and Peter Shannon have just completed an investment in a thin film solar cell manufacturer called MiaSolé in what constitutes our third investment in cleantech, after Liliputian (fuel cells) and AEB (electron beams). MiaSolé is a later stage play that brings a disruption in the cost base of manufacturing photovoltaic (PV) panels.  Atlas joins previous backers Kleiner Perkins and VantagePoint Venture Partners.

For context go back to my previous post on the evolution of the venture market; this is "brand extension" for us at Altas Venture.  We have been actively looking and investing in this space for a few years now and seeing more and more opportunities.  And often, the challenges of innovation in solar manufacturing do not look that different from semi's and systems !

Huge Market

In 2005, 1,600 MW of PV modules were produced, at market value of $6.5B.   Another way to look at size: crystalline Silicon (cSi) use for photovoltaics for the first time exceeded use for semiconductor electronics manufacturing.  It's growing fast: the module market is projected to reach $13B with 4,300MW of modules sold by 2010.  This analysis does not account for disruptive breakthroughs in cost which would likely drive additional demand growth, this market being very price elastic.

 
Fantastic team

MiaSolé’s management team comes to the PV industry with roots in thin film manufacturing from the disk drive and optical components industries. The team is led by David Pearce, who has been in the business for 35 years, of which 20 as President or CEO, and was involved in two IPO's (Domain and Miniscribe).  He is working with Chief Scientist Dr Dennis Hollars, a PhD in AstroPhysics with 30 years of experience in thin-film manufacturing  and other strong profiles.

 
Disruptive approach

Current solar technology has respective module cost points of $3.00/W and $2.50/W. Whilst I cannot reveal much about the processes (Jeff has some Irish ancestors who are good are kneebreaking), let's just say that Miasole will come in significantly below these price levels, thanks to the cost advantage created by its low capital equipment cost per unit of product. The cost advantage stems from the use of high volume, high yield, low cost manufacturing processes which the founding team brings from their 20+ years in the disk drive industry.

We will be announcing more investments in the segment soon.
 

 

Atlas exits eDreams for $190M

We are delighted for Javier and the team at eDreams on their very succesful LBO with TA Associates.  This team really came through for us, delivered a good return, and can continue building eDreams into an even bigger success !

technorati tags:edreams, taassociates

3V newest from Atlas and Benchmark

We announced the closing of 3V with our friends at Benchmark.  Christopher Spray and Barry Maloney are the board members for this online payments initiative.

We are backing Kieron Guilfoyle and his team with what is essentially the online payments equivalent of a mobile phone top-up.  Anyone who has done pre-paid top-up should get the concept and will receive a prepaid voucher with a normal VISA number that can be used to purchase online.  It's very simple but also very patented :-).  We have a great network of partners around to enable this product: PermanentTSB, VISA, Alphyra.

Valerie gave us some nice coverage, so she gets juice :-)

technorati tags:3v, benchmark, kieronguilfoyle

Songbird: time to leave the iTunes nest

Rob Lord, Babak Nivi and friends (Pioneers of the Inevitable, dude) hatched next gen music player SongBird.  If you did not feel like downloading the nightly builds, the latest developer version is pretty usable by non XUL Runners ... like me. Try it now.

Songbird is cool because it plays the web as well as your music.  If you like Firefox and Flock and all the openness we have come to expect from the web, you should love SongBird.

<--  Songbird now does open source too

We funded a while ago (discretely) but it somehow came out on VentureBeat today.  Notice how no one does boring PR releases with a dull quote from each venture principal anymore !  Now that's a relief... 

In a world rife with venture capital, funding on its own is not so newsworthy anymore.  In venture capital too, context matters.

 

technorati tags:songbird, jefffagnan, atlasventure, sequoiacapital, nivi

Atlas Venture's Isilon seeks $86M in IPO to reshape storage

Isilon Systems, of which Atlas Venture are the largest shareholder, filed to go public on Friday under the joint tutelage of Morgan Stanley and Merril Lynch. 

Isilon provides clustered storage systems optimised for rich media content.  As arms merchants go it is hard to get better market timing given what is happening in the world of video right now...  MySpace is a customer for example; so is Kodak, to mix the new and the old.

Sujal Patel was "the man with a plan" in this case after his time as Chief Architect of RealNetworks (who owe him SureStream).  He then patented the distributed file system that enables Isilon clustered rich media architecture.  He is a nice and approachable guy who, as one might anticipate, seems scarily smart (I didn't defy him at chess so I cannot confirm the rumours).  In other words, he deserves everything that is happening to him right now !

Atlas Venture led the first $8M round and was joined by Madrona Venture Group, with Greg McAdoo of Sequoia Capital coming in on the second $15M round.  Lehman and Focus Ventures led rounds 3 and 4 (for $15M and $20M respectively).   A further $10M  round was announced recently, meaning that the company has raised just under $70M to date..

[Note: I will post further as the process continues but strictly stale news of course (that's commentary to you) given our involvement in the process.  I recommend this man for some real news.  And please don't ask me any questions, respected members of the press, but rather talk to Jay Wampold, Sr. Director of Marketing Communications, at Isilon.]

technorati tags:atlasventure, isilon, sequoiacapital, sujalpatel