AugustCapital

INRIX Completes Acquisition of Leading European Traffic Information Company ITIS Holdings

Kirkland, Wash. USA and Altrincham, UK, August 22, 2011 - INRIX, Inc., a leading international provider of real-time traffic information and connected driving services, announced today that it has completed the acquisition of ITIS Holdings plc, a UK-based traffic information company. The acquisition adds $27 million in revenue and 155 employees to INRIX, and extends INRIX's reach to more than 200 leading customers in 30 countries around the world. With this acquisition, more than 150 million drivers will rely on INRX traffic information to help them save time, money and use less fuel every day.

 

"The acquisition takes us one step closer to our goal of reducing the world's traffic congestion by providing better information globally," said Bryan Mistele, president and CEO of INRIX. "As one company fueled by a talented staff and an unrivaled set of patented breakthrough technologies, we offer customers the best quality real-time, predictive and historical traffic information and services worldwide."

 

Said Stuart Marks, Founder and CEO of ITIS, "Our complementary technologies, combined geographic reach and expanded technical expertise helps us better serve our customers and provides our staff exciting opportunities to work with some of the world's leading companies. We are delighted to join with INRIX."

RelayRides raises $10M to expand service, attract members

August 17, 2011- Cartech Blog, Cnet -

RelayRides announced that it raised $10 million in series A.2 financing. The peer-to-peer car-sharing start-up raised $5.1 million earlier this year, and the injection of cash will be used to expand its service area and attract more members.

The car-sharing network started in Cambridge, Mass., but moved its headquarters to San Francisco. Rentals at RelayRides start at $5 per hour, and include gas and insurance. Borrowers go through a driving-record check before being allowed to rent a vehicle, and owners outfit their vehicles with an immobilizer that enables renters to unlock their car without a physical key exchange. Like its competitor ZipCar, a set of keys are in the vehicle's cabin, but the car will only start if there is a reservation and the vehicle has been unlocked using a member access card. Each borrower carries a $1 million insurance policy in the event of an accident.

RelayRides is backed by Google Ventures, but it is particularly excited about the $1 million investment by startup veteran Lisa Gansky. A spokesman for RelayRides says that Gansky's investment is a vote of confidence by one of the arbiters of the sharing economy. The company is hoping to increase its membership base, which consists of 2,000 members and about 100 car owners. At present, the service is only available in Cambridge and San Francisco, but RelayRides would like to expand the service area to the Boston suburbs and throughout the Bay Area.

The biggest difference between RelayRides and its direct competitor Getaround is that RelayRides lets car owners keep 65 percent of the rental fees, compared with 60 percent at Getaround. However, Getaround has an iPhone app that members can use to book reservations on the fly and unlock their reserved vehicle. Hopefully RelayRides will remedy that shortcoming with its bigger budget.

One of the best parts of its service is that if you return the vehicle earlier than you've scheduled, half the cost of the remaining time is credited to your account. However, an app would make obtaining that credit a lot easier and faster.

KAR Announces Agreement to Acquire OPENLANE

Carmel, IN - KAR Auction Services, Inc. (NYSE:KAR) announced today that its subsidiary, ADESA, Inc., has signed a definitive agreement to acquire the equity of OPENLANE, Inc., a leading Internet-based business-to-business automotive remarketing company. Peter Kelly will continue as OPENLANE’s CEO and will report directly to KAR’s CEO, Jim Hallett. OPENLANE will be acquired for $210 million in cash, plus an increase for excess cash on OPENLANE’s balance sheet at closing. The transaction’s closing is subject to certain regulatory and other closing conditions. The Company expects to finance the transaction with available cash and proceeds from its revolving credit facility.

In 2011, KAR expects that OPENLANE will generate approximately $100 million in revenue and sell over 300,000 vehicles to automotive dealers through its online auction services platform. After giving pro forma effect to this acquisition and the elimination of certain corporate costs, KAR expects OPENLANE’s pro forma Adjusted EBITDA in 2011 to be approximately $13 million. KAR anticipates that OPENLANE will contribute $20 to $25 million of Adjusted EBITDA in 2012 which reflects synergies expected to be realized upon the integration of the businesses. In addition, KAR expects OPENLANE’s Adjusted EBITDA to further improve following completion of all integration activities in 2013.

Commenting on the acquisition, Jim Hallett stated, “OPENLANE is a natural fit for the KAR family of companies as it extends our online product offerings, provides a complementary customer base and adds talented members to our management team. Sellers and purchasers of vehicles continue to increase their use of online remarketing platforms, and we believe that enhancing our existing suite of online services and products will further support KAR’s objective of expanding our addressable market to capture transactions that currently take place outside the traditional wholesale auction channel. This combination will allow ADESA to broaden its comprehensive end-to-end solutions for the vehicle remarketing industry and will provide opportunities for our sister companies, Insurance Auto Auctions and AFC.”

Commenting on behalf of OPENLANE, Peter Kelly stated, “I consider this a great
combination that will significantly benefit our customers and the industry. Joining KAR will
provide OPENLANE with the resources to accelerate the execution of our strategy and to
deliver innovative remarketing solutions to the industry. I am looking forward to working with
Jim and joining the KAR management team.”

Hallett continued, “I have known Peter and members of his management team for a number
of years and have always believed that OPENLANE would be a good cultural fit with KAR. I
look forward to Peter and his team contributing to KAR’s success.”

Non-GAAP Financial Measures
Adjusted EBITDA as presented herein is a supplemental measure of KAR’s performance that
is not required by, or presented in accordance with, generally accepted accounting principles
in the United States (“GAAP”). It is not a measurement of KAR’s financial performance under
GAAP and should not be considered as a substitute for net income (loss) or any other
performance measures derived in accordance with GAAP or as a substitute for cash flow
from operating activities as measures of KAR’s liquidity. EBITDA is defined as net income
(loss), plus interest expense net of interest income, income tax provision (benefit),
depreciation and amortization. Adjusted EBITDA is EBITDA adjusted for the items of income
and expense and expected incremental revenue and cost savings as described in KAR’s
senior secured credit agreement covenant calculations. Management believes that the
inclusion of supplementary adjustments to EBITDA applied in presenting Adjusted EBITDA is
appropriate to provide additional information to investors about one of the principal measures
of performance used by KAR’s creditors. In addition, management uses Adjusted EBITDA to
evaluate KAR’s performance and to evaluate results relative to incentive compensation
targets. EBITDA and Adjusted EBITDA have limitations as analytical tools, and should not be
considered in isolation or as a substitute for analysis of the results as reported under GAAP.
These measures may not be comparable to similarly titled measures reported by other
companies.

Forward-Looking Statements
This release contains forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 and which are subject to certain risks, trends and uncertainties.
In particular, statements made that are not historical facts may be forward-looking
statements. Words such as “should,” “may,” “will,” “anticipates,” “expects,” “intends,” “plans,”
“believes,” “seeks,” “estimates,” “contemplates” and similar expressions identify forwardlooking
statements. Such statements are not guarantees of future performance and are
subject to risks and uncertainties that could cause actual results to differ materially from the
results projected, expressed or implied by these forward-looking statements. Such forwardlooking
statements include statements regarding the proposed transaction. Factors that may
cause actual results to differ materially include the risk that KAR and OPENLANE may not be
able to complete the proposed transaction, which is subject to customary closing conditions,
including regulatory approval, risks that the businesses will not be integrated successfully,
risks that KAR may not be able to achieve the expected synergies from the transaction and
risks of disruption from the transaction. Factors that could cause or contribute to such
differences include those matters disclosed in KAR’s Securities and Exchange Commission
filings. KAR does not undertake any obligation to update any forward-looking statements.

KAR Auction Services
KAR Auction Services, Inc. (NYSE: KAR) is the holding company for ADESA, Inc., a provider of wholesale used vehicle auctions whose operations span North America with 70 used vehicle sites, Insurance Auto Auctions, Inc., a leading salvage auto auction company whose operations span North America with 159 sites and Automotive Finance Corporation, a leading provider of floorplan financing to independent and franchised used vehicle dealers with 89 sites across North America. For further information on KAR Auction Services, Inc., ADESA, Inc., Insurance Auto Auctions, Inc. or Automotive Finance Corporation, visit the company’s Web site at www.karauctionservices.com.

About OPENLANE
OPENLANE, Inc. is an online auction company in North America for automotive dealers to buy and sell wholesale vehicles. The company offers end-to-end auto remarketing solutions to auto manufacturers, captive finance companies, lease and daily rental companies, financial institutions and wholesale auto auctions throughout the United States and Canada. OPENLANE powers online remarketing programs for American Honda Finance, Audi Financial Services, Avis Budget Group, BMW Financial Services Canada, Chase Auto Finance, Chrysler Financial, Porsche Financial Services, Southeast Toyota Finance, US Bank, Volkswagen Credit, among others. For more information, please visit www.OPENLANE.com.

Merriam-Webster Partners with Livemocha, Collins

Publishers Weekly -June 7, 2011

Merriam-Webster is teaming with Livemocha and U.K.-based Collins to publish new lines of foreign language materials for the U.S. market. The most ambitious series is Livemocha Active Courses that features four books and a six month subscription to Livemocha’s online courses that lets users connect with over 9 million native speakers and instructors to practice their new language. The series, for Spanish, French, German and Italian, is priced at $49.95.

Founded in 2007,  Livemocha has almost 10 million members in its online language learning community who live in 195 countries. Livemocha combines traditional learning methods with online practice, and interaction with native language speakers from around the world.

In addition to the Livemocha line, M-W has introduced two series to its language learning line developed in cooperation with Collins. The Easy Learning in a Click courses include an audio CD, book, and interactive site subscription, in Spanish, French, German, and Italian. Price is $20.95. The Easy Learning  reference books series in Spanish and French include a book and prices range from $8.95 for books on idioms to $16.95.

“We are pleased to be building upon the success of our line of bilingual dictionaries with the introduction of this impressive collection of language-teaching resources, and we are especially pleased to be partnering with these two leaders in the field of language-learning instruction,” says president and publisher of Merriam-Webster, John M. Morse.

Mavenir Systems raises $40Million in Series E funding

Richardson, TX - May 30, 2011 - Mavenir Systems, the leading innovator of mobile infrastructure solutions for LTE operators, today announced it has raised $40 million in its fifth round of funding. New investor August Capital lead this round that included North Bridge Venture Partners, Austin Ventures, Alloy Ventures, Greenspring Associates and Cross Creek Capital that also joins as a new investor.

Mavenir has now raised a total of $105 million since October 2005.

The 4G/LTE market includes over 200 global operators who are investing in LTE with more than 400 Million subscribers expected by 2015.  This funding will fuel Mavenir’s continued expansion into fast-growing 4G/LTE markets and ensure we maintain the highest level of support services for our increasing customer base which now exceeds 120 mobile operators worldwide.

 “This is a key investment round that enables Mavenir Systems to make significant strategic growth moves that further strengthen our portfolio, resource and client base in the LTE wireless infrastructure space.” said Pardeep Kohli, president and CEO, Mavenir Systems.  “Our acquisition of Airwide Solutions increases our global presence and with our combined experience, will instill a greater confidence in our customers as they rely on Mavenir to launch innovative LTE services quickly and cost effectively."

This funding follows some significant milestones for Mavenir that demonstrate a strong foothold in the market with the win MetroPCS for LTE messaging and recently announced voice and messaging products (VoLTE) that that are essential for 4G/LTE wireless networks.

"With key customer wins in 4G/LTE deployments, Mavenir Systems has proven itself as an innovative wireless infrastructure player at a time when operators are looking into building smarter networks to keep up with smarter mobile devices." said Vivek Mehra, General Partner, August Capital.

With this investment round, Vivek Mehra of August Capital joins Mavenir’s Board of Directors.

Livemocha Challenges Rosetta Stone

PC World - Web - September 15, 2010

Confession time: If there’s such a thing as a language-learning gene, I lack it. Some of my closest relatives have taught foreign languages, but I’ve always considered myself a hopeless case. In school, I took multiple years of French, German, and Latin; I was mediocre at the time, and almost everything I did learn long ago departed my noggin.

Strangely enough, I haven’t given up hope. So I’m intrigued by Livemocha, a language-learning service that’s launching some online courses in the U.S. today after mostly doing business in other countries until now. The company is going up against Rosetta Stone–the 800-pound gorille of computer-assisted language learning. Unlike the CD-ROM-based Rosetta, though, Livemocha is a Web-based service. And it has cool community features: You can chat with native speakers and record lessons for their feedback.

Livemocha’s new “Active Courses” are available for Spanish, French, Italian, German, and English. (The company also offers more basic online courses in dozens of other languages for free.) Pricing for the Active Courses looks reasonable compared to Rosetta Stone, which starts at $249.99: They’re $19.95 a month or $149.95 a year.

That’s reasonable, of course, only if the courses get the job done. Like everybody else in the language-teaching business, Livemocha sounds super-confident about its wares, and says that anyone who takes the time to complete a course will gain conversational fluency. I’m going to dip my toe into the French course–if nothing else, I’m a good worst-case test for how effective Livemocha’s approach is.

Deliberateness Is A Good Thing

peHUB Wire -- Wednesday, September 1

Editor’s Note: Today’s guest column comes from David Hornik, a venture capitalist at August Capital in Menlo Park.

Deliberateness Is A Good Thing

The venture capital community has been getting slammed recently for moving too slowly.

And these accusations, no matter how well-founded, are beginning to stick.  Entrepreneurs loathe the idea of fundraising for protracted periods of time, and therefore they are particularly susceptible to this form of VC bashing. But I don't think that the accusations are fair. There are many of us in the venture community who are willing to work hard to get entrepreneurs a quick and definitive answer.  

For a long time VCs have been lambasted for taking an unreasonable period of time to get to "no." Yet now the mantra is that VCs take too long to get to a "yes." Entrepreneurs are being trained to expect an answer during a first meeting and anything shy of that is officially "slow." I remember playing gin rummy with my grandmother as a small child and having her urge me to "play fast and make mistakes." It would appear that some in the startup world would have VCs do the same around funding these days. Needless to say, that strikes me as irrational.

To my mind, there is a distinction between being too slow and not being irrationally fast. Many venture investors, myself included, would characterize ourselves as people investors. We bet on teams. And while we can get a great initial read on an entrepreneur or team of entrepreneurs in a first meeting, that is assuredly insufficient information to fully understand the individuals building a company, let alone the team dynamic. Taking time with a team of entrepreneurs is not about slowing things down. It is all about gathering information: How well do these entrepreneurs work together? How well do they understand the competition? How responsive are they to advice and introductions? etc. etc. Getting to know the people you are considering backing is an invaluable part of the investment process and most VCs take it seriously.

What's more, even if you are confident that you have a good read on the folks you are planning to back, there is no substitute for due diligence. Anyone who's been in the venture business for more than a few months has learned a surprising thing or two about a would-be CEO by making a few phone calls to former colleagues, bosses, classmates. Those calls are important—sometimes to validate your good impression of an entrepreneur and sometimes to disabuse you of it. And no matter how powerfully-good your intuition is, there's no substitute for making the necessary diligence calls.  

None of this should be taken to suggest that we VCs need months of time to get our work done. We don't (at least many of us don't). A few meetings and a bunch of phone calls can be compressed into a short period of time. But for those of us who are betting on teams of people with whom we intend to build big companies over the coming months and years, there are no shortcuts. It may be cliched, but it is a marriage. And there are very few marriage proposals made on first dates and fewer still that result in lasting and prosperous matrimony.

David Hornik has been a venture capitalist at August Capital since 2000, carving out a specialty in enterprise application software and infrastructure software, along with software and services aimed at consumers. Reach him at Hornik@augustcap.com

Zulily Raises $6 Million

August 4, 2010 - peHUB -

Zulily, a Seattle-based private shopping site for children’s items, has raised $6 million in Series B funding. August Capital led the round, and was joined by return backer Maveron LLC.

PRESS RELEASE

Zulily (www.zulily.com), the leading children’s private-sale shopping site for busy moms, today announced that it has received $6 million in Series B funding led by August Capital, with participation by existing investor Maveron LLC. This latest round brings the total funds raised to date by Zulily to $10.6 million.

Zulily has compiled a strong senior team of retail and e-commerce veterans from Blue Nile, Nordstrom, Provide Commerce/Red Envelope, and Eddie Bauer to build the best private-sale shopping site for busy moms, babies, and kids. The company remains focused on delivering a phenomenal website and superior customer service, and will use the funds to further advance its position as the leading children’s private-sale shopping site.

“Zulily is executing on all fronts and has already amassed a loyal following of savvy moms who value great product and appreciate a great deal,” said Eric Carlborg, partner at August Capital. “In a very short period of time, Darrell and his team have turned Zulily into the private sale category leader for busy moms. The company is on its way to become a great consumer brand and we’re thrilled about our investment in Zulily.”

“Zulily has established an impressive track record of innovation and customer momentum since our initial investment in late 2009,” said Dan Levitan, co-founder and partner at Maveron. “Children’s e-commerce is a big market and it’s clear that Zulily is the leader in the children’s private sale category.”

By signing up for Zulily’s free daily online service, busy moms are saving an average of 50-70 percent off retail prices of the most popular and up-and-coming boutique brands for babies, kids, and maternity. The limited-time-only deals are promoted to Zulily’s members via an email every morning. Since supply is limited and is typically only available for 72 hours, members quickly check the deals before they sell out. They are also encouraged to share the deal with their friends to receive a $10 credit on their next purchase, giving boutique brands immediate viral marketing access to reach busy moms on the Web, email, Twitter, and Facebook.

“Zulily is at the forefront of a profound shift in the way busy moms discover and purchase higher-end boutique brands online,” said Darrell Cavens, CEO of Zulily. “Not only are we providing the best deals, but we’re also offering a whole new way for baby, kid, and maternity boutique brands to get national distribution without having to worry about securing big box retail space. It’s a huge win for both consumers and brands.”

About Zulily
Zulily is changing the children’s retail market with invitation-only access to the most unique and sought-after children’s boutique brands at discounts of up to 70 percent off retail. Based in Seattle, WA and formed by retail and ecommerce veterans from Blue Nile, Nordstrom, Provide Commerce and Eddie Bauer, the Zulily team helps busy moms find the highest quality apparel, gear and other goodies for moms, babies and kids, including popular brands such as Graco, Melissa & Doug, and Flora and Henri to unique brands such as Baby Nay, Kate Quinn Organics, and Lex Modern. For more information, please visit www.zulily.com and connect with us on Facebook and Twitter.

About August Capital
August Capital was founded in 1995 to invest in companies differentiated by technical innovation and entrepreneurial excellence. To date, the August Capital funds total $2.0 billion. August Capital’s partners have more than a century of combined venture experience and together have invested in more than 80 companies across the technology spectrum. These companies represent an aggregate market capitalization of well over $250 billion and generate in excess of $75 billion in annual revenue. The partners at August Capital were the earliest investors in a number of ground breaking technology companies including Microsoft, Intuit, Seagate, Silicon Image, Sun Microsystems, Skype, Compaq, Symantec, Sybase, Atheros, Postini, Cobalt, shopping.com, PayCycle, Grand Junction and many more. August Capital is located in Menlo Park, California. For more information, please visit: www.augustcap.com.

About Maveron
Maveron is a leading venture capital firm founded by Dan Levitan and Howard Schultz with offices in Seattle and San Francisco. Maveron’s mission is to help exceptional entrepreneurs build great consumer businesses. Current representative Maveron investments include fast-growing consumer companies, such as Zulily, Potbelly Sandwich Works, Pinkberry and LiveMocha, and powering technology companies such as VideoEgg. Monetized investments include eBay, Capella Education Company, Shutterfly, Cranium (acquired by Hasbro), Qsent (acquired by TransUnion), Good Technology (acquired by Motorola) and lucy activewear (acquired by VF Corporation). Maveron has approximately $750 million under management and 22 active portfolio companies nationwide. For more information about Maveron, visit www.maveron.com.

Google Ventures-Backed Pixazza Raises $12 Million For Crowdsourced ‘AdSense For Images’

TechCrunch - July 18, 2010

Pixazza, a Google Ventures-backed photo tagging service that has been compared to an “AdSense for Images,” has raised $12 million in Series B funding led by Shasta Ventures, with Series A investors August Capital, CMEA Capital and Google Ventures also participating in the round. This brings the startup’s total funding to nearly $20 million.

Pixazza allows publishers to identify, tag and match products found within online images on their sites and then link them back to the inventories of Pixazza’s network of advertisers. The service, which can be integrated in a site by adding a single line of code, allows consumers to browse the photos featured on a site and mouse over it to reveal information and pricing about similar products, and if desired, click to purchase.

The startup has a vast database of products to include images and tags related to the entertainment, fashion, travel, home and sports industries. Pixazza’s tagging technology is also compelling; the startup crowdsources workers to list products and tag them with the appropriate link to a retailer. Additionally, Pixazza shares advertising and affiliate revenues with publishers.

The company’s co-founder and CTO James Everingham thought of the idea for Pixazza after his wife was trying to find a pair of designer shoes that were worn in the movie “Sex In The City.” Upon realizing the astounding price of the shoes, Everingham’s wife ended up buying a similar-looking shoe in a store for half the cost. Everingham says that he felt that the experience of finding similar items you see in photos could be a valuable business.

Turns out he’s right.

The company has also announced that it reaches more than 25 million unique visitors per month through its 75-plus publishers, which include US Weekly and Access Hollywood. Of these visitors, more than 70% are based in the U.S. Additionally, Pixazza says that the startup delivers commerce-enabled photos at a rate of 8 billion image views per year, a 60% increase in the last three months.

Pixazza plans to use its new fund fuel product growth and expand to international markets. Already Pixazza has been launching new products in the past year to help make its technology more interactive. For example, Pixazza just launched Shopdot, a service for creating branded, hosted storefronts for publisher websites. And today, the company has announced the availability of a new self-serve publishing tool that allows anyone to turn static images into more interactive ones.

Previously, Pixazza was working on a client basis with its service. But today, the self-service platform, which is still in private beta, helps make Pixazza even more like an ‘AdSense for Images.’ Publishers can identify, tag and match products within the body of online images and immediately link them to Pixazza advertisers’ product inventories. Pixazza’s platform will aggregate datafeeds from merchants into a catalog of more than ten million apparel, home, electronic, sports, travel and automotive products. Pixazza also provides full text search to find similar products to those in the images on publishers’ sites.

There’s no doubt that interactive advertising technologies like Pixazza are catching on and even attracting the attention of search and advertising giant Google. Everingham declined to name exact numbers but says that click through rates are significantly higher than regular banner ads.

Everingham says that Pixazza is only at the beginning of what could be a very successful and profitable experience. “There’s currently three trillion images on the internet,” he sad. “We want to turn every one into an interactive experience.”

Pixazza faces competition from Like.com, Image Space Media, GumGum and others.

SuVolta Inc. Closes $22M Round

peHUB Wire - May 5, 2010 --SuVolta Inc., a Los Gatos, Calif.-based developer of low-power CMOS semiconductor technology, has raised $22.17 million in new equity funding, according to a regulatory filing. The only new board member listed in Forest Baskett of New Enterprise Associates. SuVolta previously raised just over $20 million from August Capital, DAG Ventures and Kleiner Perkins Caufield & Byers.