Author Archives: Ashu Garg

Backing the Alchemist

Posted by Ashu Garg

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I am excited to share that Foundation Capital has decided to back the fantastic work being done over at the Alchemist Accelerator. We share the same values around nurturing promising startups in their early stages, and look forward to being active participants in their program. Programs like the one offered at the Alchemist play a big part in encouraging innovation in the valley, and we’re happy to support them.

Below find the full press release:

THE ALCHEMIST ACCELERATOR ADDS FOUNDATION CAPITAL AS NEW BACKER

Alchemist, an Accelerator Dedicated to Enterprise Startups, Welcomes Foundation Capital to its List of Investors 

San Francisco, Calif., August 25, 2014 – Foundation Capital has joined Cisco, Draper Fisher Jurvetson, Khosla Ventures, Salesforce.com, SAP Ventures, and US Venture Partners, as a backer of the Alchemist Accelerator, it was announced today. The amount of the investment is not being disclosed.

 Foundation Capital is an investment firm that builds great companies. It invests in startups in their early stages with a very hands-on approach, much like Alchemist does. We like that the program is structured around customer development, sales, and fundraising. These pillars form a good foundation for building successful businesses, and that’s what ultimately makes a company more appealing when we look to invest,says Ashu Garg,  General Partner at Foundation Capital. Alchemist not only finds exciting ideas, but also great teams to go along with them. 

The Alchemist Accelerator is a six-month program, accepting 13 companies every four months. On average, the companies that are accepted receive $28,000 in seed funding. As part of the program, Alchemist founders are mentored by a large network of high caliber experts and coaches. Gary Swart, former CEO of oDesk, and Mike Olsen, CEO of Cloudera were recently added to this group. 

More than half of Alchemist companies go on to raise institutional funds from some of the top venture capital firms in the valley. The list now includes Foundation Capital, in addition to Andreessen Horowitz, Draper Fisher Jurvetson, Founders Fund, Greylock Ventures, Khosla Ventures, Redpoint Ventures, Storm Ventures, and True Ventures.  

Foundation Capital is more than just a venture capital firm,says Ravi Belani, Managing Director of Alchemist. All of Foundations partners have been entrepreneurs, which brings a refreshing dose of perspective to the table when they work with our founders. We are happy to have them on our side.

On September 25, 2014, Alchemist will host their Class Seven Demo Day at Citrix in Santa Clara, where over 200 customers, partners, and investors will join to see what new ideas are coming out of the accelerator.

Learn More: Anyone interested in getting involved as a mentor, investor or customer or members of the press, should fill out this form: https://influencerseries.wufoo.com/forms/alchemist-accelerator-individual-registration/.

For more information on the accelerator, please visit the website: http://www.alchemistaccelerator.com/.

Congratulations, TubeMogul!

Posted by Ashu Garg

TubeMogul IPOEvery now and then, there comes a moment when you feel really good about a risk you took, about something you believed in and took a chance on. That’s how I’m feeling this morning about backing TubeMogul, which went public on the NASDAQ earlier today.

I remember being fascinated by the company when a close friend told me about it. That was back in early 2009 when we were in the process of investing in FreeWheel. I vividly remember the moment – my wife was due to deliver a baby any day, and we were moving houses the next day. I was supposed to be packing stuff for the move, and yet I was on the phone with my friend, Ajay Chopra, exchanging notes on how the video ecosystem would evolve, and the role that both companies could play in it. TubeMogul and FreeWheel seemed to be very complementary, and I remember asking Ajay to promise me that he would introduce me to Brett Wilson at TubeMogul well in advance of any future financing.

A year later, I got a chance to meet Brett, John, Jason, Adam, and the rest of the team. It was love at first sight! Brett and John had incubated TubeMogul at UC Berkeley, and they exemplified — and still do — everything I love about Berkeley: the exuberance, the determination, and the earnestness. Brett had pulled together a really smart and scrappy team, had launched their publisher analytics product, and had a handful of passionate customers. Most importantly, he had a grand vision to transform video advertising.

There were a few minor questions – they had yet to build the advertising platform, the team was learning about the advertising market as they went along; and the analytics product, which was most of the business at the time, had no future.

Given investments in Netflix, Freewheel and Conviva, we had a ringside seat in the online video ecosystem. We were seeing the explosive growth of Netflix’s streaming business at close quarters, and I was increasingly convinced that linear TV would eventually die, and all premium video content would be viewed on-demand over the internet. If I was right, TubeMogul had the opportunity to dominate in what could be a $ 200 B+ market over time. Very quickly, it was clear that Brett and I shared a common vision around the opportunity to transform advertising by moving brand-centric ad dollars online, and enabling media buyers to buy brand advertising through automated exchanges instead of over cocktails. I still remember sitting in Vogue (one of our Foundation Capital conference rooms) and saying, “If this works, it could be the Google of Brand Advertising!”

And so began my journey with TubeMogul. At the time, the whole company could fit into a conference room, and all they had was their Berkeley spirit, boundless enthusiasm and some naiveté. Right from the beginning, regardless of what they did or didn’t know about the ad industry, they were clear they wanted to build a self-service platform and not become just another ad network. And four years later, despite many obstacles, they have succeeded. Brett has built an exceptional culture focused on “follow through” and a high “do-to-say ratio”. I remember that when they once had a serious bug in the software, Brett rented out a handful of hotel rooms and the entire company worked around the clock for two days until the issue was resolved. Today, the company is 20 times larger, but I have confidence that they would do the same thing if such an issue arose again.

The IPO process has been a roller coaster ride, and it had its scary moments. I am proud of how everyone stepped up to the challenge, and put the company ahead of everything else. I am thrilled that we are a public company, but this is just another small step towards transforming an industry.

My conviction that linear TV will die and that all brand advertising will be bought and sold via exchanges has only gotten stronger, given the events of the last four years. It will take time, but it will happen. My belief in TubeMogul has been — and continues to be – unwavering. We are putting our money where our mouth is, and buying more stock in the IPO. This company is going to revolutionize video advertising, and we are still in the early innings of that game.

Tubemogulers – Congratulations! Let’s celebrate this today and get back to the hard work of building a great company on Monday.

Congratulations, FreeWheel!

Posted by Ashu Garg

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Content may be king, but choice makes a convincing claim to the crown. Just as it takes talented producers, directors, writers, and technicians to create great content, it takes a similarly amazing team and technology to serve customers exactly what they want, when they want it – including, importantly, the advertising to support it.

That’s exactly what I found when I met the leaders of FreeWheel who, as of today, will be joining Comcast. It is clear that Comcast sees in FreeWheel what we hoped the world would eventually see back when we first invested.

Before Foundation Capital invested back in 2009, we had been closely watching the evolution of the on- video streaming market for years. We were early investors in Netflix, and were seeing the transition it was making from DVDs to streaming. We had also invested in Conviva, a video experience management platform that was working closely with NBC to build out their online video platform. We realized that as ad supported content distributors made the transition online, they would need a monetization platform that enabled them to offer ad products akin to TV.

The industry needed the video equivalent of DoubleClick – and who better to lead that charge than veterans of DoubleClick?

Together, Doug Knopper, Jon Heller, and Diane Yu put FreeWheel smack in the middle of a massive spending shift from traditional TV advertising to Internet advertising.

From day one, FreeWheel has provided unparalleled expertise to augment its industry-leading technology. Because there is no “standard gauge” for streaming technology, they connect their clients with different systems, run-time environments, and the latest devices – so FreeWheel is ready to serve no matter when, where, or how customers want to watch.

By partnering with the industry-leading ad-serving platform, Comcast – both a content creator and provider – will better integrate its offering and better serve its customers.

In the five years since Foundation Capital invested, FreeWheel has continued to innovate and grow. Today, its clients include some of the largest media companies in the world – including Comcast’s parent NBC Universal and others ranging from AOL and Viacom to Dish and DirecTV to AT&T and Fox. In addition, we have continued to invest behind the next generation of start-ups in online video, including TubeMogul, the leading video advertising platform for brand advertisers and AdRise, an emerging player in the Connected TV space.

At Foundation Capital, we couldn’t be prouder of what the team at FreeWheel has accomplished to date, and what it is poised to become in the future. One day not too long from now, all television content will be viewed online, and – we hope – all video ads will be served through FreeWheel.

Welcome Localytics!

Posted by Ashu Garg

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In 2011, I stopped drinking the HTML 5 Kool-Aid and came to accept that apps were with us to stay. And since that time, I’ve been actively looking for marketing automation companies who were building products for the mobile-centric world.  In 2013, I was fortunate enough to find myself in a meeting with a group of entrepreneurs from Localytics who shared the same world-view.  And they were laser focused on giving mobile app creators the data analysis tools they needed to capitalize in a fast-moving space.  I soon realized that my scheduled one-hour chat with Localytics’ passionate, visionary co-founders Raj Aggarwal and Henry Cipolla simply would not suffice. I ended up spending the entire day with them.

Today, I am excited to welcome Localytics to the Foundation family.  And I’m particularly excited about what they have in store when it comes to marketing automation – a space that has undergone a dramatic evolution in a few short years.

With the shift from dial up to broadband, consumers went from “snacking” to “always consuming” – integrating the Internet into almost everything we do in our daily lives. Recently, smartphones have driven a similarly profound shift from “always on” to “in the moment” – giving consumers the ability to connect and transact anytime, anywhere.

Consider one telling fact:  PepsiCo’s HR team recently found that 90 percent of the people who clicked on their job-related emails did so from mobile phones.  And job applicants wanted to be able to apply from their mobile devices, too!   Whether it’s a job application or house hunting or recipe research, consumers expect to be able to do it – whatever “it” is – on the go.

Companies must find ways to respond to this challenge, and Foundation Capital has a long and successful history of investing in companies that help CMOs make sense of the world – from Responsys to Tea Leaf to Aggregate Knowledge.

Over the last 18 months, my partners and I have studied the impact of the mobile Internet on the marketing automation tool set, and we believe that mobile will change everything yet again. Cookies are becoming less relevant.  Globally, there are more mobile users than Internet users.  And – especially with the coming of age of the mobile first generation – marketers need to re-think everything about their model for consumer engagement – both on the web and at the storefront.

Given the profound shift underway, we have been looking to invest in companies that have the vision to drive this transformation, and the team that is up to the task of realizing that vision. If they have some customer traction in this quickly moving market, that’s icing.

Localytics has these qualities in droves  – which is exactly what made me want to give up all my other meetings that day I met with Raj and Henry.  If venture investing is like getting married, this was definitely love at first sight.

Raj had already built the go-to analytics product that 5,000 companies – including eBay, ESPN, and Microsoft – relied on.  And I saw that his vision was not limited to analytics.  Raj knew immediately that first-generation mobile marketers would want to respond in the moment, and he was already enabling them to use real-time data to drive closed-loop, highly personalized campaigns.

In short, Localytics was perfectly positioned to develop a full suite of mobile marketing tools.

Raj and Henry are more than passionate and visionary entrepreneurs. They want to build a substantial company and were not fazed by the prospect of competing with the likes of Omniture.  In fact, they had attracted very talented executives – including COO Duncan McCallum. Duncan is a seasoned entrepreneur who had been a CEO of several ventures, so it meant a lot that he chose to work with Raj.

Most importantly, I quickly learned that customers love Localytics. I spoke to several large companies who had also used other analytics tools, and they raved about how much better the Localytics product was. Some of the largest players in e-commerce, media, technology and travel were already customers, and as a result, the company had strong momentum on most metrics that matter.

I couldn’t be more excited about Foundation Capital’s investment in Localytics.  I’m eager to join the board and to play a small role in helping Raj, Henry and their teams realize their dream of transforming the marketing automation stack.

A good week for Aggregate Knowledge, Neustar and Foundation

Posted by Ashu Garg

At its essence, the Venture business is largely about people. It’s my job to get to know great entrepreneurs with bold visions and help them navigate the usually treacherous startup waters as best I can. It’s an understood occupational hazard that often times, things don’t work out as planned. But when they do, it’s very sweet. Particularly for entrepreneurs who have truly “lived” the startup journey and had the tenacity to see things through. Paul Marino, Dave Jakubowski and the Aggregate Knowledge (AK) team are just those kind of entrepreneurs. And I’m very pleased to have played a small part in helping them achieve their vision, culminating in this week’s acquisition of AK by Neustar.

When I first met Paul Martino sometime in 2007, AK was flying high on its initial idea, the notion of making recommendations based on implicit behavior. I was trying to figure what to start myself and so we exchanged ideas, and even briefly entertained the notion that we might work together. By early 2009, I had joined Foundation Capital as a Venture Partner and around that time Paul had decided to “bet the company” on helping advertisers reach their audiences online and in-exchange capture a meaningful share of the growing online ad budgets.

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