Visier Continues to Impress Us

Posted by Warren Weiss

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When we first invested in Visier back in 2011, it was a small, promising 1-year-old startup with an ambitious vision. Now, it’s an award-winning developer of analytics solutions in the cloud for the HR needs of a long list of companies, including ConAgra Foods, Hyatt, Nissan, Time Inc. and Synopsys.

I am proud to continue supporting Visier as it closes its Series C financing. It has raised $25.5 million in this round, bringing its total funding to date to $49.5 million.

Visier, in my opinion, is the future of analytics. It’s the new way to plan and manage a workforce. It’s an easy sell. The old way, the more conventional way, uses SQL, expensive data warehouses, and is IT driven. And it can take a long time to see any results — six months or more. The new way, Visier’s way, is easy to understand and work with, is significantly cheaper to subscribe to and maintain, and here’s the part that will amaze anyone who’s worked on big data projects: Visier’s solution can go live in 4 weeks! It’s in the cloud, and can pull data from a vast number of sources. It has a beautiful UI, which will make you want to use it to study and predict trends in your workforce.

Clearly, I’m not the only one who’s impressed. In just the past year, Visier has doubled its customer base — it has more than 40 customers now — and has expanded its workforce. It recently opened a new office in San Jose, a short drive from where we’re based.

CEO John Schwarz says he wants to go broader and deeper with the money he’s raised. He’s going to step on the accelerator, both in the product and the markets they serve. I’m keen to see what he and the team do next.

His team released two new products last year — one for workforce planning and one for benchmarking. I’ve been pleased with them. His team, with key executives from Business Objects/SAP,  has experience, vision and enthusiasm, and I have no doubt that they will change the face of HR (and business intelligence, of course) as we know it.

We’ve stayed the course with Visier through every round of financing so far, and I’m thrilled to extend our partnership with them. Congratulations, John and the Visier family!

AdRoll: We’re Coming Back for More

Posted by Charles Moldow

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As my seven-year-old likes to remind me, “You can never get too much of a good thing.” He generally applies this sentiment to cookies and ice cream. We apply it to our portfolio companies.

This motivated us to lead the latest round of funding at LendingClub at $1.55 billion – even though we were already investors dating back to a round at less than $100 million. It has also driven us to lead the latest round of funding for performance marketing leader AdRoll, even though we had already led the company’s Series B round in 2012 – and that is the investment I want to focus on here.

My early interactions with AdRoll’s founder, Jared Kopf, and its CEO, Aaron Bell, were innocent enough. I served as nothing more than a sounding board and advisor to their small yet growing business. As they sought to map its future, one core question remained: should AdRoll continue in its bootstrapping ways, or step on the pedal and accelerate?

AdRoll devoted careful thought to how expansion might affect the tight-knit team that had achieved so much up to that point. They identified the majority of the key risk factors, including the potential introduction of a new venture investor to the board and the expectations that might come along with the capital. Over a period of nine months, we met repeatedly to evaluate options and came to the conclusion that our shared vision and cultural fit were a promising match. Foundation couldn’t have been more pleased when AdRoll requested that we lead their acceleration round in April of 2012.

To suggest that we’ve been impressed with the AdRoll team and opportunity since that time would massively understate how we feel about this fast-growing company. For many, it would be enough to have identified a new market in the online ad space – retargeting the 98 percent of first-time visitors who would otherwise leave and not come back. Not only did AdRoll go on to build a leading company in the space, they didn’t stop there. They have a grand vision, and they will continue to push relentlessly to build solutions leveraging big data, mobile distribution, additional media channels, predictive analytics and CRM repositories to create the most effective and cost efficient form of marketing for businesses of all sizes since the advent of search marketing.

To achieve that goal takes a unique blend of moxie, vision, tech prowess, and conviction. This team has all of these things in spades – which explains many of their notable accomplishments:

* 15,000 active advertisers from over 100 countries
* Surpassed a $150 million run rate
* Part of the initial alphas for both Facebook Exchange and Twitter tailored audiences
* Rapid employee growth & recognition of #1 place to work in SF
* Aggressive international expansion with offices in Dublin, Ireland and Sydney, Australia
* Monthly revenue growth of 700 percent since our initial investment

AdRoll’s success certainly makes Foundation’s decision to invest look prescient. In fact, we had a bit of unfair advantage thanks to our deep understanding of the critical products and services necessary for success by today’s business owners and marketing practitioners. Our investments and eventual exits of Responsys (Oracle), Tealeaf (IBM), Aggregate Knowledge (Neustar), and Freewheel (Comcast) – as well as the upcoming IPO of Tubemogul have taught us invaluable lessons about maximizing the value of high-velocity sales, ROI-driven solutions, large global markets, and enduring business models.

We are thrilled to lead this most recent round at AdRoll, which promises to shape up as yet another wildly successful marketing technologies investment by Foundation Capital. We have full confidence that Aaron Bell and his management team will steward yet another period of exponential growth as they shake up the online marketing technologies space yet again.

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.

Congratulations, Coverity!

Posted by Paul Holland

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Congrats, Coverity!

By Paul Holland

Nearly 10 years ago, I received a call from a former colleague, Netflix CEO Reed Hastings, with exciting news.  John Hennessy, now president of Stanford University, had discovered at Stanford four incredibly bright computer science students and their professor, who had invented a new way to find errors and security vulnerabilities in complex source code.

Reed made introductions, and soon I was hearing about the product – Coverity Prevent – straight from the group’s leader, Seth Hallem.

Our network of relationships further affirmed just how exciting Coverity’s work was when Aki Fujimura,  another friend of Foundation Capital and early board member at Coverity, also introduced my partner Mike Schuh to the company.

It was clear early on that Seth and his team had a fantastic product – one poised to usher in a fundamentally new generation of software development technology.

In 2006, Coverity invited Foundation Capital to lead its Series A investment, and I joined the Board of Directors. Bruce Dunlevie from Benchmark Capital took an observer seat, and his  insight proved invaluable in helping to scale the company. In just a few years, Coverity’s client list grew to include 7 of the top 10 aerospace and defense companies, 9 of the top 10 technology hardware companies, and hundreds of Global 2000 companies who have come to rely on the Coverity platform to protect their brands and their bottom lines from software failures.

What began in a Stanford computer lab with four college students and their professor has grown to become the trusted standard when it comes to developing a secure infrastructure for the modern global economy. And today, we are excited to announce that Coverity has been acquired by Synopsys.

This is more than a monumental day for the company and a vote of confidence in the work of CEO Anthony Bettencourt and his team – it also represents a strong statement by Synopsys. In the development testing business, Coverity is second to none. And together, the two make an  extremely powerful combination.

Our relationship with Coverity has been more about an investment of time, energy, and support than actual dollars. To help Coverity commercialize and grow its client list, Foundation helped recruit the entire management team, introduced them to key strategic partners and customers, and also connected Coverity to the significant players at large financial institutions. In doing so, we leveraged longstanding relationships and institutional knowledge developed over years of helping companies go from being nascent to being dominant.

Coverity’s success is an affirmation of Foundation Capital’s commitment to seeking out the best ideas being generated at educational institutions like Stanford, and to building the lasting  relationships that can turn those innovative ideas into world changing companies.
Our investment in Coverity is one in a long line of successful ventures that began in university environments – including Financial Engines, Atheros Communications, EnerNOC, and others.

Foundation’s Young Entrepreners Program, whereby graduate students think and act like VCs on campuses across America, is also in service of our commitment educational institutions. The program gives students a chance to identify promising ideas, provide analysis, pitch ventures, and develop relationships with the entrepreneurs who are dreaming up tomorrow’s game-changing technologies.

So while Coverity is unique, I strongly believe its path to success is not. In the coming years, we’re going to hear more and more success stories like theirs.

In the meantime, we at Foundation offer our heartiest congratulations to Anthony and the team at Coverity as they embark on this new chapter.

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.

Celebrating Chegg

Posted by Paul Holland

When I was first introduced to Chegg  several years ago, the company’s original concept was to be a Craigslist for college students. But soon after launching, the founders discovered that what people needed more than anything else were used textbooks.

At the time, it was far from certain that a business could be built around distributing used textbooks.  After all, most people felt that need was being adequately met in the dusty backrooms of college-town bookstores. However, standing here today at the New York Stock Exchange celebrating the company’s IPO, I can say that we have once again seen the success of an approach that involves more than simply funding a company and hoping for the best.  In the course (pun intended) of working with Chegg for the past several years, we began to see striking parallels between Chegg and other iconic companies that had found success.

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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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