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Citrus Lane Raises $5.1M from GGV and Greylock

Today subscription e-commerce site for moms Citrus Lane announced its new round of funding, $5.1M led by GGV Capital and existing investor Greylock Partners (read John Lilly’s post about Greylock’s 2011 investment in Citrus Lane here).

Citrus Lane, launched in 2011 by entrepreneur and former EBAY exec Mauria Finley, has quickly built a loyal following of thousands of moms who anxiously await each month for their Citrus Lane box to arrive (it’s not uncommon to see “We can’t wait!” and “We’re stalking the mailman waiting for our Citrus Lane box!” posts on Facebook).

Needless to say we think the business Mauria and her team are building is well on its way to being a huge success.  We love the category ($40B is spent annually on babies in the US).  We love the business model (subscription, which provides major advantages in merchandising and inventory management, two areas where e-commerce businesses often struggle as they scale).  And social media is completely changing the game for both customer acquisition and engagement.

But what we love most is…the mindset Mauria and her team have towards building a long-term, sustainable brand and business.  We’ve met more than 80 e-commerce businesses in the US in the last 18 months, and while we loved many of them, it was rare to find a team that was thinking about their business 5 years down the road.

Doing so requires a different approach, and it’s not for everyone.

–          It requires rational growth (you may have noticed a “Sold Out” sign on the Citrus Lane web site last month).    Rational growth means all of the key areas of the business can ramp accordingly (things like merchandising, supply chain and customer care, which sometimes get left in the dust while Marketing and customer acquisition ramp uncontrollably).  Don’t get me wrong – Citrus Lane has phenomenal growth – but they’re managing it to ensure a great experience for their customers.

–          It requires a deep focus on engaging with customers and the community.  Visit Citrus Lane’s Facebook, Twitter or Pinterest pages and you’ll see a constant dialogue with a growing community of mothers (and some awesome photos of babies loving their Citrus Lane boxes).  High quality companies are leveraging social media in this respect like never before (read Gary Vaynerchuk’s The Thank You Economy for more examples).

–          It requires a smart approach to financing and capital.  Mauria had plenty of opportunities to raise more than she did in this round.  She chose to raise “the right amount of capital at the right time.”  We think it’s a smart approach.

We love Citrus Lane for many reasons – not the least of which are business and metrics-oriented reasons that we believe will make it a great investment for our firm – but as always it comes down to the team.  Mauria, Claire, Terra, Victoria and the rest of the team are building something special.

We’re thrilled to be a part of it!

ADDITION: Here are a few of the articles covering the financing:

Techcrunch “Citrus Lane Lands $5.1M”

VentureBeat “Oh Baby!”

AdWeek “Citrus Lane Wins Over New Moms”

 

GGV 2011 Year in Review: $700M / $4.5B / $100M+


Proud to share GGV Capital’s 2011 Year in Review (click here).  It was a terrific year for our portfolio companies and for our firm.  Another 5 IPOs (11 in the last 24 months) raising $700M, three companies exited for more than $4.5B (Endeca, SuccessFactors and the Baidu investment in Qunar), and north of $100M invested into 9 new companies.

We’re grateful to all of the entrepreneurs and management teams who work their butts off every day to make our investments valuable, and we couldn’t be more proud to be associated with their companies.

Looking forward to an even better 2012!

 

On BloombergTV with Emily Chang

Had  a great time last Tuesday on BloombergTV with Emily Chang.

You can watch the video here.

Cloud Computing: The Outlook is Bright, According to Top CEOs

We hosted our quarterly CEO dinner at Marche restaurant in Menlo Park on Wednesday night.  The topic this quarter was Cloud Computing (intentionally broad), and as usual we ended up with an amazing group of executives from some of the country’s best cloud computing companies.  We had a lively conversation and more than a few barbs thrown.  The highlights:

– Our guest speakers were Tom Fisher, CIO of Successfactors (GGV portfolio co.), and Brian Lillie, CIO of Equinix.  Thank you both for participating.  My favorite quotes from each:

Tom: “We pay an exorbitant amount in annual fees to incumbent vendors for licenses, etc. and would love nothing more than to see a lot of those dollars flow to new players.”

Brian: “We have a cloud-first policy.  For any new strategy, concept, etc., we look to use cloud-based apps and technology as a default.”

– Our Associate Adam Altman organized an iPad survey (using PollDaddy) at the dinner.  A few highlights from that survey:

+ 90% of attendees said they believe their customers are going to spend A LOT more on cloud technology in 2011 than in 2010, “I’m seeing aggressive spending trends.”  Consistent with what we are seeing in our portfolio, as well as the market at large.

+ 53% of attendees have raised >$15M in venture capital.  Not surprising, given the enterprise focus of most cloud companies.

+ 60% of attendees feel hiring is harder than usual and/or a major challenge right now.  As I’ve written in other posts, this is a major challenge in Silicon Valley right now.

+ Only 16% of attendees worry about competition from large incumbent vendors.  68% worry most about competition from emerging companies and startups.

+ 58% of attendees feel cloud startup valuations are “high, but justified given the potential.”  We certainly agree, and it’s why we’re constantly putting new money to work in this space.  Additionally, 74% said they believe valuations will be richer in 6 months than they are now.  We’re all for it…

It takes guts and a lot of optimism to run a high growth company in a competitive space like cloud computing, so our survey results are not surprising.  I do have to agree, however, with John Dillon, CEO of EngineYard, who said to the group “I’ve been around the block for a few cycles.  This one is going to be even bigger than anyone in this room believes.”

Thanks to all who attended.  We’ll do it again soon.

 

CES Recap

Polled the team at GGV for thoughts and insights from CES – below are a few of our team’s thoughts/summaries of the show.

My personal view. I’ve been going to CES for many years now.  From my perspective, this year’s was the most disappointing.  Yes, there were some cool new tv’s, and lots of tablets, and lots of cool gadgets and attachments to Apple stuff (a lot, in fact) – but there was nothing that made you go “wow!”  OK, maybe the Audi R8 Etron – an all-electric version of the R8 – which was pretty damn cool (check out the Wired video here).  In fact, with all of the announcements about Internet-connected cars (including lots of cool stuff from GGV portfolio company Pandora), one could argue that was the highlight.   Other than that, I wasn’t blown away.

Tablets were clearly “the big thing” this year.  One of my favorite quotes of the week: Friend of mine to rep at Motorola holding the new Moto tablet (Xoom) – “So…what’s the difference between this and the iPad?”  Moto rep responds “You’re the 651st person who’s asked me that today.”  To be fair, the Xoom does have some cool new features, is going to run on Android Honeycomb, and was named “Best Gadget” at CES.  However, one could not help feeling like many of the tablets at CES are a day late and a dollar short – that’s the best we can come up with 9 months after the iPad launched?

Glenn Solomon’s take.  One interesting observation – even though Apple isn’t present at the show, nearly half of all the exhibitors I saw were displaying direct or indirect linkages to Apple products.  Android was also quite prevalent.  It’s really amazing how much of the consumer electronics ecosystem is now ultimately controlled by these two forces.  And there are many companies whose market power is dwindling or gone – Sony, Motorola, RIM, etc.  Also, perhaps riding the Kinect wave, I saw a fair bit of 3-D and augmented reality.   This trend seems to be gaining a lot of steam.

Adam Altman’s take.  1) Lots of tablets, Samsung Galaxy appears to be only real competitor, we’re likely to see hundreds of Chinese knockoffs flood the market and bring down prices, 2) lots of wireless charging technology – why do I need it?, 3) TV’s are maxing out on core features, 3D still a big push but not clear consumers are biting, 4) on 3D TV’s, most manufacturers are pushing the active shutter glasses – an even harder bite for consumers when they’re $150 a pop.

Scott Bonham’s take.  Energy level was higher this year than last year.  Lots of cool but unnecessary gizmo’s flying off the shelves – see $500 ski goggles with GPS.

Kevin Chen’s take.  1) Everybody has a tablet design, and the hardware / operating systems are already commoditized and easy to do.  However, most except Apple do not know how they want to position their offering.  Say what you want about Cisco’s tab, at least they know where they want to go with it.  Everybody just seems lost, which might favor the mass suppliers such as Nvidia and Marvell.  Commoditization of tablets will be here soon, and I’m wondering if the tablet era will be just as short as the Netbook era.  2) I guess related to the point above, it is scary how many random Chinese and Korean companies Adam and I have never heard of that have these huge booths with full product lines.  The future is looking more crowded than ever for established American and European companies.

Hany Nada’s take.  For the fourth year in a row – didn’t see anything that was BREAKTHROUGH.  Dual screen laptops seemed to be a rising trend.  The Acer Iconia featuring Microsoft was cool.

GGV Mobile Commerce Dinner

We held our quarterly CEO dinner on Tuesday night in Menlo Park, CA.  This quarter’s dinner was focused on mobile commerce + mobile payments.  Terrific group of companies/CEOs in attendance (see below).  A few takeaways:

1) Belief that NFC is going to “be for real” in 2011, with notes of caution.  “Embedded in phones doesn’t mean widespread user adoption.”  “Will take time for users and retailers to embrace.”  “Most likely will see things other than payment as first wave of feature adoption for NFC – think of what Bump does for communication/collaboration.”  This last point was reinforced this week with Google’s rollout of NFC-enabled Places check-in kits.

2) Widespread discussion of how to create value for consumers and retailers.  This crew gets it, IMHO.  “Taking pain out of the transaction for retailers and credit card companies does nothing for consumers.”  “Winners will focus on how to create new transaction value for retailers and ease of use functions for consumers.”  Think – in-store advertisements, offers, prioritized payment options, etc.

3) Our straw poll of “hot company, not your own” revealed a number of really cool companies in the mobile space.  After several years of hope, it feels like we may start to see some scalable businesses built in the mobile business (by startups).  My bet’s on one or more of the companies at our dinner!

4) Like it or not, the “elephants” of the industry will play a key role – banks, carriers, Visa, Mastercard, etc.

Companies attending the GGV Dinner included:

Billing Revolution

BlingNation

Lookout Mobile

LocationLabs

BillShrink

PayNearMe

MopedPayments

PlacePop

Sparq

TrialPay

TapJoy

Trumpet

Dilemma

Vesta

Amazon

RIM

Dell

PayPal

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