May 29, 2014

A Fresh Canvas

Welcome to the first-ever Canvas newsletter! We hope you're sitting down, because this isn't just another newsletter. It's an inauguration. First, if we haven't already met, let us introduce you to Canvas, a new, early-stage tech VC firm and a spin-out of Sand Hill Road veteran, Morgenthaler Ventures. Since forming our new firm and closing our inaugural $175M fund in August 2013, we've hit the ground running. Like a cheetah on rocket skates.

Just yesterday, in fact, we welcomed another general partner to the Canvas founding team: Paul Hsiao, who spent 10 years as a partner at NEA, where he worked with companies like Houzz, Elance, and 42Floors. Paul joins Gary Little, Rebecca Lynn and Gary Morgenthaler as the fourth member of our investment team - find more in The Wall Street Journal's coverage here.

Portfolio Companies

Today, Canvas has invested in four fast-growing businesses, beginning with patient management platform HealthLoop, customer success service Totango, and digital investment advisory company FutureAdvisor. One investment, an enterprise startup, hasn't been announced yet, so stay tuned. This week, we asked two of our CEOs to answer a few questions so we could get to know them better. Check 'em out!

Guy Nirpaz, CEO of Totango

Q: Why did you start Totango?   A: The cloud was in the process of changing everything, particularly in how online businesses would interact with their customers. We saw a huge, untapped opportunity to reinvent the category called "customer success."   Q: What makes Totango different from other customer success services?   A: We have a different approach. We help SaaS and online subscription services identify which trial users are ready to buy, which customers are likely to churn, and which accounts are critical for expansion at a microscopic level. We focus on customer value at every stage of the life cycle.

Todd Johnson, CEO of HealthLoop

Q: What's the "big, hairy" problem HealthLoop is tackling?   A: Historically, doctors haven't had an easy way to continue the conversation between visits. We want to re-architect the doctor-patient relationship to bring that conversation back to healthcare in the form of a personalized digital dialogue -- accessible from the web or your phone.      Q: What's the key differentiator that sets HealthLoop apart?     A:HealthLoop was founded by a physician and born out of an exam room. The exam room has been our lab. Unlike others, we're not trying to replace doctor-patient relationships; we just want to make them better.

Spotlight on General Partners

Rebecca Lynn

Rebecca focuses on early-stage investments in mobile, financial services, digital health, SaaS and consumer. Rebecca was named a "Midas List Hot Prospect" by Forbes in 2013 and among the "Top Women in VC" in 2013 and 2014. She led investments in FutureAdvisor and HealthLoop; and Convo, Socrata and the companies below while at Morgenthaler Ventures.

Intuit announced plans to acquire Check for $360M this week. The company has more than 10M registered users who rely on Check to stay on top of, and pay, their bills. 300% increase in active payers year-over-year. Find TechCrunch's article here.

The largest peer-lending marketplace has now issued more than $4B in loans. Recently introduced small business loans. Acquired Springstone Financial in April.

112,000 monthly active medical professionals. Voted top EHR vendor among primary care docs for 5th year in a row, and launched its consumer-facing platform in April.

40% of U.S. doctors use Doximity. That's more members than the AMA (American Medical Association)! Has powered over 15M physician-to-physician connections.

Gary Little

Gary has devoted his attention to finding and cultivating innovative cloud and mobile infrastructure and solutions companies, which has led to investments in Totango while at Canvas; and PeopleMatter, Sonatype, Voltage and the companies below while at Morgenthaler Ventures. His portfolio successes have landed him on the Forbes Midas List - two of the last five years.

Going after the $500B software integration market, and with 150K+ developers and customers at 35% of the Global 50, MuleSoft is winning.

100M users globally. Now going beyond the consumer with "Evernote Business" and a marketplace for physical goods. New customers include Deutsch Telekom and LinkedIn.

Now the world's largest travel data platform, ADARA provides real-time access to more than 70 global travel brands, 250M monthly "uniques" and 5B travel searches.

Acquired by TIBCO in April, Jaspersoft's open-source business intelligence software has been downloaded millions of times by developers and businesses.

Prior to selling a majority stake to a private equity buyer, Nextag emerged to become the largest and most profitable eCommerce shopping service for products, mortgages and education on the Web.

Gary Morgenthaler

Gary Morgenthaler focuses on Big Data and enterprise software companies. Gary has built a national reputation as a successful executive in the software industry as co-founder of Ingres Corp. and Illustra Information Technology. Today, he serves on the boards of Morgenthaler Ventures' companies Nominum and Overture Networks, and led investments in the companies below while at Morgenthaler Ventures.

With more than 13,000 downloads, NuoDB is showing the market for cloud databases is hot. Company also counts Dassault Systèmes as a partner and investor and plans to launch a major sales expansion in the coming year.

A pioneer in the field of speech recognition technology, Nuance holds over 4,000 patents and powers speech and imaging applications for names like Apple (and Siri). Nuance went public in 2000 and today does over $1.8B in revenue (FY2013).

Acquired by Apple in 2010 and having attracted more than 200 million users worldwide, Siri's technology has transformed the expectations for human-machine interaction.

Paul Hsiao

Paul joined Canvas as a General Partner in May, after spending 10 years at NEA, where he oversaw seven IPOs. Beginning as a founder and entrepreneur with Mazu Networks, Paul has worked with a variety of infrastructure, software and services startups while at NEA - from Gaikai to more recent investments, like Houzz and 42Floors.

The leading platform for home remodeling and design, Houzz has built a community of 300K professionals and over 20M users. Its apps for iPad and iPhone having attracted five-star ratings from 150K reviews.

Merged in December 2013, Elance-oDesk now represents the largest freelance labor marketplace in the world, with over 8M registered users between them. In 2014, the company expects to do $1B in gross billing.

One of the leading search engines for office space, 42Floors has connected over 1,000 businesses with over 2 million square feet of office space.

Mixing It Up

We know that venture is a service business. So we've been on a mission to help our portfolio companies with PR, recruiting and - perhaps more importantly - community building. Below you'll find some highlights from a few of the community-oriented "mixers" we've held since Fall 2013.

Our Marketing Mixer last October was particularly well attended and featured marketing heads from each of our portfolio companies, who could be found networking with a slew of PR, design and social media agencies. Separately, CEOs got a chance to mingle with the press at our CEO-Press Mixer in March and attend our private CEO-only dinner, where they could let their hair down and talk candidly amongst fellow CEOs.

Team in the News

Rebecca Lynn Named Top Women in VC by Forbes Forbes Magazine

Is Bitcoin a Smart Investment? Only If it Completely Changes, Venture Investor Says Wall Street Journal

Investors Flock to Medical Software Startups Private Equity Analyst

Vcs can pivot, too Thomson Reuters

Portfolio Company News

How FutureAdvisor plans to shake up wealth management CNN

HealthLoop Lands $10M To Help Doctors Better Track And Engage Patients Between Visits TechCrunch

Totango raises $15.5M to help keep cloud app customers happy Silicon Valley Business Journal

Upcoming Events

May, 29, 2014 Rebecca Lynn to speak at the Churchill Club's 16th annual "Top 10 Tech Trends" alongside Mike Maples, Bryan Roberts and James Slavet.

June 11, 2014 Rebecca to discuss latest trends in early-stage venture investing at the renowned IBF Venture Capital Investing Conference.

New Faces

Rip Empson

After nearly four years as a reporter, editor, on-camera and on-stage personality at TechCrunch, Rip Empson has joined Canvas as a Senior Associate. For more on Rip's "blended role" at Canvas - which is a first for Sand Hill Road - find VentureWire's coverage here.

A Word about Canvas and Morgenthaler Ventures

Canvas is a spin-out of Morgenthaler Ventures. While a new firm, most of our Canvas partners know each other well, having worked together for years. They continue to support each of their Morgenthaler portfolio companies, including Lending Club, Evernote, MuleSoft, Doximity, Practice Fusion, ADARA and NuoDB, to name a few. Going forward, all new tech investments will be made out of Canvas, so please stay in touch!

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