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“KP used be a small team doing hands-on company building. We’re moving away from being this institution with multiple products and really just focusing on early stage venture capital” Kleiner Perkins partner Ilya Fushman tells me. 47 years after its founding, the storied venture fund is going “back to the future” with today’s announcement of a 18th fund — a $600 million fund for seed, Series A, and Series B financings. It’s investing across consumer, enterprise, hard tech, and fintech, looking for high-potential teams to help mold into unicorns.

Kleiner Perkins partner Ilya Fushman

“We went out to market to LPs. We got a lot of interest. We we were significantly oversubscribed” Fushman says of the firm’s raise.

Kleiner Perkins was recently rocked by the departure of legendary investor Mary Meeker. She brought along Kleiner partners Mood Rowghani, Noah Knauf, and Juliet de Baubigny and they’re reportedly raising a $1.25 billion growth fund called Bond. Fushman explained that with Kleiner refocusing on early stage, their funds will be well differentiated. “They’re going to focus on very late stage growth” while he described Kleiner fund 18 as a place where partners can “collaborate and create” alongside new startups.

Other trends Kleiner is seeking to invest in include better distributed work tools, infrastructure for technology businesses, shifts in the urban and economic landscape, and security and identity tools to protect the software-enabled future. Recent early stage investments from the firm have included wellness product subscription service FabFitFun, tax and insurance safety net Catch, and food stamps app Propel.

With the explosion of early stage funds, competition for the best deals is cut throat. Kleiner will have to trade on its reputation, the expertise of its founders, and its extensive connections to lure in founders. If entrepreneurs think Kleiner can fund their mid-stage rounds like some seed funds can’t, or hook them up with potential acquirers whether things go peachy or pear-shaped, they’ll open their cap table.

from Startups – TechCrunch https://tcrn.ch/2Gecp0b

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Houzz, a $4 billion-valued home improvement startup that recently laid off 10 percent of its staff, has admitted a data breach.

A reader contacted TechCrunch on Thursday with a copy of an email sent by the company. It doesn’t say much — such as when the breach happened, what was stolen, or if a hacker to blame or if it was a data exposure that the company could’ve prevented.

Houzz spokesperson Gabriela Hebert would not comment beyond an FAQ posted on the company’s website, citing an ongoing investigation.

In that FAQ, the company said it “recently learned that a file containing some of our user data was obtained by an unauthorized third party.” It added: “We immediately launched an investigation and engaged with a leading forensics firm to assist in our investigation, containment, and remediation efforts.”

The company said it was notifiying all of its users who may have been affected.

An email from a Houzz user. (Image: supplied)

Houzz said some publicly visible information from a user’s Houzz profile, such as name, citiy, state, country and profile description, along with internal identifiers and fields “that have no discernible meaning to anyone outside of Houzz,” such as the region and location of the user and if they have a profile image, for example, the company said.

The company also said that usernames and scrambled passwords were also taken.

Houzz said that the passwords were scrambled and salted using a one-way hashing algorithm, but did not provide specifics on what kind of hashing algorithm was used. Some algorithms, like MD5, are old and outdated but still in use, while newer hashing algorithms — like bcrypt — are stronger and can be more difficult to crack, depending on the number of rounds the passwords go through.

Regardless, the company recommended users change their passwords.

No financial information was taken, according to the FAQ.

The company was last year among many mocked for sending out emails to users alerting them of mandatory changes to their privacy policies ahead of the 2018-introduced EU General Data Protection Regulation (GDPR) law, saying it “value[s]” its customers privacy. “Their opening lines offer a glimpse of the way legal policy and user experience are colliding under the new regulations,” said Fast Company.

But it’s not clear if the company will face penalties — up to four percent of its global revenue — as a result of the regulation, only that the company “notified EU authorities within the statutory period,” said the spokesperson.

Another day, another breach.

from Startups – TechCrunch https://tcrn.ch/2BfChFo

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A new mobile banking startup called Step wants to help bring teenagers and other young adults into the cashless era. Today, cash is used less often, as more consumers shop online and send money to one another through payment apps like Venmo. But teenagers in particular are still heavily burdened with cash — even though they, too, want to spend their money on things that require a payment card, like Amazon.com purchases or mobile gaming, for example.

That’s where Step comes in.

The company aims to address the needs of what it believes is an underserved market in mobile banking — the 75 million children and young adults under the age of 21 in the U.S., who are still being forced to use cash.

This market isn’t the “unbanked,” it’s the “pre-banked,” explains Step CEO CJ MacDonald, whose previous startup, mobile gift card platform Gyft, sold to First Data several years ago.

Above: Step CEO, CJ MacDonald

“We’re building an all-in-one banking solution that primarily focuses on teens and parents,” he says. “We want it to be a teen’s first bank account. We want to be a teen’s first spending card. And we want to teach financial literacy and responsibility firsthand.”

MacDonald, along with CTO Alexey Kalinichenko, previously of Square and financial services startup Token, founded Step in May 2018. The 10-person team also includes several prior Gyft employees.

Last summer, Step closed on $3.8 million in seed funding from Sesame Ventures, Crosslink Capital and Collaborative Fund. Crosslink general partner Eric Chin sits on the board.

While there are a number of mobile banking apps out there today — like Chime, Monzo, Simple, Revolut and others — Step will specifically target teens, 13 and up, and other young adults with its marketing. Teens under 18 still need parents’ approval to sign up, of course. But the goal is to encourage the teens to bring the idea to their parents — not the other way around.

Step’s focus on this younger demographic puts it in a different space, where there are fewer competitors. Its more direct rivals are not the bigger mobile banks, but rather startups like teen debit card and bank app Current, or the parent-managed debit card for kids from Greenlight.

The mobile banking service Step provides will also aim to be more comprehensive than just a debit card. It will offer a combination of checking, savings and a Visa card that works as both credit and debit.

The card includes Visa’s Zero Liability Protection on all purchases from unauthorized use, and allows parents to set spending limits.

Parents will also be able to connect their own bank accounts to Step to instantly transfer in funds, which can then be distributed to kids’ accounts for things like allowances and chores, or other everyday spending needs. Step’s bank account itself is backed by Evolve Bank, so it’s FDIC-insured up to $250,000.

Unlike Current, which charges a subscription to use its service, Step aims to be a fee-free bank for consumers. Users don’t have to pay for their account, and there are no fees for things like overdrafts. Instead, Step’s plan is to generate revenue through traditional means — like interchange fees and by way of lending practices, once it has established a deposit base.

The company pays a 2.5 percent interest rate on deposits, offers a round-up savings feature and a range of budgeting tools and supports free instant transfers between Step accounts. It also provides access to a network of 35,000 ATMs with no fees.

Beyond simply facilitating mobile banking, Step’s bigger goal is to teach teens to become financially responsible.

“Schools do not teach kids about money. A lot of families don’t talk about money. And it’s a crucial life skill that’s not really addressed properly when people are growing up,” says MacDonald, who says he was lacking in life skills in this area, even as a young college grad.

“There were ‘Money 101’ skills that I had not learned — that no one had talked to me about. Things like building credit, how many credit cards you should have, debt to income ratio,” he continues. “A lot of people get released into the real world without experience [in those areas],” he says.

Long-term, after solving the needs associated with everyday banking transactions, Step wants to layer on other products and services — like tools that allow a family to save together for college, for example.

The company is launching the banking service under an invite-only system to scale up.

Today, it’s opening a waitlist and referral program. When you invite a friend, you each receive one dollar. Access will then be rolled out on a first-come, first-serve basis this spring. Users can join Step through the website, iOS or Android application.

from Startups – TechCrunch https://tcrn.ch/2GcVMSr