Eniac focuses solely on mobile technologies across five categories: Big data, enterprise, Ad-tech, consumer and social, and commerce.
It's not surprising given that its four founding partners have mobile backgrounds and have been either working at mobile startups or investing in them prior to getting together and investing other people's money.
Nihal Mehta was the CEO and co-founder of Ipsh!, which sold to Omnicom. He was also an angel investor in AdMob, which was bought by Google in 2010. Hadley Harris was the head of business strategy at Vling, which was bought by Nuance for $225 million. Vic Singh, CEO of Canvas, has operated and invested in mobile startups. Tim Young has a background as an entrepreneur and investor.
The team has already invested in 10 startups out of their new fund. They're targeting about 32 to 35 startups in this fund. The investment size will be more like $200,000 to $300,000, well above the amount they invested in their first fund, which was about $25,000 to $30,000 per company. The initial fund invested in 32 companies.
Of those startups, six have been acquired, two have gone out of business and the rest are independently growing, said Harris, in an interview with me. A good number of them, such as Tempo, have raised also raised Series A rounds. As for some of the exits, AirBnb bought Fondu in what appears to be an acqui-hire, and Millenial Media bought Metaresolver. None of the acquisitions were priced.
Here's a bit of Q&A I did with Hadley.
Q: There's so many places to raise capital today. How's the deal flow?
Harris: It's all incoming? We've actually never gone out to find a company. It's all been through introductions. Because of our focus, we've been fortunate that a lot of folks in the industry respect our opinion. They tend to make introductions to us.
Q: With so much capital in the early stages, how is this affecting your approach to investing?
Harris: Changes in the laws allow more folks to get involved. For startups, it's a good thing to have available capital. But this Series A Crunch is just going to be exacerbated. We won't be affected much as we tend to invest alongside sophisticated investors.
Q: We used to see tons of convertible notes at the seed stage. What are the terms like these days?
Harris: When we started, it was mostly convertible notes. There was some sort of cap at $4 million to $5 million. The valuation has gone up a bit and so has the average raise. The average raise tends to be over $1 million ($1.2 million to $1.5 million) for a seed round. So the valuations have gone up a little. The biggest difference is that the bar has been raised to get a seed round [suggesting] things have come down to earth. Since more traction is needed, there's this new phenomenon where there is a pre-seed or genesis round for around $200,000.
Q: How have accelerators/incubators been helping in the filtering process?
Harris: We've definitely invested in a bunch of companies that have gone through incubators. But with more of them, the quality has definitely gone down.
Q: What are some of the mobile themes you're investing in?
Harris: Context and understanding your context and how that can be a service to the user is important. We invested in Tempo, which uses artificial intelligence to be a virtual assistance. It takes ambient background and data and gives the user useful information at that moment.
Q: What other themes?
Harris: We also invested in Glide, which offers asynchronous video texting. We invested in them first and foremost because of the team, which is very product focused. But they're also coming up with a new form of communication.
Below are the list of companies Eniac has invested in during the last year for its second fund:
BioBeats: Merges science, mobile technology, and music to promote wellness
Boxed: Offers the benefits of shopping in a warehouse without the pain of crowds and lines
Glide: Super fast growing video texting app that can be watched live or later
Just Sing It: Social game of karaoke meets “Name the Tune” brings friends together to play
Reactor: Flagship product Winston is a personal newsreader that uses NLP to turn social network content and news into an engaging audiovisual newscast
TapCommerce: The leader in mobile retargeting and trusted by some of largest mobile brands
Vistar Media: The leading adserver for out of home advertising
(Image source: onbile)