Pivotal scores $253 million Series C led by Ford on hefty $2.8 billion valuation

Pivotal has a couple of new friends with big wallets. Today it announced that Ford and Microsoft were joining EMC, VMware and GE as investment partners on a massive $253 million Series C investment with a whopping $2.8 billion valuation.

It’s not a coincidence that Pivotal has been working closely with Ford over the last year to help it in its own transformation from a car company to what Ford VP and CIO Marcy Klevorn called a “mobility” company driven by software development. Klevorn’s company is contributing $182.2 million of the round and Klevorn is joining Pivotal’s board as part of the deal.

One of the first projects to come out of the collaboration between Pivotal and Ford was the recently released FordPass, which Ford is billing as super innovative. In reality, it allows you to monitor your car from a smart phone app, access car sharing services and find parking spaces, among other things. While these are all useful services they aren’t innovative in the true sense because they’ve been done in various guises before. What is new is the programming methodology that went into developing FordPass, and Ford is hoping that by making this substantial investment in Pivotal, it will be able to continue to build on this initial success.

Unlike many companies born with the help of venture capital, Pivotal was launched three years ago by EMC and VMware — with a 10 percent investment from GE — as a kind of disruptive company that could move much more quickly than either of these publicly traded behemoths could on their own. Pivotal, which has now raised $358 million provides customers with the technology and a programming methodology for changing the way they develop products. The main idea is bringing a digital mindset and software design sense to companies that have operated in a more traditional fashion.

Among its key technology products are Pivotal Cloud Foundry, an open source Platform as a Service offering that enables customers (and others) to build cloud applications on top of it and its Big Data Suite, a set of tools for processing and analyzing big data sets.

It worth noting that Pivotal’s primary investors, EMC and VMware are ensnared in the $67 billion acquisition by Dell and all that entails, but it is an independently run company and all indications are it will remain that way. Just the other day when Michael Dell announced a new name for the combined Dell-EMC organizations, he indicated that Pivotal would continue on with its own branding.

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There were reports last November suggesting thatPivotal could IPO early this year. As it turns out, it’s been a slow year for tech IPOs with Dell (coincidentally or not) being the lone company to venture out, spinning off SecureWorks in an IPO last month.

The company still plans to IPO eventually says Pivotal president and COO Bill Cook, but with this kind of cash in pocket the company can easily afford to wait for the market to get a bit more friendly. For now, it’s doing quite well boasting that among its clients are 7 of the top 10 U.S. Banks, 3 of the top five automative companies (including Ford, of course), and five of the top 10 telecommunications companies.

With this cash, Pivotal could expand its product development, hire engineers and developers and move into foreign markets. Cook was pretty closed-mouthed about details, saying that it was likely the company would expand beyond the 2000 employees it currently has, but just how many that would involve in the coming year or so and how it would be distributed among various departments and offices, he wasn’t willing to say.

The biggest question here is how well this methodology will scale. It has worked reasonably well in helping large organizations at least begin transforming into digitally-driven companies to this point, but what’s not clear is how this will translate as the company grows and has to make this process work for an increasingly large customer base.

Whatever happens, they certainly have the cash to try some experiments, and apply their own methods in-house and see what works and what doesn’t as they become a much larger organization over the next couple of years.

Passport raises $8 million to help cities offer pay-by-mobile parking, transit

Passport Inc. raised $8 million in a Series B round of funding to help cities make parking and transportation systems easier for people to use, and harder for them to abuse.

MK Capital led the investment in Passport, joined by Grotech Ventures and Relevance Capital. The new round brings Passport’s total capital raised to $17 million.

The Charlotte, North Carolina startup provides the cloud-based software behind city transit and parking apps including: ParkBoston, ParkChicago, Toronto’s Green P Parking app,GoTuscon, and others across the U.S. and in Canada.

Among other thing, Passport-powered apps let users pay for parking with their phones instead of with a credit card swipe or quarters at the meter, apply for and attain parking permits, buy mobile tickets or passes for trains and buses, and pay off their parking tickets or other citations by phone.

On the back-end, the apps help city offices and employees share real-time data about what’s happening within their various transit and parking systems, and make decisions about where to dedicate more law enforcement, other personnel, money and resources.

According to CEO Bob Youakim, the startup was cashflow positive before raising the Series B round.

He said Passport would use its capital for hiring, international expansion beyond North America, and to add to the feature set of Passport’s apps. But he declined to disclose what, specifically, is in the works.

Apps to help cities adapt as autonomous vehicles hit the road are a long-term possibility, he said.

Competitors to Passport include other venture-backed, enterprise tech providers to cities and their transportation-related offices, such as Transloc, Masabi or SilverRail Technologies, along with larger tech companies that have long been playing in the “smart cities” space with a focus on transportation such as IBM or Xerox.

Seaboard RISE maker ROLI raises $27 million in Series B led by Foundry Group

I first saw the ROLI Seaboard GRAND backstage at a show during SXSW 2013. Someone had tipped me that some startup was showing off a strange new piano that let the player bend its keys like a guitar string. It was strange and rubbery and fascinating — a silicone piano that made it possible to manipulate keys beyond the standard press.

The company has grown a fair deal in the intervening three years. At the time, ROLI’s CEO Roland Lamb was giving the demos himself. Now he’s got seasoned musician employees to do it for him; the company’s size have nearly quintupled from around 20 to just under 100, by his count.

ROLI issued another piece of good news this week, announcing that it has raised $27 million in Series B funding courtesy of Foundry Group and Founders Fund. I met with Lamb earlier this week in the decidedly upgraded digs of Series A funder FirstMark Capital’s Manhattan offices to discuss the funding’s role on the company’s future.

“We have an interesting selection of supporters now who I think believe in this vision,” he said. “It’s not a coincidence that a lot of that investment is coming from the U.S., because we’re very much leaning into the U.S. About 20 percent of our team is located here, and I think that figure is going to grow. We’re going to be hiring product, engineering and marketing, both in Europe and [in the States]. We see a big opportunity for market expansion here and globally.”

The Seaboard is, at present, available in 200 retail locations worldwide, and the company recently expanded sales to India and Japan, with more countries on the horizon.

Last year the company introduced the RISE, which applies the GRAND’s design to a MIDI controller form factor. It’s the latest from a company that’s seemingly more content to tweak and improve its devices rather than working to quickly expand its hardware.

“We’ve now introduced more dimensions, which means there are more complex gestures,” Lamb says. “On the RISE you can slide up and down the key to modulate. The piano fundamental offers one dimension of touch, how you strike the key. The Seaboard offers five. It takes advantage of the massive expressive capability of synthesis and of a computer.”

ROLI’s big push at the moment, however, appears to be software focused. In late 2014, the company acquired the C++ music industry framework JUCE. And late last year, it picked up social music-creation platform Blend.io.

“In music, hardware is really important. Material is really important. Music making involves material interaction,” says Lamb. “It will never be the case that the most expressive tools for music making are made of metal and glass. Where it’s a string, a key, a reed, or a new kind of silicone material, the physical interactions are crucial to musical expression. So hardware will always be a part of what we do. That’s the form, but the content is the software and the sound and the platform and how people connect. We started with hardware and I quickly realized that if we limited ourselves to it, it would be a pretty short path.”

“And the other thing we’re starting to invest in is R&D,” adds Lamb. “Some of it is refining and refining and executing well. And some of it is inventing new technologies like sensors, because we feel like it’s important to have a long-term view. We’re continuing to work on the GRAND and are about to introduce a big new update. Over the next couple of years we’re going to be leaning a lot more heavily into the software side and building it out so that it’s more robust.”

Mayfield has raised $525 million across two new funds

Sand Hill Road firm Mayfield has raised $525 million across two new funds, including a $400 million early-stage firm and a $125 million fund that will be used to support those of its portfolio companies that gain traction and need later-stage funding.

Mayfield has raised 14 early-stage funds. It closed its last fund with $365 million in 2012 and used that capital to fund roughly 30 companies.

Among the firm’s more notable investments in recent years are the cloud security startup Elastica, acquired by Blue Coat Systems last November for $280 million (Elastica had raised one round of $30 million earlier in the year); the residential solar systems installer SolarCity, which went public in late 2012; the online ad server The Rubicon Project, which went public in 2014; and the ride-hailing service Lyft, which was most recently valued at $5.5 billion.

Mayfield’s later-stage fund is the first in the firm’s history.

Earlier this week, Menlo Ventures, another of Sand Hill Road’s oldest venture firms, announced that it has also raised the first “opportunities” fund in its history. The idea at both firms and funds: to address a comparative dearth of capital for startups that are looking for Series B and C funding, now that non-traditional players like Fidelity and BlackRock are investing less actively in privately held startups.

Mayfield has five investing directors: Navin Chaddha, Rajeev Batra, Tim Chang, Ursheet Parikh, and Robin Vasan.

Michigan invests millions for driverless car testing

Last Tuesday, the Michigan Economic Development Corporation (MEDC) announced its approval of a $3 million grant to fund a driverless car testing facility in Ypsilanti. This performance-based grant went to the American Center for Mobility (ACM), who plan on using the space formerly occupied by a General Motors (GM) powertrain factory closed since 2010.

Autonomous cars have been a trending topic  since development began. Advocates of this technology assert that it promises to make transportation safer, faster, and more enjoyable than current conventional vehicles. However, before widespread use can become a reality, these self-driving cars must be thoroughly tested in both real-world and controlled testing settings. ACM plans to use the Willow Run center as a test track for a variety of situations, such as the high-speed traffic of a modern highway.

ACM plans to use the Willow Run center as a test track for a variety of situations, such as the high-speed traffic of a modern highway.

Michigan invests now but it’s only the first step

The MEDC hopes to reinvigorate the waning domestic automotive industry with this and other self-driving vehicle initiatives. Michigan Governor Rick Snyder has emphasized the importance of the project. “Michigan is proud of its auto heritage, but our goal is to be the leader in this industry for generations to come,” he said. “We need to stay on the cutting edge of technology connected with our vehicles.”

This initial grant will cover a number of early-phase costs for the center, including property acquisition, professional due diligence, and start-up support for the ACM. The facility will require an estimated total of $79 million before it will be fully functional and ready for self-driving vehicle testing. While ACM intends to secure roughly $59 million in federal funding, the center will reportedly also seek a further $17 million from the state.

Built by Ford in 1942, Willow Run started life as a production plant for B-24 bombers. After the war, the site was converted to manufacture a variety of other items with a major focus on automobiles. In 2010, Willow Run – then owned by GM – ceased production. Since then, its once-busy assembly facility has been used as a storage warehouse.