Second Genome Inc. has attracted the venture arms of two drug companies to a $42.6 million financing that will enable it to develop disease treatments based on research into the population of microbes that live in and on the body. The more than 100 trillion microorganisms living in and on the body, the microbiome, influence disease and health, research indicates. For Second Genome, the interest that the venture arms of Pfizer and Roche showed in its financing validates two premises on which the company is based. One is that the microbiome is involved in multiple diseases. The other is that Second Genome’s particular approach to microbiome-based therapy is one that should appeal to drug manufacturers, according to Chief Executive Peter DiLaura. Instead of using microbes as drugs, Second Genome develops conventional large- or small-molecule therapies, the types of products that pharmaceutical companies already produce.

ALSO IN TODAY’S VENTUREWIRE (subscription required):

Enterprise drone software and services company PrecisionHawk has raised $18 million in Series C funding from a group of corporate strategic investors led by Verizon Ventures.

Investors are betting Bugcrowd Inc. can help companies crowdsource hackers to identify vulnerabilities. The San Francisco-based company raised $15 million in Series B funding led by the Australian firm Blackbird Ventures and had participation from Salesforce Ventures.

Bossa Nova Robotics has raised $14 million in Series A funding from WRV Capital for its in-store inventory robot for big-box retail chains.

LUMA Capital Partners has closed its first fund, of an undisclosed size. The firm sought up to $100 million for LUMA Capital Partners Venture Fund I LP, according to a February regulatory filing.

Open-source machine learning company H2O.ai plans to announce on Wednesday that it hired Leland Wilkinson to lead a new push in data visualization.

(VentureWire is a daily newsletter with comprehensive analysis of all the investments, deals and personnel moves involving startups and their venture backers. For a two-week trial, visit http://on.wsj.com/DJPEVCNews, scroll to the bottom and click “try for free.”)

ELSEWHERE AROUND THE WEB:

Magic Leap Shows How It Will Augment Your Day, Yet Questions Remain. Magic Leap Inc., one of tech’s most secretive startups, wants you to see its vision for the future of your morning routine. But it still isn’t ready yet to explain how its take on augmented reality and wearable technology will work.

Tech Startup PopExpert Files for Bankruptcy to Look for Buyers. The search for buyers for PopExpert Inc., a struggling tech startup that connects customers with career coaches, music lesson instructors and other professionals, has intensified after lawyers put the San Francisco firm into bankruptcy last week.

Write to Russ Garland at russell.garland@wsj.com

As venture capital investment slowed in the first quarter, investors slammed the brakes on funding for consumer services. But some investors still bet consumers will pay to have drivers pick up their laundry so they don’t have to haul it to dry cleaners themselves: San Francisco-based Rinse Inc. grabbed $6 million in Series A funding, Cat Zakrzewski reports for VentureWire. In the on-demand economy, few services besides food delivery have become as crowded as laundry. Washio Inc., Laundry Locker Inc., Cleanly Inc., FlyCleaners Inc. and other competitors all focus on dry cleaning and laundry delivery. Rinse co-founder and Chief Executive Ajay Prakash pushes back against the comparison of his company to others in the on-demand laundry space. He said though the company can offer laundry service in 24 hours, he has focused on providing a quality dry cleaning experience rather than a fast one.

ALSO IN TODAY’S VENTUREWIRE (subscription required):

Even by Silicon Valley’s standards, Jeremy Fiance, 24, is young to raise and manage a solo venture-capital fund. The recent University of California, Berkeley graduate announced on Monday that he has raised $6 million for House Fund, a venture fund to help startups at his alma mater get off the ground.

Proteus Digital Health Inc., which closed a $172 million Series G financing in 2014, has collected $50 million in a Series H round to expand use of sensor-enabled pills designed to help patients adhere to medication regimens.

FusionOps raised $25 million in Series C funding to expand its supply chain analytics tool.

TapInfluence, a platform that connects brands with influencer marketers to promote their content online, has raised $14 million in Series B funding.

(VentureWire is a daily newsletter with comprehensive analysis of all the investments, deals and personnel moves involving startups and their venture backers. For a two-week trial, visit http://on.wsj.com/DJPEVCNews, scroll to the bottom and click “try for free.”)

ELSEWHERE AROUND THE WEB:

Bill Campbell, Legendary Silicon Valley Mentor, Dies. Bill Campbell, a legendary mentor to some of Silicon Valley’s most important entrepreneurs and executives including Steve Jobs and Larry Page, died Monday at age 75. He had been suffering from cancer.

Write to Russ Garland at russell.garland@wsj.com

TapInfluence, a platform that connects brands with influencer marketers to promote their content online, has raised $14 million in Series B1 funding.

The company, incorporated as TapInfluence Inc., has a network of about 45,000 vetted influencers. TapInfluence uses Watson, IBM’s natural-language-processing computer, to create demographic profiles of each influencer’s audience, to help marketers target their campaigns. TapInfluence also works with the Nielsen Catalina Solutions to provide its clients with attribution data on the conversions driven by each campaign and influencer. This includes return-on-investment data for both online and in-store transactions.

Last year it transitioned from a fee-for-service model to a software-as-a-service one.

TapInfluence is harnessing advertising dollars from brands that are beginning to embrace influencer marketing at scale, running hundreds of campaigns instead of reaching out to individual influencers, said Chief Executive Promise Phelon. The company’s clients include WhiteWave Foods, the maker of Silk soy milk.

Last spring the company’s investors installed Ms. Phelon as CEO to lead the company’s shift to a SaaS model. Ms. Phelon replaced founding CEO Rustin Banks, who became the company’s chief product officer.
And SaaS models are catnip for venture capitalists. Mike Elliott, a general partner at this round’s lead investor Noro-Moseley Partners, said his firm spoke to several influencer marketing startups, and settled on TapInfluence because of its SaaS model.

To read the full article and learn about TapInfluence’s funding history, go to VentureWire.

Write to Patience Haggin at patience.haggin@wsj.com. Follow her on Twitter at @patiencehaggin

Genomics company Illumina, which has used venture investments and acquisitions to help fuel its growth, is ramping up its venture activity by committing to invest $100 million over 10 years through a new venture fund. Illumina has grown rapidly as demand for its DNA-sequencing systems and other life sciences-research tools has soared. The company posted $2.2 billion in 2015 revenue, a 19% jump from 2014, and over the last five years its share price has climbed to $173 from the high $60s. For several years Illumina has made venture investments through an internal fund, backing startups such as consumer-genetics company 23andMe Inc., software provider Desktop Genetics Ltd., and biotech concern Kallyope Inc. With the genomics market growing, Illumina concluded that it could extend its reach through an independent venture fund that has access to additional capital, according to spokesman Eric Endicott.

ALSO IN TODAY’S VENTUREWIRE (subscription required):

Wrap Media LLC, a mobile-first storytelling and commerce platform has expanded its leadership team and received additional funding to fuel its growth.

(VentureWire is a daily newsletter with comprehensive analysis of all the investments, deals and personnel moves involving startups and their venture backers. For a two-week trial, visit http://on.wsj.com/DJPEVCNews, scroll to the bottom and click “try for free.”)

ELSEWHERE AROUND THE WEB:

Uber, Lyft Drivers Need Business Licenses to Operate in San Francisco. In the regulation battle between cities and on-demand ride services like Uber Technologies Inc. and Lyft Inc., San Francisco just played a big trump card: bureaucracy. Drivers for Uber and Lyft need business licenses to operate in their hometown, according to a letter the city’s Office of the Treasurer and Tax Collector started mailing to drivers Friday.

Tencent Holdings in Talks For $2 Billion Loan. Tencent Holdings Ltd. is in talks with banks to raise $2 billion in a syndicated loan, people familiar with the matter said, as the Chinese social network company seeks to raise funds for more acquisitions and expand into new areas such as financial services.

Write to Russ Garland at russell.garland@wsj.com

RefleXion Medical Inc. has collected $46 million in Series B financing to bring to market a technology that could make radiation therapy for cancer safer and extend its benefits to more patients, Brian Gormley reports for VentureWire. New investor KCK Group, a family investment fund, led the round, which also included return backers Pfizer Venture Investments, Sofinnova Partners and Venrock. RefleXion formed in 2009 and raised seed financing from individuals before closing an $11 million Series A round in 2014. Radiation therapy is a type of cancer treatment used to kill cancer cells and shrink tumors. It can be used with chemotherapy and surgery in an attempt to treat or cure cancer. Today, physicians use X-rays, computed tomography scanning and magnetic resonance imaging to guide treatment. These types of imaging provide anatomical or structural information. RefleXion intends to add another way to guide treatment.

ALSO IN TODAY’S VENTUREWIRE (subscription required):

PeakSpan Capital closed its first fund at $150 million, $25 million above target, after fundraising for nearly two years.

During the short existence of startup RigUp Inc., the oil and gas industry it serves turned on its head. Yet Austin, Texas-based RigUp managed to raise a $15 million Series A round.

SV Life Sciences Advisers and Health Enterprise Partners have formed Jet Health Inc. as the two firms seek to tap into growing demand among patients for medical treatment at home.

(VentureWire is a daily newsletter with comprehensive analysis of all the investments, deals and personnel moves involving startups and their venture backers. For a two-week trial, visit http://on.wsj.com/DJPEVCNews, scroll to the bottom and click “try for free.”)

ELSEWHERE AROUND THE WEB:

Legal Fight Hits General Motors’ Acquisition of Cruise Automation. Cruise Automation Inc. and its founder Kyle Vogt have filed a lawsuit against engineer Jeremy Guillory for allegedly delaying the company’s $1 billion acquisition by General Motors Co. by demanding a stake in the startup.

Shuddle Shuts Down Ride Service for Children After Failing to Attract Capital. San Francisco-based Shuddle Inc., an on-demand ride service for children, said it would shut down operations on Friday, a move that comes after failing to raise more venture capital.

Uber Brings Motorcycle Hailing Service to Indonesia. Uber Technologies Inc. this week brought its motorcycle-taxi hailing service to Indonesia, where it will face strong competition from similar apps as startups battle for users in Southeast Asia’s biggest economy.

Write to Russ Garland at russell.garland@wsj.com

During the short existence of startup RigUp Inc., the oil and gas industry it serves turned on its head.

When the startup started testing its online marketplace for oil-rig projects in 2014 the price for a barrel of crude hovered around $100, oil rigs were multiplying around the country and exploration companies were making profits. Since then, the price per barrel sank to around $40 and the number of oil rigs dropped some 75%, to the lowest level since at least 1949, according to data from WTRG Economics.

And yet Austin, Texas-based RigUp managed to raise a $15 million Series A round, building on top of the $3 million seed round it closed in the summer of 2014. The new round came mostly from existing investors, Founders Fund, Box Group, and Great Oaks. New backers include FreeS VC, Moore Capital and GE Ventures, part of General Electric

“The industry went into shock mode,” said Xuan Yong, RigUp’s co-founder and chief executive, about the reaction to the collapse in oil prices. But it didn’t entirely freeze over. Instead, smaller development teams needed to cut costs and turned to software, like that from RigUp, to cut the man-hours required to get a project under way.

RigUp offers a marketplace where exploration and production, or E&P, buyers can procure oil-field services and equipment vendors, validate and verify compliance attributes of the vendors, and pay via the platform, as well. The RigUp marketplace is free for buyers and sellers to use. The company intends to make money when it is selected as a subcontractor.

The startup now sees more than $150 million in transactions completed on its platform each month. About 80 exploration and production companies and more than 9,000 service companies are part of its marketplace. Transaction volume is lower than it would have been had oil and gas prices were higher, Mr. Yong said. But the good thing for RigUp is that it had started from zero, so its trajectory was going to go up.

Write to Yuliya Chernova at yuliya.chernova@wsj.com. Follow her on Twitter at @ychernova

Quartet Health Inc., which uses its technology to improve access to behavioral health care and to integrate it with physical health care, has raised $40 million to expand its offering to markets across the U.S., Brian Gormley reports for VentureWire. New investor GV (formerly Google Ventures) is leading the Series B round, which also includes previous backers F-Prime Capital Partners, Oak HC/FT Partners and Polaris Partners. Quartet formed in 2014 and raised a $7 million Series A round last year. About one in five U.S. adults experiences a mental illness in a given year, according to the National Alliance on Mental Illness. Common behavioral-health conditions include depression, anxiety and drug and alcohol abuse. Patients can have difficulty gaining access to mental-health care because of a shortage of care providers and because physical and behavioral health care have typically been siloed instead of integrated, according to Quartet co-founder and Chief Executive Arun Gupta.

ALSO IN TODAY’S VENTUREWIRE (subscription required):

Cydan Development Inc., a venture-backed accelerator that creates drug companies targeting rare disorders, has launched its second startup with $31 million to develop a treatment for sickle cell disease.

Onfido Background Checks wants to help fintech companies and on-demand startups verify identities and complete background checks. The company raised $25 million to expand operations in the U.S. from Crunchfund, Idinvest Partners and Wellington Partners.

DigitalGenius Ltd. wants to use artificial intelligence to enhance the work that human customer-service agents do. The company announced it raised $4.1 million in funding.

Pharmacy startup PillPack Inc. is about to lose access to about a third of its customers. Express Scripts Holding, a company that manages pharmacy benefits for tens of millions of Americans on behalf of health insurers, expects to terminate PillPackfrom the Express Scripts network as of the end of April, the companies said.

(VentureWire is a daily newsletter with comprehensive analysis of all the investments, deals and personnel moves involving startups and their venture backers. For a two-week trial, visit http://on.wsj.com/DJPEVCNews, scroll to the bottom and click “try for free.”)

ELSEWHERE AROUND THE WEB:

Alibaba, Ant Financial to Jointly Invest $1.25 Billion in Ele.me. Chinese e-commerce giant Alibaba Group Holding, together with its financial affiliate, is placing a $1.25 billion bet on Chinese food-delivery app Ele.me, further fueling the battle to deliver offline services to Chinese consumers through mobile phones.

(Corrections and amplifications: A previous version of this article misspelled Idinvest Partners.)

Write to Russ Garland at russell.garland@wsj.com

When Yale University’s endowment reported this month that its venture capital portfolio earned returns of 92.7% per annum over the last two decades, skeptical readers declared that headline-grabbing number too good to be true.

The $25.57 billion Ivy League endowment has cleared the air on its track record: The 92.7% return over the 20 years ended June 30 is the venture portfolio’s internal rate of return, which was lifted by outsized performance during the years of the dot-com boom, according to a statement from David Swensen, Yale’s chief investment officer.

What that number isn’t, he stressed, is the portfolio’s time-weighted return over 20 years. Calculations of annualized time-weighted returns give equal weight to the performance of each year and assume distributions get reinvested so the returns compound over time.

If Yale had been able to compound a 92.7% return over two decades, the venture portfolio would be much larger than the 16.3% share of its endowment assets as of June 30.

“Obviously, we are not able to reinvest our VC cash flows at a 92.7% rate of return,” Mr. Swensen said.

As a point of contrast, the 20-year time-weighted return for Yale’s venture capital program was 32.3% in the period ending June 30.

The differences between dollar-weighted IRR and time-weighted compounded returns highlights that no single measure of investment performance captures the entire picture.

A key metric the private equity industry uses to measure performance, the IRR accounts for interim cash flow and the speed at which managers return capital. This measurement spikes if a portfolio performs robustly at the start of a reporting period.

For Yale, its 20-year IRR was amplified by a handful of deals done in the years leading to the collapse of the technology bubble.

In three out of the five fiscal years between July 1, 1995, and June 30, 2000, Yale’s venture capital portfolio generated triple-digit single-year IRRs, according to Mr. Swensen’s statement. In the fiscal year 2000, Yale delivered a one-year IRR of 701%. “The highflying 1990s included lucrative investments in Amazon.com, Google, Yahoo!, Cisco Systems , Red Hat, and Juniper Networks,” according to Yale’s endowment report.

A more objective measure of the venture portfolio’s returns might be the 18% annualized IRR for the 10 years ended June 30. Since Yale launched its venture capital portfolio in 1976, the program has delivered a 33.8% annualized IRR.

The disparities bring into sharp focus another lesson: Beware the tyranny of the IRR.

“An anomalous period such as the Internet boom highlights this limitation of the use of IRRs, which is why we use several metrics to analyze the portfolio’s performance,” Mr. Swensen said in the statement. “In addition to the IRR, we consider net multiples of invested capital, dollar gains and various other metrics to analyze the portfolio’s performance.”

As the saying goes, you can’t eat IRR.

Here’s Mr. Swensen’s statement in its entirety:

Yale’s 92.7% return over the past twenty years represents a dollar-weighted internal rate of return (IRR). Yale employs dollar-weighted IRRs to measure the performance of its illiquid asset classes because the University makes upfront capital commitments to illiquid partnerships that are drawn down to make investments at the manager’s discretion over time. These investments are subsequently harvested when the manager feels that it is appropriate to return capital to investors. In contrast, Yale uses time-weighted returns to assess the performance of its marketable asset classes, where the timing of capital flows to and from its investment managers is generally determined by the University. The reason it is inappropriate to compound our 92.7% return over the 20-year period is that such a calculation assumes reinvestment of all proceeds from the portfolio during the period at the same rate of return for the remainder of the period. Obviously, we are not able to reinvest our VC cash flows at a 92.7% rate of return. For reference, our venture capital portfolio’s twenty-year time-weighted return is 32.3%.

The Internet boom comprises the beginning of the twenty-year period in question, during which Yale’s venture capital portfolio generated triple-digit single-year IRRs in three of its first five years, culminating in a 701.0% IRR in fiscal year 2000. Given the mathematics of the IRR calculation, a spectacular first five years of performance will have significant influence over the IRR of any longer term period. An anomalous period such as the Internet boom highlights this limitation of the use of IRRs, which is why we use several metrics to analyze the portfolio’s performance. In addition to the IRR, we consider net multiples of invested capital, dollar gains, and various other metrics. That said, we believe that dollar-weighted IRRs, though imperfect, are more appropriate than traditional time-weighted returns for the performance analysis of illiquid portfolios. Furthermore, utilizing dollar-weighted IRRs allows Yale to benchmark its performance in an apples-to-apples fashion using data services such [as] those provided by Cambridge Associates, which generally report pooled IRRs.

Uber Technologies Inc. this week brought its motorcycle-taxi hailing service to Indonesia, where it will face strong competition from similar apps as startups battle for users in Southeast Asia’s biggest economy.

Users now can open Uber’s app and choose an option called  uberMotor to summon a motorcycle driver, who will then pick them up and ferry them to their destinations.

Motorcycle taxis are common in the country because they can maneuver in the traffic-clogged streets of the capital, Jakarta, more easily than cars. At 1,000 rupiah (7 cents) per kilometer, fares for uberMotor are lower than those from rivals Go-Jek and Grab’s motorbike service, whose minimum fares are 12,000 rupiah (91 cents) and 10,000 rupiah (76 cents), respectively.

Indonesia is now the third country globally where Uber’s service is available, after Thailand and India.  Users can pay for their rides with cash, the preferred method of payment in a country, though credits cards are also accepted.

Uber did not disclose how many motorbike drivers it has tapped in Jakarta, or where the service might be launched next in the country.

Motorcycle-taxi hailing firms in Indonesia have in recent months been offering increasingly differentiated products in order to boost user growth. The country’s largest motorcycle-taxi hailing app, PT Go-Jek Indonesia, on Tuesday said that it has teamed up with e-commerce company Lazada Indonesia to improve its delivery service.

Go-Jek also recently collaborated with messaging firm Line Corp. to let users hail motorcycle-taxis directly from the company’s chat app.

Meanwhile, Singapore-based Grab last month announced its partnership with MatahariMall, the e-commerce arm of one of Indonesia’s biggest conglomerates, Lippo Group.  Grab will be the transport and delivery partner for MatahariMall, in order to further develop the online mall’s online-to-offline experience.

Uber, valued at $51 billion, entered the Indonesian market in August 2014 and now operates in the cities of Jakarta, Bandung, Bali, and Surabaya. Grab operates in Jakarta, Bali, Surabaya, Bandung, and Padang.

Grab and Uber recently became the target of rallies by traditional taxi drivers in Jakarta who protested against what they said was two firms’ supposedly “unlawful” operations that are eating into their livelihoods.

As a result, Indonesia’s Transportation Ministry sent a letter to the country’s Ministry of Communication and Information Technology recommending it ban the two apps, though the request was eventually dismissed. Grab and Uber were given until May 31 to obtain all the necessary permits and licenses to operate as car-rental cooperatives. Both have said that they’re confident they will get the permits before the deadline expires.

“With choices abundant, Uber faces an uphill road to grab a portion of the market with its bike services,” said Sudev Bangah, country manager at market research firm IDC, in Indonesia and the Philippines.

Analysts also said that relying on transportation offerings alone, like what Uber does in Indonesia, will be challenging. Go-Jek, for example, also offers grocery and food delivery services. Grab recently launched small-sized cargo delivery products in Jakarta.

“There is a reason Go-Jek diversified into many different business, as it was quickly becoming apparent that transportation alone was not exactly going to solely buoy their business,” Mr. Bangah said.

When asked if Uber plans to launch other services beyond ride-hailing in the market, a company’s spokeswoman said that Uber is always exploring options but that it had “nothing to announce at this time.”