Sphero attracts $45 mln

Boulder, Colorado-based Sphero, a maker of connected toys, has raised $45 million in funding. Mercato Partners led the round with participation from other investors that include a subsidiary of The Walt Disney Company. Also, Greg Warnock, a co-founder and managing director of Mercato, has been added to Sphero’s board of directors.


NRG buys solar power products maker Goal Zero

According to a blog post on its site, NRG has agreed to acquire Goal Zero, a maker of solar power products. No financial terms were disclosed. Goal Zero was backed by Mercato Partners. To read the announcement, visit here.

Mercato Partners invests in Primary Data

Mercato Partners has backed Primary Data, a provider of next-generation software-defined data center technologies. Primary Data recently increased the size of its Series B round and closed on $60 million in financing. In this round, Mercato joins other investors such as Accel Partners, Battery Ventures, Lightspeed Venture Partners and Pelion Venture Partners.

Mercato expands investment team

Mercato Partners has added Aaron Hall, former chief operating officer and executive vice president of client services at MarketStar Corporation, to the Mercato investment team. Mercato Partners is an expansion stage private equity firm.

Domo Closes $60m Series B Financing

Domo, a new software-as-a-service venture launched by Omniture co-founder Josh James has raised $60 million in Series B financing. GGV Capital, Greylock Partners, Bezos Expeditions, the personal investment company of Jeff Bezos, Workday co-CEOs Aneel Bhusri and David Duffield, Founders Fund and Mercato Partners, amongst others, invested in this round.

Skullcandy Prices IPO at $20 Per Share

Skullcandy, a Park City, Utah-based maker of headphones, priced its initial public offering Tuesday above the expected range, selling 9.44 million shares at $20 per share. The pricing values the company at $535.6 million, Reuters reported. Backers of Skullcandy include Mercato Partners. BofA Merrill Lynch and Morgan Stanley are underwriters for the offering.

Mercato Partners Takes A Practical Approach to Venture Capital

Much ink has been spilled over the “broken” venture capital model. Several years ago, Greg Warnock reached this same conclusion while at vSpring Capital, deciding venture capitalists weren’t being adequately compensated for the risk of investing in pre-revenue deals. So he started a new firm to do the opposite of that.

Warnock, alongside former MarketStar Corp. CEO Alan Hall, formed Mercato Partners to invest exclusively in revenue-producing startups with the goal of finding companies “grappling for their first foothold,” and bolstering their sales forces from ten to 500. That strategy has performed well thus far. Two years and four investments into its life, the firm’s IRR is in the low triple digits, while its portfolio company revenues grew 50% last year.

I asked Warnock a few questions about Mercato’s strategy and how it fits into today’s VC market.

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