The Daily Startup: Fast-Growing ZenPayroll Courts Small Businesses

dailystartup_D_20090806101628.jpgArt by Mike Lucas

ZenPayroll, a provider of payroll software for small businesses, rounded up $60 million in fresh capital at a $500 million pre-money valuation, marking a fast rise for a startup launched just 2½ years ago, Yuliya Chernova reports for Dow Jones VentureWire. The San Francisco company, which automates payroll tasks from tax filing to employee onboarding for beauty salons, flower shops, and other small businesses, is part of a growing number of startups that tackle the problems of this long tail of the American economy that has been largely ignored by software companies for years. Google Capital led the Series B round, writing the biggest check in the deal, according to ZenPayroll co-founder and Chief Executive Joshua Reeves. Other new investors are Emergence Capital Partners and Ribbit Capital. Also participating were return investors General Catalyst Partners, Kleiner Perkins Caufield & Byers and Google Ventures.

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VarageSale raised $34 million in a Series B round of venture funding from Lightspeed Venture Partners and Sequoia Capital. The Toronto-based startup aims to make the process of finding, buying or selling used goods safer and more convenient than mainstream options such as Craigslist, eBay or classified ads, while also creating bonds between neighbors.

After disclosing a $50 million financing in early March, pain-therapeutics company Collegium Pharmaceutical has filed to raise more through an initial public offering. Collegium raised the venture financing ahead of the expected launch of an opioid pain medication that is designed to deter abusers.

Ultrasound diagnostic company Infraredx, which had planned to raise as much as $55 million in an initial public offering for its intravascular-imaging technologies, has withdrawn its bid, according to a regulatory filing. Infraredx is the second medical-device company in a week to put the brakes on its IPO. Late last month, insulin pump maker Asante Solutions withdrew its planned debut on the Nasdaq, where it expected to raise $49 million.

PicnicHealth raised a $2 million seed round from investors including Social+Capital Partnership and Great Oaks Venture Capital. The San Francisco company said it provides a master library for users’ personal health history.

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“You Can’t Just Hide” From Workplace Sexism, Ellen Pao Says. Gender issues can’t be ignored, Ellen Pao tells The Wall Street Journal’s Jeff Elder in her first interview since losing her sex-discrimination case against Silicon Valley venture-capital firm Kleiner Perkins Caufield & Byers. “You need to work through these issues because they are here and they’re not going to go away,” she said.

New York Startup Finds CEO Close to Home. Enterprise software company Sailthru, a New York startup, didn’t have to look far to find its new CEO, the WSJ’s Yuliya Chernova reports. “We were super excited to find a veteran, proven, tried-and-true enterprise software CEO right in Manhattan,” said Bill Gurley, a general partner at Benchmark, one of the investors in Sailthru.

Mobile Ad Market Poised to Surpass $100 billion. The mobile add market is set to hit a major milestone next year when it surpasses $100 billion, the WSJ’s Steven Perlberg reports. The prediction is in a new report from research firm eMarketer.

DrafKings Signs Up Walt Disney. Walt Disney Co. is investing $250 million in online fantasy sports company DraftKings at a valuation of about $900 million, according to people close to the deal, Shalini Ramachandran and Amol Sharma report for the WSJ. In return, DrafKings has committed so spend about $500 million on ESPN’s platforms in coming years.

Write to Mike Billings at Follow him on Twitter at @mbillings