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The highly anticipated Great Gatsby movie comes out at midnight. Gatsby is a classic example of an entrepreneur who dreams of fame and fortune and sets out to create his own destiny. True, he comes to a tragic ending and cares far more about clothing than the average tech entrepreneur, but the man sure knew how to create something from nothing. Early reviews say the movie is terrible, but that won’t stop me from dressing up in a head-to-toe flapper ensemble and hitting up my favorite speakeasies. Whether you are closing a round of funding or pretending to live in the 1920s, champagne is in order.

X marks the spot: Matrix closes Fund X

Matrix Partners closes its tenth fund, pooling together $450 million for investments in consumer Internet, mobile, enterprise, software and IT infrastructure startups in the US. The firm was founded way back in 1977. 50 of its portfolio companies have gone public and 75 have been acquired. The firm has offices in Silicon Valley and Boston, as well as in India and China. Notable investments include Apple, Gilt, Huddle, HubSpot, JustFab, and Zendesk.

e.Bricks stacks up $100M fund for startups

Brrazilian media corporation RBS Group has expanded its operations into startups with a new $100 million fund. The fund will be run by e.Bricks, an investment arm in the digital sector of the RBS Group, and will make between 10 and 15 investments in early stage companies per year. The fund will focus on digital media, e-commerce, and mobile technology. The portfolio currently has eight companies. The Brazilian landscape for startups and venture capital is growing fast and RBS wants to position itself at the center of this activity.

Online lender AvantCredit secures $34M in funding

AvantCredit, a Chicago-based consumer e-lender, yesterday announced the completion of a $34 million round of equity and debt funding from August Capital and Victory Park Capital. AvantCredit offers personal loans to the tune of $1,000 to $10,000. AvantCredit makes use of customer attributes such as credit, social media, and user action data, to offer low interest rates to a wide range of customers. This is its first round of funding, including a $9 million Series A equity investment. The round was led by August Capital, with participation from asset management firm, Victory Park Capital. In addition, Victory Park also issued a $25 million credit facility to the e-lender, taking the total funding to $34 million. Read more on VentureBeat.

Cloud data-protection firm PerspecSys raises $12M, plans for global sales push

PerspecSys, the Toronto-based cloud data protection company, has closed $12 million in its second round of funding. The company plans to use the capital injection to further develop global sales and marketing efforts and continue product development. The company supports a variety of popular cloud-based applications, such as Salesforce.com and Oracle CRM On Demand, while using validated encryption solutions from companies like Voltage Security, McAfee, SafeNet, Symantec, and RSA. This round of funding was co-led by new investors Paladin Capital Group and Ascent Venture Partners. They were joined by return backer Intel Capital and other institutional investors. Total investment in PerspecSys now totals over $20 million. Read more on VentureBeat.

SendUs launches with $17M to help brands harness user videos

SendUs launched out of stealth mode with $17 million in funding from private investors today. The company provides a video submission and management platform so brands can use video content created by fans to their own advantage. Brands put out a call for content and consumers can submit their own videos for review and possible publishing. The Los Angeles company works with brands like FremantleMedia (creators of American Idol), Singapore Airlines, Peugeot, Nextel International, Sierra Club, and the Susan G. Komen foundation. Read more on VentureBeat.

With $3.2M in funding, Dekko unveils a clever tech to insert animations into the real world

Dekko is launching an “operating system for the real world,” which is a fancy way of saying a new augmented-reality system. Dekko inserts animated images such as cartoon characters into the real world, where they can interact with it. The company is announcing this technology for the first time today. San Francisco-based Dekko is also announcing that it has raised $3.2 million from Bessemer Venture Partners, Echo Ventures, and others. Read more on VentureBeat.

Los Angeles startup Yekra nets $3M for its digital movie distribution platform

Digital entertainment distribution startup Yekra has raised $3 million in new funding to give studios a way to distribute DRM-protected content without it being burdensome, the company announced today. Los Angeles-based Yekra’s goal is to help distribute movies online with the full blessing of Hollywood. Movies will have copyright protections but still be available to be viewed through the web, smartphones, tablets, and connected TVs.The new funding was led by Las Vegas angel investor Maurice Gallagher, with participation by Bray Capital, Shay O’Brien, and Michael Rogers. Read more on VentureBeat.

Beyond Verbal secures $2.8M, detects human emotions and character through voice recognition

Beyond Verbal Communications, an Israel-based startup that’s just pulled in a $2.8 million seed round of funding, uses what it calls Emotions Analytics to determine someone’s emotions and character traits in real-time as they speak. Beyond Verbal licenses its technology for use in consumer applications. The first mobile application using its API will launch in the near future, and Beyond Verbal is building a web tool that allows people to use the platform to analyze voices. The company launched in May 2013. The funding was led by angel investor Kenges Rakishev, and new VC Genesis Angels. Read more on VentureBeat.

MadeiraCloud nabs $1.5M from Sequoia for AWS-based visual cloud management

Amazon Web Services visualization startup MadeiraCloud has raised $1.5 million from Sequoia Capital its first round of funding with the promise of helping developers better understand how their applications fit into the cloud. MadeiraCloud offers a relatively painless drag-and-drop tool for designing, provisioning, monitoring, and managing an application stack and cloud resources inside AWS. The company launched its public beta in June 2012 and claims to service small startups all the way up to teams within large enterprises. It now oversees management of more than $25 million worth of AWS resources. Read more on VentureBeat.

Workspace solutions platform LiquidSpace raises $1.3M in follow-on funds

LiquidSpace, the two-pronged workspace solutions platform, announced today that it has raised $1.3 million in follow-on investment to the $6 million raised in the company’s second round of funding that closed earlier this year. The San Francisco-based company serves two sets of customers: modern professionals who use the platform to book office or meeting spaces instantly, and companies who employ LiquidSpace to manage their workforce’s workspace needs. It boasts over 2,000 workspaces and meeting rooms in over 250 U.S. cities. The follow-on investment comes from two strategic partners: Steelcase and CBRE Group. Both have global experience in workplace strategy and commercial real estate. Read more on VentureBeat.

RingDNA releases mobile call tracking app to ‘make sales reps smarter’ 

RingDNA released a voice communications platform today that provides sales reps with relevant, contextual data when they need it to make the most of their sales calls. The company also announced raising a $1.9 million seed round. This iPhone app integrates with Salesforce, Twilio, LinkedIn, Twitter, Facebook, and company news feeds. When a call comes in, RingDNA delivers CRM data, social media activity, and behavioral marketing information to eliminate “blind spots” and give reps “actionable business opportunities” in real time. The funding came from angel investors. Read more on VentureBeat.

Plated serves up $1.4M from investors

We’d all love to whip up a delicious home cooked meal on-the-fly, but then a lack of time, inspiration, and motivation get in the way. Plated eliminates excuses by making home-cooking as easy as possible. Each week, the startup posts a selection of chef-designed meals. You choose the meals you want and order online. Plated delivers all the ingredients to your door with everything portioned out and all you have to do is put it together. Pricing is on an a la carte or monthly subscription basis. According to a report in TechCrunch, Plated has raised a $1.4 million seed round led by ff Venture Capital along with TechStars and angel investors.

Photo Credit: Debby Wong / Shutterstock.com

Filed under: Deals, Entrepreneur

Google has taken a minority stake worth in Lending Club.

The deal was part of a $125 million secondary transaction where existing investors sold portions of their shares to new investor Google and previous investor Foundation Capital. No new money is going into the company, rather it is a reshuffling of equity to allow room for Google on the board.

Lending Club is an online community that connects people who need to borrow money with people to lend it to them. Borrowers apply for a personal loan and receive a rate quote. Interested investors fund these loans and automatically receive monthly payments on these loans in their bank account.

“Google was excited about the possibility that Lending Club could transform the banking system,” said CEO Renaud Laplanche in an interview with VentureBeat. “We are using technology and innovation to lower costs, provide more value to our customers, and increase transparency. These are all things Google has done with other sectors, and they are interested in our ability to do that in financial services, which is one of the few last large industries that has not been transformed.”

Lending Club grew by leaps and bounds over the past year and with volume almost tripling. It originated 780 million in loans in 2012 and is on track to do $2 billion this year. As of May 1st, Lending Club had funded $1.67 billion in loans. The company charges an origination fee to borrowers and a servicing free to investors and is on track to generate $90 million in revenue this year. Laplanche said that this impressive traction caught Google’s eye and it approached Lending Club about getting in on the action.

“We talked to our investors and said we wanted Google on the board, but did not want to raise additional capital and wanted them to sell some of their shares,” he said. “There was an increase in share price from last year, which made the transition easier. Our valuation is now at $1.55 billion, up from 550 million, which is a 3 times increase in just twelve months.”

The national average interest rate for unsecured personal loans in the U.S. is just over nine percent, while Lending Club offers between six and seven percent. By circumventing banks, Lending Club is able to offer lower rates. Laplanche had the idea for Lending Club in 2006 after paying 18 percent interest rate on his credit card. He realized that money was helping to fuel an inefficient system and that by allowing people to directly invest in people, it would benefit everybody involved. Now seven years later, the idea has taken off.

With this latest transaction, Laplanche said that things won’t change much initially. Over time, however, there is potential for partnerships. Right now, he is focused on providing the best possible product for consumers. Lending Club primarily deals with unsecured personal loans, but is exploring adding in student loans, auto loans and mortgage loans down the road.

Lending Club has raised $102 million to date and as mentioned above, existing investor Foundation Capital gained a greater stake as part of this deal. This marks the firm’s largest investment ever made over the course of its 18-year existence, with more than $50 million invested.

“We’ve never seen a market opportunity of this size and magnitude,” said general partner Charles Moldow. “In the financial services industry, we are seeing a shift toward the transparency of information and Lending Club is leading the charge. There is a massive restructuring taking place. We believe that Lending Club’s growth has signified that the uses of technology in the financial industry are limitless, extending to a shift in the flow of information, transparency and decision making at all levels. This is disrupting the traditional banking model as we know it.”

Moldow also said that Foundation Capital sees Lending Club as an iconic company akin to Amazon, eBay, Salesforce, or LinkedIn. The financial services industry is massive and ripe for disruption, with large returns to boot. Lending Club has generated 22 consecutive quarters of positive returns for investors and it seems that pattern will only continue. Google will join the board along with such luminaries as Mary Meeker, John Mack, and Larry Summers.

Photo Credit: Rockbadger/Flickr

Filed under: Business, Deals

Attracting attention from venture capitalists is often compared to dating. With investment, as with love, it is not always clear what the other party is thinking. Morgan Stanley Wealth Management recently conducted a survey to discover the attitudes high net worth investors have towards startups.

The results found that 37 percent of Bay Area investors have put money into a startup, and yet fewer than 23 percent plan to do so within the next three years. It would seem the wealthy are looking elsewhere for investment opportunities. As Morgan Stanley’s regional manager Michael Struckman said, “it appears that despite the boost the small companies have given the region, local investors are beginning to cool on the idea of startups.”

73 percent of respondents cited risk as the primary deterrent and expressed fear over losing their money. Millionaires, however, were less concerned on this front than people with between $100K and $1 million in assets. One-third of investors were concerned about possible legal difficulties, while 16 percent were afraid of personal failure.

When they do decide to invest in startups, investors said that innovative ideas are the most important characteristic. 19 percent expect to take a significant role in the ventures, and 58 percent of investors prefer to invest as part of a group.

The survey included 1,000 US investors aged 25 to 75 with $100,00 or more in investable household financial assists, with an “oversample” of 305 San Francisco investors. Of those, one-third interviewed had $1 million or more in household financial assets. 46 percent of the men polled said they have invested in startups, while only 29 percent of women polled had done so.

Photo Credit: Simone van den Berg/Shutterstock 

Filed under: Business, Deals, Entrepreneur

At least for the time being, Japan’s multibillion dollar gaming giant DeNA appears to be unaffected by the government’s recent inquiry into ‘gacha’ gaming mechanics. Profits were up 20 percent year-over-year to 10 billion yen ($127.3 million), and rose 6 percent quarter-over-quarter. Overall revenue was up 37 percent to $605.9 million.

Japanese gaming companies have faced some headwinds in the early part of this year as the country’s consumer affairs agency cracked down on a gambling or ‘wishing well’-like gaming mechanic called kompu gacha that randomly awards players prizes (kind of like a slot machine). The biggest mobile gaming companies in the country like DeNA and GREE have stepped back from using them, which has put downward pressure on their share prices. DeNA removed these mechanics from its games in May (or two months into the quarter). The company said that increased spending on virtual currency offset the loss of these mechanics, although we’ll only see the real effects perhaps in the next quarter.

“There was some concern in the investor community that it would have a pretty dramatic impact on sales and the good news for us is that it didn’t really have the type of impact that was feared,” said Neil Young, a director at DeNA and the CEO of Ngmoco, the mobile-gaming network the company acquired in 2010 for up to $403 million.

In another promising bit of news, DeNA said that it saw $10 million in Moba-coin consumption in July from the Western-facing side of its mobile gaming platform Mobage. In an effort to keep growing beyond their relatively saturated home markets of Japan, both DeNA and GREE have made an aggressive push toward luring in Western audiences with splashy acquisitions of U.S.-gaming startups like Ngmoco, OpenFeint and Funzio. Young said Mobage now has 45 million registered users, although he didn’t share daily or monthly actives. Zynga has at least 33 million daily active users on mobile.

Fueling that growth in Western revenues was a trading card title called Rage of Bahamut, which sat on Google Play’s top-grossing charts for 17 weeks. Some other mid or hard-core titles like Blood Brothers are also attracted average revenue per daily active users of about $1.

DeNA’s shares were unchanged on the news at 1,810 yen, giving the company a market capitalization of $3.29 billion. Like Zynga and every other contemporary, freemium gaming counterpart DeNA has, everyone’s valuations are down significantly from the beginning of the year. DeNA shares are down only 21.6 percent from the beginning of the year, however. DeNA said for the next quarter it expects to see revenue up by 40 percent year-over-year to $1.24 billion and profit up by a similar ratio to $272.4 million.

“The challenge for us is to prove to the investor community that our market cap has been limited by speculation on the Japanese market,” Young said.

He added, “To be successful, gaming companies need to be 1) global 2) prove they can monetize and 3) be on mobile. DeNA is well-positioned in that regard.”

Founders Den co-founder and angel investor Zachary Bogue has joined forces with seasoned big data VC Matt Ocko, Metamarkets founder Michael Driscoll and Prismatic CEO Bradford Cross to launch Data Collective, the world’s first Big Data-only early stage investment fund.

The two Data Collective managing partners, who are currently raising fund number two, tell me that the timing is right for a fund committed exclusively to Big Data companies, as the barriers to entry in launching these sorts of startups are only getting lower.

Data Collective has already made 46 investments from its first fund, which it calls “comparable with other seed and early stage funds” (Ocko and Bogue wouldn’t reveal fund size.)

These investments include Kaggle, a startup that compels engineers to compete against each other in order to solve “hard problems,” and Continuuity, Parse, Pushd and Citus Data. The partners are currently in the middle of successfully raising their second fund.

“We see Big Data as the same rich and long-term opportunity that ‘IT’ was broadly in the 1970s and early 1980s when great VC funds (e.g, KPCB, Sequoia) developed their core IT investment practices,” Ocko tells me, “It’s driving the same kind of multi-hundred-billion dollar economic transformation.”

He goes on, “If we and other investors in this space do our jobs, in 15 years the terms ‘IT’ and ‘Big Data’ are pretty much synonymous.”

Data Collective prides itself on its deeply technical core team, and the Big Data chops of its extended group of 35 equity partners, who, while Data Collective wouldn’t reveal specific names, all work or have worked at companies like Akmai, Zynga, LinkedIn, Apple, Facebook, Salesforce, Twitter, IBM, Citrix, Airbnb and VMware.

The fund views its portfolio startups as fulfilling one of the three layers of the “Big Data stack”:

1. The enabling infrastructure level (the storage, security, and management systems necessary to deal with petabytes of data across thousands of machines and millions of interested parties) ;

2. Analytics (the software tools and services necessary to get intelligent , accurate, and actionable analysis out of petabytes of data in minutes instead of weeks) ; and

3. The top layer of applications and services that use the innovations of the first two layers to transform vertical markets (e.g, lending at disruptively low APRs, discount travel that works for both the airline and the passenger, improving hiring outcomes while empowering employees to more actively manage their careers and job satisfaction, transforming medical research by watching a person or even a plant’s genome express itself from day to day).

“Data Collective are enthusiastic, smart and well-connected investors who never say no to any request,” says Kaggle founder Anthony Goldbloom on why he’s happy with their investment, “We’re particularly grateful to them because they introduced us to our Chief Revenue Officer, a position that would otherwise have been difficult to fill.. When we first moved to San Francisco, they helped us find office space, introduced us to investors and worked with us on architecting a successful Series A.”

With a two decade track record of 40 material exits and significant up-rounds between the two managing partners, Bogue and Ocko are uniquely qualified to help data storage, security and analytics tech. ”We’ve been working on Big Data since before it was a term,” Ocko says.

Big Data, a mega-trend that is showing no signs of slowing down, now has its own dedicated venture fund. “Data Collective” launches today, and is head up by storied investors, Zachary Bogue and Matt Ocko.

The fund’s cofounders plan to invest in about 40 early stage and seed startups in the IT infrastructure, Big Data, and analytics space, which they see as a several hundred billion dollar market opportunity. I caught up with them on the eve of the announcement to chat about the hype surrounding Big Data, their decision to go rogue with a new fund.

The partners told me they plan to take an active role in the day-to-day operations of their portfolio companies, more so than traditional venture firms. It will likely differentiate them from established VC firms from Accel Partners (who carved out a $100 million Big Data fund in 2011) to Andreessen Horowitz, who are also angling for a piece of the Big Data pie.

Both investors are still knee deep in the process of raising capital, and so would not yet disclose a figure.

The founders are confident they have right team for the challenge. Ocko has been an investor and adviser on the startup circuit for 30 years, with investments in Zynga, BranchOut and CrowdMob. Bogue, (pictured, above) an analytics expert, is an early investor in Square and cofounder of San Francisco-based office space for entrepreneurs, Founders Den.

The fund’s extended team is comprised of 35 “equity partners,” who will have a significant material share in the investments. The equity partners are all experienced technical types — data experts, CTOs and chief scientists — currently or formerly at tech giants like VMware and Facebook.

“They range from rising star female principal engineers of name brand companies who haven’t yet made a giant pile to grizzled veterans of two or three IPOs,” Ocko explained. ”What they all have in common is the opportunity to work collectively with each other and be part of a unified elite club.”

Jason Rosenberg, formerly a lead systems architect at Zynga, is one of the fund’s equity partners. He told me the managing directors have a rare “nitty-gritty of what a hacker, especially a data hacker, does every day.”

Gaining access to the partners’  network doesn’t hurt either. Rosenberg said that in 48 hours, Bogue was able to pull some strings to get him a meeting with Lieutenant Governor, Gavin Newsom. Bogue, a Bay Area-based investor and philanthropist, is currently expecting his first child with wife, Yahoo’s new CEO, Marissa Mayer.

By joining the Data Collective club, the startups will also gain a head start in the painful customer acquisition process. According to Ocko, this will help them scale quickly and “punch outside of their weight class.”

This may be Data Collective’s first micro-VC fund, but the team has been working quietly in “stealth mode” for several years. They have already made seed investments in promising, early-stage Big Data startups like Kaggle, Citus Data, and Continuuity.

Data Collective’s cofounder, Matt Ocko, said: “I may wear a jacket but I still write code.”

“Don’t get me wrong. I may be wearing a nice jacket, but I still write code,” said Ocko, formerly a managing partner at Archimedes Ventures. “Zack and I have been at this for a long time and were evangelizing Big Data when no one knew what it meant.”

Ocko defines Big Data, a rapidly emerging tech segment, as “the set of technologies and practices for dealing with an exponential increase in the amount of data being accumulated, stored, and prepared for analysis from terabytes per month to potentially pedabytes per day.” It’s a mouthful, I know. In a nutshell, Ocko and Bogue are investing in startups that can make sense of extremely large volumes of messy data within the enterprise, and use it to derive new insights. In the right hands, data can be a highly valuable commodity.

The cofounders said they like to think of the space as layers of a wedding cake. The bottom layer is infrastructure (storage, cloud management, networking, and security), the middle layer is analytics, and the top layer is the application layer, which is closest to the end-user, the person who actually uses the product.

For Data Collective, the middle layer is the sweet spot. “We’re looking for startups that are doing analytics at scale, at speed, or better yet, both,” said Bogue.

The core team will also include two data experts: Bradford Cross, Prismatic’s technical cofounder; and Michael Driscoll, Metamarkets’ CEO, who will retain their existing full-time roles. Bogue and Ocko will not reveal the exact equity breakdown for the partners, but they stressed that the terms are simple and transparent. They did reveal, however, that the equity partners will not be offered seat on the company’s board.

Before wrapping up our interview, I asked the managing directors about the trend for young talent to build new geo-located, social mobile apps, and not enterprise technology. “I welcome them, the future customers of our companies,” joked Ocko. “It means more data for us to crunch.”

Filed under: deals, enterprise, Entrepreneur

Mexican.VC, a startup accelerator based in Mexico City, announced today it is merging with 500 Startups to source and fund a growing number of promising Spanish-speaking startups.

The two programs have been working together for some time, but only on an informal and sporadic basis. Today, Mexican.VC’s founding partners César Salazar and Santiago Zavala will be joining 500 Startups full-time.

500 Startups founding partner Dave McClure provided the following statement: “Mexican entrepreneurs: We’re coming for you, bitches!!!” (That’s pretty typical McClure. Earlier this month, the no-hold- barred investor inspired the startup community in Montreal by flipping it off.)

Mountain View-based 500 Startups was founded by McClure in 2010. If you’re not familiar, it’s an early-stage seed fund and incubator program that has invested in wildly successful startups like Wildfire, Twilio, SendGrid, and TaskRabbit. Read here about 500 Startups’ most recent investments.

Venture capital firms and accelerator programs are constantly looking to expand to emerging markets. In an interview with VentureBeat, Salazar said Mexico is on the brink of explosive growth. “The Latin American market is underserved and overlooked,” he said.

Salazar points to statistics, including recent statistics cited in Forbes that Mexico is the 12th largest economy in the world. Mexico’s GDP last year was $1.65 trillion, up from $1.59 trillion in 2010 and $1.51 trillion in 2009.

Salazar and the other partners at Mexican.VC typically invite around 30 entrepreneurs per year to move to the capital to work with them for four months. Now, with the partnership formalized, companies have the option to raise funds in Mexico or in Silicon Valley.

“This is the biggest thing we are doing to expand our international focus,” said 500 Startups’ partner Christine Tsai.

We’ll see more startups in the firm’s next batch geared toward the Hispanic market.

In Mexico City, the partners will be on the hunt for 5 to 10 early-stage companies with a focus on mobile, consumer internet, and small business software-as-a-service. Salazar said that this year, they will be looking for startups with an eye for customer acquisition and marketing, which will appeal to investors in the U.S.

“In Mexico, the idea of a scalable startup is something really new,” said Salazar. “It’s been growing really fast.” In Mexico City, you’ll detect some of the telltale signs of a burgeoning startup culture, including a Women 2.0 chapter and regional office for Startup Weekend.

Filed under: VentureBeat

Looks like electronic signature company DocuSign wasn’t quite finished with its fundraising when its Series D was revealed last month — today it’s announcing a new investor.

The funding was first disclosed through a filing with the Securities and Exchange Commission, with the company then confirming that it had raised $47.5 million in a round led by Kleiner Perkins Caufield & Byers, with Kleiner partner Mary Meeker joining the board. Accel Partners, Comcast Ventures, SAP Ventures, and “a large global institutional investor” also participated.

Raising money from Kleiner is already pretty impressive, but DocuSign has added another big-name investor — Google Ventures, whose investment increases the round’s total size to $57.5 million.

The company has now raised a total of about $114 million. When the round was first announced, CEO Keith Krach told me that it would be spent on research and development, expanding into new industries, and international growth.

Opening bids from two investor groups, one led by Apple the other by Google, for Kodak’s digital imaging patents came in well below the company’s estimates of $2.6 billion, meaning the bankrupt photography pioneer may not have much capital to work with once creditors take their share.

Things aren’t getting better anytime soon for Taiwanese manufacturer HTC, which today forecast a difficult third quarter, with sales declines in every region except China.

The company announced its consolidated second quarter earnings today with revenues of $3.04 billion and profits of $247.7 million (pretty much the same as the unaudited earnings HTC released earlier this month). For the third quarter, HTC expects revenue to fall between $2.3 billion and $2.7 billion, Reuters reports. Analysts expected the company to earn around $2.92 billion in Q3.

“China will continue to see growth in the third quarter, while other markets will have different degrees of decline,” HTC CFO Chialin Chang said at an investor conference today. “Europe, Middle East, and Africa will face challenges because of macro softness and competition.”

HTC previously blamed U.S. customs delays and slow sales in Europe for its disappointing second quarter earnings.

Not only are revenues expected to fall, but HTC also said that its margins will drop in the third quarter. The company expects a gross margin of 25 percent (down from 27 percent) and an operating margin of 7 percent (down from 9 percent). Basically, that means that HTC’s overall profits will likely end up being disappointing next quarter as well.

HTC’s popularity exploded with the rise of Android over the last few years, but once Samsung locked in the Android lead with its Galaxy S phones, HTC has had trouble delivering a hit device. The company’s recent One series phones are its best yet, but now those are competing with Samsung’s popular Galaxy S III and will soon face the next iPhone.

Photo Devindra Hardawar/VentureBeat

Filed under: mobile, VentureBeat