Newswire Top Stories

Adify, the Belmont, Calif. company offering an online advertising network product that charges a lower fee to publishers, said it has raised $19 million in a second round of financing today.

That’s a lot of cash, but is probably necessary to keep Adify in the running, now that the industry is filled with all sorts of competitors.

The round was led by US Venture Partners, and includes previous investor Venrock Associates, and a strategic financing from GE Media, Communications and Entertainment (a unit of GE Commercial Finance), NBC Universal, Inc. and Time Warner Investments. Adify raised an $8.25 million Series A round last year.

See our coverage at that time.

There are two products. The first lets a publisher use Adify to attract advertisers directly. In this version, advertisers can also contact Web publishers directly. A publisher using Adify presents advertisers an online form, which lets them request a particular ad space on a Web site. It allows a publisher to negotiate ad rates, and to reject an advertiser if wanted. Adify is only taking 20 percent of what the advertiser pays to the publisher, somewhat less than the 30 percent or higher that others take.

The second product is where a larger publisher, such as the Washington Post has enough clout to attract other publishing partners to form its own network, using the Adify platform. Adify may decide to charge the Post less than 20 percent of the ad revenue, because of the bulk it promises. The Washington Post, meanwhile, gets to charge other publishers what it chooses.

It is the second model that Adify is pursuing most aggressively. It seeks to build networks around sites with similar themes, so that advertisers can select a group of the sites to advertise on at the same time. If larger publishers like the Post pool their Web pages with ad inventory with the pages of smaller sites, the overall inventory is made larger for advertisers — and thus more efficient.

Adify says it now has 30 vertical ad networks. Customers include the Washington Post, Newsweek Interactive’s Sponsored Blogroll, Time Warner and Reed Business.

Also worth noting is that the GE group providing the funding is part of a new $250 million fund designed to invest in media and technology companies. Adify is its first investment. GE’s portion was $3 million. The fund is jointly managed by two GE units: GE Media, Communications and Entertainment and NBC Universal.

Ad network Adify gets $19M to build out vertical ad network model

Tech CEOs have highest salaries — are you earning enough?

Cordys, a Dutch company that specializes in selling business process management software, has raised $80M in financing in what appears to be the largest single investment in a private company in this area. It is backed by Jan Baan, a controversial entrepreneur who was forced to leave his previous company under a cloud of questionable financial practices.

The company also informed VentureBeat that it had established a San Jose headquarters.

Argonaut Private Equity led with $67 million of the financing, and was joined by the Vanenburg Group, which contributed the rest, and which has supported the company with more than $100 million in previous backing since 2001.

The company was founded by Baan, who has a strong track record of backing companies driving change in enterprise software. After founding Baan Software, an initially successful enterprise resource planning company, he backed Top-Tier, an Internet portal company (acquired by SAP), and WebEx, a web conferencing company (acquired by Cisco).

However, after concern about aggressive accounting practices and news that unusual ties to his separate investment company were used to inflate Baan Software’s revenue, that company stumbled. Baan himself was forced to leave the company in the late 1990s. After first giving SAP a run for its money, Baan Software’s sales tanked, and it was eventually sold to Britain’s Invensys in 2000.

Baan started Cordys in 2001, and is chairman. Cordys is going after a market that is estimated by Gartner to reach $1 billion this year, and which could reach $2.6 billion by 2011.

Cordys says it is different from competing offerings because it tries harder to reduce the technical complexities of business process management software (known as BPMS) for business people. The company says its software is built from the ground up with a service-oriented architecture and seeks to bridge the gap between business and IT teams by using an intuitive web browser interface leveraging AJAX.

Here’s a blog on the BPMS market.

Also, below are examples of specific enterprises using BPMS technologies. In many cases, they are automating tedious manual systems like POs, customer service, etc. These were presented by Gartner analyst Michele Cantara at their BPM conference in February, and the notes were forwarded to us by Cordys.

–American Home Shield talked about using BPM to help them double in size and to capture and drive compliance with best practices.
–Symetra Financial talked about eliminating paper processes to improve customer service with less errors and shorter cycle time. It talked about the change of address process requiring someone to pull a paper file, make the changes, capture the before and after screen images, and then return the file.
–Symetra had huge results - 20% increase in productivity per underwriter, 30% increase in productivity per case manager, increased job satisfaction, processing time reduced by 4 days, 67% more volume without increasing staff, increased compliance, and reduced training time by using foolproof processes.
–Symetra had some good lessons learned / CSFs - work with a pilot team which for them was newer employees that weren’t stuck in the old process, advertise to the users about the benefits (e.g., “No more papercuts”), talk to lots of vendor references, and do a proof-of-concept.
–SanDisk talked about their implementation focused on A/P. Their PO processes were too manual making authorization enforcement difficult and international paper approval processes ridiculous (e.g., paper “evaporation”).
–SanDisk did a 16 week implementation but smartly added on 2 months of piloting and UAT. They reduced cycle time from 3 weeks to 1 week and were able to handle 80% more volume without increasing FTEs.
–SanDisk’s team is 4 people - architect, administrator, and 2 business analysts.
–SanDisk said that even though they automated the current state it opened up Pandora’s box since the users saw the power of the system and wanted to make lots of changes.
–Western Union make a great point about how they modeled the “To-Be” future state process prior to buying a tool. Once they got the tool, it identified steps that weren’t necessary because the system could fully automate things that the users just assumed had to happen manually.
–Epcor talked about their order to cash process which often required a “hero” to make it successful. They looked at custom development (5x) versus BPMS.
–Epcor was able to drive their order to cash process form 12-16 hours to 5 hours which made it easier for everyone and increased job satisfaction. The change was hardest on the heros that enjoyed saving the day in the old manual process. It talked about using BPM for clinical document capture, A/P, and appeals and grievances with great outcomes.

Cordys grabs $80 million for business process software, backed by controversial Jan Baan

Newswire Venture Capital

Yardbarker, an Emeryville, Calif. company that runs a site aggregating content from sports bloggers, has raised another seed round of capital.

Yardbarker lets users rank the sports news they like — which pushes the best news to the top. We first covered the company after its August launch (scroll down).

The company wouldn’t disclose the size of the round, saying only that it was a “large” seed round.

It has since compiled feedback and created a new release of Yardbarker, which is also just out this week.

The investors include Russell Siegelman, who is the lead lead angel investor, and a partner at Kleiner Perkins Caufield and Byers. Other investors include Ron Conway and Steve Anderson from Baseline Ventures; Ronnie Lott and Harris Barton of HRJ Capital; Labrador Ventures; and the Band of Angels, among others.

Yardbarker raises another “large” seed round, for sports news site

Sientra, a Santa Barbara medical device company focused on plastic surgery and aesthetics medicine, said it raised a $85 million second round of financing — one of the largest private funding rounds in the medical device sector.

Sientra also announced that it has acquired the assets of Silimed Inc., a leading developer of plastic surgery implants for both cosmetic and reconstructive surgery.

The round was co-led by OrbiMed Advisors and Clarus Ventures, and included Goldman Sachs and TIAA-CREF.

Sientra plans to use some of the proceeds to finance the Silimed acquisition.

Statement is here. We couldn’t find a Web site for Sientra.

Sientra, device maker for plastic surgery, raises $85M

Expansion Capital Partners, a San Francisco venture firm focused on investing in mid-stage clean technology companies, said it has added $10 million to the size of its latest fund.

The fund now totals more than $80 million. The new investment came from Palmshore Investments Ltd., according to firm’s statement, sent out yesterday.

Expansion Capital Partners ads $10 million to latest clean tech fund

Multiverse, a Mountain View company that builds virtual worlds for companies and individuals, said it has raised $850,000 in convertible debt from unnamed angel investors as it searches to raise a first round of capital, according to VentureWire (sub required).

There’s an overview article mentioning Multiverse and other virtual world companies in BusinessWeek.

From VentureWire:

Multiverse co-founder and Chief Executive Bill Turpin said the company has raised $2 million in convertible debt to date from 10 angel investors, which he declined to name…. Multiverse, founded in July 2004 and based in Mountain View, Calif., is creating a “virtual world browser,” a technology platform that allows businesses and independent game developers to create virtual worlds. Developers can then either connect their games and worlds via the platform or allow the content to stand alone.

Virtual world co., Multiverse, raises $850,000 more in debt

Tectura, a Redwood City, Calif. company that provides Microsoft software products to mid-sized and large-sized companies, has raised $22 million in debt financing from Hercules Technology Growth Capital.

See statement here.

Tectura provides things like Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) applications built on Microsoft Dynamics™ business management software.

Tectura is backed by a number of investors, mainly Pequot Ventures, but also General Electric Asset Management, Diamond Capital Management and hedge fund Ritchie Capital Management, and has previously raised about $55 million.

Tectura, Microsoft software provider, raises $22M in debt

Newswire M&A

TeleCIS Wireless, a Campbell, Calif. developer of WiMAX fixed and portable wireless chips, said it has sold its 16e WiMAX mobile system-on-a-chip technology to Qualcomm for an undisclosed amount.

See announcement here.

TeleCIS said it will focus on its flagship product, the TCW 1620 fixed/portable WiMAX 16d SoC.

More discussion here.

Qualcomm acquires mobile WiMAX assets of TeleCIS

Tech CEOs get bigger salaries

moneymoney.jpgChief executive officers at U.S. venture-backed technology companies are earning nearly $30,000 more per year in total compensation than they did a year ago.

CEOs in Silicon Valley and the Northeast enjoy the best deals overall.

The data, compiled by Dow Jones, shows that technology CEOs are earning a median $289,000 this year, up from $260,000 last year. See table below, which also shows how much vice presidents and directors are making.

Total compensation, which includes salary and bonuses, for CEOs of venture-backed healthcare companies also climbed to a median $300,000, from $284,000 a year ago. Total ... » Continue reading

ITerating launches wiki for software

iterating.jpgITerating.com, a New York company, has launched the first Wiki-based directory of software.

It covers open source, commercial and hosted software.

It's early, and isn't exactly jam-packed with reviews yet. But then it only opened in January, and tomorrow makes its launch announcement. It says it has about 10,000 uniques so far this month.

It has raised a $350,000 angel round from Larry Augustin, founder of VA Software, parent company of open source repository site Sourceforge.net, and Brian Roberts, former Corporate Vice President of Corporate Development at Microsoft. We played around on it, and it looks ... » Continue reading

MDV throws down gauntlet for venture firm Web sites

mdvlogo.jpgSilicon Valley venture capital firms want to invest in the world's most innovative technology companies, but you wouldn't know it from looking at their stultifying Web sites.

Venture capital firm Web sites remain surprisingly similar, static and unimaginative.

Why are these VC firms such fossils? Flash technology, the stuff that lets you run a video with animation, is dead cheap to use, and paying someone to create a decent site doesn't take much. Yet, look at the sites of the valley's leading Sand Hill Road firms. You'll find sites coded in simple HTML, many with team pictures ... » Continue reading

Roundup: Google’s deals, Google’s staff exodus, Silverlight, SunPower and more

clearchannel.jpgGiant radio station company Clear Channel signs with Google -- The two companies announced a multi-year agreement that enables Google to sell a guaranteed portion of 30-second advertising inventory available on more than 675 of Clear Channel's AM/FM stations.

Want to be acquired by Google? Don't call them -- Google takes deal-making seriously, responding to every e-mail pitch, but responding to only about 10 percent of phone calls, according to an interview with one of its dealmakers. In the past, Google has also used a technique called Monte Carlo analysis to size up ... » Continue reading

April 16: A sad day for all Americans

(Editor's note: Michael Foroobar, a contributor at VentureBeat, attends the University of Virginia, Virginia Tech's traditional rival a short two-hour drive away.)

Please take a moment of silence for those affected by the massacre at Virginia Tech yesterday, the worst shooting of its kind in U.S. history.

Waking up yesterday morning to news of a shooting at Virginia Tech was a tragedy. But hearing the fatality count jump from one to twenty in the blink of an eye and then settle at thirty two was surreal. There had to be some mistake--maybe they meant casualty instead of fatality? I was on the ... » Continue reading

Inpowr creates a social network for ME

inpowrlogo.jpgThere’s a social networking site for nearly every person, animal, and interest – but what about a social network for the person who matters most? That’s right, a social network for YOU, the proud recipient of Time Magazine’s Person of the Year.

Look in the mirror. Do you really know yourself? Could you be happier? Thanks to a new web site called Inpowr, which launched yesterday at the Web 2.0 Expo in San Francisco, you can finally learn how to build a better YOU 2.0.

Inpowr bills itself as the web’s first platform for self-exploration.

Once ... » Continue reading

Tellme, Google 411 searches — all about the data

tellmelogo1.bmpTellme, the voice recognition company, has released more mobile search features, giving it a leg up on Google's recently announced 411 service.

In addition to offering voice mobile search, which Tellme announced last month, it gives you a way of search for business listings using SMS texting or mobile Web. Tellme gives business listings, maps, phone numbers and driving directions. See images below.

If you use the voice service, which you do by calling 1-800-555-TELL and just saying “business search,” you can get the results visually. If you text, you send your request to ... » Continue reading

Biotech financing: Are early-stage companies hot again?

dollar.jpgVenture investors’ interest in early-stage biotech companies may finally be starting to revive, nearly six years after the collapse of a biotech-stock bubble quashed appetites for the industry’s riskiest but often most innovative companies.

Biotech fundraising is certainly booming. The industry newsletter BioCentury (no link available) recently reported that biotechnology pulled in nearly $2 billion in venture capital during the first quarter, topping the previous record of more than $1.7 billion in the fourth quarter of 2000. A recent survey by law firm Fenwick & West* revealed that 79 percent of Bay Area biotechs saw ... » Continue reading

People search engine, Spock, two months away

spock.bmpSpock, the secretive people search engine getting ready to launch in two months, showed another demo to VentureBeat last week.

It has shown improvements from last year, when we first got a look. The company also just announced the "Spock challenge," a competition that rewards $50,000 to the team that best identifies individuals referred to in a set of 100,000 documents selected by Spock. This is designed to help Spock find new ways to distinguish between say, Michael Jackson the singer, and Michael Jackson, the football player. This entity resolution problem is proving to ... » Continue reading

Y Combinator continued

ycombinatorlogo1.jpgSome readers took issue with VentureBeat's recent assessment that Y Combinator had successfully "nailed" the start-up incubator model. There's one particular critique we should address.

In return for its advice and money, Y Combinator does take its pound of flesh, in the form of six percent of a company's stock, on average, which some people think is excessive. In our earlier, favorable assessment of Y Combinator, we were referring mainly to the vibrancy of the start-ups emerging from the group -- a sure sign that something is right. But let's look a bit closer at ... » Continue reading

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Kenneth Lawler, Battery Ventures, Forbes Profile

Kenneth Lawler at VentureBeat Rate this dealmaker & see more of their investments

Looking at the rain outside my posh Sand Hill office, my co-founder Jay Bhatti and I wondered how we could assemble the right team to build the company we had envisioned. Every entrepreneur confronts this challenge. The vision, in my opinion, is the easy part. Getting it done is a lot harder. My experience in […]

(Editor’s note: We asked Ryan Floyd, venture capitalist with Storm Ventures, what the traits are of the most successful entrepreneurs he’s backed. Here is his response.)
I am not sure there is a stereotypical entrepreneur right out of central casting.
The following are some common characteristics of the entrepreneurs that we have funded and will fund […]

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