March 30, 2007

Indian Casual Game Business Games2Win Raises

Mumbai-based Games2Win has raised around $5M in Series A funding. Clearstone Venture Partners led the deal and was joined by SVB Financial Group. Games2Win was seed funded by Contests2Win.

The business gets a lot of traffic in India, thanks largely to games that are created for this distinct cultural market. ContentSutra reports that the company will be launching a multiplayer game this month.

If you don't see any posts on the a:c for a while, its because we are addicted to Bombay Taxi

The company is led by co-founder/CTO Mahesh Khambadkone who came from a consulting background and has only been full time less than a year and CEO Cyrus Oshidar who was an MTV exec.

View - site
Read - Games2Win Gets $5 Million Funding From Clearstone Venture Partners And SVB Financial Group (Content Sutra)

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Naturally Curly - CurlMunity/CurlMart - For Ladies With Curly Hair Raises Angel Funding

We had to check to see if this is April Fool's day when we came across this funding announcement. It's not and indeed the Austin-based business Naturally Curly has raised $600K from some big Texas tech investors that include: Jim Treybig (NEA Partner founder of Tandem Computers, and entrepreneurs Dr. Philip Sanger and Tim Wall. Founded 9 years ago, the site says it has nearly 10,000 daily visitors.

Naturallycurly.com founders

Read - Web site devoted to curls lands cash (Austin Business Journal)

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How To Go From Angel To VC Partner: Saar Gur Joins Charles River

We spoke today with angel investor Saar Gur who has told us that he has joined Charles River Ventures. Saar was a VP with Adteractive until 2006 when he locked in on angel investing. In 2006, he made angel investments in a good number of promising Web 2.0 companies. Thus far none of his investments have seen liquidity events but several have seen huge growth in traffic and valuations from subsequent investors. Saar's angel investments include:

Social network for films buffs. TechCrunch reports that LightSpeed Ventures invested $2M in a very competitive round.

Slideshow company Rockyou raised $11M in a second round at a $50M post money valuation, most or all from Partech, reports TechCrunch. The company had previously raised $1.5M from Sequoia Capital and Lightspeed Venture Partners.

Mobile ad marketplace AdMob has raised $15M in Series B funding led by Accel Partners and joined by return backer Sequoia Capital.

Pre-launch email analytics startup Xobni has secured $1.5M of a $4.26M Series A round led by Khosla Ventures.

VoiceStar is a pay per call lead generation network. First Round Capital and Felecis Venture Capital invested an undisclosed amount.

The SMS contest companies closed $2.3M led by Index Ventures and Khosla Ventures.

Video ad network BrightRoll closed a series its A round raising a total of $1M from 9 angel investors plus True Ventures.

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This Week In Euro Tech

Investments
+ <ZBD, a UK company that has commercialized what it calls e-paper (bi-stable displays) has raised a further $20M.

+ Sweden's eye-tracking technology maker Tobii Technology has raised $14M.

+ Burda takes stake in German video portal SevenLoad.

+Scottish startup MTEM seeks £25M to grow oil- and gas detecting biz.

+ France's Ipercast raises capital to grow Internet video distribution biz.

+ Streetcar - London's pay as you go car rental business raised £6.4M and plans IPO by year end.

+ Estonia's Ambient backs GPS' Oskanda Eurosat deal.

+ Universal Music Group has made a strategic investment of an undisclosed amount in Trace.tv.

+ Austria's UC4 Software is buying Bellevue, WA's AppWorx. The company makes the claim to be the first truly global and independent provider of IT process automation and optimization solutions. Financial details of the transaction were not disclosed.

+ Germany's Experteer, which runs a web-based executive recruitment platform, has raised a second round of investment.

+ French VC Backs UK's Webjam.

+ Novintel and C-squared raise VC funding.

M&A
+ ePayment's Moneybookers bought out by PE firm for €105M.

+ Germany-based business social network Xing buys Spanish competitor eConozco.

+ France's WebWag acquires fellow French startup Mobease.

IPO
+ Euronext Internet IPOs - more dotcoms. Euronext has supported a few more dotcom IPOs:
Notrefamille (mkt cap €16.9M on Alternext)
Referencement.com (mkt cap €16.5M Marche Libre)
Entreparticuliers (mkt cap €52.6M on Alternetxt)

News & Analysis
+ Top 5 fast digital startups in the UK - King.com is king.

+ alarm:clock euro Puzzler
Which of the following statements is most accurate?
a) Germany has 4 business angel networks?
b) Germany has 40 business angel networks?
c) Germany has 14 business angel networks?

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March 29, 2007

Sequoia Invests $11.5M in Micro-finance Fund

Sequoia is getting some nice TV coverage today on MSNBC's Closing Bell for its $11.5M investment in Indian Microfinance bank SKS. SKS says it is now one of the fastest growing Microfinance institutions in the world and the first for-profit microfinance lengder. The company says it grew by 160% with a 99% on-time repayment rate last year. SKS currently provides loans to its 600K members in 7,200 villages in rural India.

SKS says that the new capital will go towards giving loans to over 5M poor families by 2010. SKS estimates that its loans have a return on equity of 23%. In fact, 23% is the standard interest rate for its loans, which seems to us like loan sharking but we understand the poverty level folks that get these loans don't have many other options.

Sequoia's investment includes an exit clause. In the next three to five years, SKS will either have an initial public offering or be acquired.

Here's an interesting quote from another SKS investor: “Established markets never took poor people seriously. They neglected the obvious business opportunity. The larger banks and some of the larger institutions have not gone into this business systematically. This creates an opportunity for an entrepreneur like Vikram and a company like SKS.” Unitus Equity Fund, Chris Brookfield.

Read - Sequoia Invests $11.5 Million in Microfinance Fund (CNBC)

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UK Search Company Magpie Earns Funding

Magpie which makes its HQ in Brighton, England has raised funding from London Seed Capital and Tennants Ventures.

The company's flagship search product can be run on sites a search engine with no advertisements and without taking users off to other sites. Results are then displayed in clusters, allowing users to refine their search further. Alerts can be set up on the basis of any search string. Magpie also has a brandwatch tracking product so that users can track Internet buzz or lack thereof of their product or company.

Founded in 1999 as a Web builder called Runtime Collective, we have been building database-backed websites since 1999 the company has morphed and developed 3 product lines around its custom search engine.

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Personal Empowerment Social Network Zaadz Angel Funded By Whole Foods CEO

Sustainability, empowerment, bliss, authenticity, conscious capitalism - these is the kind of language that you will find on the LA-based social network Zaadz. The company recently raised a round of seed financing from Whole Foods CEO John Mackay. There is now word if Mackay will use marketing leverage at this starts to promote Zaadz.

Zaadz Profile of its Founder/CEO

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SMS Games' Frengo Launches With Funding From Index and Khosla

In August 2006 Frengo completed a seed round of $2.3M led by Index Ventures, Khosla Ventures and angel investors like Saar Gur. Frengo has a partnership with Boost Mobile. The company is led by a group of people who all seem to have worked at Verisign.

Frengo combines two venture trends: content for mobile messaging and contests.

The initial release includes familiar online contests:
+ Mobile versions of Fantasy Football.
+ Entertainment-based contests such as “Celebrity Lies” where members win points for spotting the truth among a pack of lies.
+ Posting of content comments and pictures to MySpace pages from a mobile phone.

Read - Frengo Launches Industry’s First Intelligent Platform for Mobile Social Play

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Pre-launch Search Physics Funded For Iterative Search

San Francisco-based Search Physics has raised an undisclosed amount of angel funding. The pre-launch startup says it has developed a search engine that extracts the information content of websites and stores additional information about each site in a database that can be used for other purposes. One use is to classify the links, and the other is to assist the users in narrowing down their search results.

We can agree with their case that search searches return too many URL's irrelevant to the search topic. and it difficult to judge relevance from the URL list, so each must be visited individually, which can be a time sink.

Search Physics says it not only reduces the number of irrelevant URL' in the returned list but also gives a brief description that makes it easy and quick to judge the relevance of the site.

At this point we don't know if Search Physics will be a stand-alone search site, a tool-bar or sit on top of other search engines. Investors Stanley Wong and David Shen both came from Yahoo. The company's CEO/founder is Dr. Minh Duong-van physicist in the field of theory of chaos and quantum theory.

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Inside Building-B: Former Sony CTO's Startup To Bring US Affordable Premium Video

The a:c's cable bill is a killer. We'd love to have HBO and some premium sports channels so we could watch the European soccer league action but when we add up how much we would pay for that over a year we back-off.

Building-B is building a net-based premium video system that targets folks like us - they actually say they are going after middle America. It looks like this might require some kind of set-top box, which we hate - but this is not certain. The company is led by former Sony CTO and Liquid Audio co-founder Phil Wiser and CEO Buno Pati.

Wiser told PC Magazine: "We found this gap in the field within the last year. There are a few basic changes in the entertainment patterns of consumers overall. One of those is on-demand [video]. Anyone who has been able to access on-demand video, certainly will go back to that. The other element is mobility. Consumers have gotten used to having access to their entertainment on the go. And the other primary shift is the fragmentation between traditional TV viewing, Internet viewing, and gaming, so we're looking at these habits and optimizing the service to meet those."

Recently, Wiser and Pati surfaced as the board of directors of the recently funded Fliptrack, which enables personalized music video creation.

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Boston's Neosaej Raises 1st Round For eCommerce Tools

Stealth-mode eCommerce infrastructure software, Neosaej has secured $505K of a $1M Series A round led by Stata Venture Partners, according to a regulatory filing dug up by PEHub. These guys are hiring up but are tight-lipped about what they are up to so we will have to be patient. The company was founded only 3 months ago by Rohit Goyal, who was a network engineer at Enterasys Networks.

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Liberty Media's TruePostion Buys Mobile People Finder Tech's Useful Networks

TruePosition, which sells wireless location solutions and is a subsidiary of Liberty Media has bought Useful Networks.

Useful Network's technology allows social networks, local search companies, mobile advertisers, and mobile gaming companies to add location-based elements to their services while keeping user location data secure and protected in accordance with wireless carrier policies. Useful was recently founded, in 2006, and has yet to get out to the market.

Useful was founded by Brian Levin, who previously started Mobliss, which built the SMS text voting
system for American Idol.

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Linux Cluster's Penguin Computing Raises $9M

San Francisco-based Penguin Computing has closed $9M in a second round of financing which was led by vSpring Capital, and also included prior investors San Francisco Equity Partners, Weber Capital, and Convergence Partners. Penguin Computing is developing cluster management and virtualization software for high performance Linux computing.

Painful Linux Geekiness

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SuperMicro Computer's IPO Not So Super. More Like Micro.

Super Micro Computer raised $64M in its IPO that was priced well below a forecast range.

The offering of 8M shares sold for $8 per share, compared with its $9.50 - 11.50 forecast range, set by its underwriter led by Merrill Lynch. The shares trade on the Nasdaq under the symbol SMCI.

The San Jose-based company founded in 1993 has a market cap of $325.2M on revenues of $328M and net income of $18M.

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March 28, 2007

LightSpeed Funds Newly Launched B2B Lead Gen Network Tippit

The B2B lead generation space tends to piss off editorial purists who write for an audience first, then figure out how to monetize it. Companies like Tippit figure out which leads pay the most, then create sites to target that audience. Often the content is licensed and in some cases the lead generation sites are sham sites.

Tippit is building a B2B content network that now includes:
+ VoipNews
+ Daily Wireless
+ It Management
+ IT Security
+ Homeland Security Weekly

Rather than licensing content, Tippit seems to have hired freelance bloggers and program managers to publish content for each of its sites. The quality of the content seems better than the average.

This is the kind of lead generation 'call to action' that you might find on a Tippit site...

Tippit was founded by CTO Shane Holland, who was VP Engineering/CTO at Adteractive and CEO Scott Albro who was VP Business Development at Covalent. The company has raised funding from Lightspeed Ventures.

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The WebVan of Minneapolis, SimonDelivers, Raises Funding

It looks like the home grocery deliver service SimonDelivers may be up for sale. The company's sales have been flat the past couple of years, says InternetRetailer, and it recently received a new amount of undisclosed funding from Denali Partners, a private equity firm that targets businesses that need between $1M and $5M in investment capital for growth, expansion or buyouts.

In 2006, SimonDelivers posted revenue of about $60M, a decrease of 7.2% from web sales of $64.7M in 2005.

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Visa Invests in DotMobi

Dotmobi is one of those domains that we tend to forget. But Visa brings it back into focus, joining a growing list of investors in a consortium built around promoting the dotmobi domain sector. Other investors are: Ericsson, Hutchison 3, Microsoft, Nokia, Orascom Telecom, Samsung, Syniverse, T-Mobile, Telefonica Moviles, TIM and Vodafone. Apparently about 500K dotmobi domains have been registered.

Read - dotMobi Announces Strategic Investment From Visa

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Home To Budweiser, St. Louis Alcohol Fuel Cell Co. Akermin

Akermin has raised $3.5M in venture capital which ads to the nearly $3M that Akermin raised in 2005. Akermin's product eventual goal is creating an array of fuel cells that last a long time and can be instantly recharged by replacing a small alcohol cartridge. Corn-based ethanol is a likely source of fuel because there is a ready supply, but the cells can run on vodka, gin and even beer.

Akermin's prototype is just approaching the amount of power generation sufficient to fuel a cell phone. Creating a device that could run a laptop computer is years away, Akers said.

Competitors include Oorja and Polyfuel.

Read - Company here raises funds for fuel-cell breakthrough (St. Louis Today)

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Pre-Logo Loudspeaker Startup AudioPixels Raises $4M

Lightspeed Ventures, DCM and a group of private and strategic investors have invested $4M in thin loudspeaker developer AudioPixels, says Globes

AudioPixels' CEO Daniel Lewin founded the company six months ago. The company says that its technology enables the production of thin high-performance loudspeakers suitable for a wide range of devices.

We have posted on a few new age speaker companies that have received funding, including:

+ Gecko Audio
+ G-lab
+ Iosono

Read - Audiopixels raises $4M (Globes)

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Cisco Buys SpansLogic For $6M Or So

Cisco has bought Mountain View-based SpansLogic for around $6M. SpansLogic makes a specialty memory-type good for storing large routing tables. LightReading reports that the deal might make Cisco supplier NetLogic want to barf. 61% of NetLogic's revenues came from Cisco last year, and now Cisco owns competitive technology that may slow down this gravy train.

ATA Ventures fund invested in SpansLogic.

Read - Cisco To Buy Spans Logic (Light Reading)

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China's P2P Video Startup PPStream Raises $10M

Sorry, but this logo character is a blatant rip-off of Kenny from SouthPark and the the name of the company is definitely one that the show would run with.

Now that we have that out of the way, we learn today that Shangai-based PPStream has raised about $10M funding from Qiming Ventures and its existing investor Ceyuan Ventures.

PPStream offers P2P video on demand and has done partnerships with ESPN Star China, Sina and Yahoo among others. And of course, BitTorrent sites are enormously popular in China.

PP Stream competes with Google portfolio company Xunlei as well as with UUSee which recently raised its series B funding at $20M.

Read - PPSTream Closes Series B Funding

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Tattooes For Whoosies Startup - Freedom2Ink - Raises $1.5M

Apparently there is a sizable population of people who want to take part in the tattoo fad but who anticipate that their tats will look gross when they are old. The NYC-based startup Freedom-2 has raised $1.5M in Series A for its inks that are used for permanent but removable tattoos. The financing was led by Brightleaf Capital and a healthcare angel investors. Previous investors Jamestown Investments and the Center for Innovative Ventures at Partners HealthCare participated in this round.

Look like Alan Iverson now. Remove when you want to look like Alan Alda.

If you need a technical explanation for how the process works, here it is: Freedom2Ink uses microscopic bioabsorbable pigments and dyes that are encapsulated in a biocompatible polymer forming a microencapsulated colored bead. The tattoo is "easily" removed by a single, standard laser treatment that breaks the polymer beads allowing the body to naturally expel the dye trapped inside.

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Biofuels' Mascoma Wins $4.9M Grant from Department of Energy

Cambridge, MA-based Mascoma has won $4.9M in funding from the U.S. Department of Energy . The funding is specifically for the development of fermentative organisms that speed the conversion of cellulosic biomass into ethanol. The grant is part of President Bush's Twenty in Ten Initiative, which seeks to reduce domestic gasoline use by 20% in 10 years.

For investors and execs at Mascoma such a grant must seem like found money. Mascoma had already raised significant VC funding: $39M in three funding rounds from investors led by Khosla Ventures with Flagship Ventures, General Catalyst Partners, Kleiner Perkins, Vantage Point Venture Partners, Atlas Ventures, and Pinnacle Ventures. Mascoma also received a $14.8M matching grant from the New York State Department of Agriculture and Markets and the New York State Energy Research and Development Authority to build and operate a biomass-to-ethanol demonstration plant in or near Rochester, NY.

Read - Mascoma Secures $4.9MM Funding from U.S. Department of Energy

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WindFarmers UPC Wind Raises $44M

Boston-based UPC Wind says it has secured equity financing for its Mars Hill Wind Farm. Proceeds totaling approximately $44M were funded by JPMorgan Capital Corporation and WFC Holdings (Wells Fargo). The investment will go towards reducing debt on UPC's Mars Hill Wind Farm in Maine, which it says is New England's first utility-scale wind project and is currently suppling approximately 42 megawatts or electricity.

In May 2006, DE Shaw and Madison Dearborn Partners "made a significant investment in UPC Wind while the firm's original investors retained a substantial stake in the company."

Read - UPC Wind Secures Equity Financing

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Sequoia Invests In Wireless Testings' LitePoint

Sequoia has invested an undisclosed amount in LitePoint in Sunnyvale. The startup sells test equipment to wireless chipset vendors (Atheros, Beceem, TI), OEMs (Gemtek, RAFI, Sercom), and consumer electronics systems makers (AVM, NETGEAR).

Read - LitePoint Receives Funding from Sequoia Capital

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Universal Music Group Invests in France's Urban Music Biz Trace.TV

Universal Music Group has made a strategic investment of an undisclosed amount. In addition to cash, Universal will provide Trace with global music and video rights, a weekly slot on Universal's International Music Feed and cross promotions, including an urban music partnership to sell mobile content in China.

Launched in 2003 in Paris, France, TRACE began as a print magazine and now runs urban music programming in multiple languages across Internet, cable, satellite, radio, IPTV and mobile platforms. It expects to launch in the US market in 2007/8. In 2003, Goldman Sachs Urban Investment Group made an investment.

Trace celebrates the 10th anniversary of the death of Christopher Wallace, aka The Notorious B.I.G,

Read - Universal Music Group (UMG) to Invest in Alliance TRACE Media (TRACE)
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Stealth Mode Data Center Play FastScale Raises $6.5M And Other Fresh Deals

Investments
+ SAN JOSE, CA FastScale Technology has raised $6.5M in Series A led by ATA Ventures with Leapfrog Ventures and Hunt Ventures. (Stealth mode: technology for scalable web farms & data centers)

+ EMERYVILLE, CA Streamcore has raised $7M in Series B (Application performance and network optimization space)

+ LONDON, UKWebjam has raised £1M from iSource Gestion, a French venture capital firm (Social Networking)

M&A
+ CHALFONT, PA Optium [Nasdaq: OPTM] to acquire Israel's Kailight Photonics for $35M in up-front cash plus a stock earnout of up to $5M. Kailight has raised around $12.1M in VC funding (40Gb/s optical transmission products)

+ TWICKENHAM, UK wickenham<strong>Sonus buys Zynetix for $13M ( IP-based GSM system-in-a-box)

+ AUSTRIA & BELLEVUE, WA UC4 Software is buying AppWorx for an undisclosed sum. (Business application automation and batch integration technology)

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UK-based PayPalish Startup Moneybookers Bought For €105M

London's Moneybookers, an online payment provider and the UK's first FSA-licensed e-money issuer, says that private equity firm Investcorp Technology Partners has bought-out of the company for €105M. The company was 100% owned by Gatcombe Park Ventures in London.

Moneybookers says its processed transaction volume reaching more than EUR2.5B with 3M account holders. Moneybookers customers can pay and at more than 3,500 online shops that are using Moneybookers without entering their payment details. Moneybookers charges never exceed EUR0.50 for sending money worldwide.

So why are people using Moneybookers rather than PayPal or Google Checkout? It seems that Paypal still does not work or work well in a number of countries.

View - Press release

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Q&A With Vinod Khosla

We recently asked alarm:clock readers to mail in questions for VC titan Vinod Khosla of Khosla Ventures, who has been busy lately making investments in alternative energy. Here some top questions with his responses.

Q1 from Scott Eblen, Library House: I'm interested in hearing Vinod's thoughts on the unintentional effects of the heightened demand for clean technology. One specific example of this is the new competition between "corn as a food" versus "corn as a fuel". The impact of US ethanol demand on Mexican tortilla prices was a dramatic example of how this can play out. I've outlined this situation and some alternative solutions here if you're interested in background:

Vinod Khosla: "I think the effects are widely overstated in their impact – moreover, most of our proposals advance beyond corn-based ethanol in the long run, towards usage of biomass, waste, algae and other items where fuel isn’t competing with food for resources. A lot of what we propose is an addition to current production, not a replacement of its current usage. Mexico’s tortilla crisis has been a function of their import restrictions. The developing world has been asking from reduced farm subsidies and corn ethanol caused a $6b reduction in farm subsidies last year compared to the $3b in ethanol subsidies. This is the main hangup in the Doha round of trade talks."

Continue reading "Q&A With Vinod Khosla"

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Personalized Music Video Startup Fliptrack Does First Funding Round

Ever want to take Michael Jackson's spot in the Thriller video or sing White Snake to Tawny Kitaen? Fliptrack is a newly launched site where users submit photos and video clips that are combined with soundtracks to produce personalized music videos.

With it HQ in Mountain View, Fliptrack has raised around $1.53M in Series A funding led by Mohr, Davidow Ventures with angel investors. It had previously raised $500K in angel funding. The company is led by Derek Reisfield (Vice Chairman, SVP). He was co-founder of Marketwatch, Luminant, and i-hatch Ventures and was the founding President of CBS New Media after the Marketwatch deal went down.

Fliptrack's music library is week. It has only 8 songs in the punk/metal category, for example, and none of them rock. Well, to be fair, You've Got Another Thing Coming, by Judas Priest does rock.

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Coghead Raises $8M For Web Application Builder For Dummies

Coghead is one of new bread of Web application frameworks that is meant to be used by visual designers wh in the past probably felt that they were in over their head with application development Coghead is primary used to create business applications and sets new standards of making business forms creation accessible through drag and drop functions.

Coghead faces competiton from the likes of Dabble DB, Zoho Creator and WyaWorks.

Today, Mountain View's Coghead has raised $8M in second-round funding led by American Capital Strategies led the deal with new investor SAP and they were joined by return backer El Dorado Ventures. Coghead's CEO, Paul McNamara was an EIR at El Dorado. Before that he was BD VP at Red Hat and took part in their IPO lucre.

Coghead says that since launching its public beta program in October 2006, it has attracted more than 16,000 developers with its "No coding required" message.

For pricing, Coghead says: "We're still working on pricing, and will share more with you as we get closer to launch. That said, our pricing will be extremely competitive. We can tell you that we will offer a free trial account, and a subscription model with tiered pricing plans.To give you a rough ballpark, our average user plans will be less than basic cable TV per user per month."

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MobileLime Buys Out Grocery Tech's Cuesol

Watertown, MA's Mobilelime has acquired Quincy, MA's Cuesol for an undislosed amount. Cuesol was founded in the UK as Unipower Systems in 1990 and moved to Quincy in 2001.

Mobilelime sells software to enable consumers to make purchases via mobile phones while Quesol sells technology nteractive shopping and self-service for grocers.

Mobilelime has raised around $15M in VC funding from Ignition Partners, Seapoint Ventures and Oak Investment Partners.

This is Quesol's Cart Companion. Functionality includes targeted marketing, self-scan in the aisle, specialty department ordering from the cart, and personalized location-based coupons.

Quesol's ShopWatch technology uses infrared location beacons that are installed in the ceiling. The second component is a small tracking device that is attached to each cart. These tracking devices receive location identifications from the beacons and transmit them and cart identification.

View - Mobilelime site
View - Quesol site

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Report: DoubleClick Up For Grabs. MSFT Sussing.

Online advertising firm DoubleClick. is exploring a sale and is in talks with Microsoft and other potential buyers including IAC and is seeking a $2B valuation, says the Wall Street Journal.

The New York-based company has retained Morgan Stanley to find a buyer, or take it back to Wall Street for another IPO. The company was taken private and is majority-owned by San Francisco private-equity firm Hellman & Friedman.

If the effort indeed works, Hellman & Friedman will look smart. They bought DoubleClick in 2005 for approximately $1.1B, then sold off a number of divisions and brought focus to the business. DoubleClick has sold its e-mail marketing service for about $90M and in December agreed to sell its Abacus data-management and analytical unit to Alliance Data Systems for around $435M. It also doesn't hurt that the online ad business is peachy but many online ad observers have been impressed with the resurgence of DoubleClick.

We think this would be a smart move by Microsoft for a number of reasons. DoubleClick has many of the pieces that Microsoft lacks including ad server know-how, long-term relatioinships with publishers and advertisers. DoubleClick has also been working on technology for the next generation of Internet advertising including video. And as the Journal reports, Google is expected to get into DoubleClick's brand advertising kitchen soon so the timing would be great for both companies.

Here is a complimentary opinion from AG Edwards:
"DoubleClick provides a web-publishing platform for Internet ads that we believe would provide a boost to Microsoft's online services ambitions which have so far been lackluster. According to the (WSJ) article DoubleClick is seeking at least a $2 billion valuation and has about $150 million in annual revenues. This would be far less a purchase of Yahoo! by Microsoft which has been long rumored and feared by investors, though Yahoo! has a much broader portfolio that DoubleClick."

The flipside argument is that Microsoft has also put a great deal of effort into developing its own system, and so could go it alone. It has dedicated $2.4B to building out AdCenter. However, DoubleClick itself has bought competitive ad servers, including Falk eSolutions in Europe recently. In this market you are really buying the relationships.

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DigitalFuel Raises $5M For Service Level Agreements

Digital Fuel has raised $5M from Apax Partners, Benchmark Capital, Israel Seed Partners and Sigma Partners, according to a regulatory file unearthed by SiliconTap. This is a pretty mature company so we are surprised that the size of the funding is so small. Digital Fuel sells Service level agreement management and service cost management to Global 2000 companies.

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Office 2.0 Best In Show Smartsheet Raises Angel Funding For Project Management Tool

It can't be too much fun running business applications software company these days. Any number of small startups are replicating your functionality and making it more Web friendly and less expensive. One of the darlings of last week's Office 2.0 event is Bellevue, WA-based SmartSheet, which tells us that they have raised a round of angel funding and is presently reviewing candidate investors for its next round of financing to execute its 2007/2008 growth strategy.

We think the company has what it takes to raise an strong round. This is not a piece of functionality masquerading as a real company. It has a strong management team, many of whom came from Onyx Software. The product gets favorable reviews and has plenty of functions, which are growing by the month. And pricing ranges from free to $150 (if you are a storage pig.) The one downside that we can see is that the software is important enough that as a buyer we would want to make sure that the company is stable.

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Newly VC-Backed Natpal To Move Yellow Page Advertisers To Net

A year ago, a 20-something Wharton Business School student had this Q&A session with a VC panel:

The venture capitalist, wearing an open-necked shirt and sitting with his arms crossed, cuts in. "You're up and running?" he asks.

"Yes, we have about $500,000 in sales."

"What's your cost per client acquisition?"

"About $300. And we have about an 85 percent retention rate."

The company was Natpal.com, a Wharton Business School incubated, and now a VC-backed start-up that says it is poised for a major national rollout. The startup says that in its phase 1 sales launch it validated the business model by acquiring over 250 customers in over 30 business categories in two major metro markets. Phase 2 is to repeat this method in a national rollout to every major US market.

What is did was to comb through the yellow pages and contact local businesses to convince them to move their marketing budgets to the Net using an ROI model. Natpal charges on a pay-for-performance basis. The platform integrates web plus phone analytics with targeted ad-serving to the major search engines and structured content.

Natpal is led by CEO/founder Nathaniel Stevens who was the Wharton School grad and CTO John Merryman who was CTO of Did-it Search Marketing. Bessemer Capital's Alex Ferrara led the investment, which has yet to be announced.

Naptal competes with ReachLocal, LocalLaunch, WebVisible, Leads.com, etc.

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March 27, 2007

Canadian Wireless Broadband Co. TeraGo Thinking IPO

Toronto's TeraGo Networks is considering an IPO that would raise Cdn$30M - Cdn$40M, says Dow Jones. The company sells fixed wireless broadband solutions, VC backers are Dolphin Equity Partners, Dynamic Ventures Opportunities Fund, and Growth Works. Launched in 1999, TeraGo currently has a footprint in 25+ Canadian cities.

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The Week In Tech Stocks

Read on a tech:stocker

+ Who says you can't monetize social networking? News' Corp's MySpace revenues are at $30M per month and it expects that to double within a year, with good margins to boot.

+ Intuit cancels Electronic Clearing House buy-out. Shares of Electronic Clearing House [ECHO] took a 35% faceplant after the company disclosed a federal investigation into certain customers and said its merger with Intuit [INTU] has been terminated.

+ How Intuit blew it. Shares in Intuit (INTU] fell after its quartelry earnings report as the company is losing share in the tax prep software category as more consumers shift to Web-based filing from using packaged software.

+Thanks World of Warcraft: Retailer GameStop kicks quarter in high gear. Video-game retailer GameStop [GME] bot beat analysts' fourth-quarter expectations and guided the Street higher for its current quarter and new fiscal year. The top seller for Gamestop was World of Warcraft, which sold 850K units in January alone.

+ Rumor Watch: SAP to buy Amdocs. FTN Midwest Securities says they are hearing about a potential deal in which SAP would buy Amdocs [DOX] which today has a $7.6B market, but which might start rising if the rumor has legs.

Apple iTunes Movies Has Just 298 Movies. For all the hulabaloo over iTunes video, selection is about as rich as what you might find on the thin video rack at 7/11 or CircleK. Bottom line, if you are counting on iTunes video to represent yet another major revenue stream for Apple, think different.

+ Openwave's [OPWV] CEO ejected and the wireless company is up for sale. The CEO is gone beacuse the company whiffed with its earnings by a mile.

+ Like AppleTV? Don't Buy AAPL, Buy Chip Suppliers. Analysts at Caris & Co. explain that Broadcom (BRCM), Nvidia (NVDA) and Intel (INTC) are providing the guts for AppleTV. Broadcom supplies the wireless chip content. Intel has three chips inside and comprises the greatest dollar. And Nvidia has the second-biggest chip in the box with as much $20 worth in each box If 2M AppleTV’s ship in 2007, it would be worth $40M to Nvidia.

+ Why GOOG 1/4 may be better than expected. Google’s first quarter is tracking ahead of estimates, says JP Morgan, which now says that Google is on track to grow global query volume 15% sequentially in the quarter, rather than the 13% street consensus. JP Morgan disputes claims that Google's market share has not been hurt by Yahoo’s new Panama search platform.

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Israel's Hiro Media Launches/Angel Funded For This Year's Video Ad Model

Established in 2004 in Israel, Hiro Media has developed ad-supported video download. Consumers download videos for free while content owners generate advertising revenues. Of course it includes analytics and payment features. The company does downloading instead of streaming, due to better quality it argues, lower cost, and offline viewing.

To date the company has lived in obscurity but is says it is active with Jetix Israel and promises to soon be launched with major content providers in the US, Australia, Holland and the UK.

+ Hiro's ads are targeted to the user. Two users who will download the exact same file could view it with different ads.

+ Hiro's ads are dynamic and change between viewing – each viewing generates different ads.

+ Hiro ad-powered videos will continue to get distribution via P2P services.

The company's co-founders are Ariel Napchi and Ronny Golan who previously founded AIM traded Valis, which had raised VC funding from from Pitango VC and AOL.

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Burda Takes Stake in German YouTube Sevenload And Other Fresh Deals

Investments
+ GERMANY<Burda Digital Venture, the German media company's venture arm has taken a small stake in Sevenload GmbH. There was no disclosure on the size of the investment, but the corporate finance team said it is "one of the largest Web 2.0 investment in Germany to date". (Video portal)

+ CLEVELAND, OH Thin Battery Technologies has raised $6.2M in Series A (Printed power source)

+ LONDON, UK Streetcar Raised £6.4M and plans IPO by year end (Pay as you go car rental business)

+ PHILADELPHIA, PA Sanovia has closed a $3M Series B investment (Pharmacy cost managment software)

+ UK ZBD has raised a further $20M in private equity funding (Electronic point of purchase solutions - ePaper)

+ GERMANY Experteerhas raised a second round of investment of an undisclosed amount from firm BV Capital and Wellington Capital Partners (Web-based executive recruitment platform)

+ FINLAND CapMan made an investment in, and acquired 3i Group’s stake in, Novintel. No financial terms were disclosed. (Custom market intelligence)

+ LONDON, UK C Squared raised £250K from The Capital Fund. (Publisher and event organizer for the advertising industry)

+ ALPHERETTA, GA Compliance 360 has secured $1.1M of a $2.2M Series B round (Enterprise compliance software)

M&A
+ NEW YORK, NY NYTCO’s About.com has acquired UCompareHealthCare.com for an undisclosed amount (Health care ratings)

+ FRANCE WebWag has bought Mobease (Mobile widgets)

+ SOUTH PLAINFIELD, NJ Finisar [Nasdaq: FNSR] to acquire Kodeos Communications for $7M in cash, plus the possibility of up to $3.5M in earnouts for shareholders and employees. Kodeos had raised around $24M in VC funding from Highland Capital Partners and JVP. (Optical transponders)

+ PERTH AMBOY, NJ U.S. Starcom (Pink Sheets: USTA) has acquired Mundetel. Mundetel generates $8 - $12Mm a year in revenues. U.S Starcom paid 3.8M shares of its stock and
$400K in cash. (Telecom services to the Hispanic market).

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Handheld Continues To Rollup Sites On The Cheap With Unoriginal.co.uk Buy

San Francisco-based HandHeld Entertainment has acquired UnOriginal.co.uk, a user-generated media site, for $500K. The deal is split between cash and HandHeld stock. HandHeld says that UnOriginal.co.uk gets 900K unique visitors per month.

Unoriginal is one of the myriad amateur viral video sites that build traffic through link exchanges. Its a smaller version of the eBaum's Worlds and aBums Worlds of the world. Many of these sites are hard to get advertising interest, except at the lowest payout levels. Apparently Handheld things it can improve on that.

+ In Febuary, Handheld bought Putfile For $7.1M.
+Last December, it bought YourDailyMedia.com for $1.06M.
+ In November, it bought Dorks.com in a deal worth $1.5M.

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Formotus Wins Angel Funding For Wireless MSFT App Builds

Wireless app enabler Formotus has launched in time for CTIA. Formotus' software as a service enables non-technical workers to create applications for their wireless mobile devices that integrate with Microsoft Office. It charges $10 per month per device, but it plans to raise that to $35.

The Seattle company's co-founder is Joe Verschueren who had founded ImageX which he took public IPO in 1999. His co-founder/CTO is Adriana Neagu, who worked on wireless data for a decade at Microsoft.

The company has raised angel funding, says the Seattle PI, from former VC Elwood Howse, Oracle engineer Roger Bamford and Microsoft researcher Gordon Bell. It plans to raise Series A shortly.

There is no shortage of competition in wireless application platforms, but Formotus says it coziness with Microsoft give it an edge. Dexterra recently raised $36M, Gearworks raised $21M+ while Airclic raised $12M+.

Read - Formotus to launch mobile software at CTIA (Seattle PI)

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Job Board's Beyond.com Raises $13.5M First Round

From our vantage point, the job search business is changing quickly to the detriment of the big portals like Monster and Hotjobs, in favor of niche portals. Beyond.com has quitely been building a nice business since providing the software for niche jobs boards.

Today, Safeguard Scientifics [NYSE: SFE] which does growth-stage deals said it provided $13.5M in first round to Beyond.com. The King of Prussia, PA company claims that it powers 15,000 communities and attracts on average more than 3M unique visitors per month. Among the sites that it powers are: Network World, PhillyJobs.com, and SeattleJobs.com.

Some of the sites in Beyond's 15,000 strong network

As competition, Beyond.com competes with newer but well funded business like Indeed.com and SimplyHired. The a:c works with a competitor called Jobthread.

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Salesforce Customizer Verticals onDemand Angel Funded

Pleasanton, CA's Verticals onDemand has raised an undisclosed amount of Series A funding from individual angels. The recently launched company sells industry-specific CRM solutions delivered on Salesforce.com. The company will have an initial focus on global biotechnology, pharmaceuticals, and medical device companies. The type of functionality that the startup provides for this market includes:
+ Call reporting, PDMA-compliant sampling, and signature capture on mobile phones and tablet PCs
+ Aggregate spend, expense capture, and state compliance reporting
+ Closed loop marketing and campaign management
+ Medical information request and patient reimbursement support

Craig Ramsey is co-Chairman of Verticals OnDemand and board member of Salesforce.com. The company's CEO is Peter Gasner who was SVP of technology at Salesforce from 2003 – 2005.

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BestBuy M&A: This Time Its DSL/VoIP's Speakeasy For $97M

BestBuy's [NYSE: BBY] acquisition of GeekSquad has been a financial success for the company and it is hoping to follow on with a buy-out of Speakeasy. BestBuy has paid $97M or 1.2X Speakeasy's 2006 revenue of $80M.

Founded in 1994 in Seattle as an Internet cafe chain, Speakeasy has morphed and employs 300 people and more than 40K customers.

Speakeasy was backed by BV-Cornerstone Ventures, Granite Ventures and 3i but given the multiple paid here this seems like one where they are just happy to get it off the books.

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MSFT Spinout ZenZui Launches With VC Funding

ZenZui, a Microsoft spinout, has raised around $12M in Series A funding from Oak Investment Partners and Hunt Ventures and has received Microsoft IP. The company's exec team is lead by some old MSFT hands.

ZenZui is a mobile browser that aims to make Web navigation on mobile phones easier through widgets. The problem they are looking to solve is how to get more nav items or buttons placed on the small screen. ZenZui is launching with 36 buttons, powered by its launch content partners including: Zillow, Eventful, Kayak, Razorfish and Traffic.com. But it plans to have 1000+ buttons. The business model is for ZenZui to do an ad rev share with content providers.

Early reviews of ZenZui have not been terribly positive:
"The implementation idea by ZenZui: atrocious, if the early indicators from the company are true. Instead of trying to open up the mobile UI and deck, this is a typical Microsoft-closed-ecosystem that only the software giant can dream up." MocoNews

ZenZui represents yet another Microsoft spin-out, the previous one being the social networking startup Wallop. Other are Vimeo and Inrix. It will be interesting to see how these startups fare.

Read - Microsoft Backs New Mobile Technology Company: ZenZui (Press release)
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CTIA: GoTV Raises $12M From Motorola and Qualcomm

Mobile video has been around since 2004 or thereabouts, but it hasn't taken off yet due to poor content and video quality and handset requirements. M:Metrics says that less than 1% of U.S. wireless subscribers watched video on their cellphones in January.

Still some VCs are bullish. LA's GoTV Networks has raised $12M in Series B funding from Motorola Ventures and Qualcomm Ventures, says VentureWire. The company previously had raised over $17M from Bessemer Venture Partners and Charles River Ventures. GoTV competes with MobiTV which did a $70M C round last July.

Both companies will see competition from Verizon which began selling its new VCast Mobile TV service in a handful of markets earlier this month. Unlike MobiTV and GoTV, which use carriers' data networks to stream video, Verizion uses a separate network owned and operated by Qualcomm that is optimized specifically for video. So it is interesting to see that Qualcomm has invested in GoTV and that Verizon runs GoTV.

Formerly known as V*Star, GoTV made-for-mobile TV programming is accessible via monthly subscription through Cingular, Verizon, Sprint Nextel, Helio, and Boost Mobile. GoTV creates 15 hours of original, made-for-mobile content each week, comprising about 18% of all content that they distribute.

Why we wonder create original content, why not just repurpose and would repurposing give the upper hand to Fox, NBC, Viacom, etc.? Amp'd Mobile President Bill Stone provides that answer, indicating that only 5% of all content available on his network is original, but it accounts for about 30% of all paid content. Furthermore, costs to create and develop original made-for-mobile content are only about $100K to $200K

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Yea We're Brash Entertainment And We're Doing A $150M+ For Video Games

There is so much to cover here with the launch of Brash Entertainment. If and when Brash formerly closes a $150M+ plus round, we expect this will become a huge story and for many to take swipes at the execs for their hubris.

The Founders

Bertram 'Bert' Ellis. Bert Ellis got rich rolling up radio stations. In the dot-com salad days, Bert Ellis was a leader in the get big-or-go-home movement. At iXL's height in 1999, the company employed more than 2,000 people and was trading at $50 a share. By 2001, the company had gone through huge layoff and the staff dwindled to a few hundred and its stock was worth 21 cents a share. After the iXL meltdown, Ellis continued his deal maker ways, investing in startups and buying media properties, including a $150M buyout of an LA TV station.

Thomas Tull. 36 year old Thomas Tull made a small fortune as the founder and former chief of operations for Tax Services of America, which owned more than 500 Jackson Hewitt locations nationwide. He then went to work for a VC firm and later worked for the Convex Group, an Atlanta-based company launched by WebMD founder Jeff Arnold that invests in new media networks.

Tull is now CEO of Legendary Pictures which is backed by a $500M private equity fund. Tull has produced several major films, including Superman Returns, We Are Marshall and the recently released hit 300. He also produced soon-to-be-released feature films Warcraft, a movie based on the video game franchise World of Warcraft. He also has upcoming: Where the Wild Things Are and Kung Fu in 2008 and Trick 'R Treat and 10,000 B.C. in 2007.

Tull is described as painfully media shy and a buttoned down conservative who is a bit of a square peg in Hollywood.

Tull and Ellis first met when they were investors in WebMD. The pair also invested in Massive Inc., a New York-based video game advertising startup that Microsoft bought in May of last year.

Funding Brash
Brash Entertainment has already closed on a $6M round from Ellis, Tull and other investors and has hired 20 employees. A senior Earthlink exec is also names as an investor in this seed round. Brash also claims a term sheet for a $150M round from a major media technology investor and others and the deal should be complete by the first week of April.

The Red Herring heard from Brash's PR team that the funding amount could be much more than $150M. This makes sense given that the cost of video rights for a film like 300 (plus marketing, production, and other costs) would get to $25M or more. If indeed Brash wants to do as many titles as its says, and grow ahead of revenues, it will need more than $150M.

The Business
Atlanta-Los Angeles co-based Brash is developing games that will be licensed with major movie, book and music titles. Potentially in the works is a license agreement to produce a PC video game for "300." Brash is working on five other major titles and plans on producing 60 to 100 over the next five years.

Spin
One blogger, Scott Burkett, who used to work for Bert Ellis has an interesting take on why the company leaked the funding ahead of the formal announcement: "it is possible that the founders were not terribly excited about their 1st term sheet, and so they’re trying to drum up some others. By leaking the story to the press (and getting it on the front page of the Chronicle), they could be trying to create some semblance of a term sheet auction to garner more attention."

Read - My Thoughts on Bert Ellis’ Latest Gambit
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Read - Brash Entertainment: a $150M 'grand disaster'? (Red Herring)

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Spin Hawaii 5-0 Theme Song. Imerium Renwables To Build $50M Biodiesel Refinery In Aloha State

Seattle's Imperium Renewables, which has raised $214M to date, plans to build a $90M biodiesel plant in Hawaii and expects it to be operational in April 2008. Hawaii suffers from the most expensive gas prices in the country, so that might be one reason for building on the Islands.

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Smart Video Surveillance Startup Buys Crimedex Database Of Criminal Masterminds

3VR Security has acquired Amcrin and its CrimeDex networked database of criminals. The CrimeDex database is networked and web-driven provider of alerts and updates in addition to a comprehensive database with 10K criminals and suspects in ongoing investigations. For its part, 3VR is a developer of searchable video surveillance systems. 3VR plans to integrate the CrimeDex database into 3VR products. Terms of the acquisition were not disclosed.

3VR is one of the new wave of smarter video surveillance startups. Last October, San Francisco-based 3VR raised $15M in its third round of venture funding led by DAG Ventures of Palo Alto led the round with VantagePoint Venture Partners, In-Q-Tel and Kleiner Perkins.

Read - 3VR Acquires Amcrin Inc., CrimeDex Database (SecurityInfoWatch.net)

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March 26, 2007

Channel Advisor Hires New CFO To Prep IPO

Research Triangle, NC's Channel Advisor ChannelAdvisor has hired a new CFO as the company readies to add about 100 employees this year. ChannelAdvisor’s has made a lot of money with its comparison shopping engine software that helps retailers streamline the process of getting their products online into the myriad shopping sites via data feeds. Channel Advisor also sells expertise to manage the ROI of the channel with insight into revenues, costs and merchandising.

ChannelAdvisor says it is now processing over $100M/month (or more than $1.2B/year) in gross merchandise value on behalf of its customers. eBay is an investor along with VCs Kodiak Ventures, Southern Capital, and Blue Sky Ventures.

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So Long As Windows Continues To Crash, Marathon Technologies Wins. Startup Raises $12M

After years of suffering through Windows crashes we have made a jump to the reliable Mac. But we know there are hundreds of millions of people who endure on. Marathon Technologies has raised $12M today for its software which protects Microsoft Windows applications from leading sources of downtime. This is impressive for a turnaround. Marathon emerged from bankruptcy protection and reinvented itself as a software company in 2004.

Marathon’s software synchronizes, or locksteps, two Windows servers to create a virtual application environment that runs on both of them simultaneously. If one server fails, the other server enables your application to continue operating without interruption.

Marathon claims 1200+ customers, including hospitals and airlines that really can't afford downtime. Marathon's software costs from $7,500 to $16,000. Marathon competes primarily with clustering software, which often requires complex management, including application modification to make sure workloads are cluster-aware.

Read - Marathon Technologies Continues Momentum with $12 Million in Funding from Leading Industry Investors (Press release)

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Xing Buys Spanish Biz Social Network eConozco

Our sister site alarm:clock euro breaks the story that Germany-based business social network Xing has made its first acquisition since going public with its purchase of eConozco. We have no word yet on how much Xing paid for eConozco, the second largest Spanish social network with about 150K users.

When we met with the Xing folks last month they indicated that they were close to completing a deal or two and boasted that Xing's ability to monetize social network visitors is what sets them apart and why the can justify M&A.

Read - Xing Now Speaks Spanish With eConozco Acquisition (a:c euro)

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Speaking Of AdMob, Casee Is China's Mobile Ad Network

After covering the important funding of AdMob this morning, we came across, Casee Mobile Advertisement Network, which has a very similar model, enabling China’s WAP sites to sell their wireless ad inventory. Payment is on a CPC with an auction where advertiser bid for placement.

We do note however, that AdMob is global out of the box and is offering Geotargetting so AdMob and Casee are already competitors.

Casee was launched in December 2006 and is run by Xin Ye, formerly CTO of Linktone [Nasdaq: LTON} Pacific Epoch repeats rumors that Casee may soon close a Series A round of funding.

Read - The Admob of China

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Eye Tracking Tech's Tobii Raises $14M

Stockholm, Sweden-based Tobii Technology has raised $14M from Investor Growth Capital. Tobii's eye tracking enables a computer to tell exactly where a person is looking. Tobii sells its technology to usability labs, market research companies, web portal companies, software houses and advertising agencies.

This has become an increasingly competitive field that includes companies like Seeing Machines and ClickTale.

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Onstream Buys Infinite Conferencing For $14M Cash + 1.38M Shares

Onstream Media (Nasdaq: ONSM) is buying Infinite Conferencing, which sells audio and Web conferencing, webinar and webcasting services and claims 2000 clients, mostly in the small to medium sized businesses range.

For the year ended December 31, 2006, Infinite's unaudited financial statements reflected revenues of approximately $6.1M, with net income of approximately $23K, after a deduction for founder draws
of approximately $2.3M. Infinite has shown revenue growth of 38.5% for the past year.

Onstream Media will pay $14M in cash and approximately 1.38 million shares of Onstream Media stock. Onstream Media arranged a private equity financing totaling $11M, to fund the transaction, consisting only of the sale of Onstream Media restricted common stock at $2.25 per share.

New Jersey-based Infinite competes with Webex, MSFT's Placeware and a number of other conferencing companies.

Read - Onstream Media to Acquire Infinite Conferencing (Press release)

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Electron Beams No Longer A Science Project. Startup Raises $17M+

Wilmington, MA-based Advanced Electron Beams (AEB) has raised $17.47M in Series B, according to a regulatory filing noted by PEHub. Rockport Capital Partners was joined by return backers Atlas Venture and General Catalyst Partners. The company had raised a $10M Series A round in 2005.

AEB claims 40 customers which use AEB products for a range of applications across sterilization, pollution abatement, curing and polymer treatment sectors. The company projects these future uses across a range of advanced applications spanning from the destruction of airborne viruses and bacteria, generating hydrogen for fuel-cell vehicles, treatment of seeds to improve yields, extending the shelf life of food, the modifying recycled tires into high quality engineered plastics, to the removal of hazardous gases such as nitrous oxides from fossil-fuel burning power plants.

Electronic Beam Emitter Used For Sterilization

CEO Michael Tyson has the background to take this company public. He was CEO of PRI Automation, a publicly traded corporation, that supplied automation systems including hardware, software and services for the semiconductor industry.

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Read on for an electron beam primer...

Continue reading "Electron Beams No Longer A Science Project. Startup Raises $17M+"

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Discera Raises $17M And Other Fresh Deals

Investments
+ SAN JOSE, CA Discera has raised $17.5M in Series C funding led by Scale Venture Partners (Silicon resonators for the frequency and timing control markets)

+ ATLANTA, GA ControlScan Raises $1.8M (Security)

M&A
+ DENVER, CO Avanquest Software has bought SendPhotos Terms of the deal were not disclosed. It claims 30K subscribers and plans to launch a wireless service. (Online photo-sharing)

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Report: News Corp./NBC JV Bad Deal For Video Startups

We have been trying to understand how the News Corp., NBC Universal joint venture might affect other video startups. We read several opinions today:

David Clark, a managing director with online media specialist/investment banking firm Jordan, Edmiston Group: "When the big players agree to play together, there's automatically less need for the smaller guys," said Inc. "There's room for other players, but they obviously don't have as much to offer."

Forrester Research analyst Josh Bernoff: "To the extent that this creates an efficient use of one set of servers powered by NBC and News Corp., the deal could take some of the air out of peer-to-peer."

Read- What Of Joost, BitTorrent If NBC/News Corp. JV Succeeds (Online Media Daily)

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Web Debit Card's Payoneer Raises $4M

Founded in early 2005, New York-based Payoneer has raised $4M in Series A funding. Greylock Partners led the deal, and was joined by seed backer Crossbar Capital plus some angels.

Payoneer is being marketed as a way for parents to give their kids money in credit card form without the risks of them running up big debts as they can only spend what you put on the card. It is also a substitute for travelers checks. Moreveover, Payoneer's prepaid debit cards does, co-branding, placing a company's logo on the cards. Payoneer also provides a white-labeled payout site that allows a company to continue communication with its payees after payment was made. The payout site can include a customizable online account management tool for the cardholder to check their balance and account activity online.

"The Internet payout space may well become a killer application in the next few years as Internet companies transition to smarter ways to pay out their partners around the globe," aid Moshe Mor, partner at Greylock Partners.

CEO Yuval Tal was with a startup called E4X and before that was VP business development at RADWARE.

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Khosla Invests In Email Analytics Firm Xobni

San Francisco-based Xobni has secured $1.5M of a $4.26M Series A round led by Khosla Ventures, according to a regulatory filing pulled by PEWire. The company was originally seeded by the incubator Y Combinator. Pre-launch Xobni promises an Outlook plugin that tracks email analytics so that power-users can more easily can or specific contacts, threads, or emails by times of day. Xobni says they will help you understand:
+ How do you use email?
+ How much time do you spend reading and writing emails?
+ How quickly do you respond to emails?
+ What time of the day is best for contacting busy people?
+ What time of the day do you receive your most important email?
+ How much time do you spend reading mailing lists?

We are not sure what is the revenue model here but are guessing there will be a free trial followed by a licensing fee and perhaps some enterprise pricing as well.

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Spire Capital Buys SalvageSale

Spire Capital has acquired Houston-based SalvageSale, and online marketplace for commercial insurance salvage and corporate bankruptcy managers. The amount of the buyout is unknown. In 2000, SalvageSale raised $17M in second round from Securitas Ventures, Merrill Lynch Ventures; and American Re-Insurance Company.

Our guess is that this business has really been hurt by eBay, as there are very few items for sale here. Back in 2000 when investments were made, investors did not believe that eBay would have the success with high end items as it has.

Cat Excavator For Auction on SalvageSale

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In The IPO Bullpen, It's Aruba And Comverge

Aruba is being cast as a test for investors appetite for IPO risk. The wireless networking start-up Aruba Networks has never turned a profit and it competes head to head with Cisco among others. Aruba lost more than $12M in 2006 compared with $32.6M in 2005. The company did increase revenue to $72.5M in 2006 from $12M in 2005. f priced at the top of a forecast range, the company could raise $80M and give it an initial market cap of $752M.

Comverge is a smart meter company whose products are used by electrical utilities. It has set its planned initial public offering at 4.7M shares for $15 - $17 per share. The underwriters are led by Citigroup and Comverge is planning a Nasdaq listing under the symbol "COMV."

Comverge, which is based in New Hanover, NJ, did $24M in revenues last year with $9M in profit.

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Mobile's AdMob Pours $15M From Top Shelf Investors

Sequoia seems to be enamoured of its AdBrite investment as AdMob looks a lot like AdBrite. Like AdBrite, AdMob is an open marketplace where any publisher can sell his mobile ad inventory. When we first covered AdMob, we were taken aback by their claims of ads served. The number keeps getting bigger as it claims over 1.6B ads served in less than a year and it now says it has more than 1200 publishers.

Today, San Mateo's AdMob has raised $15M in Series B funding led by Accel Partners led the deal and joined by return backer Sequoia Capital.

To some extent, Admob competes with Screentonic, Medio, ThirdScreen Media as well as Google.

AdMob's leadership is provided by Omar Hamoui, CEO and Founder. He previously founded Fotochatter: a mobile to mobile image sharing network that he ran for 11 months from March 2005 – January 2006. Before that he ran HerBabyShower for 2 years and GoPix for a bit over a year.

CEO Omar Hamoui Bangs The Gang To Celebrate 1B ads served

We have to say we are impressed with the maturity of the company's ad server. AdMob lets advertisers target by country, language, carrier, phone brand, phone model, behavior and OS. This is all standard for web servers but they had to build their ad server from scratch.

Read - AdMob Closes $15 Million in Series B Funding

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Office 2.0 Winner For Best Web Sharing: Conceptshare

At the Under The Radar Office 2.O event on Friday judges and the audience both voted ConceptShare the winner in the web sharing catagory. The way we view ConceptShare, its a Web-based white board to help suits, geeks and creatives to visually communicate with each other.

We got in touch with the ConceptShare folks up in Sudbury Canada (outside Toronto) to inquire on how the company is doing financially and learned that it has raised $500K a angel funding from an un-named, local Sudbury investor. That should buy the 3-4 person outfit a year or so to grow revenues or raise another round. The company has been a darling of the Techcrunch crowd so it is received a great amount of free exposure.

ConceptShare is certainly a product that we could see using as we are pretty lousy truth be told at explaining to creatives what we want our dream sites to appear. And when we do get v 1.0, we are more often than not pissed that the creative could be so far off base.

ConceptShare is well thought through. Comments and markups can be applied to each page, or each part of a design. With forward and backward arrows, you can read what your tech or creative had in mind at each step of the way.

The service is free to try for a single workspace. Or users can start paying, depending on number of workspaces, number of account managers, workspaces and storage. Security is higher for the paid service and, at the upper levels, your own site branding can be used. Monthly fees range from $19 to $199. Another feature that Conceptshare is offering is an expert directory. The company promises that topical experts will soon offer their design consulting services for a fee inside the community.

Design and Review of Merchandize and Web sites

Business Cards or T-shirts

Toy or Retail Design

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March 25, 2007

Disney Invests in Tween Social Networking Biz Imbee

Steamboat Ventures, the VC arm of the Walt Disney, has made an investment in Industrious Kid, which built the tween social networking site Imbee.com. Imbee has also officially launched in Beta. We covered Industrious Kid last March when we reported that it had raised $6M in its Series A round of funding.

The first round included an investment from Steamboat as well as from its wealthy co-founder Jeannette Symons. Symons owned a large stake telecom networking's Ascend Communications, which was to Lucent Technologies in 1999 for $24B.

Imbee is designed for kids from ages 8 to 14. Functionality includes: avatars, blogs, messaging, photo sharing, Invitation access, points that can then be redeemed for prizes or rewards at the Imbee store. Imbee has teamed up with the Disney division Hollywood Records so that it will be able to offer song downloads to its membership. And of course keeping the site child-safe through user verifications is a big deal.

Imbee has a formidable competition from Club Penguin, which we recently profiled. Club Penguin targets the same demographic and had 4M visitors last January alone. Imbee says it has attracted nearly 25K active members since its launch.

Read - Creator of tween social network nabs Disney VC investment (CNET)

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March 23, 2007

VoxPop.TV Funded For Entertainment/Sports Contests

An a:c frat bro Mike "Scrape" Derezin has won angel backing for his contest startup Voxpop.tv. So you know we are biased here but the UI is sweet. We played their basketball conference contest and its the best basketball bracket we have seen.

VoxPop says it is also publishing its games on third party sites, such as Entertainment Weekly and CBS Radio. The UI must have impressed investor David Shen given that UI is his bread and butter.

The online contest model is one of the bigger trends that we have been tracking. We have profiled a few other contest companies that have raised funding including:

+ Singing Superstar

+ How Famous

+ King.com

+ Atomic Moguls

+ Major League Gaming

+ Threadless

+ Mobile2Win

It is interesting to note that Yahoo bought the contest startup Bix.com for an undisclosed sum last November. Given that VoxPop.tv's seed investor is a Yahoo man, he must see that there are plenty of ways to skin the online contest cat.

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SF's Pre-launch Casual Game Maker Outspark Gets VC Twitch

OutSpark has won Altos Ventures and Doll Capital Management as investors, notes silicontap.com.
Angel investing came from former Yahoo VP David Shen. We know next to nothing about the venture other than that it will publish casual games.

Outspark Games Screen Shots

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Seattle's Stealth Mode, Semantic Web Startup Hypertext Solutions Raises VC Dollars

"Hypertext is building the first Internet application to tap the potential of "intelligent" data on the Web." That's a bold statement.

Steve Hall at Vulcan Capital claims credit for investing in Hypertext but won't say much more than the obvious: they need dudes to code. Here's a bit more: "Hypertext is actively looking for a range of engineering talent in the areas of advanced data modeling, machine/artificial intelligence, large-scale systems management, data mining/filtering, and Javascript wizardry."

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Rooftop Comedy Gets Chuckles From Angels

San Francisco-based Rooftop Comedy has raised an undisclosed amount of angel funding for its Web-based live comedy channels. Last year the company won best investment idea at Investorfest 2006. We don't much like stand-up comedy but other are and it does seem like this could be a financial laugh-riot if they can do the marketing right.

The company was founded and is run by Will Rogers (funny name) who was a SVP with the Web Development shop Icon Media Lab.

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GetThere Founder Launches Carbon Cleansing Startup Climos

Dan Whaley was the founder/CTO of GetThere which launched in 1994. He stayed with the company through its 1999 IPO and to its eventual sale in 2000 to Sabre for $750M in cash. We imagine he has enough cash then to bankroll the seed of Climos, a San Francisco-based climate company dedicated to leveraging natural processes to remove carbon from the atmosphere. Its not yet clear how this will work but the firm today announced a stellar group of scientists have agreed to sit on its advisory panel.

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OnTheFly: Online Retailer For Male Fancy Pants Goes Real World

We have been reporting on several eCommerce fashion sites that cater to women. Here's one for me - San Francisco-based OnTheFly. The general idea is that men or women buying gifts can find anything they need here from shoes to cigars for the Wall Street guy to the sportsman.

The company started out as a Web site for dandies but the company recently opened a bricks and mortar retail location in the SOMA district of San Francisco and there are plans to open another store in the financial district that would have a wine cellar and place to smoke cigars. Launched in 2004, OnTheFly says that profits tripled from 2005 to 2006 and its on-pace to quadruple profits in 2007.

The company's founder is Ami Arad who was previously a sales guy at Blue Martini Software. Advisors include Martin McClannan who was CEO or Red Envelope; Chip Conley who is CEO & Founder of Joie de Vivre Hospitality, a 20+ hotel company; and Rob Giglio, CMO of Art.com.

This cashmere sweater is marked down from $340 to $85 Sold!

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On the topic of urban male lifestyles, Ben Lerer who founded the Thrillist writes in after a recent post on his company and its competitor in the urban male lifestyle media biz, to let us know that his company is thriving.

Ben says hey have over 60K daily subscribers across three editions (NY, Nation, Los Angeles). Thrillist, which is funded by Bob Pittman says it is now profitable and has a staff of 7 full-time employees plus two-part timers that are supported by our revenues. And they have over 75 advertisers. To be fair, this is clearly a nice business and they are certainly pulling in more than the a:c does. Our point in the post was that new behavioral ad technology should allow advertisers to reach affluent male shoppers whichever site they are on.

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Audible Magic Clearing The Table By Cleaning Up Copyrights. But Attibutor Is Looming Competition.

Over the past week we have heard a lot about a Silicon Valley startup called Audible Magic. That's because with each passing day we get news of major online media companies feeling the pain through accusations of copyright abuse. Google's YouTube felt is this week with the launch of the new anti-YouTube consortium and today Microsoft shut down its Soapbox video service while it cleaned up its copyright protection act.

Audible Magic scans online files for copyrighted material, checking against its database of audio and video content published by recording, movie and TV studios. After analyzing the digital fingerprints, Audible Magic determines whether the material has been authorized to be shared or not.

Audible Magic is primarily backed by a small Naples, FL, venture capital firm, Tierra Del Oro, which has invested an undisclosed amount of seed capital in the company. The VC firm is run by Addison Fischer who is Chairman of SmartDisk (NASDAQ: SMDK) and who has also made VC investments in RSA, Oak Technology and Verisign.

Sitting in the cat-bird seat is a startup called Audible Magic which has been selling its copyright cleaner tech to sites at risk like Sony's Grouper, Myspace, Break.com, Microsoft's Soapbox channel, and Revver.com. YouTube may me using Audbile Magic but will not confirm the story.

Audible Magic competes with Gracenote, Advestigo, Auditude, Attributor and Vobile.

Redwood City-based Attributor in December closed Series B for a total funding amount to date of $10M. The latest round was ed by Sigma Partners, the round also included previous investors: Selby Venture Partners, Draper Richards, First Round Capital and Amicus Capital.

The company's co-founders are former Yahoo exec Jim Brock, and Jim Pitkow who sold Outride to Google and last year sold Moreover Technologies to VeriSign (he was Chairman of both companies).

While it is well behind Audible Magic with clients and experience, Attributor claims to go further. The company says it will has over 10B Web pages that it can scan for copyright infringement.

Read - Audible Magic on Copyright Patrol (AP)

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The Onion Invests $1M In Fake News Video Biz

Overshadowded by the launch party for the new YouTube killer by NBC, News Corp., et al was the launch of Onion New Network (ONN), a site that parodies CNN. ONN plans to initially deliver 2 short video segment per week.

ONN promises TV news that is "Faster, harder, scarier, and all knowing." Dewer's Scotch (a poor blend that tastes like Theraflue in our opinion) is the sponsor of the launch.

TheOnion.com's 2006 ad revenues were a respectable $18M. The company says it has invested $1M in the new video venture, which includes a head count bump of 15.

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Will The a:c Cover Megabuzz? What-Will-Happen Social Network Launches With Angel Funding

If you had predicted yesterday that the a:c would cover MegaBuzz, you would now have gained some more points, which you can accumulate to win some prizes. MegaBuss is in open beta mode and has been funded with $175K (says the Seattle PI) which was led by Seattle-based angel investors including Erik Blachford, ex-CEO of Expedia. The company was founded by former Expedia techs Ashish Pandey and Joe Wild.

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Mojo Lost Watch: SingingFish and Docusign

TrenchMice, which offers a new take on F@*#ed Company with community input on how tech companies are faring, the good, the bad, and the ugly. Here are some prominent posts with news that we were not aware of.

AOL layed-off all employees of a startup that it bought called Singingfish, the discontinued the service. Singingfish was an audio/video search engine that powered av search for Windows Media Player, RealOne/RealPlayer, AOL Search, Real Guide, Dogpile, Metacrawler and Singingfish.com, among others. Launched in 2000, it was one of the earliest and longest lived search engines dedicated to multimedia content. It was acquired in 2003 by AOL.

Given how hot is the market for Video and video search, it it amazing that AOL screwed up a company that was first to market.

Over at Docusign, whose electronic legal paper filing system we have used and liked, founder Court Lorenzini has been formally removed as CEO, plus 1/3 of the company was laid off. Lorenzini was replaced by Matthew Schiltz. Lorenzini's name continues to appear on the site as a VP.

Just last April, DocuSign raised $10M from Sigma Partners, Frazier Technology Ventures and Ignition Partners. Total financing comes in at $16.1M.

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Mobile Dating Startup CrushorFlush Gets First Round Funding

Seattle's Icebreaker raised initial funding for the launch of its initial site, Crush or Flush from a combination of angel investors and Lightspeed Venture Partners. Icebreaker says it is the first company to do mobile dating but over in Europe we have been tracking the highly successful Flirtomatic, which garnered 250K users in short order.

The founders, Michael Robinson and Eric Hennings, met at Microsoft. Robinson founded a community Web site in China called renren Media, a public company in Hong Kong that was partially funded by News Corp. The startup does its development in China.

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Alt LinkedIn Launched In Seattle: Biznik

We have been wondering when we would see more business social networks to compete with LinkedIn, as well as Xing in Europe. Now we find Biznik which calls itself "a social network of bootstrapping entrepreneurs and indie professionals." Like Xing, the startup looks to merge online networking with happy hour chatter.

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Oracle Buys Web 2.0/SOA Infrastructure Co. Tangosol

Oracle says it is buying Tangosol for an undisclosed amount. Tangosol is privately funded but does not appear to have VC backing. Tangosol's in-memory data grid software increases application performance by providing distributed access to frequently used data. Oracle will package Tangosol with Oracle Fusion Middleware, Oracle TimesTen and Oracle Database.

Read - release

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Wales' Enfis Does AIM IPO And Other Fresh Deals

Investments
+ GERMANY Smava and OneToMoney raise angel funds (P2P lending)

+ OLDSMAR, FL Fortress Technologies has raised $4.17M in Series E (Wireless network security solutions)

+ INDIA IDG Ventures India has invested $2M in Manthan Systems (Software product firm focused on business intelligence and analytics in the retail segment)

M&A
+ NEW ZEALAND Cre8 has bought Brazil'sMobile Development Limitada for an undisclosed sum (Production and distribution of content services to mobile operators)

IPO
+ WALES Enfis has raised £4.5M on London's AIM (LED-based light engines and arrays)

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After The Recap, Convergence Networking's Reef Point Raises $25M

Burlington, MA's Reef Point Systems has raised $25M in its second round of funding since a 2005 recap round led by One Equity Partners led the deal. Reef Point last raised $21M in funding in June 2006, at which point it brought on its 5th and current CEO.

The company sells gateway platforms for fixed-mobile convergence networks with a particular focus on providing security. Azaire Networks and Tatara Systems as well as session border controller like NextTone Communications and Netrake are its main competition. Of course Cisco is here as well. Its key partner is Alcatel, which is an OEM partner.

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