September 21, 2007
Rural Broadband's Conterra Raises $41M
At a time when big cities are throwing in the towel on municipal wireless services, companies that are bringing the real internet to America's heartland have been going gang-busters serving business in rural areas as well as consumers. Charlotte, NC-based Conterra Ultra Broadband has raised $41M in a round led by an undisclosed financier. Also participating were DukeNet Communications (subsidiary of Duke Energy).
Conterra sells its boadband connections and wide area networks to education, healthcare, business, government, and carrier customers in under served communities.
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September 14, 2007
1 of first 10 Google Employees Launches Imo.im
Palo Alto-based Imo.Im has been founded (and funded) by one of the first ten employees at Google and says it is advised by several early Googlers. Imo allows you to chat with your friends on instant messaging clients from one spot. You can also create group chats between buddies from any of your messaging services. As one reviewer pointed out, this particularly helpful for people who use GTalk, since they it doesn't have a group chat function available. The company has also launched a Facebook app version.
Image via
Imo will face comparisons to Meebo and eBuddy which has been out much longer and has many more users and features. But Imo is just in Alpha and surely have some ideas on how to zig where Meebo zags. Ralph at Imo just says: "We plan on offering a variety of features that go beyond basic IM."
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September 12, 2007
3D's Canesta Raises $10M More
Sunnyvale-based Canesta appears to have been ahead of its time. The startup sells 3D technology into various industries: automotive, security, factory automation and robotics. To date the company hasn't announced much in the way of clients (although a year back Honda announced it would use Canesta's technology) but it does need more funding to stay afloat. Canesta has secured $10M of a $24.4M Series D-1 round, says PEhub. Return backers include Apax Partners, Carlyle Venture Partners, Korea Global IT Fund and Venrock. The company had raised over $40M in total VC funding.
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July 17, 2007
Yipes Goes For $300M To India's Reliance
In the largest M&A transaction its ever made, Indian telecommunications service provider Reliance Communications is buying data communications services provider Yipes for $300M.
Yipes owns more than 22K route kilometers of fiber across 14 US cities. Yipes expects its revenue to grow to about $100M in the year ending March 31. For the past two years the company has experienced 40% year-over-year growth.
Yipes has benefited from the growth of electronic trading, where financial exchanges such as INET at the Nasdaq Stock Market and Globex at the Chicago Mercantile Exchange employ split-second trading strategies. Yipes's network connects buy-side and sell-side traders with the different exchanges.
Yipes has run a long and winding road. Founded in 1998 as Yipes Communications, it raised more than $270M from JPMorgan Partners, NEA, Norwest Venture Partners, the Sprout Group and others. The company filed for Chapter 11 bankruptcy in 2002. It has since raised more than $100M in funding from Crosslink Capital and returning investors.
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July 13, 2007
Net Scam Artist Bilks Investors, Including Mother-in-law, Out Of $21M
Over the past decade, scam artist Brent Kovar's companies raised $22M from investors, including from a group in Kuwait and Saudi Arabia ($13M) to his own mother-in-law ($40K).
Kovar is a real piece or work. One of his big scams - a company called Satellite Access Systems - claims to have had developed technology that could download feature length films in seconds. He duped investors with an impressive demo that he faked. While we feel sorry for investors, this does seem like something that anyone with basic knowledge of Internet technology could see through.
Kovar had all the spending habits of a your scam artist - ellaborate spending on Hummers fleets, diamonds for employees, sky boxes, yachts, and so on.
Read - Invention was too good to be true. Brent Kovar got investors and employees to believe his invention was the next big thing, but nobody's ever seen it. (St. Petersberg Times)
via - Valleywag
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July 09, 2007
IMakeNews Seeks Recap While Competitor Constant Contact IPOs
iMakeNews (IMN) wants to raise $30M - $40M recapitalization, in order to acquire at least one other like-sized company and enable it to partially pay off investors. The company was founded in 1999 and has been well funded but has not been terribly successful. This announcement comes at as time when a comparable company, Constant Contact, is planning an IPO.
Read - MassTech Report
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July 06, 2007
Our Own Email Platform Constant Contact Files IPO
Constant Contact, which sells on-demand e-mail marketing, filed to raise up to $86.25M in a Nasdaq IPO.
CIBC World Markets and Thomas Weisel Partners are the lead underwriters for the Waltham, MA-based company which plans to list under the symbol "CTCT." The company reported a net revenue of $27.55M in the fiscal year 2006, ending last December, compared to $14.66M in fiscal year 2005, an 88% growth rate. However, its net loss grew from $1.23M to $7.84M in that same period.
The company reported an increase in customer base from about 25K at the end of 2004 to more than 120K at the end of June 2007. About 2/3rds of its customers employ fewer than 10 workers.
As users, what does the a:c think of Constant Contact? We'd recommend it. I has extremely strong analytics and is fairly priced. However, it does seem disconected from the new trends online and doesn't have the connections to the web and RSS that it might.
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June 29, 2007
Corporate Email Management Tool iContact Gains Growth Funding
iContact, which sells a corporate email marketing and blogging application, says it has closed a $5.35M funding round led by Updata Partners.iContact says it has 11,500 customers and over 90K users. Revenues last year came in at $6.9M and it has 57 employees.
iContact is a tool used to create email newsletters, blogs, RSS feeds, surveys, and autoresponders for corporate marketers.
iContact is a hosted servce that charges $100 up to $700K per year depending on how many contacts you are managing. iContact's biggest competitor is Constant Contact. iContact was previously called IntelliContact.
iContact founder Ryan Allis was recently interviewed on The Big Idea as he is a very young founder - he launched his first business at age 11 and is now 22.
Read - announcement
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April 27, 2007
Goldman Sachs Goes Whole Hog With Arcadian Networks Putting In $70M To Date
Goldman Sachs has invested another $30M in broadband wireless carrier Arcadian Networks. That means that Goldman is into Arcadian to the tune of $70M.
The company began rolling out its service last April, using licensed 700 MHz spectrum that it acquired from the secondary market for the tens of millions of dollars.
Arcadian's first customer, signed in April 2006, is the Elk River, MN-based nonprofit utility cooperative, which serves about 1.7M people. The final installation of the first phase of the company's network is due to be completed by the end of the year.
Acardian plans to spread its network across the US. From a population perspective it plans to cover about 1/3 of the US and from a square mile perspective it will cover 2/3rds of the US.
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April 26, 2007
China's Akamai - ChinaCache - Closes $32M Round
We are surprised that Akamai is not a bigger deal in China. Akamai has a partnership with china Telecom but that has not slowed down ChinaCache which seems to have already taken all the business. It counts Soho, NetEase, eBay China, SportsCN and many others as clients. If we were investing in Chinese online video, we would want to own ChinaCache. Will the video portals are all trying to figure out how to make money from their massive traffic, ChinaCache is charging them (and their VCs) to manage all traffic.
ChinaCache just raised $32M funding from Draper Fisher Jurvetson, Ignition Partners, IntelVC, Internet Investor Growth, JAFCO ASIA, SIG, Starr International, and Susquehanna International Group.
ChinaCache was founded in 1998. In September 2005, ChinaCache received $8.5M from Draper Fisher Jurvetson, JAFCO Asia, Intel Capital and Investor Growth.
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April 05, 2007
ISP Private Labeler Ikano Raises $25M For M&A
Salt Lake Ciy's Ikano Communication has raised $22.5M in long-term venture debt funding from Hercules Technology Growth Capital. The firm sells managed services, commerce services, and applications services Ikano is backed by Insight Capital Partners and Chicago Ventures.
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April 03, 2007
Saudi Prince Al Hussein Bin Talal Invests $32.5M In Free Directory Assistance Startup
Saudi Prince Al Hussein Bin Talal has invested in Toll Free Yellow Pages in the amount of $32.5M in funding and an additional $7.5M upon met milestones.
Toll Free Yellow Pages has not yet launched (" it is set to launch sometime in the second half of 2007 ") but says it will be offering a free alternative to 411 calls. To pay for for all of those free calls, the company has partnered with DiscountMore.com to deliver consumers comparison shopping over the phone.
The company and investors must be inspired by 1-800-Free-411 from Jingo which surprised everyone by ringing up 100M calls as of last November and now controls 6% of the U.S. market in 411 calls. TellMe and AT&T have also apparently jumped into this proven market winner.
Read - Toll Free Yellow Pages, Corp. Finalizes Negotiations with Private Overseas Investors for Investment Package Worth over $32.5 Million
Read - control 6% of the U.S. market in 411 calls
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Mojo Watch: JanRain Pulls CTO from VeriSign. Looking For Funding.
Verisign is bleeding talent. Today, hot Portland, OR startup JanRain - maker of OpenID which gives you one ID for all your logins - has recruited Michael Graves as its CTO. Graves was the founder of Signio, a payment services company purchased by VeriSign in 2000 for $700M.
In addition to OpenID, JanStuff is building other tools such as Schtuff, a site that helps you to create your own wiki, which it sold to VC-backed PBWiki. JanRain has also developed Jyte, an open source social network. JanRain has about a dozen programmers who are focused on building light-weight ID services for the web.
JanRain says it is "currently seeking outside funding" and the addition of Graves should help.
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Compression's Samplify Raises $6.5M 1st Round
Having just launched its high-speed, FPGA-based sampled-data compression technology, Samplify has raised $6.5M in Series A funding from Charles River Ventures and Formative Ventures. Samplify’s technology can compress real-time signals in Windows up to 40 Giga samples per second.
The plan is to find value addressing storage and bandwidth bottlenecks primarily in medical imaging, wireless infrastructure, automated test, military, and instrumentation systems.
Read - Samplify Systems Completes $6.5M Funding from Charles River Ventures and Formative Ventures
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April 01, 2007
MegaPath Buys DSL.net For $11M
Broadband ISP DSL.net has been bought by MegaPath for $11M. Wallingford, CT-based DSL.net reported a loss of $8M on revenue of $49M for 2005.
Read - DSL.net bought by MegaPath subsidiary
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March 30, 2007
United Villages: Bus-powered Net Connectivity With Solar Powered PCs To Rural Tribes Raises $2M
The poor are really hot right now. Yesterday Sequoia invested in a micro-financing company that targets the poor. Today, United Villages, a Cambridge, MA startup that sells wireless network services to isolated rural villages, has raised $2M in Series A, says PEHub from a regulatory filing. The round's investors are Omidyar Network, Cambridge Light & Power Corp. and Gray Matters Capital Foundation.
United Villages distributes pre-paid cards to locals in remote villages who can write emails or record phone messages at solar powered computer kiosks installed in schools and community halls. United Villages deploys buses tricked out with short-range Wi-Fi antennas which pass through villages, automatically picking up stored emails and voice messages as they go. Once a bus reaches a city with Internet connectivity, it relays the emails and messages to their appointed destinations via the web.
Apparently the company has operations in Rural areas of Costa Rica, Rwanda, India, Cambodia and Paraguay.
United Villages has received an extraordinary amount of press coverage and former Xerox Park-man John Sealey Brown joined the advisory board.
The plan
In addition to buses, Villages also uses vehicles like this Honda motorcycle to pick up Internet dumps.
Or Donkey-powered. The company got its start thanks to a $50K prize from an MIT contest.
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March 27, 2007
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.
Posted at 11:43 AM | TrackBack | Permalink
March 22, 2007
IP Biz Services Startups Merge To Form $500M Rev Player
Greenville, SC's NuVox Communications is merging with Maitland, FL's FDN Communications of Maitland, Fla., in order to form a single facilities-based communications provider. The new company to be named NuVox Communications and will provide IP-based communications solutions including voice, data connectivity and storage, private networking, web hosting, and security services to business customers in the Southeast and the Midwest. The combined company will have more than 90K customers, 1M voice and data lines, and annual revenues exceeding $500M.
NuVox has raised around $495M since i1997 inception, with current shareholders including Goldman Sachs, Quadrangle Group, Columbia Capital, KKR, Wachovia Capital Partners, M/C Venture Partners and J.H. Whitney & Co. FDN has raised around $144M since 1998, with current shareholders listed as M/C Venture Partners, Columbia Capital and Centennial Ventures.
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March 16, 2007
Progress Watch: Grand Central, PowerReviews and Piczo
The New York Time's David Pogue elevates the startup Grand Central with his review: "It’s a rather brilliant melding of cellphone and the Internet." For a $15M monthly fee, Grand Central will unify your home, work and cell phone numbers so that you only have to give out one number. GrandCentral, which is backed by CNET founder Halsey Minor, is getting smother with love by reviewers, but says that the response from the NY Times story has them particularly slammed with sign-ups.
San Francisco-based photo site Piczo claims it did $11M in ad sales revenues last year.
VC-backed customer review services vendor PowerReviews has signed partnership agreements with six e-commerce outsourcing vendors to integrate PowerReviews tag-based customer review technology into 6 vendors e-commerce platforms. The vendors are Art Technology Group, Demandware, Elastic Path Software, Fry Inc., GSI Commerce and Truition.
Read - One Number That Will Ring All Your Phones (NY Times)
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March 15, 2007
Atlanta's BigContacts Self Funded For Web Business Contact Manager
The a:c has been looking high and low for a Salesforce.com type of system, but being cheap we didn't want to pay for Salesforce. So far we are thrilled to have the freely accessible BigContacts, which just launched in December.
BigContacts was founded by Paul Freet, who previously was founder and CEO of VC-backed blade server company Recemi. He also was Founder and CTO of TruSOLUTIONS, which was bought in 2000 by VA Linux for $200M.
BigContacts is awesome for small teams. It has group calendars, shared contacts, tasks, notes, history. It is now free, but it looks like they will start charging something for certain version after beta.
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March 13, 2007
Seattle's Ygnition Raises $20M Credit
Ygnition claims to be the largest private provider of high-speed Internet services to apartment complexes, with 50K deployed multi-family units in the western US. It has become a reseller of services like Tivo and Vonage to this market.
Ygnition Networks is backed by has Comventures and has now closed a $20M credit facility from Full Circle Capital.
Read - Ygnition Announces $20 Million Financing With First Capital and Full Circle Capital (Release)
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October 31, 2006
Narus: $100M VC Raised And Counting
What the hay is software-based deep packet inspection (DPI)? DPI enables carriers to identify IP traffic (from old school POTs traffic), detect and protect against security threats and network attacks, and facilitate lawful intercept of IP traffic. As Skype, Vonage and other VoIP companies become a larger percentage of network traffic, carriers need new software.
DPI specialist Narus has raised $20M in new funding and secured a $10M credit line as it seeks to capitalize on the increasing demand for IP traffic management systems. The new round is led by American Capital Strategies with existing VC backers: Mayfield , JPMorgan Partners, and NeoCarta Ventures.
Narus claims 20 carrier customers. But it is still a small fry amongst larger competitors. Competitors include Allot Communications (which just went public today, CacheLogic, Ellacoya Networks, Sandvine. (London: SAND), and Cisco Systems (via its P-Cube acquisition).
Posted at 02:02 PM | TrackBack | Permalink
October 30, 2006
Tricked Out Cell Phone Start-up TalkPlus Raises $5.5M Series A From Menlo
We have seen two new trends with cell phone tools, one is to down them down for the elderly and the other is to soup them up for the people who read Gizmodo.
In the later camp, San Mateo-based TalkPlus brings some of the advanced features that you see from VoIP companies to cell phones. That means you can have more than one phone number mapped to a single phone for one (so your home, office, and ponzi scheme numbers could all come to your cell-phone. Likewise, you could also have the ability to deliver outbound caller ID information as multiple different identities.
TalkPlus demo-ed its product at the DEMO event, and by some accounts it was a big hit. MobileCrunch documents TalkPlus' VC travails as it had to delay launch due an inability to raise funding on its time-plan. It sounds like TalkPlus didn't do a great job of communicating with testers while it was in limbo with VC funding.
Read - Big News For Talk Plus: $5.5 Million A-Round and Eminent Launch of Voice 2.0 Services (MobileCrunch)
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July 28, 2006
Ex MSFT Big Shot Paul Maritz's Start-up Pi Raises $9.4M
Pi Corp., a 2-year-old Kirkland software company led by former Microsoft big man on campus Paul Maritz has just closed another round of financing -- $9.4M in Series B.
PI recently made news by acquiring Smart Desktop, a startup that was spun out of the Intelligent Information Systems Laboratory at Oregon State University. Smart Desktop, which is keeping its brand, is led by former Visio and Autodesk executive John Forbes.
PI seems to be a major undertaking - two years in the making and it has not yet launched, although it is in private beta. Pi stands for "Personal Information." The company creates online services for individuals to gather, share and organize information, organize it from any web-based device.
Pi users are not required to set up servers, explicitly copy or upload information, or surrender control of their personal information to an online hosting company.
Posted at 12:31 AM | TrackBack | Permalink
June 14, 2006
Popular Avatar Maker Oddcast Gets $4M From Union Square + Itochu
NYC-based Oddcast has raised $4M. You have probably seen their avatars someplace on the net. Oddcast sells their Avatar tools to both media companies and corporations. The company charges $100-$500 per year. It competes with the likes of Meez and Springwise. Oddcast is run by the Sideman brothers - Ari and Gil.
The a:c Has Never Liked Avatars But We Admit that Oddcast Does It Well
Read - Oddcast (Union Sq. Ventures)
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Run For It, Here Comes Another RSS Aggregator
The RSS aggregation business is not for the faint hearted. Pubsub for example, gets great reviews but it is doing lay-offs. Rojo and Pluck are also well-rated but are re-making themselves.
Here comes Moqvo out of Columbus, OH of all places. Moqvo offers an RSS aggregator that is meant to be super easy to use. It also plans to private-label the software for media companies, a path that several other RSS aggregators are trying.
Moqvo has raised about $1M in seed funding, and has launched in beta. The start-up says it has about 20 employees. Moqvo lets on that it has traded a 1/3 equity stake with ad agency Ten United in exchange for services.
Read - Bringing Rich-Media RSS to Masses (Ad Age)
Posted at 05:31 PM | TrackBack | Permalink
June 13, 2006
Private Label IM/SMS for Radio Broadcasters Funded
San Diego-based mSnap has received a round of VC financing from Partech for its text-messaging system aimed at radio broadcasters. The company declined to reveal the exact amount of funding, but said it was below $10M. The start-ups's initial funding came from the Norwegian company Boost Communications. Angel funding also came from First Round Capital in December 2005.
mSnap says it currently works with 165 radio stations in the US, including more than 80 stations owned by Clear Channel Communications, however, the a:c could not find implementations to take screen grabs of and one of the pages was broken.
mSnap's model is to offer its IM software to radio stations for free and do a rev share on the ad revenues. The company faces stiff competition from several companies including Vibes Media, which signed a similar deal with CBS Radio, the second-largest radio conglomerate, to provide text messaging to 41 stations.
While we understand that radio stations get decent on-site traffic and there is money to be made here, the a:c is not terribly impressed with the opportunity. There are too many IM options for consumers and we don't think that consumers will stay with their KIIS FM text messenger for long when they have better options. We'd be interested to know how Mspan plans to grow beyond radio broadcasting sites.
Posted at 03:55 PM | TrackBack | Permalink
June 05, 2006
How To Spend $26M in Fresh VC Cash? Buy Tyra Banks
In April, 800Free411.com raised $26M in series B financing, with new investor Comcast Interactive Capital. The company had recently hired experienced CEO George Garrick (CEO of Flycast, PlaceWare, Wine.com) to put the hammer down. One of his first moves was to pay Trya Banks to pimp Free1800 on her TV program.
Tyra Banks on 800Free411.com
Read - My favorite wireless app (Ed Sim)
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May 25, 2006
FreeConference.com Gets Bought-out
One of our favorite service on the Web - FreeConference.com - has a new owner. American Capital Strategies [Nasdaq: ACAS] now owns 84% of FreeConference.com. Advisors Glickman Capital and Broadstream Capital Partners are also investing
The company also operates GlobalConference.com, ConferenceUK.com and FreieKonferenz.com.
Posted at 08:28 PM | TrackBack | Permalink
May 16, 2006
Group IM Outfit Funded By NEA
Menlo Park-based 3Jam has raised $500K of a $1M Series A Round from NEA. 3Jam was founded by Andy Jagoe, a partner with VC firm Netservice Venture Group. Jagoe previously founded Intranet Communications.
Each message you get from 3jam shows who sent it, the message, and who else got the message. If you reply, your text message goes to the whole group. Details or a demo of 3Jam are unavailable. Because this seems more like a feature to us than a rival to AIM, we suspect that 3Jam will work to integrate with other IM applications, similar to Gtalkr.
Posted at 12:36 PM | TrackBack | Permalink
May 02, 2006
Wavestream Raises $28M For Cool Power Amplifiers
Oak Investment Partners has led a $28M round in San Dimas, CA based Wavestream. The company was started by some Jet Propulsion Lab smarties down Pasadena way.
The company pitches an amplifier that it says provides better price performance. It can be used for commercial and military applications, including satellite links, radar, terrestrial communications and directed energy.
Wavestream Technology Powering a Scary-looking Military Vehicle
Read - Wavestream Closes $28M Funding Round Led by Oak Investment Partners (Press Release)
Posted at 08:25 PM | TrackBack | Permalink
January 16, 2006
Convoq = WebEx + SalesForce Plug-in
Lexington, MA-based Convoq has raised $13M led by Bay Partners with previous investors North Bridge Venture Partners and Polaris Venture Partners. The company has raised over $30M to date. The company was founded as an Instant Messaging company and smartly hitched its wagon to Salesforce.com. From what we can see, the company sells a very expensive version of WebEx or GoToMeeting, only it is integrated with Salesforce so that data from meeting will be automatically entered into Salesforce as if it was an sales email sent through Salesforce.
The President and CEO of Convoq is Chuck Digate. He was chairman, president & CEO of MathSoft (now Insightful Corporation). He had previously founded Beyond Incorporated, a developer of enterprise messaging systems.
Posted at 08:38 PM | TrackBack | Permalink
January 10, 2006
WildBlue Gets $200M Debt From Shareholders
Denver, CO-based Wildblue has raised $200M in debt led by Liberty Media, WildBlue's largest shareholder, as well as The National Rural Telecommunications Cooperative, and TimesArrow. Kleiner Perkins is an investor in WildBlue, which sells broadband access to consumers and small offices in rural areas and small cities via satellite.
Read - WildBlue Secures Over $200 Million of Additional Shareholder Financing
Posted at 01:09 PM | TrackBack | Permalink
January 04, 2006
Fonality Gets $s for VoIP PBX
Culver City, CA-based Fonality has raised around $4.11M in Series B funding from Azure Capital. The company has developed a PBX system based on VoIP that it sells for $1000 to $2000. At this price it is much less than traditional PBXs - and it gets good product reviews. The company was founded by two so-cal dudes who play beach volleyball and who previously worked at hosting.com.
Fonality's UI
Posted at 09:21 PM | TrackBack | Permalink
December 23, 2005
Adomo = VMail + VoIP + Cell - Fun
HQ: Cupertino, CA
Founded: 1999
Management: CEO Jeff Snider had co-founded TouchWave, an enterprise IP telephony company bought by Ericsson in 1999. Chairman Bob Cohn was co-founder of Octel Communications. Adomo was founded by Samir Lehaff, a serial entrepreneur who left the company to start gpware, a defunct mobile software startup.
Investors: In December 2005, the company closed $15M in Series C. Investors are Menlo Ventures and Storm Ventures.
Business Model: Its sounds dull: next generation voice mail that integrates with Microsoft Exchange - an upgrade for enterprises that makes for better VoIP and wireless voice mail integration. Adomo has integrated speech recognition and text-to-speech technologies. Users can access their e-mail, calendar, and contacts by phone using voice commands. Adomo can read e-mails, record replies, and schedule business meetings.
Competitors: Avaya, ActiveVoice, Cisco Systems, Lucent, Nortel, Orange
Dirt: Enterprise voice mail in Cupertino makes us sleepy. Adomo also strikes us as a startup that has been kept in life-support by VCs. With its latest round of investment, however, we expect the company has turned the corner - if nothing it should be able to make this last until at least 2008.
Posted at 02:17 AM | TrackBack | Permalink
December 20, 2005
LifeSize Launches High-Def Video Conf. And Gets $17.5M
A day after it shipped its first product, Austin, TX-based LifeSize - a high-definition video communications company - announced $17.5M in a third round of financing. The round included current investors Austin Ventures, Norwest Venture Partners, Redpoint Ventures, and Sutter Hill Ventures with the addition of a new investor, Pinnacle Ventures. The company, founded in 2003, has raised $56M in total.
LifeSize Room Sells for $12K and Claims a High-definition Quality Video that is 10X better than Polycom
The company's primary competitor is Polycom. It so happens that LifeSize's CEO and co-founder Craig Malloy was a co-founder and CEO of ViaVideo, an Austin-based startup launched in September 1996 that was purchased by Polycom in 1998. He then served as SVP and GM of Polycom's Video Communication Division until 2002.
Read - LifeSize Grows $17.5M (Red Herring)
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December 19, 2005
Vonage VCs Ante Up $250M More
The Wall Street Journal gets the scoop that Vonage has stalled its IPO plans in favor of another mega-VC round. With this round of financing Vonage has raised a $658M from private investors. Coming back to the table are Bain Capital, Meritech, 3i Group, NEA as well as some hedge funds.
The WSJ says that Vonage's latest valuation is $2B, but Om has a bone to pick with that.
Read - Another $250 million for Vonage (GigaOm)
Posted at 01:01 AM | TrackBack | Permalink
December 16, 2005
Spodradio = Digital Radio + Podshow + Swabian Dialect
Valerie Thompson reported this profile. Bal Balaji, co-founder of wireless software startup SurfKitchen provided his insight into the mobile market for this section.
HQ: Stuttgart, Germany
Founded: 2002
Management: This is the third venture for founder and CEO, Mikko Linnamäki. In 1999, he founded Buchungsmachine AG, an online travel booking engine, which he sold within a year for a mid-two digit million dollar sum (Linnam declined to disclose exact amount.) Before that he established HexMac Software Systems AG, a content management software firm. Using his print media contacts from a life, the software was popular with large online publishers in Germany. It was acquired by Tomorrow Focus Technologies for an undisclosed amount in early 2001.
Investors: In December 2005, the company raised €2M Series A from Baytech Venture of Munich is the only outside investor. The capital should be sufficient to secure Spodradio's foothold in the German market.
Business Model: LiquidAir Lab , the company behind Spodradio, has developed the software and the platform that pulls radio broadcasts onto the mobile phone, serving up related multimedia content simultaneously from its database of licensed content. Sales are generated by offering music downloads, merchandise, ringtones and the like. The firm shares revenues with the radio broadcasters. Spodradio's founder calls this the "visual radio" category for mobile networks.
Users must download a free spodradio player to their phones to listen and view content. There's no need for an FM receiver in the phone. The firm also maintains a catalogue of MP3 audio files, aka podcasts, that can be activated via the mobile phone. That means users don't need to download or setup feeds with a PC. It has signed some two dozen radio stations in Germany, along with 27 US Internet radio stations to its platform, since going live in November 2005. Payments for content and delivery is fulfilled by T-Online, part of Deutsche Telekom. Spodradio also aims to make agreements with mobile network operators to promote flat rate subscriptions for 3GSM (the high speed cellular network) and it will take a share in the sales of such packages too.
Competition: US satellite radio competition from XM and Sirius is not to be underestimated as Spodcast is also aiming to market devices that can subscribe, store, and play broadcasted radio content. And while Germany and certain parts of Europe are well covered with the type of third generation mobile networks required to run such a service, some pockets on the Continent and the US are only starting to get the upgraded infrastructure. That means the installed base, while potentially very large, is still emerging. If Apple decides to add the requisite cellular chips to make its iPod less tethered to the fixed networks, it could also end up being competition.
Dirt: Although it developed the software and the technology platform to enable this new form of radio to mobile phones, Spodradio is a media play, as opposed to a software play. Success for this startup will depend on the management team's media mojo. And probably on the ability to attract a US VC at a later point in time that has the requisite media connections.
Posted at 02:06 AM | Comments (5) | TrackBack | Permalink
December 13, 2005
Decrepit Brand For Sale - AT&T To Unload Prodigy
AT&T or SBC or whatever you want to call it is trying to lose another one of its logos - Prodigy Communications. In 2001, SBC spent $465M to buy the remaining 58% of the Prodigy stock that it didn't already own. SBC got 2.4M unhappy Prodigy dial-up customers. Prodigy was founded in 1984 as a joint venture between odd bed-fellows IBM, Sears and CBS. Can there be anything more depressing than obsolete brands and legacy consumer technology?
Report: Prodigy brand for sale (Austin Business Journal)
Posted at 06:55 PM | TrackBack | Permalink
Earthlink Buys New Edge For $144M To Get VPN Network
EarthLink Inc. (Nasdaq: ELNK) is paying $144M to buy national VPN service provider New Edge Networks in an effort to get wins with small and medium-sized businesses. New Edge, based in Vancouver, WA, boasts that its total invested capital is almost $400M including $39M of debt. The company claims revenue of $115M in 2004. New Edge's prestigious investors are: Goldman Sachs, Accel Partners, Crosspoint Venture Partners, and Greylock.
It doesn't seem like Earthlink has to pay a very high multiple on revenues. New Edge investors must be a tad disappointed.
Read - EarthLink Buys NewsEdge (LightReading)
Posted at 05:26 PM | Comments (1) | TrackBack | Permalink
November 06, 2005
The Skype Economy
Draper Fisher may prove that there is more than one way to cash in on Skype-mania. The VC firm has invested in Santa Cruz Networks (SCN) [not to be confused with the Unix company Santa Cruz Operation (SCO)]. SCN was founded back in 1997 but recently found its groove when it developed a video plug-in for Skype called Festoon and this week it unveiled Festoon for Google Talk.
Skype and Google restrict the number of users for their video and audio conferencing products while SCN enables large numbers of users up to 200 to engage in face-to-face meetings over VoIP connections. Users can talk and see each other while sharing photos, spreadsheets, and presentations.
Skype's 153M users have downloaded Festoon 2.75M times, which according to SCN, makes it Skype’s most popular plug in. While Festoon users are currently able to share pictures and converse with others free of charge, SCN expects to charge for some services later.
Itzik (Isaac) Cohen is the company's president and CEO. He is a jock - a pro basketball player in Europe, Cohen played for Maccabi Tel Aviv, the Euroleague champion for the past two years. And he also worked in the office of the president at WebEx.
Posted at 07:10 PM | TrackBack | Permalink
September 28, 2005
Vonage: M&A A Better Option?
And the winners of a 6 month bakeoff are: Citibank, UBS and Deutsche Bank. Lightreading gets some of the bankers to acknowledge that they think M&A is a better route than IPO. They think they could get a $1.5B sale. Why so much less than Skype at $2.6B plus much more in incentives? Vonage has burned through a lot of VC money, its costs of acquisition are high, and its competition is getting nasty.
Read - Vonage Selects IPO Bankers (Light Reading)
Posted at 01:01 PM | Comments (2) | Permalink
August 09, 2005
Skype To Remain Independent After Failed Takeover by News Corp.
Tim Draper makes news these days when he expressed his opinion that Skype is worth more as an independent than it is if it is owned by News Corp. Draper's firm DFJ owns 10% of Skype. His remarks came after Britain's Independent on Sunday reported that News Corp. had approached Skype with an offer of just under $3B.
Read - Skype Investor Says Firm Should Stay Independent - Reuters
Posted at 10:17 AM | Permalink
July 22, 2005
TelEvolution (PhoneGnome) - Profile
HQ: Danville, CA
Founded: 2004
Management: David Beckemeyer is Founder and CEO. He was co-founder of EarthLink, where he was as VP of Engineering and CTO.
Investors: Bootstrapped by founders and angels including Joi Ito and Reid Hoffman.
Business Model: The company sells a VoIP device called PhoneGnome, a small box that costs $120, and is not accompanied by any monthly services or charges. The PhoneGnome prudently marries the best of VoIP and the best of traditional phone service. The PhoneGnome connects to your phone line, your Internet connection, and your phone. It allows owners to keep their existing phone numbers, they can call any other PhoneGnome in the world for free and they can dial any other phone in the world without access codes. Instead of switching to a new service, getting a new phone number, or transferring an existing number, PhoneGnome automatically configures itself. So there is no need to own a computer, run software, switch to a new phone number.
Competitors: Vonage, Lingo, AT&T, Skype, Packet8.
Dirt: Telco geeks have boners over PhoneGnome and indeed PhoneGnome offers some significant ease-of-use advantages over the likes of Vonage. Still, the VoIP game at this point is being won on marketing. Most consumers are just not sophisticated enough to be able to compare the features and benefits of Vonage vs. PhoneGnome so they need to be sold. Vonage has unlimited marketing dollars and its promotions are ubiquitous on the Net and in BestBuy. Unless PhoneGnome can quickly raise a quarter billion dollars, it might make sense for a large company to acquire PhoneGnome and go mano a mano with Vonage.
Posted at 10:00 AM | Comments (3) | Permalink
May 26, 2005
Curious Dearth of Internet Video Startups
At a recent Churchill Club event on digital entertainment, VC Roger McNamee challenged entrepreneurs to develop an offering that would cross Tivo and Bittorent. Scrolling the VC blotters for funding of new Internet video businesses, we see very few - mostly notably Akimbo. Startups still seem focused on text and audio. Are there a bunch of companies here in stealth or is it fear of lawsuits from Hollywood that keeps entrepreneurs and VCs away?
Read - What's Ahead for Net, Digital Entertainment (USA Today)
Posted at 03:53 PM | Comments (1) | Permalink
May 05, 2005
Live Longer – Fire Your PR Firm
Most startups are better served by running PR in-house. That’s our opinion. There are sound reasons for larger publicly-traded companies to bring on an agency, but for most startups the primary motivator seems to be insecurity and a desire to do as the big boys do. Here are five reasons not to hire or to fire your PR firm:
1) They’re full of baloney. In their pitches, PR agencies will boast of their relationships with journalists and claim responsibility for every positive story run on their portfolio companies, almost as if they actually wrote the articles. This is why journalists hate PR professionals – because PR flacks can’t help but ooze a sense that they create the news. Indeed journalists do hate flacks. We once worked with a respected tech journalist who broke up with his girlfriend because he couldn’t stand the fact that she worked for a PR agency. If startups execs could hear the tone in the voice of tech journalists who take calls from flacks they would be appalled that they are being represented in this way.
2) Journalists prefer direct contact with the startup. This can only be anecdotally supported, but in our experience it is always a smoother experience for journalists to contact or be contacted by someone in-house. PR agencies get in touch when it i