San Diego-based Concerro, the developer of Web-based software that enables nurses in 200 U.S. hospitals to bid for shifts, says it has acquired all the assets and intellectual property related to CommandAware, a hospital-incident management system, from Los Angeles-based PortBlue. The deal means a new line of business for Concerro, which has 50 employees and has received approximately $10 million in funding.

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ParAccel, which has offices in Cupertino, CA, and San Diego, says it has raised $22 million in a Series C round of venture funding. The company provides database management system for data warehousing and analysis.

A new investor, Menlo Ventures, led the round, which included Walden International as well as previous investors Bay Partners, Mohr Davidow Ventures (MDV), and Tao Venture Partners. San Diego’s Enterprise Partners Venture Capital, an early backer of the company, is missing from the round, according to SoCalTech.com. ParAccel board member Tom Clancy is a former managing director at Enterprise Partners and now a managing director at Tao Ventures, which also participated in the round.

ParAccel says the new funding will be used to “expand product development, accelerate sales and marketing and ramp up services and support to manage its rapidly growing customer base.” ParAccel was started in October 2007 by CTO Barry Zane, a former co-founder of Netezza. The Cupertino-based company has previously raised nearly $30 million, and has approximately 60 employees.

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Boston-based Backchannelmedia said this week that it’s moving from an extended period of beta testing to launching commercial operations in the New York area. The company, whose motto is “TV and the Internet finally just click,” has created a system that allows TV viewers to click using their remote controls in response to special onscreen offers and Web addresses, bringing additional information to their e-mail inboxes. Backchannelmedia says it hopes the “Clickable TV” technology will become a mainstream tool for targeted interactive marketing. The company was founded in 2000, has 29 employees, has raised $15 million in funding, and is expecting a full launch by mid-2010 with more funding.

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Lowell, MA-based Auriga Measurement Systems says it has raised $2.75 million in additional seed funding. The wireless instrumentation and design company delivers test equipment for high-frequency, high-powered RF microwave front-ends. The company did not disclose the names of the participants in the seed round. In 2007 Ohio-based White Oak Partners put $1.5 million into Auriga, whose name is Latin for “charioteer.” Auriga is also a constellation in the northern sky.

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DivX is a codec that packs large video files into a smaller size. It’s also the San Diego company that has commercialized the technology.

CEO Kevin Hell talks of DivX moving towards “any online content on any device” as the next step in the evolution of consumer media, and “video freedom”, which means you will be able to seamlessly move a video from one screen to another, and watch it from all “three screens in our lives.” That means the computer screen in the office, the TV screen and video consoles in the living room and on the screens of cell phones and mobile devices anywhere. DivX’s Korean partners, Samsung and LG, are already making this inter-operability between their consumer products an asset. “There’s a great future in being able to move video from one device to another,” Hell says.

It started a little differently—with Wachowski Brothers’ and Keanu Reeves’ Hollywood megahit “The Matrix” (1999). A hacker nicknamed Gej reverse-engineered Microsoft’s version of MPEG-4, a standard video packaging system, to compress video files to more manageable sizes. Gej made a breakthrough that made it possible to download a whole movie in a few hours. The hacker called his software codec “DivX;)” (distinguishing it from an earlier version of DivX) and made it available on the Internet for free.

In San Diego, MP3.com executive Jordan Greenhall used DivX to download a copy of “The Matrix.” He was so inspired he made a concerted effort to contact Gej, who turned out to be Jérome Rota in France, now 36-year old former graphic designer. (Hell replaced Greenhall as DivX CEO in mid-2007, and Greenhall resigned from the company’s board later that year. Jerome Rota continues to serve on the company’s board of directors.)

With the extremely handy free codec software they formed DivX in San Diego.

For a moment, the movie industry thought they had arrived in the same untenable situation as the music industry with napster.com and MP3 file sharing—their products would be downloaded without permission and distributed freely throughout …Next Page »

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What recourse does an entrepreneur have when there is no venture capital for a start-up with a truly promising invention? At San Diego’s Biological Dynamics, 27-year-old founder Raj Krishnan’s solution is to win entrepreneur and student competitions—and so far he has won 13 awards, nine of them this year, including most recently a $40,000 first prize in the UC San Diego Entrepreneur Challenge, where the judges were impressed with his presentation skills. “We went to the competitions because venture capital is extremely hard to find now, and we have been fortunate. It enables us now to protect our IP and pay bills,” Krishnan says.

Raj Krishnan talks eagerly about the prospects of someday making a cancer diagnosis no more troubling to a patient than telling someone they have caught a common cold. And the bioengineering Ph.D. student at UC San Diego says he may have found a way to make that happen. Krishnan’s team of fellow UCSD students and professor Michael J. Heller believe they have found a simple and cost-effective way of detecting cancer at its outset.

Nowadays finding a cancer at an early stage usually means it can be cured. But there hasn’t been any method of detecting cancer in its earliest stages. Symptoms usually aren’t apparent until the cancer has reached a late stage of growth.

As cancer cells begin to grow, an increased amount of DNA circulates in the blood. Krishnan says this increase in “cell-free” DNA is believed to be of cancerous origin. In the 1970s, scientists noted that people with tumors have a lot of free DNA in their blood, but serious studies have only been done lately. “There still hasn’t been an easy method to isolate the DNA without degrading it,” says Krishnan. “Ours is the first that doesn’t do that, and it’s a very clear and very easy separation.”

Michael Heller and Raj Krishnan

Krishnan’s research efforts have been directed at creating technology to identify abnormal amounts of cell-free high molecular weight DNA in the blood. High molecular weight DNA is widely considered a good secondary biomarker for almost every type of cancer, but separating nanoparticles of DNA that circulate in extremely small amounts has been problematic, to say the least. This DNA is thought to be of 5-50 nanometers in size, which means it is smaller than the wavelength of light. “It’s very difficult to find in blood. The analogy of needle in the haystack has been used, but I’d say it’s more like looking for a needle on the whole farm,” says UCSD’s Heller, a professor of bioengineering. Krishnan discovered it can be done by generating an electric field through a microelectrode array.

Until recently, using AC (alternating current) electric field techniques to separate nanoparticles such as DNA from blood would have been considered impossible because of …Next Page »

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San Diego has retained its status among the country’s top regions for innovation, but the hometown venture community is contracting to the point where venture funding is back where it was in the 1990s.

—Qualcomm is getting ready to deliver its latest innovation, a display screen for mobile devices that provides great visibility outdoors. The San Diego chip giant’s Qualcomm MEMS Technologies subsidiary has commenced operations in its display fabrication facility in Taiwan. Qualcomm’s mirasol display mimicks the shimmering color of butterfly wings, which also serve as the mirasol logo.

—Mission Ventures’ Robert Kibble says the venture capital community is undergoing a reset of the business, “and the basic reason is that the returns have not been good.” San Diego business leaders recruited Kibble to relocate here in 1996, after Netscape Communications’ breathtaking IPO in 1995. But now Mission Ventures, the firm he founded in 1997, is among a dwindling number of San Diego-based VCs that are still actively investing.

—In the countdown among high tech cities, San Diego remained at No. 7, according to a North American ranking released last week by The Milken Institute. Silicon Valley is No. 1, Seattle rose to a surprising No. 2, and Boston fell to No. 3. Metropolitan areas were ranked by “their ability to grow and sustain thriving high-tech industries.”

—Ernst & Young has crowned Quake Global’s CEO Polina Braunstein as San Diego’s High Tech Entrepreneur of the Year. Quake Global makes satellite transponders for tracking purposes for companies in trucking, heavy equipment, aviation, and maritime industries. Braunstein turned Quake Global’s business around after she was named CEO in 2003.

—The UC San Diego Entrepreneur Challenge named its award-winners in a university-wide business plan competition that had its finals Monday night. Biological Dynamics, a medical diagnostics startup led by Raj Krishnan, won the first prize of $40,000. Best high-tech/IT start-up was Radiofast, which creates better X-ray technologies.

—San Diego’s Synthetic Genomics and its renowned scientist J. Craig Venter may soon create headlines with their algae fuel initiative. Two of Venter’s major research & development lines are coal and algae, and he has suggested Synthetic Genomics is preparing an announcement for a scaled-up operation in the near future. One plan could lead to the creation of “home breweries” that use genetically engineered algae to produce backyard fuel that would be almost ready to use.

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Ernst & Young has named Quake Global CEO Polina Braunstein as its San Diego regional High Technology Entrepreneur of the year. Quake Global makes palm-sized satellite transponders for tracking purposes. Ernst &Young issued awards to San Diego entrepreneurs in seven other categories for 2009: Master Entrepreneur, CEO Les Cross of DJO Inc.; Emerging Entrepreneur, CEO Jeff Goldberg and COO Tanner Haigwood of Cali Bamboo; Turnaround Entreprener, President Jose Luis Paparte of PriceSmart; Health Sciences Entrepreneur, Chairman and CEO Alexis Lukianov of NuVasive; Consumer Business Products and Services, CEO Jeffrey McCain of McCain. In addition, Ernest Rady of American Assets has been honored for Lifetime Achievement.

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Three San Diego-based biopharmaceutical startups have been raising capital, according to recent filings with the U.S. Securities and Exchange Commission (SEC).

—Valor Medical, which was founded in 2007, has raised $3.1 million of an $8 million offering, according to a recent SEC filing.  CEO H. Clark Adams says this is a partial close of a Series B round, the investors were individuals, and the company expects to have a final close by the end of the month. Valor is developing a treatment for a brain aneurysm that is administered through a microinfusion catheter. According to Clark, the funds will be used for completing requirements for their mandatory European conformity mark, scaling up for commercial launch in Europe next year, and beginning U.S. clinical trials. Valor was founded by UC San Diego Radiology & Neurosurgery Professor Charles Kerber, who serves as its president.

—Tocagen, which is developing gene therapy treatments for terminally ill cancer patients, has raised $10.8 million in an $11.2 million equity offering that began in September, according to its regulatory filing.  Tocagen was founded in 2007 by Harry Gruber, a San Diego serial entrepreneur who previously founded local biotechs Gensia Pharmaceuticals, Viagene, Aramed, and Metabasis, Inc. Gruber also founded Intervu, a San Diego Internet media startup acquired in 2000 by Akamai Technologies in a deal valued at $2.8 billion, and Kintera, which provided Web-based software used by non-profit organizations to raise funds. Neither Gruber nor Tom Darcy, Tocagen’s chief financial officer, responded to email queries seeking information. According to information on Tocagen’s website, the startup is developing treatments for two deadly types of cancers, glioblastoma multiforme (a type of brain tumor), and malignant melanoma (a type of skin cancer).

—Zogenix, which was founded in 2006 and was previously known as SJ2 Therapeutics, is raising $3.1 million through a combination of debt, warrants, and securities, according to a recent SEC filing. Zogenix is a specialty pharmaceutical startup developing two drug candidates for treating central nervous system disorders and pain. According to the Zogenix website, current investors are Abingworth Management, Clarus Ventures, Domain Associates, Scale Venture Partners, Thomas, McNerney & Partners, Life Science Angels, and Windamere Venture Partners. Chairman and co-founder Cam Garner has founded six other specialty pharmaceutical companies.

[Xconomy San Diego Editor Bruce V. Bigelow contributed to this report]

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When renowned genome scientist J. Craig Venter spoke at San Diego’s Connect’s Innovation Summit two months ago, he focused mostly on creating genetically engineered microbes that consume coal to produce natural gas. But a review of Venter’s recent presentations and other information suggests that Synthetic Genomics, the San Diego startup he co-founded, also has a major biofuels initiative underway, as well as other revolutionary projects.

So when Venter said in April, “we’re not too far away from making an announcement to scale this up,” it’s possible he was just speaking generally about an industrial-scale project based on a synthetic organism, and not about the coal project in particular.

Either way, such an announcement could represent the first time a synthetic organism created from transplanted genes moves from the research laboratory to an industrial-scale operation. “Over the next 20 years, synthetic genomics is going to become the standard for making anything,” Venter said in a 2007 article in NewScientist magazine. He says it will become possible to add different characteristics, to or take them away, from almost everything. In the future, Venter says one DNA-based species (human) will be able to sit down at a computer to create another.

As a result, the first commercialization project that Synthetic Genomics undertakes with a major corporate partner may well involve algae that have been genetically engineered to produce biofuels. Synthetic Genomics’ team already has genetically optimized an algae species so that almost half of the organism’s mass consists of lipids, a broad group of naturally occurring molecules that include fats, waxes, sterols and other energy storage compounds. Now the team is enhancing the organism further to make even more lipids. Such algae would serve as a biofuel feedstock.

Venter has described “the new algae” as a kind of biochemical factory. In his Joint Genome Institute keynote speech in March, Venter said “the new algae” is something that “secretes whatever lipid size we want to engineer. This changes algae from what everybody’s been looking at as a farming problem into a manufacturing problem. So we are trying to get algae to go into a continuous production mode, pumping up these lipids, that come out in a pure form.”

Two years ago, Synthetic Genomics struck a long-term research and development deal with BP, the global energy conglomerate previously known as British Petroleum to develop cleaner energy production.  BP has also been a strategic investor in Synthetic Genomics—even though Venter has stated that he wants the company to replace the petrochemical industry in ten years.

Many aspects of Venter’s algae project seem fanciful. He has described a future where people produce their own biofuel in their backyards, a self-sufficiency scenario he sees as a major source of future fuel production. He envisions possibly millions of “algae micro refineries,” in neighborhoods throughout the United States and beyond. Genetically engineered algae needs sunlight and carbon dioxide, and then secretes a liquid that “can basically be used right away as biodiesel,” according to Venter. The only hardware needed would be stuff like sinks, filters, barrels and pipes.

In a Popular Mechanics magazine interview last year, Venter said the goal at Synthetic Genomics is to have “multiple things on the market within five years.” In a TED speech in February 2008 he estimated that the team would have “the first fourth-generation fuel out in about eighteen months.”

Privately-held Synthetic Genomics was founded in 2005 by Venter, who serves as chairman and CEO, Nobel Laureate Hamilton Smith, who serves as scientific director, and former General Counsel David Kiernan. Its board includes Biotechonomy CEO Juan Enriquez, Draper Fisher Jurvetson managing director Steve Jurvetson, Pulsar CEO Alfonso Romo, and Raydiance CEO Barry Schuler. In 2005 Draper Fisher Jurvetson provided $30 million in Series A round of venture funding. Last year it was reported they were in the process of raising another round, in the range of $100 million to $200 million.

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Seattle, the Washington D.C. area, and Orange County have moved up in Milken Institute’s ranking of top high-tech center areas in North America. From 2003 to 2007, Seattle passed Boston and became America’s second-ranking high-tech metro area. San Diego is at seventh place. (These are Xconomy’s network cities.) The number one spot belongs to Silicon Valley, which “continues to lead all other metropolitan regions in North America in the breadth and scope of economic activity it creates through technological innovation,” according to the study.

According to Milken Institute, the Top Ten North America high-tech centers are:

2007 Ranking (2003 Ranking) Metro Area Total High Tech Score

1 (1) San Jose-Sunnyvale-Santa Clara, CA 100.0
2 (3) Seattle-Bellevue-Everett, WA 46.4
3 (2) Cambridge-Newton-Framingham, MA 45.2
4 (5) Washington-Arlington-Alexandria, DC-VA-MD-WV 41.8
5 (4) Los Angeles-Long Beach-Glendale, CA 40.2
6 (6) Dallas-Plano-Irving, TX 21.8
7 (7) San Diego-Carlsbad-San Marcos, CA 19.3
8 (11) Santa Ana-Anaheim-Irvine, CA 17.7
9 (9) New York-White Plains-Wayne, NY-NJ 16.8
10 (8) San Francisco-San Mateo-Redwood City, CA 16.1

The study was done with 2007 benchmarking data. The report, called “North America’s High-Tech Economy: The Geography of Knowledge-Based Industries,” was presented by Milken Institute director Ross DeVol at the 2009 IEDC Technology-Led Economic Development Conference on Tuesday.

Metro areas were ranked by “their ability to grow and sustain thriving high-tech industries.” The study compares wages and employment in the metropolitan areas, and adds a location quotient, which measures the concentration of high-tech employment or wages in the area.

In the separate Life Sciences Small Business Vitality Index, the Top Five ranking was 1. Greater Los Angeles 2. Greater San Francisco 3. San Diego (tie) 3. Boston (tie) 5. Greater Raleigh-Durham, according to DeVol’s presentation.

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After filing last month for Chapter 11 bankruptcy, San Diego rapid molecular diagnostic products maker Nanogen has moved to lay off 89 employees by July 14, according to the website GenomeWeb. The San Diego company plans to sell its assets through an auction supervised by the federal bankruptcy court to the French firm Elitech, as we reported earlier.

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San Diego’s Qualcomm (NASDAQ: QCOM) says it has commenced operations at its mirasol display fabrication facility in Taiwan, which the wireless technology giant operates with Foxlink, a leading device manufacturer. Qualcomm MEMS Technology’s plant in manufactures displays on generation 4.5 glass, which is based on the innovative mirasol (”look at the sun”) display technology that provides superior visibility outdoors and uses significantly less energy than traditional displays.

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A biotechnology company aiming to revolutionize early-stage cancer screening last night won the UC San Diego Entrepreneur Challenge. Biological Dynamics, led by bioengineering PhD student and CEO Raj Krishnan and his fellow graduate students David Charlot and Roy Lefkowitz, took home the $40,000 first prize.

Biological Dynamics has developed a screening tool that identifies secondary cancer biomarkers such as free circulating DNA from unnatural cell death. Krishnan’s technology helps to detect signs of early stage tumors with a cost-effective blood test that takes less than 30 minutes and shows signs of almost every cancer type, according to the already much-awarded team.

Medical device company Tritonics, which has a solution to treat clogging in implanted catheters, came in second. Third prize was given to Radiofast, which is creating new integrated circuits technology for medical and security imaging.

In addition, the best entries in five categories got $2,000 each. They were Biological Dynamics (Biotech/Life Sciences), Radiofast (Hi-Tech/IT), Profile UST (CleanTech), The Nicholas Conor Institute (Social Entrepreneurship), and Cyrotrace Solutions (Undergraduate).

The UC San Diego Entrepreneur Challenge is a student-run competition now in its third year. Each of the 70 competing teams had to have at least one active company team member who is a UCSD or affiliate student or recent graduate.

Last fall, teams had to present their business concept, and during the winter quarter they went head-to-head in an executive summary competition. The spring quarter culminated Monday night with business plan presentations.

Judges for the final round included Mary Ann Beyster, president of the Foundation for Enterprise Development; biotech entrepreneur, venture investor, and Xconomist Larry Bock; SDSU College of Business dean Gail Naughton; Connect CEO Duane Roth; Mission Ventures managing partner Leo Spiegel; and UCSD’s Rady School of Management’s founding dean Robert Sullivan.

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In the short week after Memorial Day, we got a little European literature with tips on bootstrapping, Medsphere got some venture funding, and Good Technology got a San Diego startup, among other interesting news.

—At the San Diego Venture Group’s panel discussion on bootstrapping a business, MaxLinear’s CEO Kishore Seendripu talked defining bootstrapping, which he sees as a process of supporting a business without external help. That is what happened when Seendripu and seven other semiconductor veterans started MaxLinear in 2003 and funded the startup from their consulting work.

—How can a company slide from a 28 percent share of the U.S. market in 2002 to less than 10 percent now, when at the same time it still has almost 40 percent of the global market? That’s the question for Finnish cell-phone maker Nokia (NYSE:NOK) and its CEO Olli-Pekka Kallasvuo, who argued at the D7 conference in Carlsbad, CA, that Nokia’s San Diego engineering and design facility is the key to its comeback in the U.S.

—Phone-service company Leap Wireless (NASDAQ:LEAP) revealed it’s raising more than $1.1 billion to refinance some of its debt. Leap, which operates Cricket throughout the country, also raised $264 million through a private stock sale. The deals set off some merger speculation.

—San Diego’s KESDEE is an all-digital, web-based eLearning company that is moving its financial courses business to mLearning, or mobile learning on mobile phones. “We want to become a dominant niche player in this market. Not Wal-Mart, but Nike,” says CEO Swarna Srinivas. Her company already has created 700 accredited interactive courses for the Federal Reserve Board, Citigroup, Standard Chartered Bank, and others.

—Carlsbad, CA-based Medsphere has raised $1.9 million of a $15 million secondary venture round. CEO Michael Doyle says they have $6 million worth of commitments. Previously the start-up has raised $50 million from Azure Capital Partners, Epic Ventures, and Thomas Weisel Partners to commercialize its electronic health-record system, which was developed decades ago for the U.S. Department of Veteran Affairs.

—Good Technology (now wouldn’t that be some idea?), based in Redwood City, CA, acquired San Diego’s social-networking firm Intercasting, although terms of the deal were not disclosed. Intercasting established the social media site Rabble for mobile phones in 2004, and has created the popular Anthem platform.

—And finally, San Diego’s lovable little digital-net creature, Chumby, raised $3 million through debt and security offerings. Chumby Industries previously raised a total of $20 million in venture funding.

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Insulin pump developer Tandem Diabetes Care has raised $21.4 million in a $52.3 million financial round, according to a filing with the U.S. Securities and Exchange Commission. San Diego-based Tandem specializes in new insulin pump therapy technology. Last June, Tandem raised $13 million in a Series B round led by Domain Associates and Texas Pacific Growth.

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Chumby Industries has raised $3 million through a combination of debt and security offerings, according to a filing with the U.S. Securities and Exchange Commission. The San Diego company makes a Web-enabled device called Chumby that is partly an Internet terminal, partly a stuffed toy, and partly a video player. As I reported, Chumby previously raised a total of $20 million in VC funding.

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Nokia CEO Olli-Pekka Kallasvuo says San Diego plays a key role in the Finnish mobile phone giant’s plans to stage a comeback in the U.S. market. Kallasvuo was questioned by Wall Street Journal columnist Walt Mossberg at the All Things Digital D7 conference in Carlsbad, CA, about Nokia’s (NYSE: NOK) decline with U.S. carriers. Nokia operates a handset engineering facility in San Diego specifically for the U.S. market and Kallasvuo said, “I’ve been working on this for a long time. And it’s kind of interesting, the idea that we’re in San Diego now; we have about 2 or 2.5 years ago started to make U.S.-market-specific products right here in San Diego.”

Back home in Finland, Kallasvuo famously said in 2006 he wouldn’t sleep until Nokia had improved its position in the United States. Nokia lost its No. 1 rank in the U.S. after missing the trend for clamshell phones and thinner designs. The Finnish company now has approximately 9 percent of the U.S. market, while globally the company’s market share is 35-40 percent. This week Nokia took flak after the debut of its Ovi application store flopped. (Ovi is Finnish for ‘door’)

Nokia cut its workforce in San Diego from 1,100 to 500 in late 2006 when the company retreated from its CDMA operations. Nokia’s San Diego operation focuses only on North America, so there would be handsets designed for the U.S. that exist nowhere else. That is an exception in the company’s global strategy. Last year, Nokia and San Diego’s CDMA giant Qualcomm settled their legal disputes, and in January the two former rivals announced they were cooperating in the development of U.S. mobile devices.

Kallasvuo was showing Nokia’s new flagship phone, the N97, at the D7 conference yesterday. But the N97 does not have a U.S. carrier, and it costs $699.

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San Diego-based Awarepoint says an independent medical laboratory has tested and validated its sterlizable RFID tags, which are designed to provide hospitals real time location tracking information about patients and medical equipment. The tests, which simulated clinical use, were done to show that Awarepoint’s battery-powered Radio Frequency Identity tags can be repeatedly cleaned, disinfected, and sterilized. As Bruce reported last month, the privately held company makes tags that operate with Awarepoint’s Zigbee-based Real-Time Location System (RTLS), which enables tracking the location of thousands of items in the network.

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KESDEE calls itself world’s largest eLearning company for money managers. The San Diego company provides state-of-the-art financial education and training for professionals, and it is taking its digital headstart to new levels.

KESDEE plans to move its courses to mLearning—as in mobile learning—which means its 700 accredited eLearning courses on such topics as banking, insurance, and risk management will become available on cell phones. The company is researching and developing this transition to small screens—it’s both a challenge and a great opportunity for the global startup, as the Internet becomes increasingly mobile and hundreds of millions of people will access the Internet only with their mobile devices. “It’s difficult to do, but we want to move fast. We want to become a dominant niche player in this market. We want to be Nike, not Wal-Mart,” says CEO Swarna Jessica Srinivas, a 26-year-old Harvard graduate who uses “Go for the Moon” as her personal motto.

Swarna Srinivas

The company’s all-digital financial courses are fun in a way that few have seen in education. There’s interactive simulations, engaging graphics, and quizzes preparing for real-life situations—even in topics like Anti-Money Laundering or Trading Operation Controls or Asset Liability Management. “We provide eLearning, not eReading. We think eLearning is done by individual choice and so must keep the student interested in the topic,” says Srinivas.

KESDEE is an acronym for Knowledge, Economy, Skills, Development, eLearning, Excellence. It’s an energetic and disciplined company that provides 2,100 hours of e-courses for financial industry professionals. KESDEE went to the Internet right from the start in 2001, when their eLearning platform was developed. “We are purely digital, no bricks and mortar. We want to be in the heart of cyberbusiness, and our advantage is in web-based delivery. Our dream is to see ‘KESDEE Inside’ in all eLearning, just as there was ‘Intel Inside’ earlier in PCs,” says Srinivas.

The company was founded and is completely self-funded from the asset and liability management training programs of chairman S.L. “Sam” Srinivasulu, Srinivas’ father, who has doctorate in financial risk management from the University of Michigan. He prefers to stay in the background and calls himself retired. Daughter Sarwan Srinivas runs the company. She started to promote its services to Spain and Portugal when she was 19 years old.

In addition to its San Diego headquarters, KESDEE currently has a 70-person development center in Bangalore, India, and an office in Mexico City with 25 employees who translate materials into Spanish and localize them. The company is planning to establish customer support centers in China, Vietnam, Brazil, and other countries. “This year’s most significant challenges are scaling up, scaling up, and scaling up,” according to Srinivas.

KESDEE differs from its eLearning competitors like Skillsoft with an all-digital, web-based approach and by focusing only on financial courses. KESDEE customizes and tailors content for various corporate clients, and even allows clients to brand its courses as their own (just as long they remember that small ‘KESDEE Inside’ thing.) The three largest customers are the Federal Reserve Board, Citigroup, and Standard Chartered Bank. Others include PriceWaterhouseCoopers, IBM, and many major international banks. KESDEE uses blue chip clients as an ad for their next prospect and concentrates on producing educational content—they call this their disruptive business strategy and disruptive technology.

The courses are also available for individuals. An accredited risk-management course costs $400.

Beyond that, Srinivasulu is not keen to provide much financial information about KESDEE itself. He says KESDEE is profitable. Thousands of professionals have taken their courses, but only the company knows how many licenses it has sold.

How has the economic crisis affected KESDEE? Characteristically, CEO Srinivas says it’s both a tough time and an opportunity. “Many businesses have realized that they don’t need their own financial-education department. On the other hand, many institutions are cutting down spending, too.”

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