VC is Up or Down Depending on Who You Read, Congress Looks to Revive SBIC Program, & More San Diego BizTech News

10/19/09Follow @bvbigelow

Dueling reports on venture capital activity came to contradictory conclusions last week when the numbers came in for the three-month period that ended Sept. 30. Catch up on that and the rest of San Diego’s technology innovation news:

—New York-based ChubbyBrain says $6 billion in venture capital was invested nationwide in 680 deals during the third quarter—a 14 percent gain over the previous quarter and a sign that VC funding is improving. But Dow Jones VentureSource says just $5.1 billion was invested in 616 startups—a 6 percent decline and a sign the nation’s slow economic recovery is faltering. The two groups use different methods to count VC investments, and it’s not yet clear which one is more accurate.

—Skeptics made a strong showing at the 3rd Annual Algae Biomass Summit held recently in San Diego. Among the critics was John Walter of San Antonio-based Valero Energy, who urged the algae biofuels industry to “get away from some of the outlandish claims that are out there.”

Skype is in negotiations to buy San Diego-based Gizmo5, a much smaller competitor with similar peer-to-peer technology, according to Michael Arrington of TechCrunch, who cited multiple unnamed sources familiar with the matter. Michael Robertson, the serial entrepreneur who made his fortune starting San Diego’s MP3.com, is the founding CEO of Gizmo5.

—Connect, the San Diego non-profit that supports technology and entrepreneurship, is working with BIO, the Biotechnology Industry Organization, to support a recently introduced bill to provide $250 million to revive SBICs, Small Business Investment Companies. For those who think the government should stay out of the venture capital business, consider a post written last week by PE Hub’s Dan Primack. He says, “you can’t separate government from venture capital.”

—After identifying a mini-cluster of algae technology companies in the San Diego area last December, we decided to update what the local industry looks like today. Denise found at least a dozen companies in this area are now developing deep technical expertise in various aspects of algae-related R&D, production, and processing.

—We also noted several new rounds of venture capital investments in mid-stage technology companies last week:

—Oak Investment Partners of Palo Alto, CA, and New Enterprise Associates of Menlo Park, CA, were among the investors that put another $12 million into SmartDrive Systems, a San Diego company that uses video recording technology and web-based services to reduce the costs of operating motor vehicle fleets.

—ABS Ventures of Waltham, MA, Dolphin Equity Partners of New York, and Whelan Capital Management of Palo Alto, CA, participated in $2.5 million in venture funding for Overtone, a company based in San Diego and San Francisco that provides Web-based analytics. Overtone’s software-as-a-service enables its corporate customers to monitor what people are saying on the Internet about its services and products.

—Venrock Associates of Palo Alto, CA, RRE Ventures of New York and Palo Alto, CA, and VeriFone Holdings of San Jose, CA, have invested more than $6.7 million in San Diego’s Semtek Innovation Solutions. Semtek is commercializing technologies for preventing the theft of credit card data and identifying counterfeit credit cards.

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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