Doxo, Kashless, Physiosonic led WA’s Equity Financing Deals in February

3/21/11Follow @curtwoodward

Doxo’s bid to wipe out paper business correspondence attracted a $10 million round of venture financing last month, outpacing several others as the biggest single venture deal in Washington state last month, according to data compiled by CB Insights.

Doxo‘s Series B investment was led new investor Sigma Partners, and included returning investors Mohr Davidow Ventures and Bezos Expeditions. The company’s mission is to become a central hub for all of the assorted bills, benefits statements, and other business mail that consumers get by the truckload each year. It’s part of a mini-trend that I’d call the New Boring: attacking a mundane, inefficient, unreformed system in business and consumer life that is just begging to have some computing power and engineering smarts applied to it.

Co-founder and CEO Steve Shivers told us last month how the company is introducing a regionalization strategy focused on the greater Seattle area, tied to its recent partnership with Puget Sound Energy—a major electric and natural gas utility. Shivers and company are betting that tying up with a utility that’s already in hundreds of thousands of homes will build customer demand for Doxo’s service among more companies in PSE’s billing area.

The second-largest fundraising haul in February went to Kashless, the Martin Tobias-led parent company of Seattle-based daily deals competitor Tippr. RRE Ventures was listed as the investor in the $4 million Series B financing, according to CB Insights. Kashless has been in the news a fair bit in the past month or so as the competition for third place in the rapidly crowding daily deals market intensifies. First, Kashless sued New York- and Boston-based competitor BuyWithMe in federal and state court, alleging in separate lawsuits that BuyWithMe was infringing on patents and had improperly obtained trade secrets from a Tippr salesman. While it’s wrapped up in those court battles, BuyWithMe found time to buy LocalTwist, an online discount company that put BuyWithMe in Tippr’s backyard for the first time. I suppose we’ll be hearing more about this.

A close third in the monthly rankings was Bellevue, WA-based PhysioSonics, a University of Washington spinoff that makes medical diagnostic equipment that measures blood flow in the brain. The company got about $3.6 million from Medtronic and Kirby Cramer, the former chairman of Bothell, WA-based SonoSite (NASDAQ: SONO). PhysioSonics had previously declined to specify the amount, but CEO Brad Harlow told my colleague Luke in January that PhysioSonics planned to use the cash to complete development of its ultrasound technology, hire another 10 people, and shoot for FDA clearance in the next 12 to 15 months.

Fourth was Datacastle, a Seattle-based data-management company that landed a $2 million venture round led by CM Capital and Haag Ltd., both of Australia. As Xconomy’s Greg Huang wrote about a year ago, Datacastle has moved from a smaller-scale backup and recovery company into the larger business and enterprise market. Their marketing tagline at present revolves around asking companies whether their laptops are “vulnerable to a Wikileaks moment.”

Rounding out the seven-figure deals was a $1 million financing from undisclosed investors for Cardeas Pharma. The stealthy startup is led by well-known biotech entrepreneur A. Bruce Montgomery, a former senior vice president at Gilead Sciences.

Check out the full list, which includes several sub-$1 million equity investments.

Curt Woodward is a senior editor for Xconomy based in Boston. Email: cwoodward@xconomy.com Follow @curtwoodward

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