There’s a new player in the seed-stage investment game in Boston. As of this week, the Experiment Fund is open for business at Harvard University, backed by the Silicon Valley venture firm New Enterprise Associates (NEA). The startup investment fund is being hosted by Harvard’s School of Engineering and Applied Sciences in Cambridge, MA.

The new fund is led by Hugo Van Vuuren (see photo above), a Harvard graduate student and entrepreneur, and two venture capitalists from NEA, Patrick Chung and Harry Weller (both Harvard alums). David Edwards, a Harvard professor of biomedical engineering, serves as an advisor to the fund. Van Vuuren and NEA did not respond to requests for comment in time for this article.

The basic structure of the Experiment Fund is that selected startups—mostly student-led teams from Cambridge—will receive up to $250,000 in seed funding over the next two years, presumably in exchange for a sizable equity stake in the companies. The fund is based out of Harvard but says it will operate independently of the university and will look at teams from other local schools—and, more broadly, from the East Coast. The sectors targeted are pretty broad as well; they include information technology, healthcare, and energy.

No word yet on the size of the fund or how many companies it will invest in. But Van Vuuren, a recent fellow at Harvard’s Berkman Center for Internet and Society, said in a press release that he and his partners are looking for “smart and resourceful people, zealous full-time teams, and experiments in need of seed funding and hands-on help to get off the ground.”

Not to beat a dead Zuckerberg, but the overarching goal here is to keep the next Facebook in Boston—and, preferably, affiliated with Harvard. “It’s continued growth of the ecosystem for Harvard and beyond,” says Gordon Jones, director of the Harvard Innovation Lab, which is collaborating with the Experiment Fund to provide office space and resources, but is separate from the new fund. Jones calls the Experiment Fund “extremely complementary” to the i-Lab.

One of the first Harvard teams to receive an investment from … Next Page »

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A decade ago, scooters and mopeds made up the bulk of motorized transport in India. Today, motorcycles and cars of all makes are a common sight, from Harley Davidson and French carmaker Renault to Suzukis. India is undergoing important socio-economic shifts that are resulting in the segmentation of existing markets and the opening of previously nonexistent ones.

Even though India seems full of opportunities and market potential for almost any foreign product, it requires a lot of sensitivity and awareness because the complexities arising from its heterogeneity make it a challenge for companies looking to copy-paste business models from abroad. In addition to experiencing growth in the consumer market, India is also the stage for an emerging entrepreneurship sector.

Big retail is a prime example of how the diversification of India’s class structure is creating new market opportunities. As little as five years ago, the viability of giant retail stores operating in India would have been seriously questioned. In her book Winning in the Indian Market, published in 2006, India’s leading market strategist and consumer analyst, Rama Bijapurkar, explains that large discount retail outlets in Indian cities have failed for multiple reasons. The principal one being that supermarkets cannot cater to India’s lower income groups because they live day by day and do not have the discretionary income for volume purchases, even at a discounted price. The model adopted by manufacturers of fast moving consumer goods (FMCG) is small quantity at an even smaller price. An example of such would be hotel-like sachets of shampoo for two rupees (0.04 USD); these small packaged goods accounted for 40 percent of the sales of FMCG. Nonetheless, India’s rapid growth has given rise to a new socio-economic group that is filling the demand void, allowing hypermarkets to set up shop in India.

India’s middle class has grown tremendously over the years, due in part to substantial investment in education, and a booming job market fueled by foreign investment. India is outputting almost half a million engineers a year, amongst others skilled employees. Salaries are on the rise with 11.7 percent hikes in 2010 and a projected growth of 12.9 percent in 2012, according to consulting firm Aon Huwitt. Devinder Mahna, general marketing manager at Mechelonic Engineers, explained that it is no longer infrequent for engineers graduating from top schools to find jobs with salaries closely matching those they would find in the U.S. Even though this is not the norm and many will only earn between 400 and 700 dollars a month, it is still preferable for them to buy their groceries at a one stop-shop location rather than waste time purchasing their goods in the various specialty stores.

Even though many of these young wage earners shop at big retail outlets and drive a Chevrolet, it does not translate into a general infatuation with western goods, for the simple reason that Indian and western consumers have diverging tastes. Satya Bonala, head of Delhi-based market research firm Vox Populi, argues that many multinational companies have often made this mistake. India, having 20 officially recognized languages, with dozens more regional tongues, each with its own culture, is an extremely heterogeneous market requiring products tailored to each segment’s needs. Bonala went on to explain that The Coca Cola Company learned this lesson when it attempted to re-introduce its product in India after almost a 20-year absence, by … Next Page »

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This is a tale of two CEOs whose reputations precede them. It is a short tale.

The news today is that Cambridge, MA-based Kinvey and Portland, OR-based Urban Airship have formed a technology partnership involving mobile applications. Basically, Kinvey will handle the data back-end for mobile app developers whose apps reach end users through “push notifications” powered by Urban Airship; push notifications are typically marketing or news messages sent by publishers over a data network. Financial terms of the partnership weren’t given.

But this story isn’t really about financials. These are two startups, separated by 3,000 miles, and each has a personal flair. Last year, Urban Airship CEO and co-founder Scott Kveton told me about how his company first got off the ground. It was June 2009, Urban Airship had barely started, and Kveton and his team couldn’t afford to attend the Apple Worldwide Developers Conference in San Francisco. Instead, they bought $1,500 worth of donuts and camped outside the Moscone Center, chatting up (and feeding) hundreds of developers waiting in line about their mobile messaging needs.

Fast forward, and today Urban Airship’s thousands of customers include ESPN, Fox, LivingSocial, Warner Bros., and the White House. The company has raised more than $20 million, and its investors include Foundry Group, True Ventures, Founder’s Co-op, Intel Capital, Salesforce.com, and Verizon.

Kinvey’s back-story is no less dramatic. The founding team moved to Boston from Austin, TX, and graduated with the most recent class of TechStars Boston. Last July, when founder and CEO Sravish Sridhar and chief technology officer Morgan Bickle were stuck underground for two hours on the Red Line subway, they spent their time chatting up commuters about their mobile-app needs.

Sridhar’s startup has since raised a $2 million seed round from Atlas Venture, Avalon Ventures, and numerous angel investors. Kinvey is building its business around providing cloud-based back-end services like storing and managing app data, handling security and analytics, and enabling purchases. We’ll be watching to see how much its partnerships, like the one with Urban Airship, help boost its profile among developers and publishers.

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If you want something done right, the old saying goes, do it yourself. That’s exactly what XL Hybrids, a Boston-based transportation tech startup, is up to these days.

Despite a thin layer of gloom that pervades much of the cleantech industry, XL Hybrids is advancing in its quest to make commercial vans and trucks greener and more fuel-efficient. The two-and-a-half-year-old company is announcing today it has appointed Richard Canny, a longtime Ford Motor exec and electric vehicle expert (former CEO of Think Global), to its board of directors. Canny is based in the Detroit area and gives XL Hybrids some more gravitas and deeper connections in the auto industry. But there are a lot of other things going on under the hood at this ambitious startup.

“We’ve been hard at work not only in technology development but also in re-examining our market,” says Justin Ashton, the company’s co-founder and vice president of business development.

Part of that re-examination includes ending a partnership that XL Hybrids had formed about a year ago with U.K.-based Ashwoods Automotive, which makes a vehicle retrofitting kit. The plan had been for XL to adapt the kit for the U.S. market. But XL found the process was taking too long, in part because European vehicles are so different from American ones. “It made sense to work on our own,” Ashton says.

So, XL Hybrids is handling the technology for commercial fleets by itself now. “Our strategy has shifted to doing all systems development [ourselves] but working with tier-one suppliers for components,” Ashton says. That means employing large battery makers and established electric motor manufacturers, he says. “Our role is to build the hybrid architecture from the ground up.”

The architecture consists of a hybrid electric powertrain (for which XL has patents pending) that can be installed on either existing vehicles or new ones. It includes a lithium ion battery, electric motor, and control software. The computer-aided design drawing of the system (see left) resembles a space-age tuba, or maybe a Star Wars pod-racing engine, but the point of the powertrain is to store energy wasted in braking and reapply it during acceleration. XL says this results in about 20 percent lower fuel consumption and emissions for high-mileage city driving, in standard cargo vans (typically made by GMC or Chevy).

Starting in January, XL Hybrids is working with commercial fleet companies to start pilot tests of retrofit cargo vans in the Boston area. If all goes well, there will be a couple dozen vehicles on the road around New England by June, Ashton says.

But he emphasizes that there is a bigger opportunity. “This business is not about retrofit. Long term, it’s about creating a unique hybrid powertrain for a large market,” Ashton says. “We can do retrofits where they make economic sense for our customers. But we have a lot of interest from customers in what’s called ‘upfitting’”—putting the technology into new vehicles.

Of course, this could be a difficult journey for a small startup—but XL is focusing on a market it thinks it can handle. “The real challenge in transportation is finding your path to get your product to market. And dealing with some of the largest companies in the world with long product cycles,” Ashton says. “We don’t want to wait. You have to find a business model that is relatively capital efficient, that leverages existing infrastructure.” He adds, “Right now we’re focused on a niche within a niche. The commercial vehicle side is dwarfed by the consumer segment. Our strategy is to position ourselves.”

XL Hybrids was founded by a team of MIT grads in 2009 and has about 10 employees. The company has raised roughly $4 million from angel investors and the Massachusetts Green Energy Fund. It says it plans to raise more money next year.

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First of all, the name is Ginger.io, not Gingerd. The latter is how the company was incorporated; but the former is its real name.

And real is what Ginger.io is becoming. Since graduating with the most recent class of TechStars Boston startups, the MIT Media Lab spinoff (from professor Sandy Pentland’s research group) has been heads-down working on its product—software that helps healthcare providers and pharmaceutical companies monitor the behavior of patients via their mobile phones.

The startup has been busy fundraising too—and it is naming its investors today. Ginger has closed $1.7 million in first-round financing led by Silicon Valley-based True Ventures. Also participating were Kapor Capital (Mitch Kapor’s VC fund), Romulus Capital, and a number of angel investors, including Bill Warner, Walt Winshall, James Joaquin, and Ty Curry. All together, Ginger’s investors and advisors represent a pretty interesting mix of people with experience in big data, healthcare, and mobile software.

Here’s the idea. A mobile phone can provide crucial information about its owner’s activity level, location, and communication patterns—all in real time, more or less (assuming the person opts in). That information could be valuable to drug makers and hospitals looking to track the results of clinical trials, market medications to certain types of patients, or design new therapies for things like diabetes, obesity, or brain disorders. The data alternatives—behavioral self-reports, surveys, and the like—are famously unreliable by themselves. With this in mind, Ginger is not one of the dozens of startups developing consumer apps for tracking one’s own health and wellness (though that’s sort of where the company started). No, this is a business-to-business play.

But here’s the bigger idea. What’s really valuable is not so much the data as the insights and patterns that can be gleaned from that data. If Ginger’s software knows how you behave on a “normal” day, for example, it can figure out when your behavior changes—maybe you’re stuck in bed, or not calling your usual friends—and correlate that with indicators of problems such as doctor visits. If the software tracks a population of patients taking a drug, and some respond in an expected way but others don’t, the pattern might suggest a way to target the drug more effectively.

“If you’re a pharmaceutical company, to know a segment is behaving differently and doing better on that drug, that can help you market that medication,” says Anmol Madan, co-founder of Ginger.io and a Media Lab PhD.

What’s more, the company is harnessing its tools in computer science, machine learning, and data analytics for a much deeper purpose. “It’s about understanding people,” says Frank Moss, the former Media Lab director and software technologist who serves as an advisor to Ginger (he’s also an Xconomist). “I think it’s going to be revolutionary.”

Moss is talking about Ginger’s potential to “discover the principles behind … Next Page »

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On a dismal day in Boston, here are a few tech-related company financings worth mentioning (one in mobile/social, one in video, and one in education):

—BetterLesson, a Cambridge, MA-based startup that helps teachers organize and share lesson plans and curricula online, has closed a new $1.6 million financing round from Highland Capital Partners, General Catalyst Partners, New Markets Ventures, NewSchools Venture Fund, and angel investors. BetterLesson says it has built up a Web community of tens of thousands of K-12 educators. Any education company led by a Teach For America alum (founder and CEO Alex Grodd) is worth paying attention to, I say.

—Earlier this week, Wikets, a social commerce and recommendations startup, said it raised a $1.5 million seed round from Andreessen Horowitz, Battery Ventures, and angel investors, according to TechCrunch. (Xconomy reported on the round back in June, but without information about the investors.) The Boston-area startup, which is working on its mobile app, is led by founders Andy Park, Vijay Manwani, and Ravi Reddy.

—PeerApp, a Newton, MA-based online video delivery firm, raised $8 million in growth financing led by Summit Partners. Cedar Fund, Evergreen Partners, Pilot House Ventures Group, and other investors also participated in the round. PeerApp started in 2004 and is led by CEO Robert Mayer, a former EMC exec.

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First of all, please don’t call CustomMade a “mass customization” startup. That phrase refers to the cluster of companies, many of them in the Boston area, that specialize in offering consumers personalized goods online—everything from clothing to jewelry to artwork.

No, CustomMade is different. At least that’s what co-founder and CEO Mike Salguero would have you believe. The Cambridge, MA-based startup runs a website that connects consumers with expert makers of furniture, ceramics, home décor, glassworks, and more. That’s different from sites that let consumers configure products or browse through umpteen permutations of features before ordering them.

“Where we play is the service, not the product,” says Salguero. “There’s no configurator. This is custom on a whole different level.” (As an aside, “The Configurator” sounds like either a great nickname or the next Jason Statham movie.)

Salguero and fellow co-founder Seth Rosen were building their careers in real estate development when they bought CustomMade.com for $140,000 in early 2009. The site had already existed for years as a custom woodworking site and was getting modest traffic, about 500,000 unique visitors a year. Salguero and Rosen raised about $2 million from friends and individual investors, rebuilt the user interface, and have grown the site’s traffic to more than 3 million uniques a year. The company currently uses a subscription model; its 2,500 makers and craftspeople pay an annual or monthly fee, says Salguero.

The company has just raised an additional $2 million from unnamed investors. The new money is being used to continue its growth, Salguero says. But the startup isn’t saying anything more specific about that yet.

Nevertheless, here are a few more reasons why CustomMade is interesting (and about to get more interesting):

—The company is moving to a transaction-based model (it will still make money on subscriptions as well) in which it will take a cut of each purchase made through the site. And just for reference: Etsy, a prominent online marketplace for handmade goods, has an average transaction value of about $25, Salguero says. CustomMade’s average is $2,000.

—As part of the shift, the company will roll out a new interface for consumers and craftspeople to interact. More on that coming down the pike.

—CustomMade has been hiring, and is now up to 22 employees. The firm recently recruited Michele Pearl, a well-known exec from BzzAgent and Monster.com, as its chief product officer.

—Locally-made and handcrafted goods are a multibillion-dollar market that can conceivably compete on price and selection with medium-to-high-end retailers. The question, of course, is how much of that market can be captured if the process is made simple and efficient.

—Perhaps more than mass customization, CustomMade fits into the trend of online communities that connect experts with paying customers who want specific jobs done, through a social interface. See GrabCAD, Kickstarter, IndieGoGo, and Quirky, for instance.

Stay tuned for more on this company…

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Score one for video-based recruiting and marketing. (Yes, there are a lot of startups in this sector, plus Skype and Google.)

Cambridge, MA-based Take the Interview has closed $775,000 in seed funding this week from angel investors, as well as partners and limited partners of DreamIt Ventures, the startup incubator in New York City in which the company participated this summer. It was the first New York class of startups for the program, which is based in Philadelphia.

Take the Interview makes a video-based platform for companies to screen job candidates, and for job seekers to market themselves to employers. The goal is to use self-recorded video clips to make the hiring process more efficient for all involved. Take the Interview rolled out its private beta this summer and says it has more than 100 users.

The startup, which is based at Dogpatch Labs Cambridge, is led by co-founder and CEO Danielle Weinblatt. I first mentioned the company in a story back in February.

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[Updated 3:00pm, see below] Providence, RI-based Betaspring, a seed-stage accelerator program in its third year, is holding its Investor Demo Day down in the Ocean State today. Eleven young startups, between three months and a year old, are presenting to an audience of venture capitalists, angel investors, entrepreneurs, and media. Looks like most (if not all) of them are Internet software or mobile-related.

Here’s a quick rundown on this summer’s class, courtesy of Betaspring founder and managing partner Allan Tear:

BuildingLayer
Intuitive mapping and wayfinding solutions for indoor spaces

TouchBase
Keeping teens and parents in touch over a private, mobile network

Revenizer
Easy marketing scorecards to help companies grow faster

Mosec
Speech-to-text for mobile professionals, integrated directly with CRM systems

Nest4Less
Relationship marketing platform for realtors and home owners

Translate Abroad
Translate Chinese writing into English using your mobile phone

Inhabi
Matching landlords with prequalified renters

Zoko
Enabling dinner groups to form, plan, and grow dinner parties

Study Egg
Increasing learning performance for college students with short activities via smartphone

FittedFashion
Custom clothing platform delivered through digital tailoring technology

…and the final company has a name and logo that I can’t read. Orb? Corb? (No website.) [Update: I'm told it's Gorb.]
Bringing skill-based wagers to mobile gaming

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Boston-to-Silicon Valley transplant E la Carte has raised $4 million in new funding, according to a report in TechCrunch. The round was led by Lightbank. The startup previously raised more than $1 million in angel capital from investors including John Landry, Roy Rodenstein, Dave Balter, Dave McClure, Joshua Schachter, and Paul Buchheit.

E la Carte, based in Palo Alto, CA, makes a tablet-based computer system for ordering and paying for food in restaurants. The seven-inch “Presto” tablet is custom-built for the restaurant environment and includes a built-in credit card reader.

The company, which started in 2008 and was a resident of Dogpatch Labs Cambridge before heading to Y Combinator last year, says it has more than 20 employees spread across offices in Silicon Valley, Boston, Chicago, and New York City.

E la Carte is led by co-founder Rajat Suri, a former MIT student who worked as a waiter at several restaurants in Cambridge, MA, as part of his product research. Suri told TechCrunch the company has signed up close to 100 eateries, including Pizzeria Venti and Umami Burger, with a waiting list of 150 more.

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There’s something about Estonia. Maybe it’s the Skype phenomenon—the Estonian-born company (now part of Microsoft) certainly helped create a strong culture of engineering there. But the Baltic nation of 1.4 million seems to have a greater concentration of engineers and technical talent than almost anyplace else.

That’s probably an exaggeration, but at least one recent Boston-area company hails from there—GrabCAD, a nine-person startup that graduated from the TechStars Boston incubator program in June. If all goes well, the company, which splits its staff between Cambridge, MA, and Tallinn (the Estonian capital), will do its part to advance a traditional strength of the local tech scene. That would be computer-aided design, or CAD software, the means by which most technical components we take for granted are designed and built—and the basis of iconic companies like Parametric Technology (PTC), SolidWorks/Dassault Systèmes, and Autodesk.

GrabCAD has built an online community and marketplace that connects mechanical engineers with people and companies who need stuff built—everything from auto parts and motorcycles to custom furniture, toys, and mobile devices. The startup provides a Facebook-style feed where users can see other engineers coming online, uploading their designs, and looking for business. That also means the company is accumulating a large library of CAD models and tutorials that engineers and companies can use as a resource, says co-founder and CEO Hardi Meybaum.

Last week, GrabCAD unveiled a new dimension to its offerings. It is letting companies host their own design contests to take on specific engineering challenges, such as building a new ventilation system for a luxury yacht or designing a new kind of electrical “superbike.” Engineers upload their designs in response, and the companies choose the winners and award them cash prizes.

Meybaum, 29, and his co-founder Indrek Narusk—they went to Tallinn University of Technology together—started working on a product development company back in 2007. They got some customers, but they found running the business took too much of their creative time.

Around 2009, when GrabCAD started working on its current idea, the founders “didn’t meet anyone who said it’s going to work,” Meybaum says. People thought (and still think) the company would get besieged by orders for impossibly complex designs like rockets, for example. But in fact its first order … Next Page »

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A local tech startup that has been toiling away for four years saw its first partnership with a big company come to fruition last week—and it could be a sign of bigger things to come.

Back in February, Cambridge, MA-based OfficeDrop, a digital filing software company, inked a deal with Nuance Communications (NASDAQ: NUAN), the speech and imaging tech firm in Burlington, MA. OfficeDrop provided the software and expertise for Nuance’s new cloud-based scanning and document-managing service, called PaperPort Anywhere, which rolled out last week.

It’s a big deal for OfficeDrop, which stands to get about $1 million in revenue from Nuance in the first year of the partnership, says Prasad Thammineni, the co-founder and CEO of OfficeDrop. Nuance’s scale could help the startup reach millions of new users—so it’s a distribution model that Thammineni is looking to replicate with other big companies in the next year or so.

OfficeDrop lets people (primarily in small businesses) organize, index, and share their digital data, and look at their documents instead of a list of files, for example. “We take visual elements of paper and replicate it,” Thammineni says. “And we bring search to the table.”

The startup sits somewhere in the middle of a swirling ecosystem of companies, many with Boston roots, offering cloud-based services like data storage (EMC), online backup (Carbonite, Backupify), paper digitizing and document management (Iron Mountain), personal file management and search (Evernote), and file hosting and sharing (Microsoft SharePoint, Box.net, and Dropbox, the astronomically-valued startup du jour).

OfficeDrop (formerly called Pixily) started in 2007 as a service to help people scan in and digitally organize their paper documents. It has evolved to include collaborative features and mobile apps, so people can scan documents and access their files from their iPhone, iPad, or Android device. The company has 20 employees, split about equally between the Boston area and Brazil, where most of its software developers are.

Interestingly, although the three founders are Indian, OfficeDrop has no employees in India. Thammineni says that’s because most software developers in India have a big-company mentality that doesn’t mesh well with a startup. Brazil, on the other hand, has a lot of “out of the box” talent that fits with the OfficeDrop culture. “They challenge you at every turn,” he says.

Thammineni’s company, his fifth so far, was self-funded in its early days. It raised a small financing round in 2009, followed by a $1 million angel round this spring—and it will be looking to raise more money this fall, he says. But for now, OfficeDrop’s main focus is on “making the product better and better,” Thammineni says. And on squaring away its next big-company deal.

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Kinvey, a mobile software startup (originally from Texas) that recently graduated from the TechStars Boston accelerator program, said today it has completed a $2 million seed financing round that was led by Atlas Venture. Avalon Ventures also participated in the round, along with Boston-area angel investors including Chris Lynch, Mike Baker, Jennifer Lum, Ty Danco, and Joe Caruso, according to BostInnovation. The idea behind Kinvey is to provide an easy cloud-based backend for mobile app developers. At TechStars’ demo day in June, Kinvey founder and CEO Sravish Sridhar joked that he was putting the “BaaS” (backend as a service) in “Badass.” Sridhar has a flair for the dramatic: last month he and chief technology officer Morgan Bickle were among the unfortunate Boston subway riders stuck underground for two hours during a morning commute. (Welcome to Boston, gentlemen.)

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This morning was a busy one for Eric Gastfriend, but he made time to chat about his Cambridge, MA-based startup’s coming out of beta. Its goal: to make high-quality PC video games as fast and easy to access as the social-network and casual games that have swept the country over the past few years (think Zynga, Playdom, and increasingly Electronic Arts, which owns Playfish and now PopCap).

The Happy Cloud, if you can get past the name (OK, it’s actually fine), has opened up its on-demand game store to the general public today, with 10 PC games from three publishers—Warner Bros. Interactive Entertainment, Paradox Interactive, and Frictional Games. The games themselves range from first-person shooters (F.E.A.R. 2) to adventures (LEGO Harry Potter, Amnesia). They are free to demo, says Gastfriend, the company’s general manager, and if people buy the full version of a game, the startup splits the revenue with the game publisher.

Happy Cloud tries to drastically cut down the amount of time it takes to download PC games—from around six hours (or overnight), which is the status quo, to just a few minutes. Gastfriend, a recent Brown University grad, has probably been thinking about how to do this for a long time. He’s been playing and working with video games since he was five (and making websites since 5th grade).

“If you make games easy to access, frictionless, and simple and easy to learn, then it turns out everyone and their grandma wants to play a video game,” he says. “Hopefully, Happy Cloud can bring a high-quality experience to a more casual audience.”

Unlike other approaches to streaming games, Happy Cloud works by buffering the first few moments of the game and tricking the system into thinking the game is fully installed, when in fact Happy Cloud’s browsing and caching algorithms are constantly figuring out what parts to download next. The company says this approach gets rid of time lags (because the game runs locally on your PC) and poor resolution issues (because there’s no video compression) that come with streaming.

The two-year-old startup has been in private beta trials since May. In its first month, Happy Cloud logged more than 2,500 unique visitors, Gastfriend says, and half of them signed up for e-mail blasts. The company has since found that half of its traffic comes from outside the U.S. (mostly Europe and South America). So although the public launch today is only for U.S. consumers, the startup is looking to add more countries.

Happy Cloud currently has 10 employees, split half and half between Cambridge, MA, and Israel. It previously raised about $1 million in angel financing and will be looking to raise another round, Gastfriend says. The company was founded by Jacob and David Guedalia, serial entrepreneurs who sold their last company, iSkoot, to Qualcomm last fall.

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News flash: This company actually makes physical stuff for businesses. Not social software, not a mobile app or backend system, not a retail website or aggregator. And it has been able to raise some new money to expand its product. Its goal: to provide automated kiosks (see image, right) for dispensing everything from loyalty cards and luggage tags to cell phones and iPods.

I’m talking about Cambridge, MA-based Vigix, which closed a $1.5 million Series A-1 round this week, led by Still River Funds, a venture firm based in Waltham, MA, that invests in hard technologies and life sciences. Vigix previously raised a smaller A round from investors including LaunchCapital, Launchpad Venture Group, and Race Point Capital. The company has taken in a little under $3 million to date, says CEO Steve Pytka.

Vigix has been around the block. The company started in 2004, founded by Eduardo Alvarez (who is president), and its product has been in development for years. Selling kiosks is a very challenging business, Pytka says, with a market full of entrenched competitors like Redbox, NCR, and ZoomSystems.

“We were able to survive two very difficult years. Nobody was investing in new technology,” says Pytka, a veteran of Streamware, Gazelle, Wang, and Xerox, who joined Vigix in early 2008. “We’re starting to see customer traction in a big way.”

The Vigix kiosk, designed by Cambridge-based Ideo, is roughly person-sized (six feet tall, under 200 pounds, takes up 2 square feet) and includes a video screen and a unique dispensing mechanism. Unlike a traditional vending machine, the kiosk has no moving parts; a special hook holds each item inside, and a pulse of heat melts the hook so the item falls through the dispenser.

The machine also includes software so it can be monitored and controlled over a wireless network; ongoing software licensing is an important part of the company’s revenue stream, Pytka says. And the kiosk uses a cartridge of products that can be restocked by a courier such as UPS. The goods are never touched by retail employees, so that could help stores cut down on theft (“shrinkage”), Pytka says.

Besides Ideo, Vigix has forged key partnerships with Flextronics for manufacturing, Kodak for installations, and IBM for software. These relationships have been instrumental in helping the small company gain traction, Pytka says. Vigix has five full-time employees and is now looking to expand its engineering support and sales and marketing team.

In the past year, the company has won a couple of $250,000 contracts, Pytka says. Its customers include Qantas, the Australian airline (which is using Vigix kiosks for self-service luggage check-in), and South Carolina-based wireless provider Clear Talk (which sells prepaid cell phones and accessories). The firm has 25 kiosks out in the field so far.

Vigix clearly has a long way to go, but its “rapid growth” has Pytka talking about putting its kiosks in all manner of retail stores (think jewelry, pens, watches, electronics), as well as in airports, train stations, hotels, movie theaters, and stadiums.

“It’s a classic hockey stick,” he says.

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The pace of tech startup events is a little out of control this week. You can thank (or curse) David Beisel, Jon Pierce, Coolio, TechStars, DartBoston, Xconomy, and many others for that. With some more time and distance, though, we might all look back at this week as a flashpoint in history when the tech community was reborn in Boston.

Or not. These trends are cyclical, so it’s all a matter of degree. But you know it’s a busy week (not even counting the Bruins series) when I’m reduced to writing multiple stories in the form of top-10 lists.

Well, the second annual Angel Bootcamp, which was yesterday at MIT, warrants such a list. I couldn’t make all the sessions (in particular I missed Bill Warner’s closer), but here are the top 10 snippets I heard during the afternoon:

1. “All you have to do is write checks.” That was Dharmesh Shah, the famed investor and co-founder of HubSpot, saying that the reality of angel investing is that all you really need is money. (Which was followed by a slide saying, “I add minimal value beyond the cash. Maybe I can be a VC someday.”)

2. “Dharmesh is full of shit.” That was Laura Fitton of oneforty. Shah is one of her investors, and she was making the point that, of course, he actually adds a ton of expertise despite what he says about just writing checks.

3. “Humility.” Dave Balter of BzzAgent talked about the characteristics of successful founders, and which entrepreneurs angels should seek to invest in. He bluntly pointed out that lots of founders who’ve gotten money probably shouldn’t have, and consequently they have an inflated sense of themselves and their companies. Angels should look for humble teams who are always learning, work harder than others, have strength of conviction and a relentless, fearless, grind-it-out mentality, and believe they are “unstoppable.”

4. “Entrepreneurs need to run a process.” Brian Balfour, co-founder of Boundless Learning (and before that, Viximo), was talking about how to go about seed-stage fundraising. Startups need to follow a step-by-step plan and get their financing done efficiently, he said. Balfour, Fitton, Jeremy Levine (StarStreet), and Raj Aggarwal (Localytics) shared their experiences, which ranged from desperate to disorganized to definitive.

5. “No.” That was David Tisch of TechStars New York on whether he does due diligence on seed-stage investments; there is some debate about how much one can really analyze an early-stage company or idea. Another nugget from Tisch, on what he has learned about the dynamics of angel-VC investing syndicates: “I need to know every VC, so they don’t squash me out anymore.” (The flip side of that was Bijan Sabet of Spark Capital saying, “Choose your syndicates wisely,” and make sure your co-investors have the ability to finance the next round.)

6. “Boston VCs are dinosaurs.” In case you didn’t quite feel the undercurrent of angel-VC competition, that was one member of the startup community speaking on background. Dinosaurs in the sense of hanging on to old models, networks, and ways of doing things. An example: Not letting their entrepreneurs work on multiple projects, as Balter mentioned in his talk.

7. “Crazy shit is going to happen to your companies that you cannot control. You are along for the ride, whatever the destination.” That was David Cohen, founder of TechStars, talking about his experiences as an angel (18 personal investments, 156 total, and “12 exits that mattered”). He calls angel investing “addicting, surprising, and social.”

8. “The follow-on investment market now is quite good.” That was Eric Paley of Founder Collective, moderating an angel panel. How quickly things change: less than two years ago, people were talking about a bloodbath of consumer Web companies that would be unable to get follow-on funding. So maybe things have turned around, but…

9. “I’m seeing a bit of a funding gap—companies have high expectations for an A round. I try to invest in companies with some path to revenue.” That was the ever-pragmatic Roy Rodenstein, co-founder of Going.com and an active angel. (Spoken like someone who’s still investing during a recession or something.)

10. “You only need one giant win to pay for 100 stupid mistakes.” David Cohen again—and this gets to the heart of why angels should (and do) invest in companies they don’t necessarily know that much about. It also brings to life why angel investing can be so addictive (and surprising).

Analysis: For those scoring at home, that was 3 mentions of “VC,” 3 mentions of “checks” or fundraising, 2 mentions of “shit,” and 1 mention each of “humility,” “mistakes,” “addicting,” “fearless,” “unstoppable,” and “win.” (Zero mentions of “bubble,” by the way.)

I’m not sure what that all means, but the above words might hint at the direction the Boston tech angel community is headed. We’ll see how much farther it gets in the coming year.

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Smarterer, a Boston-based tech startup, is generating some buzz this week, having demoed its product at the WebInno meeting last night.

The company started in the fall of 2010, founded by Dave Balter, Jennifer Fremont-Smith, and Michael Kowalchik. It provides crowdsourced skills tests on digital, social, and other techie tools—think Twitter, Ruby, Matlab, Photoshop. Job seekers and other curious folks can sign up, take multiple-choice tests in under 60 seconds, and get a score that they can promote on their resume (or bury with shame, for us dumb and dumberer folks).

Although some media outlets are reporting it like it’s news this week, Smarterer raised a $1.25 million seed round, led by True Ventures and Google Ventures (and a bunch of angels), before April.

In honor of the company’s 10-question test format, here’s Smarterer in 10 points:

1. The problem: “There’s no smart way for professionals to validate that they have [certain technical] skills and articulate it to the world,” says Fremont-Smith, the company’s CEO.

2. Goal: “To completely reinvent the skills section of the resume of the world,” she says. “Our mission in life is to take that skills section—which is completely wasted, it’s like a joke—and give it meaning.”

3. Context: “The tools people are using today did not exist a few years ago, and there will be a bunch more new ones tomorrow. The pace of change is actually accelerating. So we use the collective intelligence and experience of the crowd.”

4. How it works: Any user can go in and create a test about any topic. (But to get in, you have to be invited by another user.) Then others add to the test questions. When people take the test, Smarterer’s software figures out which questions are harder or more relevant than others, and the tests get “smarter” over time.

5. Approach: “This will be a very powerful tool for employers…but I’ve got the whole team focused on building for consumers.” (Eventually the trend-spotting of which skill sets are becoming important could be valuable too.)

6. Business strategy: “Not chasing revenue right now, we’ve got a lean team. We’ve got some time to get it right for the consumer.”

7. Biggest challenge: “Getting engineering talent. It’s definitely an arms race.”

8. Impact: “We’re building it for professionals to show the world what they know—what they know, instead of who they know. Think about all those people who have a lot to offer, but they’re not natural self-promoters.”

9. Deeper idea: There’s a “core craving” to show people “this is what I know, this is why I’m important.” “That’s for everybody,” she says.

10. Why Google Ventures: “It makes perfect sense for us to be partnered with Google Ventures because these guys [Google] make all the tools. And Google hires the top 1 percent. Our system is designed to identify the top 1 percent.”

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Last week we published the first half of an extended interview with Mike Maples Jr. and Ann Miura-Ko, the co-founding partners at Palo Alto, CA-based seed stage investing firm Floodgate. The focus in that part was on big issues like how Internet technologies are accelerating startup innovation, how investors have to adapt in response, and what types of entrepreneurs and business ideas attract the firm (Maples and Miura-Ko say they’re looking for “F-16 pilots” who can observe and adapt to changing conditions more quickly than the competition).

In the second part of the talk we got into some more concrete, nut-and-bolts questions—among them, the merits of the Y Combinator-style venture incubator model for launching startups and the difference between a true startup pivot and what Maples calls a “mulligan.” Maples also talked about why he wanted to grow his investing practice beyond angel scale and create a firm that would be “the absolute standard-bearer of early stage investing in a new innovation environment.” Here’s an edited transcript.

Xconomy: Sometimes investors say that they invest in teams, rather than ideas, or that they’re looking for great serial entrepreneurs rather than great product ideas. Y Combinator seems to put out that message a lot. How does that fit with your approach?

Ann Miura-Ko: A lot of people say they just bet on good teams, but I don’t think we’ve ever invested in a company that was just primarily a good team. There is always something about the insight they have that’s proprietary in nature.

Mike Maples: And we don’t necessarily look at being a serial entrepreneur as a positive. Just like some people try to convert it into a science, this idea that you can be a professional entrepreneur is a little bit suspect. Some people have shown they can do it, but the truly great companies get created by first-time entrepreneurs, and great entrepreneurs very often only have one great company in them.

You get some examples where that is not true. You can point to Evan Williams, who started Blogger, then Odeo [which grew into Twitter], but even those were both on the same vector—they were both about sharing and democratizing Web 2.0 content. Very few entrepreneurs are successful in multiple generations of technology or multiple eras of the technology business. It’s authenticity that we look for. Is this entrepreneur truly an authentic match to the opportunity?

X: What about this notion of the startup “pivot”? So often these days, that seems to be a euphemism for, “Oops, our first idea was wrong, and we still have some angel money in the bank, so we’re trying something completely different.”

AMK: That’s not what a pivot is. The whole concept of a pivot is to keep one foot grounded and move the other foot.

MM: I think people have dumbed down the term to mean “We failed the first time so we get a mulligan, let’s try again.” The real reason to pivot is when a great startup starts out saying, “I want to be one of the 15 awesome companies of this year.” And such a company is willing to continually ask themselves if they are on the path to greatness. If I am not on the path to greatness, then it’s axiomatic that I have to pivot. That is the thing that people miss. A lot of companies could be fairly successful in their current business, but the founder has the presence of mind to say that “Merely being successful is not enough, I have to be great.”

AMK: A pivot, for me, is taking one component of your business model and changing it somehow. There will be ripple effects on the other parts, but it’s really just … Next Page »

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Estonia- and Cambridge, MA-based startup GrabCAD announced today via TechCrunch that it has raised $1.1 million in seed funding from Boston-area investors Matrix Partners, Atlas Venture, NextView Ventures, and angel investors. GrabCAD, a member of the current class of TechStars Boston startups, has developed an online marketplace for connecting mechanical design engineers with manufacturing and product development companies. Computer-aided design (CAD) might sound like a boring niche market, but look at what billion-dollar firm Parametric Technology (NASDAQ: PMTC) has done over the past 25 years.

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Seattle-based Buuteeq, a startup focused on digital marketing software for independent hotels, said today it has raised $3.5 million in Series A financing. The round was led by aQuantive co-founder Mike Galgon and angel investor Geoff Entress, with participation from Benaroya Capital and others. Buuteeq (no, that’s not a misprint) makes cloud-based software that helps small hotels and inns produce marketing materials that work across Web, mobile, and social networks. The company was co-founded in early 2010 by former Microsofties Forest Key and Adam Brownstein and has raised a total of $5 million to date.

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