Healthcare deals are going one way, tech deals another. That’s my read from the past week in the Northwest, where we’ve seen some of the biggest biotech deals around, even as a prominent Seattle tech venture firm (and software financings in general) head south.

—Bothell, WA-based Alder Biopharmaceuticals scored one of the biggest biotech partnerships of the year, as Luke reported today. The company has formed a collaboration with Bristol-Myers Squibb (NYSE: BMY) to develop Alder’s experimental rheumatoid arthritis drug, ALD518, and the deal could be worth more than $1 billion. In exchange for granting Bristol a worldwide exclusive license to develop ALD518 for all uses except cancer, Alder will get $85 million upfront, as much as $764 million in development and regulatory milestone payments, sales-related milestone payments that could exceed $200 million, and royalties on product sales.

—I took a look at the venture and debt financings for Washington companies last month (and the previous two months), and concluded that large investments in software startups aren’t coming back anytime soon. The data, courtesy of New York-based ChubbyBrain, shows most of the money is in healthcare and life sciences.

—Kirkland, WA-based Clearwire has secured an additional investment of $1.5 billion from Sprint, Comcast, Time Warner Cable, and Intel, as first reported by the Wall Street Journal. Google, a previous investor, is not participating in the round. The money will support Clearwire’s (NASDAQ: CLWR) deployment of its WiMax broadband network.

—Verathon, a Bothell, WA-based maker of ultrasound technology, has been acquired by Sarasota, FL-based Roper Industries (NYSE: ROP) as part of a pair of transactions worth a combined $356 million, as Luke reported. The price of Verathon’s sale by itself was not announced. The company develops a 3-D diagnostic imaging tool that helps doctors diagnose bladder disorders.

—One of Seattle’s most prominent tech VC firms will not be raising another fund or making new investments. Len Jordan of Frazier Technology Ventures confirmed the news as he announced he’s moving to Madrona Venture Group at the beginning of next year.

—Bellevue, WA-based Light Sciences Oncology has lined up $35 million in follow-up financing to develop its drug-device treatment for cancer, as Luke reported. The investors weren’t disclosed, but the deal gives Light Sciences the right to access a $23.3 million line of credit, and $11.8 million more if investors choose to exercise warrants. The company raised $40 million from undisclosed VCs last year.

—Seattle startup Movaya Wireless has been acquired by Digby, a mobile commerce firm based in Austin, TX, for an undisclosed price. Movaya was founded in 2006 by Phil Yerkes and Stanley Wang, and focuses on making digital goods storefront applications for the iPhone, Android, and mobile Web platforms. The company’s development team in China will serve as the basis for Digby’s operations in Asia.

Comments | Reprints | Share:        

Early-stage software and IT deals are a scarce breed these days. That’s my initial take from looking at the October funding numbers for Washington state, courtesy of ChubbyBrain, a New York-based information services company that makes tools for investors, startups, and entrepreneurs.

According to ChubbyBrain’s stats, Washington tech, life sciences, and cleantech companies raised a total of $69.75 million last month—down from $84.9 million in September, but still up from $51.4 million in August. There were six venture deals in October, worth a total of $59 million (see below), to go along with three debt financings (a total of $8.35 million) and an unattributed financing round of $2.4 million.

The venture deals were dominated by a $30 million Series A round for Integrated Diagnostics, Lee Hood’s early disease detection startup, and a $22.5 million financing for PopCap Games, the 10-year-old company’s first outside funding round. Looking at the past three months, it’s clear that large early-stage software deals aren’t coming back anytime soon. (You really have to look at the sub-$1 million deals to get an idea of the activity in software and IT, at least in the Northwest.)

In addition to the VC deals, there were three debt financings in the ChubbyBrain stats (and previously reported in Xconomy): Kennewick, WA-based solar developer Infinia raised $3.25 million; Seattle-based lab automation company Teranode raised $900,000; and Kirkland, WA-based health-tracking firm Veratect raised $4.2 million. Lastly, Spring Wireless, a Brazilian company that set up North American headquarters in Seattle early this year, raised an unattributed round of financing worth $2.4 million.

.

.

Comments (1) | Reprints | Share:        

Zeemote, a Chelmsford, MA-based startup that developed a handheld game controller for use with games on mobile handsets, has closed its doors and is putting its assets up for sale, according to a story today in Mass High Tech. Founded in 2005 by Boston-area entrepreneur Beth Marcus, the company worked with handset manufacturers Nokia, Samsung, LG, Sony Ericsson, and RIM to make its Bluetooth-based device compatible with their phones. Mass High Tech spoke with a partner from Zeemote backer Commonwealth Capital Ventures who confirmed the closure but offered no further details.

Comments | Reprints | Share:        

I was chatting with a couple of local investors at the TechStars (seed fund and mentorship program) event in Seattle on Wednesday. They thought the VC panel discussion of the startup climate and culture in different cities around the country was boring. If you’re an entrepreneur or investor, they said, that’s just where you are, and you deal with it.

But au contraire, mon frère—as a journalist and outside observer—I view those comparisons across different innovation clusters and their respective histories as a way to generate some good stories and insights. On the panel, there were certainly some constructive (and at times controversial) things said about the entrepreneurial climate in Seattle, Boston, and Boulder.

Here are a few edited highlights from the panelists, several of whom bring an outside perspective to their current cities:

Brad Feld of TechStars and Foundry Group gave a brief history of the startup scene in Boulder, CO—useful for any city with entrepreneurial aspirations. “When I showed up in ’95, what I found was on the software side you had a lot of smart engineering talent but you didn’t have much else. A handful of entrepreneurial companies in storage and cable infrastructure. Not much in the way of entrepreneurial executive leadership other than from these pockets. In the mid-90s, because of the counter-culture community—and the Internet was purpose-built for places like Boulder—you had a lot of people who were independent, very smart, doing their own things suddenly intersecting with a medium that allows you to be anywhere. It’s 100,000 people plus 25,000 college students. A pretty small town, but it has the largest percentage, per capita, in the United States of computer scientists and PhDs. Yet there wasn’t a broad wave of entrepreneurial experience,” Feld said.

“In the mid-to-late 90s, there was huge activity around the Internet. Anybody with a pulse could get a company started. The predictable thing eventually happened, there was a lot of wreckage. But from ‘95-2001, Boulder had imported a lot of executive talent—CEOs, VP sales, engineering leadership. We also had a lot of entrepreneurs who had one or two companies in that cycle. So by 2003, people were starting to come back and get re-engaged in entrepreneurial activity. There were probably 50-plus people that made $10 million or more, so there was enough of an angel community. There was critical mass around this. But what was missing was something that tied the community together. There was the endless cocktail party circuit of entrepreneurs. Eventually people got bored and stopped going.”

That led David Cohen, Feld, and others to form TechStars in Boulder. “It cemented this notion of first-time entrepreneurial activity is the core of the ecosystem. What was needed was fresh meat into the system. We got a lot of new, young people into the community,” Feld said. “The other thing was that one of the hardest things for first-time entrepreneurs is to have an engaged relationship with an experienced entrepreneur. We found we were creating this thing that integrated the whole value chain of entrepreneurs. It really energized the existing entrepreneurial activity around a thing.”

Chris Sheehan of CommonAngels then gave his thoughts on the Boston innovation scene. [Disclosure: Chris is on Xconomy’s board.] “In the IT ecosystem in Boston, there are a number of things going on,” Sheehan said. “It’s a wonderful place for universities and colleges. MIT has been the granddaddy in terms of the entrepreneurial ecosystem. But what I’m seeing is a fresh set of energy coming …Next Page »

Comments (8) | Reprints | Share:        

Len Jordan, a general partner at Seattle-based Frazier Technology Ventures, will be joining Madrona Venture Group, also based in Seattle, as of January 1, 2010. Jordan will start at Madrona as a venture partner, the firm announced today, and will identify and lead new investments across technology areas like software, mobile, and Internet, as well as helping coach entrepreneurs and existing portfolio companies.

The other half of the story is that Frazier Technology Ventures will not be making any more investments beyond follow-on rounds for its existing portfolio companies. “We aren’t making new investments, and we’re not raising another fund. Earlier this year, we made that decision,” Jordan says.

Jordan joined Frazier in 2003 after a distinguished career at RealNetworks, where he was a senior vice president in charge of media systems, and also worked on products in mobile and gaming. Before that, he spent a number of years in the software business at two companies in Oregon—Creative Multimedia and Central Point Software (both were acquired). Jordan currently represents Frazier on the boards of Control4, DS-IQ, Medio, and Wetpaint, and will continue his duties with those companies.

“We’ve known Len for a long time, back to his RealNetworks days,” says Matt McIlwain, a managing director at Madrona. “It’s a clear fit from a culture perspective and an investment perspective…He’s a very experienced and seasoned venture capitalist. He’ll make decisions while functioning in a partner capacity.”

It sounds like Jordan’s skills and relationships are pretty complementary tofit well with the existing Madrona team. “We really like the fact that Len has significant operating experience,” McIlwain says.

Jordan concurs, “What I can add is early-stage operating background. This is a team sport.” He says he wants to “be able to sprinkle any help” where it is needed in Madrona’s portfolio. “There are a lot of relationships I have that may be complementary to Madrona on the deal flow side,” he says. “I have deep relationships with BestBuy, T-Mobile, Verizon, HP. In terms of deal sourcing, I’ve found this is a very person-to-person business.”

I asked Jordan more about the future of Frazier Technology Ventures. “The current fund is in the fifth year of a 10-year cycle. You won’t see any changes in the foreseeable future,” he says. He adds that FTV has 11 active portfolio companies. “The irony is the portfolio will actually do quite well,” he says. “Frazier has a great portfolio, but we’re also a relatively new group. In a regular fundraising environment, you’d probably be fine.” (Frazier Healthcare Ventures remains a separate family of funds, as always.)

Meanwhile, Madrona has continued to strengthen its team recently. In August, the firm added former aQuantive CEO Brian McAndrews as a managing director, bringing in more expertise in digital advertising, marketing, and media. The addition of Jordan helps the firm more on the software and operational side. “What really excites us about Len is he’s a strategic thinker who has experience both in the technology side of companies and in having a board member view,” McIlwain says. “The highest and best use for Len is looking to develop investment themes, meeting with companies, and making a couple of new investments.”

Comments | Reprints | Share:        

[This post also appears on OVP's blog---Eds.] The University of Washington’s Computer Science and Engineering (CSE) department’s Affiliates day is one of the most fun and rewarding days of the year for me as venture investor and geek. It involves a showcase of projects and research areas by professors and students and is a festival of creativity, new ideas, and engaged smart people. It is a day my colleagues and I look forward to every year.

Last Thursday’s meeting ended with a panel on “The Changing Face of Venture Capital” moderated by UW’s Ed Lazowska, who prompted us with a series of provocative questions. On the panel with me were Greg Gottesman of Madrona Venture Group, Ron Howell of WRF Capital, Bill McAleer of Voyager Capital, and Cam Myhrvold of Ignition Partners.

One of the first topics was the impact of the recession on startups and venture capital. Most VCs expressed the opinion that money was harder to find but that if you could get funded, it was a great time to start a company because skilled people were available, cloud computing providers such as Amazon have made it possible to do with less capital, and there were fewer competitors being funded. There was recognition that it has to be done with less, given the exit markets. But if anything, Greg Gottesman said Madrona is sticking to its model and not changing given a one-year blip.

Cam Myhrvold made the point that there were a lot of entrepreneurs using Amazon Web Services and open source to quickly bootstrap companies with much less capital than prior years. My comment was that if you play at the application layer using open source and AWS, you better think hard about marketing and customer knowledge since there are few technical barriers to entry.

One topic that was raised was why should entrepreneurs go for VCs over angels, money aside. I disagreed that money could be ignored and said that the quality of money was critical in these times. The recession has meant that almost all companies have needed more cash and, given that outside funding is tough, insiders had to step up. Many investors have not stepped up, which has made all VCs more conscious of the quality of their co-investors.

Ed asked what areas were particularly attractive for Seattle, and we got a consistent set of answers. Digital media, gaming, software, and the emerging areas of IT applied to green tech and IT applied to biology are core areas of interest. Each firm had its own areas of interest—for instance, Bill McAleer liked mobile apps and the application of social networks to the enterprise as one of his areas. Bill related a story from a recent trip to NYC where the cab driver was touting his favorite iPhone app—a map of all the public bathrooms. When asked about really innovative new ideas, Greg Gottesman mentioned 3-D printers and how his son was willing to empty his bank account to get one.

At OVP, we like the investment thesis that green tech and biology are becoming more compute-intensive, and that companies that can bring a view of IT applied to these areas are particularly attractive.

My conclusion from the evening is that Seattle is a great place for innovation and has a set of dedicated VCs who want to see a vibrant, risk-taking community. Each firm had its own areas of focus, some overlapping, but all were focused on creating great companies and skilled entrepreneurs here in Seattle. I left feeling that we were lucky to have UW CSE, a great research department generating innovative ideas, and a VC community very committed to fostering growth.

Comments | Reprints | Share:        

Seattle-based Big Fish Games announced today it has hired Michael Vernon as chief financial officer and Ian Hurlock-Jones as chief technology officer. Vernon is a veteran of Seattle-area firms aQuantive and Zumobi, while Hurlock-Jones comes from Fox Interactive Media and Buy.com. Big Fish, a leading developer and distributor of casual games, announced it was opening its European headquarters in Cork, Ireland, in April. The company also has a small office in Vancouver, BC, which former CFO Glenn Walcott told me about last year. Big Fish raised $83.3 million back in September 2008.

Comments | Reprints | Share:        

There’s a new tech startup incubator in town. The Founder Institute is accepting applications for its four-month training program, which begins in Seattle on December 7. The program is designed to mentor very early-stage entrepreneurs, with the goal of creating new companies across a wide variety of tech sectors including software, social media, consumer electronics, e-commerce, medical devices, and cleantech.

The program fits with a trend of increasing resources for entrepreneurs in the Seattle area. The Founder Institute was started by Adeo Ressi, the founder of the venture capitalist rating site TheFunded. The incubator recently completed its first session in Silicon Valley, graduating 54 companies (three of which have since rustled up outside funding), and has also announced expansions to San Diego and Washington DC.

Chris Early is leading the Seattle program. He’s a game industry veteran who was most recently general manager of Windows Gaming Technology at Microsoft. He left the company earlier this year, and caught up with Ressi around a month ago over drinks. (The two had known each other for years from the game industry.) Early suggested that Ressi should expand his program to Seattle, and it sounds like it didn’t take much convincing. “It’s been a whirlwind month putting it together here,” Early says.

As he explains, the concept behind the Founder Institute arose from what Ressi was seeing with TheFunded. “A large number of people were coming through at a pre-company stage,” and they were looking for mentorship and money to get started, Early says. So the Founder Institute provides classes on every step of the startup process, led by experienced mentors, including Derrick Morton, the CEO of FlowPlay, and Bryan Starbuck, the CEO of TalentSpring. About a third of the mentors will come from out of town, including David Kidder of Clickable.com and Bryan Thatcher of Empressr (both from New York). The ideal students are entrepreneurs with new companies—less than two years old—or just promising ideas. The goal is for every student to have a business plan and a polished pitch for their company by the end of four months.

OK, so everyone knows entrepreneurs, especially first-timers, need a lot of mentorship. But what’s different about the Founder Institute compared with incubators like Y Combinator …Next Page »

Comments | Reprints | Share:        

What’s the connection between hardcore, chest-pounding video game action and Niels Bohr’s interpretation of wave-particle duality? It’s an Iranian-American physicist-turned-entrepreneur named Shahriar Afshar. Five years after Afshar announced the results of one of the most controversial experiments in the recent history of physics—one suggesting that it is possible, contrary to Bohr’s long-accepted theory, to observe light behaving as both particles and waves at the same time—the Cambridge, MA-based startup he founded, Immerz, is about to launch an “acousto-haptic” device that lets gamers both hear and feel gaming action at the same time.

Immerz’s product, called Kor-fx, is essentially a pair of woofers for your chest cavity, designed to enhance the sense of being immersed in a game (or a movie or a song)—hence the company’s name. Immerz showed off the device for the first time last week at the i-stage competition in Phoenix, AZ, where the Consumer Electronics Association—the same organization that runs the giant CES convention in Las Vegas every January—chose it as one of the 11 most innovative consumer technology products shipping next year. The company plans to bring the product to market in the first quarter of 2010, focusing first on PC gamers, and later on console players.

Afshar’s switch from experimental physics to gaming may sound like a strange change of direction—and it is. But there’s some logic to it, just as there is beneath the perverse and often baffling world of quantum mechanics. “My mission in life, ever since I have been mature enough to have a sense of a goal in life, has been to reveal realities that are right in front of our eyes but we missed,” Afshar says. “It excites me that there are so many hidden realities out there that we can unravel”—including the hidden monster who may be sneaking up behind you in a video game.

The Kor-fx device consists of a pair of vibrating transducers attached to a yoke that holds them snugly against a gamer’s chest. They translate the same audio signal going to a user’s speakers or headphones into a shaking sensation that is literally visceral—the vibrations echo through the user’s chest cavity and vastly heighten the sense of immersion when playing an action-heavy PC game, watching a movie, or listening to music.

Because the transducers vibrate in stereo, and because the human tactile system is pretty good at translating vibrations into directional information, it’s actually possible for someone wearing the device to sense which direction gunshots are coming from in a first-person-shooter game like Half Life, and even to feel events occurring “behind” them in the virtual world. Afshar calls this the “seventh sense.” (I’m not just repeating public-relations verbiage here—I’m one of the first journalists who has had a chance to try out the device, which adds an almost frightening level of you-are-there realism to both video games and action movies.)

Immerz, a two-person company based at the Cambridge Innovation Center, has applied for patents on the transducers. It has what Afshar calls “big name” angel investors, though he won’t identify them yet. But it’s also seeking venture-level financing so that it can start to produce the Kor-fx units in mass quantities (the company outsources a lot of its design and manufacturing work). The next big public showing for the technology will be at Pepcom Digital Experience, an event for journalists, analysts, and industry insiders preceding the CES trade show in January.

Afshar obviously isn’t your typical game-industry entrepreneur; my interview with him yesterday started off with a 15-minute discussion of quantum mechanics. In 2004, I learned, the Harvard-trained physicist presented the results of a groundbreaking …Next Page »

Comments (11) | Reprints | Share:        

GamerDNA, the Cambridge, MA-based startup building an online community where avid gamers can find recommendations for new games, has cut its staff nearly in half, shrinking from 13 employees to seven, according to a story today in Mass High Tech. Jon Radoff, the company’s founder and CEO, confirmed the layoffs in an e-mail to Xconomy, but declined to discuss them further, saying he was “trying to focus more on the future than the tough decision we just had to make.” GamerDNA, formerly called GuildCafe, raised $3 million in Series A funding from Boston’s Flybridge Capital Partners in April 2008.

Comments | Reprints | Share:        

The deals rained down on the Northwest this past week. We saw some strong activity in biotech, gaming, and software.

—Integrated Diagnostics, the new biotech company founded by Lee Hood, has secured $30 million in venture funding from Menlo Park, CA-based InterWest Partners, the U.K.-based Wellcome Trust, and Germany-based dievini Hopp Biotech holding, as Luke reported. The startup aims to detect cancer and neurodegenerative diseases like Alzheimer’s in their earliest (and most treatable) stages.

—Washington state’s venture funding numbers for the third quarter of 2009 fell to $144 million, down from $275 million in the previous quarter, as Bruce reported. And one deal in September, the $50 million investment in Calypso Medical, a Seattle-based developer of technology that pinpoints radiation therapy for cancer to minimize side effects, dominated the state’s third-quarter figures.

—Decho, the Seattle-based subsidiary of EMC (NYSE: EMC), formed a partnership with British mobile network operator Vodafone to develop new data backup services for European markets. Financial terms weren’t given. The products will be built using Mozy, the online backup service operated by Decho.

—Redmond, WA-based Bionavitas formed a partnership with Seattle-based Blue Marble Energy to make biochemicals from algae, as Luke reported. Financial terms of the deal weren’t announced, and the companies didn’t say exactly what they plan to make under this alliance.

—Seattle-based Evri formed a partnership with media giant Hearst to power its new website and news aggregator, LMK (which stands for Let Me Know). Evri, a Paul Allen-backed startup that uses semantic analysis and natural language processing to find connections between entities on the Web, is providing the content-filtering software for LMK.

—Omeros, the Seattle biotech company developing a treatment to improve recovery from knee surgery, completed its initial public offering last week, raising $68.2 million, as Luke reported. The state’s first IPO in more than two years was underwritten by Deutsche Bank and Wedbush PacGrow Life Sciences. Omeros (NASDAQ: OMER) opened trading at $10 a share and closed its first day at $8.73, giving it a market valuation of about $186 million.

—Seattle-based Amazon (NASDAQ: AMZN) participated in a $19 million Series C investment in Engine Yard, a cloud computing and software automation company based in San Francisco. Amazon was a previous investor in Engine Yard, along with Benchmark Capital and New Enterprise Associates. The latest deal also included new investors DAG Ventures, Bay Partners, and Presidio Ventures.

—Seattle-based PopCap Games raised $22.5 million in its first outside funding round since its founding in 2000. The investment was led by Meritech Capital Partners, based in Palo Alto, CA, and also included participation from investors Larry Bowman and John McCaw. The money will be used to help accelerate PopCap’s global expansion and distribution of its games.

Comments | Reprints | Share:        

It’s one of the great mysteries of the modern Internet. How can Web publishers make more money from their content? For everything from blogs and journalism to games and entertainment, publishers and software companies alike have been trying to solve this problem for many years.

Now BigDoor Media, a six-person startup in Bellevue, WA, thinks it has found the right approach, at least for a certain market. Its basic idea is to provide a revenue stream for entertainment publishers that bridges the gap between traditional advertising and subscription models. BigDoor, which is emerging from stealth mode today with a beta version of its software, provides an “offer platform” that acts as a gateway to a website’s premium content. Instead of paying for a game by credit card, say, a consumer can opt to fill out a survey, sign up for a newsletter, or buy an advertiser’s product (like Fiji Water, for instance).

This is not an entirely new idea. And in fact, BigDoor operates in a similar space as many other Seattle-area startups we’ve reported on, including AppBank (for social entertainment applications), DevHub (for creating and hosting websites), Mpire (for online-ad optimization), Wetpaint (for social publishing), and Others Online (for behavioral profiling of audiences), which was acquired this summer by the Rubicon Project. These companies have different customers and revenue models, but they are all fundamentally trying to help Web publishers make more money from their content.

What seems to set BigDoor apart is the experience of its founders. Keith Smith and Jeff Malek spent about 10 years in the online advertising world with Bellevue-based Zango, the controversial “adware” company that closed down earlier this year. Smith was CEO and co-founder of Zango, while Malek was vice president of engineering and products. Zango had success but eventually ran into problems, in part because adware in general—software that tracks which sites you visit and delivers targeted ads—became widely reviled by people who felt it violated their privacy or was just plain annoying.

The key is that Smith and Malek seem to have learned from their mistakes as well as …Next Page »

Comments | Reprints | Share:        

Seattle-based PopCap Games dropped a bit of a bombshell this morning. The casual games developer and publisher announced it has secured $22.5 million—the first outside funding in its nearly 10-year history—led by Meritech Capital Partners, a late-stage investment firm based in Palo Alto, CA. Also participating in the round are Larry Bowman, a PopCap board member, and John McCaw, a mobile and finance guru. The funding represents a minority stake in the company.

The news is surprising because PopCap has been profitable since its inception, and has shunned taking outside investment up to this point, even as the company has grown dramatically. From 2003 to 2008, PopCap’s consumer game sales shot up from $10 million to $170 million. Bejeweled, a puzzle game that involves lining up gems in a grid, made up about 40 percent of PopCap’s revenue as of last year.

The funding raises the question of whether the recession, which has hit video games hard, necessitated more capital for PopCap’s operations. The company’s chief executive, David Roberts, said the reason for the funding is to accelerate PopCap’s global expansion and distribution of its games. “We’re excited to have additional working capital that lets us be more aggressive with our expansion into social media and reaching new geographies,” Roberts said in a company statement. “We’ve been pursued by investment firms for many years and have resisted taking outside capital, but we liked Meritech’s style and believe there’s a tremendous opportunity to grow and evolve our business at a time when many other video game firms are retrenching.

Brian Fiete, Jason Kapalka, and John Vechey founded PopCap in 2000. It now employees 240 people in Seattle, San Francisco, Chicago, Vancouver (BC), Dublin, and Shanghai.

PopCap’s news represents the third large funding round for a Seattle-area gaming company in the past year. In September 2008, Big Fish Games landed $83.3 million led by London-based Balterton Capital, and in August 2009, Smith & Tinker revealed it has raised a total of $29 million from DCM, Vulcan Capital, Foundry Group, and others.

Comments | Reprints | Share:        

Natick, MA-based Vivox said today that it’s opening its new “Vivox Web Voice for Facebook” service to all Facebook members. The application—which allows Facebook users to set up free voice chat rooms and invite their friends to participate from within Facebook—is one of the first creations of Vivox Labs, a new R&D arm of the company, and had been in closed beta testing for the last few months. Vivox, which we profiled last month, is known mainly as a provider of voice communication services for massive virtual worlds and game worlds such as Second Life and Eve Online.

Comments | Reprints | Share:        

Boston is home to a huge cluster of hot game companies, from Harmonix to Turbine to 38 Studios. But you might be surprised to learn just how deep the region’s gaming history goes. If Xconomy had been around a century ago, we probably would have been writing about Parker Brothers, which got its start in Salem, MA, in 1883 and went on to create Monopoly, Clue, Risk, and Trivial Pursuit, to name just a few of the company’s blockbuster board games.

As Parker Brothers’ star gradually dimmed—it was absorbed by General Mills in 1963, then Tonka in 1987, then Hasbro in 1991—Boston’s prominence in the game and toy business waned as well. But today the Parker Brothers gaming legacy is re-emerging—and fusing with another local industry, robotics. The link? Tom Dusenberry, a lifelong game industry insider who got his start working on the Parker Brothers loading dock and eventually rose to become the founder and CEO of Hasbro Interactive, the video game subsidiary of toy giant Hasbro (NYSE: HAS). This week the multinational startup Robonica, where Dusenberry is now president, will launch its first product: Robini-i, a novel wheeled robot packed with sensors, radios, and a fully programmable onboard brain.

Roboni-i is arguably the biggest thing to hit the robot-toy business since the uber-popular Lego Mindstorms. And the new robot is emerging just a few miles from Salem, in Beverly, MA, where Robonica is headquartered. But there’s also a South African side to the story: Robonica CEO Johan Poolman, an electrical engineer by training, is the founder of a series of technology companies in the Johannesburg area, and works from the company’s R&D and manufacturing facilities in Centurion, a suburb of Pretoria. The company has 45 employees in Centurion, and obtained 100 percent of its financing from a pair of technology investment funds run by the South African government, Dusenberry says.

Sometimes, all a smart startup needs to succeed is a lucky break, and Robonica has caught a huge one. Hammacher Schlemmer, the specialty gift merchandiser, decided to feature the Roboni-i on the cover of its Holiday 2009 catalog, which is being mailed out to millions of consumers starting today. (”How cool is that?” Dusenberry cracks.) The robots are also available starting today from Robonica’s website, and will be stocked by FAO Schwarz, the Fry’s Home Electronics chain on the West Coast, and some Toys R Us stores, as well as Amazon and other e-retailers.

Dusenberry says the primary target audience for the Roboni-i is 13- to 17-year-old boys, for whom the remote-controlled devices will provide, in his words, “a killer interactive entertainment experience.” But after watching a demonstration at last week’s MassTLC Tech Tuesday event at Microsoft’s NERD Center in Cambridge—and, I admit, after taking the Roboni-i for a spin myself—I think it’s safe to say that the nimble little machines will appeal to gadget lovers of all ages.

Roboni-i comes pre-programmed with six action games that, in the words of a company announcement, challenge players to “beat the odds, race against time, manage resources, neutralize threats, execute special effects and collect bonus points to improve score.” Using the remote control, players can maneuver the robots around pylons, saucers, balls, and other accessories; the units also have sensors that allow them to navigate autonomously or …Next Page »

Comments (17) | Reprints | Share:        

Regulatory documents filed September 15 show that Conduit Labs, the Cambridge, MA-based maker of music-driven online games such as Loudcrowd, has collected $3 million in new equity financing. Conduit founder and CEO Nabeel Hyatt told Mass High Tech that the funding came from Charles River Ventures of Waltham, MA, and Prism VentureWorks of Westwood, MA, who also provided Conduit’s $5.5 million Series A round in August 2007.

Comments (2) | Reprints | Share:        

The world of traditional mobile games can be tough for small studios and publishers to navigate. Having to work around all the different wireless carriers, handsets, and operating systems can severely limit the distribution of their games. Which is why the iPhone and other app stores attract so many developers. Now, Seattle-based RealNetworks is trying to make the process of mobile game publishing faster, cheaper, and more efficient on a much broader range of mobile devices—all while advancing its own business in the sector.

RealGames, the gaming division of RealNetworks (NASDAQ: RNWK), is announcing today a new mobile publishing program, called Federation of Studios, that lets game developers quickly and cheaply port their games across 1,700 mobile handsets, 130 carriers, and eight different operating systems (J2ME, BREW, iPhone, Windows Mobile, BlackBerry, Android, Nintendo DSi, and Flash) worldwide. Real is offering game studios a development platform—plus distribution, marketing, and customer service, with no upfront cost—in exchange for a split of the game revenues. The first studio partner Real has announced is New York-based Sonic Boom, maker of games like Puzzlings and Kill All Bugs for the iPhone and iPod Touch.

“We’ll give you the emerging technology to develop in, we will train you in it, support you in the development process, and once the game is finished, we’ll take it and run it through the handset creation process,” says Charles Harper, general manager of business development for RealGames. “The ideal partner is someone currently creating great, innovative, and compelling content without a direct route to get onto traditional mobile.”

The technology originates from Real’s 2005 acquisition of Mr. Goodliving, a mobile game studio in Helsinki, Finland. It makes the process of developing, porting, and testing mobile games for different platforms and handsets more efficient, by automatically adjusting for technical issues like the screen size and user input scheme. Real says it will also handle the localization of mobile games for other countries, as it has expertise in 10 languages (primarily European).

RealGames employs roughly 400 people, and is known for developing and publishing games in-house (including popular games for the iPhone, Facebook, and personal computers). This is Real’s first dedicated program for working with outside game developers. The program is non-exclusive, so developers can use Real to reach a broader range of handsets and carriers while still submitting an iPhone version, say, on their own.

But, as Harper puts it, the iPhone has 30 to 40 million users, while the size of the overall mobile market is something like 2 billion people. “If you look at iTunes now, there are amazing games that are not making it onto mobile, [except for] a limited number of handsets,” he says. “We’re trying to kick the doors open and throw it out to everybody.”

Today’s news fits into RealNetworks’ broader strategy of investing in mobile as an increasing focus of its business. “We are obviously trying to expand into marketplaces as best we can,” says Harper, a two-time Real employee who has also worked at Seattle-area gaming firms WildTangent and Screenlife. “Mobile is an extremely fast-growing area for us. Because we have this unique technology, this is the best methodology we can bring in to publish out to carriers. It is the next big step for our mobile strategy.”

Comments (1) | Reprints | Share:        

Massachusetts “digital gaming” companies have total revenues exceeding $2 billion, according to a survey being released today by the Mass Technology Leadership Council. And those companies are hiring aggressively, with plans to increase their head counts by an average of 20 percent in 2009, the survey found.

The gaming industry employs roughly 1,200 people across the state, in disciplines like software engineering, digital art, game design, and quality assurance, according to MassTLC—an industry-sponsored association that promotes technology entrepreneurship. Only 8 percent of the companies the association surveyed are public, meaning that most of the ferment in the gaming industry is happening within venture-funded companies (8 percent) or smaller angel-funded or privately funded companies (79 percent).

MassTLC says it collected the survey data between January and June from more than 30 Massachusetts gaming companies, including 38 Studios, GamerDNA, Harmonix Music Systems, Quick Hit, Rockstar New England, Turbine, and WorldWinner. The association says it will use grant money awarded to UMass Boston by the UMass President’s Creative Economy Initiatives Fund to continue its research and “take a deeper dive into the impact of the industry on the Massachusetts economy,” in the words of today’s announcement.

“The digital gaming industry is on fire in Massachusetts,” Massachusetts Governor Deval Patrick said in the announcement. “I am committed to supporting this and other creative economy industries, for the job opportunities they create and for what they do to elevate Massachusetts’ strengths as a center of technology innovation.”

Comments (4) | Reprints | Share:        

For a long time, Second Life was stuck in the cyber equivalent of the silent-movie era: people communicated by typing, and their words showed up in little thought bubbles above their avatars’ heads. All of that changed drastically around 2007, when Linden Lab, the company behind Second Life, hired an obscure outfit called Vivox to equip its 3-D virtual world with a voice communication system. Now any Second Life citizen who has a headset connected to their computer can simply speak, and everyone whose avatar is standing nearby will hear them in living stereo.

For the Gloria Swansons of Second Life, like myself, the changeover from typing to talking was a bit traumatic—and indeed, 20 percent of Second Life citizens still abstain from voice communication. But the other 80 percent gab for a billion minutes every month, which is a rather convincing demonstration that most people inside 3-D computer environments prefer talking to texting.

And now Vivox, a four-year-old startup based in Natick, MA, is about to introduce its technology to three new communities that could vastly increase its user base. The company announced this morning that it has formed a partnership with Redwood City, CA-based Electronic Arts (NASDAQ: ERTS), the world’s largest entertainment software company, to add its voice services to several online EA games. First up is Command & Conquer 4, a continuation of EA’s hugely popular real-time strategy game that’s expected to launch early next year.

At the same time, Vivox is announcing the launch of Vivox Labs, an incubator-within-a-startup where the company is trying out different ways of delivering its voice services over the Web. And the first two Vivox Labs experiments are aimed at big targets: Facebook, where the lab’s “Vivox Web Voice for Facebook” application will allow members to invite their friends to instant Web voice conferences; and World of Warcraft subscribers, who will be able to use a new Vivox-powered website called Puggable to assemble teams of players for in-world campaigns. Both the Facebook and Puggable applications are in private beta testing and are expected to go public by January.

“We started the company about four years ago with the goal of making voice a seamless, natural part of every online experience,” Vivox co-founder and CEO Rob Seaver told me when I visited the company last week. “Our view at the time was that more and more human interaction would take place online, and the richest form of communication we have is talking to each other. So we thought there would be an opportunity to turn the Web from this silent, barren place into one filled with the warm sounds of human voices.”

That’s exactly what could happen if even more gaming, virtual-world, and social networking communities turn to Vivox’s services. Not bad for a company that started out as a wacky idea from Jeff Pulver, the founder of the company that became Internet phone service provider Vonage.

You’ve probably heard of Voice over Internet Protocol, or VoIP; it’s the technology behind Vonage and Skype, and the one that has turned the telecom industry upside down by transforming phone calls into digital data packets and routing them over the open Internet. Vivox’s system works on similar principles, except that …Next Page »

Comments | Reprints | Share:        

Last month sure seemed like a busy one for Seattle-area startup financings, especially for summer. But the hard data paints a much more modest picture. Venture capitalists invested $25 million into four companies headquartered in Washington state last month, according to data provided to Xconomy by ChubbyBrain, a New York-based information services company that develops tools for investors, startups, and entrepreneurs. There was also one debt financing for a Washington company, worth $10 million. Two other firms with Seattle offices, but whose headquarters are elsewhere, raised $16.4 in venture funding.

The deals were spread evenly across software, mobile, gaming, and energy. The biggest one was Bellevue, WA-based Apptio’s $14 million Series B financing from Madrona Venture Group, Greylock Partners, and new investors Shasta Ventures and Andreessen Horowitz Fund. Apptio makes software to help businesses manage their IT costs.

A couple of notes about the companies that did not make the table below. Bellevue, WA-based Smith & Tinker’s most recent venture round, which we and others reported in August, didn’t make the list, as it closed in July. (The company has raised $29 million in funding to date.) Jambool, a virtual currency startup founded in Seattle and now headquartered in San Francisco, raised $5 million led by Madrona. And Profibrix, a Netherlands-based healthcare company focused on stopping surgical bleeding, which has a Seattle subsidiary, raised $11.4 million led by Gilde Healthcare Partners.

Four of the six venture financings in firms with ties to Washington state were Series B rounds, versus one Series A round—Madrona’s $3 million investment in mobile social gaming startup Z2Live—and one unspecified round, Portland, OR-based Pivotal Investments’ $2 million backing of Seattle solar developer Tuusso Energy (an early-stage deal). Madrona was the most active Seattle-area VC firm in August, being involved in three of the Washington deals.

In addition to the venture deals, Seattle-based NewPath Networks, a wireless infrastructure company, raised $10 million in debt financing from Square 1 Bank, to help expand its distributed antenna systems in the U.S.

.

Comments | Reprints | Share: