It wasn’t so much the predictions as the discussion that was most interesting at last night’s annual predictions dinner, organized by the Washington Technology Industry Association. Will Twitter be acquired in 2010, and why? Who will have the dominant cloud computing platform in the next couple of years? What kind of startup are you looking to build or finance, and which areas are you staying away from?

A panel of Seattle-area tech entrepreneurs and investors gamely took the bait and had some lively exchanges over the course of an hour. OK, these guys all know each other, and we’ll take what they say with a grain of salt since it’s a public forum—but here were some of the most interesting points they made. (You can read more comprehensive recaps of the panel on Brier Dudley’s blog at the Seattle Times, and soon on TechFlash by moderator John Cook.)

The panel was split 3 to 2, with the narrow majority guessing Twitter will get bought next year. Andy Sack of seed-stage fund Founder’s Co-op predicted Twitter will make more money than Facebook in 2010 (surprising, given the current disparity in the other direction). Glenn Kelman, the CEO of Redfin, an online real estate firm, said Twitter should charge for search (as it has begun to do in partnerships with Google and Bing). Kelly Smith from Curious Office and the startup Pressplane argued that Twitter could be “absorbed by a big company,” but “it’s going to go nowhere.” By the end of the evening, Sack was predicting that Microsoft would buy Twitter next year.

There was a consensus that 2010 could be a big year for acquisitions. Bill Bryant of Draper Fisher Jurvetson boldly predicted that Amazon will buy Netflix, Blockbuster, and Hulu, while opening brick and mortar “Amazon media stores.” Greg Gottesman from Madrona Venture Group said Cisco might buy EMC (for VMware) and Seattle-based F5 Networks, while Microsoft might buy Research In Motion, the maker of the BlackBerry smartphone. Sack predicted Adobe would pick up Seattle photo-editing startup Picnik. Rupert Murdoch (News Corp.) would buy Seattle’s Cheezburger Network, and someone would buy Redfin.

Looking back on 2009 for a minute, the big deals that were questioned by the panel included Adobe’s acquisition of Omniture (Gottesman said it just didn’t make sense strategically) and …Next Page »

Comments (2) | Reprints | Share:        

Sony Ericsson says it plans to close its operations in San Diego as part of a global consolidation that the cell phone handset maker announced today. The London-based joint venture between Sweden’s LM Ericsson and Japan’s Sony Corp plans to move its North American headquarters from Research Triangle, NC, to Atlanta, and consolidate its product development operations by closing sites in six locations—San Diego; Research Triangle, NC; Seattle; Miami; Kista, Sweden; and Chennai, India. About 1,600 jobs are being eliminated.

Comments | Reprints | Share:        

Sony Ericsson, the London-based mobile handset maker, is shutting its Seattle-area office, as first reported by Engadget and Triangle Business Journal. Sony Ericsson is cutting about 2,000 out of 9,900 jobs globally, including closing offices in Research Triangle Park, San Diego, Miami, Kista, Sweden, and Chennai, India. The moves are part of a company-wide restructuring that includes moving its North American headquarters from Research Triangle Park to Atlanta, GA.

Comments | Reprints | Share:        

Seattle-based Voyager Capital has participated in a $5 million investment in 1020, the San Francisco developer of Placecast, a location-based advertising and marketing platform, according to a report in TechCrunch. Quatrex Capital and Onset Ventures also participated in the Series B funding, which will be used to accelerate Placecast’s technology development. Placecast’s algorithms combine data across the Web, mobile, e-mail, and Wi-Fi to try to maximize relevance for advertisers and publishers. In an interview with Xconomy last year, Voyager co-founder Enrique Godreau mentioned 1020 as an example of an intriguingly mainstream mobile startup.

Comments | Reprints | Share:        

Managing a venture fund is hugely different from running a startup. Eric Paley told me that last year at this time his primary responsibility was at dental imaging firm Brontes Technologies, the MIT spin-off that he co-founded and where he had served as general manager after its sale to technology giant 3M (NYSE:MMM) in 2006. Nowadays, as managing partner and co-founder of new seed fund Founder Collective, his much broader focus includes meetings with a whopping 30 entrepreneurs a week, he said.

Early this month Paley’s firm had an official launch after closing a first fund of about $40 million to invest in seed-stage startups, even though reports about the firm surfaced in June after its initial SEC filings became public knowledge. The firm is made up of a group of successful entrepreneurs who have been backing each other’s startups for ages before coming together as Founder Collective. David Frankel, the firm’s other managing partner along with Paley, was a seed investor in Brontes as well as partner Chris Dixon’s startups SiteAdvisor and Hunch, for example. Their experience as entrepreneurs who have raised venture capital and reached successful exits, along with their compelling investment strategy, could help them succeed in the struggling venture industry.

Founder Collective, which has offices in Cambridge, MA, and New York (where Frankel is based), is taking a much different tack than many funds have taken over the past decade. Paley says that the vast majority of funds closed over the past 10 years have been more than $100 million, while most of the funds were less than that in the previous decade. But the big knock on the venture industry is that it’s done a poor job of returning capital and returns commensurate with their risk profile to their limited partner investors. And large funds often aim to invest big amounts of capital ($10 million or more) in their portfolio companies, even when companies don’t really need that much money, Paley says. Founder Collective’s first fund is a lean $40 million or so, and that money is intended to be invested in capital-efficient businesses that aren’t taking on more investment capital than is needed to achieve their goals. Indeed, we’re seeing this movement toward smallish investments in lean teams, at least in software/tech, all around the country.

Another big downside of a startup raising more venture capital than it requires to execute its plan is the dilution of ownership for the entrepreneurs who founded the company. “We really created the fund out of frustration that there wasn’t a really good answer for the capital-efficient business in the early days to achieve major milestones and increase the value of the company before giving so much of it away to investors,” Paley said.

There are no banker-turned-venture capitalists at Paley’s shop. Many of the partners maintain operational roles at startups they’ve co-founded. Dixon, a founder of Web security firm SiteAdvisor (acquired by McAfee), is full-time CEO of his firm Hunch that provides an online decision-making tool. Also, Micah Rosenbloom, who co-founded Brontes with Paley, is now the general manager of the Brontes business for 3M. (Here’s a full list of the the Founder team on the firm’s website.)

The investment philosophy at Founder is to back startups led by committed entrepreneurs. And though Paley said the firm has no stated limits on sectors or geographic areas in which it invests, the firm will most likely invest, as it has done so far, in …Next Page »

Comments (2) | Reprints | Share:        

Google, Yahoo, Facebook, MySpace. Those companies’ products spread over the Internet like a virus. But why hasn’t there been a runaway hit like those in the mobile software world? Why does it take so much longer to build value, and a strong customer base, in mobile companies than in certain Internet startups?

Dan Shapiro had some entertaining thoughts on this yesterday, as he spoke to the Mobile Northwest 2009 crowd in Seattle. Shapiro is the co-founder and CEO of Ontela, a Seattle-based mobile imaging startup, and he’s a veteran of RealNetworks and Microsoft. I won’t do justice to his presentation, but here’s the gist.

Hotmail was one of the first examples of viral marketing. By appending the message, “Get your free e-mail at hotmail.com” (or some such) to the bottom of each e-mail, Hotmail helped pioneer a new method of promotion that was “basically free, highly measurable, and ridiculously effective,” Shapiro said. Its number of new subscribers jumped from hundreds to tens of thousands per day.

Maybe there’s something about the viral distribution model that doesn’t fly in the mobile world, Shapiro thought. In epidemiology, he pointed out, researchers use a parameter called the basic reproduction number to gauge whether a viral outbreak will spread or die out. The corresponding number in the Internet world tells you how many people a given user will “infect,” on average: Shapiro gave some estimates for Facebook (6), Gmail (5), MySpace (4), and Twitter (1.5). He argued that Twitter hasn’t been spreading virally; it has used more conventional marketing through word of mouth and the press.

“Heterogeneity in the target population is the best protection to keep you from being infected by viruses,” he said. That means some people have different levels of resistance, different behaviors, different types of contacts, and so forth, so not everyone will get infected by, say, the latest flu bug.

And that same kind of variety that makes individuals different is exactly why mobile isn’t viral, he argued. He cited some survey stats to explain how fragmented this market really is: There are roughly 500 different types of handsets, about 30 per carrier; about two-thirds of people (65 percent) don’t have a data plan; three out of four people (75 percent) are on a different carrier from you; almost that many (70 percent) don’t have a smartphone. And despite all the attention it gets, 98 percent of mobile users don’t have an iPhone. (iPhone apps are definitely not spreading virally, Shapiro said. He also argued that Tegic’s T9 predictive texting did not spread virally; it was pushed out by carriers and handset manufacturers in a dedicated partnership.)

“We will not see the Facebook, Gmail, or Yahoo of mobile until this changes,” Shapiro said. He added that he’s not advocating one standard mobile platform; he’s just saying how it is right now.

So his advice for mobile entrepreneurs and investors was:

—Be skeptical of anyone peddling viral marketing in mobile.

—Build a business model that doesn’t require big adoption.

—Pick a market segment that’s homogeneous. (Examples: BlackBerry corporate users, Silicon Valley techies.)

—Use ubiquitous technologies like WAP (Wireless Application Protocol) and SMS texting.

—Wait… (”Things are getting better,” he said.)

Afterward, Shapiro said he thinks “Europe holds the future of the U.S.” Over there, wireless carriers have influence, but only about half of consumers get their services directly from carriers, versus about 90 percent in the U.S. “I think you’ll see the carrier role diminish,” he said, when it comes to mobile software.

Comments (1) | Reprints | Share:        

I sat in on a good venture capital panel yesterday at Mobile Northwest 2009 in Seattle. No huge arguments or chair throwing to speak of (we’ll see what we can stir up at the next few Xconomy Forums). But some solid and useful observations from Geoff Entress of Voyager Capital, and also a prominent Seattle-based angel investor; Adrian Smith of Ignition Partners in Bellevue, WA, an expert in telecom and wireless; and Puneet Tandon of Bellevue-based T-Mobile USA, who is looking to sign partnerships with top entrepreneurs in digital media and social networking. (You can also see some comments from mobile VC Tom Huseby’s keynote here.)

The panel was moderated by Tricia Duryee, the Seattle-based correspondent for mocoNews, a website that covers wireless telecommunications. Here are my quick “top three” takeaways from the discussion of the local mobile industry:

1. The panic may be over, but caution rules. Entress says he’s added nine companies to his portfolio this year, out of a total of 32 he’s involved in (and six mobile firms, including TravellingWave, Swype, Dashwire, and Treemo). “We’re definitely not out of the woods yet,” he said. “But 2010 might be a good year for selling companies.”

2. It’s not all about the iPhone. Entress and Smith pointed out that Apple has only 17 percent of the smartphone market, so there’s plenty of opportunity on other platforms, like the BlackBerry and devices that use Windows Mobile. “Apple has a huge amount of mindshare,” Smith said, “but the critical thing is the development environment around [mobile applications].” Tandon agreed, saying, “Barriers to doing business with us [carriers] perhaps have been lowered.” Entress stressed the importance, especially for startups, of trying to avoid “getting locked into any one carrier, handset, or operating system.”

3. Watch advertising, input technologies, and connected devices. Tandon pointed out that by sometime next year, there are projected to be 3.3 billion Web-connected devices, and 70 percent of them will be connected via wireless operators. That means carriers will be willing to pay to know “who are the social influencers in your subscriber base,” he said. Smith and Entress said Google’s $750 million acquisition of AdMob signifies that mobile advertising is here to stay—but that the deal was the “first one out” (like YouTube for video), so don’t look for anything near that sort of valuation again. Entress added that he’s working with a number of startups selling new ways of inputting text on mobile devices (using speech recognition, touch-screen methods, and so forth). For all our fancy gadgets, it seems we still struggle to communicate.

Comments (1) | Reprints | Share:        

Tom Huseby says he’s finally able to go home and not worry about seeing his family’s savings stuffed under his mattress. “The panic is over,” he says. “All of a sudden, things are getting a lot better. It doesn’t feel much better now, but it is.”

Huseby, a noted Seattle-based venture capitalist with SeaPoint Ventures, Oak Investment Partners, Hunt Ventures, and Voyager Capital (and the Godfather of what we’ve been calling the “Qpass mafia”), was giving his 30,000-foot view of the economic landscape and VC market at today’s Mobile Northwest 2009 conference in Seattle. He also drilled down into some of the most pressing challenges in the mobile space, as well as what the startup opportunities are. Just a few highlights here:

“Unemployment is going to slow growth across any consumer business. If you’re in mobile, I hate to tell you, but you’re in the consumer business. I do think there will be liquidity in mobile startups,” Huseby says. “Most startups are going to have to earn it the old-fashioned way, they’ll have to grow over a long time. You’re going to have to survive during a roller coaster ride. Every single company will have to go rushing to the bottom, and then do the slow, clanking ride to the top.”

In terms of startup opportunities, it helps to think in terms of what wireless carriers need. Huseby calls himself “fairly carrier-centric.” As he puts it, they are big customers that are predictable (once you understand them) and they generate huge amounts of cash. He laid out the top three challenges for carriers today—absolutely critical to understand if you’re an entrepreneur trying to get their attention with a new product.

—Bandwidth. There’s “tremendous pressure on carriers” to provide more bandwidth to support people’s exploding need for data connectivity wherever they go, Huseby says.

—Costs of bandwidth. “Oh my God, how are you going to pay for it?” he asks. With such a competitive market, Huseby thinks costs for consumers will actually go down. “I think they’re not going to get the money from us, they’re going to have to get it from advertising. Advertising revenue will absolutely help pay for the bandwidth.” (The problem is that mobile advertising revenue is still relatively small and doesn’t usually go to carriers.)

—Holding onto consumers. “If they’re going to pay for it with advertising, they need to get a much firmer grip on their customers,” Huseby says. He sees this as a crucial issue for the coming decade. “The next viral social network has to work hard to make [ad revenues] accrue to them. Carriers have to be very conscious of the demographics of their customers. They have to get their customers anchored in.”

After his talk, I had a chance to ask Huseby about some other areas of interest, like mobile search. He says he’s generally staying out of that space, but is looking at location-based services from the perspective of retail stores and local advertising.

We’ll have more from the conference soon, so watch this space.

Comments | Reprints | Share:        

San Diego serial entrepreneur Michael Robertson is going to have to find something else to do now that Gizmo5, the VoIP (voice-over-Internet-protocol) company he founded in 2003, has become part of a certain search giant to the north. We have that news and more.

—Google confirmed that it’s buying San Diego-based Gizmo5, a six-year-old company that provides Internet-based calling software for mobile phones and computers. The service will become part of the Google Voice number-unification service. Google did not disclose the purchase price, which media reports put at about $30 million. Gizmo5’s 6 million users will still be able to use the service, according to a statement. But Google is suspending new Gizmo5 signups, and existing users can no longer sign up for a call-in number.

—Platformic, a Web-based startup that enables customers to create and manage their own websites, said it is adding social media capabilities. The two-year-old San Diego-based company, which has targeted broadcast companies, says its expanded software-as-a-service product will help a broadcaster’s audience share photos, create their own user profiles, and create personal blogs on the broadcaster’s Platformic-powered website.

—Qualcomm’s No. 2 executive opened a regional mobile technology conference in San Diego by providing an overview of steps the chipmaking giant is taking to help ease the pressure on wireless network bottlenecks as mobile data traffic soars. Qualcomm (NASDAQ: QCOM) Chief Operating Officer Len Lauer told the 3G CDMA Americas Regional Conference that in the year 2014, worldwide mobile data traffic in one month will exceed mobile data traffic for all of 2008.

—Technology innovations that help companies optimize their profitability will likely lead to the next wave of analytics-based software startups, according to Stephen Coggeshall of San Diego-based ID Analytics. Another hot area will be analytics that can help forecast consumer behavior, said Coggeshall, who was participating in a discussion about new opportunities in analytics during the San Diego Software Industry Council’s annual forum on analytics.

—Israel’s Panoramic Power won $250,000 and became the first winner of the top QPrize, the incentive prize competition launched earlier this year by Qualcomm Ventures. Panoramic Power is developing energy-monitoring wireless technology that enables a company or institution to deploy so-called “smart grid” technologies within their existing facilities.

—The San Diego-based Cannon Power Group said is getting $19.4 million in federal renewable energy grants to help fund construction of a giant wind farm in eastern Washington state, about 110 miles east of Portland, OR. The $1 billion Windy Point/Windy Flats project is expected to generate enough electricity for 250,000 homes.

Comments | Reprints | Share:        

A consumer tech company has scored one of the bigger equity financing rounds in the Portland area this fall. Beaverton, OR-based Avnera, a fabless semiconductor company that makes chips for wireless audio applications, has raised about $8 million in equity financing out of a total offering of $10 million, according to a regulatory filing with the SEC. The investors in the current round were not specified, and e-mails seeking confirmation of the deal sent to Avnera and previous investors were not immediately returned.

Before the latest round, Avnera had raised about $42 million in funding. Its original investors include Bessemer Venture Partners, Redpoint Ventures, and Jafco Ventures. Other investors joined in later rounds, including Intel Capital, DAG Ventures, Altien Limited, Panasonic Ventures, Polycom, and BestBuy. Most recently, Avnera raised a $14.7 million Series C round in September 2007.

The current filing lists as company directors Rob Chandra and Umesh Padval of Bessemer, John Walecka of Redpoint, and John Miner, formerly of Intel Capital (now with Pivotal Investments).

Avnera was founded in 2004, and is led by CEO, chairman, and co-founder Manpreet Khaira. Its technology involves advanced circuit design techniques to put things like radio frequency electronics, power management systems, audio data converters, and programmable signal processors onto a single silicon chip. That can help make audio accessories cheaper and have better sound quality in computers, iPods, home entertainment systems, and mobile devices. Avnera’s customers include Logitech, Creative, Panasonic, Vizio, and Sanyo.

Back in June, Eric Rosenfeld of Capybara Ventures and the Oregon Angel Fund told Xconomy that Avnera was one of the leading lights in Portland’s semiconductor scene. “They’re doing very well,” he said at the time. “Hopefully they’ll be the one that revives people’s confidence locally.”

Comments | Reprints | Share:        

When Tom Clancy introduced a panel discussion yesterday at a forum on analytics software, the founder of San Diego’s Tao Venture Partners said the forum was “founded four years ago by people who had an interest in seeing San Diego get established as a leading cluster in the analytics space.”

The forum, which is sponsored by the San Diego Software Industry Council, offers an annual snapshot of local developments in a booming industry that has become crucial to business intelligence, data storage and management, and complex decision-making.

Since Robert Hecht-Nielsen founded HNC Software here in 1986, the number of companies that focus on analytics software in San Diego has mushroomed, with more than 100 companies specializing in neural networking, data mining, pattern recognition, and related algorithms and technologies for analyzing data. Yet Clancy and local experts who discussed “opportunities in analytics” lamented that San Diego’s standing as the birthplace of some key companies and technologies has gone largely unrecognized. Among the examples cited:

— HNC, which specialized in technology to analyze credit card transactions, was acquired for $810 million in 2002 by Fair Isaac and Co. and integrated with the Minneapolis, MN-company’s credit-scoring business.

—Urchin Software, a suburban San Diego Web analytics company that developed an assortment of tools for measuring website usage, page views, and other statistics, was acquired by Google in 2005 for an estimated $30 million. Seven months later, Google renamed its Urchin business Google Analytics, and made analytics tools available to Web users for free.

—WebSideStory, a San Diego company that developed website traffic analysis tools, rebranded itself as Visual Sciences in 2007 and was acquired later that same year for $394 million by Utah-based Omniture. (Last month, Omniture was itself acquired by San Jose, CA-based Adobe Systems in a $1.8 billion deal.)

—Carlsbad, CA-based analytics software developer Keylime Software was acquired for $9.5 million in 2003 by Pasadena, CA-based Overture, an advertising distribution network that was later acquired by Yahoo for $1.6 billion.

Such deals reflect a surging awareness of the value of data, says Stephen Coggeshall, a co-founder and chief technology officer for San Diego-based ID Analytics, which uses advanced analytics to search credit databases for telltale signs of identity theft. In terms of technology innovations that will likely lead to forming new companies, Coggeshall says …Next Page »

Comments (1) | Reprints | Share:        

Boston-based Skyhook Wireless is expected to announce next week that it’s releasing an application for Nokia smartphones that will give owners a far faster and more accurate fix on their locations. Skyhook’s $2.99 Maps Booster works on any Symbian S60 handset and will be available starting next week through Nokia’s Ovi app store; it replaces the Symbian operating system’s built-in location-finding platform with Skyhook’s software, which then feeds location data directly to other location-aware apps such as Google Maps. The company says it created the program because Nokia phones are notorious for their slow performance in GPS mode. “With such high price tags, we think all features of Nokia smartphones should work perfectly,” Kate Imbach, Skyhook’s director of marketing and developer programs, said in a statement. “Maps Booster, finally, will make the location on any Nokia S60 device work just as well as location on the iPhone.”

Comments | Reprints | Share:        

Online search and information discovery are being transformed before our eyes. It’s no longer just Google, or Google and Bing, or even Google, Bing, and Twitter—there are big problems in technology and business to solve across all areas of social media search, real-time news and information, mobile search, user interfaces, search marketing, vertical search (travel, products, people, video, you name it), and other related topics. Just imagine what the landscape might look like in another 10 years.

A lot of the action is happening around Seattle. If you want to hear what the big companies are doing to stay ahead of the curve, and where startups and venture capitalists have some real opportunities, you’ll want to join us for the Xconomy Forum on “The Future of Search and Information Discovery” on November 30 at the University of Washington. (Registration info is here—the early bird rate ends tomorrow, and tickets are going fast.)

Search touches almost every aspect of business today. So get your tough questions ready for our panel, which will feature Brian Bershad from Google, Harry Shum from Microsoft (Bing), Steve Hall from Vulcan Capital, and Oren Etzioni from UW, Madrona Venture Group, and Farecast (acquired by Microsoft last year). Ed Lazowska will moderate the discussion, and I’ll be there to help stir up the crowd and make sure your questions are heard.

We’ll also have a series of startup “bursts”—short presentations from some of the most exciting young companies in the field. They include Evri, which is creating a smart index of the Web to help you browse for information more effectively; Gist, which sits at the intersection of e-mail, social media, and search, feeding you updates about your contacts; Sage Bionetworks, an effort to do for biology what open source did for software and Twitter and Facebook did for social networks; SEOmoz, which helps businesses do search engine optimization and online marketing; and Topsy, which is developing a new search engine for social media (starting with Twitter).

I can’t think of a better way to kick off the holiday season than to spend a couple hours being inspired and challenged by these guys. And, of course, some of the best stuff isn’t even in the program, it’s in the networking—besides our stellar panelists and speakers, you’ll be mingling with a first-rate crowd of entrepreneurs, investors, VCs, executives, researchers, technologists, and students.

Come to think of it, let’s get the discussion rolling right now. What do you really want to hear about at the event? What are your most compelling questions about search, information discovery, and online marketing? Leave a comment below, and we’ll address it.

Comments (1) | Reprints | Share:        

[Corrected 11/11/09, 3:15 pm. See below] Qualcomm chief operating officer, Len Lauer, says the San Diego wireless chipmaking giant is working across a broad front of technology development to accommodate a surge in wireless data traffic.

“The mobile Internet has arrived,” Lauer says in the opening keynote talk yesterday at the 2009 3G CDMA Americas Regional Conference. With more than 4 billion wireless subscribers around the world now—including 885 million 3G phone users—Lauer says the growth in wireless data is reflected by a roughly one-third increase in revenue reported over the past year by Verizon, AT&T, and other major carriers.

[Corrects to say Lauer was comparing monthly data traffic in 2014, not monthly growth in data traffic] By 2014, or just five years, Lauer says  worldwide mobile data traffic in one month will exceed total mobile data traffic for all of 2008.

Qualcomm founder and former chairman and CEO Irwin Jacobs and his son Paul Jacobs, who is Qualcomm’s current chairman and CEO, sounded a similar theme when they warned of capacity constraints last month during a keynote appearance at the CTIA Fall 2009 conference in San Diego.

In addition to the increasing demand for mobile data from smart phones and netbooks, Lauer says the trend can only accelerate as new wireless device categories proliferate, especially in what he calls machine-to-machine (M2M) communications. Examples of M2M technology developers include CardioNet, a Pennsylvania wireless health company that uses wireless sensors to continuously monitor heart patients for irregular heartbeats; wireless smart grid technologies being deployed by electric utilities (including San Diego Gas & Electric), and eBook devices like Amazon’s Kindle.

“Other operators are seeing this as a viable market, but it is going to take awhile to develop,” Lauer says, citing estimates that 229 million M2M cellular connections are forecast for 2013. “We do see from Qualcomm’s standpoint this being a very large opportunity for our chips.”

To cope with the surge in wireless data traffic, Lauer outlined a range of technology advances that Qualcomm has underway:

—The latest generation of advanced wireless receivers, which include updated revisions to the EV-DO (Evolution Data Optimized) telecommunications standard (part of Qualcomm’s CDMA2000 family), operate …Next Page »

Comments | Reprints | Share:        

We spotted three New England startups today that have recently filed papers with the SEC to report new rounds of equity financing. Other than their common geographic ties to region, it’s tough to see any relationship among these firms. But here’s a brief synopsis of the deals and what each company does:

—Waltham, MA-based Affectiva reports it has raised $1.7 million of a planned $2 million round of equity financing. This spinout of the MIT Media Lab is developing a biosensor, called the “Q,” that is designed to “measure and communicate emotional arousal” of the person wearing it, according to the firm’s website. The company says that it grew out of a collaboration at MIT to find ways to help people with varying degrees of autism. Rosalind Picard, the director of the Affective Computing Research Group at MIT, is listed as a director and executive of the company. (These filings don’t list investors in the companies.)

—Meanwhile, Westford, MA-based Aylus Networks, previously backed by Matrix Partners and North Bridge Venture Partners, reported raising $5.7 million out of a planned round of about $9.3 million. The company, formed in 2005 by wireless entrepreneur Shamim Naqvi, seeks to enable rich data communications such as video telephony, video blogging, video sharing, and social networking for mobile operators.

—Have you found yourself willing to shell out gobs of cash on your pet’s drugs? I have, and I’m sure many other people have, too. Putney, a Portland, ME-based provider of specialty drugs for the veterinary market, reports that it has raised $6.6 million of a proposed $6.8 million round of equity financing. The company—which was founded in 2006 by pharmaceutical entrepreneur and CEO Jean Hoffman—says that it plans to double the size of its staff, revenues, deals, and more in 2010. (I’ve got a guess as to how the new capital will be spent.)

Comments | Reprints | Share:        

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:        

San Diego’s Gizmo5, which was rumored to be a Skype acquisition target for $50 million about three weeks ago, is now reported to have been sold—except the buyer is identified as Google, and the price is put at $30 million.

Both the Skype and Google reports were exclusives from TechCrunch’s Michael Arrington, who initially explained that Skype’s acquisition of Gizmo5 was the perfect backup plan in case Skype lost control of certain patents to its core technology that were the subject of lawsuits filed by Skype’s prospective buyers. Now Skype doesn’t really need Gizmo5, since eBay reached a comprehensive settlement with Skype’s founders last week. TechCrunch now says, citing “multiple sources with knowledge of the deal,” that Google has therefore stepped in to acquire Gizmo5.

Gizmo5, which was founded by Michael Robertson of MP3.com fame, provides free VoIP (Voice Over Internet Protocol) software and related technology for making Internet-based phone calls. After seeing the TechCrunch account earlier today, I sent an e-mail to Robertson asking, “Can you confirm? Can you discuss?”

He replied by e-mail, saying, “No and no. Can’t comment on any rumors. Sorry.”

The deal could make sense. While Google Talk is among Google’s many free offerings, the on-line chatting service is not set up to call specific phone numbers, and both parties in a call must have the Google Talk client running for it to work. TechCrunch says, anyway, that the Gizmo5 acquisition would enable Google to combine Google Talk with Google Voice, the application it has been testing that allows users to have a single phone number that connects to a variety of features, including conference calls, phone call recording, and text messaging.

While Google was mum on the Gizmo5 report at the time of this writing, it did confirm one acquisition today, saying that it has agreed to pay $750 million to acquire AdMob, a mobile display ad technology provider based in San Mateo, CA. Wade offers his perspective and some reaction among Boston’s mobile ad startups to the deal here.

Comments | Reprints | Share:        

I was at the offices of uLocate, a Boston startup with a suite of location-aware information services for mobile phones, when I heard today’s news about Google’s $750 million acquisition of San Mateo, CA-based AdMob, which runs one of the largest mobile advertising networks. “It’s a very good thing,” commented Walt Doyle, uLocate’s CEO, who was clearly impressed by the figures involved. “It’s a very good thing that Google, or any company, is willing to pay close to a billion dollars for a company involved in mobile.”

And that’s the dominant message today from the mobile companies around Boston that I’ve reached about the AdMob deal. No one’s fretting (publicly, anyway) that a Google-AdMob combination will overrun the still-fragile market for mobile advertising, or that there’s one less exit path for other startups, now that Google has already bought itself a mobile ad network. Instead, the consensus in the company’s public statements is that Google’s move offers an important boost for the whole mobile media industry.

“We actually think it’s great for the industry, because it really shows the importance of the mobile advertising market, and how important it is for advertisers and publishers to have access to mobile specialists who know how to make the most of that medium,” says Lynn Tornabene, chief marketing officer at Waltham, MA-based Quattro Wireless. Quattra presents itself, of course, as one of these specialists—it works with major brands such as Ford, Netflix, Procter & Gamble, and Visa to get their ads into the most advantageous mobile venues.

“Google is a sophisticated company with deep resources, and yet they really saw the need to acquire a specialist to gain traction in the space,” Tornabene says. “So that really validates the business model of all the mobile ad networks.” (By the way, when it comes to Google, Tornabene knows what she’s talking about—she used to be head of communications for Google’s DoubleClick division.)

That word “validates” came up a lot today. “The announcement is causing tremendous excitement as it validates the enormous potential of mobile advertising,” says Paran Johar, chief marketing officer at Jumptap, a Cambridge, MA-based provider of targeted mobile ads. “We predicted consolidation in the industry and Admob’s broad high volume business model is highly synergistic for Google.”

The $750 million price tag—making Admob Google’s third largest purchase ever, after the $3.1 billion deal to buy DoubleClick and the $1.65 billion purchase of YouTube—surprised some observers today, including me. (AdMob had raised some $46 million in financing since its founding in 2006 from Silicon Valley venture firms Accel, DFJ Growth Fund, Northgate, and Sequoia Capital, which makes the Google acquisition an extremely lucrative exit by current venture standards.) The odd thing, to me, was that …Next Page »

Comments (1) | Reprints | Share:        

Kirkland, WA-based Clearwire (NASDAQ: CLWR) is about to receive an investment of at least $1.5 billion led by Sprint Nextel, according to the Wall Street Journal. Sprint will invest $1 billion, and its partners, including Comcast, Intel, Time Warner Cable, and Bright House Networks, will chip in an additional $500 million, for continuing support of Clearwire’s WiMax broadband network. Google, which has invested previously in Clearwire, is not participating in the current financing round. The official announcement could come as early as this week, the WSJ reports.

Comments | Reprints | Share:        

It was a busy week for local technology news.

—Two teams from San Diego and a third from Northern California demonstrated their development of advanced chemical sensor prototypes that are tiny enough to be found inside ordinary cell phones. The U.S. Department of Homeland Security is funding the Cell-All program, with a goal of basically creating an anti-terrorism app for cell phones that would enable authorities to crowd-source chemical detection.

—MaxLinear has filed for its initial public stock offering. The Carlsbad, CA-based fabless chipmaker, which specializes in designing semiconductor-based television receivers, intends to raise about $100 million through its IPO. The market may be de-frosting a bit, with 47 IPOs so far in 2009, compared with 45 last year, and 272 in 2007.

—ProQuo, a San Diego-based Web 2.0 company that was founded in 2007, was quietly shut down after taking in a total of $15 million in venture capital from Menlo Park, CA-based Draper Fisher Jurvetson and San Diego-based Mission Ventures. ProQuo was never able to validate its business model; its website offered consumers a way to remove their names from mass-mailing lists for free, and the company planned to sell its optimized lists back to mass marketing companies.

—San Diego’s wireless industry group, CommNexus, celebrated the opening of EvoNexus, its free high-tech incubator, by announcing the selection of three more startup companies: EcoATM, MicroPower Technologies, and TetraVue. CommNexus CEO Rory Moore says EvoNexus is believed to be the first incubator that is completely free for startups—that is, it doesn’t even require an equity stake in participating companies, as most incubuators do.

—Jitterbug, the San Diego wireless provider that puts an emphasis on simplicity, has acquired MobiWatch, a Waltham, MA-based startup developing mobile personal emergency response services. A regulatory filing shows that Jitterbug’s parent, GreatCall, provided 630,000 shares of common stock to MobiWatch and its shareholders in a deal valued at $107,100.

—San Diego-based Networkfleet is using its technology to help companies that operate fleets of vehicles go green by monitoring engine emissions and ensuring that vehicles are operating efficiently. Co-founder Diego Borrego told me the company also expects to be a player as consolidations sweep through the fleet tracking industry.

—EcoDog, a Vista, CA, cleantech startup that has developed a device that helps homeowners sniff out savings in their electric utility bill, was named best of show at GadgetFest, the annual fall competition sponsored by CommNexus, the San Diego wireless industry group. EcoDog founding CEO Ron Pitt won over the crowd when he declared, “My product is the only product up here tonight that saves you more money than it costs.”

—San Diego-based cleantech startup EESG is looking to raise $1.2 million to expand the 10-employee company’s sales staff, purchase inventory, and ramp up public relations and marketing. The company’s founders told me they have raised about half so far, including $300,000 from Longboard Capital Advisors, a green investment firm based in Santa Monica, CA.

Comments | Reprints | Share: