Just when I thought venture deals, especially for software and tech companies, had headed south for the winter (or longer), the Northwest erupted with a slew of financings in the past week.

—But first, some serious biotech. Kirkland, WA-based OVP Venture Partners led a $30 million Series B round for Fate Therapeutics, a San Diego-based stem cell company with ties to the University of Washington, as Luke reported. Existing investors Arch Venture Partners, Polaris Venture Partners, and Venrock Associates also participated in the funding, as well as three strategic corporate investors—Astellas Venture Management and Genzyme Ventures were named.

—Seattle-based DocuSign, a maker of software to automate and control the process of electronic signatures, received a strategic investment from Second Century Ventures, the VC fund of the National Association of Realtors. The funding amount was undisclosed, but the money will be used to accelerate and extend DocuSign’s efforts with real estate customers.

—Beaverton, OR-based Avnera pulled in an $8 million equity round from undisclosed investors, according to a regulatory filing. The company’s previous investors include Bessemer Venture Partners, Redpoint Ventures, Jafco Ventures, Intel Capital, and DAG Ventures. Avnera was founded in 2004, and designs novel chips for wireless audio applications.

—Seattle stealth startup Doxo raised $5.25 million in equity financing, according to a regulatory filing and media reports. The investors were not disclosed, but David Feinleib of Mohr Davidow Ventures was listed on the SEC form as a director.

—Bellevue, WA-based Enroute Systems, a developer of software that helps companies manage their parcel-shipping logistics, closed a Series A funding round worth $810,000 from Keiretsu Forum, Zino Society, Puget Sound Venture Club, and angel investors. Next up, Enroute is looking …Next Page »

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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.”

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[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 »

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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.

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MaxLinear, a fabless RF chipmaker based in Carlsbad, CA, filed a registration statement today for an initial public stock offering, marking only the second IPO in the San Diego area since Bridgepoint Education made its debut on the New York Stock Exchange in April. About 45 IPOs have taken place nationwide so far this year.

Eight semiconductor industry veterans founded MaxLinear in 2003. The company specializes in designing highly integrated, CMOS (Complementary metal–oxide–semiconductor) chips, and has had notable success designing semiconductor-based TV tuners. Maxlinear says its customers include wireless module makers, original equipment manufacturers and original design manufacturers.

David Rodewald, an outside spokesman for the company, said MaxLinear executives would not comment beyond the statement issued today.

The number of shares to be offered and the price range for the offering were not disclosed, although Dow Jones says the Carlsbad company plans to sell an estimated $100 million in stock. The company plans to use the proceeds for working capital and general corporate purposes.

The founders self-funded MaxLinear for the first year, and co-founder and CEO Kishore Seendripu talked about their efforts to generate revenue by taking on consulting work and other outside work during a panel discussion on bootstrapping in San Diego six months ago. Seendripu defined bootstrapping as “a self-sustaining process that proceeds without external help.”

MaxLinear secured its first round of venture funding in late 2004, after completing development of its first prototype silicon television tuner using CMOS technology. The company identifies its venture investors on its website as San Diego-based Mission Ventures, U.S. Venture Partners of Menlo Park, CA, and Battery Ventures, which has offices in Waltham, MA, and Menlo Park, CA.

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Bitwave Semiconductor of Chelmsford, MA, has raised $1.33 million out of a planned $6 million Series C equity funding round, according to regulatory documents. The company makes radio-frequency integrated circuits for portable devices. Bitwave collected $10 million in Series B funding from Apex Venture Partners, TVM Capital, and ECentury Capital Partners in August, 2008.

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MaxLinear, a Carlsbad, CA, fabless semiconductor company developing broadband radio-frequency designs that enable TV on any device, is introducing two tuner-and-demodulator designs that provide a single-chip solution for all terrestrial TV applications. In a related announcement, MaxLinear says its MxL101SF design was selected by Sigma Designs for its latest hybrid set top box, which combines digital TV and Internet television capabilities.

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EvoNexus, the non-profit incubator launched in San Diego three months ago, has selected its inaugural group of new technology companies to be hatched.

Cathy Pucher, the incubator’s executive director, tells me the first clutch of startups getting support from EvoNexus were culled from about 45 applicants. The contenders came from a surprisingly diverse number of industries, including software, cleantech, wireless health, semiconductor, communications, and other technologies. “We really didn’t know how many applications or what kind of applications we would get,” Pucher says. Most of the applications came from “brand new” startups, she adds, including several started by individuals who had taken early retirement offers or had been laid off in the recession.

EvoNexus, which plans to move by the end of this month into commercial office space recently vacated by San Diego-based Leap Wireless (NASDAQ: LEAP), also has begun reviewing its second round of applications. (More on that below). Pucher says the three startups are:

—San Diego-based Medipacs is commercializing non-mechanical intravenous infusion technology that uses polymer pumps instead of electric motors and pump mechanisms. The company is initially targeting delivery of pain medications and already has developed wearable, programmable, and disposable infusion technology. It is looking for wireless industry expertise to add remote monitoring capabilities (and expand into the wireless health market).

CEO Mark McWilliams has extensive experience in the medical devices industry and in early stage companies. He has worked previously at Beckman Coulter, Q3DM, and Baxter Healthcare.

—IO Semiconductor is a fabless semiconductor startup that is focused on applying new technologies to RF (radio frequency) devices for the cellular industry. “They don’t give out a lot of detail about what they’re doing because …Next Page »

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As interest builds in the coming introduction of new wireless netbooks, Qualcomm CEO Paul Jacobs tells the San Diego Union-Tribune that many netbooks based on Qualcomm’s Snapdragon processor also will include Qualcomm’s MediaFLO, the company’s satellite-based TV broadcast for mobile devices.

In an interview with the newspaper’s editorial board, Jacobs says the new line of netbooks—which he calls “smartbooks”—will use MediaFLO technology so users can watch live events and FloTV programming transmitted directly to their display screens. But the technology also will be used to rapidly broadcast and store Internet content. Qualcomm calls it “data casting,” Jacobs says. “That’s sending snippets of data down, so headlines, weather, sports, stock quotes — whatever you might be interested in — we are looking at broadcasting that down to the device. So when you open it up, there’s already live data on it. I think that will be pretty compelling.”

Paul Jacobs

The next three months should tell whether Jacobs is right, but we should expect a few more surprises by the time the Christmas shopping season begins in earnest.

In June, Collins Stewart analyst Ashok Kumar said Hewlett-Packard plans to launch a line of netbooks before the year ends that will be powered by Qualcomm’s Snapdragon processors, rather than the Intel Atom processors now dominating the sector. As the world’s No. 1 desktop PC maker, HP’s decision to power its netbooks with Snapdragon chips represents a significant endorsement for Qualcomm over Intel and the line of Atom processors developed for the emerging netbook market.

Neither Qualcomm nor HP have announced the deal, but Kumar told me at the time that he’s got sources in HP’s Asian supply chain who are vouching that HP’s new netbooks will have “Qualcomm inside.”

Analysts have been closely watching the uptake of Qualcomm’s Snapdragon chipset—both for what it means for Qualcomm’s expansion into smartbooks (as opposed to netbooks) as well as the ramifications that has for Intel’s business. But in his interview with the Union-Tribune, Jacobs minimized the significance of the looming head-on competition between Qualcomm and …Next Page »

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Hillsboro, OR-based TriQuint Semiconductor (NASDAQ: TQNT) announced today it has acquired TriAccess Technologies, based in Santa Rosa, CA. Terms of the deal were not disclosed. TriAccess makes integrated-circuit amplifiers for audio, video, and HDTV applications. TriQuint Semiconductor, founded in 1985, makes wireless communication technologies for mobile manufacturers, cellular base stations, and defense and aerospace contractors.

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At a time when semiconductor startups seem to be an endangered species, San Diego’s cleantech sector continues to show unusually strong growth. Get the lowdown on that and more.

—The shutdown of San Diego’s Sequoia Communications is a sign of broader problems that are making it harder to build new fabless semiconductor design companies, according to Sequoia CEO Dave Shepard. As the complexity of system-on-a-chip technology increases, Shepard says U.S. startups are getting squeezed by sharply higher costs and dramatically lower valuations. He says the venture-backed model for semiconductor startups is broken.

—Wade sat down with Boston lawyers Tom Burton and Lewis Geffen to discuss their cleantech corporate practice at Mintz Levin. Partner Carl Kukkonen, who helped open Mintz Levin’s San Diego office in 2006, says he likes to tell people he was working with alternative energy startups before he ever heard the term “cleantech” to describe them.

—San Diego now counts more than 20 startups that are specializing in developing advanced algae biofuels, according to Lisa Bicker, the executive director of Cleantech San Diego. That’s more than double the number of algae biofuels startups found in an informal survey nine months ago. Many of those companies, though, remain in stealth mode.

—TheFunded Founder Institute is looking to expand its training camp for startup CEOs in San Diego, and eventually other cities, including Boston and Seattle (where Xconomy operates). The program, which is part-training and part-technology incubator, was launched in San Francisco earlier this year by Adeo Ressi, a founding member of TheFunded, an online community for venture-backed CEOs. Jeanine Jacobson and Cliff Currie are heading the startup of the institute in San Diego, and Currie says they plan to enroll their first class and launch the program in November.

—Dennis Mudd has stepped down as CEO of Slacker, the San Diego-based online music streaming service founded three years ago. Mudd is handing over his duties to Jim Cady, Slacker’s president and chief operating officer.Mudd plans to remain on Slacker’s board.

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Sequoia Communications CEO Dave Shepard was out of town last week when the demise of the San Diego fabless semiconductor design company came to light. I was told he was furious over the shutdown, as Sequoia had finished its product, a chip for use in cellphones and wireless devices, had secured customers, and was roughly a year from breaking even. The explanation was that the eight-year-old startup had been unable to raise the additional venture capital.

But if he was upset, the semiconductor CEO had processed the news, so to speak, by the time I finally reached him yesterday. Instead of talking from Sequoia’s ground zero, Shepard spoke from a considerably higher altitude, saying, in effect, that the problems that swamped the San Diego startup chipmaker extend well beyond the company itself.

“The issue is bigger than Sequoia Communications,” Shepard says. “I think the venture-backed model for semiconductor startups is broken. The complexity of these chips has just gotten so high, it just takes so much money to fund a startup nowadays, that to the VCs, it’s just not worth it.”

In a nutshell, Shepard says semiconductor startups are getting squeezed by sharply higher costs and dramatically lower valuations. A new chip technology that would have required two to three years and $15 million to $30 million in startup funding to get to proof of concept a few years ago now requires five to eight years and something closer to $80 million. For that kind of startup capital, Shepard says VCs want to see semiconductor buyouts of $400 million to $500 million. But deal values have plunged. At a meeting organized earlier this month by CommNexus, San Diego’s non-profit wireless industry association, one presenter said the median value of 97 semiconductor M&A transactions in 2000 was $484.1 million. In 2003, there were only 47 deals and the median deal size was just $144.5 million. The trend has worsened with the economic downturn, and Shepard says valuations for semiconductor startups are now in the range of $75 million to $100 million.

Shepard says he was unable to sell Sequoia, even though the company had contracted with several customers in China and had a finished product—a sophisticated multi-mode transceiver designed to accommodate the burgeoning market for various 3G mobile phones. In addition to transmitting and receiving standard cell signals, Shepard says Sequoia’s transceivers perform multiple functions, such as translating analog RF signals into the digital code used by mobile devices.

After raising close to $75 million from VCs and other investors, Shepard estimates Sequoia was about a year away from breaking even. The company, which had about 30 employees, needed to raise an additional $10 million. Sequoia’s investors instead decided to cease operations in mid-July. (By last week, auctioneers were preparing to sell the company’s remaining assets and Shepard was taking a break in Lake Tahoe.)

“The VCs just got tired,” Shepard says. “Half of our VCs were out of money, and the other half had been in the company for a long time. So they were looking at a low return on their investment.”

He adds, “It’s not really anybody’s fault. I’m not mad at the VCs.”

He maintains that what happened to the San Diego startup “is not a Sequoia-specific problem.” The changing economics of semiconductor innovation have ramifications for the entire industry, he says, because the big chipmaking companies like Qualcomm, Intel, and AMD have traditionally counted on smaller startups as a key source of their innovation.

Worldwide, Goldman Sachs data shows semiconductor M&A transactions declining from 137 deals with a total value of $33.7 billion in 1999 to 86 deals with a total value of $2.2 billion so far in 2009. Semiconductor IPOs have been practically non-existent this year, with Goldman Sachs showing 10 deals worldwide with a total value of $43 million. The CommNexus meeting, which Shepard helped organize, was billed as “Endangered Species Alert: Fabless Semiconductor Startups Threatened With Extinction!”

Shepard says he not sure how the broader problem is going to get solved. It’s possible that China could move into the semiconductor R&D vacuum, although that could raise broader issues for U.S. economic policy. “The semiconductor industry is a sensitive area that touches everything,” he says.

Meanwhile, an online auction of Sequoia’s office furniture and electronic testing equipment is set to begin today.

The company’s most-valued assets, the design database for the chip and its intellectual property, including Sequoia’s portfolio of 20 issued U.S. patents and 15 patent applications, will be sold through a separate process. Proceeds will go to the investors. “I have no idea what the value is, but it will be under $10 million,” Shepard says. “It will be vastly less than what they put in.”

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San Diego wind turbine maker Helix Wind made some more acquisitions, and out-of-business chipmaker Sequoia Communications arranged to sell its equipment in an online auction tomorrow. So it was a good news, bad news week for technology here.

—San Diego’s Sequoia Communications, which gained attention in the wireless chip industry when it introduced a multimode transceiver, has ceased operations. The nine-year-old chipmaker, which raised about $64 million from at least eight venture investors, was unable to secure additional capital.

—San Diego-based Helix Wind (OTC: HLXW), which is developing vertical-axis wind turbines, has agreed to buy the assets of two Oregon wind turbine companies in a bankruptcy case. The non-binding contracts for Abundant Renewable Energy and Renewable Engineering, which have the same owners, could be worth as much as $6.5 million. Helix has been moving to expand its product line of small-scale turbines.

—San Diego video codec developer DivX (NASDAQ: DIVX) and Yahoo (NASDAQ: YHOO) settled a lawsuit that DivX filed after Yahoo backed out of an Internet advertising agreement.

—San Diego-based Platformic, which makes Web development and content management technology, introduced a new mobile blogging tool, which the company says is ideal for journalists and professional bloggers.

—In a two-part “state of venture” quiz that Xconomy’s Bob Buderi put together with help from the Boston office of the Cooley Godward Kronish law firm, contestants learned that company valuations have been rising in the past quarter. The quiz, which is based on nationwide data, also shows that more than half of the Q2 deals were “flat” or “down” rounds. Check out the quiz here. The answers are here.

—Amid the nationwide downturn in venture capital investment activity, I’ve written a fair amount about the evaporation of San Diego’s hometown VCs. Now Connect, the San Diego non-profit group that serves as a catalyst for technology innovation, has proposed a series of initiatives to help fill the gap—including the formation of a seed fund. Connect CEO Duane Roth has said the initiatives will require more than $10 million, which Connect has begun to raise from both private and public sources.

—Xconomy has made it easier for you to get our electronic missives on your mobile phone by going to http://m.xconomy.com for the new mobile-friendly version of our site. But it’s only one of many new developments at Xconomy. And as always, you can sign up for Xconomy’s e-mail newsletters, including specialized newsletters, and our RSS feeds here.

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San Diego’s Sequoia Communications, a venture-backed semiconductor company founded in 2001, has shut down—ending the startup’s effort to develop an innovative microchip for cellular phones. The company’s demise was reported yesterday by the website SoCalTech.com, which noted that Sequoia has raised more than $50 million from BlueRun Ventures, Cadence Design Systems, Gabriel Venture Partners, Huntington Ventures, Motorola, Nokia Venture Partners, Tallwood Venture Capital, and Third Point Ventures.

Rory Moore, CEO of CommNexus, the San Diego non-profit wireless industry group, confirmed the closure in a terse e-mail to me, saying simply that Sequoia’s VCs “pulled the plug.” Additional details were not available late yesterday, including the number of employees who lost their jobs. (The chipmaker had about 50 employees two years ago.) Sequoia’s former CEO, Dave Shepard, could not be reached for comment.

In a 2007 Q&A with the San Diego Union-Tribune, Shepard said the wireless chip under development at Sequoia was intended for the high-end phone market. “Our chip actually makes those high-end phones have much better battery life, much better cost, and much smaller form factor, so they get into a smaller phone size,” Shepard said at the time. He also described the wireless chip as “multi-mode,” saying, “It works in GSM, Edge and wideband CDMA, which are all the different phone modes.”

The Woodland Hills, CA, auction firm Cowan Alexander has scheduled an auction of Sequoia’s test and measurement equipment, computers, printers, flat-panel monitors, lab benches, and other equipment at the company’s headquarters. The auction, which begins at 11 a.m. PT Tuesday, is being webcast.

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It was a crazy busy week for deals in the Northwest. Just when we thought the flow might slow down before the end of summer, we saw tons of activity in software, Internet, mobile, gaming, and materials.

—Bellevue, WA-based Apptio, the IT cost management startup led by CEO Sunny Gupta, raised $14 million in Series B funding from Madrona Venture Group, Greylock Partners, Shasta Ventures, and the Andreessen Horowitz Fund. The money will allow Apptio to aggressively expand its sales and product development. Gupta also had some telling things to say about his company’s culture.

—Seattle-based Impinj has teamed up with Coca-Cola to provide radio frequency identification tags and readers for the soda giant’s new Freestyle drink dispensers. Financial terms were not given. The Impinj technology will allow Coke to track and monitor its dispenser operations and customer preferences in real time.

—Hillsboro, OR-based AISI, maker of a testing system for semiconductor memory manufacturing, closed a Series B financing round worth $11 million, as Eric reported. Investors in this round included OVP Venture Partners, TL Ventures, and Intel Capital.

—Seattle and San Francisco-based Jambool raised $5 million in venture funding, led by Madrona Venture Group. Bay Partners also participated in the financing round. Jambool has developed a micropayments and virtual currency system for social online games.

—Vancouver, WA-based ClearAccess raised about $6 million in Series B funding from Blade Ventures, Buerk Dale Victor, and DFJ Frontier, as Eric reported. ClearAccess provides data services and broadband device management for Internet service providers.

—Kirkland, WA-based OVP Venture Partners led a $14 million Series B financing round for Boston-based Novomer, a green materials startup, as Wade reported. Physic Venture Partners, Flagship Venture Partners, and DSM Venturing also participated in the round.

—Seattle-based iLike is rumored to be bought by MySpace for some $20 million, as Eric reported. The deal could close by the end of this week. Founded in 2002, iLike is an Internet music company that helps people find new music and concerts and create playlists.

—Seattle-based NewPath Networks, a provider of wireless carrier network technologies, announced a new $10 million line of credit from Square 1 Bank. Back in April, NewPath raised $30 million from New York-based Charterhouse Group and Denver-based Meritage Funds. NewPath designs and operates antenna systems for wireless networks.

—Seattle Genetics (NASDAQ: SGEN), a Bothell, WA-based developer of antibody drugs for cancer, raised $136 million in a stock sale, as Luke reported. JP Morgan and Goldman Sachs led the offering. Seattle Genetics is six months ahead of schedule in a pivotal study of its experimental drug for Hodgkin’s disease.

—Seattle-based Z2Live, a mobile social games startup, has raised $3 million from Madrona Venture Group, according to a report in TechCrunch. Z2Live has developed a free, multiplayer platform for social and casual games on the iPhone and iPod Touch.

—Microsoft (NASDAQ: MSFT) and Nokia (NYSE: NOK) announced an alliance that will create adaptations of Microsoft programs, like Office, for Nokia smartphones. Financial terms weren’t given, but the two companies will jointly market the products they create together. Nokia’s Symbian mobile operating system has been a major competitor to Microsoft’s Windows Mobile platform.

—Lastly, we provided some more in-depth analysis of Microsoft’s sale of Seattle-based Razorfish to Publicis for $530 million, from Cascadia Capital’s Warren Gouk, an expert on mergers and Internet strategy. Gouk said Microsoft stands to gain a lot if the deal drives its search and display advertising business, while Razorfish could expand its international market.

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Any venture firm named after a rodent, especially the world’s biggest rodent (100 pounds), is OK in my book. But I did have to ask co-founder Eric Rosenfeld where the name Capybara Ventures comes from.

Rosenfeld explained that the capybara is a “majestic, noble, inspiring rodent.” It’s also a “category leader,” he added, and “spends most of its time beating the bushes” for food. It’s much like how he and fellow Capybara co-founder Bob Ward beat the bushes of Oregon looking for the next great company to fund.

Earlier this week, I dropped in on Rosenfeld at his office in Portland, OR, for a wide-ranging chat about his investment philosophy, the Portland tech scene, and the state of venture and angel capital in Oregon. Rosenfeld is a managing partner at Capybara Ventures, and is also a co-founder of the Oregon Angel Fund (which has seeded Portland companies like Elemental Technologies and RNA Networks). In April, he and Ward were also named venture partners with DFJ Frontier, a branch of Menlo Park, CA-based Draper Fisher Jurvetson. Let’s just say these guys are connected. They’re also Portland natives who have known each other since sixth grade.

Rosenfeld and Ward started Capybara Ventures in 2004. Since then, the firm has made investments in 10 companies, all early-stage, including RSS software startup Attensa, telecom networking firm Clear Access, and optical tech startup Phoseon. “We look for companies that are at the intersection of what grows well in Oregon, including semiconductors, electronics, Internet software, wireless communication, and where we have experience,” Rosenfeld says. He adds that Capybara’s seven active portfolio companies are doing between $3 million and $11 million in revenue this year, and about half are at cashflow break-even.

Here are a few highlights from our discussion:

Xconomy: Talk about your connections to other venture firms on the West Coast, especially with your recent DFJ Frontier relationship. Do you collaborate much with Seattle-area investors, for instance?

Eric Rosenfeld: We talk to them quite a bit. The ones we’re most close with are Buerk Dale Victor, Voyager Capital, and Madrona Venture Group. We collaborate quite a bit with the angel groups. The DFJ Frontier is a close relationship, but there’s nothing formal yet. They want to be active in Oregon. We have co-invested in one deal with them—Capybara and DFJ led a Series A round in Clear Access in Vancouver, WA. We hope to do more with them. They’ve been wonderful partners. They come up at least once a month, and we try to introduce them to companies they should know. They share their due diligence, we share our due diligence. We have a similar relationship with Walden Capital in the Bay Area.

X: What are your thoughts on the strengths and weaknesses of the Portland innovation scene, as compared to Seattle and Silicon Valley?

ER: When we started Capybara, the semiconductor industry here was more diverse and in better shape. It was Intel plus a whole ecosystem. It’s been a long time since we’ve had a startup really succeed in the semiconductor world. One company we’re involved with is Avnera, which does analog wireless audio chip sets. They’re doing very well, hopefully they’ll be the one that revives people’s confidence locally.

If you step back, Portland’s got an enviable quality of life which draws people from all over. That’s part of the solution. Our research universities are not necessarily world-class, and that’s hurt …Next Page »

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There is a lot of great stuff going on in Boston right now. Granted, there are still many signs of paralysis throughout the system, but there are also many high-quality entrepreneurs in the marketplace attempting to change the world with exciting, innovative solutions to some very large problems.

June 2009 has been dubbed “Innovation Month in New England,” so I thought I would tick off some of the investment themes we are excited about today.

* My favorite theme is the convergence of IT and life sciences (we dub it “technology for healthcare”), as that manifests itself in smart devices, important advances in healthIT, and the promise of personalized medicine and sophisticated diagnostics. The parallel developments in bio-informatics, computing power, material sciences, microfabrication, power management, and imaging modalities have dramatically advanced our ability to diagnose, manage, and cure many chronic diseases. I am particularly intrigued with the “connected health” paradigm—and who will be the winners and losers as this model becomes a reality.

* I am spending a lot of time with robotics entrepreneurs these days. There are exciting and very obvious applications in the industrial, manufacturing, medical, and consumer markets. And Massachusetts has a world-class robotics ecosystem already in place.

* Developments in mobile applications as well as wireless infrastructure are very exciting.

* We are seeing a number of important consumer infrastructure opportunities which will better optimize the allocation of advertising dollars and improve marketing efficiencies. We are particularly excited about advances in video infrastructure and distribution.

* Tech-enabled business services, particularly in the financial services industry, show great promise. Banks and insurance companies simply need to be more efficient in how they do business.

* We still see compelling opportunities in the enterprise software space, although admittedly fewer than in years past.

* Since 9/11 we have observed that the government—on a massively parallel basis—has been subsidizing numerous technologies in the name of homeland defense through non-dilutive grants and contracts. We have been pursuing an investment thesis which is centered on the ability to redirect some of these technologies to large industrial or commercial applications.

* We have been pursuing a number of exciting opportunities in the platform semiconductor space, which drives many of our other investment themes above.

* And lastly—and most recently—we elevated cleantech as a new investment theme. We do so cautiously, recognizing the many challenges these companies now face. Our principal focus is on demand-side energy management, which is more akin to business models found in the above themes. We have avoided supply-side, generation companies, which require extraordinary amounts of capital, have very significant technical risks, uncertain business models, and extended development timelines.

We are always happy to engage with great entrepreneurs, particularly if they are focused on some of the themes above. Several important events in June will take on these issues, including the Xconomy Summit on Innovation, Technology, and Entrepreneurship, or XSITE 2009, an all-day conference at Boston University on June 24. Many of these themes will also be discussed at an event Scott Kirsner is hosting on June 25, also at Boston University. Please come and join in the debates.

[Editor's note: This column also appears, in slightly different form, on Michael Greeley's blog, On the Flying Bridge.]

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Beverly, MA-based Axcelis Technologies (NASDAQ: ACLS), which makes ion implantation equipment for semiconductor manufacturers, said yesterday that it will lay off 235 workers, or about 20 percent of its global workforce. The company said the decision, which comes after a series of other cost-cutting moves, will save it $25 million in the coming year. “This is a difficult but necessary decision due to the continued weakness in the semiconductor industry,” said Axcelis CEO Mary Puma in a statement. We’ve updated the Boston Tech Layoff Tracker accordingly; the Boston area’s technology-sector job losses now total more than 12,000 since last summer.

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Since it began raising its second venture fund several years ago, New York-based Lux Capital has only invested in one startup in the San Diego region—Carlsbad’s Luxtera, which specializes in developing technologies to eliminate the bottlenecks in fiber optic networks for computers. (Luxtera got $26.7 million in a later-stage venture round at the end of last year from Advanced Equities Financial, August Capital, New Enterprise Associates, and Sevin Rosen Funds.) In comparison, Lux Capital counts four portfolio companies in the Boston area: Magen Biosciences, Genocea Biosciences, Cerulean Pharma, and Lux Research.

Perhaps compensating for such imbalance is the fact that Larry Bock, a respected biotech entrepreneur and venture investor (and Xconomist), represents Lux Capital in San Diego as a special limited partner. As a serial entrepreneur who has specialized mostly in the life sciences, Bock has founded 17 companies, including San Diego’s Illumina (NASDAQ: ILMN), Sequana Therapeutics, River Medical, Idun Pharmaceuticals, and Neurocrine Biosciences (NASDAQ: NBIX).

Bock also has become increasingly active as a philanthropist, and was both a principal organizer and sponsor of the San Diego Science Festival, a celebration of science held throughout March. The festival’s events included a session on nanotechnology, which pulled Lux co-founder Josh Wolfe out of his New York orbit. After giving Bock a few weeks to recuperate from the science festival, I recently caught up with both of them by phone to get their thoughts on investment strategy in the current climate.

Larry Bock

When I asked Bock if there would be another science festival next year, he said, “I was a little ambivalent whether I would do another one until the next-to-last day. But then, on the last day of the Science Festival, 100,000 people showed up at Balboa Park and the traffic was backed up for about 8 miles. The police had to close down [access to] the park at 2 pm.”

Bock also noted that having spent 15 months organizing the festival, “I’ve gotten to know every science community in San Diego. Being involved was one of the best sources of venture deals I’ve ever experienced.”

Bock said he met Wolfe more than six years ago, after he developed an interest in nanotechnology. “When I was traveling around to universities and scientific conferences, learning about nanotechnology, the only other VC I’d see was Josh,” Bock said. But Wolfe said Lux’s investment focus extends …Next Page »

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San Diego wireless giant Qualcomm (NASDAQ: QCOM) and Irvine, CA-based Broadcom (NASDAQ: BRCM) said last night they have agreed to end their wide-ranging patent war and enter a broad cross-licensing deal.

As part of the global settlement, which terminates litigation in federal court as well as formal disputes before trade commissions in Europe and South Korea, Qualcomm has agreed to pay Broadcom $891 million over the next four years. Qualcomm says its first payment, for $200 million, will be paid to Broadcom before June 30.

That could put a ding in Qualcomm’s net income next quarter, but it seems doubtful shareholders will mind. A J.P. Morgan analyst said last week that settlement payments would have little impact on Qualcomm’s future earnings.

When Qualcomm announced Wednesday that it was postponing the release of its earnings for the second that ended in March (because it was in advanced settlement talks with Broadcom), the San Diego company added it would meet or exceed its prior guidance for quarterly revenue and operating income (excluding the cost of its deal with Broadcom.) In last year’s second quarter, Qualcomm reported operating income of $766 million on $2.6 billion in revenue—and the company said earlier this year it expected second-quarter revenue to fall between $2.25 billion and $2.45 billion.

The agreement also relieves both Broadcom and Qualcomm of substantial legal costs—in a battle where Qualcomm wasn’t faring particularly well. The company suffered its worst setback in mid-2007 when San Diego federal judge Rudi Brewster issued a blistering, 54-page ruling that found Qualcomm and its trial counsel had committed “gross litigation misconduct” by withholding tens of thousands of relevant documents from Broadcom during a patent infringement trial. That decision against Qualcomm was largely upheld by a federal appellate court last December.

Strategically, the benefits of reaching a comprehensive settlement with Broadcom would seem to far outweigh the financial impact on Qualcomm’s earnings—especially since Qualcomm said terms of the agreement “will not result in any change” to its licensing revenue model for its 3G and 4G wireless technologies. And Qualcomm’s licensing revenue is the central engine of its success.

After fighting for more than a decade to establish its CDMA (for Code Division Multiple Access) wireless digital standard, Qualcomm attained its first strategic breakthrough in 1999, when it settled a wide-ranging patent dispute with Sweden’s Ericsson. In that deal, Qualcomm agreed to sell its CDMA wireless infrastructure business to Ericsson and Ericsson agreed to support a single worldwide CDMA standard.

At that time, Qualcomm also settled on a corporate strategy that focused its business on wireless innovation, which enabled the company to generate enormous revenue through technology licensing deals.

In July, Qualcomm struck a surprise settlement agreement with Nokia, the world’s largest mobile phone maker, that ended a similar high-stakes licensing dispute. That deal enables Qualcomm and Nokia to share many more technology patents than they did before. Qualcomm also licensed its technology to Nokia and Nokia allowed Qualcomm to incorporate its technology within its mobile phone components; buyers of those components will pay Nokia’s royalty fees rather than Qualcomm’s.

Broadcom posed the last major challenge to Qualcomm’s licensing model.

“We believe that this resolution is positive for both Qualcomm and Broadcom, our customers, our partners and the overall industry,” Paul E. Jacobs, chairman and CEO of Qualcomm, and Scott A. McGregor, president and CEO of Broadcom, said in a joint statement.

“The settlement will allow us to direct our full attention and resources to continuing to innovate, improving our competitive position in this economic downturn, and growing demand for wireless products and services,” Jacobs said.

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