It’s a big day for the New England mobile community. Boston-based Apperian, the maker of a software platform for enterprise mobile apps, said it has raised a $9.5 million Series A round from North Bridge Venture Partners, Bessemer Venture Partners, and Kleiner Perkins Caufield & Byers (iFund, focused on Apple iPad and iPhone software). The company’s seed-stage investors, CommonAngels and LaunchCapital, also participated in the round.

Apperian, which started in early 2009, previously raised $1.9 million in angel capital. About a year ago, the startup unveiled its plan to help big companies create, deploy, and manage iPhone and iPad apps (and soon Android), through a software platform called the Enterprise Application Services Environment (EASE). Then, last September, David Patrick, a veteran of The Learning Company, Ximian, and Xkoto, came on as CEO to raise a venture round and expand the business. Apperian founder Chuck Goldman, a former Apple executive, shifted over to chief strategy officer and remains as involved as ever.

My colleague Wade has previously delved into the technical features and issues around Apperian and EASE. But I’m just about the money. In particular, the fact that a sizeable new venture round led by Boston, New York, and Silicon Valley firms should go a long way towards bolstering Apperian—and Boston—as a leader in mobile apps, particularly for big businesses.

“There’s an opportunity for a new generation of software companies,” Patrick says. “We knew from the first meeting that these were the partners we wanted to have at the table. This gives us three centers of power.”

Outside venture firms seem to be paying a little more attention to Boston these days. In recent months, Balderton Capital and Google Ventures helped pour $15 million into SCVNGR, while Sequoia Capital, Google Ventures, and Salesforce.com led a $32 million round for HubSpot. Throw in Gemvara’s $15 million round announced last week, led by Balderton, and Boston software startups are practically rolling in outside dough.

Apperian will use its new cash to build out its sales and marketing teams, as well as its engineering and development teams. The company expects to double its headcount from 25 to about 50 people this year. It is also moving into a new 9,000-square-foot office on Summer Street in Boston this May, … Next Page »

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There’s some interesting personnel news today in the world of mobile software apps for companies. Boston-based Apperian, a mobile development and platform startup, says it has appointed a new CEO as of last week. He is David Patrick, a veteran of Lotus, Sun, Novell, and a number of cutting-edge tech startups on both coasts. He succeeds founder Chuck Goldman, a former Apple executive who is staying on as chief strategy officer and will continue to run the company’s services, sales, and business development.

I took the opportunity to get to know Patrick a bit, and to get an update on Apperian’s business. The company has about 20 full-time employees plus a number of consultants; there were three new hires last week, and more will come soon. Patrick says the firm’s revenue “has grown very dramatically” and could be on pace to increase by 300 percent this year over last year. Nevertheless, one of his first objectives as CEO is to raise a Series A financing round. To date, Apperian has been supported by $1.5 million in seed money from CommonAngels, plus services revenue from its mobile-app development work.

“I’ve looked at a lot of startups, and this is the first one I’ve seen as healthy as it is after 18 months,” Patrick says.

Founded in January 2009, Apperian has developed consumer iPhone apps for companies like American Greetings (electronic cards), Intuit (tax forms), and Timberland (retail marketing). It also counts Estee Lauder, Rue La La, Progressive Insurance, and Warner Bros. among its customers, for whom it has developed 55 apps so far. But an even bigger opportunity may lie in creating a platform for companies to develop their own internal mobile apps—what would amount to an “enterprise app store” for iPhones, iPads, and Google Android-based devices.

That’s what Apperian announced it was working on this spring, as my colleague Wade detailed in an interview with Goldman. The software platform is still in beta mode, Patrick says, and he has been studying it for the past couple of months (before officially starting with the company), thinking about issues such as how to ensure the security of confidential data and users’ identities on mobile devices. In the meantime, the company seems to be gaining traction, particularly around the iPhone and iPad.

Challenges aside, it’s clear that being an early player in the emerging mobile business … Next Page »

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Monday may have been a holiday, but New England’s tech and life sciences companies haven’t slowed down their deal making. We’ve had plenty of headlines of acquisitions, an IPO, and venture funding rounds for companies we’ve covered before and other not-so-familiar names.

—Expressor Software, a Burlington, MA-based integration software provider, raised $4.5 million in expansion capital funding. The money comes from existing Expressor investors Commonwealth Capital Ventures, Globespan Capital Partners, and Sigma Partners.

—Waltham, MA-based Xkoto, a maker of database virtualization software for businesses, confirmed that it had been acquired by business intelligence giant Teradata (NYSE: TDC). Xkoto, which raised a $3 million Series C round last year from GrandBanks Capital and GrowthWorks Canadian Fund, said the companies don’t plan to disclose the financial terms of the acquisition.

—OzVision Global, a maker of remote video platforms for surveillance and telecommunications companies, raised $4.9 million of a planned $6.7 million offering of debt that can be converted into equity. The Woburn, MA-based company is backed by Aviv Venture Capital and Kardan Communications.

—Tesaro, a new Boston biotech company that plans to develop and acquire cancer drugs and other oncology products, said it has pulled in $20 million in a Series A financing. The money comes from the company’s founders and New Enterprise Associates, which has reserved another $40 million to support Tesaro over time.

—Waltham-based drug developer Logical Therapeutics announced it had wrapped up a $16.9 million Series C financing, led by SV Life Sciences. Burrill & Co., Novo A/S, and Novitas Capital participated in the round, which we first covered when an SEC filing showed that the company pulled in $10 million.

—Thermo Fisher Scientific said it will acquire Fermentas International, a Canadian maker of life sciences research materials and diagnostic tools, for $260 million in cash. Waltham-based Thermo said it expects to … Next Page »

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[Updated 1:00 p.m. May 26, 2010] Waltham, MA-based Xkoto, which makes database virtualization software for businesses, has been acquired by Teradata (NYSE: TDC), the Dayton, OH-based data warehousing and business intelligence giant, PE Hub first reported this morning. In an e-mail to Xconomy, Teradata public relations director Dan Conway confirmed the acquisition, and said the companies have no plans to disclose the financial terms of the deal. We first covered Xkoto back in 2007, when Boston-based GrandBanks Capital arranged to transplant the company’s headquarters from Toronto to Boston. Xkoto raised a $7.5 million Series B round in 2007 and a $3 million Series C round in 2009 from GrandBanks and GrowthWorks Canadian Fund.

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Plenty of deals to discuss from all areas of technology and life sciences this week—including a couple of M&A switcheroos.

—Diagnostics maker Exact Sciences (NASDAQ:EXAS) of Marlborough, MA, sold its assets related to prenatal and reproductive health to Cambridge, MA-based Genzyme (NASDAQ:GENZ) for $24.5 million. In response, San Diego-based Sequenom (NASDAQ:SQNM) ended its attempted takeover of Exact—an all-stock deal valued at $41 million.

—CloudSwitch of Waltham, MA, raised $7.4 million in a Series A financing round. Atlas Venture and Matrix Partners co-led the deal for the cloud-computing startup, which was co-founded by CEO Ellen Rubin and John Considine.

—New Haven, CT-based antibiotic developer Rib-X Pharmaceuticals raised $25 million in a debt financing. Previous investors Warburg Pincus, ABS Ventures, Axiom Ventures, EuclidSR Partners, MedImmune Ventures, Oxford Bioscience Partners, SR One, and Vox Equity Partners participated in the deal.

—Virtual Computer, a PC virtualization startup in Westford, MA, raised $15 million in a Series B funding round led by return investors Highland Capital Partners and Flybridge Capital Partners and joined by strategic investor Citrix Systems of Fort Lauderdale, FL.

—IT security consulting firm GlassHouse Technologies of Framingham, MA, acquired Chicago-based CSSG, a fledgling security consulting firm, for an undisclosed sum. Wade explains the strategy behind the deal and a bit about its history.

—Software maker Centive of Lowell, MA, was acquired by San Jose, CA-based Xactly for an undisclosed sum. Centive offers an on-demand version … Next Page »

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Waltham, MA-based Xkoto, a database virtualization company that relocated from Ontario, Canada, to Massachusetts in 2007, announced today that it has raised $3 million from existing investors GrandBanks Capital and GrowthWorks Canadian Fund. The infusion brings the four-year-old company’s total venture pot to $13 million. Xkoto was named InformationWeek’s “Startup of the Year” in 2008 and reports a major expansion in its customer base and revenue for the year.

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A few weeks ago I chronicled the tale of Xkoto, a database virtualization company founded in Toronto that has a brand-new headquarters in Boston and a brand-new American CEO, courtesy of GrandBanks Capital, which has made something of a specialty lately out of moving Canadian companies (or at least their administrative functions) to Massachussetts. Today the Boston Globe has a nice article by Rob Weisman following up on the trend.

GrandBanks partner Tim Wright told me that one big motivation for the transplants (Xkoto was GrandBanks’ fourth) is to make it easier for U.S. investors to put money into innovative Canadian firms, given tax penalties that discourage U.S. investment in Canadian-owned firms. But Weisman notes that the Canadian dollar’s 65 percent appreciation against the U.S. dollar since 2002 is another big factor—it makes it much cheaper for companies whose assets are still mostly in Canada to expand into the United States.

In addition to the four GrandBanks companies we mentioned—Xkoto, Colubris, Coradiant, and FirstCoverage—Weisman’s piece rounds up three more Canadian transplants:

• Extend Media, a digital media delivery company started in Toronto, Ontario; new headquarters, Newton.
• Q1 Labs, a network security company founded in Fredericton, New Brunswick; new headquarters, Waltham.
• SiGe Semiconductor, a maker of silicon-germanium chips for mobile devices started in Ottawa, Ontario; new headquarters, Methuen.

The Globe piece observes that the poaching has “sparked a mix of resignation and recognition”—recognition that Canadian tech firms need U.S. partners and investors in order to reach big potential markets in North America and around the world. But as long as the companies’ technical brains stay in Canada—as they have in most cases—the cross-border operations don’t seem to result in much resentment or worry.

Outright acquisitions of Canadian companies—like IBM’s recent $5 billion purchase of Ottawa-based Cognos—may be a different story. Some of the company’s Canadian employees are so worried about the value of their new IBM stock options, given the U.S. dollar’s weakness against the loonie, that Cognos has pledged to reimburse them.

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Virtualization is all about breaking down artificial boundaries. Typically, the boundaries involved are those between machines such as business servers—and Xkoto, a virtualization startup that announced a $7.5 million Series B funding round yesterday, fits that mold perfectly. It’s one of many companies these days looking at corporate data centers and trying to figure out how to spread computing tasks (in this case, running database programs) across machine boundaries as efficiently as possible.

But Xkoto is also breaking another artificial boundary: the one between the United States and Canada.

Along with its financing, the startup announced that it’s moving its headquarters from Toronto to Boston and getting a new American CEO, former Ximian chief executive David Patrick. It’s all part of a transition engineered by Boston-based GrandBanks Capital, leader of the funding round. Patrick says the money and the move will help the company more easily recruit sales and marketing talent and become better known in the U.S. market.

GrandBanks is becoming an old hand at this sort of thing: Xkoto is the fourth Canadian company it has transplanted to Boston since it began making software investments north of the border in 2001. It’s not an attempt to drain Canada’s software brains to Massachusetts—in fact, all of the company’s engineering and development staff will stay in Toronto. Rather, it’s about giving Canadian entrepreneurs access to U.S. capital—or, to put it the other way around, giving U.S. investors the opportunity to back innovative Canadian companies.

“For investors, there is a very onerous tax code in Canada that, at exit, would try to repatriate any profits from investments made there,” explains Tim Wright, the GrandBanks partner who engineered the Xkoto deal. “So GrandBanks sets up Delaware corporations that become the parents of these Canadian subsidiaries, so that our limited partners can get access to investments in Canada. It’s expensive to set up—the Xkoto deal cost us close to $300,000 in legal fees—but it gives us access to fantastic resources, including well-educated, cheaper talent.”

It’s very much a two-way street. The Canadian companies in which GrandBanks has invested—including, before Xkoto, FirstCoverage of Toronto and Colubris Networks and Coradiant, both started in Montreal—were all at the stage where they were looking to expand internationally and sell their products or services in the U.S. “We can provide them with some of the underlying expertise that’s missing, in terms of executive management teams or finding successive funding from U.S. venture capital firms, and help them to penetrate a market that’s difficult to get into,” says Wright.

Getting into the U.S. market is especially key for Xkoto, since there are so many more companies here that use enterprise database software and might benefit from the company’s particular brand of virtualization. If you’ve been reading this blog, you know that there’s been a lot of hubbub lately about virtualization—talk that is both fueling and being fueled by the stellar stock performance of EMC (NYSE: EMC) subsidiary VMware (NYSE: VMW). But VMware’s software is for virtualizing operating systems and the applications that run on them, not the data that these applications actually operate upon.

In an ideal world, it would also be possible to virtualize databases, so that, for example, multiple copies of a database could be active at the same time, across one or many machines. As it turns out, that’s exactly what Xkoto’s software does. IBM’s DB2 database system—which, for now, is the only system the two-year-old company’s software works with—has the ability to run one “active” copy of a database and one “passive” copy, which can be brought up as a backup in case the active copy fails or is undergoing maintenance. But that’s a tricky, time-consuming process, with some downtime in between.

According to Patrick, Xkoto’s “Gridscale” software can run multiple active copies of a DB2 database on a network, updating all of them continuously. “That gives you high availability for disaster recovery or maintenance,” says Patrick, “but it also allows you to scale up and improve performance,” since the active copies spread themselves out evenly and automatically whenever new hardware resources are added to a network.

Gridscale will run alongside VMware on systems where operating systems and applications are also being virtualized, Patrick says, and the company is working on versions of the program that will work with Microsoft’s SQL Server software.

But while virtualization is hot, Xkoto couldn’t sit in Toronto and wait for business to come to it, Patrick says. “You’ve got to go out and define your market. And to position itself as a market leader, Xkoto needed access to venture capital and more presence in the United States. It’s a win-win situation. Both the investors and the employees will see us accelerating at a much more rapid pace, without the loss of anything they were doing in Canada.”

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