This week’s New England deals list includes a mix of life sciences and IT companies.

—Lexington, MA-based T2 Biosystems, a developer of a system for identifying biological substances such as proteins, small molecules, viruses, and DNA more cheaply and quickly than existing methods, took in $23 million in Series D financing. New T2 investor Aisling Capital led the round, which also included return backers Flagship Ventures, Polaris Venture Partners, Flybridge Capital Partners, Physic Ventures, Partners Healthcare, Arcus Ventures, RA Capital, Camros Capital, and WS Investments.

—Boston-based online data storage firm Carbonite raised $62.5 million in an initial public offering, selling 6.25 million shares at $10 per share. That was the bottom end of a range ($10 to $11) that Carbonite (NASDAQ: CARB) had already lowered earlier on the day it priced. Late last month it had said it expected to price the shares at $15 to $17 each.

—My colleague Greg wrote about how Harvard University’s Office of Technology Development is looking to raise another fund of $20 to $30 million, up from its $10 million “Accelerator Fund,” created to help the school’s scientists commercialize their inventions.

—Amesbury, MA-based Fluidnet, a maker of electronic infusion pumps for administering IV fluids, raised $19.8 million of an offering that could hit $25 million, according to an SEC filing.

—Proteon Therapeutics, a Waltham, MA-based kidney and vascular drug developer, nabbed $15.2 million from 19 investors, an SEC filing showed.

—Lexington-based Pulmatrix raised $14 million in Series B financing, to bring its total funding raised to $60 million. The investment came … Next Page »

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It’s no secret to anyone looking at venture activity that New York has blossomed over the past few years as a startup mecca. Riding a wave of investments in Web , media, and advertising startups, the city has recently climbed past Boston to become the second greatest center (after the Bay Area) of high-tech deal making when it comes to the general Internet space.

But why? It’s not hard to make some guesses about the economy coming back, or about the low cost of starting companies these days. But for a more expert perspective, I thought I would check in with Xconomist Rich Levandov, a partner at Avalon Ventures. Levandov is based in Boston, but he’s had a good ride on New York startups in the past few years—including some great exits with ad technology companies Tacoda and Pictela (both sold to AOL, Tacoda in 2007 and Pictela last December)—and he even took an apartment in the Big Apple last summer.

In fact, the first time I interviewed Levandov was back in 2007 about Tacoda. He and company founder Dave Morgan revealed they had made a deal to get tattooed with the Tacoda logo if the company returned 10x the investment Levandov, then with Masthead Venture Partners, had made—which it did when AOL bought it for about $275 million. (By the way, there’s still no tattoo three years later—what’s up with that, guys?)

Levandov, who also co-led the Series A round in Zynga with New York’s Union Square Ventures and Boulder-based Foundry Group, says he currently has seven or eight investments in New York, among them Ad Summos and TV ad company Simulmedia (which Morgan also founded)—and that he’s seriously looking at three or four more. It’s safe to call him extremely bullish on the Big Apple’s startup future. “Avalon’s interest in New York has been soaring, but I think it’s going to double again,” he says. (In case you doubt the NY connect with Avalon, Levandov’s colleague, Avalon founder Kevin Kinsella, is the son of Broadway and movie actor Walter Kinsella—and one of the original producers of the musical Jersey Boys).

So, following are some of his thoughts and observations on why the city’s innovation scene has exploded lately, what has changed in recent years, and what he thinks the future holds.

—It’s Safe to Go Back in the Startup Waters

“New York City has always been about ideas,” says Levandov. When it came to tech startups, those ideas were largely benched after the bubble crashed early in the 21st century, but that has changed in a big way the past three years or so. Now, he says, “It’s safe to do a startup again. It’s kind of like … Next Page »

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Lexington, MA-based Highland Capital Partners is the lead investor in a $7.5 million series B round for WePay, the group payments startup that emerged from the Mountain View, CA-based Y Combinator startup incubator last year.

WePay co-founders Rich Aberman and Bill Clerico confirmed news of the funding round, which was first reported tonight by the tech blog Mashable. “We’re very excited,” says Aberman.

The startup, which was born in Boston in 2009 and relocated to Silicon Valley after Aberman and Clerico were admitted to Y Combinator, opened its online payments service to the general public in March. (For the full story on the company, see this July 8 Xconomy Q&A with Aberman.) The service enables members of organizations such as fraternity houses or homeowner’s associations to handle joint expenses by creating group financial accounts. Members can send money to the account from their bank accounts or credit or debit accounts, and group coordinators can spend the money by check or using a special WePay credit card.

All funds are kept in FDIC-insured accounts at Minneapolis-based Bancorp, the nation’s sixth-largest bank. Aberman and Clerico argue that alternative ways of organizing group payments are awkward and old-fashioned, and that other online payment processors like PayPal have failed to address this need, leaving a big opening for WePay.

On the strength of that argument, WePay closed a $1.65 million Series A round last November, with August Capital and a high-profile group of angel investors contributing. Since then, “We’ve been operating at an extremely low burn rate and have plenty of cash in the bank,” says Clerico. “But we’ve seen some pretty impressive growth numbers, and we’re excited about the going-back-to-school season. So we wanted to make sure we have the capital to scale our operations, based on the demand we’re seeing.”

Fraternities, college clubs, and rooming groups have been signing up at high rates, Clerico and Aberman say. But WePay is also popular among non-profit groups and professional association. The founders say the services is used by groups as diverse as roller-derby clubs and groups of artists preparing projects for the Burning Man festival.

WePay’s B round was “extremely competitive,” according Clerico—the implication being that the startup turned away a number of eager venture investors, though he couldn’t name them due to confidentiality agreements. Highland won the lead spot in part because of a Boston College connection. Aberman and Clerico are both BC alums, as is Highland partner Peter Bell (who has now joined WePay’s board).

“Peter is actually a trustee at Boston College, and one of my first college internships was at one of Peter’s portfolio companies,” a small medical tourism company called HealthBase, Clerico says. “Peter has made great investments across the board, including Ocarina Networks and SCVNGR, and we have great respect for him as an investor and for Highland as a firm.”

August Capital returned for WePay’s B round. But Aberman and Clerico aren’t commenting on whether any of the startup’s stellar lineup of Series A angel investors—who included PayPal alumni Max Levchin and Dave McClure, former Googler Paul Buchheit, Swipely founder Angus Davis, and super-angel Ron Conway—also ponied up.

The Series B funds will help the company staff up. “We think that in this space, the best product wins, and the best product comes from having the best people building it,” says Clerico. “So we’re aggressively hiring engineers, and also staffing up in customer support and sales and marketing.”

Interestingly, six of the company’s nine current employees—counting Aberman and Clerico—hail from Boston, where Clerico says the startup has had the most recruiting success. The most recent addition is product manager Kyle Paice, whom WePay hired away from Cambridge, MA-based Hubspot.

“Out here I’m competing [for job candidates] with Facebook and Twitter and eBay and all of these big Internet companies,” says Clerico. “Boston doesn’t have that level of competition, but it has the same level of talent.”

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Dave McClure is a dynamic guy. I had the pleasure of hearing him speak to a small audience of tech startup founders in Seattle earlier this week. His impassioned message to entrepreneurs was, first of all, to take risks and be ambitious, and second, to build something that people really, really care about.

That sounds obvious, but when you’re a developer slaving over a piece of code, or a designer tinkering with a new look for a website, or a CEO trying to make money to pay your employees, it can be easy to forget that most people visiting your site (or otherwise perusing your services) won’t care about whatever new feature you’re working on.

Of course, every tech company from Amazon to Apple says it focuses heavily on its customers—and always has. But what McClure is talking about is something deeper, something primal.

McClure, a self-professed Silicon Valley geek, angel investor, fund manager, and startup advisor, has amassed a large following among techies and entrepreneurs. He has advised or invested in more than 60 companies in the past six years, including Mint.com (acquired by Intuit), KissMetrics, TeachStreet, Twilio, and WePay (which my colleague Wade just wrote about yesterday). Back in 2001-2004, McClure was director of marketing for PayPal. He has expertise in microfinance, social networks, consumer Internet strategies, and other areas.

There was some overlap in his Seattle talk with what he has said elsewhere—including at Dogpatch Labs in the Boston area in March—about the kinds of metrics that Web startups should pay attention to. But I pulled out a few more nuggets that I think all business leaders interested in innovation on the Web should listen to, even if they might disagree. (These are just my takeaways, they’re not representative of McClure’s whole talk or philosophy.)

First, McClure stressed the importance of building something meaningful, and getting the big picture right. There’s no sense in iterating small things about a product and testing different versions with consumers if you’re not in the right ballpark to start with. And that’s something that can be tested out by gauging just a few people’s reactions to your idea. If no one seems interested, look for a different concept.

Once you’re on what he calls a “meaningful hill,” you can start testing out different looks and features with a small number of consumers (say, 10-20 to start), to gauge whether what you’re doing really matters to them. Ideally, he says, you should talk to potential customers before you even start coding. This is related to “driving usage before trying to acquire users,” he says—a crucial distinction that means, basically, make your product matter before you try to sell it too hard.

And to make a product really matter, McClure says, entrepreneurs need to “tap into the reptilian psyche” of consumers. Make your service—and the visual elements on your website, if it’s Web-based—appeal directly to people’s primal need for things like sex, power, money, fight-or-flight response, protecting loved ones, and so forth. Simplify the interface and focus on one or two aspects, making use of people’s natural visual affinity for things like faces, buttons, and edges. (McClure didn’t give the following as examples, but I think of the “gamification” trend of services like Foursquare as appealing to power; companies like PayPal, Mint.com, and WePay as appealing to money; and some news media sites and porn sites, obviously, as appealing to sex.)

Lastly, as a developer or founder, when do you know you’re done with a given product cycle? It’s when you have a meaningful offering that’s “easy to find and better than the alternatives,” McClure says. “You’re done, market it!…Stop building [stuff]!”

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Somebody at Intuit must have seen the writing on the wall. Last September, the Mountain View, CA, software company, which has been selling PC-based personal finance programs since 1983 via floppy discs, CD-ROMs, and downloads, paid $170 million to buy a two-year-old Web startup called Mint.com. If you believe, as I do, that almost everyone who uses a computer to manage their personal finances will be doing so using a Web-based service like Mint.com within a few years, then you have to conclude that Intuit got a great bargain.

In essence, Intuit (NASDAQ: INTU), by acquiring the one company that had the potential to destroy its personal finance business, bought that business an indefinite life extension. Imagine how much stronger Microsoft’s position would be now if it had bought Google when the search company was two years old, back in 2000, and you begin to get a sense of what I mean.

The move was unexpectedly insightful. Few companies have the wisdom to recognize that they’ve been superseded, let alone the courage to admit that they aren’t competent to reinvent themselves from within. As a result, Intuit, the maker of Quicken and TurboTax, has won back at least one customer, namely me.

I used Quicken for years, probably starting around 1996. At home I have an ancient Dell Inspiron laptop computer, purchased in 2004, that I have kept around far past its point of obsolescence—and long after switching the rest of my life over to my Mac—solely in order to run Quicken. (Until very recently, there wasn’t a decent version of Quicken for Mac.) But even that use tailed off around 2008, as I ran into more and more difficulties with the aging version of Quicken that I was running, and as the online alternatives grew more attractive. Finally, in the middle of 2009 or so, I stopped using Quicken altogether.

I haven’t missed it in the least, because the combination of Mint.com’s free service and my bank’s website give me all the information I need about the status of my savings, checking, investment, and credit card accounts. (I use Bank of America, which has pretty good online tools.) But now that Mint is part of Intuit, I’m back in the fold.

I should say up front that I was never an advanced user of Quicken, and neither do I make use of all of the features of Mint. Also, my financial situation isn’t very complicated—I’m single with no kids and no mortgage. Mainly, I just need to see all of my updated account balances in one place. I don’t care much (though I probably should) about comparing the performance of every fund in my 401(k) to the broader market. Plus, being a natural-born skinflint, I don’t need help from software to … Next Page »

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In 1933, President Franklin Roosevelt outlawed the hoarding of gold, ending its use as the basis of U.S. currency. Since then, the American (and the rest of the world) economy has relied on paper currency based on trust in a particular government and a currency’s value relative to other monetary systems around the world.

Sometimes though, someone wakes up and decides to spread a new dream of wealth. Here in Seattle, I’ve come across three different examples of companies with a new dream of wealth that isn’t built on dollars and cents, built rather on using technology to advance entirely new notions of how people exchange goods and services.

A few weeks ago, I wrote a story about a Seattle startup called Dibspace.com and how it is creating a mini-economy based on its own currency. Alternate means of commerce tend to gain momentum during recessions, when people feel short on cash. It turns out Dibspace founder Dominic Canterbury is not alone in taking advantage of the economic climate for alternative currency. Two other Seattle-area alternate barter startups, Divvy.com, founded by Aaron Freed, and Kashless.org, founded by Martin Tobias, have started within the past year.

“It’s a way to monetize physical goods in the real world,” Tobias says.

Money is sometimes not the only goal of these sites and their users. Helping the environment is an important aspect of Kashless, Tobias says. Unlike Dibspace and Divvy, Kashless isn’t about buying and selling—all the items listed on the site are free. “In a recession, people want free stuff,” he says. Whether it’s a slightly emptied bottle of sunscreen or an entire set of bedroom furniture, everything offered is free. And because of the way Tobias set up the website, people can use what they give away as tax deductions the same as if they gave it to Goodwill, only much more than just clothes or small goods. Tobias aims to make money from value-added services, like shipping and delivery, as well as advertising on the site. He also plans on creating a way for people to track the positive impact of giving away goods instead of sending them to the dump. He plans to do this by … Next Page »

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Bing, Microsoft’s new search engine, is partnering with PayScale, a Seattle-based salary comparison company, to help Bing users find answers about job salaries. Bing debuted last week, and has continued to add new features and capabilities as it attempts to compete with Google and become what Microsoft calls a “decision engine.”

Under the terms of the partnership, salary queries about the 4,000 most popular jobs will be available immediately to people searching on Bing. Those who want more specific information will then be directed to PayScale. Staying on the Bing site, users will be able to access both national and metropolitan figures about salary.

PayScale, which has more than 17.5 million compensation profiles, is the biggest salary database on the Web. Founded in 2002, the company offers a free anonymous comparison of salaries to people who fill out a profile, and a more detailed comparison report for about $20. It also offers software for employers looking to figure out the best compensation and benefits plan for their company.

With more job-hunters using the Internet than ever before, the benefits in increased recognition and popularity for both PayScale and Bing could be enormous, especially if more people turn to Bing, and through it, PayScale, for all of their job-seeking concerns. Those who buy the premium package from PayScale get not just information but analysis and career-planning recommendations.

Working with PayScale may turn out to help Bing in its struggle to compete with Google, as well as in its effort to attract users and advertisers in a recession.

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A new startup in Newton, MA, MortgageReport.com, unveiled a Web-based service today designed to help homeowners with mortgages better understand their financial situation. The site provides users with data such as the current estimated value of their homes, advises them on whether to refinance, and directs them to available loan options. MortgageReport.com is a sister company to SimpleTuition, which, as we reported in January, raised a $6 million Series C round to support its online guide to student loans.

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Could anything be a more secure investment than buying into the very paper that dollars and a bunch of other currencies are printed on? The over-200-year-old Crane & Co paper mill in Dalton, MA, has manufactured paper for U.S. dollar bills since 1879. Up until now, the company has been family-owned. But in order to accommodate family members who want to liquidate their stock, the company “will sell a 20 percent minority ownership stake to an affiliate of New York-based investment firm Lindsay Goldberg for an undisclosed sum,” the Berkshire Eagle reports.

The Crane mill makes paper from “recovered cotton fibers”—in other words, rags. Though you might think that your dollar bills have a tendency to just disappear into thin air, the long cotton fibers makes the currency paper extremely resistant to wear and tear. Today’s currency paper also includes a number of advanced security features, like embedded metal threads, watermarks, fluororescent markings, and other special additives.

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