More than 1,100 experts who analyze “Big Data” are gathered in San Diego today for the industry’s major conference on “Knowledge Discovery and Data Mining” (KDD). The registered attendance is a 22 percent increase over the 900 who attended last year’s KDD conference in Washington D.C.

“In this field, at least, we’re experiencing a recovery,” says Joe Milana, the global head of analytics at Opera Solutions, which was founded as a consulting firm in 2004 and has developed a specialized focus on helping big companies use predictive analytics. When the economy crashed in 2008-09, Milana says a lot of companies eliminated their data analytics services as part of their overall cost-cutting efforts. By 2010, however, he says the analytics industry was experiencing a recovery as financial institutions and corporations realized the growing importance of identifying customer trends and user patterns in the deluge of data that gets generated daily.

Opera Solutions, based in New York and Jersey City, NJ, has been a beneficiary of this resurgence, Milana says. While the company has about 550 employees worldwide, Milana heads the company’s San Diego-based analytics business—which had five employees three years ago, and has doubled its headcount to more than 70 employees in the past eight months.

“There’s this niche in machine learning, where San Diego is the place to be, and our company explicitly moved to San Diego to tap into it,” Milana says. Among the U.S. cities with technology clusters focused on software analytics, he estimates that San Diego ranks third—behind Silicon Valley, with its regional expertise in search engine applications, and the New York area, where Wall Street’s financial sector has a seemingly insatiable appetite for data mining and analytic technologies.

The focus of San Diego’s analytics and machine learning community seems to extend beyond search applications, and is focused more on Main Street than Wall Street. Many local companies are focused in various ways on helping big businesses take advantage of the terabytes of data being generated by their customers each month. More than 100 companies in the San Diego area are working on predictive analytics, Milana says, making predictive analytics one of the few cohesive communities in San Diego’s fragmented software industry.

Opera Solutions sees … Next Page »

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While venture capital activity remained relatively constant in year-over-year funding for San Diego companies, most of the capital went to local life sciences companies. It was a big week for VC news, and our briefing begins now.

—A regional breakout of venture activity from the MoneyTree Report shows that 29 startups in San Diego received a total of $198.2 million during the second quarter that ended June 30. That’s an 8 percent decline from the $215.7 million that VCs sunk into 30 deals during the same quarter last year, according to MoneyTree data. Life sciences deals accounted for 97 percent of the total in the recent quarter. The biggest information technology deal was nearly $1.6 million for Verve Wireless.

—A rival survey of venture activity from Dow Jones VentureSource found that VCs invested $152.2 million in 17 deals in San Diego during the second quarter. That’s a 4.4 percent increase in capital and slight decline in deals since the same quarter last year, when Dow Jones counted $145.8 million in 18 deals. The two surveys are not comparable because they use different sources and different methods of counting deals.

—The Backplane, a Web-based startup backed by the mistress of pop Lady Gaga, was listed among the San Diego companies that got $1 million in venture funding during the three months that ended June 30, according to a breakout of venture activity from the MoneyTree Report. The Backplane has operations in San Diego and Palo Alto, CA, according to Davis Corley, director of operations at Tomorrow Ventures, which also invested in the startup.

—Lisa Bicker resigned as CEO of CleanTech San Diego, the non-profit industry group that has worked for two years to stimulate innovation in renewable energy and clean and green technologies, as well as sustainable business practices. Jim Waring, a co-founder and chairman of CleanTech San Diego, is her successor as CEO, effective Aug. 1.

—A comprehensive report on San Diego’s innovation economy during the first three months of this year counted 70 new startups—double the 35 new companies formed during the same quarter in 2010. The Connect Innovation Report also showed that … Next Page »

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When I profiled Torrey Path in 2009, CEO Peter Dresslar was in the process of moving his software analytics startup from Ann Arbor, MI, to San Diego. The company was focused on providing information services to life sciences companies, and had developed the capability to provide a scientist or research group with all the data results from experiments involving a particular gene.

Dresslar tells me he’s now winding down Torrey Path to start a new company with Derren Barken, a bioinformatics scientist who was most recently at San Diego’s Prometheus Laboratories. Prometheus agreed last month to a buyout offer from Nestlé Health Science that one analyst has estimated to be worth more than $1 billion.

Torrey Path “generated a real amount of revenue and some assets,” Dresslar says. But the focus on a still-emerging field like genomics meant the company “was always running into headwinds” as the company’s customers struggled to advance both the science and the business. Dresslar says he’s now in talks to sell some of Torrey Path’s assets.

Dresslar, who is president of Sequencethree, says he got to know Barken through San Diego’s analytics software community and a local bioinformatics user group. The idea for starting a new bioinformatics startup came to them a couple months ago with “the realization that we wanted to work together,” Dresslar says. Their startup is initially focusing on complex problems in immunology. The two founders are developing computational technology to analyze the immunological properties of peptides and similar molecules, and Dresslar says they can envision ways to develop both new therapeutics and prophylactic vaccines from computer-based simulations.

“The technology takes advantage of massively parallel computing as well as some modern artificial intelligence concepts, and gives us a unique way of exploring complex biological phenomena related to those molecules,” Dresslar says. “We are exploring both technology licensing and developing our own intellectual property as possible commercialization paths.”

Barken is the director of bioinformatics at Sequencethree. He holds a doctorate in bioinformatics from UC San Diego and was a software developer at UCSD’s San Diego Supercomputer Center before he joined Prometheus Labs in 2007. His brother Lee is known among San Diego’s startup community as a CPA and IT practice leader at Haskell & White, and as a Cleantech San Diego board member.

“It’s just the two of us, although we have a couple of great advisors we’re going to be announcing in coming weeks,” Dresslar says. The founders have funded the company themselves so far, although Dresslar says they are looking at a combination of revenue-generating partnership activity, grants, and possibly an angel round in the next six to twelve months.

“We think we have a combination of technology and an approach that will let us understand the properties of biologically interesting molecules better than has been done previously,” Dresslar says. The co-founders also have been seeking out partnerships in fields besides immunology, because their approach also should work with a large number of other molecules. Dresslar says they can envision specific applications in analyzing anti-microbial peptide activity and even microRNA analysis.

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Eight months after San Diego’s Accelrys (NASDAQ: ACCL) completed its merger with Santa Clara, CA-based Symyx Technologies, the scientific software developer is today lifting the curtain on a new strategy based on the company’s broader and deeper resources.

The merger, valued last year at about $175 million, combined Accelrys’ flagship software for simulating and modeling scientific experiments with Symyx’ strength in cheminformatics and notebook software used to chart and manage lab experiments. Along with its fourth-quarter financial results today, Accelrys is also sharing some new software products that are intended to help manage the entire process of scientific development—from R&D to commercialization and manufacturing—at industry, academic, and government institutions.

Max Carnecchia

“It’s the future for us, the strategy for the next two to three years,” says Accelrys CEO Max Carnecchia. “What we’re hearing from our largest customers is that they really need a framework, they need a [software] architecture that can harness all of the innovation, all the experiments, all the modeling and simulation, and all the work they’re doing across labs on a global basis, both within their own organizations and within their collaborators.”

In explaining today’s new product introductions, Carnecchia said, “A series of individual islands of capabilities have now been brought together into a true platform.”

The Symyx merger brought Accelrys a combined base of more than 1,350 customers, including 29 of the top 30 biopharmaceutical companies, all five top chemical giants, and many U.S. government agencies and universities.

“It was actually our customers who talked with us about their needs during the merger and pre-merger” that led to the strategy, says Melissa Purcell, Accelrys’ senior director of marketing communications.

“Obviously, we had thoughts around the idea that the combination was going to create … Next Page »

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San Diego-based EDSA, which specializes in software analytics for complex electrical power systems, is changing its name to Power Analytics Corp. In a statement from the company, chairman and CEO Mark Acolese says, “the name Power Analytics reflects the enormous technological revolution that has occurred with the advent of our Paladin Live and Paladin SmartGrid platforms… not just for our company, but for the mission-critical community as well.”

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San Diego analytics startup Algebraix Data, which moved its headquarters to San Diego from Austin, TX, at the end of 2009, has raised about $7.5 million in a combination of debt, securities, and rights to acquire securities, according to a regulatory filing this week.

As I reported in 2009, Algebraix has developed analytics software that works with unstructured databases, eliminating a time-consuming and laborious process. By applying advanced algebraic algorithms and parallel processing, Algebraix says its software can monitor users’ query patterns, and it adaptively restructures the data. The company’s advanced analytics is intended for use in business intelligence, data-mining, and decision support applications.

CEO Charles Silver told Silicon Valley Watcher Tom Foremski in April that Algebraix has 22 employees and has raised $12 million from individual investors since it was founded in 2004. Since moving to San Diego, the company has added Beyond Trust CEO John Mutch (who took over San Diego’s Peregrine Systems during its bankruptcy reorganization) and Craig Andrews, the venerable San Diego technology lawyer who is now of counsel at DLA Piper.

Algebraix co-founders David L.R. Stein and Chris Piedmonte remain on the board.

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Predixion, the Aliso Viejo, CA-based startup that recently closed on a $5 million A round led by DFJ Frontier, said it has formed a strategic partnership with Zementis, a San Diego startup that specializes in predictive model markup language. Predixion specializes in low-cost, self-service in the cloud predictive analytics software and Zementis is a leader in PMML technology.

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San Diego’s Mitek Systems, the developer of optical character recognition and intelligent pattern recognition technologies that processes 10 billion checks a year, might have created a new opportunity in the emerging market for mobile check processing. Today, the U.S. Patent and Trademark Office granted Mitek a utility patent for “systems for mobile image capture and processing of checks.”

A spokesman for the company, Jim Byrnes, tells me the patent covers Mitek technology that enables mobile users with camera-equipped smartphones, including the iPhone, BlackBerry, Android, and Windows Mobile, to use a picture of a check (front and back) to make check deposits. Byrnes says the patent issued today is Mitek’s seventh U.S. patent in image analytics and related fields; the company has five other patent applications pending.

Mitek Systems (OTCBB: MITK) CEO Jim DeBello, who joined the company about five years ago, was out of the country and unavailable for comment today. He outlined the company’s strategy for me earlier this year, though, saying Mitek’s “aha! moment” occurred two years ago—Use Mitek’s longstanding expertise in character recognition to “pivot” on the growth of smart phones. “We’re turning the camera on the smart phone into a virtual check scanner in your hand,” DeBello said. “What it’s meant for Mitek is essentially a transformation of skill sets.”

It’s an intriguing strategy and a compelling investor story. The question is whether Mitek can really pull it off. (Yesterday, the company posted a loss of $647,000, or 4 cents a diluted share, on revenue of $822,000 for the third quarter that ended June 30.)

Even though bookings were down in the third quarter, DeBello said in the company’s earnings report that Mitek has established itself as the “gold standard for … Next Page »

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San Diego’s Covario, the venture-backed analytics company that specializes in helping customers improve the results of their search-based marketing, has added to its Software-as-a-Service capabilities for tracking online search and display advertising.

The company says its latest innovation, the Covario Social Media Insight (SMI) solution, is an extension of its Web-based platform for Cross Media Optimization, or CMO. As if disambiguating acronyms like CMO isn’t hard enough as it is, Covario says it developed its CMO platform to help Chief Marketing Officers (a different kind of CMO) who want to improve their Current Mode of Operation (another form of CMO). Are you noticing a pattern here? It’s a confusing method of organization, to say the least.

As I’ve reported before, Covario has been expanding its software analytics tools to help customers improve their results in search engine marketing (SEM) and search engine optimization (SEO). Covario targets many of the largest companies in the world and its customers include such companies as IBM, Microsoft, Sony Pictures, T-Mobile, Lenovo, and Yahoo.

Covario is expanding its offering of Web-based tools to help customers measure their online marketing success as new competitors are emerging, such as BrightEdge, a startup in San Mateo, CA, that specializes in SEO management—and which Wade recently profiled.

In announcing the added social media capability of its CMO dashboard, Covario cites data from Forrester Research that says online consumer-generated comments—or “impressions”—about products and services totaled more than 500 billion last year. That’s close enough to the 2 trillion ad impressions that were created … Next Page »

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We’ll be turning on the lights soon for our big afternoon event, the Xconomy Forum on smart energy. On the other hand, we might not need the lights inside Atkinson Hall, where we’re gathering at Calit2, because we’ve recruited some of the brightest minds from San Diego and beyond to discuss energy and innovation.

After months of planning, I’m especially looking forward to the late afternoon demonstration of wireless energy transmission by Eric Giler, the CEO of Watertown, MA-based WiTricity. It sounds like something Nikola Tesla might have dreamed up in 1891. But it’s technology that might be ideally suited today for safely recharging electric cars, and we’ll be seeing a lot more of those around town over the next year.

Our agenda is focused on innovations in smart energy, and I’ve asked our speakers to talk about both the innovations that are underway and the innovations that are needed to make us smarter about the ways we use energy.

Kicking off that discussion will be Internet pioneer and green energy strategist Larry Smarr, who advocates the “greening of the Internet” and who is observing his 10th anniversary this year as founding director of Calit2—one of our event co-sponsors that is more formally known as the California Institute for Information Technology and Telecommunications. Our plenary panel, which is focused on smart grid innovations in sensing, IT, and analytics, will be moderated by Roth Capital Cleantech analyst Brian Kremer and includes UCSD assistant professor Jan Kleissl, Balance Energy Solution’s Terry Mohn, and software analytics expert Alex Guazelli of Zementis. He’s subbing for Zementis CEO Michael Zeller, who expects to be a father today, if he isn’t already. Congratulations Michael!

We also have arranged for case studies by Ron Pitt of EcoDog, Jonas Olsen of On-Ramp Wireless, David Johnson of Achates Power, and Manuel Jaime of Qualcomm. And we have invited Richard Brody of PowerGenix and startup CEOs Stephanie Rosenthal of Pyron Solar and Cheryl Bostater of 5th Generation Energy to make short “burst” presentations.

After the event, Calit2 is hosting a networking reception that’s also intended to showcase several UC San Diego research projects that are focused on sustainability and smart grids, including work related to the National Science Foundation’s GreenLight project.

Thanks to the many people who have helped make this happen. The list includes the event host, Calit2; and event sponsors Roth Capital Partners, Latham & Watkins, and Calit2. Of course, we’re grateful for help from our event partner, CleanTECH San Diego. And we can’t forget the support from our underwriters: Alexandria Real Estate Equities, Latham & Watkins, and the Science & Technology Directorate of the U.S. Department of Homeland Security.

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Over the next decade, San Diego Gas & Electric (SDG&E) and other public utilities in California must undergo a massive transformation in the ways they generate and transmit electricity to meet aggressive regulatory requirements for renewable energy.

We’re starting to see some of those changes today. In less than two years, SDG&E is expected to complete the installation of “smart meters” for more than 1.4 million of its customers. Once activated, the system will act much like a wireless computer network in which millions of devices regularly update their status and transmit their data to the utility’s operating center. The smart meter technology enables the utility to measure its customers’ energy use in detail (eliminating the need for meter readers), and the network will alert operators to outages and other problems.

Once the smart meters are switched on, SDG&E and other utilities also are expected to adopt so-called dynamic pricing that sets electric rates higher during mid-day periods of peak energy demand—and gives customers strong financial incentives to save energy based on their “time of day” usage.

But many of the most important changes for both utilities and energy consumers haven’t been invented yet—which is one of the major themes running through the Xconomy Forum on “smart energy,” which is set to begin at 1:30 p.m. tomorrow at U.C. San Diego (Online information and registration is here.)

There’s a wide variety of companies in the San Diego area working on smarter ways of generating, distributing, and conserving energy. But one group that hasn’t received much attention yet are the companies in San Diego’s predictive analytics cluster that are now focusing on new ways of analyzing and predicting energy use and other smart grid data.

As the power grid gets “smarter,” innovations will be needed to help meet regulatory requirements under which 33 percent of the power California utilities distribute must come from renewable energy sources by the year 2020. The essential problem, though, is that the electricity generated by solar panels, wind power, and other renewables is intermittent—it increases and decreases as clouds pass overhead and as the winds rise and fall.

Until now, the power grid has operated as a centralized power distribution system, and the key to understanding the problem is in knowing that the system cannot easily store energy (innovation needed!)—so power generation must … Next Page »

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As the editor of San Diego Xconomy, I’m as thrilled as the next journalist to say I have electrifying news—and this time it’s almost literally true.

In planning the Xconomy forum on smart energy, now just five weeks away, we’ve asked some of San Diego’s leading luminaries in energy innovation to discuss what they’re doing to develop smarter ways of using energy. We’ve recruited strategic thinkers, such as Terry Mohn of Balance Energy, leading visionaries like Calit2 director Larry Smarr, and startup CEOs like Achates Power’s David Johnson, to enlighten us with their ideas and views, as well as their technologies and startup business plans.

Today, I am pleased to report that the closing keynote speaker of the afternoon will be Eric Giler, CEO of Watertown, MA-based WiTricity, who is overseeing the development of technology that transmits electricity without wires. As I said, it’s electrifying. The technology was conceived by MIT assistant professor of physics Marin Soljačić, who won a MacArthur Foundation “genius grant” in 2008 for his work in this field. WiTricity was named the emerging innovative company of 2009 by the Massachusetts Technology Leadership Council, and it won the audience choice award among startup energy companies in Boston last June at XSITE, the Xconomy Summit on Innovation, Technology, and Entreprneurship. Today, WiTricity is pursuing a host of applications, such as wireless recharging of cell phones, laptops, and other mobile consumer electronics. But another prospective application—recharging electric vehicles—could have major ramifications throughout Southern California.

In addition to WiTricity, we have landed Qualcomm Senior Director of Business Development Manuel Jaime, who will give a case study presentation on technology that Qualcomm is developing to help electric vehicles communicate with the power grid.

As I mentioned last month, when we first announced the Xconomy Forum event on Smart Energy, many of the innovation clusters that already exist in San Diego specialize in technologies that will be needed to help make people smarter about using energy. By providing a glimpse at innovations that lie just over the horizon, the smart energy forum offers an opportunity for people with expertise in IT, wireless communications, data warehousing, and software analytics to understand how and where these new opportunities are emerging.

Our Xconomy Forum is set for the afternoon of June 8 in the Calit2 auditorium at UCSD, and tomorrow is the final day you can buy discounted tickets at the super-saver rate of $75. If the previous Xconomy Forum on San Diego Life Sciences 2030 was any indication, tickets for the 200-seat auditorium will sell out well before the event. Additional information and online registration is available here, and maps and directions to Calit2 can be downloaded here.

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Software analytics continues to be one of San Diego’s busier high-tech sectors, with ParAccel leading a new generation of technologies that combine data warehousing and analytics. Get ready for the week ahead with this overview from Xconomy:

—Sequoia Capital, the Menlo Park, CA, venture firm, is taking a big stake in Service-now.com, the Software-as-a-Service company based in suburban San Diego that helps companies track their corporate assets. After initially disclosing a $66.1 million investment by Sequoia, Service-now.com told Dow Jones that Sequoia is expected to make a $75 million investment to acquire the shares of Service-now.com’s founders and 133 employees. Roughly half of the total is designated for Fred Luddy, the CEO and co-founder and CEO, and Andy Chedrick, the chief financial officer, according to regulatory filings.

—ParAccel CEO Dave Ehrlich told me how the software developer, which specializes in column-oriented database management systems for massively parallel processor-based networks, is part of a wave of innovation that has been sweeping through the data warehousing industry. ParAccel, which is based in San Diego and Cupertino, CA, was founded in 2005 by Barry Zane, a co-founder and system architect of Framingham, MA-based Netezza.

—A five-year-old software analytics company that was founded in Austin, TX, as Xsprada, has moved its headquarters to San Diego and changed its name to Algebraix Data Corp. The move was part of a decision by chairman and lead investor Charlie Silver to take over as CEO. Silver was previously the CEO of San Diego-based RealAge.com, which sold to Hearst Magazines two years ago for a reported $100 million.

—Connect, the San Diego non-profit group for technology and entrepreneurship, announced its 22nd annual most innovative product awards on Friday. Check here for the full list of the winners.

—San Diego’s Mission Ventures and Laguna Beach, CA-based Okapi Ventures have invested about $2 million in a Series B round of venture funding for Transaction Wireless, a San Diego startup. Transaction Wireless has developed mobile payment processing technology that allows merchants to accept credit card payments using only a mobile phone. Founder Basil Abifaker was previously a co-founder of Tourmaline Networks.

—Denise profiled San Diego’s Anvita Health, which believes its software can reduce human error in medical prescriptions and fill the sort of information gaps that can lead tohorrible side effects or even death. Besides analyzing electronic medical records, the software is continually reloaded with the latest medical research and drug information to provide up-to-date advisories on how drugs interact with each other, and medical tests and procedures. Anvita sees a big opportunity in plans by the Obama administration to hasten the digitization of electronic medical records by providing incentive payments to doctors who adopt the technology.

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As I noted in a recent post about ParAccel, there seems to be a recent proliferation of startups that are combining database management systems with sophisticated analytical capabilities.

Another one has just come to my attention: Algebraix Data Corp. is a business intelligence software company that moved its headquarters to San Diego from Austin, TX, three months ago. The startup, which was founded in 2004 as Xsprada, changed its name to Algebraix at the same time and also named its chairman, San Diegan Charlie Silver, as CEO.

“Business intelligence and analytics is probably the largest growth area in IT today,” Silver says. “It’s a very hot space. But no one can do what we do.”

I know Silver from his years as the CEO and co-founder of RealAge, a San Diego “healthy lifestyle” Internet company that uses an online questionnaire (e.g. Do you smoke?) to help consumers calculate their “real age.” Subscribers who fill out the questionnaire get a personalized plan to help them look younger and advertising-supported e-mails that provide diet and fitness tips. Hearst Magazines acquired RealAge about two years ago to strengthen the physique of Hearst’s online health and fitness offerings. While terms of the buyout were not disclosed, The New York Times estimated the deal at just under $100 million, based on RealAge’s revenue at that time of $20 million a year and 2007 Web traffic of 2.1 million unique visitors a month.

Silver says that Algebraix established its headquarters in San Diego when he took over, but the privately held company has only 12 employees, and is maintaining an office in Austin. While San Diego has a thriving cluster of analytics companies, it looks to me that it’s just more convenient for Silver.

“I am essentially the lead investor,” Silver says. “The guys pitched … Next Page »

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I discerned a couple of recurring themes when I sat down with ParAccel CEO David Ehrlich to discuss the venture-backed startup that specializes in database management systems technology.

One is that ParAccel’s industry seems prone to what Ehrlich calls “database wars,” which might be best exemplified by the intense competition that broke out in the 1990s between Oracle, Sybase, Informix, and others. Another is that the computerized data storage networks that were designed for data warehousing have not proved to be well-suited for data analytics.

Both themes weave through the ParAccel story, which was founded in 2005 by Barry Zane, a co-founder and system architect at Netezza who left the Framingham, MA, company to start ParAccel in San Diego, and who now serves as its chief technology officer. Ehrlich says another key technologist is Rick Glick, ParAccel’s vice president of technology and architecture, who was previously the chief technology officer of the San Diego-based database engineering group at Teradata of Ohio.

Ehrlich, who divides his time between Par Accel’s offices in Cupertino, CA, and San Diego, says the company’s “center of gravity is in San Diego” largely because Zane started here, and both Zane and Glick continue to live in San Diego. Another factor is the emerging cluster of software analytics in San Diego, as well as the presence of Teradata’s engineering group. As Ehrlich puts it: “You just can’t find people anywhere else in the world that have 15 to 20 years of experience in parallel processing database computing.”

ParAccel, which has raised about $53 million in venture capital and now has 70 employees, specializes in relational database software that enables its customers to combine the benefits of data warehousing with analytics processing. Its technology is designed as a column-based database management system that runs on a massively parallel processing hardware platform.

As Ehrlich tells the story, it became clear to experts in database management in the late 1990s that the exponential growth of data and increasing sophistication of software analytics and business intelligence were creating new demands on systems that were essentially designed for data warehousing. “As it turns out, database architectures that were designed for warehousing are terrible architectures for data analytics,” Ehrlich says. “Oracle can do lots of little questions, but stumbles when it comes to 10 terabytes of data and really difficult questions.”

The industry developed tools—Ehrlich calls them “crutches”— to make traditional databases work with software analytics. “With every new innovation,” Ehrlich says, “the demand [for analytics] went up and the innovations struggled”—with two notable exceptions. One was a decision at Teradata to develop data warehousing equipment based on massively parallel processing computer technology that ran Sybase IQ relational database software in what Ehrlich described as a “brute force” approach to the analytics problem. The other was Netezza, which was founded in … Next Page »

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Overtone, a company that provides Web-based analytics that enables companies to monitor online sentiment about their brand and products, has raised nearly $2.5 million in a venture round that could be worth as much as $5.3 million, according to a recent regulatory filing.

The company, though, defies any simple definition—at least based on a conversation I had late yesterday with Overtone CEO Craig Brennan.

When I called Brennan at Overtone’s San Francisco office to determine whether the company’s headquarters are there or in Carlsbad, CA, as listed in the SEC filing, he told me that Overtone’s headquarters are in both places. He described Overtone as a virtual company—with a CEO who works in San Francisco, while CFO Chris Vohnout works in Carlsbad. Brennan declined to provide the company’s exact headcount for competitive reasons, but said Overtone has about 50 employees throughout its operations.

And when I asked when Overtone was founded, Brennan said the company, which was previously known as Island Data, has gone through three distinct phases in the 14 years since it was created. Its latest reincarnation came after 2004, when Island Data sold much of its assets—including email routing technology it had developed, he says.

Since he joined Overtone in December, Brennan says the company has raised about $8.5 million in venture capital, including the current round, from a number of individual investors and three venture firms—ABS Ventures, Dolphin Equity Partners, and Whelan Capital Management (also known as the Encinal Capital Group.)

Brennan says Overtone’s business is now focused on providing its analytics technology as software-as-a-service for consumer-oriented companies that need to monitor what their customers are saying on social media sites, Internet message boards, and other online venues. Overtone says monitoring unguarded comments can help companies assess how they are viewed by their customers, how well they are managing their brand, identify issues with products and service, and determine how well their advertising works. An animated graphic on Overtone’s website offers some examples of just how important monitoring such sentiment can be, with one quoted comment about TV advertising for a male enhancement product saying, “I would ask that no Extenze commercial ever air again. Creepy and sad.”

Overtone describes its “Open Mic” technology as a “real time natural language processing, analysis, and reporting engine optimized to extract customer intelligence from free-form consumer-generated text.”

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MeLLmo, a Del Mar, CA, startup developing graphics and visualization software, has raised $4 million from private investors to accelerate its penetration in the market for 3G mobile devices. The secondary round means MeLLmo has now raised a total of $10 million from its angel investors since the company was founded 21 months ago.

“I think we’ve ended up with a whole new paradigm for how to visualize and analyze data,” says Santiago Becerra, a co-founder and MeLLmo’s chairman and CEO. While the company initially focused its software for use on Apple’s iPhone, Becerra tells me MeLLmo intends to broaden its development efforts to other 3G smart phones. And as the advantages of its software become more widely understood, Becerra says he even anticipates demand among PC users.

The business-oriented iPhone application that MeLLmo introduced in May enables users to restructure statistics and other types of data gleaned from Excel spreadsheets, HTML table data, CSV files, and Salesforce CRM reports into interactive charts and graphical displays. The software also allows users to analyze and share their graphical displays with others.

The company, which currently has 28 employees, plans to use its new funds to expand MeLLmo’s sales and business development resources.

Becerra, who co-founded MeLLmo in January 2008, says it is his fourth company. His previous software company, Infommersion, developed Xcelsius, software that provides consolidated views of key business metrics. Becerra, a former Booz Allen & Hamilton management consultant with a Harvard MBA, sold Infommersion to Business Objects in 2005 (the software is now owned by SAP). He also was the founding CEO of Graphical Information, a software company he sold to Oracle in 1998.

Becerra tells me his current startup was still in stealth mode last … Next Page »

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San Diego-based BrightScope, a startup that analyzes and rates the performance of 401k plans, says it has raised $2 million in a Series B funding round led by an angel investment from Jim Caccavo of Steelpoint Capital Partners. BrightScope was founded two years ago as an independent data analytics firm that reviews and rates 401k plans, which have become a crucial method of personal saving for retirement. BrightScope says its rating engine reviews more than 200 criteria for each plan to calculate a numerical score. Caccavo, a former CEO of Tickets.com, will join BrightScope’s board.

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San Diego’s Covario, which specializes in high-end software analytics that helps customers optimize search engine results for their web sites and products, says it is expanding to offer Internet marketing services capabilities. The company says the move into agency services, which marks a turning point in its technology-focused strategy, came in response to growing advertiser market demand.

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The biggest news by far last week was ExxonMobil’s decision to invest $600 million in biofuels, with half of that going to San Diego’s Synthetic Genomics. A number of companies also launched new technology iniatives. To find out what’s happening, just keep reading.

—ExxonMobil, the world’s largest oil company, said last week it plans to invest $600 million to develop algae-based biofuels, with least $300 million going to fund fundamental work at Synthetic Genomics, the startup co-founded by J. Craig Venter, the human genome pioneer. Venter said Synthetic Genomics plans to begin construction soon on a research and test facility in San Diego. Venter’s wife, Synthetic Genomics spokeswoman Heather Kowalski, told me the ExxonMobil deal won’t affect the startup’s joint venture with BP, where the initial focus has been on coal. Kowalski also said that BP is an equity investor in Synthetic Genomics, but ExxonMobil is not.

—Covario, the San Diego-based software analytics startup, said it has developed a new software-as-a-service program that automates the process of analyzing Web traffic on a customer’s corporate website. Covario says its “D3″ product for search engine optimization replaces the time-consuming work often performed by Web marketing agencies.

—San Diego wireless giant Qualcomm (NASDAQ: QCOM) said it is “reviewing its options” for LifeComm, its virtual mobile network focused on healthcare services. Qualcomm said LifeComm has been unable to raise enough capital from third parties to fully develop its initial launch product. Mobihealthnews, a Boston website focused on the wireless healthcare industry, said Qualcom has decided to pull the plug on LifeComm.

—Aculon, a San Diego startup specializing in nanocoatings for use in a variety of industries, said its proprietary technology replaces hexavalent chromium in paint primers applied to stainless steel, titanium, aluminum, and other metal surfaces. Hexavalent chromium is a toxic, cancer-causing heavy metal used to make anti-corrosion coatings. Aculon CEO Ed Hughes told me Aculon’s technology forms a coating that is just one molecule thick, or 2 to 4 nanometers.

—San Diego’s TelCentris said it is upgrading its VoxOx universal communicator service to include an automated “personal assistant” that can answer your phone calls and route them according to your preferences. A VoxOx user can combine his or her existing phone number with their e-mail service provider, instant messaging service, and social networking sites like Facebook, MySpace, and Twitter.

—Simon Thompson, ESRI’s director of commercial marketing, mapped out some of the innovative trends in Geographic Information Systems, or GIS, when we met amid the hubbub of the 2009 ESRI International User Conference in downtown San Diego. Thompson said one trend stems from creating GIS mapping “masks,” or layers of mapped information, so you can change the underlying data set on your iPhone app from a map of gas stations to a map of restaurants or schools. Another key trend he discussed involves the convergence of GIS mapping technologies with software analytics.

—Quasar Geophysical Technologies of San Diego has developed a new type of electromagnetic sensor that is sensitive enough to detect tiny electrical currents flowing through subsea rock—and variations in the conductivity among different types of geological formations. The company says its technology is sensitive enough to help the oil and gas exploration industry increase its chances of discovering offshore oil and gas deposits. Quasar has designed its sensors to be deployed on the ocean bottom, as deep as 2.5 miles below the surface, for weeks at a time.

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