[Clarification 11/5/11, 11:10 am. See below.] Toronto’s QuickPlay Media says its goal is to stream video to any IP-connected device on behalf of any media network or wireless carrier.

To accomplish this, the Canadian startup founded almost eight years ago has raised about $42 million in venture capital, and established several offices in the United States and London for its 150 employees. More importantly, though, QuickPlay also acquired the data and network operations center that Qualcomm (NASDAQ: QCOM) built for in a San Diego office park for its independently operated Flo TV subsidiary.

“This is probably the best facility in the world for delivering video content,” says QuickPlay CEO Wayne Purboo, who opened the network center to journalists and wireless industry analysts in mid-October. The network operations center, or NOC, looks like NASA’s mission control, only darker. Rows of computer-equipped desktops face a wall with more than two dozen 50-inch TV monitors. A data center on the other side of the wall has more than 300 terabytes of storage capacity.

QuickPlay is using the 30,000-square-foot control center, which includes a nearby satellite dish farm, to manage the satellite-based feed and Internet Protocol (IP)-based distribution of both live and on-demand content for customers like AT&T, T-Mobile, Sirius XM Radio, Motorola Mobility, Research in Motion, and Sony Pictures Entertainment.

Wayne Purboo

“We’re still in significant growth mode,” says Purboo, who closed the purchase in July. “We are building a cloud-based, IP video head-end to manage and support video delivered across multiple devices,” Purboo says. Flo TV never became a profitable business for Qualcomm, but Purboo says, “We believe there are significant cost savings to delivering video over IP.” With Qualcomm’s NOC, Purboo says QuickPlay can provide its premium-quality infrastructure to media companies at a lower cost than they might face if they tried to build their own network.

QuickPlay is growing fast to ride the growing wave on Internet streaming video. The company’s revenue has grown by 360 percent from 2005 to 2010, enough for QuickPlay to be named to Deloitte’s list of the 500 fastest growing companies in North America. The network ops center in San Diego, though, is key to everything that QuickPlay is pulling together for the next generation of Internet-connected devices.

Purboo won’t say how much QuickPlay paid for … Next Page »

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Years ago, Bellevue, WA-based Clearwire (NASDAQ: CLWR) placed a big bet. It thought that an Intel-backed wireless technology called WiMax would become the foundation of the “4G” broadband data networks that will eventually take the place of today’s 3G networks. It bet wrong—a rival technology called long-term evolution (LTE), backed by Verizon, AT&T, and other carriers, is winning the 4G battle in North America. But quarterly earnings results from Clearwire today show that the company is gradually bouncing back from its mistake.

Clearwire said that despite the spread of LTE, it has grown the subscriber base for its WiMax-based network to 9.54 million, an increase of 6.73 million over the figures from one year ago. Clearwire added 1.89 million of those subscribers in the third quarter. Revenues for the quarter totaled $332.2 million, a 13 percent increase over second-quarter 2011 revenues of $293.7 and a 134 percent increase over third-quarter 2010 revenues of $142.2 million.

Of course, the company is still hemorrhaging cash—just not quite as fast. After accounting for interest, taxes, deductions, and amortization, third-quarter losses at the company totaled $46.4 million, compared to second-quarter losses of $108.5 million.

The numbers were pretty much in line with financial figures that Clearwire pre-reported back on October 13. That disclosure was intended to stem a stock slide prompted by remarks by Sprint CEO Dan Hesse indicating that Sprint wouldn’t be leaning on Clearwire to build out its own national 4G network. The tactic seemed to help; after hitting an all-time low of $1.28 per share on October 10, Clearwire’s share price rebounded a bit, closing today (before the release of the third-quarter data) at $2.02.

Clearwire is now scrambling to switch over to LTE technology, arguing that it’s still got one big advantage—a fast, all-Internet based backend network. ”Today Clearwire is the only operational 4G wholesale business combining an all-IP network, substantial spectrum resources, and a technology roadmap to serve the growing demand for mobile broadband,” Clearwire president and CEO Erik Prusch said in a statement today. “We believe Clearwire’s deep spectrum resources are capable of meeting the urban demand that will likely strain the lower-capacity LTE deployments planned by other wireless operators.”

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Santa Clara, CA-based OpSource, a nine-year-old managed Internet hosting provider, said today that it has been acquired by telecommunications firm Dimension Data, an NTT Holdings subsidiary based in Johannesburg, South Africa. OpSource’s 150 employees will become part of a new “Cloud Solutions Business Unit” at Dimension Data, the companies said. Financial details of the deal were not disclosed.

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Microsoft’s blockbuster $8.5 billion deal to acquire Skype dominated headlines far beyond the Puget Sound region last week, raising all kinds of interesting implications for mobile computing, business communications, video games, and more. Many commenters were walloped by the sheer scope of Microsoft (NASDAQ: MSFT) products that Skype could be plugged into, but in our initial report, we called out mobile and video as the two broad areas to watch.

Xconomy writers from around the country also weighed in with follow-up reports from different angles. Xconomy Boston’s Greg Huang sat down for an exclusive interview with Microsoft’s Qi Lu, president of Microsoft’s online services division. Skype won’t report to Lu, but he praised the power of bringing a big consumer brand under Microsoft’s umbrella. Lu also pointed to “powerful scenarios” in combining Skype with Windows Phone, Xbox Kinect, and the Lync messaging service on the business side.

In San Diego, Xconomy’s Bruce Bigelow had this Q&A with Bryan Hertz of Telcentris, a small California-based startup that makes a Skype competitor. Hertz pointed out that some of the initial mixed reaction might have to do with Skype’s upstart profile, including its roots in the music-sharing service Kazaa: “People saw Kazaa and then Skype as a way of ‘beating the system.’ Microsoft IS the system, so it’s easy to assume the worst.”

Here’s the rest of the news making headlines at Xconomy from the past week on the Seattle-area tech scene:

—Speaking of Microsoft, co-founder Bill Gates was on hand for an event from environmental nonprofit Climate Solutions focusing on the future of clean energy. As Luke reported, Gates said he was bullish on the science and business opportunities—but less optimistic about leadership from the government in setting carbon limits and paying for research and development. If Gates’ talk is up your alley, you should definitely check out our next power-packed Xconomy Seattle event, Separating Hype from Reality in Alternative Fuels, this Thursday.

—Xconomy San Francisco’s Wade Roush interviewed Dan Reed of Microsoft’s Extreme Computing Group—basically, the guy who’s in charge of figuring out what the future will hold for the world’s largest software company. Reed and Roush chatted about smart radios, data center design, artificial intelligence, and more—and all this was just a preview to today’s Beyond Mobile event in San Francisco, where Reed will join Bill Mark of SRI International, Larry Smarr of Calit2 and others for an in-depth discussion on the next 10 years of computing.

—Lest Microsoft steal all the headlines, we also had a couple of interesting items from the world of gamification—the drive to apply common video game features and experiences to a broader array of consumer life, from shopping to health and beyond. First up was BigDoor Media‘s announcement that it was partnering with Major League Baseball to bring game mechanics to the league’s live game-tracker site. Following that, we got an in-depth interview with Scott Dodson of Bobber Interactive, a Seattle startup that’s bringing game features to children’s finance. Dodson, a leading thinker on gamification, is optimistic about what the future holds—but he’s also worried that too much use of shallow elements could saturate the market and bring the whole thing down.

—Finally, a pair of great guest posts from people in the Seattle-area technology community. First up was Kal Raman of GlobalScholar, who wrote about the opportunity that entrepreneurs in the region have to bring innovation and data-driven solutions to the country’s education system. We also cross-posted this piece from Eric Koester of Zaarly, who recounted his recent trip to Washington, D.C., to speak about on the importance of maintaining a strong ecosystem for startups.

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The sale of Bellevue, WA-based T-Mobile USA to AT&T for $39 billion shook up the mobile world this weekend, both nationally and in the Seattle area. It’s unclear what the practical effects will be for T-Mobile employees in the Puget Sound region, and we might not know for some time: The companies say the acquisition process could take about a year.

T-Mobile’s sale does, however, clearly mark the end of another major era in the region’s longstanding leadership in the wireless field. Check out this really interesting interview that Xconomy’s Greg Huang did with venture capitalist Tom Huseby in 2008 for a sense of the history at play. Basically: AT&T’s wireless business came of age with the 1994 acquisition of Seattle’s pioneering McCaw Cellular. And McCaw veteran John Stanton started VoiceStream, which was purchased by T-Mobile in 2001.

As Huseby noted in that Xconomy interview, “Every time someone was bought, they actually didn’t move people out of Seattle. People would move here, and it just kept growing … We have more concentration of carrier presence here than anywhere else in the country. It’s unbelievable.”

That’s not the situation today. AT&T’s headquarters are in Dallas and will undoubtedly stay there. In Sunday’s press release, AT&T did say that “the combined company will continue to have a strong employee and operations base in the Seattle area.” An AT&T spokesman told The Seattle Times’ Brier Dudley that “any reduction we anticipate will come through natural attrition.” GeekWire also got ahold of the memo sent to T-Mobile employees, in which CEO and President Philipp Humm said that “AT&T’s leadership has said keeping [T-Mobile's] talented people through this transition is one of their top priorities.”

Meanwhile, AT&T President Ralph De La Vega tells Mobilized that the tie-up will improve the network, won’t be a distraction for customers, and should have a good chance at getting federal approval. Washington, D.C.’s The Hill interviewed AT&T policy executive Jim Cicconi, who indicated that one element of the regulatory case will be that consolidation in mobile was inevitable.

And finally, The Seattle Times’ Jon Talton saw no positives for the Seattle area in the T-Mobile news. I found particularly compelling Talton’s emphasis on the effect that losing a major standalone tech company will have on the entrepreneurship landscape in the region. Therefore, his take gets the last word:

“I believe there’s nothing like a major headquarters for well-paying jobs, civic stewardship, attracting talent and capital, and fostering executive talent that leaves the mother ship to start new enterprises. Back-office towns always languish.”

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The IPO pipeline, which slowed to a trickle in 2008 (when just six companies went public), rebounded significantly during the last three months of 2010, as 57 companies went public and 56 others registered for IPOs, according to a report from the Ernst & Young accounting firm.

The rate of replenishment represents a healthy balance that is being driven by an increase in IPO filings by small companies, says Mark Sogomian, an IPO leader at Ernst & Young. Two-thirds of the registrations (75 companies) were seeking to raise $100 million or less, according to the accounting firm. Among total filings, the average amount sought is $191 million, down by 3 percent from the previous quarter, when the average was $198 million.

At the end of December, Ernst & Young said a total of 121 companies had filed to go public on U.S. exchanges, including 16 based in China. (The increase in Chinese IPOs reflects a trend that the National Venture Capital Association also highlighted about a month ago.) But California now ranks No. 1 in terms of registrations, with 22 California companies in registration at the end of December. (At least one of those, San Francisco-based Epocrates, went public last week.)

Ernst & Young says the largest company to file is HCA Holdings, the largest for-profit hospital operator, which is seeking to raise $4.6 billion. The next largest are media and entertainment company Nielsen Holdings, which filed to raise $1.75 billion, and the Kinder Morgan oil and gas company, which is seeking $1.5 billion.

Technology companies make up the biggest industry sector, with 25 seeking a total of $2.5 billion. Ernst & Young counted 17 pharmaceutical filings, seven biotechs, and four telecoms.  The firm also provided a state-by-state list of filings, (with the responsible Ernst & Young in parenthesis); the listings for states with Xconomy websites is here:

California

Language Line Services Holding

Newegg

Demand Media

NeoPhotonics

Cornerstone OnDemand

InvenSense

Peregrine Semiconductor

IronPlanet

Corsair Components

Ellie Mae

Ambit Biosciences

AcelRx Pharmaceuticals

Fluidigm

Epocrates

ServiceSource International

Reply!

Responsys

Fallbrook Technologies

GameFly

Circle Bancorp

IASO Pharma

Quark Pharmaceuticals

Massachusetts

Aveon Group

Sige Semiconductor

Bruker Energy & Supercon Technologies

Zipcar

GlassHouse Technologies

NEXX Systems

Washington

Univar

Atossa Genetics

Michigan

Affinia Group Holdings

TA Delaware

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Wi-Fi: it’s the new utility, as crucial to many consumers and businesspeople as electricity and telephones. Wi-Fi chips are built into 800 million new laptops, mobile phones, tablet PCs, printers, video game controllers, and TV set-top boxes every year, and Wi-Fi networks blanket virtually every office, library, airport, hotel, café, and campus.

If only Wi-Fi were as dependable as most other utilities. Unfortunately, the more people who install access points in dense urban environments, the more interference arises between devices, slowing everyone’s connections. On top of that, Wi-Fi signals share the unlicensed 2.4-Gigahertz frequency band with Bluetooth, Zigbee, cordless phones, baby monitors, car alarms, ham radio, and even microwave ovens. (Yes, Wi-Fi devices use roughly the same wavelength as the radio pulses that, at much higher power, can bake a potato.) That’s why you might have a blazing-fast, 30-megabit-per-second Wi-Fi connection in one corner of your office, but lose it a minute later if you shift six feet to the left. Especially if someone is using the microwave at lunchtime.

Part of the problem stems from the fact that Wi-Fi signals, like cellular or FM signals, spread indiscriminately in all directions. That’s a feature, not necessarily a bug: your home or office Wi-Fi router doesn’t know where you are, so it has to send signals everywhere. But what if your router were smarter, and could use modern beam-forming technology to shoot a signal straight at your device—then make that beam follow you as you moved from your desk to your couch to your kitchen? In principle, signals from a dynamic, directional Wi-Fi antenna would have a greater range, and would be far less vulnerable to interference.

Well, it turns out this is an idea radio engineers have been thinking about for a while. And there’s a company in Sunnyvale, CA, called Ruckus Wireless that’s making it work so well that cellular carriers may soon start placing Ruckus Wi-Fi systems in public places, where they could help rescue strained 3G networks by taking on much of the data traffic now squeezing through the 3G channel. That’s called “offloading,” and it’s one of the ways harried operators—whose networks now support unanticipated numbers of 3G devices like iPhones, iPads, and Android phones—hope to survive the interim years before the arrival of true 4G technologies, which could offer Wi-Fi-like speeds across much greater distances.

PCCW, Hong Kong’s leading telecom company, has been installing Ruckus Wi-Fi routers in phone booths, which tend to be located in places where there are also lots of people using cell phones. “Pedestrian gathering places are good places to put Wi-Fi access points,” Ruckus CEO Selina Lo says. “PCCW told me that in peak areas, at peak times, they can see as much as 20 percent offload.” If AT&T were able to hand off that much of its 3G traffic to Wi-Fi, it might be able to mollify many of the iPhone owners who are eager to switch to Verizon, on the (iffy) assumption that the other carrier’s network will have more capacity.

Incubated six years ago in the offices of Sequoia Capital in Menlo Park, CA, Ruckus has collected $51 million in venture backing, from Sequoia as well as Firelake Capital, Focus Ventures, Investor AB, Motorola Ventures, Sutter Hill Ventures, and WK Technology Fund. It’s a scrappy and persistent company—the barking dog in its logo isn’t wholly whimsical—and it has reinvented its product line at least twice over the years to adapt to market trends. But the 278-employee startup, which flirted earlier this year with the idea of going public but put the idea on hold due to the sluggish economy, is now under pressure to find a major market for its smart Wi-Fi access points. So there’s a lot riding on the 3G offloading concept—an idea Ruckus adopted from one of its own customers in India, Mumbai-based Tikona Digital Networks (more on that below).

Lo argues that even after 4G technologies like Verizon’s LTE standard take hold, there will be a need for other shorter-range technologies to fill in the inevitable gaps in coverage. “Licensed spectrum is an expensive resource, so there is always going to be … Next Page »

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Every month we take some time to look at the deals Washington tech and biotech companies inked in the month prior, and compare them to recent trends. Unlike our weekly investment deals roundups, these monthly features give us the opportunity to look back through both the large investment that made big headlines when they broke, as well as the smaller “under the radar” deals that may have gone unnoticed. As October comes to a close (can you believe it’s gone by this fast?), it’s time to take a look at the tech and biotech deals Washington companies closed in September. As always, the information is based on data provided by our partner, New York-based private company intelligence firm CB Insights, and our own past coverage.

Since we first started these monthly deals roundups back in June, the healthcare sector has been the dominant deal-maker, hands down, bringing in $41.1 million in June, $62.5 million in July, $21.8 million in August, and serving as the bulk of Washington’s startup financing over any other sector each month.

In September, the healthcare sector was still the top contender for financing, bringing in $17 million. But much like in August, the Internet and software sectors came in second and third in September, bringing in $13.6 million, and $12 million respectively.

Computer hardware and services startups came in fourth, with $8 million in financing, and the mobile and telecommunications sector trailed behind for the bottom rank, with just $1.1 million in deals.

Some of the more notable deals from September include Bothell, WA-based business software company Winshuttle’s $12 million financing from Summit Partners, which singlehandedly carried the software sector to the top of the financing list in September. Others include DataSphere Technologies’ $10 million Series C, led by Kirkland, WA-based OVP Venture Partners, MOD Systems $6 million Series B (which the company inked despite a rather public indictment of its co-founder Mark Phillips), and Stratos Genomics’ $4 million Series A for low-cost DNA sequencing.

One big deal somewhat surprisingly squeaked by our coverage: Pathway Medical Technologies raised $10 million in equity, according to a regulatory filing, and somehow we missed it. Seattle-based video optimization company Opanga Networks raised $600,000, as did Bellevue, WA-based cloud-based IT services startup, Doyenz, both of which flew under our radar.

Here’s the full list of September’s equity-based deals, both under the radar and on it:

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Boxborough, MA-based Lightower Fiber Networks, a bandwith service provider and operator of data-transporting fiber networks, said today that it is acquiring New York City-based Lexent Metro Connect, which provides custom-built dark fiber networks. The company is not revealing how much it paid for Lexent, but has said that the acquisition will expand its base in New York and New Jersey, adding more than 150 miles of fiber and 200 commercial buildings to the Lightower network. Lexent is Lightower’s second acquisition this year; in May the company purchased Westford, MA-based fiber operator Veroxity Technology Partners.

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For the second month in a row we’re compiling all recent Seattle-area tech and biotech deals—”under the radar” and otherwise—into one comprehensive overview of all financings for the month. As always, the information is based on data provided by our partner, New York-based private company intelligence platform CB Insights, and our own prior coverage. And just as in June, the July data shows a clear trend: the majority of the local venture and angel-backed investments are going to the healthcare sector, which includes biotech.

Of the 17 deals Washington companies saw over the month of June, seven of them were in the healthcare sector, amounting to $62.5 million of the $81.7 million invested overall.  Compare this to the $104.3 million raked in locally in June, of which biotech companies nabbed $41.1 million, and it’s easy to see that the healthcare sector is leading in terms of regional financings. But whereas the energy and utilities and computer hardware and services sectors trailed close behind healthcare in June, no other sector was even close to bringing in the same amount of funding in July. The electronics sector trailed far behind with $5.8 million in financing, and the business products and services sector was close to follow with deals totaling $5.4 million.

The Internet sector came in fourth with $4 million in financing. (The Northwest Open Access Network did nab $54.5 million in federal stimulus money to expand high-speed broadband service across Washington state, but as this is grant money and not investment financing, it is not included on the list). Software took fifth place, with $2 million, and the mobile and telecommunications sector took a distant sixth place with $1.3 million in funding.

Perhaps the most shocking result has to do with the energy and utilities sector, which only brought in $0.69 million in July—the only sector to drop below the million-dollar mark—compared to the $35.8 million they raked in back in June. The computer hardware and services, risk and security, industrial, automotive and transportation, and gaming sectors brought in no funding at all in July.

We reported on a number of the larger deals that came through in July, including the $32 million Seattle-based Immune Design raised in Series B funding for the development of a new generation of vaccines. This deal, the second-largest venture deal in Washington state this year so far (behind the $40 million nabbed by Seattle-based Calistoga Pharmaceuticals in June) is just another indication of the healthcare sector’s leading role in Washington state investments. Further evidence: Uptake Medical’s $17.5 million investment for the sale of its emphysema treatment device, and Integrated Diagnostics $10 million deal, the second of its three-part, $30 million Series A.

On the tech side, contact-organizing software developer Gist raised an additional $4 million from Vulcan Capital and the Foundry Group. There were also a few interesting deals you may not have heard of, including a $690,000 round of equity that Seattle-based General Biodiesel, one of the first cleantech companies to set up shop at the McKinstry Innovation Center, brought in.

Here’s the full list of July’s equity-based deals, both under the radar and on it:

July also saw a few startups raising cash through deals based on debt, options, and/or warrants, rather than equity, including mobile software company Dashwire, which brought in over $515,000 in July from an undisclosed investor. (CEO Ford Davidson says the mobile app space is a “market that’s on fire.”) Those seven transactions, worth a combined $14.5 million, are listed below.

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Pace PLC, the UK-based provider of digital pay TV technologies, said yesterday it will acquire San Jose, CA-based 2Wire, which makes the broadband cable modems deployed in homes by AT&T and other telecommunications companies. Pace will pay $475 million for 2Wire, which had raised nearly $200 million in venture financing since its 1998 launch, according to PE Hub, and is thought to have $55 million in cash on hand. The acquisition will make Pace the United States’ biggest provider of residential gateway devices.

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A new law is about to go into effect in San Francisco requiring sellers of mobile phones to post the “Specific Absorption Rate” (SAR) levels of the devices. How will conveying this information to consumers affect sales of mobile phones and devices—and which manufactures will feel the burden of this new stigma?

The Cellular Telecommunications Industry Association defines SAR as “a way of measuring the quantity of radio frequency (RF) energy that is absorbed by the body.” For a mobile phone to be sold in the United States or Canada, its maximum SAR level must be less than 1.6 watts per kilogram. In Europe, the highest allowed SAR level is 2 watts per kilogram.

I should state now that currently there is no concrete evidence that current SAR levels affect humans in any detrimental way. Some studies have shown that cellular radiation has no affect on the human body and does not cause cancer, while others say that higher levels of radiation with continued usage can have an impact on human physiology.

But it is likely that people’s fears of “radiation” will lead consumers to view higher numbers as negative, even if only subconsciously, which will affect mobile device sales.

By requiring sellers of mobile devices to post SAR numbers, the manufacturers on the low end of the scale would have an additional tool in their marketing arsenal to convince buyers that their device is the better choice for you. The numbers will probably not affect the buying decisions of brand loyalists, in the same way that nutrition facts don’t stop many consumer from buying food that may not be the healthiest of choices.

San Francisco may be the first city in the country to require SAR number to be posted, but will other jurisdictions follow suit? If more cities and states start requiring SAR levels to be posted along with the device, it may indeed begin to affect sales of devices in the upper range of “acceptable” limits. If manufacturers jump on the low-SAR band wagon and reduce their SAR levels by either lowering the power of their handsets or inserting shielding, we may see less reliable phones and more dropped calls.

What do you think about having the SAR numbers displayed with the mobile device? Will a higher number affect your buying decision? Do you have a phone in the “high” risk area, and how does that make you feel about continued use of the device? Let’s get a discussion going.

Data sources for charts: Environmental Working Group (http://www.ewg.org/node/2839, http://www.ewg.org/cellphoneradiation/Get-a-Safer-Phone?allphones=1)

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Things might be starting to turn around in the Seattle-area economy, but that doesn’t mean startups are raking in the dough. It’s becoming clear that, with the exception of maybe one or two big deals a month, venture funding for young companies in the Northwest has stabilized to a much lower level than we were seeing two or three years ago.

Last month, companies in Washington state raised a total of $36 million in seven venture financing deals. That’s the official tally from our partner CB Insights, a New York-based private company intelligence platform and information services firm. The stats don’t include financing deals worth less than $1 million, which are becoming increasingly prevalent, especially for seed-stage software startups (more on that below).

The May numbers are fairly consistent with the $30 million raised by seven companies in April (not counting the $315 million Liberty Dialysis deal), and are up a little over the $21 million raised by three companies in March. Four of the seven financings in May were Series A rounds, and the deals were fairly evenly distributed between Internet software, mobile, and healthcare companies.

The biggest deal of the month was a $12 million Series D funding round for Spring Wireless, a Brazilian telecommunications company that set up its North American headquarters in Seattle early last year. Other notable financings included healthcare startup Coronado Biosciences raising a $7 million Series A round, and advanced materials firm MicroGreen Polymers getting $6.9 million in Series B funding to accelerate its entry into the consumer market, where it will introduce products like recyclable coffee cups and packaging materials that use less plastic than conventional items.

Meanwhile, a couple of early-stage Internet startups exemplified the trend we’re seeing of software companies doing more with less money upfront. Off & Away, a hotel-auction travel site incubated by Madrona Venture Group, and SeniorHomes.com, a healthcare resource site for seniors led by CEO Chris Rodde, each raised a little over $1 million in first-round funding. And a number of companies raised smaller rounds that didn’t show up in the current stats (more on that in a separate story).

That, in fact, is becoming the modus operandi for most young software and tech companies: bootstrap or raise a small angel round, get some market traction and revenues, and try to raise more money after that. The angel and VC community has already been adjusting to this dynamic.

Here is the list of venture financings for Washington state companies in May:

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Boxborough, MA-based Lightower Fiber Networks, which owns and operates 4,500 miles of data-transporting fiber stretching from New England to Long Island, said today that it is acquiring Veroxity Technology Partners of Westford, MA. Veroxity operates about 2,000 miles of fiber in New England and New York City. Financial details of the deal were not disclosed. Lightower Fiber was formed in 2008 from the splitup of National Grid Wireless into Lightower Wireless and Lightower Fiber; it’s been on a buying spree for the past couple of years, also acquiring the fiber assets of companies like DataNet Communications and KeySpan Communications.

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Seattle-based Airbiquity announced today it has formed a partnership with Tokyo-based Hitachi Automotive Systems to develop telecommunications systems for electric vehicles. Financial terms of the deal weren’t given. The technology could allow drivers to do things like check their battery using their mobile phone, locate nearby charging stations, and get directions. The move is part of a broader effort to establish a global infrastructure for networked vehicles. Founded in 1997, Airbiquity is focused on wireless technologies for connected vehicles and smart transportation services.

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Seattle-based Vulcan Capital, the venture firm of Microsoft co-founder Paul Allen, has participated in a $15 million Series E round for Audience, a Mountain View, CA-based voice processing semiconductor company. New Enterprise Associates, Tallwood Venture Capital, and VentureTech Alliance also participated in the funding, which was all raised from existing investors. Audience designs chips, for mobile phones and telecommunications applications, that suppress background noise and improve the audibility of speech. The company has raised $75 million in total.

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Boston’s M/C Venture Partners is the big winner in the $647 million sale of NuVox, a Greenville, SC-based provider of business telecommunications services, to Windstream Corporation (NASDAQ: WIN), a deal announced yesterday. In a press release yesterday, M/C said that it became NuVox’s largest shareholder after NuVox absorbed M/C portfolio companies NewSouth in 2004 and Florida Digital Network in 2007. Little Rock, AR-based Windstream, which provides phone, Internet, and digital TV service to customers in 21 states, paid $280 million in cash and $187 million in stock to acquire NuVox, and also repaid $180 million in NuVox’s outstanding debt.

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Gryphon Networks, a Norwood, MA, telecommunications and marketing services company, raised $7 million in a Series C venture funding round, according to an SEC filing. The funds come from Waltham, MA-based Symmetric Capital and include a combination of cash and stock from Gryphon’s Series A and Series B rounds, says Gryphon CFO Eric Bornhofft. The company did not disclose what portion of the $7 million was cash. The company uses the Software as a Service model to deliver contact governance, compliance and contact management solutions.

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[Corrected and updated, 10/28/09, 12:40 p.m.; see page 4.] Back in 2002, it must have sounded like a good idea for Orange, a fast-growing European wireless provider known more for the simplicity of its services than for their sophistication, to open an R&D center in Boston, where it could hire a troop of brainy engineers, consultants, and startup entrepreneurs to come up with ideas for new high-tech services that would continue to fuel its growth.

In practice, though, an array of barriers meant that Orange Labs—which settled near MIT in Cambridge, MA, and became home to what one former employee calls “the most talented, most passionate group of people I’ve ever worked with”—never really fulfilled its potential. Eventually, it lost the pull it needed within Orange and its parent company, France Telecom, to keep growing. And after a seven-year run, the lab will close its doors tomorrow.

France Telecom’s decision to shutter Orange Labs Cambridge is ostensibly part of a corporate consolidation effort—there’s another Orange laboratory in South San Francisco, and in tough economic times it’s hard to argue that any European company needs two U.S. research centers.

But several former Orange Labs members tell Xconomy that the Cambridge facility’s demise was so long in the making that it could perhaps have been predicted from the start. It was rooted, these sources say, both in cultural differences between the lab’s American engineers and their British and French overseers, and in textbook organizational frictions and rivalries that prevented most Orange Labs initiatives from maturing into products that could be deployed to actual Orange customers. Just as important, the former employees say, Orange’s San Francisco lab developed far stronger political connections to the France Telecom leadership, making it obvious which of the two labs was more likely to survive any cost-cutting round.

Orange Labs' facility on Second Street in Kendall Square, Cambridge, MA

But while Orange Labs Cambridge may not have fulfilled its creators’ hopes, it will leave a lasting footprint on the Boston technology scene. Developers at the lab prototyped services such as push-to-talk, mobile photo sharing, localized search, and app-like “widgets” long before any of these technologies became standard on mobile phones. The lab provided a home, at its height, to about 60 brilliant hardware and software engineers, including many graduates of MIT and other local universities. And it acted as a springboard for entrepreneurs who have gone on to play other important roles in the mobile industry—the most prominent being Orange Labs’ founder and first director, Rich Miner, who later co-founded mobile software startup Android, helped transform the Android operating system into an industry standard before and after the company was acquired by Google, and now runs Google Ventures.

Still, there’s a sense that the lab could have accomplished much more. “If I were to summarize the ultimate legacy that the lab had for Orange and France Telecom, I would say ‘missed opportunity,’” says Iliya Rybchin, who was a program manager at Orange Lab from 2002 to 2004 and is now overseeing digital development projects at publisher McGraw-Hill. “The fact that [France Telecom] wasn’t willing or capable of tapping into that talent pool, with that amazing level of innovation and insight and passion, is frankly unfortunate, because the kinds of things that we were producing in the lab really had the potential to be transformative in the industry.”

Officials at France Telecom have not responded to Xconomy’s requests for comment on the shutdown, nor has Orange Labs CEO Frank Bowman.

The story of Orange Labs starts with Orange itself, formed in 1994 by a consortium of British and French companies. Industry insiders describe the early Orange as a scrappy, innovation-focused, startup-style company that … Next Page »

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For a long time, Second Life was stuck in the cyber equivalent of the silent-movie era: people communicated by typing, and their words showed up in little thought bubbles above their avatars’ heads. All of that changed drastically around 2007, when Linden Lab, the company behind Second Life, hired an obscure outfit called Vivox to equip its 3-D virtual world with a voice communication system. Now any Second Life citizen who has a headset connected to their computer can simply speak, and everyone whose avatar is standing nearby will hear them in living stereo.

For the Gloria Swansons of Second Life, like myself, the changeover from typing to talking was a bit traumatic—and indeed, 20 percent of Second Life citizens still abstain from voice communication. But the other 80 percent gab for a billion minutes every month, which is a rather convincing demonstration that most people inside 3-D computer environments prefer talking to texting.

And now Vivox, a four-year-old startup based in Natick, MA, is about to introduce its technology to three new communities that could vastly increase its user base. The company announced this morning that it has formed a partnership with Redwood City, CA-based Electronic Arts (NASDAQ: ERTS), the world’s largest entertainment software company, to add its voice services to several online EA games. First up is Command & Conquer 4, a continuation of EA’s hugely popular real-time strategy game that’s expected to launch early next year.

At the same time, Vivox is announcing the launch of Vivox Labs, an incubator-within-a-startup where the company is trying out different ways of delivering its voice services over the Web. And the first two Vivox Labs experiments are aimed at big targets: Facebook, where the lab’s “Vivox Web Voice for Facebook” application will allow members to invite their friends to instant Web voice conferences; and World of Warcraft subscribers, who will be able to use a new Vivox-powered website called Puggable to assemble teams of players for in-world campaigns. Both the Facebook and Puggable applications are in private beta testing and are expected to go public by January.

“We started the company about four years ago with the goal of making voice a seamless, natural part of every online experience,” Vivox co-founder and CEO Rob Seaver told me when I visited the company last week. “Our view at the time was that more and more human interaction would take place online, and the richest form of communication we have is talking to each other. So we thought there would be an opportunity to turn the Web from this silent, barren place into one filled with the warm sounds of human voices.”

That’s exactly what could happen if even more gaming, virtual-world, and social networking communities turn to Vivox’s services. Not bad for a company that started out as a wacky idea from Jeff Pulver, the founder of the company that became Internet phone service provider Vonage.

You’ve probably heard of Voice over Internet Protocol, or VoIP; it’s the technology behind Vonage and Skype, and the one that has turned the telecom industry upside down by transforming phone calls into digital data packets and routing them over the open Internet. Vivox’s system works on similar principles, except that … Next Page »

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