San Diego’s Semtek Innovative Solutions has raised more than $6.7 million in a planned Series B round of $8 million, according to a recent regulatory filing. Semtek, which is commercializing technologies for preventing the theft of credit card data and identifying counterfeit credit cards, said earlier this month that VeriFone Holdings now owns a 19.9 percent stake in the company. Semtek’s founding investors and venture capital investors Venrock and RRE Ventures, which added to their investment in the round, will own the remaining 80.1 percent stake in Semtek.

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The big story out of the International CTIA Wireless IT & Entertainment expo in San Diego last week could perhaps be summed up in one word: “spectrum.” We also have reports from the Algae Biofuels Summit and other big news, so read on.

—Qualcomm co-founder Irwin Jacobs and his son Paul, who is now chairman and CEO of the San Diego wireless giant, told CTIA goers that Qualcomm’s labs have reached the limit in terms of optimizing the efficiencies of wireless devices within current radio bands. Yet demand continues to accelerate for mobile data services. FCC Chairman Julius Genachowski said in a different session that finding more spectrum is the agency’s No. 1 priority. “Spectrum is oxygen,” Genachowski said.

—In a report that preceded the CTIA conference, Seattle-based Ontela released a survey that shows people still have problems doing simple things like transmitting photos on their mobile phones, even as the popularity of mobile data plans and services such as text messaging continue to grow in the U.S.

—Denise gave us a preview of the 3rd Annual Algae Biomass Summit, which also was held in San Diego last week. Cleantech San Diego president Lisa Bicker said more than 625 cleantech companies are now based in the region, including more than 30 algae biofuels companies.

—At a time when investment capital has been pouring into the development of algae-based biofuels, Bill Barclay of Columbia, MD-based Martek Biosciences said it could take a decade or more for commercial-scale algae biofuels production to become reality. Scientists still need to identify the best algae strains, optimize production processes, and find the best ways to convert “green crude” to fuels.

—San Diego-based Achates Power has raised $12.1 million out of a $20 million venture round, according to a regulatory filing. The company has been developing a radical new design for a high-efficiency two-stroke automotive engine.

—We’ve been too busy to do much celebrating, but Xconomy’s San Diego website officially marked its one-year anniversary last week. In the past year, we’ve published more than 1,400 news stories, briefs, and commentaries about the innovation leaders, businesses, technologies, and trends that make up the “exponential” part of the San Diego economy. Thanks to all our readers for their great comments.

—While the Obama Administration continues to push its plans for healthcare reform, Gary West is refining his own plans for using the new San Diego-based West Wireless Health Institute to catalyze innovations in wireless health that help deliver healthcare equivalent to what’s generally available today at lower cost. The non-profit institute, which was funded in March by a $45 million donation from the Gary and Mary West Foundation, ranks as one of the first organizations in the world to seek improvements in healthcare specifically through advances in wireless technologies.

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Helicon Therapeutics, a San Diego biotech developing drugs to enhance memory, has raised $50 million from undisclosed investors, according to a recent filing with the U.S. Securities and Exchange Commission. Although the filing was dated June 24, it was not among the second quarter venture capital fundings in the recent MoneyTree Report, according to Emily Mendell, a spokeswoman for the National Venture Capital Association.

The filing provides only minimal information, and Helicon president Kenneth E. Johns Jr. did not respond to calls or an e-mail last week. But Helicon explains on its corporate website that the biotech was founded on Long Island, NY, in 1997 as a collaborative venture among the Cold Spring Harbor Laboratory, OSI Pharmaceuticals, and Switzerland’s Hoffman LaRoche. The startup established its headquarters in Farmingdale, NY, and moved to San Diego in late 2007 or early 2008. The company joined Biocom, the trade association for San Diego’s life sciences community, in June 2008, when it had about 19 employees.

Helicon’s key founders include Tim Tully, a longtime scientist at the Cold Spring Harbor Laboratory who discovered a gene called CREB that’s involved in converting short-term memories into long-term ones. Tully, who continues to serve as Helicon’s chief scientific officer, did not return calls to his office, but a recent issue of Discover magazine reports that his team has identified several CREB-modulating molecules. The magazine says that Helicon completed a human trial of one memory-enhancing compound to test for safety last year, and plans another trial this year.

On its website, Helicon says it has conducted Series C, D, and E convertible preferred stock offerings, which enabled the biotech to start its two clinical trials and move into new facilities in San Diego. According to Helicon’s website, “Proceeds from a new Series F offering will support the ongoing clinical development, enable IND filings for two more drugs in 2009 and continue drug discovery research.”

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Nexus Biosystems, a four-year-old biotech tools maker in Poway, CA, has raised $5 million in venture funding from Telegraph Hill Partners, a private equity firm based in San Francisco, according to a regulatory filing. Nexus CEO John Lillig, who declined to comment on the filing, told me the company specializes in making automated sample storage and retrieval systems capable of holding millions of compounds. In a statement, Nexus says the funding will be used to accelerate the commericalization of several new products, including a family of machines that store samples at minus-80 degrees Celsius.

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The clouds may be parting for cleantech startups. Venture capital funding for renewable energy and cleantech startups (which plunged from last October through March) rebounded in the second quarter—but the $1.2 billion invested in 67 countries is still down 44 percent from the same quarter in 2008.

Cleantech venture investments were strongest in transportation—specifically, vehicles ($236 million invested), biofuels ($206 million), and advanced batteries ($165 million), according to the Cleantech Group, the San Francisco, CA, research and advisory firm, and Deloitte, the financial services firm. Researchers say the $1.2 billion total was invested in 94 companies, with an average round size of $12.9 million. A spokeswoman for the Cleantech Group says the results reflect VC deals in areas where the Cleantech Group has established offices with local researchers, and therefore represents the most accurate and comprehensive global survey of cleantech investing trends.  Roughly two-thirds of the deals were in North America, mostly the United States.

Brian Fan, the Cleantech Group’s senior director of research, tells me the biggest cleantech deals in Xconomy cities during the quarter that ended June 30 occurred in San Diego, where V-Vehicle got $100 million, and suburban Boston, where A123 Systems also got $100 million. The biggest financing in Seattle was $6 million for Powerit Holdings.

Things continue to look gloomy in the solar sector. Venture investment in solar technologies fell to its lowest level in three years, with just $114 million invested. VC funding in solar startups peaked at $1.2 billion during the third quarter of 2008. “We don’t see solar as dead,” says Brian Fan, the Cleantech Group’s senior director of research. “Solar has strong support in the venture community and among investors. What they’re doing is taking care of their existing portfolio companies. So they’re not making new investments and adding to their portfolio companies.”

The researchers say the largest deals in each sector were:

—Vehicles: San Diego-based V-Vehicle, which is building a fuel-efficient and environmentally friendly vehicle in Northeast Louisiana, raised $100 million from Kleiner Perkins Caufield & Byers and T. Boone Pickens. Fisker Automotive of Irvine, CA, raised $85 million from Eco-Drive Partners and Kleiner Perkins to fund development and manufacturing of its Karma plug-in hybrid. Norway’s Think Global raised $39 million, and Israel’s ETV Motors raised $12 million.

—Biofuels: Agri.capital, a European developer of biogas plants, raised $82 million from TCW Group and others. Solazyme, a renewable oil producer based in South San Francisco, CA, raised $57 million from Braemar Energy Ventures, Lightspeed Venture Partners and new investor VantagePoint Venture Partners.

—Advanced Batteries: A123 Systems of Watertown, MA, raised $100 million from GE and others. Deeya Energy of Freemont, CA, raised $30 million from new investor Technology Partners and existing investors BlueRun Ventures, DFJ, Element Partners and New Enterprise Associates.

—Solar: Cobol Technologies, an Indian solar developer, raised $30 million from Pangea Capital. Ausra, a Mountain View, CA, startup developing technology that concentrates solar energy, raised $25.5 million from Khosla Ventures and Kleiner Perkins, among others. Infinia, a Kennewick, WA, vendor of technology that combines a Stirling engine with concentrating solar dish, raised $14.1 million in convertible debt, as part of a plan to raise $50 million.

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If there was a theme in the first session of the Cleantech Capital Summit that convened in San Diego yesterday, it’s that government spending on cleantech projects in 2009 will easily dwarf whatever investments in “green” deals the VC industry can muster.

No surprise there. As we reported over the weekend, total U.S. venture investing in energy and environmental startups plunged by 84 percent during the first quarter—to $154 million from $971 million in the first quarter of 2008. Meanwhile the federal economic recovery and stimulus package calls for spending nearly $33 billion in direct grants for energy-related projects and more than $100 billion in loans for projects related to energy and the environment.

So one topic that arose at the summit was where venture investors fit into the ecosystem for cleantech funding.

To Brian Fan, senior director of research for the Cleantech Group, the U.S. economic stimulus plan amounts to “the largest government spending project in history.” The Cleantech Group, previously known as the Cleantech Venture Network, has played an influential role in developing cleantech as an investment category. The San Francisco-based firm provides research, cleantech news coverage, executive recruiting, and other services.

In an opening presentation yesterday morning, Fan said that while cleantech venture funding has declined sharply, global stimulus spending is soaring. He says the U.S. and other countries have earmarked $400 billion in worldwide stimulus spending for cleantech programs—and about half of that amount is expected to be invested this year.

William Lese, a managing director of Braemar Energy Ventures, which has offices in New York and Boston, indicated that VCs will welcome federal spending. “The federal government is not terribly competitive,” Lese said during a panel discussion on cleantech venture financing. “That money is not going to be directed at early stage companies, and the government funds will fill in, hopefully, where the later-stage funding has disappeared.”

To Lese, a more challenging problem in funding cleantech startups is the enormous amount of venture capital that’s required to take many cleantech innovations from the laboratory to full-scale projects. “It is a big problem,” he said. Matt Horton, a principal of @Ventures in Menlo Park, CA, agreed. “You’re going to hear a lot today about the capital requirements for project finance, and the private equity part of (project development) has been hit especially hard,” Horton said.

That’s true for some cleantech startups, but not all, said Marianne Wu, a partner at Mohr Davidow Ventures in Palo Alto, CA. It’s true, Wu said, “If you have to generate power at utility scale, or if you have to build a chemical plant or a fuel plant. But there are other portions (of the cleantech sector) that are not at all capital-intensive, such as some of the green building plays, and energy efficiency plays.”

Victor Westerlind of RockPort Capital Partners, which has offices in Boston and Menlo Park, CA, agreed that many big cleantech projects that require debt financing ran aground, especially among the ethanol-based biofuels projects. “But with good teams and good projects, you can get it done, whether it’s through government financing or partnerships.”

Some other familiar VC themes emerged during the cleantech discussion:

—Innovative technology is often less important than the entrepreneurial team building a cleantech startup. “Sometimes I think we get a little too carried away with the technology innovation,” Lese said.

—With the recession still exerting financial strain on venture firms and their portfolio companies, Horton said it’s critical to be form syndicates with other VC firms that will remain committed to future funding rounds.

—The recession and financial crisis are forcing venture capital firms to return to their core strength, which is identifying promising innovations and funding early stage companies. As Wu put it, “It’s back to basics in venture capital.”

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San Diego-based Evoke Pharma has managed to maintain a low profile since early 2007, when the specialized drug development company got started with the help of some prominent names in the local biotech industry.

Cam Garner, who is listed on Evoke’s web site as a co-founder and chairman, has been on the ground floor of Cadence Pharmaceuticals and at least six other San Diego life sciences startups. Ken Widder, who has founded seven biomedical companies, including NovaCardia and Santarus, also is identified as an Evoke board member.

So when a brief surfaced recently about Evoke getting some new venture funding, I called CFO Matt D’Onofrio to clarify the terms and to learn a little more about Evoke and how it got started. D’Onofrio took my call, but he declined to discuss the deal, saying Evoke prefers to remain in stealth mode at this time. He told me all that Evoke is saying is what’s available on the company’s web site.

As limited as it is, the information is pretty interesting. A lone Evoke Pharma press release, which was dated June 15, indicates the company was headed at that time for a late-stage clinical trial of a new drug candidate for treating a particular gastrointestinal disorder known as diabetic gastroparesis. Evoke elsewhere describes gastroparesis generally as a common problem affecting some 8 million Americans in which the stomach is unable to contract normally, and therefore cannot crush food or push it into the small intestine properly. The symptoms include vomiting, bloating and pain.

Evoke says diabetes is a major cause of gastroparesis, accounting for almost one-third of all cases, although the specific mechanism is unknown. After announcing the successful completion of an early stage trial in its June press release, Evoke said it was planning to discuss its results and a late-stage clinical trial strategy with the FDA in October, with an eye toward starting final-stage trials in 2009.

That’s about the extent of the information available from Evoke’s web site, and the company issued no follow-up announcement in the fall. So perhaps that’s when CEO Dave Gonyer and the board decided it was time to slip below the radar. In fact, they had never really called attention to the company in the first place.

Nevertheless, some additional information is available from an amended disclosure form concerning Evoke’s venture investors, which the company filed with state officials in December. The paperwork shows Evoke has raised a total of almost $12.3 million in equity investments since the company was founded two years ago, although it doesn’t reveal how many tranches it has taken. The investors include Domain Associates, a venture capital firm in Princeton, NJ, that is among San Diego’s most-active life sciences investors, Latterell Venture Partners of San Francisco and individual investors.

Even if Evoke won’t discuss how they’re using the venture funding, it’s nice to know that some local biotechs are still getting funded.

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One good turn deserves another, and San Diego alternative transmission maker Fallbrook Technologies is ready to shift to the next level. After working more than 10 years to develop a radical new transmission design that helps motors operate more efficiently, Fallbrook announced today it has secured $25.4 million in its first round of venture funding.

NGEN Partners, a Santa Barbara cleantech venture firm, led the financing with a $10 million investment. Another $10 million came from Robeco, the investment arm of Rabobank of The Netherlands. The remaining $5.4 million came from many of the company’s true believers, the angel investors who provided some $25 million in private funding to Fallbrook since the company was founded in 1998.

The additional funding is intended to help Fallbrook gear up and extend the commercialization of its proprietary “NuVinci” technology, a continuously variable “planetary” transmission that smoothly adjusts to increasing speeds without the need to change gears. A more detailed explanation is here.

Fallbrook introduced its transmission in markets for light electric vehicles and bicycles in 2006, and the company says market acceptance has increased steadily—especially in Europe. The company says a NuVinci-equipped bicycle won “Bike of the Year” in The Netherlands and the iF Design EUROBIKE Gold 2008 Award—which helps explain why the Dutch investment bank’s cleantech fund is in the deal. NGEN managing director Steven Parry …Next Page »

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Last month we reported that Seattle-based Impinj, a prominent maker of radio-frequency identification (RFID) technologies, had sold off its memory business to focus on its core RFID products. Now the company has announced that it is acquiring Intel’s RFID business, which specializes in making chips for smaller-size applications like handheld readers.

It’s a “huge step for Impinj,” said CEO William Colleran in a statement. Although financial terms were not disclosed, the deal sends RFID chips and patents, a handful of employees, and a couple dozen new customers worldwide to Impinj, in exchange for Intel gaining an unnamed equity stake in the startup.

Intel’s chips fill a clear need for Impinj, which focuses on the ultra-high-frequency band: they allow the company to sell RFID hardware not only for high-performance stationary devices (at gates, tollbooths, border crossings, and check-out lanes, say), but also for smaller, faster, and cheaper readers that can be carried around warehouses and stores or embedded in vehicles for keeping track of supplies, tools, or products. Starting this fall, for instance, new Ford trucks will have an option for a built-in RFID reader.

“For a while now, Intel has been looking for the right home for this product line. There’s a lot of satisfaction to see this business graduate,” says Kerry Krause, marketing director of Intel’s RFID business, based in Portland, OR, and now with Impinj. The deal “puts Impinj in a terrific position,” he adds, because it opens up “a much broader range of applications and a broader worldwide customer base.” Krause cites a list of new customers that includes ThingMagic in Cambridge, MA, Alien Technology in Morgan Hill, CA, South Korea-based Samsung and Ceyon, and Sense Technology and Hopela in China—with a couple dozen more customers in the works.

I remember covering RFID technologies five years ago, back when Gillette and Wal-Mart were just starting to buy into the tracking-tag approach, and I’ve been wondering how the industry has been doing. According to Krause, the main hurdles to adoption—such as agreeing on international standards and getting the right hardware—have largely been overcome. And startups like Impinj have been cashing in. Since 2000, Impinj has raised more than $100 million in venture funding from the likes of Arch Venture Partners, Madrona Venture Group, and Polaris Venture Partners. With today’s deal, the company is clearly positioning itself to be the RFID market leader in chips, readers, and other hardware—at least for now.

Mark Roberti, founder and editor of RFID Journal, speculates that Impinj might eventually get out of the RFID reader business and just sell the chips, once the market takes off. But that will be another two to three years or more, he says, because end users are still figuring out the physics and economics of RFID tags and readers.

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