Granite Global Ventures Should Do Right By Canopy Customers

Ever since the Canopy Financial scandal broke last month, there has been lots of speculation about existing investors cashing out during the company’s July financing round. peHUB has now learned that $40 million of the $62.5 million deal was used as liquidity for Granite Global Ventures, Canopy board member John Powers (CEO of Stanford Management Co.) and Canopy’s three co-founders. Of that, GGV took the lion’s share with $27.5 million.

It’s time for them to give the money back.

As Deb reports below, over 1,000 people have had their Health Savings Accounts frozen because of the Canopy fraud. This mean sick people could be unable to access money saved for the purpose of paying medical bills. They may get the cash back eventually — via bankruptcy proceedings — but that’s cold comfort to someone who is ill or injured right now.

I’m told that one large healthcare administrator is making its clients good in the meantime, but it is an exception to to rule. Everyone else is just out of luck, and the FDIC doesn’t care because a failed bank isn’t involved.

GGV and Powers will almost certainly be required to pay back the money via the bankruptcy proceeding — let alone a possible civil case from the July investors — but they shouldn’t wait. At the very least, set up some sort of fund for those currently unable to access their accounts. It wouldn’t have to be an admission of wrongdoing, but rather an example of doing right.


Curse Raises $6 Million

Curse Inc., a San Francisco-based gaming portal focused on MMOGs, has raised $6 million in Series B funding. Ventech and SoftTech VC were joined by return backer AGF Private Equity. Curse previously raised $5 million.

According to our VentureXpert database, most of the Series B round closed in Q1 2009. www.curse.com


ChaCha Adds $7 Million

ChaCha Search Inc., a Carmel, Ind.-based search startup, has raised $7 million in new equity funding, according to a regulatory filing. The company previously raised over $25 million from Morton Meyerson, Bezos Expeditions, Rod Canion (founding CEO of Compaq) and Jack Gill (partner at Maven Ventures). It also had secured a $2 million grant from 21st Century Technology Fund. www.chacha.com


CrowdStar Backer Sees Early Profits

I had an interesting conversation this week with Peter Relan, the founder of YouWeb, the shoestring-budget Silicon Valley incubator that spawned social gaming hitmaker CrowdStar.

Relan, YouWeb and CrowdStar are interesting for a number of reasons. One is that Crowdstar, a social gaming startup that launched by an Armenian physics major named Suren Markosian, has gained phenomenal traction in the last couple of months. The 17-person company’s biggest hit, Happy Aquarium, a virtual fish-raising game, now has 27.5 million monthly active users on Facebook, according to AllFacebook.com. Across all games, CrowdStar has just shy of 40 million monthly Facebook users.

So are they making money? Relan says Happy Aquarium is bringing in about a million dollars a month selling virtual fish- and fish-related goods, with profit margins around 90% or higher. Other games in a similar style, such as Happy Pets, with 11 million monthly users, are monetizing at similar rates, he says. And looking ahead, he says, the company’s plan is to launch a new game every month.

CrowdStar’s sharp growth curve (it launched Happy Aquarium less than four months ago), has started to draw attention from investors. “Every firm on Sand Hill Road has tried to call me about CrowdStar,” Relan says. “Our view is, what is the value add? At this point it’s not the money… I keep looking or people who can actually add value.” Because it’s younger and smaller than industry leader Zynga (which announced a $180 million investment round last week, in part to provide employee liquidity, shortly after launching Happy Aquarium rival Fishville), Relan says providing employee liquidity isn’t currently a top priority.

YouWeb, the incubator behind CrowdStar, is one of several micro-incubators (think YCombinator) launched in the last couple of years to capitalize on the rapidly falling cost of starting and scaling an Internet company. Its main office space, in Burlingame, Calif., includes the usual crowded room of jeans-clad twenty-somethings hunched over keyboards and caffeinated beverages. The model, Relan says, is to seek out brilliant technologists from top schools, pay them a moderate salary, and have them start businesses. But unlike most incubator models, in-house entrepreneurs come without a team or a business plan.

Relan calls the model an exemplar of “the next generation of microfinancing.” The whole thing was funded by less than a million dollars from a group of private angel investors, Relan says, including Silverlake Partners co-CEO David Roux and David Whorton, formerly of TPG Ventures and KPCB. Relan himself was formerly CTO at defunct grocery delivery service Webvan and founding vice president of Oracle’s Internet division. He’s also started and funded a number of startups since then, including Business Signatures, acquired by security software developer Entrust in 2006.
 
I’m always mystified by how startups today grow to massive scale without massive staffing. Usually when I ask how, there’s a reply about cloud computing, crowdsourcing and outsourcing. Relan’s reply to the how-do-you-scale question relied heavily on cloud and crowdsourcing. To cut back on customer service, the company appoints users to be administrators of the game, which they do voluntarily, ostensibly for recognition. (Go figure.) CrowdStar also saves some on advertising by running promotions for its games on content and quiz-oriented Facebook applications it has developed, such as Know-It-All Trivia.

Content applications, such as quizzes, don’t make a lot money, since users don’t buy virtual goods on them, Relan says, However, they can be a good platform to promote games in which people do buy virtual goods.

Even in the game space, however, the vast majority of users play for free. Relan estimates that “98% of people create the virality and community; 2% of people or less actually monetize the game.” Still considering that it costs nothing to produce a virtual good, virtually any revenue is pure profit.


Webvanta Closes Series A Round

Webvanta Inc., a Sebastopol, Calif.-based developer of SaaS solutions for building content-rich websites, has closed its Series A funding led by indivduals from the North Bay Angels. No financial terms were disclosed, although the two-year-old company recently reported in a regulatory filing that it had secured $378,000 of a $500,000 equity offering.

PRESS RELEASE

Webvanta Inc. today closed its Series A financing, led by a group of angel investors from the North Bay Angels.

Webvanta was founded in fall 2007 to develop what the company calls “website machinery”: hosted content management systems that make it easy to build sites with rich, structured content. Seed financing came from the founders, Michael Slater and Christopher Haupt, and from angel investors.

Webvanta began beta testing its service in late 2008. In September 2009, Webvanta 1.0 emerged from beta, and the service has been gaining a loyal following.

With the new financing, Webvanta will be adding staff and rolling out several new services in 2010.

About Webvanta Inc.Webvanta Inc. was founded in 2007 by two Adobe veterans, CEO Michael Slater and CTO Christopher Haupt, to deliver superior SaaS solutions for building content-rich web sites. The Webvanta [hosted CMS for designers][link to www.webvanta.com] is the company’s first product. Webvanta has offices in Sebastopol, CA and Auburn, CA.


PTC Therapeutics Raises $50 Million

PTC Therapeutics Inc., a South Plainfield, N.J.-based drug company focused on post-transcriptional control mechanisms, has raised $50 million in new VC funding. The Column Group and return backer Delphi Ventures co-led the round. Undisclosed new investors were joined by return backers like CSFB Private Equity, HBM BioVentures, Novo A/S and Celgene. PTC previously raised over $143 million in VC funding, and filed for an IPO in 2006 that it later withdrew.

PRESS RELEASE

PTC Therapeutics, Inc. (PTC) today announced the completion of a $50 million financing. The round was led by The Column Group - a new investor - and existing investor Delphi Ventures. The co-lead investors were joined by current investors Credit Suisse First Boston, HBM BioVentures, Novo A/S, Celgene, and other existing and new investors. In conjunction with the Delphi investment, general partner Deepa Pakianathan, Ph.D. will join PTC’s Board of Directors.
“We are delighted to welcome both The Column Group as an investor and Deepa as a Board member,” stated Stuart W. Peltz, Ph.D., president and chief executive officer, PTC Therapeutics, Inc. “This is our first syndicated equity financing round in over four years, and serves as an important external validation of the tremendous progress we have made as a company since 2005, including advancing our lead product ataluren into multiple pivotal studies. We are grateful for the continued support from our existing investors.”

“The Column Group focuses on companies with groundbreaking science, innovative products, and strong management talent. PTC epitomizes these attributes and we are pleased to lead this round,” commented Rick Klausner, M.D., managing partner, The Column Group and former director of the National Cancer Institute. “With top line pivotal data for ataluren in DMD expected in 2010, we believe that PTC is on the cusp of significant value creation opportunities.”

“As a long-term investor in PTC, we are delighted to co-lead this round and I am honored to join the PTC Board,” added Deepa Pakianathan, Ph.D., Delphi Ventures. “This round of funding increases financial flexibility for PTC as it prepares to commercialize its internally discovered and developed lead product. We believe the commercial launch of ataluren will represent a new paradigm in the treatment of genetic disorders.”

About PTC Therapeutics

PTC is a biopharmaceutical company focused on the discovery, development and commercialization of orally administered small-molecule drugs that target post-transcriptional control processes. Post-transcriptional control processes regulate the rate and timing of protein production and are of central importance to proper cellular function. PTC’s internally discovered pipeline addresses multiple therapeutic areas, including genetic disorders, oncology, and infectious diseases. PTC has developed proprietary technologies that it applies in its drug discovery activities and are the basis for collaborations with leading biopharmaceutical companies such as Celgene, Genzyme, Gilead, Merck, Pfizer and Roche. For more information, visit the company’s web site at www.ptcbio.com.


Bricsnet Scandal: Others Claim Ex-CEO Owes Them Money

Former Bricsnet CEO Ethan Jinian left the software company in September and was indicted last month for embezzling over $1 million from Bricsnet, a charge that Jinian denies.

Now another former employee of Bricsnet — acting chief technology officer Kevin Horio — claims that Jinian owes him money too.

Horio says Jinian borrowed at least $350,000 from his technology consulting company, Dimensia, over a period of several years when the two were business partners. According to Horio, they were brought into Bricsnet in 2004 to assess Bricsnet’s technology because Bricsnet’s Madrid investors were considering shutting the company down. But the technology was good, Horio said, and the two started working for Bricsnet — Horio as a technology consultant and Jinian as CEO.

Horio said Jinian was bright and had great business connections and knew the software business. He said he had loaned Jinian a lot of money before he realized that Bricsnet had serious financial problems and he might not get his money back. The two had a deal, according to Horio, where Horio would pay Jinian a commission on business that Jinian brought to Dimensia, but the biggest piece of business that Jinian brought was Bricsnet.

Horio said he hasn’t pressed charges against Jinian because he’s not sure if he has a case — “We loaned him the money; he didn’t steal it” — but the government notes in a court filing that Jinian owes money both to Dimensia and to another Bricsnet employee and claims Jinian has “no known assets.”

According to the government, a house in San Francisco owned by Jinian’s wife is in foreclosure, and a second house in Walnut Creek is overencumbered by at least $250,000.

Jinian’s attorney, Douglas Schwartz, said last week that Jinian will plead not guilty to charges. He also declined to comment on the government’s claim that Jinian has a history of fraud. In 2000, Jinian resigned as CEO of Luna Information Systems, where he was working under the name Farid Khoujinian, after the San Francisco Chronicle reported that he’d inflated his resume.


Small Businesses Are Finally Getting Online

We asked VCs this month about the most significant trends of 2009, and this was one of them — that after years of waiting, small business owners finally saw it as worthwhile to get themselves and their companies onto the Web.

“People used to think it was impossible to sell to small businesses, except through the Yellow Pages, who put armies of people on the street going door-to-door asking businesses to advertise,” said Sharon Wienbar of Scale Venture Partners. Then she ticked off several Scale portfolio companies that do online marketing for small businesses — HubSpot, MerchantCircle, Reply.com — adding that each had a strong year.

ReachLocal’s proposed $100 million IPO today (S-1 filed here) is more evidence that she’s right. The six-year-old company connects small businesses with potential customers by managing both their online and offline ad campaigns and has raised $68 million, according to Thomson Reuters — including a Series D of $55 million a little over two years ago.

This year it was profitable –$143 million in revenue for the first nine months of 2009 and net income of $11.66 million, compared to around $100 million in revenue a year ago with a $4.47 million loss.

ReachLocal has risks — the company says in its S-1 that it is fixing deficiencies in its internal controls for capitalizing software development costs and is also worried about possible government regulation of online advertising. Another risk it cites is VantagePoint — ReachLocal says the firm will own a substantial amount of stock after the IPO (it owns over half the shares now) and, with two board members, including chairman Alan Salzman, will have significant influence over its business.

Still, its success shows that when given the right opportunity, small business owners will get online.

So many did this year that they attracted more attention from hackers — proof on the Internet that you’ve arrived. In November, the FBI reported an increase in scams involving bank credentials stolen from small businesses, municipal governments and school districts and warned all of them to protect their computers.


Rho Ventures PIPEs Bluefly

Rho Ventures has agreed to purchase $15 million worth of newly-issued common stock in Bluefly Inc. (Nasdaq: BFLY), an online fashion retailer.

PRESS RELEASE

Bluefly, Inc. (NASDAQ Capital Market: BFLY), a leading online retailer of designer brands, fashion trends and superior value (www.bluefly.com), today announced that Rho Ventures has reached a definitive agreement to purchase $15 million of newly issued common stock from the Company.

“We are thrilled to have Rho Ventures as an investor in the business,” said Melissa Payner-Gregor, CEO of Bluefly.com. “Bluefly has created a large and loyal following among those in the know as the place to find in season, on-trend designer apparel and accessories at a value. With Rho’s support and expertise we can accelerate our growth and reach new customers while solidifying our market position.”

Under the terms of the deal, the Company agreed to sell $15 million of newly issued common stock at a price of $1.70 per share. Approximately $4.7 million of the investment was closed simultaneously with the execution of the agreement, with a second closing for the remainder of the investment scheduled to occur during the first quarter of 2010, subject to the receipt of stockholder approval (as required by Nasdaq rules). Following the completion of the second closing, Rho Ventures will own approximately 33% of the Company’s shares, on a fully diluted basis, and will become its largest shareholder.

“Bluefly has built an impressive market position as the leading, recognized brand in designer online retailing,” said Habib Kairouz, managing partner at Rho Ventures. “Rho Venture’s investment strategy seeks to fund high-growth companies focused on large markets and Bluefly is no exception. Their success and future potential can be attributed to a seasoned direct-to-consumer management team, deep relationships with top fashion brands, and the fiscal prudence to manage resources in hard economic times. We look forward to working with them to ignite this next phase of growth.”

Simultaneously with the execution of the agreement, affiliates of Soros Fund Management LLC (“Soros”) and private funds associated with Maverick Capital, Ltd. (“Maverick”) converted their holdings of an aggregate of $3 million principal amount of the Company’s outstanding convertible notes into shares of the Company’s common stock at a conversion price of $1.70 per share. Under a voting agreement entered into among Rho Ventures, Soros, Maverick and investment entities and accounts managed and advised by Prentice Capital Management, LP (“Prentice”), Rho and Soros each have the right to two designees on the Company’s board of directors and each of Maverick and Prentice will continue to have the right to designate one member of the Company’s board of directors, in each case subject to specified ownership thresholds. The second closing is also subject to shareholder approval of an amendment to the Company’s certificate of incorporation to establish a classified board of directors. Pursuant to the voting agreement, Soros, Maverick and Prentice also agreed to vote such portion of their shares in favor of the transactions contemplated by the agreements, as when aggregated with the shares already purchased by Rho Ventures, equals 40% of the outstanding shares of common stock of the Company.

This press release does not constitute an offer of any securities for sale. The offer and sale of the shares of common stock issued to entities affiliated with Rho Ventures were not registered under the Securities Act, and such shares may not be offered or sold absent registration under the Securities Act or an applicable exemption therefrom.

About Bluefly, Inc.

Founded in 1998, Bluefly, Inc. (NASDAQ Capital Market: BFLY) is a leading online retailer of designer brands, fashion trends and superior value. Bluefly is headquartered at 42 West 39(th) Street in New York City, in the heart of the Fashion District. For more information, please call 212-944-8000 or visit www.bluefly.com.

About Rho Ventures

Rho Ventures’ multi-stage investing strategy focuses on high-growth companies in large markets that are disrupting traditional value chains. With a broad, but strategic, sector mandate, Rho Ventures’ investments span new media, healthcare, IT, communications, energy technology and other disruptive technologies. Rho Ventures brings nearly 30 years of venture experience, combined with its partners’ deep sector expertise and its far-reaching network to assist each portfolio company in forming a unique strategy to address the specific sector and stage. This approach has allowed Rho to participate in the growth of some of today’s most innovative and successful companies, including Ciena, Capstone Turbine, Compaq Computer, Gloucester Pharmaceuticals, Human Genome Sciences, iVillage, MedImmune, Senomyx, Shire, Tacoda, Tercica, Tripod and Yantra. Rho Ventures is currently investing from Rho Ventures VI, a $510 million fund. The firm has offices in New York City, Palo Alto and Montreal, with investments across the globe.


LiveMocha Raises $8 Million

LiveMocha Inc., a Bellevue, Wash.-based provider of online language education, has raised $8 million in Series B funding. August Capital led the round, and was joined by return backer Maveron. The company previously raised nearly $6 million. www.livemocha.com


MobGold Raises $12 Million

MobGold, a China-based provider of mobile advertising and mobile transaction solutions, has raised $12 million in Series B funding from Fast Global Investments.

PRESS RELEASE

MobGold, the leading platform provider in mobile advertising network and mobile transaction solutions, today announced that expansion-stage venture capital, Fast Global Investments has made a strategic investment in the company’s series B round of financing. The company plans to use the new investment for product development, marketing and market expansion.

“MobGold has made huge strides over the past year to solidify its position as a leading mobile advertising company,” said Alan Chang, president and chief executive officer, MobGold. “Fast Global Investments’ venture in MobGold is strategically significant for the industry at large, and it validates the efforts we’ve made to make MobGold the thriving company it is today.”

“Our strategic partnership with MobGold is an important addition to Fast Global Investments’ mobile entertainment initiatives,” said Qimie, vice president and investment director of Fast Global Investments. “We are excited about this company’s prospects and are delighted to help support the global expansion of an established industry leader that has a proven ability to develop cutting-edge mobile advertisement platform and establish strong distribution partnerships.”

“We’re committed to working with the world-class team at MobGold to help this company build upon its leadership position in the mobile advertising industry,” said Qimie, representing Fast Global Investments. Terms of the investment are not being disclosed.

MobGold, a global player in mobile advertising has expanded into US, UK, Spain, South Africa, India, Indonesia and Thailand as of todate. Through the worldwide ad serving platform, MobGold Network serves targeted ads within its community effectively, making mobile advertising more efficient and cost effective for both publishers and advertisers. MobGold Network is expected to convert advertisement formats on 1500 popular handset models based on single upload, including the Nokia Series 30, Series 40 and Series 60 devices, Sony Ericsson, Siemens, Motorola, Samsung, iPhone, BlackBerry and LG.

MobGold, allows publishers, network operators, web portals and mobile phone retailers to monetize their mobile traffic; at the same time, allows advertisers to market their products and services in different mobile platforms, by allowing consumers to access millions of contents and services on the move. By harnessing the mobile devices as a promotional tool, MobGold Network helps publishers drive data revenues and ARPU by attracting and retaining high value customers.

The company forms strategic partnerships in North America, Europe, Asia and Africa, with access to over 150 network operators and 500,000,000 mobile users around the world.

About MobGold
MobGold develops and operates MobGold Network, the mobile advertising network and mobile transaction solutions for advertisers, brand owners, publishers, network operators, web portals and mobile phone retailers to monetize their user traffic around the world. With expertise in architecture design of high traffic high speed transaction platform, web development and mobile content provisioning, MobGold is uniquely positioned to offer complete end-to-end solutions for both advertisers and publishers from advertisement format conversion, campaign management, statistic, to final delivery and billing. MobGold believes that mobile is the future of digital marketing and as the new media to outshine the conventional web media. For further information, please visit www.mobgold.com

About Fast Global Investments
Fast Global Investments is an investment holding company focused on high and fast growth Information Technology, Telecommunication and Software companies. The company provides seed funding, expansion-stage venture capital, as well as corporate advisory services. The company main investments focus in Greater China markets such as China, Hong Kong and Taiwan, as well as South East Asia.


CVS Caremark Ups Take in Generation Health

Generation Health Inc., a genetic benefit management company, has received a new investment from existing shareholder and strategic partner CVS Caremark. No financial terms were disclosed. Generation Health previously raised VC funding from Highland Capital Partners.

PRESS RELEASE

CVS Caremark (NYSE: CVS), the nation’s largest pharmacy health care provider today said it is taking an increased ownership interest in Generation Health, Inc., a genetic benefit management company (GBM). The two companies last month announced a strategic partnership to expand pharmacogenomic (PGx) clinical and testing services for CVS Caremark pharmacy benefit management (PBM) clients to improve care for patients who either are non-responsive to their medications or who have adverse reactions. The announcement today illustrates CVS Caremark’s intent to further strengthen its work on applying pharmacogenomic medicine to its benefit management product suite.

(Logo: http://www.newscom.com/cgi-bin/prnh/20090226/NE75914LOGO )

“With this additional investment in Generation Health we are accelerating our commitment to personalized medicine and making genomic benefit management an integral part of our PBM offering,” said Tom Ryan, Chairman, President and CEO of CVS Caremark. “We believe there will be a growing opportunity to tailor pharmaceutical treatment to patients based on genetic patterns. This investment expands our clinical capabilities to improve pharmacy health care and is consistent with our integrated approach to help save payors and patients time and money while improving health outcomes.”

The pharmacogenomic clinical services resulting from the strategic partnership are expected to be introduced to CVS Caremark’s PBM clients in the second quarter of 2010.

Generation Health will continue to operate as an independent, separate business from CVS Caremark offering a full range of GBM services to health care payors. CVS Caremark will have financial and strategic ties to the company, and will be represented on its board of directors.

Rick Schatzberg, a company co-founder, will become Generation Health’s president and CEO and will serve as a member of the company’s Board of Directors, replacing Per Lofberg, who was named president of CVS Caremark’s PBM business today. Lofberg will also continue to serve on Generation Health’s Board of Directors. Financial details of CVS Caremark’s additional investment in Generation Health were not disclosed.

About CVS Caremark

CVS Caremark is the largest provider of prescriptions in the nation. The Company fills or manages more than 1 billion prescriptions annually. Through its unmatched breadth of service offerings, CVS Caremark is transforming the delivery of health care services in the U.S. The Company is uniquely positioned to effectively manage costs and improve health care outcomes through its more than 7,000 CVS/pharmacy and Longs Drugs stores; its Caremark Pharmacy Services division (pharmacy benefit management, mail order and specialty pharmacy); its retail-based health clinic subsidiary, MinuteClinic; and its online pharmacy, CVS.com. General information about CVS Caremark is available through the Investor Relations section of the Company’s Web site, at cvscaremark.com/investors, as well as through the press room section of the Company’s Web site, at cvscaremark.com/newsroom.

About Generation Health

Generation Health provides a clinical and economic framework for harnessing the burgeoning field of genomic medicine in pursuit of quality health outcomes. This framework includes evaluation of clinical evidence to determine clinical utility; cost and outcome models to support evidence for reimbursement; a Best Test(TM) laboratory network to manage the rapid growth of testing costs for payors; data and analytics to review gaps in care among patients; and outreach programs to ensure thorough communications between patients, physicians and pharmacists. Generation Health, a privately owned company, was established in November 2008 with funding from its founders and Highland Capital Partners, one of the country’s leading venture capital organizations with a strong history and commitment to innovation in health care and life sciences. General information about Generation Health is available on the Company’s website, at www.mygenerationhealth.com.


BridgeCo Raises $7.5 Million

BridgeCo, an El Segundo, Calif.-based provider of digital home networking solutions, has raised $7.5 million in new VC funding. Earlybird Venture Capital and Christian Wenger co-led the round, and were joined by Brian Long (general partner with Atlantic Bridge). The company previously raised $59 million in private equity and debt funding, from Earlybird, Advent Venture Partners, Balderton Capital, Cipio Partners, Fidelity Ventures, Intel Capital and Wellington Partners.

PRESS RELEASE

BridgeCo® Inc. (www.bridgeco.com), a leader in networked entertainment technology, announced today a $7.5 million investment to support the rapid growth in connected home audio. A 2009 report, published by Eureca Research, projects the market to grow by over 300% in 2010*. BridgeCo’s financing will serve to accelerate the company’s technology development, support its rapid growth and fund the expansion of the company’s customer base and global design partner program.

“This funding helps us meet the growing needs of our Tier 1 customers and their markets,” said BridgeCo CEO, Gene Sheridan. “With the rapid market growth, we need to deliver cost-effective connectivity and a broader range of features for a variety of home audio products from A/V receivers, iPod docking stations, kitchen radios, to mini systems and home theaters.”

BridgeCo’s market-leading JukeBlox™ technology platform combines a multi-core networked media processor with a full featured, embedded software design kit (SDK). The processor and SDK are integrated in to a turn-key WiFi certified module. The second generation platform, JukeBlox 2.0™, will be launched next year, extending BridgeCo’s industry leadership by offering dramatically lower price points with unprecedented features sets.

BridgeCo’s technology powers some of the biggest consumer electronics brands in the world with customers like Denon®, Pioneer®, Nokia®, Harman-Kardon® and Philips®. With consumer demand for connectivity reaching an unprecedented level, the company is preparing for a significant increase in the CE brands coming to market using BridgeCo technology over the next 24 months.

According to Jordan Watters, BridgeCo SVP of Sales & Marketing, “Our Design Partner Program, launched in 2008, has been a great success, bringing our technology to more customers around the world, small and large. Our new financing allows us to expand this program by bringing on additional partners and adding infrastructure to support customers. We will be ready for the accelerating growth in 2010 and beyond.”

The financing was led by existing investor Earlybird Venture Capital and private investor, Christian Wenger, along with a new private investor, Brian Long, a General Partner with private equity firm, Atlantic Bridge. Brian will also join the Board of Directors as Chairman. “We see BridgeCo in a strong leadership position, as well as a rapidly increasing demand for home CE product connectivity” says Brian. “This is an exciting market with tremendous opportunity, as all products are becoming connected. We look forward to working with BridgeCo and supporting their efforts to enable and lead this new market opportunity.”

* Eureca Research, March 2009, Author: Gareth Owen.

All trademarks are the property of their respective owners.

BridgeCo Inc. is the leading provider of network media processors and related software, middleware and SDK solutions for enabling network and internet connectivity for consumer electronics in the home. BridgeCo’s JukeBlox technology integrates a broad range of functionality including internet radio with premium services such as Pandora®, Last.FM®, Rhapsody®, Napster® & Sirius®, wired or wireless streaming of digital music over uPnP and DLNA standards, iPod® and USB functionality, a broad suite of codecs, protocols and DRM standards, as well as traditional home audio functionality such as AM/FM radio and clock/alarm functionality. BridgeCo is an ISO 9001 and ISO 14001 certified company with operations in El Segundo, California, Bangalore, India and sales offices and a distributor network throughout the world.


InnovationsKapital Backs Microdata Telecom

Microdata Telecom Innovation AB, a Stockholm, Sweden-based provider of radio solutions to OEMs and network operators has raised SEK10 million ($1.38m) in VC funding led by InnovationsKapital.

PRESS RELEASE

Microdata Telecom Innovation AB is raising 10 million SEK from venture capital firm InnovationsKapital and from existing shareholders through an equity issuance. Microdata Telecom is currently expanding internationally to address a rapidly growing global market for Microdata Advanced Site Solutions ( MASS™ ) in the mobile infrastructure market. Through this equity infusion, we are able to further expand our marketing and sales internationally with our portfolio of state of the art radio products within Advanced Site Solutions says Mats Gustavsson, CEO and co-founder of Microdata. We believe that InnovationsKapital will be a valuable partner as we grow the company.

Microdata is led by an impressive team with solid experience both from the industry and from building companies, says Martin Falkevall from InnovationsKapital. We have been impressed by their early customer traction and are looking forward to an exciting journey together with the company in the coming years

Microdata Telecom Innovation AB offers cost effective radio solutions to OEMs and Network Operators, in order to improve radio coverage, capacity and quality of mobile communications. The company has offices in Täby, Sweden and in India. For further information, please visit: www.microdata.se.

InnovationsKapital was founded in 1994 as an independent private equity/venture capital firm focused on investments in growth companies. Our investment strategy is to invest in technology companies in the Nordic countries. InnovationsKapital has invested in over 60 companies and Carmen Systems, Formex, Kreatel, Nordnav and Spotfire are some examples of successful exits. InnovationsKapital currently advises four venture funds aggregating over 3 billion SEK (or about 300 million Euro), raised from well renowned Swedish and international institutional investors. For further information about InnovationsKapital, please visit our webpage: www.innkap.se.

This information was brought to you by Cision http://www.cisionwire.com


LipoFIT Analytic Raises €4 Million

LipoFIT Analytic GmbH, a German developer of new methods for routine assessments of the risk of developing atherosclerosis, has raised €4 million in VC funding. Backers include SHS Gesellschaft für Beteiligungsmanagement, KfW Bankengruppe and Bayern Kapital.

PRESS RELEASE

LipoFIT Analytic GmbH is receiving growth financing in the amount of €4 million to help it transform an analytical technology developed by researchers at the University of Regensburg into diagnostic products. Funds provided by SHS Gesellschaft für Beteiligungsmanagement, a growth investor located in Tübingen, Germany; KfW Bankengruppe (ERP Startfonds); and Bayern Kapital are being invested in the company, which is located in Regensburg.

Volker Pfahlert, formerly Chief Executive at Dräger Medical AG, will add his talents to the management at LipoFIT as COO in charge of strategy, marketing and sales.

The technology of LipoFIT permits very quick analysis of the multitude of contents to be found in a single sample of bodily fluids. With this technology, practically the entirety of a person’s metabolism can be
determined quickly, precisely, and without great expense. This enables physicians working from complex clinical findings to make quick and finely tuned diagnoses, thereby considerably improving patients’ chances of recovery.

The scientific basis for this technology is the use of very strong magnetic fields for NMR spectroscopy (nuclear magnetic resonance spectroscopy). Magnetic-resonance tomography is already established as a form of imaging in human medicine. LipoFIT uses considerably stronger magnetic fields, applying these to an analysis of e.g. blood or urine samples.

All of the components of the sample are identified simultaneously. Unlike established biological or chemical
analytical approaches, the LipoFIT approach has the power of identifying not just individual elements (often with fluctuating levels of precision) but rather entire human metabolic processes – in their entirety, and with a high level of precision. Digital storage of the findings permits access to data for further evaluation and fresh examination later on, e.g. in light of new research findings.

LipoFIT Analytic GmbH was established in 2004 by biophysicists Prof. Dr. Dr. Hans Robert Kalbitzer, Associate Professor Dr. Werner Kremer and CEO Dr. Fritz Huber as a spin-off of the University of Regensburg. All of the partners of the company to date will continue their involvement in the company. In exchange for their investment, the new partners, with SHS Gesellschaft für Beteiligungsmanagement as lead investor, will receive around a 50-percent interest in the company. Fritz Huber will remain as CEO. Currently, the ten staff members at LipoFIT are already generating annual sales of around half a million euro. The company’s clients include major corporations in the pharmaceuticals sector, as well as several
university clinics. The company anticipates robust growth in the near future.

‘We are very pleased that, thanks to the assistance of our investors, we now have the opportunity introduce these processes to the broader market – processes developed over many years’ work and trials. The history of LipoFIT demonstrates how top-flight international research can also manifest itself in products and economic success. This drives medical advancements while creating jobs in the region at the same time’, LipoFIT founder and CEO Fritz Huber observes with regard to the company’s planned growth.

‘LipoFIT has enormous market potential. The technology offers a host of new applications that will meet an acute need in the hospital setting while offering genuine progress for patients. We will support the management not just financially but in terms of strategy in staffing as well, to permit broad application of the innovative methods developed by LipoFIT. That we managed to win over Dr. Volker Pfahlert for this company is an important step in this direction’, notes Dr. Bernhard Schirmers, Partner at SHS Gesellschaft für Beteiligungsmanagement, commenting on his company’s investment in LipoFIT.

Effective immediately, Dr. Volker Pfahlert will be strengthening LipoFIT as COO. Pfahlert brings a rich résumé of experience in outstanding positions in the medical technology and diagnostics industry. Through the
end of 2007, he was Chief Executive at Dräger Medical AG&Co.KG and a member of the Executive Board at Drägerwerk AG. Prior to that, as an executive at Roche Diagnostics in Switzerland, and in Mannheim and
Penzberg, Germany, he headed two divisions: Roche Professional Diagnostics and Roche Applied Sciences. Volker Pfahlert is a lecturer at the University of Mannheim, where he lectures on the application of
concepts in marketing strategy.

‘I see in the LipoFIT technology and opportunity to install new standards in diagnostic fields that, to date, have not satisfactorily been covered. I look forward to working in this small yet highly innovative company and am certain that LipoFIT is going to experience strong growth’, remarks Volker Pfahlert about his new employer.

About LipoFIT Analytic GmbH
LipoFIT was launched in April 2004 with a new, patented method for routine assessments of the risk of developing atherosclerosis. Based on this expertise, the company has now evolved into Europe’s largest
provider in the NMR analytics field. LipoFIT specializes in the analysis of hundreds of substances in a wide variety of biological fluids, including, particularly, in high-capacity operation. In addition to this, LipoFIT offers a broad spectrum of ultra-modern analytics services in the medicalpharmacological area.


Youku.com Raises $40 Million

Youku.com, a Chinese video sharing site, has raised $40 million in the first tranche of a Series E funding round. Chengwei Ventures led the close, and was joined by fellow return backers Brookside Capital, Maverick Capital and Sutter Hill Ventures. The company has now raised $110 million in total VC funding, plus $10 million in venture debt from Western Technology Investment.

PRESS RELEASE
On the third anniversary of its launch, Youku.com, China’s leading Internet video website, today announced that it has closed US$40 million in private equity funding in a first tranche of a growth financing round.

The round was led by Chengwei Ventures and the first closing was raised entirely from existing investors. Besides Chengwei, those investors include Brookside (Bain) Capital, Maverick Capital, and Sutter Hill Ventures.

Youku is in active discussion with other potential investors over a second tranche of the round, which will raise up to an additional $40 million.

Including the first tranche for the current round, the company has raised $110 million in private equity funding, and $10 million in venture debt.

This latest round of funding will be used to syndicate professional media and produce Web-based content, to further enhance user experience, and on both PC-based and mobile R&D, according to Youku founder and CEO Victor Koo.

“We are honored to have the continued support of our board and our investors,” said Mr. Koo. “We feel this is a vote of confidence in our ability to execute and deliver results over the last three years, and this round of funding will help us to extend and solidify our lead in the market,” he said.

Youku currently works with over 1500 content license-holders to deliver professionally-produced programming. Youku has attracted 350 brand advertisers to date, and the company’s gross revenues for 2009 will surpass RMB 200 million.

“In the year 2009, Youku has cemented a dominant market position and achieved successful monetization,” said Eric Li, managing director of Chengwei Ventures. “We will continue to ensure Youku has the strongest financial resources to maintain and expand its leadership position,” he added.

Youku had 149 million unique visitors accessing the site from home or office PCs and 57 million accessing from Internet cafes during the month of October 2009, according to Shanghai-based Internet research firm iResearch. iResearch also reported that Youku users spent a total of 229 million hours on the site in October.


Tioga Energy Raises $20 Million

Tioga Energy, a San Mateo, Calif.-based provider of renewable energy services , has raised $20 million in a first close on its Series B round. Backers include MEMC Electronic Materials (NYSE:WFR), NGEN Partners, Nth Power and Draper Fisher Jurvetson.

PRESS RELEASE

Tioga Energy, a leading supplier of renewable energy services to commercial, government, and non-profit institutions, today announced it has completed $20 million of an initial closing of its Series B financing round. Investors in this financing included MEMC Electronic Materials (NYSE:WFR), NGEN Partners, Nth Power and Draper Fisher Jurvetson. The investment will support Tioga’s growth and short-term financing needs for construction and development of solar projects.

“This financing round will provide the operating capital to rapidly grow our business and accelerate the development of our growing project pipeline,” said Paul Detering, CEO of Tioga Energy. “We are also pleased to have MEMC as both an investor and a partner in achieving our mutual business goals. As an established leader in the solar wafer industry, MEMC’s support will have a very positive impact on achieving our growth objectives.”

Tioga provides project financing through its SurePathSM Solar Power Purchase Agreements (PPAs), and maintains and operates solar systems on behalf of its customers. Tioga’s solution delivers predictably priced power and enables organizations to not only green their operations but also manage their energy budget. By avoiding the upfront capital expenditure and simply buying the electricity generated by the solar system, Tioga’s customers benefit from solar power without diverting resources away from their core business.

“This investment supports our strategy to drive revenue growth in our solar wafer business,” said Ahmad Chatila, chief executive officer of MEMC. “Tioga is a leading provider of solar ‘power purchase agreements’ in North America, with a solid management team and strong growth expectations. Tioga and MEMC have common business values, as well as a common goal of accelerating the use of solar energy by achieving grid-competitive pricing. With their established presence in the US market, they will make a strong partner for MEMC and our solar cell and module customers. We look forward to supporting Tioga in delivering efficient and affordable solar power.”

“As one of the original investors, we are pleased to participate in this round and continue working with Tioga towards our mutual goal of accelerating the adoption of clean technology and renewable energy,” Steve Parry, a partner with NGEN Partners.

A large part of the non-residential solar generation installed in the US over the last several years has been delivered through PPA contracts. Additionally, the PPA financing approach is forecast to grow considerably over the next 3-5 years driven by state-level regulatory requirements to develop renewable resources, the rising cost of electricity, and the falling price of solar equipment. Industry analyst Gartner Inc. recently predicted that the PPA portion of the U.S. PV market will have a compound annual growth rate exceeding 100 percent through 2013 and that in 2013, IPP firms will install PV systems in the U.S. with an energy generation capacity of 2.9 gigawatts, at a cost of $8 billion.

“Demand for Tioga’s services will continue to increase as organizations look to minimize the risk associated with the up-front capital investment and operational concerns of installing a solar system and we look forward to our continued partnership with Tioga to help these organizations make the switch to solar,” said Tim Woodward, a Managing Director at Nth Power.

“The PPA model has had significant impact on shaping the commercial solar market and Tioga is well positioned to take advantage of the growing demand for renewable energy services,” said Raj Atluru, Managing Director at Draper Fisher Jurvetson.

About Tioga Energy:

Tioga Energy enables commercial, government and non-profit organizations to reduce their energy costs while lowering carbon emissions. Through the SurePathSM solar power purchase agreement (PPA), Tioga Energy owns and operates renewable energy systems that provide organizations a hedge against energy price volatility and accelerate their access to clean energy without any capital outlay. For more information call 877.333.9787 or visit: www.tiogaenergy.com.


Twitter App Store Oneforty Gets Funded

Back in June, Twitter app store oneforty became the first TechStars Boston company to get seed funding (just two weeks after presenting). Now it has become the first one to get institutional VC funding, with a small round that was led by Flybridge Capital Partners.

According to a regulatory filing, Oneforty has secured $1.62 million of a $2.37 financing with Flybridge’s Jeff Bussgang joining the board of directors. This includes an equity conversion of around $372k from a debt bridge.

Oneforty is run by Laura Fitton (@Pistachio), founder of a Twitter consultancy and author of Twitter for Dummies. The Brighton, Mass.-based company describes itself thusly on its website:

“We give you access to the very best tools that make Twitter valuable. We help developers reach the Twitter community and keep providing the innovations that make Twitter better for all of us. There’s an exploding ecosystem of applications and services for Twitter — way too many to keep track of! Your home on oneforty is your place to find, rate, collect and share the best tools for you, and to tell the world what you’re accomplishing with Twitter.”

The company’s provides links to all sorts of free apps (e.g., TwitPic, Tweetdeck, etc.), but its initial revenue stream is based on referrals it makes to paid apps (e.g., Tweetie’s iPhone effort). It also plans to eventually become an initial point of purchase for Twitter app developers, and hopes its social networking features will make it THE yellow pages for Twitter, as opposed to just A yellow pages for Twitter. Or maybe Twitter just scoops up oneforty, and it becomes TWITTER’s yellow pages for Twitter…

Two final notes: First, I really need to emphasize what a big deal it is that a TechStars Boston company has already been funded by a Boston VC. If memory serves — and I’m sure someone will correct me if I’m wrong — but no YCombinator Boston company ever got funded by local VCs, which perhaps is another reason why Paul Graham closed the East Coast outpost earlier this year. In less than a year, TechStars has already succeeded on that account, and I’m told that another got an institutional term sheet but opted not to take it. Seattle will be lucky to have them…

Second: Fitton has organized a Twitter-based fundraising campaign for MyCharityWater. She discusses it here, and ends with a cryptic: “COMING SOON: SURPRISE ANNOUNCEMENT FOR WHOMEVER RAISES THE MOST BY CHRISTMAS!!!”

She tells me that the surprise is that the most successful fundraiser will get a pair of tickets to the Winter Classic, the hockey game happening at Fenway Park on New Year’s Day, between the Boston Bruins and Philadelphia Flyers. Good luck… Fitton declined to discuss the fundraising, citing SEC marketing rules (because the whole round isn’t closed yet).