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Tuesday, June 30, 2009

Business Funding Deals for July 09

In our regular monthly blog on business funding activity around the globe, this month again we saw some interesting activity some of which are listed below., a do-it-yourself social networking start-up, has landed an additional $1 million in its first round of financing, led by Golden Horn Ventures.

Google has invested an additional $2.6 million in 23andMe reports the New York Times. The personal genetics company co-founded by Anne Wojcicki, the wife of Sergey Brin, a Google co-founder. The investment, which Google disclosed in a regulatory filing on Thursday, brings Google’s total investment in the company to $6.5 million.

The man who popularized the Web browser has started a venture capital fund to back the next generation of new technologies.

Marc Andreessen (above), a founder of Netscape, announced Monday that he and Ben Horowitz, a longtime business associate, had raised $300 million that they intended to invest in technology companies, Claire Cain Miller of The New York Times reported. The venture capital firm, Andreessen Horowitz, will risk small sums, some as small as $50,000, on new ideas.

The The New York Times and VentureBeat reported that Bling Nation, which allows users to pay for goods in stores via their mobile phones, has landed $8 million in financing, VentureBeat. Investors include Lightspeed Venture Partners, Meck and Camp Ventures

Business funding: Interesting Deals for June 09

June saw some great business funding activity around the globe. See below for some of the more interesting deals and let us know if we're leaving anything of note out. reported that Cloudera, an data storage and management start-up, has attracted $6 million in a second round of financing led by Greylock Partners. A previous backer, Accel Partners, also ponied up for the round, which brings Cloudera’s total financing raised to date to $11 million.

VentureBeat Reported that MyBuys, which helps e-tailers make personalized recommendations to customers, said it raised $7 million in second round financing round from Lightspeed Venture Partners and Palomar Ventures. Both firms participated in the company’s previous round in 2007. In a press release, MyBuys said it planned to use the new money to invest in products, client services and market expansion., the Twitter-focused search engine that has nabbed a total $15 million in financing to date, was introduced last week says VentureBeat. Investors in the start-up, whose search functions operate Google’s for Twitter accounts, include Blue Run Ventures, Ignition Partners and Founders Fund.

The chief of a soon-to-be-independent AOL is expected to create a unit called AOL Ventures, which will house some of the start-ups AOL recently acquired and seek new venture-capital investment for them, according to All Things Digital. reported that Seatwave, the secondary ticketing Web site, is catching up with its rival Viagogo in terms of fund-raising, announcing that it has received another $17 million from its venture capital backers: Atlas, Mangrove and Fidelity, and a newcomer, Accel.

Wednesday, June 24, 2009

Go Where the Money is

If you're still in two minds about whether to push ahead with a clean tech or healthcare project, take comfort from the latest VC investment figures. Funds are definitely out there to back good ideas - and record amounts of cash are now being poured into some sectors.

Data released by Dow Jones VentureOne over the weekend indicates that US VC firms pumped $590m into energy investments in the third quarter of 2007, a leap of 28 per cent over the same period last year. Investment in advanced specialty materials and chemicals companies - another substantial subset of the clean tech equation - doubled from the previous year to $277m. UK investment trends don't slavishly follow the US, of course, but with Silicon Valley emerging as a leader in clean technologies, the figures give some indication about where investment preferences might swing in the UK and elsewhere going forward.

Alongside green concerns, of course, healthcare remains a big talking point in the US and has also proved to be fertile ground for entrepreneurs. Earlier this month, the first Baby Boomer, a retired teacher, applied for social security - and as VentureOne points out, there are 76m other Boomers waiting to follow suit. Aside from the impact on social security funds, all of these new retirees are going to need medical care - which helps explain why overall investment in the healthcare sector grew four per cent. The medical devices sector in particular continues to grow strongly - while the number of actual deals fell, total investment climbed 19 per cent to $830m, taking the sector to record annual figures with just three quarters gone.

Elsewhere, traditional information technology investment slipped a little, with ten per cent fewer deals and five per cent less overall investment in the third quarter. It remains, however, the largest VC investment area overall with $3.77bn of investment. Not surprisingly, the information services category - which includes Web 2.0 companies - now accounts for around a quarter of overall IT funds. Significantly, some 60 per cent of IT deals went to second and later round companies, a trend that was borne out across the whole VC arena. While the level of early-stage investment remained steady, this later-stage focus helped push median deal sizes to a new record of $7.92m.

Finally, if you ever decide to seek out US investment, bear in mind that just like house prices, location is everything. New England and New York both saw healthy growth on the East Coast - but it's hard to argue with California, which alone accounts for a staggering 44 per cent of all US VC activity in the third quarter. While the Bay Area's share fell slightly, Southern California saw its biggest deal volume since 2001 - suggesting that we'll have to wait a while before any other state makes a serious challenge for the number one slot.

By Keith Rodgers

For South African Business Invetment Opportunities and Capital check out SA Investors Network

Growing your business exponentially

Want to know how to grow your business 20,000 per cent over the next three years? Take a look at the September issue of US entrepreneur's magazine Inc., which contains this year's list of the fastest growing private companies in America.

The ludicrously high headline figure (20,128.9 per cent, to be precise) comes from a company called MemberHealth, which struck it rich in the US health market prior to agreeing a tasty $630m buyout offer earlier this year. But while it leads Inc.'s highly-respected Top 500 listing, it's just one of many companies enjoying super-quick growth. Companies from a broad cross-section of industry have made it into the ratings, and as always, the tech sector has a fair showing.

One point that stares you in the face on the listings is just how big a part luck plays in making silly money. After MemberHealth, the second fastest-growth company on Inc.'s list this year is a telephone switch supplier that happened to get a big break from a deal with a large US cable company. Net result? Three-year growth of 14,853 per cent with current revenue of $68.1m.

But while luck matters, good ideas still count. In the software field, Turning Technologies is the highest ranked company at number 18 - it develops software and hardware extensions to Microsoft PowerPoint which allow members of the audience to interact with a presenter using handheld devices. If the thought of presenting in public makes you break out in a cold sweat, this is probably the last thing you want to get involved with, but the software clearly has applications in education and other fields.

Other noteworthy representatives from the software sector include SPADAC at number 32, which makes predictive geospatial software - the sort of stuff governments use to predict where terrorist infrastructure attacks might take place, and the stuff companies use to work out where they should locate. And then there's TopCoder, 45th in the growth stakes with revenue of $14.8m and three-year growth of 2,459 per cent. This is a company that really is breaking the mould with its software coding competitions, where companies - including blue-chips - submit coding problems to a network of over 115,000 freelances, who compete to provide answers. The set-up works well for everyone: the customers get some relatively cheap development work, while prize money for freelances can reach a cool $100k.

Inevitably, though, the success of some of the top-performers is less about technology and more about its creative application. Take Bill Me Later, number six in the list with three-year growth of 8,650 per cent, revenue of $53.6m and 100 employees. It provides an online billing system that eases consumer concerns about entering credit card details over the internet by using purchasers' birth dates and part of their social security number. As its name implies, consumers also get billed later, which definitely helps get them excited.

And good ideas don't have to be ground-breaking ideas either. Position number 34 in Inc.s' list is held by a company that sells software for medical practice billing and record-keeping, and brings in revenue of $38.2m in the process. Likewise, TaxStream, which makes accounting software for large public companies, comes in at 51.

Finally, if you're of a creative bent, take comfort from the fact that style can indeed win over substance. The consumer products field is led by one of last year's listed firms, Digital Lifestyle Outfitters, which makes a range of accessories, including cases, for iPods and other handhelds, and was recently bought out. No mystery there about the cause of its success - although with revenue of $98.6m and just 70 employees, it definitely fits into the 'wish I'd thought of it first' category.

By Keith Rodgers