Author: Erin Kutz

Erin Kutz wrote:

Biotech companies occupied the majority of the deals news in the last week, but we also saw headlines on smaller transactions and acquisitions for some transportation, Internet, and software companies.

—Darien, CT-based Cytogel Pharma, a biopharmaceutical development firm, pulled in $2.2 million in equity and rights-based funding. The company, which aims to license drugs to ultimately sell to larger drug firms, is a portfolio company of Stamford, CT-based Centripetal Capital Partners.

—Terrafugia, the Woburn, MA-based company that’s out to make the first practical flying car (or “street legal airplane,” as the company prefers), raised $2 million in Series B funding. The money will go to development of Terrafugia’s next-generation vehicle, which will be publicly discussed in July, company CEO Carl Dietrich said.

—Watertown, MA-based biotech startup Arsenal Medical grabbed $10 million for the second tranche of its Series C financing, bringing the round’s total to $18.2 million. North Bridge Venture Partners, Polaris Venture Partners, and Durham, NC-based Intersouth Partners invested in the latest round for Arsenal, which was founded by MIT inventor Bob Langer and Genzyme (NASDAQ: GENZ) co-founder George Whitesides.

—OurStage, a Chelmsford, MA-based company that promotes indie bands through online audience voting in monthly contests, nailed $2.63 million in a mixed offering of equity, options, and warrants, an SEC filing revealed. All told, the company has raised about $19 million, including $3 million in Series B money last year that came from a group of 100 angel investors and Portland, ME- and Austin, TX-based Signature Capital.

—Diagnostics company LightLab Imaging was acquired by St. Jude Medical (NYSE: STJ), the St. Paul, MN-based cardiac devices giant, for about $90 million in cash. St. Jude is purchasing the Westford, MA-based company from Goodman Co., a Japanese medical devices firm that has owned LightLab since 2002.

—Waltham, MA-based Logical Therapeutics nabbed $10 million of a planned $16.9 million round, an SEC filing showed. The company, which is developing anti-inflammatory drugs that are safer on the stomach, didn’t disclose its backers for the most recent financing. SV Life Sciences, Burrill & Company, Novo A/S, Sigvion Capital, and PA Early Stage Partners were behind the $30 million the company raised in June 2007.

—NormOxys, a Wellesley, MA-based drug developer, raised $17.5 million in a venture financing led by new investor Princeton, NJ-based Care Capital. The round also included NormOxys’ original backer, Switzerland-based Index Ventures. The money will go toward …Next Page »

Comments | Reprints | Share:  

 
 
 

UNDERWRITERS AND PARTNERS

Erin Kutz wrote:

What do an online music marketing service, a maker of a platform that helps employers target job ads to potential candidates based on what they read, and a developer of treatments for Alzheimer’s disease all have in common? They’re all New England companies that pulled in financings worth less than $1 million in April, or what we like to call under-the-radar deals.

We got the data on their financings from our private company intelligence platform partner CB Insights, who also supplies us with a list of bigger monthly venture transactions. (Massachusetts companies pulled in $203 million across 21 of these $1 million-plus equity deals in April.) The under-the-radar deals are often too small for us to write about when news first breaks of them, but we think rounding up the deals as a group each month helps to paint a richer picture of what startup investing looks like in the region. And often the companies that make the list are the ones that are ramping up to exit stealth mode and hit the market.

There were five equity deals on April’s under-the-radar list, with the biggest financing, at $502,512, going to Waverx, a Waltham, MA-based maker of dermatological treatments. Two other companies brought in funding with options-based transactions. The April under-the-radar list shrank from March, when there were 16 such transactions, but it still includes a dynamic mix of life sciences companies, software makers, and Internet startups.

One interesting company on the April list was Hire Reach, a Cambridge, MA-based tech startup that’s revamping the employee search process. The company is using algorithms to get a picture of engineering job candidates based on the blogs and articles they read, and provide more targeted job ads to them. It pulled in $401,000 in equity-based funding last month.

Meanwhile, a $265,000 equity deal went to Playsmrt, a stealthy Bedford, MA-based company led by Beth Marcus, a serial entrepreneur who sold her joystick technology company EXOS to Microsoft in 1996. The company doesn’t have a website, but I actually caught up with Marcus last week to discuss the women’s CEO group she’s a member of. She told me that her venture is working on making the Internet safer for kids to browse.

We did happen to report on one of the financings on the list when it happened: the $376,950 that went to Nimbit, a Framingham, MA-based online music marketing service. (Earlier this year, the company also donated a year of its retail service as a prize for our Battle of the Tech Bands event). The April transaction capped off a $1.75 million Series A-1 round of funding, the company’s CEO Bob Cramer told me.

Read below for the full list of April’s sub-$1-million transactions in New England:

Comments | Reprints | Share:  

 
 
 

Erin Kutz wrote:

If you’re in an industry where you depend on suppliers from across the globe, searching the Web for a part or a collaborator isn’t exactly as easy as trying to figure out where you should eat dinner. Josh Green discovered this around 2005 when he was a Harvard Business School student interning at E Ink, the maker of the screen behind Amazon’s Kindle, and needed to find a supplier for an electronic component.

It wasn’t easy. So he started talking to MIT computer science student Jim Psota, who he had already been working with on putting together a startup. In 2006 they incorporated Panjiva, a Web company that aims to simplify the supplier search process for businesses of all sizes. Their product is out to tell manufacturers and retailers everything from who they can order parts from, to whether or not a potential supplier is stable enough to work with, to what their top competitors are shipping.

“We’ve built a Google-like product, but we’re organizing information specific to the global trading space,” says Psota, the co-founder and chief technology officer, who I spoke with at the company’s Cambridge, MA, headquarters (CEO Green leads the operations in New York).

Panjiva (a play on the name of the supercontinent Pangea) is based on a system of data mining algorithms, machine learning, and natural language processing that culls numbers from more than 10 sources, like U.S. Customs. After Green and Psota found their initial inspiration for the business, they spent a few years developing the product, and raising angel and venture financing. Its backers include Battery Ventures and angels like eBay veteran and Stanford professor Michael Dearing, fashion designer Diane von Furstenberg, and David Frankel of the Founder Collective, Psota says. Panjiva’s Web-based, industry-comprehensive search tool launched in April 2009. Home Depot was its first customer.

The core of the Panjiva product is its search engine, where users can find suppliers by searching for parts, or get more information on a particular supplier they have come across by searching their name. Panjiva’s database has more than 1.5 million companies (including suppliers and customers) from more than 190 countries. Its interface is made to allow users to sift through that deep set of data to find a short list of potential partners. Panjiva customers use drilldown menus based on variables such as country, certifications, shipping date, or the health of the supplier’s business.

“The raw data that we get in is very messy, it provides disparate data points that are not that interesting in and of themselves to helping the user,” explains Psota. “The secret sauce is taking the disparate and messy data sources and boiling them down and cleaning them up.”

Once users get a manageable list of suppliers they could potentially purchase from, they can select a particular company to view a complex profile, which includes information such as …Next Page »

Comments | Reprints | Share:  

 
 
 

Erin Kutz wrote:

Monday was Xconomy’s first ever event dedicated specifically to exploring how information technology can be used to improve the healthcare system. The event opened with a keynote address by Frank Moss, director of the MIT Media Lab (our venue for the forum), who used a clip from Saturday Night Live satirizing the Middle Age-technique of bloodletting to demonstrate the sluggish pace at which doctors adopt new technologies. This introduced us to a theme that ran throughout the event: that patients will assume much of the power in thrusting the healthcare industry forward.

John Moore, a physician and MIT Media Lab researcher, offered a look at the technology and interfaces allowing patients to communicate more effectively with caregivers both near and far. Executives from San Francisco-based Keas, the Microsoft Healthcare Innovation Lab, EMC Healthcare Consulting, and Life Image, each took the stage for an “innovation profile.” They talked about how their technologies are putting control of healthcare more in patients’ hands and how the growing volume of data in the medical field will fuel enhanced physician care. Following our rave-drawing executive panel on the Internet’s role in transforming medicine, a slew of audience members lined up to ask questions of the speakers (and in some cases grill them), voicing concern on topics such as the degree of control patients should have in pushing the healthcare system for changes and employers’ management of healthcare costs.

The day concluded with spotlights of companies that are developing technology to make people healthier, including FitnessKeeper, the startup behind the RunKeeper mobile app, and Vitality, a maker of Internet-connected pillboxes designed to keep patients on track with taking their prescription meds. Many of the speakers addressed the myriad inefficiencies in the system, but also acknowledged that patients need to take greater responsibility in leading healthier lifestyles.

Click on the photos in the gallery below for snapshots of some of the speakers and sessions I mentioned.

Comments | Reprints | Share:  

 
 
 

UNDERWRITERS AND PARTNERS

Erin Kutz wrote:

When it came to startup investing in the Northwest last month, it was a bit of a give and take. Washington-based companies raised about $21 million across three deals, each worth more than $1 million, plummeting from the $53.5 million that companies pulled in across 10 such transactions in February.

But the number of “under-the-radar” deals—what we call startup financings worth less than $1 million—more than doubled from February to March. We tracked 11 transactions under $1 million for the region last month, a jump from the five under-the-radar deals that area startups inked in February. The stats are courtesy of our partner CB Insights, a New York-based private company intelligence platform.

The trend was not unique to the Northwest. Across the country, the list of smaller deals trumped their larger counterparts. The New England under-the-radar funding list for March was the longest we had seen all year, while Massachusetts companies pulled in the smallest amount of funding this year in the monthly list of bigger venture deals we reported on.

In March, 10 Northwest under-the-radar financings went to companies in Washington, while one Portland, OR-based company nabbed some funding ($500,000 in equity for wind turbine maker Skyron Systems). Of the 11-transaction list, six deals were in equity and five were based in debt. The top deal was a $853,288 offering of equity, options, and warrants that went to Moseo, a Kirkland, WA-based company behind the website SeniorHomes.com, an online directory of elderly care information (which just changed its name last week).

There are a few companies that, while not at the top of the list, are worth noting. We might not have included Mad Fiber, a Seattle-based maker of carbon bicycle wheels—except for the fact that it is working out of a former bakery, and using the ovens and freezers that previously played a role in constructing dough and pastries as part of its manufacturing process. (Now that’s innovation you can’t ignore.) HomePipe Networks, a Seattle company that pulled in $215,000 in debt-based funding, also struck my interest. It is making networking software that enables you to access content on your home computer anywhere, using your mobile phone. And there’s Fridge Door, a Seattle Web startup that’s too stealthy for a website at this point, but has what I think is a cool name.

We saw a few names on the March under-the-radar list that are familiar to us. We wrote about online travel site Yapta when it raised a $2 million Series B round last June. In February, the Seattle-based company announced Kayak.com would be powering the flight search engine component of its website. Yapta showed up on our under-the-radar list with a $300,000 mixed offering of debt, options, and warrants. Also, Iverson Genetic Diagnostics reprised its spot on the under-the-radar list, with a $110,000 transaction of debt, options, and warrants in March. (The Bothell, WA-based company also made it on the February list with $341,000 in equity-based funding.)

Check out the full list of under-the-radar transactions below:

*includes options or warrants

Comments | Reprints | Share: