VC Buzz – $270.65+ Million in Today’s Deals

For the latest on cool Internet Start-Ups and their VC backers, point your browser to:


New in the News,, Ceon, eCompanies,,, Finali,, Hypernix Technologies, Information Architects, IPCell Technologies,, Mainspring, mySimon, NexPrise, Phase Forward, Promptu, Reciprocal, Vivaldi Networks, X:drive, xSides, Zoneworx


Reciprocal Completes $35 Million Mezzanine Financing

NEW YORK– Reciprocal, a digital rights management company that enables content owners to secure their valuable content for distribution and sale via the Internet, completed a $35 million mezzanine financing. New strategic partners who have invested in this round include First Data Corp., Hewlett-Packard Company, Xerox Corporation, and TVT Records. They are joined by J. & W. Seligman & Co., Van Wagoner Funds, Sheng-Hua Venture Capital (the largest investment company in Taiwan), Aman Ventures, and MC Capital, a subsidiary of Mitsubishi Corp., as well as current investors Adams Capital Management, Chase Capital Partners, Constellation Ventures, Flatiron Partners, SOFTBANK Technology Ventures, Venrock, Microsoft, and Reuters. Reciprocal offers a scalable, digital clearing service that is multi-platform, multi-vendor, and multi-content compatible, and capable of handling millions of transactions per day.


spring Raises $32.5 Million in Mezzanine Financing Round

CAMBRIDGE, Mass.– Mainspring, a leader in helping companies rapidly develop and execute profitable e-commerce strategies, raised $32.5 million in a mezzanine financing round. Lead investor Crosslink Capital was joined by investors Essex Investment Management, GE Equity, J. & W. Seligman & Co., Lucent Venture Partners, and Sandler Capital Management. Previous investors Chase Capital Partners, Flatiron Partners, Greylock, Highland Capital Partners, and Softbank Ventures also participated. In connection with this investment, Anthony Brenner, managing director for Crosslink, has joined Mainspring’s Board of Directors. As a result of this financing, Mainspring now has an investment capital base exceeding $50 million. Secures $30 Million in Second Round of Financing

SAN FRANCISCO —, a free, Web-based service for coordinating and planning activities of all types, raised $30 million in new funding. The participants include first-round investors August Capital and Staenberg Venture Partners, as well as Advent International, Greylock Management, Hikari Tsushin, North Hill Ventures, Technology Crossover Ventures, and several other private funds and investors. With this round of funding, brings its total raised to date to $38 million. The company concluded a first round of funding of $8 million in July, led by August Capital with investments from Staenberg Venture Partners and several other private investors.

Phase Forward Secures Additional $27 Million in Financing

WALTHAM, Mass.– Phase Forward Inc., a pharmaceutical eProcess company for Web-based clinical trials, completed a $27 million round of financing. Led by Schroder Ventures Life Science Advisors, the third round of financing also included investments from Pacific Venture Group, HLM Management Co., and BioVentures Investors. Existing investors Atlas Venture, North Bridge Venture Partners and Sprout Group also participated in the funding round. Phase Forward also added Eugene D. Hill III, a partner at Schroder Ventures, to the company’s Board of Directors. To date, Phase Forward has raised more than $39 million in total financing.

Ceon Completes $25 Million Equity Financing Round

REDWOOD CITY, Calif.– Ceon Corp. secured $25 million in capital after closing a second round of financing from four high-tech venture capital firms. Berkeley International joins Accel Partners, Sutter Hill Ventures and Technology Crossover Ventures investing in Ceon, a leader in providing eBusiness solutions that allow service providers to rapidly provision, bundle and manage multimedia services. The Ceon product approach toward service fulfillment uses an eBusiness platform that has global applications. The company will use this round of financing to continue to expand sales, marketing and operations to address this global opportunity.

X:drive Nets $20M

SANTA MONICA, Calif. — X:drive, the company that turns the Internet into a virtual hard drive, raised $20 million in venture capital funding. The financing was led by multimillion-dollar investments from eCompanies Venture Group L.P., Goldman Sachs Group Inc. (NYSE: GS), and Wit Capital Group Inc. (Nasdaq: WITC). The investment enables X:drive to expand its national advertising campaign and continue to secure high-value partnerships with category-leading Web sites and companies that benefit from its innovative Web-based hard-drive service. Raises $20 Million

SAN FRANCISCO —, a site where consumers go for answers to just about any how-to question and access to all the solutions needed to do them, raised $20 million from a select group of venture capital firms and strategic partners. New investors include GE Financial Assurance, a wholly-owned subsidiary of General Electric (NYSE: GE), Fingerhut, a wholly-owned subsidiary of Federated Department Stores (NYSE: FD), Freedom Communications, with Presidio Ventures, a division of Sumitomo Bank (TOKYO: J.STB or 8318) and Scripps Ventures (NYSE: SSP). Existing investors Hummer Winblad Venture Partners and Media Technology Ventures also participated in the investment.

IPCell Technologies Secures $16 Million From Cisco Systems

RICHARDSON, Texas– IPCell Technologies, a company focusing on developing new voice and integrated services for carriers, secured $16 million of funding from Cisco Systems. This funding will accelerate the telephony market’s transition from circuit switching to packet switching. IPCell products enable data and telecommunication service providers to implement voice and data services over Internet Protocol or Asynchronous Transfer Mode data networks.

xSides Closes $15 Million Round of Financing

SEATTLE– xSides Corp., an industry pioneer in technology development and design, formerly called The Pixel Company, completed a second round of funding and support from strategic investors in Internet and broadband telecommunications sectors. The $15 million Series B round includes financing from the founders of Broadcom Corp. — Henry T. Nicholas III, Ph.D., Broadcom’s president, CEO and co-chairman, and H

enry Samueli, Ph.D., co-chairman and chief technical officer of Broadcom. Also participating in xSides Series B round were Amerindo Investment Advisors Inc., Hikari Tsushin Inc., and Rader Reinfrank & Co. LLC. xSides also named Nicholas to its board of directors.

NexPrise Raises $12.9 Million in Series B Funding

SANTA CLARA, Calif. — NexPrise Inc., a provider of outsource management solutions for the manufacturing enterprise, raised $12.9 million in Series B funding. The company’s second financing round was led by Crosspoint Venture Partners. All parties who provided NexPrise’s first round of funding also participated in the Series B, including Apex Investment Partners, which led the first round. NexPrise also announced the appointment of Seth Neiman, Crosspoint general partner, to the NexPrise board of directors. Raises $10 Million In Latest Round

IRVINE, Calif.– Inc., an interactive shopping community, raised in excess of $10 million in its latest round of funding through the sale of restricted common stock pursuant to a private placement. The funds will be utilized to fund’s business plan and working capital requirements.

Zoneworx Completes $9 Million Round

TEMECULA, Calif.– Zoneworx Inc. (formerly Zone Automation) closed a $9 million third round of venture funding. Led by Communications Ventures, with participation by existing investors First Analysis Venture Capital and Enterprise Partners Venture Capital, the investment will be used primarily for sales and marketing. Zoneworx develops network infrastructure connectivity products that deliver critical data from industrial and commercial machinery to information and control systems, using Internet technology and standard networking infrastructures.

Information Architects Secures Over $7 Million in Equity Financing

CHARLOTTE, N.C.– Information Architects Corp. (NASDAQ: IARC), providers of XML-based dynamic content aggregation and syndication solutions for the Internet, completed a Mezzanine-round of institutional funding. Led by Stonegate Securities Inc., Information Architects secured over $7 million of institutional funding through the private placement of common stock.

Finali Completes First-Round Financing Company

BOULDER, Colo. — Finali Corp., a full-service online retail customer service outsourcing business, completed a $6.25 million first-round venture capital financing from Sequel Venture Partners, SOFTBANK Venture Capital and Boulder Ventures Ltd. Finali offers eRetail clients a complete turnkey online sales and support outsourcing solution, including software and hosting, live sales and customer service staffing, e-mail management and response, automated online FAQ, and telephone call-back service for online shoppers.

Promptu Secures $5 Million

SAN JOSE, Calif.– Promptu, a provider of web-based solutions for connecting marketing with the field, including sales personnel, channel partners, international subsidiaries and customers, received $5 million in Series A funding, including investments from Discovery Ventures and Trinity Ventures. Promptu also announced that Arnold Silverman from Discovery Ventures and Larry Orr, general partner of Trinity Ventures, have joined Promptu’s board of directors. Investors Return For Second-Round Funding

ALEXANDRIA, Va.–, a destination on the Web for marketing communications solutions, closed its second round of venture capital financing. Returning investors Flatiron Partners and Chase Capital Partners led the round along with Liberty Venture Partners. will use these funds to begin its marketing and brand-building campaign. The company’s proprietary technology enables customers to develop coordinated suites of identity items, such as business cards, newsletters, letterhead and other promotional pieces, in just a few simple steps. Receives First-Round Funding from Idealab! Capital Partners

FULLERTON, Calif.– Idealab! Capital Partners has provided full first-round funding to launch, as part of the latest, $364 million round of its venture capital fund. Jim Armstrong, a principal at ICP, directed the venture capital fund’s initial multimillion-dollar investment in offers an innovative solution for finding and selecting quality local service merchants.

Hypernix Secures Strategic Funding

NEW YORK– Hypernix Technologies Ltd., the creators of the roving Internet platform Gooey, announced strategic investments from Allen & Co., a New York-based investment bank, and JAFCO Co., Japan’s largest venture capital firm. Concurrently, Hypernix has selected Allen & Co. as its strategic adviser and investment banking partner. Gooey, launched by Hypernix in June 1999, is an integrated roving communications and media platform that gives users the power to communicate with others visiting the same sites (via chat and instant message) and receive rich-media broadband with one dynamic product.

Draper Fisher Jurvetson Funds Vivaldi Networks

REDWOOD CITY, Calif.– Draper Fisher Jurvetson announced the funding of Vivaldi Networks, company that helps consumers track purchases from traditional brick and mortar retailers and online retailers. The company will also allow retailers to extend customer relationships and customer service opportunities beyond the time that the consumer is physically in the retail environment. Financial details were not disclosed. Receives Investment From Citigroup and Intel

SANTA CLARA, Calif. — mySimon Inc., a comparison shopping site, announced that the e-Citi unit of Citigroup and Intel Corp. have invested in the company. The amount is undisclosed, but it adds significantly to the $21 million mySimon raised in its last round of financing this summer. e-Citi and Intel join Brentwood Venture Capital, Marquette Venture Partners and The Sprout Group as recent investors in mySimon inc.

Internet Fact of the Day

The U.S. business Internet access market will grow by nearly 70 percent to an annual rate of almost $17 billion in 2003, according to a report from The Strategis Group. This explosive growth will be fueled by the demand for higher bandwidth technologies, especially digital subscriber line.

eCompanies Pays $7.5 Million for Domain Name

SANTA MONICA, Calif.– eCompanies purchased the Internet domain name,, for $7.5 million. eCompanies will use the domain and brand for its upcoming business-to-business Internet service. Established in June 1999, Santa Monica-based eCompanies combines an execution-driven Internet incubator, eCompanies LLC, with a strategic venture fund, eCompanies Venture Group LP. eCompanies was created by Sky Dayton and Jake Winebaum to rapidly launch Internet start-ups, providing essential services start-ups need from a range of disciplines, including strategy, finance, people, creative development, technology, business development and marketing.

Who’s Who & Where Names Vice Presidents

SAN FRANCISCO–, an Application Service Provider for Web sites, hired Saloni Howard-Sarin as vice president of marketing and Roxanna Jung as vice president of sales to develop and implement strategy and programs for launching the Internet start-up. is based in San Francisco and recently secured $4 million in venture capital funding.

Do you think YOUR cool company ought to be featured in a VC Watch column?

Then go here …

… and tell us all about yourself.


VC Buzz, that is.

The latest buzz on the daily deals coming down in the femtosecond pace of the Venture Capital world

VC Buzz brings you the latest on who’s gotten their funding and from whom, what’s happening at the VCs and who’s just swallowed whom in the maniacally fast, deadly serious Darwinian scramble for Internet success and dominance.

Don’t get trampled by the herd … stay ahead with VC Buzz, delivered every business day to your e-mail box.

Check it out online or SIGN UP get it delivered FREE every day to your e-mail. When you sign up, scroll down to the “Internet Stocks Channel” subhead and check the VC Buzz box.

News Around the Web