VC Buzz – $397.05+ Million in Today’s Deals


New in the News



@Motion, 3wVentures.com, BAV Software, BlueGill Technologies, CAIS Internet, ChemConnect, Companyfinance.com, eGroups, encoding.com, e-Net, ereorg.com, Fusion Networks, HoopsTV.com, Ivus, MessageBay, MVP.com, NerveWire, PSAINC, SUMmedia.com, SwapIt.com, UltraStar Internet Services, WebPartner, World Commerce Online, YouthStream Media Networks



 






CAIS Internet to Receive Up to $200 Million Investment From KKR



WASHINGTON– CAIS Internet (NASDAQ:CAIS) a provider of broadband Internet access solutions, signed a definitive agreement with an affiliate of Kohlberg Kravis Roberts & Co. under which KKR will make a strategic investment of up to $200 million. CAIS currently has master agreements to be the exclusive provider of high-speed Internet access to over 9,000 hotels worldwide, covering in excess of 1.1 million rooms. In addition, the company has long-term agreements to provide Internet access to 575 multi-family communities, reaching close to 200,000 residences.

An initial $100 million investment will be in the form of convertible preferred stock with a conversion price of $16.50 per share. The agreement also includes a one-year option for KKR to purchase an additional $100 million of convertible preferred stock with a conversion price of $20.00 per share. KKR’s initial purchase will represent a 16.5 percent fully diluted capital interest in CAIS Internet. Upon the exercise of the option, KKR’s investment would represent a 26.4 percent fully diluted capit

al interest in CAIS Internet. As a result of its investment, KKR will have two of eight seats on CAIS Internet’s board of directors. KKR would have three board seats upon the exercise of the option. Assuming the exercise of KKR’s option, the average conversion price represents a 22% premium to CAIS’s 30-day average closing price.


http://www.caisinternet.com






encoding.com Closes $48 Million Third Round



SEATTLE– encoding.com, a creator of digital media solutions on the Internet, secured a third round of financing totaling $48 million, led by Wasserstein Adelson Ventures. Current investors continuing their support of the company include Olympic Venture Partners, RRE Venture Partners, Encompass Group, and Martin Tobias. In addition to America Online, CBS, Intel, Microsoft, and NBC, new investors as part of round of financing include The Barksdale Group, Venture Partners AG, Waterview Partners, entities affiliated with Hambrecht & Quist and Robertson Stephens; Allen & Company, Creative Artist Associates, Angel Investors, and Venture Law Group. Individual investors include Terry Semel, former chairman of Warner Brothers Studios; Michael Deluca, president of New Line Cinemas; Michael Gruber, agent at Creative Artist Associates; Jeff Berg, founder and CEO of International Creative Management Agency, and Robert Zangrillo, digital media industry executive.


http://www.encoding.com






eGroups Raises $42 Million in Mezzanine Financing Round



SAN FRANCISCO– eGroups Inc., an email groups service, closed a $42 million mezzanine investment round. eGroups is currently funded by CMGI, Sequoia Capital, Atlas Venture and Bertelsmann Ventures, all of whom participated in this financing. This latest round of funding was led by Bank of America Ventures and included investments from Comdisco Ventures and several Japanese investors including Recruit, Co., NTT-X, The Nomura Securities Corp. and Impress Corp.


http://www.egroups.com






YouthStream Media Networks Completes $31.5 Million Private Placement



NEW YORK– YouthStream Media Networks, also known as Network Event Theater Inc., (NASDAQ: NETS), publishers of young adult focused online communities mybytes.com and sixdegrees.com, announced the completion of a $31.5 million private placement of common stock. YouthStream sold approximately 1.25 million shares at $25 per share to a group of institutional investors.





World Commerce Online Receives $20 Million in Funding



ORLANDO, Fla.– World Commerce Online Inc. (OTCBB:WCOL), a leader in global business-to-business electronic commerce exchanges for the perishables industries, closed on $17 million of a $20 million funding commitment from Interprise Technology Partners LP. World Commerce Online received $5 million from ITP, a Miami-based venture capital fund specializing in the information technology i

ndustry, and closed commitments on another $12 million that ITP raised from new investors. In addition to the $17 million, ITP has made a commitment to WCO for $3 million from strategic investors. This transaction, which will close in the first quarter of 2000, represents the final component in the company’s second round of funding. The financing of convertible preferred shares will be used for the ongoing development and marketing of Floraplex, the e-commerce exchange for the $80 billion worldwide floriculture industry.


http://www.wconet.com






HoopsTV.com Raises $20 Million in Second Round of Funding



ROSEMONT, Penn.– HoopsTV.com, a 24-hour basketball network featuring playground, college and pro content, raised $20 million in its second round of funding. The round was led by Safeguard Scientifics Inc. (NYSE: SFE), an Internet-centric holding company focused on e-commerce, e-business solutions and e-communications, and Footstar Inc. (NYSE: FTS), a large specialty footwear retailer in the United States. HoopsTV.com’s first round of funding included backing from AND 1, a $100 million basketball shoe and apparel manufacturer, and TA Associates, a Boston-based private equity investor.


http://www.hoopstv.com


http://www.safeguard.com






Broadwing Completes $10.8 Million-Plus Equity Investment in e-Net



GERMANTOWN, Md. — e-Net Inc. (Nasdaq: ETEL) — a developer of hardware and software that allows voice to be transmitted over data networks, including the Internet, IP, ATM, or Frame Relay– announced that Broadwing Inc. (NYSE: BRW) completed its planned equity investment in e-Net Inc. by acquiring 18.26 percent of e-Net’s issued and outstanding shares for approximately $10.8 million. Broadwing will also provide access to its Gemini2000 network for e-Net’s ZeroPlus.com products, as well as network support, co-location space and joint marketing and sales support. e-Net will provide software and installation support, long distance routing capability on an IP data network, as well as technology and customer support.


http://www.datatelephony.com


http://www.broadwing.com






BAV Software Secures $7 Million in Second Round Financing



FAYETTEVILLE, Ark. — BAV Software, a pioneer of the collaborative merchandise optimization business process, received $7 million in a second round of venture capital funding. North Bridge Venture Partners of Waltham, Mass., led the financing. Other contributors included New Meadows

Capital of Saratoga, CA, which reinvested after providing the first round of capital; Diamond State Ventures of Arkansas; and Southeast Interactive Technology Funds of Research Triangle Park, N.C. BAV also announced that David C. Peterschmidt, president and CEO of Inktomi Corp., will support BAV as a private investor and as chairman of the BAV Innovation Development Committee. BAV’s InitiaLink software enables businesses to incorporate consumer dynamics into merchandising and category management decisions.


http://www.bavsoftware.com






Draper Fisher Jurvetson Funds Ivus with $6 Million



REDWOOD CITY, Calif.- Draper Fisher Jurvetson announced the funding of Ivus. This investment represents one of Draper Fisher Jurvetson’s largest to date. Ivus integrates technology solutions that include phone ACD, e-mail, live chat, VoIP, CRM, e-marketing and data reporting and analysis solutions into one seamless environment.


http://www.ivus.net


http://www.dfj.com






WebPartner Secures $5.25 Million in Funding



CUPERTINO, Calif.– WebPartner, a provider of web-based real-time competitive intelligence that maximizes e-commerce revenue, secured $5.25 million in an oversubscribed Series B financing from Brookwood Financial Partners, Alpine Technology Ventures, and a small group of successful high-technology industry entrepreneurs and executives. In conjunction with this financing, Tom Trkla, chairman & CEO of Brookwood Financial Partners, and Bill McKiernan, chairman & CEO of CyberSource, will join the WebPartner board of directors. WebPartner provides real-time alerts of competitive threats and opportunities, based on online store monitoring, channel performance and market intelligence.


http://www.webpartner.com






SUMmedia.com Completes $3 Million Financing



DENVER — SUMmedia.com Inc. (OTCBB: ISUM) completed a private placement investment of $3 million. The private placement consisted of 1,000,000 units to be issued by SUMmedia.com at a price of $3 per unit for gross cash proceeds of $3 million. Each unit consists of one common share and one share purchase warrant. The warrant may be exercised to acquire an additional share of SUMmedia.com at a price of $5, for a period of 12 months from the issuance date. SUMmedia.com is an Internet media and marketing company that provides online coupons as eCommerce opportunities for small business through its eCoupon portal, SavingUMoney.com.


http://www.SUMmedia.com






Siemens Pension Fund Invests $2 Million in PSA



LOS ANGELES — PSAINC (OTCBB: PSAX) announced its first funding involving a $2 million equi

ty investment in the company with one of the Siemens Pension Funds (“Pensionskasse der Siemens-Gesellschaften in der Schweiz”). PSAINC plans to be broad-based global travel and entertainment company. PSAINC is structuring the company’s Internet brand via advanced broadband convergence through its psazz.com platform.





MessageBay Completes $1 Million First Round



SANTA CLARA, Calif.– MessageBay closed its first round of funding, led by Labrador Ventures. Specific terms of the deal were not disclosed. The funding by Labrador followed one week after MessageBay had signed an agreement with NBCi’s Snap.com (Nasdaq:NBCI) to add Voice Greetings to Snap’s eCard section. MessageBay provides two-way, web-based voice messaging services through its user-friendly Voice over IP products and services. The MessageBay technology allows visitors to record, play and send voice messages from a web page without attachments or telephones.


http://www.messagebay.com


http://www.labrador.com






Net Value Holdings Announces Equity Investment in SwapIt.com



SAN FRANCISCO — Net Value Holdings Inc. (OTCBB: NETV) invested $500,000 in exchange for shares of preferred stock convertible into 12% of SwapIt.com’s common stock. SwapIt.com, headquartered in Boston, Mass., is a web-based electronic barter exchange marketplace planning to launch its Internet Web site in April 2000.





Venture Catalyst Invests in Companyfinance.com



SAN DIEGO– Venture Catalyst Inc. (Nasdaq:VCAT) made a strategic minority investment in Companyfinance.com, an Internet-based capital-matching firm for lending institutions and middle-market borrowers. This agreement marks Venture Catalyst’s first investment in a business-to-business Internet-based company. Andrew Laub, Venture Catalyst’s executive vice president of corporate development, will join Companyfinance.com’s board of advisors.


http://www.companyfinance.com


http://www.venture-catalyst.com






NerveWire and Northeast Consulting Merge



NEEDHAM, Mass. & BOSTON– NerveWire Inc., a business-to-business Internet professional services firm, and Northeast Consulting Resources Inc., a provider of e-business strategy and scenario planning, announced the merger of the two companies. NerveWire will incorporate Northeast Consulting’s iterative Strategy Mapping process as the lead Digital Business Reinvention solution offering for Global 2000 and Internet startup organizations. NerveWire is backed by a $60 million investment from Thoma Cressey Equity Partners.


http://www.nervewire.com






Phone.com Acquires @Motion



REDWOOD CITY, Calif. — Phone.com Inc. (Nasdaq: PHCM), a provider of mobile Internet software and services, signed a definitive agreement to acquire @Motion Inc. for $285 million. Headquartered in Redwood Shores, Calif., @Motion is an emerging provider of voice portal technology for the converging telephony and Internet industries. @Motion’s internet voice portal will voice-enable both Phone.com’s MyPhone mobile portal and its UP.Link Server Suite WAP 1.1 platform. In addition, @Motion will add voice communications services such as virtual assistant and unified messaging to the MyPhone offering. @Motion shareholders will receive $285 million or approximately 2.25 million shares of Phone.com based on the closing price of Phone.com common stock as of December 20, 1999. The stock-for-stock transaction will be accounted for using purchase accounting and closing is anticipated to occur in the first calendar quarter of 2000. @Motion’s investors include Doll Capital Management LLC, Intel Corp., T-Venture (the venture capital subsidiary of Deutsche Telekom), Sienna Holdings and Allegro Capital.


http://www.phone.com


http://www.atmotion-inc.com






CheckFree Acquires BlueGill Technologies



ATLANTA — CheckFree Holdings (Nasdaq: CKFR), a leader in electronic billing and payment, will acquire BlueGill Technologies, a provider of Internet billing and statement creation software applications, for shares of CheckFree’s common stock. CheckFree will exchange approximately 3.2 million shares of CheckFree common stock for all outstanding BlueGill capital stock, based on a valuation of $250 million. The transaction will be accounted for as a purchase, and is expected to be final in early calendar 2000. BlueGill recently received a new round of financing.


http://www.checkfree.com


http://www.bluegill.com






MSGI Acquires Up to 19% Equity Position in Fusion Networks



NEW YORK– Marketing Services Group Inc. (Nasdaq: MSGI), an integrated marketing and Internet services company, announced the signing of a definitive purchase agreement in which the company will acquire up to a 19.13% equity position in Fusion Networks Inc., an interactive, multimedia and entertainment Latin-American portal. Under the terms of the all-stock transaction, MSGI will initially acquire approximately 10% of Fusion Networks common stock. MSGI also has an option to acquire an additional 9.13% of Fusion Networks within six months under t

he same terms. As part of this agreement, MSGI will have a seat on the board of directors of Fusion Networks. GE Capital is the owner of an 18 percent stockholder position in MSGI and CMGI is the owner of a 10 percent stockholder position in MSGI.

Fusion Networks has an agreement and plan of merger with IDM Corp. (Nasdaq: IDMC) pursuant to which IDM will form a holding company to acquire Fusion Networks. Consummation of the IDM Merger is subject to stockholder approval and other customary terms and conditions. Fusion Networks recently completed a $9 million private placement with Infospace.com (Nasdaq: INSP) and Naveen Jain, chairman and CEO of Infospace as investors in the round.


http://www.Latinfusion.com


http://www.msginet.com






SportsLine.com Agrees to Strategic Relationship With MVP.com



FORT LAUDERDALE, Fla. — SportsLine.com Inc. (Nasdaq: SPLN), the global Internet sports media company and publisher of CBS SportsLine, signed a letter of intent to enter into a 10-year strategic relationship under which SportsLine.com’s domestic e-commerce business will be acquired and operated by MVP.com. A new sports and outdoor e-commerce destination, MVP.com, was formed in partnership with Benchmark Capital, Freeman Spogli & Co., Galyan’s Trading Company, John Elway, Michael Jordan and Wayne Gretzky. SportsLine.com will receive $120 million in guaranteed cash payments over the 10-year period and an equity interest in MVP.com. MVP.com has the financial backing of Benchmark Capital and Freeman Spogli & Co., and Galyan’s Trading Company. MVP.com has also entered into a media partnership with CBS Corp. (NYSE: CBS) in which MVP.com will receive $85 million in advertising, promotion and other consideration over a period of four years from CBS Corp., in exchange for an equity stake in the company.


http://cbs.sportsline.com


http://mvp.sportsline.com






SFX Entertainment Acquires Stake in UltraStar Internet Services



NEW YORK– SFX Entertainment Inc. (NYSE: SFX), a large live entertainment provider, announced an investment in UltraStar Internet Services LLC, the Internet company co-founded by rock legend David Bowie. SFX will have a substantial minority interest in UltraStar, with options to further increase their holdings. UltraStar created a subscription-based model that targets entertainment, sports, fashion and other types of affinity group

s. The company specializes in developing private label ISPs and community and commerce oriented sites targeting these groups. Initial UltraStar web sites include David Bowie’s web site BowieNet; the official web site of the New York Yankees, YankeesXtreme; and the official web site of the Baltimore Orioles, OriolesWorld.


http://www.sfx.com


http://www.ultrastar.com






3wVentures.com Forms $100 Million ‘First Look Participation’ Venture Capital Fund



MARINA DEL REY, Calif. — 3wVentures.com, the Internet incubator subsidiary of Web Capital Group Inc. (OTCBB: WBCG), announced the establishment of its $100 million “first look participation” venture capital fund, the company’s initial foray into large scale venture capital financing. Concurrent with the new incubator fund, 3wVentures.com launched 3W Capital Partners to manage its venture funds. This initial $100 million fund will finance 50 new Internet and e-commerce-related firms to be incubated at 3wVentures.com’s new SiliconLosAngeles.com (SiliconLA.com) Internet incubator facility. The 50 companies will receive on average $2 million apiece in initial first round capital financing. The fund will allow prospective qualifying venture capitalists first rights to participate in all follow-on offerings, including second and third round financing of potential emerging-growth pre-IPO companies under SiliconLA.com incubation.


http://www.3wVentures.com






Who’s Who & Where



Philip J. Andryc Named President and COO of ereorg.com



NEW YORK — Philip J. Andryc, formerly a managing director with Morgan Stanley Dean Witter, has been named president and chief operating officer of ereorg.com Inc. ereorg is a business-to-business e-commerce enterprise which introduced a global online auction market for trading bank loans, trade claims and sovereign bank debt. The company recently received a third round of financing.


http://www.ereorg.com






ChemConnect Hires Raj K. Bhargava



SAN FRANCISCO — ChemConnect Inc., a large global Internet exchange for all types of chemicals and plastics, announced the appointment of Raj K. Bhargava as senior vice president, product planning and engineering. Bhargava joins ChemConnect from Trade Reporting and Data Exchange Inc. where he was CEO and president. Top-tier investment firms including Institutional Venture Partners, Weiss, Peck & Greer, Goldman Sachs, CMEA Ventures, and Highland Capital Partners back the company. Andersen Consulting, The Dow Chemical Company, Eastman Chemical Company and Rohm & Haas are also equity investors in ChemConnect. Chemical Week Associates rec

ently invested in the company.


http://www.chemconnect.com



 





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