VC Buzz – $402.05+ Million in Today’s Deals

FRANKLIN, Mass. — Utilicom Networks, a provider of bundled communications services under the TOTALink brand name, announced a commitment of up to $100 million by affiliates of Blackstone Capital Partners III. Utilicom builds and operates advanced broadband communications networks in partnership with local electric and gas utilities to deliver voice, video, Internet and data services to business and residential customers.

FRANKFURT, Germany– Star One AG closed its second round of funding, raising Euro 72 million (about $72 million) in equity. This round was led by Incepta International, a telecommunications development and investment firm backed by Bechtel Enterprises Holdings. Additional major investors include Providence Equity Partners Ltd, GE Capital, and Texas Pacific Group. Other investors include Viventures, TeleSoft Partners and Dresdner Kleinwort Benson. Star One AG has started to establish a Point-to-Multipoint wireless broadband telecommunications network that will offer customers ‘last mile’ broadband connectivity. Star One will provide its targeted customers with a variety of individual and bundled high-quality services at competitive prices, including high-speed data transport, Internet access, local and long distance voice services, and other enhanced communication services such as e-commerce.

DALLAS — BenefitMall.com, an online marketplace for small business employee benefits, received $40 million in venture capital funding, enhancing the company’s position as a player in the business-to-business online insurance marketplace. Technology Crossover Ventures led the recent round of financing, and was joined by new investor Morgan Stanley Ventures as well as existing investor Austin Ventures. The company currently manages more than $400 million in active insurance premiums for small businesses and helps independent brokers sell more than $500,000 Internet-enabled premiums each day. BenefitMall.com was originally a wholly owned subsidiary of Humana, one of the nation’s largest publicly traded health insurance companies.

HOUSTON — CompuBank, the first Internet national bank, received $36 million investment in its first institutional round of financing led by Softbank Finance with GE Financial Assurance, The Goldman Sachs Group and Marsh & McLennan Capital participating. CompuBank, Member FDIC, offers a variety of depository products and services to both businesses and consumers. By targeting Internet users, CompuBank has experienced over 100% quarter-to-quarter growth in its account acquisition over the past 12 months.

HOUSTON– iWaterways.com secured $21 million in first-round financing from James Ventures, private investors and The Alpert Companies. iWaterways.com is developing a community-based portal that will enhance the boating and water-sports lifestyles through interaction with experts, clubs and other members, and provide access to marine articles and databases.

LOS ANGELESInternet Wire, an Internet-based distributor of direct company news and online business communications materials, closed its first preferred round of venture capital, a total of $17.5 million, led by Sequoia Capital and Hummer Winblad Venture Partners. Also participating in the Series A round were first-round investors Osprey Ventures, Montreux Equity Partners and Mindful Partners, as well as Stanford University’s Daper Fund and Perkins-Coie LLP.Ann Winblad, partner, Hummer Winblad Venture Partners; Sameer Gandhi, Sequoia Capital; and Stuart Rudick, partner, Mindful Partners joined the board of directors.

BURLINGTON, Mass.– Burst! Media, an ad network for specialty-content web publishers, closed a $15 million round of private equity financing, exclusively led by Summit Partners. Burst! offers customized advertising solutions and ad management technology.

CANNES, France– CitiKey, a developer of city guide applications for the Wireless Application Protocol platform, received a new round of funding which will allow the company to more rapidly deploy its services to European cities. The new $11.5 million investment will enable the CitiKey to continue to develop mobile city guides that can help users access vital, personal, location-specific information, and launch guides in a dozen cities in the coming 12 months. The new funds have been secured from lead investors Crescendo Ventures, along with Atlas Venture and Kennet Capital.

SAN FRANCISCO and MENLO PARK, Calif.– NextOffice.com, a new online destination for business furnishings, secured a $10 million round of financing, led by the CMGI @Ventures B2B Fund. CMGI @Ventures joins The Phoenix Partners and Venture Frogs in funding the development of a comprehensive business-to-business e-commerce solution for business furnishings. Josh Daniels of CMGI @Ventures is taking a seat on NextOffice.com’s board of directors.

CHICAGO– Edventions, an education technology firm, secured $8.8 million in its third round of financing. Institutional investment comes from River Cities Capital Fund of Cincinnati, Ohio, and M Group Inc. of Birmingham, Michigan. Private investors included nationally prominent business leaders, celebrities and education proponents, according to the company. Edventions developed the Starship School on-line communications and learning system that debuted in Chicago area schools in Fall 1999. This round of financing will fund the national rollout of Starship School and its related programs to 500 schools in targeted regions.

RADNOR, Pa. — Cross Atlantic Technology Fund, a $150 million venture fund focused on investments in information technology companies in the United States, Ireland, and England, closed an investment in TradeAccess. XATF is the lead investor in a fully subscribed $5 million round. Cross Atlantic will have two board seats that will be filled by Glenn Rieger, managing director of XATF, and Scott Sill, an associate. TradeAccess provides next generation B2B software that facilitates complex, negotiated e-commerce.

PROVIDENCE, R.I. — Bungo.com, a provider of Internet enabled mobile information management solutions, completed a $2.5 million “post-seed” round of investment. Stuart Fullinwider, Edward Grace, Paul Kazarian, and Matthew Lorentzen were named to its board of advisors. Bungo.com offers a web-based personal desktop environment with a sophisticated information sharing infrastructure.

SEATTLE– Guide Ventures and a consortium of investors completed a second round funding for the theDial.com, a premier source of private labeled audio for the web. Joining the funding consortium are Vantage Point Venture Partners and first round investors, Utah Ventures, Wasatch Venture Funds, and other investors including Timothy Draper. theDial provides it’s partners with entertaining, web-centric spoken content created by theDial’s productions staff.

LAS VEGAS — Flight Time Corp., a leader in air charter, will acquire Wyvern Ltd., a safety and compliance auditing firm, and MACH-1 Software Corp., a provider of aviation enterprise management software, and rename the company FlightTime.com. The new company will leverage the safety and technology components associated with Wyvern and MACH-1 with the company’s existing e-commerce site AirCharter.com to create the first, audited global aviation network. FlightTime.com has received substantial financial backing from Southeast Interactive Technology Funds and BancBoston Ventures.

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TAMPA, Fla. — BrainBuzz.com, a virtual community and online resource for IT professionals and job seekers, acquired surfIT.com, an Atlanta-based online job site that recently completed its first round of venture capital financing. The foundation of the BrainBuzz.com site consists of more than 200 topic-specific discussion boards “hosted” by highly trained professionals and industry experts. Terms were not disclosed.

PHILADELPHIA — Keystone Venture Capital closed Keystone Venture V, a $102 million fund. Keystone V is targeting early and expansion stage companies in high-growth technology sectors, with particular emphasis on Internet-enabling applications, telecom and wireless communications, and B-to-B and B-to-C electronic commerce. Limited Partners include the Pennsylvania State Employes’ Retirement System, the State of Connecticut Retirement Plans, the City of Philadelphia Board of Pensions and Retirement, Dime Capital, Citizens Capital, Progress Bank, Silicon Valley Bank, Imperial Bank and Cambridge Holdings. Atul Madahar and Robert Pace have joined the team of investment professionals as vice presidents.

NEEDHAM, Mass.– NerveWire, a business-to-business Internet professional services firm, named Kirk Arnold chief operating officer, executive vice president, and member of the NerveWire board of directors. Before joining NerveWire, Kirk was president of the consulting group of Computer Sciences Corp. Thoma Cressey Equity Partners has committed $60 million to fund the company’s growth strategy.

SAN FRANCISCO– Geneva Venture Partners, a seed and early stage venture capital fund for new economy, web-centric startups, appointed Robert Hambrecht as a Special Advisor to Geneva Venture Partners II, a $60 million investment fund in the process of formation. Geneva Venture Partners LP was spun off from GenevaGroup International, an internet and software search firm, in 1997. Hambrecht is the managing director of equity capital markets for WR Hambrecht + Co.

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