VC Buzz – $404.35+ Million in Today’s Deals

New in the News

Anderson Unicom Group,,, Cephren, Chrysalis-ITS,, Commerx, ConnectSouth,,, eFORCE, Fusient Media Ventures,, Highland Capital Partners, IBM, IKANO, Imageon Solutions, KhiMetrics, Korea Thrunet, LatinForce.Net, MarketMAX, NoWonder, PassCall Advanced Technologies, Rainfinity, Tachion Networks, Web Capital Group,

Deal News

ConnectSouth Secures Equity Funding of $100 Million

AUSTIN, Texas — ConnectSouth, founded by Jeff Mucci, members of ConnectSouth management and Morgan Stanley Dean Witter Private Equity, obtained a $100 million equity commitment from an investment group led by Morgan Stanley Dean Witter Private Equity that includes Fleet Equity Partners and Waller-Sutton Media Partners. This investment commitment will allow ConnectSouth to build a broadband, high-speed DSL network in 80 cities, serving an estimated 5 million businesses throughout the region.

Internet Capital Group’s Antes Up $45 Million for Stake in

BURLINGAME, Calif.–, a service that lets media buyers purchase premium advertising over the Internet, announced that Internet Capital Group spent $45 million to acquire a strategic stake in the company. Internet Capital has targeted 50 vertical industries and is acquiring interest solely in business-to-business e-commerce companies that display market dominance in these sectors. Internet Capital’s interest in marks the holding company’s only foray into the media industry.

Cephren Closes $41.5 Million Mezzanine Funding Round

PALO ALTO, Calif.– Cephren Inc., formerly known as Blueline Online Inc. and Inc., closed a $41.5 million mezzanine funding round lead by GE Equity Investments, GE Power Systems, Goldman Sachs, and Grupo Picking Pack. The latest financing increases total private funding for Cephren to more than $60 million since its inception. Cephren agreed to merge with, an e-commerce firm, to deliver procurement services for its collaboration and e-commerce framework. All of Cephren’s current investors also invested in the mezzanine round including Telos Venture Partners, Bay Partners, Montreux Equity Partners, RWI Group, and Donald L. Lucas, as well as the firm’s founders and executive management team. E.M. Warburg, Pincus & Co. was the leading venture investor in and will continue as an active investor and board member in Cephren; GE and GPP will also each hold a board seat.

NoWonder Secures $40 Million in Mezzanine Funding

SUNNYVALE, Calif. — Redpoint Ventures led the latest round of investment in NoWonder Corp., an online marketplace for technical support. Other investors include Integral Capital Partners, Brentwood Venture Capital, Menlo Ventures and Bedrock Venture Capital. These companies join CNET, a previous corporate investor in NoWonder. Individual investors in this round include eBay founder and chairman, Pierre Omidyar, and former Microsoft technical support guru, Sam Jadallah. NoWonder’s website makes it easy for users with computing questions to ask questions, choose from a variety of support options and get expert resolution quickly. Users can enter details about their problems, then choose to request Live Help, personal help via e-mail or link to self-help.

Commerx Secures $38.6 Million in Financing

CHICAGO — Commerx Inc., an e-commerce solutions company for industrial processing markets, secured $38.6 million in Series B equity financing from institutional investors, companies with a strategic interest in the plastics industry, Commerx management and affiliates, and other individual investors. Series B institutional investors include Capital Research & Management, divine interVentures, Internet Capital Group LLC (Nasdaq: ICGE), MC Capital Inc., Mitsui & Co. (U.S.A.) Inc., Palantir Associates and Pivotal Asset Man

agement. Investors with a strategic interest in the plastics industry include Ashland Distribution Co., a division of Ashland Inc. (NYSE: ASH), Eastman Chemical Co. (NYSE: EMN), EP Partners, Huntsman Corp., Mitsubishi International Corp., MSC Industrial Direct Co. Inc. (NYSE: MSM) and H. Muehlstein & Co. Inc. Other investors include Commerx executive officers, directors and individual investors. The completion of this round of funding will enable Commerx to expand PlasticsNet.Com (, its flagship electronic marketplace, and accelerate entry into other vertical marketplaces. Inc. to Issue $35 Million in Common Stock to Venture Capital Investors

AUSTIN, Texas–Whole Foods Market Inc. (Nasdaq:WFMI), a large retailer of natural foods, announced the formation of Inc., a multi-faceted e-commerce company in the “Whole Living” industry, a $79 billion industry comprised of products, information and services that support a healthy, positive lifestyle and the environment. has agreed to issue $35 million in common stock to Oak Investment Partners, Invesco Private Capital Inc., North Castle Partners andEssex Woodlands Health Ventures in exchange for approximately a 22% minority interest.

Tachion Networks Secures $26 Million in Second Round Funding

EATONTOWN, NJ– Tachion Networks closed its $26 million second round funding, providing the capital investment necessary to take it to its planned initial public offering, scheduled for the latter half of 2000. The round was led by Goldman Sachs and J.P. Morgan Investment Management Inc. New service provider investors in this round include Roy Wilkens, chairman of Williams Communications, Clark McLeod, chairman of McLeodUSA, Gabriel Communications (chairman is Bob Brooks, former founder of Brooks Fiber), and UniDial Communications. Tachion Networks received first-round funding from Walden International Investment Group and Morgenthaler Venture Partners. Tachion Networks builds next-generation networking infrastructure equipment.

Chrysalis-ITS Secures $20 Million in Venture Capital Financing

OTTAWA–Chrysalis-ITS Inc., a provider of Internet security products for customers in the e-commerce and networking markets, completed its fourth round of venture capital financing totaling US$20.6 million. New investor CIBC Capital Partners led the financing with additional investment from Goldman, Sachs & Co. Other new strategic investors include AGF, Altamira Funds, Working Ventures, Royal Trust, Laketon Investments together with funds from some original investors. The current round of financing brings the total capital the company has raised to date to more than US$35 million. Original investors in Chrysalis-ITS i

nclude: the Business, Engineering, Science and Technology Discoveries (BEST) Fund Inc., Capital Alliance Ventures Inc., Centara Corp., Furneaux and Co., J.L. Albright Ventures, Intel Corp., Novacap Investments Inc. and Mosaid Technologies.

eFORCE Raises $16 Million

HAYWARD, Calif. — eFORCE, an eBusiness solutions provider, closed on a $16 million round of funding led by Norwest Venture Partners. The funding includes investments from Infinity Capital and from Greylock, a first-round lead investor. The company’s product is called eBRIDGE, eBusiness Rapid Implementation and Deployment for Global Enterprises.

IKANO Receives $11.5 Million in Venture Capital

SALT LAKE CITY — IKANO, a private label Internet access provider, received $11.5 million in a first round of venture capital financing from Insight Capital Partners and Chicago Venture Partners. IKANO allows any company, organization, affinity group, or group association to provide Internet access to its customers or members on a purely private label basis.

Web Capital Group Announces a $9 Million Private Placement

MARINA DEL REY, Calif. — Web Capital Group Inc. (OTC BB: WBCG) completed a $9 million private placement. The new equity infusion will continue to fund the company’s incubator unit and e-finance subsidiary operations. A portion of the new capital will be allocated for the continued development of, Inc. and its new state of the art 50,000 sq. foot Internet technology campus,

US & Dutch Funds Invest $5M in Passcall Advanced Technologies

TIRAT HACARMEL, Israel– PassCall Advanced Technologies announced that Infinity, an American-Israeli venture fund, together with the European Holland Venture fund completed a $5 million investment in PassCall. PassCall Advanced Technologies has developed a new technology providing mobile phone users with real Internet access, utilizing existing Internet web sites. PassCall’s GateWave technology enables access to any Internet site, in any language, via any cellular device. Neither modification nor change of regular Internet sites is required. Secures $3.75 Million

NEWTOWN SQUARE, Pa. — Inc. secured $3.75 million in initial funding to support the development and marketing of its new website, Another $9 million in funding is expected. The initial funding has been provided by TL Ventures. says it provides the lowest cruise prices in the industry and extensive resources to help users research and book cruises on 31 cruise lines.

KhiMetrics’ Dynamic Pricing Solution Wins Venture Funding

SCOTTSDALE, Ariz.– KhiMetrics Inc., a company that enables online retailers to create profitable pricing strategies, received a $3.5 million investment led by Telos Venture Partners. Other investors include RWI Group and Donald L. Lucas. KhiMetrics is introducing a new retail system category — advanced price optimization — that enables e-commerce sites and traditional retailers to predict consumer behavior and then set prices accordingly. Receives $3.5 Million in First Round of Venture Financing

WORCESTER, Mass.–, a secure e-commerce site specifically for the commercial light bulb market, closed $3.5 million in total equity in its first round of venture financing. In 2000, will establish a distribution center, begin business-to-business direct marketing programs and hire key personnel. The private financing was shared by venture capital investors including Arbor Venture Partners II LLC, Ralph Wilson Equity Fund LLC, Hexagon Investments and Grandhaven. Arbor Partners took the lead in this round of funding. Receives $3 Million Investment

CHICAGO– First Analysis Venture Capital made a $3 million equity investment in, a comprehensive, one-stop resource for international Internet calling. delivers free online tools enabling novice and experienced callers to navigate the current tangle of technology, providers and prices.

Oak Technology Invests in

SUNNYVALE, Calif.– Oak Technology (NASDAQ:OAKT) invested in a new start-up venture,, with a first round funding of $3M for a minority equity position. is a developer of Internet music software and services for the online music market. Oak and are working closely together to l

everage synergies between’s technologies and Oak’s core competencies in optical recording.

Anderson Unicom Group Inc. Receives Venture Capital Funding

YORBA LINDA, Calif.– Anderson Unicom Group Inc., a life sciences business-to-business Internet company, closed its first round of venture financing. Prime Ventures LLC and Edgewater Ventures LLC, Santa Monica, Calif.-based investment companies headed respectively by Internet entrepreneurs Richard Rosenblatt and Anthony Mazzarella, led the round. Anderson Unicom Group in March of 1995 was the first Internet-based company to aggregate catalogs and create an online classification system for products used in research, and to allow scientists and technicians to initiate one-click purchases.

Imageon Solutions Completes First Round of Financing

BIRMINGHAM, Ala. — Imageon Solutions Inc., a provider of next generation Internet enabled clinical image management solutions, completed a major round of funding. The company also announced the appointment of Charles Jett as chairman and chief executive officer and Jeff Timbrook as vice president of sales and marketing. Participants in the first round include Paradigm Venture Partners LLC, Finn Partners and private investors. Imageon Solutions, Inc. is an e-Health company specializing in developing and deploying systems that provide cost effective archiving, routing, and viewing of full fidelity digital diagnostic images “real time” over private networks and the Internet.

MarketMAX Launches With New Round of Financing

NEW YORK– MarketMAX Inc., a provider of integrated e-business, merchandise planning and optimization solutions for the $2.7 trillion retail market, received a second round of capital. The investment was led by industry leaders Bernard F. Brennan and Frank J. O’Connell, both of whom will also join the company’s board of directors providing strategic assistance, representing both the retailer and consumer goods manufacturer perspectives. Insight Capital Partners also participated after providing the Company with its first round of capital.

Reshuffling News

Korea Thrunet Purchases Nowcom

SEOUL, South Korea, and NEW YORK — Korea Thrunet Co., Ltd. (Nasdaq: KOREA) purchased equity ownership in one of the leading Korean online service providers, Nowcom Company Limited, from Hanchang Corp. In this deal, Korea Thrunet led a group of investors consisting of TriGem Computers Inc., TriGem Ventures and Metaland Inc. The Thrunet-led group acquired a 61.2% ownership stake in Nowcom. Co., Ltd. investing KRW 68 billion or US $59 million. Korea Thrunet acquired 32% of equity ownership of Nowcom Co., Ltd. for KRW 35.6 billion or US$ 31 million and has become the largest shareholder. TriGem Computers, TriGem Ventures and Metaland will own 10.0%, 17.5% and 1.7% respectively.

Dolan Media Acquires E-Commerce Company

GOLDEN, Colo. — Dolan Media Co. acquired e-commerce and Web developer from Marketing Solutions Ltd. The acquisition included Internet sites and specializes in integrating large volumes of data into its proprietary databases and distributing it electronically to customers, primarily via the Internet but also by other electronic media. Its customers are businesses needing customized lists for marketing, research or development purposes. Purchase price and terms were not disclosed. will form the nucleus of a new corporate group that will work with its National Group units, which are electronic information companies, and its Regional Group, comprising newspapers. The new corporate group will be supervised by executive vice president and CFO Scott J. Pollei. The operating company’s new name is inc.

Fund News

Highland Capital Partners Raises New $500 Million Fund

BOSTON — Highland Capital Partners announced its largest investment fund to date — Highland Capital Partners V. The firm’s fifth fund totals $500 million and brings Highland’s total money under management to over $1 billion. Highland will continue to focus on investing in entrepreneurs seeking to build world-class Internet, communications and medical companies. Within the Internet sector, primary investment areas will be business-to-consumer, business-to-business and infrastructure opportunities. Highland will also continue to target both early and late stage investments. Some of Highland’s 25 limited partners in the U.S. include Harvard, MIT, Stanford, Yale, the Ford Foundation, Hewlett-Packard, and the Mayo Clinic. Also represented are three European institutions based in London, Munich and Zurich.

IBM Establishes $500 Million Fund

NORTH CASTLE, N.Y.– IBM established a $500 million global fund that will significantly enhance its Net Generation financing program and expand its support to fast-growing business-to-business Internet companies. IBM Global Financing will team with select venture capital firms to provide financing for IBM hardware, software and services to emerging Net Generation companies that have already completed their first round of venture capital financing. IBM inte

nds to expand its relationships with venture capital firms that have Internet companies in their portfolios, and will offer these companies access to additional capital for growing their IT infrastructure.

Fusient Media Ventures Incubator Launches with $30 Million in First Round Financing

NEW YORK — Fusient Media Ventures, a full-service content incubator committed to identifying, funding and distributing programming built around the Internet, launched, backed by a team of media, Internet and entertainment industry executives. Fusient’s founding partners are Brian T. Bedol, former Time Warner executive and creator and co-founder of Classic Sports Network, Stephen D. Greenberg, former deputy baseball commissioner and co-founder of Classic Sports Network, and Tom Lassally, former executive vice president of Warner Bros. The founding investors include Redpoint Ventures, whose partner Geoff Yang will serve on the board of Fusient, Allen & Company, Waterview Partners, Grotech Capital Group, Berkshire Partners and Monitor Clipper Partners. Fusient will operate as the early-stage content investment vehicle for its investors, evaluate new content business ideas and first-round investment opportunities, as well as develop new concepts internally that will be funded and packaged with talented management. As its partner companies grow, Fusient will work with its investors and other venture capital companies to provide the later-stage capital for accelerated growth.

LatinForce.Net Incubator Completes Funding

NEW YORK — LatinForce.Net, a new Internet incubator company created to develop e-businesses that target Hispanics in the US and Latin America, completed a first round of venture funding from institutional and individual investors and strategic partners. The company’s initial $18 million financing includes $5 million from two strategic partners, Z-Spanish Radio, a Hispanic-serving radio company, and Vista Media, the nation’s largest Hispanic outdoor company. The financing was led by Brown, McMillan & Co., a private equity firm based in San Francisco, which was joined by TSG Capital Group, The Hillman Company, and several individual investors, including Michael Fuchs, the former CEO of Home Box Office. Brown, McMillan’s investors include several institutional investors and current and former principals of Forstmann Little & Co., Integral Capital, Kohlberg Kravis Roberts & Co., Robertson Stephens & Co., and The Carlyle Group.

Who’s Who & Where

New Rainfinity CFO

MOUNTAIN VIEW, Calif.– Rainfinity, which provides scalable software solutions that improve the reliability and performance of Internet infrastructure and Web-based applications, appointed Steve Wong as chief financial officer. Most recently, he was with SQRIBE Technologies. At the same time, it was announced that company founder, Gil Margalit, will assume the position of executive vice president of strategy and corporate development with acting responsibilities of marketing and business development. Recently, the company completed

a $15 million second round of venture capital financing.


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