VC Buzz – $439.15 Million in Today’s Deals


For the latest on cool Internet Start-Ups and their VC backers, point your browser to: http://www.internetVCwatch.com/



 


New in the News



Advanced TelCom Group, Alliance Entertainment, AudioBase, Big Shoulders InterTech Fund, Broadbase Software, CardioDynamics Intl, Communications Equity Associates, COMTEX News Network, eFrenzy, eNutrition, Financial Engines, Guidance Solutions, Hawk Holdings, iCastle.com, Interactive Music, Internet Broadcasting Systems, Internet Capital Group, ishoni Networks, Petopia.com, Pets.com, QXL.com, Sales.com, STSN, Tachion Networks, Technology Crossover Ventures, the-sticks.com, USLaw.com, ValueStar



 






Texas Pacific Group to Lead $175 Million Equity Investment in Advanced TelCom Group



SANTA ROSA, Calif.– Advanced TelCom Group Inc., an integrated communications provider serving mid-sized US markets, signed a definitive agreement with Texas Pacific Group and other private equity investors to invest $175 million in the company. This investment, combined with a prior equity round of $105 million and a $160 million credit facility, brings ATG’s total capitalr

aised since December 1998 to $440 million. TPG will be the largest investor in the new equity round. Other institutional investors include: Norwest Venture Partners, Norwest Equity Partners, JP Morgan Investment Corp., The Centennial Funds, First Union Capital Partners, Alta Communications, Telecom Partners, BCI Partners, Duff, Ackerman & Goodrich, AT&T Ventures, and Union BanCal Equities.


http://www.callatg.com






STSN Secures $55 Million in Funding



SALT LAKE CITY– STSN, a high-speed Internet technology and service provider for vertical markets, closed a second round of equity funding and has secured debt funding from: APV Technology Partners, BankOne, First Media ST Holdings, Intel Corp., Marriott International, Third Coast Capital, ThomVest, TransAmerica Technology Finance, VantagePoint Venture and Communication Partners, and Venture Frogs Fund. The additional $55 million will provide STSN with the resources necessary for continued growth, market expansion, and an aggressive installation schedule. APV Technology Partners and several key private investors provided the first round of funding for STSN.


http://www.STSN.com






Guidance Solutions Announces $47 Million in Funding



MARINA DEL REY, Calif.– Guidance Solutions Inc., an online business developer and e-business incubator focused on transitioning traditional businesses and existing brands into world-class online businesses, announced that two private investment firms have made an investment of $46.6 million in its securities. The investment includes approximately $35 million from a fund sponsored by Clayton, Dubilier & Rice Inc. and $11.6 million from BCI Partners. Both investing companies will receive representation on the board.


http://www.guidance.com


http://www.cdr-inc.com


http://www.bcipartners.com






Petopia.com Barks Up Additional $35 Million in Funding



SAN FRANCISCO– Petopia.com, an online pet store, raised an additional $35 million in venture financing from existing investors, Technology Crossover Ventures, PETCO Animal Supplies Inc. (Nasdaq:PETC), [email protected], the Internet investment company established by Group Arnault and new investors Attractor Investment Management Inc., BancBoston Ventures and Comdisco Inc. (NYSE:CDO).


http://www.petopia.com


http://www.petco.com


http://www.tcv.com






Siebel Spins Out Sales.com; Sales.com Secures $27 Million in Funding



SAN MATEO, Calif.– Sales.com Inc., a Web destination for sales professionals, became an independent, private company. Formerly a wholly-owned subsidiary of Siebel Systems Inc. (Nasdaq:SEBL), Sales.com recently secured $27 million in private financing from Sequoia Capital, U.S. Venture Partners, and Siebel Systems. Sales.com delivers a tightly integrated suite of tools and services tailored to maximize a sales professional’s time, effectiveness, and productivity. This includes sales productivity software, up-to-the-minute business intelligence on top accounts and competitors, a prospect database of more than 15 million leads, articles, and tips from sales experts, community-building networking forums, virtual office capabilities, and a full-service travel agency.


http://www.sales.com


http://www.siebel.com






eNutrition Completes $20 Million Round of Funding



WOODLAND HILLS, Calif.– eNutrition, an Internet resource for nutritional products and information, announced the successful completion of a $20 million round of private financing led by Brentwood Venture Capital, with additional investments from idealab Capital Partners and Entertainment Media Ventures. eNutrition is an online retailer of nutritional supplements, vitamins, minerals, herbs, sports nutrients and other related products. eNutrition mixes commerce with content to provide health-conscious consumers with unbiased information on an array of relevant health topics. Sandy Climan, managing director of EMV, will sit on eNutrition’s board of directors.


http://www.enutrition.com


http://www.icp.com


http://www.brentwoodvc.com






$20M Investment Round Is Sweet Music to AudioBase



SAN FRANCISCO — AudioBase, a provider of streaming audio services for online marketers and music publishers, closed its latest financing round of $20 million. Bay Partners, which provided AudioBase’s original venture financing, was joined in this round Hambrecht & Quist Access Technology Partners; personal investor Charles R. Schwab; Sony Music Entertainment; Texas Pacific Group; and Trans Cosmos USA. Charles R. Schwab will join its board of directors.


http://www.audiobase.com






Pets.com Raises Fourth Round of Funding



SAN FRANCISCO– Pets.com, an online retailer of pet products, information and resources, raised a $15 million fourth round of funding which included several new strategic partners. This is a follow-on financing from Pets.com’s nearly $35 million

round in November which included Amazon.com, Hummer Winblad Venture Partners, Bowman Capital and Phoenix Partners. Combined with nearly $95 million raised by Pets.com in its first three rounds of funding, the investment in the online pet site totals nearly $110 million. Pets.com’s new strategic investors in this round include Comcast Interactive Capital, the venture capital affiliate of Comcast Corp.; ETF Group, a venture capital firm which makes investments in U.S. companies that seek to establish operations in Europe; Pacific Century CyberWorks Limited, the technology flagship of the Pacific Century Group; and World Online, a European ISP. In addition, one of Pets.com’s current investors, Hummer Winblad Venture Partners, also contributed to this round of funding.


http://www.pets.com






Post-Newsweek Stations Partners With Internet Broadcasting Systems



NEW YORK, and WASHINGTON, DC– Post-Newsweek Stations Inc, the broadcast subsidiary of the Washington Post Company (NYSE: WPO) and Internet Broadcasting Systems Inc., a company leading the convergence of local television and the Internet through its national network of local web channels, announced an agreement in principle to jointly develop Web sites for the six Post-Newsweek stations, which will become part of the growing IBS network of more than 40 local Web channels. Post-Newsweek Stations has also agreed in principle to invest $10 million of cash in IBS in return for an 11% equity interest in the company. Hearst-Argyle, CanWest, and St. Paul Venture Capital have substantial equity investments in IBS.

In other news, former Turner Broadcasting executive, Andrew Goldman, has joined IBS as executive vice president of sales and business development. Goldman comes to the company after 18 years of Internet and broadcast, sales and marketing experience.


http://www.ibsys.com






Cyrk Invests $10 Million in Alliance Entertainment



GLOUCESTER, Mass.– Cyrk Inc. (NASDAQ: CYRK) made a $10 million strategic investment in Alliance Entertainment Corp., a national distributor of music, video, DVD and games and a developer of both e-commerce-enabling databases and proprietary websites. In a transaction which closed recently, Alliance, an affiliated company of The Yucaipa Companies, acquired Digital On-Demand, a supplier of digital entertainment into retail environments.


http://www.cyrk.com


http://www.aent.com


http://www.digital-demand.com






eCompanies Makes Strategic Investment in ValueStar



OAKLAND, Calif.– ValueStar Corp. (OTCBB:VLST), a national rater

of local service companies, announced a $6.05 million strategic investment from eCompanies Venture Group L.P. This represents an ownership of approximately 15% of ValueStar on a fully-diluted basis. Other participating investors brought the total funding to $9.05 million which included follow-on investments from institutional investors Seacoast Capital Partners, Pacific Mezzanine Fund and Tangent Growth Fund.


http://www.valuestar.com


http://www.ecompanies.com






ishoni Networks Secures $8.5 Million Venture Funding



SANTA CLARA, Calif.– ishoni Networks, a developer of broadband communication gateway technology, secured $8.5 million of venture funding to build a next generation broadband gateway platform with integrated voice features. Investors include venture capital firms Bessemer Venture Partners, Infinity Capital L.L.C./Information Technology Ventures and Invesco. ishoni Networks is developing a next-generation, highly integrated gateway platform from which any systems vendor can build gateway products that provide easy voice and Internet services over a single broadband connection. Broadband gateways allow end-user customers to combine high speed “always on” Internet access with their voice service and media-rich content over a single connection. In turn, gateways enable service providers to offer new, revenue-generating, bundled services over cable or xDSL to millions of subscribers.


http://www.ishoni.com


http://www.bvp.com


http://www.ITVentures.com


http://www.invesco.com






CardioDynamics Completes $3.3 Million Private Placement for Internet Medical Product Development



SAN DIEGO– CardioDynamics International Corp. (Nasdaq:CDIC), manufacturer of BioZ noninvasive digital cardiac output monitoring systems, completed a $3.3 million private placement of common stock to institutional investors, providing the company with capital to fund research and development of an Internet-based medical product family and continue its domestic and international sales expansion. Participants of the private placement include Veritas Societe Generale, the company’s second largest institutional shareholder, and three additional European institutional investors. The investors purchased the unregistered common stock with a four-month holding restriction at a 9% discount to the 30-day average closing bid price.


http://www.cardiodynamics.com






Interactive Music Receives $3M Equity Funding Commitment



NEW YORK– Interactive Music Inc. (OTCBB:SONG) announced that it has received a commitment letter from Charlotte, NC-based Avenel Financial Group to provide a minimum of $3 million in equity funding. The commitment is contingent on the company’s closing its acquisition of zebramart.com Inc., and Avenel reaching agreeable financing terms with both the company and zebramart.com. Recenly Interactive Music announced that it executed a definitive stock purchase agreement to acquire in excess of 80% of the issued and outstanding stock of zebramart.com Inc. The closing is scheduled for on or before Dec. 14, 1999. Upon closing of this transactions, the company intends to apply for a name and symbol change. The proposed name will be zebramart.com Inc. Following the closing date; zebramart’s management will assume the management of Interactive Music. Inc.


http://www.zebramart.com






COMTEX News Network Receives $1.3 Million in Private Offering



ALEXANDRIA, Va.– COMTEX News Network, Inc.(OTCBB:CMTX), a real-time news source distributed by over 375 Internet services, announced the closing of a private round of funding. The Next Generation Fund LLC, New River Capital Partners, Wien Securities, members of the board of directors, management team and other private investors purchased 1,300,000 shares of restricted common stock at $1.00 per share.


http://www.comtexnews.net






Internet.com Venture Fund II Adds the-sticks.com to Investment Portfolio



DARIEN, CT–internet.com Venture Fund II, part of the affiliated venture arm of internet.com Corp. (Nasdaq: INTM), publisher of this website, announced the closing of its investment in the-sticks.com. The investment is part of internet.com Venture Fund II’s expanding portfolio of early-stage investments in Internet content properties and is the first non-US investment for the fund. internet.com Venture Fund I and II have invested in 15 properties to date.

the-sticks.com (http://www.the-sticks.com) is a comprehensive resource guide to entertainment, arts, leisure, social activities and shopping services for the 47 counties (outside of London) that comprise England. the-sticks.com is complemented by the affiliated monthly newspapers that serve these counties, reaching over 500,000 readers a month in the United Kingdom.


http://www.internet.com






USLaw.com Launches Online Legal-Service; Grand Central Holdings Leads First Round



SILVER SPRING, MD — USLaw.com launched an online legal service and completed its first round of financing which was led by Grand Central Holdings and included Broadview Associates. Terms were not disclosed. Users can obtain legal information by conducting a one-on-one live chat with qualified lawyers or use the site to locate lawyers in specific practice areas and geographic locations. In addition, USLaw.com includes a library of over 500 articles

on numerous legal topics ranging from age discrimination to consumer rights to criminal statutes. USLaw.com is the operating name of AmericasLawyer.com Inc., founded as a joint venture between LawCorps Development Company, Venture Consultants, and Dispute Resolutions.


http://www.uslaw.com


http://www.grandcentralholdings.com







Internet Fact of the Day



Germans spend an average of five hours per month online, according to a recent study by Media Metrix. UK viewers spend an average of four hours, and the French clock in at three hours per month.






Internet Capital Group to Sell $50 Million of Common Stock



WAYNE, Pa.– Internet Capital Group Inc. (Nasdaq:ICGE) signed an agreement to sell 609,533 shares of its common stock to AT&T for $50 million in a private placement. The purchase price and number of shares were based on Internet Capital Group’s closing price on Dec. 3, 1999, as adjusted its 2 for 1 stock split to be paid on Dec. 10, 1999 to all holders of record of the common stock on Dec. 6, 1999. This private placement is expected to close during December 1999. In addition, Internet Capital Group and AT&T intend to explore a variety of potential strategic relationships. The private placement to AT&T Corp. is not conditioned upon Internet Capital Group’s public offerings.


http://www.icge.com






Communications Equity Associates Acquires Regent Associates



TAMPA, Fla.– Communications Equity Associates International Ltd., an affiliate of Communications Equity Associates LLC, a US-based investment and merchant banking firm specializing in the telecommunications, entertainment and new media industries, announced the acquisition of Regent Technology Limited, the holding company of Regent Associates Ltd. Regent is a mergers and acquisitions advisor for European companies in the Information Technology sector.

CEA is a privately held company specializing in investment banking, merchant banking, corporate finance, strategic consulting and related services for clients in cable, broadcast, telecommunications, entertainment and new media. Regent Associates is a specialist in all aspects of corporate development, including acquisitions, divestments, company sales and mergers, valuations and capital raising for the IT. Regent has completed nearly 250 transactions and has many of the world’s largest IT companies as regular clients. Last year over 70% of Regent’s acquisition deals were cross border. Both companies are moving strongly into the private equity and fund management business. CEA has $492 million under management in six region-specific, private funds, all of which are targeted at the high growth industries of telecommunications, media, and the Internet. CEA is currently developing additional funds in excess of $1 billion.


http://www.ceaworldwide.com


http://www.regent.co.uk






Broadbase to Acquire Rubric in $330 Million Deal



MENLO PARK, Calif. — Broadbase Software Inc.(Nasdaq: BBSW), a provider of e-business analytic solutions, has entered into a definitive agreement to acquire privately held Rubric Inc., an industry leader in eMarketing Automation applications. The Broadbase-Rubric integrated solution will enable dot com companies to increase traffic and generate e-commerce revenue by automating customer acquisition, retention and growth campaigns. Broadbase will issue approximately 3.6 million shares of its common stock to the shareholders of Rubric, or approximately 14.5% of the combined company on a fully diluted basis. The transaction will be accounted for as a purchase. Rubric investors include Brentwood Venture Capital, Menlo Ventures, the Cambridge Technology Capital Fund, TL Ventures, Amerindo Investment Advisors, and RRE Investors.


http://www.rubricsoft.com


http://www.broadbase.com






QXL.com Acquires Largest Norwegian Auction Site



LONDON — QXL.com plc (Nasdaq: QXLC) (LSE: QXL.L), the pan-European online auctioneer, announced the acquisition of the largest Norwegian online auction site, DinSide Auksjon, for a total consideration of £13.2m ($21.45 million) satisfied by the issue of 1,296,154 QXL.com Ordinary Shares. DinSide Auksjon is the largest consumer-to-consumer and business-to-consumer auction web site in Norway, with over 40,000 members and 7,500 concurrent auctions. Tore Andre Godager, managing director of DinSide Auksjon, will join QXL.com as managing director of the Scandinavian region, based in Oslo.


http://www.qxl.com


http://auksjon.dinside.no






Technology Crossover Ventures Invests $111.8 Million in Two Months



PALO ALTO, Calif.– Technology Crossover Ventures announced that it has invested $111.8 million in 12 Internet enterprises during October and November. Since July 1, the venture firm has invested more than $250 million. TCV’s most recent investments include Total Sports, Cameraworld.com, eBags, Great Entertaining, ICON Holding Corp., Mayan Networks Corporation, Noosh, OurHouse, Spree.com, XACCT Technologies Ltd., Evite.com, and Zone Trader.com. These new investments expand TCV’s Internet portfolio to more than 70 companies since the firm’s founding in 1995.


http://www.tcv.com






Baxter Investments and Qwest Communications Launch Hawk Holdings



NEW YORK — Baxter Investments LLC announced a joint venture with Qwest Communications International Inc. (Nasdaq: QWST) to identify and partner with emerging Internet companies. The new venture –Hawk Holdings LLC — will accelerate the creation and delivery of broadband applications by providing companies with a combination of capital, infrastructure and advice. Initially, Hawk’s investments will be in financial services, media and exchange service providers — three major sectors suited to large-scale Internet commerce based on next generation infrastructure.


http://www.hawkholdings.com






Mayor Daley, divine interVentures Unveil Plans for City’s First Incubator Campus for Internet Businesses



CHICAGO — Mayor Richard M. Daley announced three initiatives that will help Chicago enhance its “unmatched potential” as a technology economy leader in the next century. The initiatives are: a new state-of-the-art incubator campus for Internet businesses proposed by the Chicago-based divine interVentures inc; the city’s first strategic technology action plan, developed by the Mayor’s Council of Technology Advisors; and the Big Shoulders InterTech Fund, one of the largest Chicago-based early-stage seed capital funds. divine is an Internet holding company that provides entrepreneurs and corporate spin-offs with strategic guidance, operational support and business services to create dynamic business-to-business Internet commerce leaders.


http://www.divineinterventures.com







Who’s Who & Where



iCastle.com Names Michael C. Toll President and CEO



SAN JOSE, Calif.– iCastle.com, an Internet home improvement portal, announced that Michael C. Toll has joined the company as president and chief executive officer. Most recently, Toll was president of Sears Home Improvement Services, a $1.1 billion annual revenue division of Sears Home Services. ICastle.com is venture-backed.


http://www.iCastle.com






Tachion Networks Hires CFO Thomas Amato



EATONTOWN, N.J.– Tachion Networks Inc., creator of the Collapsed Central Office for communications carriers, has added to its core management team, naming Thomas G. Amato as chief financial officer. Amato brings more than thirty years experience at high-profile technology companies including Intel, Rockwell and Dialogic. He will play a major role in leading Tachion to an Initial Public Offering planned for 2000. Tachion Networks received first-round funding from Walden International Investment Group and Morgenthaler Venture Partners.


http://www.tachion.com






Financial Engines Appoints Ray Sims Chief Financial Officer



PALO ALTO, Calif. — Financial Engines Inc. announced the appointment of Raymond J. Sims as the company’s new chief financial officer. Sims joins Financial Engines from Raychem Corp. where he was treasurer and senior vice president. The company is funded by Foundation Capital and New Enterprise Associates.


http://www.financialengines.com






eFrenzy Hires Key Senior Execs from iVillage and nytimes.com



SAN FRANCISCO — eFrenzy, an online marketplace for buyers and sellers of services, announced that it has added two veteran Internet executives to its management team. Stephen Lake, formerly of iVillage and Reuters NewMedia, joins as CEO bringing more than 20 years of Internet, management and finance experience to eFrenzy. Noah Mercer, former director of strategic technology at nytimes.com, joins as CTO, bringing critical technical expertise to handle rapid growth and heavy consumer use. eFrenzy has received backing from key institutional investors.


http://www.efrenzy.com



 






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