Category Archives: Venture Capital

Venture Wrap: Five Across For Cisco

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Cisco has announced it is acquiring social network builder, Five Across. The San Francisco-based company was founded in 2003, raised $2 million from Granite Ventures and Adobe Ventures in 2004 and have 11 staff.

Five Across has a social networking platform called the Connect Community Builder, which empowers companies to easily augment their websites with full-featured communities and user-generated content. In essence, they provide socnet functions to websites.

Dan Scheinman, Senior VP and GM of the Cisco Media Solutions Group sees this acquisition as an important step towards Cisco being positioned to assist its customers “evolve their website experience into something more relevant and valuable to the end-user.”

Cisco seems to have woken up to the fact that networking is not all pipes and plumbing. The people factor is the X-factor. In fact, check out their tagline: Cisco is the worldwide leader in networking that transforms how people connect, communicate and collaborate.

I suspect we’ll be hearing about more acquisitions in the social media space from these guys.

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Virtual Venture Wrap: Doppelganger goes to C

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Doppelganger, a San Francisco-based virtual world company has raised a Series C funding round of $5 million from Greycroft Partners.

CEO, Andrew Littlefield, prefers to call them a community entertainment company that builds virtual environments for the rest of us, aka non hardcore gamers.

Doppelganger initially raised a Series A of $2.5 m from Draper Fisher Jurvetson and a Series B of $8.5 m from Trident Capital, DFJ and Draper Richards. That’s a lot of dough for a virtual world play – but when you consider it costs them up to $250k to build one of their inworld characters you understand where the money is going. Hey guys, ever heard of user-generated content…

Andrew sees the market for 3D environment vendors to be akin to the nascent cable market. He sees Second Life as focusing on the older sci-fi demographic whereas they are angling to be the 3D MTV, with Habbo Hotel the Nickolodeon. Neat analogy.

At Yoick we agree that these interactive spaces will act mostly as a connection manager (the first C in CICS), at least initially, and we also agree that they will reach similar sizes as MySpace.

Virtual Worlds: A $100 billion opportunity

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Venture guy, serial entrepreneur and chairman of Second Life, Mitch Kapor said in an interview at the World Economic Forum in Davos that he sees virtual worlds as being a $100 billion opportunity.

When the PC was invented, nobody anticipated the spreadsheet, which I was very involved with, when the Internet became commercial nobody anticipated Amazon.com or eBay, and I have the same conviction that these virtual worlds are going to have killer applications that will just make it a huge industry.

Right on, Mitch.

Venture Wrap: LinkedIn, ROO and Headsprout

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In venture news this week, professional networking site, LinkedIn, has raised $12.8 million from Bessemer Venture Partners and the European Founders Fund. The post money valuation placed on the Palo Alto company was a cool $250 million.

The funding will be used to allow them to experiment with new products. They’ve recently been trialling LinkedIn Answers – a user gets to ask her contacts business questions – and launched LinkedIn Experts earlier this month – users can submit requests to experts for advice.

Seattle-based kids online learning company, Headsprout, has raised $8 million from Kaplan, an educational company, to focus on putting an end to illiteracy. The company was set up in 1999 and initially raised funding from Sofinnova Ventures, the Raisin Fund and Roser Ventures.

On the acquisitive front, News Corp. is reported to be making a $12 million investment into ROO Networks, a listed company that provides digital video solutions. Michael Arrington has picked up on the fact that this is not through Fox Interactive – who, he says, have been having separate conversations with Brightcove, a competitor to ROO.

Former Fox Interactive head, Ross Levinsohn must be shaking with laughter.

Fox is also said to be in talks to acquire ad optimisation company, Strategic Data Corporation.

Venture Wrap: Wikio, Kiptronic and Sun

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It’s shaping up to be another busy week in venture land:

* Kiptronic, a podcasting ad network company which has a marketplace of 47 million available downloads, has raised $4m in Series A funding from Blueprint Ventures and Prism VentureWorks. The existing angel investors who tipped in the seed round of  $400k, also contributed.

* Wikio has raised $5.3m in Series A funding from Lightspeed Venture Partners and Gemini Israel Funds. Wikio is best decribed as a mashup of Technorati, Digg and Google News and is based in Luxembourg.

* Private equity firm, Kohlberg Kravis Robert is reported to be investing $700m into Sun.

Venture Wrap: Wizen Up To Product Research

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San Mateo start up, Wize, assists people find the best products in less time than if they were searching for them on generic search engines like Google.

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How do they do this you may ask? They compile expert and user reviews and insert them into a scoring algorithm that outputs a Wize Rank – a single numerical score from 0 – 100 – that essentially uses the wisdom of crowds to alert consumers to products worthy of their attention.

Wize has raised $4million in  Series A financing from the Mayfield Fund and Bessemer Venture Partners. Michael Arrington covered this news recently in a post that was headed “Four Month Old Wize Gets $4m” – a number of folk have reacted to this heading with the WOTF knee jerker that the world of venture has gone all crazy again. I mean, how could a company that’s only been going for four months get $4 million in funding. So we yoicked around a bit and soon placated ourselves that Mayfield and Bessemer hadn’t gone nuts.

Wize’s CEO, Tom Patterson, had been an Entrepreneur in Residence at Mayfield, so this start up has been cooking for a while – it’s only been on the plate for 4 months, but the recipe is a tried and tested one. I’m a big fan of EiR’s and have been successfully running such a program over at NICTA for a few years now.

According to Raj Kapoor, managing director at Mayfield, “We started working with Tom as our Entrepreneur in Residence a year ago to revolutionize the product research space and zeroed in on Wize, as they have the most compelling proposition – giving the mass market consumer the simple answer on what product to buy when confronted with dozens of reviews and guides on the Net. By bringing together a breadth of data in an intuitive interface and simplifying the decision process, Wize will funamentally change the way users research products on the Web.”

Talking with the folk at Wize, I agree with their premise that while expert reviews are ideal for letting you know how a product compares to others in its category, user reviews are better at letting you know how a product performs over the long term in the real world.

Competition includes ViewScore, Nextag, Thefind and Shopping. Nothing wrong with a bit of healthy competition. It will be interesting to see how the space pans out as consumers oscillate between the comfort zone of a generic search and honing in on the right products based on collective knowledge of what works in various product categories. More power to the consumer!

Draper gets Meebo’d

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Meebo, which bills itself as a website for instant messaging from absolutely anywhere has raised a Series A funding round of $9 million – anyone recognise a trend in funding we’ve been covering this year — 9 is the number of choice.

This round follows the $3.5 million seed round they raised from Sequoia in December 2005 and Draper Fisher Jurvetson led the round. Venture capitalist extraordinaire, Tim Draper, has joined Meebo’s board.