Tag Archive | "skype"

Who’s afraid of young startups? An increasing number of venture capitalists

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Venture-capital investors, apparently spooked by declining returns over the past ten years, raised less money for investment in early- and mid-stage startups in 2010 and flocked to late-stage startups.

Funding available for startups was down 14 percent in 2010, to $11.6 billion, from $13.5 billion in 2009, according to a report by Dow Jones. 119 funds raised money for investing in startups last year, compared to 133 funds in 2009.

Despite some positive activity in the exit market, it looks like investors are still less willing to take significant risks on early- and mid-stage startups that haven’t found some significant traction yet. Exit activity was up 25 percent in 2010 when compared to 2009, but the average size of each exit was lower than what was paid out before the recession began in earnest in 2008.

Eight late-stage funds — geared toward startups that have already seen some success and become established — accounted for $1.5 billion worth of venture capital investment last year. That’s up 68 percent from $887 million in 2009. Venture capital firms raised around $390 million for late-stage investments in the fourth quarter last year alone.

Multi-stage funds, which are a little more flexible and account for the majority of fundraising in 2010, raised $5.4 billion in 2010. Venture capital fundraising was still down 26 percent, from $7.3 billion in 2009. That’s largely a result of most major firms downsizing their funds, such as Menlo Ventures’s $400 million fund that’s about a third the size of its earlier funds.

Early-stage investment funds raised $4.8 billion across 73 funds. Fundraising for early-stage investment funds was down 12 percent from $5.5 billion in 2009. A sizable chunk of last years’ early-stage investment fundraising can be attributed to Andreessen Horowitz’s latest fund, which racked up $650 million, in part on the promise of partner Marc Andreessen’s deftness with picking early-stage startups. But Andreessen Horowitz invests across a range of startup sizes, including its blockbuster investment in Skype.

The other sizable cunk of early-stage investment fundraising came from angel investors turning to venture funds, according to the report. Angel investors are wealthy individuals that are typically responsible for a company’s first batch of seed funding or institutional fundraising. Angel funding has become increasingly popular lately — so much so that the SEC is even reconsidering its rules for disclosure of funding by angel investors.

But with exit activity increasing, 2011 looks better for venture capital funds. A survey conducted by Dow Jones indicates that most venture capital firms and angel investors plan to push additional funding into startups this year. More than half of them expect venture-capital funding to pick up this year. It looks like cloud computing, which lets developers offload programs that require heavy-duty computing firepower onto remote servers and deliver the results through the Internet — will help usher the venture buzz back in this year, according to the report.

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Article courtesy of VentureBeat » deals

Skype founder develops a passion for fashion via Fashiolista

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Atomico Ventures, the investment fund of  Skype co-founder Niklas Zennström, just made a seed investment of $500,000 in Fashiolista, an online fashion community. Having seen Zennström in person, I can vouch for the fact that he is no dandy, so his investment firm must see the potential for solid returns in the area of fashion.

Fashiolista launched in 2010 and provides a “Love” button, which functions in a similar way to Facebook’s “Like” button. Users install a toolbar which allows them to “love” an item from any shopping site and add it to their collection. You can also follow other members to get updates on their latest fashion finds. 1 million items are currently “loved” per month.

Fashiolista is most popular in Brazil and the Netherlands but has members in over 100 countries. The biggest user group is, unsurprisingly, female and aged between 15 and 25. The business model is based on advertising and affiliate fees. In the future, the founders plan to add group deals and marketing intelligence since the “loves” can be used to spot trends in real-time.

Fashiolista launched in 2010, is based in Amsterdam and has 10 employees. Prior to this investment the company was privately funded.

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PrimeSense raises round for motion-control chips

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PrimeSense has raised a round of private equity funding as part of its plan to expand its motion-control chips beyond Microsoft’s Kinect game console product.

The funding comes from Silver Lake Sumeru, a private equity firm. The amount wasn’t disclosed. But it was likely a hefty round since PrimeSense is sitting in a good spot now. Microsoft has scooped up two other rivals, so there aren’t as many chip suppliers doing 3D sensing.

“A year ago, this was like science fiction,” said Inon Beracha, (pictured above), chief executive of PrimeSense. “Seeing the response of the consumer to Kinect is overwhelming. I heard a four-year-old was explaining to his father how to use Kinect. It’s so natural.”

PrimeSense designs chips that can capture the movement of people in a 3D space. It processes those images and feeds them to software that translates them into control inputs for game consoles.

PrimeSense’s chips are used in the 3D camera that is the backbone of the Kinect motion-control system, which saw spectacular sales of 8 million units since its debut on Nov. 4. With Kinect, Steve Ballmer, chief executive of Microsoft, bellowed at his keynote speech at the Consumer Electronics Show, “You are the controller.” That means you use your body to control the game. It took a lot of preparation to line up the supply chain for the Kinect launch, Beracha said.

Tel Aviv, Israel-based PrimeSense is now expanding to customers in the TV and PC markets. Asus showed off its Wavi set-top box, which can wirelessly connect to both a TV and a PC. It takes content stored on the PC and displays it on the TV. The PrimeSense chips allow users to surf through the content using their own hand and body gestures.

Asus plans to launch the Wavi in the second quarter. Other companies are also planning to launch PrimeSense-based systems this year, Beracha said. One of the customers is in the IPTV, or internet protocol TV, market.

PrimeSense calls its technology Natural Interaction Technology. It enables 3D mapping of everything in a room and gesture recognition. It can be used in consumer electronics devices such as TVs, game systems, and PCs. It allows people to get rid of their remote controls and use natural motion instead.

Silver Lake Sumeru is a $1.1 billion middle market tech-focused fund started by Silver Lake Partners, the Menlo Park, Calif.-based private equity firm with $14 billion in assets. Silver Lake’s investments include Skype and Avago. Paul Mercadante, managing director of Silver Lake Sumeru, said that the 3D gesture-recognition technology could revolutionize the way consumers interact with living room devices. Mercadante is joining PrimeSense’s board.

The technology isn’t perfect yet. PrimeSense is working on improving the field of view so that devices such as the Kinect can recognize movement in a wider 3D space. The company is also trying to improve the accuracy, or resolution, of the recognition.

Previous to today’s funding, PrimeSense had raised $39.4 million from investors including Gemini Israel Funds, Genesis Partners and Canaan Partners. Rivals include Optrima, a sister company to Softkinetic. Others rumored to be working on technology include Samsung, PMETec, and Mesa Imaging. Check out the video of Beracha using the Asus Wavi below.

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Article courtesy of VentureBeat » deals

Nabto’s nabs $1 million in funding for tiny web servers

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Nabto makes web technology for devices like medical appliances (see Medotech’s Grindcare) and building automation devices. The Danish startup just closed a new funding round combining funds from previous investor Østjysk Innovation, the Danish government-backed fund Vækstfonden and some private investors. The new financing will mainly be used to boost Nabto’s sales and marketing.

Nabto’s target market is home or industrial devices which are remotely controlled or whose data needs to be queried from a web browser. More broadly it applies to the type of interconnected device which will form the upcoming “Internet of Things“. Many of the target devices will be located behind a firewall and have dynamically assigned IP addresses which is problematic when it comes to locating and connecting to them. The web client can be a PC, tablet, mobile phone or any other Internet connected device.

Nabto combines HTTP and VoIP technologies to minimize the processing and memory requirements of a web server embedded in the device. This is done by moving the  heavy lifting from the device to the web client (via a browser plug-in) and an additional mediation base station. The base station keeps track of the locations, i.e. the IP addresses, of all the devices it manages.

Instead of the web client connecting in the normal way to the device’s web server (which requires locating it and getting past the firewall), it contacts the base station which mediates a one-to-one connection to the device. This connection is of the same type as that used in Voice over IP (VoIP)  applications like Skype or other peer-to-peer (P2P) applications. P2P is more scalable for large numbers of devices. Nabto’s product also provides security features like authentication and encryption.

Device manufactures buy a licence per device for the web server and one or more base station. The device software’s footprint ranges from 1 Kilobyte up to 2 Megabytes and costs $1.25-5 depending on the number of devices. Target devices must have an Ethernet, WiFi or GSM or other type of modem to connect to the Internet.

According to CEO Carsten Rhod Gregersen, proprietary systems built by the device manufacturers themselves are the biggest competitors. Other competitors might be companies who build home gateways or central device management services like Google Power Meter but Gregersen argues that most manufacturers don’t want to use an external service shared with the competition.

Nabto was founded in 2007, is based in Aarhus, Denmark, has 10 full-time employees and has previous raised $1 million in private and seed funding.

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Article courtesy of VentureBeat » deals

Mingleverse picks up $1.4M in seed funding for video conferencing with cardboard cutouts

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Video-conferencing service Mingleverse announced today that it has raised $1.4 million in a seed funding round to help expand its social network version on Facebook.

Think of Mingleverse as Skype meets Second Life: You get voice over IP with a silly avatar. Mingleverse users can chop their faces out of an old photo and duct tape it to any randomly generated avatar. The video conferencing service then drops all those avatars into one of a number of rooms.

Those rooms can be either 2D or 3D environment, and Mingleverse provides users with “3D voice chat.” This means that the sound coming out of a user’s computer is similar to what they would hear if they were actually standing in the room with other users. The pitch and intensity of the sound is dependent on where their avatars are standing in the mingle room with respect to other Mingleverse users.

Mingleverse lets users then display a number of things on the walls of the room. They can switch to a live webcam feed and plaster it on one of the walls. They can also display things from their computer, like photos and videos from YouTube and Justin.tv. If a business is using Mingleverse for its services, it can even slap advertising on the walls to generate a little bit of extra revenue.

It’s a little surprising to see new entrants in the consumer video conferencing sector right now given that there are a large number of powerhouses. The obvious competitor is Skype, which allows free Skype-to-Skype video calls and conferencing. But companies like Cisco and Microsoft are also making a play to enter the consumer-facing video conferencing segment.

Then there’s the obvious enterprise play here. For business users that are looking for a newer teleconferencing service, there’s a premium version that allows for a greater number of people to be present in one room and enables desktop sharing. The service is free for up to 5 people in a chat room, and then costs $5 a month for up to 25 people in one room. The cost goes up to $9 a month for up to 50 people in a video conferencing room. It’s still relatively cheap for a web service, but this is a space that Cisco has all but dominated for several years, and it will be difficult to crack into.

This is the second round of seed funding the company’s been able to secure since it was founded in 2008. The Canadian company has raised $1.84 million to date, and this round of seed funding was led by Yaletown Venture Partners and a number of angel investors. Mingleverse’s co-founder, Ron Stevens, also invested a chunk of the $1.4 seed round — although the company wouldn’t specify how much.

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Seedcamp, Europe’s Y Combinator, closes $4 million fund

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Seedcamp, a seed fund that is best described as Europe’s version of Y Combinator, just announced the closing of its second fund of $4 million. This fund is 50 percent larger than the first fund, raised in 2007.

New investors include Notion Capital in the UK, 360 Partners from France, Team Europe in Germany, Ahti Heinla from Skype, and Lars Hinrichs the founder of Xing. Existing investors such as Atlas Venture and Index Ventures are also on board. According to Seedcamp CEO Reshma Sohoni, the objective was not only to raise new money but to add investors who can widen Seedcamp’s geographical reach.

Seedcamp provides seed investment of up to $67,000 in exchange for 8 to 10 percent of the startup in question. The fund stages events all over Europe and beyond that culminate in 20 or so companies being selected to participate in the annual Seedcamp week in London. Following an investment, startups spend three months in London working with mentors to develop their product.

Seedcamp’s ideal trajectory for a startup is that it will attract an external investment of $340,000 – $1.35 million within 3-6 months of receiving the Seedcamp investment. Erply (received funding of $2.7 million) and Zemanta (received funding of €3.18 million) are among the most successful investments made by Seedcamp in its three-year history. Two companies, Jordan-based Talasim and Palo Alto, Calif.-based Mobclix, have had successful exits.

Since Seedcamp launched, it has received over 1,500 applications but invested in only 22 companies. The selected companies have so far come from 12 countries. Many of the startups that attracted venture backing came from tech-talent hotspots like Estonia, Romania and Slovenia.

The new fund will allow Seedcamp to make more investments and extend its geographical coverage. In the next year, Seedcamp events are planned in New York, Singapore, India and South Africa. The fund also intends to work more closely with corporations. IBM’s Smartcamp competition, whose global finals take place this week in Dublin, is a Seedcamp “clone” focused on entrepreneurs that are working on technology for a smarter planet.

Seed investing is a growing trend in Europe. Techstars‘ first affiliate outside the U.S., Copenhagen’s Startup Bootcamp, just put the first batch of startups through its three-month program. It’s striking how few of the teams in the program are Danish. Like Seedcamp, they come from all over Europe and as far afield as South America. Another established seed investment program in Europe is Italy’s H-farm. And Index Ventures announced a seed investment fund in April this year that will also cover Europe.

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Article courtesy of VentureBeat » deals

Andreessen Horowitz raises $650M fund

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Andreessen Horowtiz has confirmed earlier rumors that it has raised a $650 million fund, less than a year after it raised its first $300 million fund.

For Netscape buddies Marc Andressen and Ben Horowitz, that means they will be busy pouring a lot of money into Silicon Valley startups. For those already in the portfolio of the prominent venture capital fund, it likely means future rounds of funding will be in the cards.

Techcrunch reports that the fund now has an investment staff of 18 and a portfolio that includes Skype, Zynga and Foursquare. The two men are in the unique position of being entrepreneurs who have sold two companies for more than $1 billion each (Netscape and Opsware). Andreessen sits on the boards of Facebook and Hewlett-Packard. You can’t really get more A-list than that. Hopefully, these guys will be able to get into any fancy restaurant they want now. In fact, they have so much money they might open some restaurants.

Horowitz said the fund isn’t larger because they didn’t want the size of the fund to dictate the pace at which they make investments. They would rather go raise money again if things go well than to have to rush to find good deals because they have too much money to invest.

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Qualcomm scoots into mobile software with iSkoot acquisition

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Qualcomm, which manufactures chipsets for some of today’s most popular smartphones, is making a move into software development with its acquisition of mobile app developer iSkoot today.

iSkoot gives Qualcomm a way to package various social networking and website feeds on remote servers and ship them off to phones in a less data-intensive way. The process — similar to “push” notifications in most smartphones today that send alerts to phones instead of the actual data — should cut down on the strain on wireless networks, something valued by the wireless carriers and network operators who are Qualcomm’s customers.

iSkoot has been working for a while on making cheap phones smarter, a goal which should be advanced by Qualcomm’s broad set of customers in the wireless business.

The acquisition carries an implicit acknowledgment of the changing mobile landscape, where lines are blurring between software, hardware, and network providers. Companies can’t stick exclusively to hardware, as Nokia has shown with its slow decay. Nor can companies develop software exclusively, as Microsoft had earlier shown with its weaker Windows Mobile platform.

The most successful mobile companies work on both the hardware and the software. Apple manufactures its own chipset, the Apple A4 processor, and its own phone in addition to providing the software for it. Microsoft, with its new Windows Phone 7 platform, closesly specifies the hardware device makers must use. And Research in Motion — which produces the BlackBerry, its accompanying operating system, and crucial messaging services — still remains one of the most successful enterprise mobile platforms.

More broadly, hardware makers like Cisco and Intel have aggressively added to their software holdings, most recently with Intel’s $7.7 billion purchase of security software maker McAfee.

San Francisco, Calif.-based iSkoot was acquired by the Qualcomm Innovation Center, a subsidiary of Qualcomm. Founded in 2005, iSkoot began offering its aggregated social networking features in 2009, and has some experience with services that transmit voice data over the internet with its Skype applications developed in 2006.

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Cisco Has Not Had Talks About Acquiring Skype, Source Says

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Rumors that Cisco (CSCO) has been discussing an acquisition of Skype are not true, according to a source close to Cisco.
“There have been no talks between Cisco and Skype,” the source told Tech Trader Daily this morning.
TechCrunch yesterday had reported that Cisco has made a bid for Skype.
Skype, a voice [...]

Article courtesy of BARRONS.com: Tech Trader Daily

Cisco: Bidding For Skype?

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Cisco Systems (CSCO) has made a bid for Skype, according to TechCrunch, which attributes the information to “one of our more reliable sources.”
Skype is in registration with the SEC for an IPO.
According to the Tech Crunch post, Google was also “rumored to be sniffing around Skype, but antitrust concerns [...]

Article courtesy of BARRONS.com: Tech Trader Daily