Reports

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Digital Media

Raising $185 million in funding from Advanced Equities Financial Corporation, Carl Icahn and New Enterprise Associates, mobile content management and delivery specialist Motricity used $135 million of the funding to purchase fellow mobile media and access tool provider InfoSpace Mobile. The remaining $50 million will be put toward general business development, according to the company.

Heavy, Inc. secured $10 million in funding from Polaris Venture Partners, bringing total investment in the last two years to $22.3 million. The multimedia destination site targets the young male demographic, and has also made moves to expand into offering services for independent content creators wanting to leverage Heavy's player technology and advertiser portfolio.

Director of Corporate Media Strategy Jeremiah Owyang left PodTech Network shortly before the company secured $1 million in additional funding in Q3. Then founder John Furrier stepped down as CEO and star spokesperson Robert Scoble left in Q4. The company has refined its focus on creating sponsored content for clients such as Intel and Symantec, and raised an additional $300,000 in bridge financing just before the close of the year.

eCommerce

Way Systems, Inc. which received $22.4 million in a Series C round led by Bessemer Venture Partners. The funds will be used to support WAY’s growth, which has more than doubled in the past three years.

Xoom Corporation, an online-to-offline international money transfer service, received $20.29 million in a Series E round led by DAG Ventures. In recent times, Xoom has been expanding its services both nationally and internationally. In November, it announced the ability to transfer to any bank in the US, Canada, UK, Poland, Germany, Australia and the addition of 450 money transfer locations in Mexico.

Software

As always in the software sector, investments are broad. Nowadays, there is less appetite for pure consumer plays although angel investors are still active. Instead, investors are looking at less risky models where the emphasis is on infrastructure style plays or additional investment in proven companies. AppTrigger for example raised $21.5 million led by CenterPoint Ventures. AppTrigger provides a new type of development environment for the telecommunications industry where time to market is critical and where new services are constantly evolving yet have to fit into complex IT infrastructures.

Healthcare continues to attract investment in those areas where innovation can make a ready impact. Medvantx raised $14.3 million from Polaris Venture Partners to help develop its consumer medication management service while MedAptus which supplies healthcare charging solutions, raised $11 million from Boston Millennia Partners. Continuing the medical theme, Medefinance secured $10 million to further develop its healthcare analytics business from Emergence Capital Partners and others.

Imprivata raised $12.5 million. The company provides solutions that offer a practical and affordable means to achieve regulatory compliance while also improving security, reducing IT help desk costs, eliminating password management problems, and improving user productivity. It has carved out a strong position in the healthcare sector. Investment came from General Catalyst Partners and others. In the related market of database auditing for compliance, Lumigent, secured $11.7 million from a syndicate including Greylock Partners and Solstice Capital.

The video market is burgeoning but so far there has been little for the business market to get excited. ObjectVideo, which provides intelligent video software for security, public safety, business intelligence gathering, process improvement and other applications raised $12.6 million from Novak Biddle Venture Partners and others.

In the Web 2.0 space Newsgator Technologies raised $12.0 million from Vista Ventures, Mobius Venture Capital and Masthead Venture Partners. Newsgator provides RSS technologies that allow the aggregation and syndication of information. It is now ramping up sales of its on-demand offerings to larger organizations having successfully captured significant mindshare in the RSS reader market.

In the mobile device market, IXI Mobile, which makes the Ogo mobile messaging device for prosumers, raised $9.7 million from Gemini Israel Funds to support ongoing operations and ramp up its subscriber base.

Table 1

Venture Funding Activity – 4th Quarter 2007


Industry
Click Industry For Detail
($25 Subscription Req’d)
Total
Amount
Funded
% Change
Vs. Prior
Quarter
Number of
Companies
Funded
% Change
vs. Prior
Quarter
Internet $1.07 Billion + 14 % 140 --
Digital Media $399 Million -2 % 29 --
eCommerce $56 Million - 76 % 5 - 55 %
Software $956 Million + 41 % 148 - 12 %
Total $2.48 Billion + 9 % 322 - 8 %

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