Reports

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Digital Media

Digital Media funding reversed its previous quarterly decline by showing significant increases in both total amounts funded and the number of companies funded. Digital Media companies for the purposes of VentureDeal's definition are generally either video/casual game producers or advertising networks. Total funding increased by 15% to $146 million, with 29 companies being funded, an increase of 21% versus the previous quarter.

Tremor Media received the largest funding, raising $20 million in a round of strategic financing from SAP Ventures. Tremor provides advertisers with in-banner and in-stream video advertising services via a network of publisher sites.

MediaMath secured $12.5 million in equity and debt, from corporate strategic investor Safeguard Scientifics and other investors. The company said it would use the funding proceeds to geographically expand via organic growth and tactical acquisitions as well as continue product development and executive recruitment.

ProtonMedia garnered $2.5 million for its series A round of equity financing. Proton produces 3D virtual worlds and corporate training and development software for the pharmaceutical and energy sectors, among others.

eCommerce

The eCommerce sector reversed its previous quarter upward trend, with seven companies receiving a total of $60 million in funding, a decrease of 43% in financing amounts versus the previous quarter.

Part of AOL pioneer Steve Case's family of Revolution branded companies, Revolution Money raised an additional $15 million in financing from the likes of RRE Ventures and U.S. Venture Partners. Revolution Money aims to make inroads in the credit card and stored card payment processing market currently dominated by Visa and American Express.

MyWebGrocer garnered $13 million in a funding round from undisclosed investors. The company offers a variety of eCommerce, eMarketing and related services to retail grocery chains. The company did not disclose how the funding proceeds would be used.

iSend secured $2 million in its series A round of funding, from a syndicate of venture capital investors. iSend said it would use the funding proceeds to expand its network of US payment locations and generate more partnerships with international wireless carriers.

Software

During the quarter, Software company fundings represented the second largest sector, raising $610 million between 97 companies. This activity represented an increase of 10% in total funding amount and a decrease of 22% in the number of companies funded.

The average financing round size reversed its previous decline and rose sharply, from $4.7 million in Q2 09 to $6.3 million in the current quarter.

The largest funding of the quarter was a $62.5 million round for Canopy Financial. The company has developed technology that connects healthcare organizations and financial services.

AppFolio raised $8 million in its series C round of institutional venture capital investment. AppFolio provides web-based software for property management firms that helps them both market and run their businesses. Investors in the round were not disclosed, nor was how the company intends to use the funding proceeds.

Social software company Mzinga secured $10 million in venture equity and debt during the quarter. Mzinga provides what it calls "pervasive community" solutions in order to allow businesses to harness the collective intelligence of their employees, customers and partners. Acadia Woods Ventures and BlueCrest Capital Finance provided the financing.

Table 1

Venture Funding Activity – 3rd Quarter 2009


Industry Total
Amount
Funded
% Change
Vs. Prior
Quarter
Number of
Companies
Funded
% Change
vs. Prior
Quarter
Internet $514 Million - 29 % 97 + 18 %
Digital Media $146 Million + 15 % 29 + 21 %
eCommerce $60 Million - 43 % 7 - 22 %
Software $610 Million + 10 % 97 - 22 %
Total $1.3 Billion - 13 % 229 - 4 %

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