VentureBeat

Social web browser Flock has garnered a lot of hype since its release in 2005. It’s also won a lot of fans. Both likely played a role in its new $15 million fourth round of funding announced today. The round was led by Fidelity Ventures, with all previous lead investors, including Bessemer Venture Partners, Catamount Ventures and Shasta Ventures, participating.

Impressively, this round of funding actually surpasses all of Flock’s previous rounds combined.

This money will be used for the usual purposes such as research, development and marketing. An emphasis will be placed on global expansion as well as the company sets its sites on the 230 million members of social networks globally.

Flock is a browser just like Firefox or Internet Explorer except that it has built-in functionality for various social networks on the web. Say for example you sign in to your Flickr account, you can have Flock remember your info and keep it open in a sidebar tab and update you when your contacts post new photos. It also works with more traditional social networking sites as you might expect such as Facebook.

According to the company, since January of this year Flock’s user base has increased by more than 250 percent while its revenue has risen by more than 400 percent. As we’ve reported previously, Flock makes money thanks to a deal it has with Yahoo to use its search technology. This is similar to the deal Mozilla’s Firefox browser has with Google.

Flock is currently testing out its 1.2 Beta version of the software, which includes Digg integration. This is a pretty good idea and certainly hardcore Digg users will go crazy over it. While I don’t think anyone can accuse the browser of not looking nice, I still find it too slow for my tastes in what I use a web browser for: browsing the web.

Another service, Minggl, shares some similar social functionality of Flock but does it via a Firefox or Internet Explorer plug-in rather than an entirely different browser.

SpikeSource, a startup that helps companies build, test and integrate software, is partnering with Intel to launch the SpikeSource Solutions Factory Platform. For SpikeSource, it’s a big strategy change — instead of partnering with independent software vendors, the startup will now provide its technology to major players like Intel so they can certify products in their ISV networks.

The new platform could catapult SpikeSource into the big leagues. When SpikeSource launches a new product, it normally signs up around 30 ISV customers, says Dominic Sartorio, SpikeSource’s senior director of product management. With the Intel deal, the Redwood City, Calif.-based startup hopes to reach 200 customers in the next few months, then hold a bigger launch and reach out to the full pool of 12,000 ISVs that’s already registered with Intel.

To help SpikeSource meet the increased demand, the company has raised a new round of funding. Intel’s investment branch Intel Capital contributed $10 million, while Kleiner Perkins, Fidelity Ventures, CMEA Ventures and DAG Ventures — who are all prior investors — also contributed undisclosed amounts.

Sartorio says SpikeSource’s platform allows ISVs (namely, companies making software, usually niche software) to assemble, test, package and update their products automatically. It combines the different offerings that SpikeSource has developed since it was founded in 2003, and creates a single package that Intel — and, eventually, other big vendors — can use to give its seal of approval to new software.

Each of the platform’s components (security, inventory, updating, etc.) faces real competition, but Sartorio says SpikeSource is the first company to bring everything together in a commercial product. The only real competitors are do-it-yourself, in-house solutions developed by big tech companies, he says.

The new approach should help software vendors to get their products to market, because the platform makes it easy for them to use Intel’s branding and distribution network. Sartorio hopes to eventually sell the platform to enterprise IT departments and to the developer community as well, although the company is still figuring out the details.

SpikeSource first made a name for itself as an open source company, but the new platform is compatible with proprietary and hybrid software, Sartorio says. At the same time, it still serves open source developers, and parts of the platform are open source too.

The startup has a high-profile chief executive — Kim Polese, who was the original product manager of Java, and who was declared “the web’s 1997 It Girl” by Time Magazine.

Read our previous coverage of the company here.

This new funding should be SpikeSource’s last before it becomes profitable or makes an exit, Sartorio says.

[This article is expanded from a VentureBeat Wire story posted earlier today.]

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IBM has invested in open-source database company EnterpriseDB, part of the giant company’s effort to hold its own in the fast growing Web application services market.

IBM typically does not invest in start-ups, but it has watched on as competing server company Sun acquired the popular open-source database company MySQL. Databases are a key component of the “stack” required to run applications on the Web, basically a place that stores the information that is called upon by servers when people visit the Web site.

IBM participated in a $10 million third round of investment into EnterpriseDB, which also included prior investors Charles River Ventures, Fidelity and Valhalla Partners.

Open-source, cheap tools for Web developing have become very popular, as they are forming the base of some of the fastest growing Web companies, from Facebook to Google.

MySQL has been a hit, because it is so cheap, letting Web developers use a basic version for free, or charging about $599 if it used commercially. EnterpriseDB, which is also open-source, charges closer to $1,000 for its basic version, justifying the higher price by saying it offers more features that make it more like the robust databases offered by Oracle. EnterpriseDB is still much cheaper than Oracle, however.

However, there’s been some criticism of EnterpriseDB’s claim to be open-source. Its products are based on open-source PostgreSQL technology, but EnterpriseDB adds its own improvements on top of PostgreSQL, additions which it does not make open-source, and for the most part hasn’t contributed back to PostgreSQL to make that product better (only very recently did it contribute some improvements).

Notably, Sun Microsystems had been a big supporter of PostgreSQL, offering it with its Solaris 10 server operating system, and partnering with EnterpriseDB. However, with Sun moving to acquire MySQL, the relationship with EnterpriseDB has cooled somewhat. To make things more complicated, IBM also has a relationship with MySQL, bundling it into many of its servers — which is unlikely to change.

The New Jersey-based EnterpriseDB has seen slower growth that MySQL, having 200 customers after raising $37.5 million. MySQL raised about $40 million, before selling to Sun for $1 billion last month (see our coverage ). MySQL says some 100 million copies of its product had been downloaded (see our coverage), though only a small portion of users request support or pay for the product.

Clarification: EnterpriseDB’s CEO Andy Astor got back to me and contested my point that EnterpriseDB hasn’t been contributing back to PostgreSQL. Here are a few lines his company’s PR representative sent me:

EnterpriseDB is the single largest contributor to the PostgreSQL community project, measured by financial contributions, resources, and technology contributions. It has regularly contributed back to PostgreSQL since its launch in May, 2005, so the statement that “only very recently did it contribute some improvements” isn’t quite right. Last week, in addition to the Series C financing, EnterpriseDB announced that it has open sourced its business intelligence/data warehousing technology, GridSQL, which is now available on SourceForge: http://www.enterprisedb.com/about/news_events/press_releases/03_25_08c.do

…Finally, here’s the blog from Matt Asay, one of the open source industry’s most vocal “purists” who applauded EnterpriseDB’s recent announcements: http://www.cnet.com/8301-13505_1-9902671-16.html. Matt writes: “EnterpriseDB deploys the same hybrid model as Zimbra, SugarCRM, Funambol, and others. While I’m not a big fan of hybrid models, the reality is that it’s an accepted, successful model within commercial open source. If it means that EnterpriseDB and these others also contribute ever growing mountains of open-source code, which it does, then I can accept that.”

Seatwave, a European market place for event tickets where fans can buy and sell directly from and to each other, has raised $25 million in a third round of funding.

The financing continues a — yes, a large wave — of interest in the secondary ticket market, where people buy tickets, but then turn around and sell them to someone else. These markets can serve people who are legitimately caught with tickets and want to get rid of them because the can no longer go to an event, or they can also benefit scalpers trying to make a few bucks through arbitrage.

In the last year, we’ve seen a frenzy: Stubhub, TicketsNow and GetMeIn have all been gobbled up in the last 12 months by eBay and Ticketmaster (see our coverage).

The funding comes from Fidelity Ventures, a Boston based venture capital firm that is betting strongly on online marketplaces. It backed marketplace companies like China’s Alibaba and money lending company Prosper. Indeed, the firm’s partners are going around saying that Alibaba’s recent IPO represented a watershed event ushering in a new era of successful marketplace companies. Another firm making a big bet here is Benchmark, which is also an investor in Prosper.

Seatwave offers tickets for theater, sports, music and other live events. Other investors in Seatwave include Atlas Venture, Mangrove Capital Partners and Adinvest.

The company was launched last year by Joe Cohen, a former exec at Ticketmaster and Match.com.

The company said it has 500,000 tickets available for sale and is the most-trafficked ticket exchange website in the UK. The money will be used to expand into other countries, the company said.

The company estimates the secondary market to be worth around $1.9 billion in the UK alone, and $6.8-9.7 billion Europe wide.

TODAY’S HEADLINES:

• Gene-silencing developer Santaris raises €20M (PDF release)
• Consumer-driven healthcare manager RedBrick Health prescribed $15M (release)
• Cardiac Dimensions takes in $36M for heart-valve device (release)
• TcLand Expressions gets €8.2M for biomarkers (PDF release)
• TheraQuest Bio gets $3M for pain drugs (release)
• Brain-software maker NeuroTrax visualizes $1.5M (VentureWire)
• ActivBiotics selling off assets after clot-busting drug failure (release)
• Nanostart buys stake in Singapore’s Curiox, a drug-discovery tech firm (release)
• Respiratory biotech Altair Thera gets additional funding (VentureWire)
• Specialty pharma Prometheus Labs files for $100M IPO (Edgar)
• Sirtris co-founder David Sinclair joins Lux Capital as venture partner (PDF release)

Gene-silencing developer Santaris raises €20M — Denmark’s Santaris Pharma, a developer of gene-silencing drugs, raised €20 million ($30 million) (PDF) in a third financing round. Investors included Gilde Healthcare Partners, BankInvest, Novo, LD, Forbion Capital Partners, Global Life Science Venture, Sunstone Capital, Seventure, Omega, Innovation Capital and members of the Company’s board and management. Gilde contributed €7.5 million to the round.

Santaris is pursuing an “antisense” strategy for turning off particular disease-related genes using synthetic strands of nucleic acid, which bind to and deactivate the messenger RNA molecules that are crucial to gene activity. (Technically, the mRNA plays a key role in the manufacture of a gene’s protein or proteins, which in disease states are often either malformed or overproduced. The drug molecule is a complement to the mRNA’s nucleic-acid sequence, which in DNA chemistry makes it an “antisense” molecule.)

Whereas biotechs working on antisense drugs have traditionally used strands of DNA — often chemically modified to improve their durability and cell-penetrating abilities — to block gene activity, Santaris has produced what it claims is a unique RNA analogue that it calls a “locked nucleic acid.” (The company goes into detail here.) The Santaris molecule, which combines LNA and DNA, is supposed to bind RNA in three dimensions, presumably boosting its binding ability and therefore potency.

Santaris is first targeting chronic lymphocytic leukemia, and says its drug candidate has already demonstrated initial safety and efficacy in an early-stage human test. The company has several other candidates in preclinical development, as well as two other molecules it licensed to Enzon Pharmaceuticals, one of which has also begun human testing against cancer.

For a more detailed look at antisense, see our coverage of Excaliard Pharmaceuticals, a biotech that licensed a slew of technology from antisense pioneer Isis Pharmaceuticals, here.

Consumer-driven healthcare manager RedBrick Health prescribed $15M — RedBrick Health, a Minneapolis healthcare company promoting “consumer-oriented” plans that shift much of the financial responsibility for medical care to individuals, raised $15 million in a second funding round. Investors included Fidelity Ventures, Highland Capital Partners and Versant Ventures.

RedBrick aims to help companies set up consumer-directed healthcare plans, which are also known as “defined contribution” schemes in that they limit the financial exposure of employers, who simply make regular contributions to employee “health savings accounts.” These plans, obviously, put the financial onus on individuals, who pay for their own medical care out of these accounts, in contrast to traditional “defined benefit” plans in which individuals pay premiums for comprehensive health coverage. In theory, these consumer-oriented plans should hold down healthcare costs by making individuals more “responsible” users of medical care; in practice, sick patients are often in a terrible position to be good medical “consumers,” and the plans have have proven generally unpopular to boot.

That hasn’t slowed RedBrick or its backers. The company will use the funding to continue expanding its efforts to sell and manage consumer-directed healthcare plans, which RedBrick somewhat misleadingly insists on calling “consumer-owned” healthcare. (Such plans usually couple health-savings accounts with a high-deductible insurance plan.) The company recently announced deals with several new client companies, although none are exactly what you’d call high profile firms — their ranks include the Ridgeview Medical Center in the Minneapolis-St. Paul area, which is switching its employees to a RedBrick-supported plan, and Welch Allyn, a medical-device manufacturer in Skaneateles Falls, N.Y., which is doing likewise.

Cardiac Dimensions takes in $36M for heart-valve device – Cardiac Dimensions, a Kirkland, Wash., developer of heart-valve devices, raised $35.5 million in a fourth financing round. Investors included Johnson & Johnson Development, Lumira Capital, Mitsubishi UFJ Capital, West River Capital, Montgomery & Co., Frazier Healthcare Ventures, Interwest Partners, MPM Capital, and Polaris Venture Partners.

Cardiac Dimensions is working on an implantable device designed to reshape the heart’s mitral valve, which in heart-failure patients sometimes weakens and allows blood to swish backward through the heart’s chambers. We’ve covered several other startups working on mitral-valve devices, including Evalve and Cardiosolutions.

Xoom, a company that lets you go online to transfer money internationally, has raised $20.29 million in a fifth round of funding.

It’s just the latest in a wave of companies using the Web to shake up the payment-lending industry.

This six-year-old San Francisco company has now raised more than $50 million. To use it, you log on to Xoom’s Web site and pay between $3.50 and $12 per transaction, not exactly cheap — but considering the hassle and cost of other transfer methods, it’s competitive. Recipients don’t need to have bank accounts or Internet connections to receive fund.

It follows a $50 million round of capital raised by another PayPal competitor, Revolution Money (see our coverage), which is just about to launch.  That company, however, is promising free transfers within social networking settings. So transfers are tending toward zero, like Internet phone rates. (Bytes are almost free.)

This Xoom latest round was led by DAG Ventures, and included Fidelity Ventures, New Enterprise Associates and Sequoia Capital. Peter Thiel, former executive of online payment company PayPal is also an early investor. The financing was first reported by PE Hub.

A whole bunch of other new companies are trying to make inroads into the micro-payment or lending markets.

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In a highly risky strategy of piggy-backing on other carriers’ networks, Kajeet has raised $36.8 million in a second round of financing to offer cellphone services to tweens and teens.

It offers a dashboard for parents to control when the phone can and can not be used, along with wallpaper, games, ringtones, applications and more.

The Bethesda, Maryland company is brushing aside the grim evidence provided by string of disasters at other companies trying something similar. Amp’d Mobile was the most high-profile recent case of a so-called MVNO (or Mobile Virtual Network Operator) for youth that saw its business fall part because of high costs. Firefly, a venture-backed company that served teens and younger kids with a phone, also struggled. It was forced to restart again when its original investors bailed on the company.

Founded in 2003, but launching nationally six months ago, Kajeet is a pay-as-you-go service. The company charges 35 cents a day, 10 cents a minute and 5 cents per text message. The phones are available at Best Buy, Limited Too and Longs Drugs Stores and at the company’s Web site. It is not saying anything about its sales traction so far.

It operates on the Sprint PCS network.

Draper Fisher Jurvetson Growth Fund (DFJ Growth Fund) led the financing. Existing investors, including Bessemer Venture Partners, Fidelity Ventures, Gabriel Venture Partners and InterWest Partners, also participated in this financing.

Here are the reasons that Firefly faced, but only some of them will haunt Kajeet:

The premise that kids need specialty phones is flawed. They only get a phone for a year or two until they want the real thing. So there’s a very short lifecycle, and correspondingly weak lifetime revenue — given the cost of acquisition. Kids tend to break phones quickly or lose them, at which point the parents are not too happy. Third, the carriers tend to add a cheap but good phone for kids for say, only $10 a month. Firefly managed to get traffic in the carrier store, but then suddenly salespeople in the stores started switched customers over to the carriers’ own cheaper phone. So then the only sales model is to sell through stories or its own site, which is what Kajeet is doing.

However, Kajeet isn’t selling special phones, like Firefly. It is using normal phones, said Daniel Neal, chief executive and founder, in an interview, and so its model is vastly different from Kajeet’s, he says. The company is targeting the “sweet spot” of 11 to 14 year olds, he said.

And Neal reminds us that the MVNO record isn’t all bad. TracFone and Virgin Mobile are examples of MVNO services that have done well in the US, he said.

Kajeet previously raised a $27 million first round.