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Jim Crowley, the CEO of Turbine, isn’t an easy man to get a straight answer from. I heard that his company, which makes “massively multiplayer online” games such as “The Lord of the Rings Online,” was raising a new round of venture capital about a month ago. That’s a big deal, since Turbine is one of the big success stories in this industry and raising a new round could mean big new projects are in the works at the Westwood, Mass., company.

Adam Mersky, Turbine’s PR man, told me the funding rumor wasn’t true. Then I interviewed Crowley on April 17, where he pretty much said the same thing. His answer was evasive, but it left an opening for the possibility that Turbine had already closed a round.

In any case, on Tuesday, the news broke that Turbine has indeed raised another $40 million in venture capital to fund its online computer game business, according to a report by peHub. The round was led by Granite Global Ventures and included Highland Capital Partners, Polaris Venture Partners, Tudor Ventures and Columbia Capital. To date, the company has raised more than $90 million.

Mersky still declines to comment on the funding. But I leave it to the reader to surmise from my Q&A with the secretive Crowley to figure out what Turbine is going to do with all of that money, if, in fact, the filing dug out by peHub is true.

From what I see, here is a logical theory. Turbine has raised $40 million, partly to expand the Lord of the Rings Online around the world more quickly; Crowley says the Asia expansion alone will bring millions of subscribers to that game. Turbine also wants to fund the expansion of properties like Dungeons & Dragons Online, which on its own isn’t generating enough revenue to fund expansion. And then the company has a couple of more secret projects in the works. My guess is that they’re going to do a console MMO game based on The Lord of the Rings Online. Taking the MMO to the consoles would be a big deal and would help it compete head-to-head with console MMO rivals such as Sony and NCSoft. But take a look at Crowley’s words and judge for yourself.

What’s the latest at Turbine?
JC: Our technology has been pushing the envelope. We are operating three worlds today. Asheron’s Call. Dungeons  & Dragons Online. And the Lord of the Rings Online. We are operating in 50 countries now with our worlds. We are growing like gangbusters on every dimension that you could possibly imagine. We are very focused on the topics of accessibility and distribution. That is both on how we can expand access to the worlds to more players and expand our markets. We are focused on global expansion. We are expanding the portfolio. There are things we can’t talk about there but there are lots of exciting things going on.

VB: You guys said you are not raising a round now. I initiated this call because I heard you were raising a round.
JC: One of the great things about Turbine, and one of the most exciting things about Turbine, given our success, we have a tremendous number of people who seek to partner with us, whether it be IP owners, or financial sponsors and or traditional VC firms. As a result, we have a tremendous amount of flexibility in avenues we may choose. At this specific time we are not out chasing money. I don’t expect to be in the near future. We had a lot of success in our past. We have had a lot of things that we have concluded that we have not yet made public.

VB: I had heard there were a couple of unannounced projects. Have you spelled out how many?
JC: We do have some unannounced projects. We have not articulated those yet, with the exception of the announcement of the Moria expansion to Lord of the Rings Online. We have a couple of more announcements as the year goes on. It’s very exciting in terms of expansion of our IP portfolio and geographies.

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Coremetrics, one of many analytics companies trying to help website owners understand and market to their visitors, has raised $60 million in a fifth round of financing.

Back in 2006, we said there was some real demand in this area, but probably not enough to support all the companies that were springing up. Coremetrics, however, seems to be getting some real traction, which chief executive Joe Davis attributes to building sophisticated marketing tools — such as search engine bid marketing, email marketing and cross sell applications — on top of the basic analytics features.

Most analytics services, such as Omniture, are really designed to aggregate data about the overall patterns of site behavior. Coremetrics, on the other hand, functions as a “data warehouse” of information about each visitor, and helps you market to those visitors, Davis says. Using Coremetrics’ default package, companies can find out everything they want to know about an individual. If companies want that kind of data from the competition they have to constantly formulate and reformulate their queries — and with Coremetrics’ competition, the data collection starts anew each time, Davis adds. There is also some data that competitors just can’t get, such as a visitor’s behavior across multiple sessions.

For example, Davis says, most analytics companies will tell you that say, 20 percent of your customers put an item in their shopping cart and then abandoned it. Coremetrics can tell you who those 20 percent of people are, by gathering that information from email addresses, for example. Companies can use that information to market similar products to those customers later.

The analytics field has been winnowed down since we last took a close look, Davis says: Omniture is doing well with its paid service, and Google Analytics is popular on the free end, but most other companies — such as Webtrends — are struggling or have disappeared. Davis says Google Analytics actually functions as marketing for Coremetrics, because Google users understand the importance of analytics, but also see its limitations and are often ready to pay for additional tools.

Coremetrics’ customer base grew by 46 percent in 2007, and the company achieved profitability at the end of the year, Davis says. The San Mateo, Calif.-based startup was gearing up for an IPO when the market (and the economy as a whole) started struggling. Now the company is focused on growth instead, and may make some acquisitions in behavioral marketing and multivariate testing to expand its offerings. With the planned expansion, Coremetrics will go back into the red and likely stay there for the rest of the year, Davis says.

The round was led by the 3i Group, a new investor, and existing investors Accel Partners, FTVentures and Highland Capital Partners.

Here the latest action:

Social network Hi5 publicly launches its developer platform — San Francisco-based Hi5 may be a big opportunity for developers of third-party applications that live on social networks. It is popular in places like Portugal, Thailand and select countries of Latin America. Overall, it’s one of the largest social networks worldwide, with more than 35 million monthly active users — and the company claims that only 25 percent of them also have profiles on other social networks.

Many developers have been excited about MySpace’s developer launch a couple weeks ago, but the company has yet to release a way for users to easily send messages to each other — friend invites and updates from an application — and application growth has yet to happen. One big difference with Hi5, as Mashable points out, is that it specifically lets applications tap into communication channels on the site. These so-called “viral loops” can lead to exploding traffic for applications, as seen on Facebook’s formative platform launched last May. But abusive applications spam users with too many messages — also a problem that Facebook has been dealing with. It remains to be seen how Hi5 will both help applications grow and keep users happy. See our previous coverage of Hi5’s platform here and here.

Facebook does regular old targeted advertising — The social network is working with job site CareerBuilder.com on a non-exclusive ad campaign, where Facebook will run its ads on the side of pages and in news feeds. The specialized recruiting ads will be targeted based on information on a user’s profile, like what their major is in college, according to Reuters. Many had expected to see more such ad targeting done by Facebook itself last year, but it instead introduced Beacon, which automatically tells your friends about the purchases you make on other sites — and proved unpopular with users.

Silicon Valley start-ups are losing their sizzle — The slumping stock market has stalled potential IPOs (initial public offerings) and may slow the creation of new start-ups for the next year or two, the San Jose Mercury News reports. There have been only four IPOs nationwide so far this year and the Nasdaq being down almost 15 percent isn’t likely to create a rush of new ones.

Social news site Buzznet may have acquired music application maker Qloud – The deal went down for a little over Qloud’s last valuation, a source tells Mashable. Backed by former AOL head Steve Case, Qloud has had over 1.8 million Facebook users install its “My Music” application. Meanwhile, Buzznet is rumored to be raising a new round of $25 million, according to PaidContent.

For the first time in 38 years, a new type of memory chip is about to hit the market — A joint venture between Intel and STMicroelectronics called Numonyx has created a new type of memory chip known as phase charge memory (PCM), CNET reports. The chips uses a laser to hit a material, which can melt into two different kinds of crystals. Those crystals serve as the ones and zeroes of digital memory. Interestingly enough, Gordon Moore (the co-founder of Intel and of Moore’s Law fame), predicted such a type of memory in an issue of Electronics magazine in 1970.

Personal shopping recommendation site StyleFeeder has opened its API — Developers will now be able to create third-party applications and widgets centered around StyleFeeder to put on any e-commerce site. Personalized search, bookmarking, item recommendations, watchlists, and customizable images will all be accessible through this API. The Watertown, Massachusetts-based StyleFeeder recently received a $2 million Series A round from Highland Capital Partners and Schooner Capital.

After months of delay, Livescribe finally releases its computer-in-a-pen device — We’ve seen several demos of the cool technology, which allows students to take lecture notes on a special paper. When tracing over those notes later, students can call up an audio recording of the words being spoken as those lines were written. The pen can also be used to do math calculations, translate words, and record conversations. Limited quantities of the pen have begun shipping, according to the company blog (currently down). We previously covered the company last year.

While the big names in the social networking world, Facebook and MySpace, get most of the headlines, several niche networks are out there signing up millions of users. One such network is CafeMom, a social network for mothers, that has just raised a new round of funding.

Already positioned well with several big-name advertisers such as Wal-Mart, HP, Disney, Johnson & Johnson and General Mills, CafeMom hopes to use this new money to attract even more advertisers. They plan to do this by expanding operations — including their core and marketing teams, which will work to pull in more more traffic. The site claims to already have over 120 million monthly page views and 6 million monthly visits.

“The bigger we get, the more valuable we are,” CafeMom chief executive Michael Sanchez told me today in the context of pulling in more advertisers. Sanchez says their site offers companies a unique situation with regards to advertising because CafeMom has attracted what it considers to be influential mothers to its service. These are moms who try various products and then spread the word on what they like, whether it be by word-of-mouth or by writing something about them.

Sanchez noted that what has been driving the sites’ growth has really been the desires for moms in similar situations to open up with one another. Specifically, he spoke of a large community for pregnant mothers on the site and also one for mothers of autistic children who log on to share their experiences.

This latest round, valued at $12 million was co-led by original investors Highland Capital Partners and Draper Fish Jurvetson. Based in New York, CafeMom also raised a $5 million round in August of last year (our coverage). Prior to that the company had raised $50 million, mostly during the last Internet boom of the late 1990s/early 2000s.

TODAY’S HEADLINES:

• Pervasis Thera pulls in $9.8M for regenerative medicine (release)
• Embrella Cardio receives $2.3M for stroke-prevention heart-surgery devices (release)
• Vivendy Thera raises CHF 17M for rare-disease drug (Private Equity Europe)
• Novacta Bio gets £3.5M grant for anti-infective drugs (release)
• Metavante acquires health-plan admin software co. Bensoft (release)
• Pharma-marketing analyst ImpactRx acquires Paragon Research (release)
• Arteriocyte gets $509K grant for stem-cell work (release)
• HBM BioVentures shoots for Swiss IPO (Reuters)
• Covington Capital assumes control of NGB biotech fund (release)

Pervasis Thera pulls in $9.8M for regenerative medicine — Pervasis Therapeutics, a Cambridge, Mass., developer of cell-based regenerative treatments, raised $9.8 million in a follow-on to its second funding round. Investors included Flagship Venture Partners, Polaris Venture Partners, Highland Capital Partners, and Musket Research Associates.

Pervasis is developing a cell-based gel called Vascugel designed to promote healing of blood vessels injured angioplasty to open clogged arteries or other surgical procedures, all of which can induce scarring that might lead to further dangerous blockages. Vascugel contains cells from the blood-vessel lining that have been grown in culture, which release growth factors intended to encourage healthy regrowth of the vessels with a minimum of scar-tissue formation. For more details, see this Technology Review piece here.

The gel is designed to be “wrapped around” injured vessels, and degrades naturally after 30 to 60 days. Pervasis is currently testing Vascugel in kidney-dialysis patients, who frequently have blood-vessel grafts designed to improve blood flow during the toxin-filtering process. Those grafts themselves are often subject to scarring and blockage. The product is currently in mid-stage trials.

One drawback of Vascugel is that it requires open vascular surgery, a much more complicated procedure than angioplasty or the insertion of artery-opening stents, which are minimally invasive procedures that involve the threading of a device into a blocked artery. Pervasis also appears to have plans for some form of minimally invasive use of Vascugel in mind, but the sections of its Web site dealing with those are password-protected.

Vivendy Thera raises CHF 17M for rare-disease drug — Vivendy Therapeutics, a Basel, Switzerland, biotech developing an enzyme-replacement treatment for a rare disease, raised CHF 17 million ($15.5 million) in a first funding round, Private Equity Europe reports. Investors included BioMedInvest AG I, LSP Life Sciences Partners and TVM Capital.

Vivendy, whose Web site is still a stub, is focused on a treatment for mucopolysaccharidosis IVA, or MPS, one of several related conditions in which a genetic malfunction produces deformed enzymes that are crucial to normal cellular metabolism. The Vivendy tack, like those of other biotechs that have targeted these conditions, is to supply replacement enzyme grown up via biotech production. For instance, BioMarin Pharmaceuticals markets drug for MPS types I and VI.

Enzyme-replacement drugs are among the most lucrative treatments in biotech despite the rarity of the conditions they treat. Naglazyme, for instance, wholesales for $1,450 per five-milligram vial. A 40 pound child (18 kilograms or so) would require four vials every week at a cost of $5,800, or just over $300,000 a year. (See the PDF prescribing information here.) The cost for adults could rise to $1 million a year or more.

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.

Featured companies: Mawell, OpGen, Vital Therapeutics

Optical genome-mapper OpGen raises $23.6M in a restart — OpGen, a Madison, Wisc., biotech developing a genomic test for identifying disease-causing microbes, raised $23.6 million in what the company is billing as a first funding round. In fact, however, the funding is more of a restart for the company, which was founded in 2001 and previously provided genomic services to researchers.

OpGen is now focused on developing speedy genome-based tests that can help identify and track infectious disease microbes. The company has set its sights on clinical microbiology laboratories as potential customers; such laboratories now try to identify the source of a patient’s infection by growing up the responsible bacterial in culture, a process that can take days. OpGen’s technology, which identifies patterns in single molecules of DNA to identify particular microbial strains, can deliver answers within two to three hours, the company says.

Investors included CHL Medical Partners, Highland Capital Partners, Versant Ventures and Mason Wells.

Vital Therapies gets $28.1M for artificial liver — San Diego’s Vital Therapies, a device maker developing an “artificial liver,” raised $28.1 million in a third funding round. Investors included Versant Ventures, Delphi Ventures, HBM BioMed China, DFJ DragonFund China, MedVenture Associates, Valley Ventures, Toucan Capital and Heights Capital.

Vital’s main focus is on a cartridge-style device that mimics the toxin-breakdown and waste-filtering function of the liver. The device, which contains artificially grown human liver cells, is intended for use while patients await a liver transplant. The device has completed four early-to-mid-stage trials, two of them in China, where prevalent hepatitis frequently contributed to liver failure.

Finland’s Mawell draws €8M for healthcare IT — Helsinki’s Mawell, a bioinformatics company providing software and services to drug companies and hospitals, raised €8 million ($11.1 million) from the private-equity firm CapMan, VentureWire reports (subscription required). CapMan will become Mawell’s largest owner.

Here’s the latest action:

Google adds search to Reader — In an obvious but very useful move, Google Reader, the company’s web-based RSS feed reader, has added the ability to search through your RSS subscriptions, or the categories and tags you use to organize them. So you can search for words in articles in RSS feeds you’ve subscribed to, without actually having the articles on your screen. Cool!

First venture capitalist to sell his blog: Rob Day — We’ve been a fan of venture capitalist Rob Day’s blog Cleantech Investing from the day it started. It’s about clean technology. Greentech Media Inc, a company that has just launched to focus on the clean-technology sector, has acquired the blog for an undisclosed amount, and now runs it on its site. By the way, Greentech Media is also pulling feeds from VentureBeat’s articles about clean-technology. It provides links to our full stories. Day told us about the purchase last week, but we were waiting for Greentech to launch and get its feeds squared away, which it did yesterday. Day now works for @Ventures.

Quattro Wieless raises cash to help companies adapt their Web sites to mobile versions – The Waltham, Mass. company serves businesses by providing them with mobile versions of their sites. This field has many competitors now. The year-old Quattro has raised $12.3 million in a second round of funding from Globespan Capital Partners and Highland Capital Partners, bringing its total funding to $18 million. It provides online software to let companies see what their mobile site would look like. If the publisher likes it, they can join Quattro’s network, which customizes it for most mobile devices. The company helps publishers serve advertising on their mobile site, and takes a cut while doing so.
reword:

Universal sues Veoh — Universal Music Group, a record label that has been actively suing music and video-focused startups, is at it again. It is suing Veoh, a site where you can upload and share videos, for letting users upload and share videos that Universal claims a copyright to. Veoh received threatening letters from Universal earlier this summer, and actually counter-sued for court protection against Universal in August, saying that it should not be held liable for what users do on the site. Universal was not deterred. Paid Content has more.

Groxis, the company with a visual search engine, now gets third CEO in little more than a year — We profiled Groxis and its search engine Grokker here and here. It was an early challenger to Google’s search format. Instead of giving you pages of results, it provided spheres, breaking out result by categories. Search for Paris, for example, and you’d get spheres titled “History,” “Museums,” “Universities,” “Hotels” and so on. It was always a bit complicated, however, and it has struggled to find direction. It has moved away from the sphere format, and is clearly still experimenting. We’ve heard almost nothing new from this company in years. Here’s the announcement of its latest CEO, Randall Marcinkio. He replaces Brian Chadbourne, who replaced founder and CEO R.J Pittman last year. Groxis raised $16 million for its search engine Grokker from investors including Draper Fisher Jurvetson, Jackson Boulevard Capital Management and Draper ePlanet Ventures.

Featured companies: Atritech, Avalon Partners, Ensemble Discovery, Hyperion Therapeutics, LifeBond, ReShape Medical, SafeStitch, Trophos, UltraShape

Hyperion Therapeutics raises $40M against GI and kidney disease — Hyperion Therapeutics, a South San Francisco, Calif., specialty pharmaceutical company, raised $40 million in a second funding round. Investors included Sofinnova Ventures, Highland Capital Partners, New Enterprise Associates and WRF Capital.

Hyperion, which buys the rights to test and market drug candidates from other companies, said the proceeds will allow it to complete a licensing agreement with Medicis Pharmaceutical’s Ucyclyd subsidiary, build out its management team and advance its clinical trials. The company’s two leading candidates address a genetic disease called urea cycle disorder, in which toxic ammonia builds up in the blood stream, and hepatic encephalopathy, a neurological complication of cirrhosis.

Atritech raises $22M for clot-prevention device — Plymouth, Minn.-based Atritech, a developer of a device designed to prevent dangerous blood clots, raised $22 million in a fourth funding round. Investors included SightLine Healthcare Vintage Fund, Prism Venture Partners and other existing investors.

Atritech’s device, which it calls the Watchman system, is essentially a tiny mesh basket designed to be implanted in the opening to the heart’s left atrial appendage, a small pouch on the top of the heart. That pouch is often the source of blood clots in patients with atrial fibrillation, a condition in which the heart’s upper chambers beat too fast. Ideally, the implanted basket will catch clots that threaten to escape into the bloodstream, where they could cause a stroke.

The funding will allow Atritech to finish enrolling patients in a late-stage trial of the Watchman device, which is being tested against a blood thinner typically given to prevent clots from forming.

UltraShape gets $15.1M for “body contouring” — UltraShape, an Israeli developer of ultrasound systems designed to break down fat cells for cosmetic purposes, raised $15.1 million in a fifth funding round. Investors included Meritech Capital Partners, Israel Seed Partners and Polaris Venture Partners. The company’s non-invasive device isn’t approved for use in the U.S.

Trophos raises $11.6M for neurological drugs — Trophos, a Marseille, France, biotech focused on developing new drugs for neurological conditions, raised $11.6 million (€8.5 million) in a third round of funding. Investors included OTC Asset Management, CM-CIC Capital Privé, Society General Asset Management (SGAM), Viveris Management, Turenne Capital Partners, Blue Medical and the Association Française contre les Myopathies.

Trophos develops drugs that it believes will promote the survival of neurons threatened by degenerative neurological diseases such as Huntingdon’s disease. Its leading candidates target neuropathic pain and amyotrophic lateral sclerosis, better known as Lou Gehrig’s disease.

SafeStitch goes public in reverse merger, raises $4M in debt — SafeStitch, a Miami medical-device maker without a Web site, went public in a reverse merger with the defunct firm Cellular Technical Services. The company will list its shares on the American Stock Exchange. As part of the deal, SafeStitch raised a $4 million line of credit from the Frost Group, a private-equity firm, and also takes control of $3 million in cash held by CTS. The company makes devices for minimally invasive gastrointestinal surgery.

NationsHealth acquires Diabetes Care & Education for $3M — NationsHealth, a Sunrise, Fla., provider of medical products and insurance-related services, acquired Diabetes Care & Education, a provider of insulin pumps and related supplies for diabetics. NationsHealth will pay $3 million, $2.5 million in cash and $500,000 in unregistered common stock.

Obesity-device maker ReShape Medical pulls in $3M — ReShape Medical, a Lake Forest, Calif., developer of minimally invasive medical devices to treat obesity, raised $3 million in a follow-on to its first funding round, PE Hub reported, citing a regulatory filing. Investors included New Leaf Venture Partners and SV Life Sciences. The company was previously known as Abdominis, and has now raised a total of $8 million.

Avalon Ventures raises $84 million in eighth fund — Avalon Ventures, a La Jolla, Calif., venture-capital firm specializing in life-science and wireless-technology companies, raised $84 million in an eighth fund, VentureWire reports (subscription required), citing a regulatory filing. Avalon previously raised $75 million for its seventh fund, which closed in 2005.

LifeBond gets $1.5M for new surgical bandages — LifeBond, a Jerusalem-based device company, raised $1.5 million. Investors included GlenRock Israel and the Zitelman Group.

LifeBond is developing a bandage that exudes a sticky gel when it comes into contact with blood, presumably creating a barrier that minimizes blood loss.

Ensemble Discovery , a Cambridge, Mass., biotech, named former Pfizer vice president Michael Taylor as its CEO. Ensemble is developing new drugs and tests based on large, repetitive molecules called macrocycles.

Ensemble raised $17 million in a first funding round in 2004, and in February VentureWire reported that the company was closing a second round in the “tens of millions.”

CafeMom, a no-frills social network site for mothers, has raised $5 million in funding.

The site is owned by New York’s CMI Marketing, and gets its backing from Highland Capital Partners and Draper Fisher Jurvetson, who have supported the company for seven years, helping pump $50 million into the company — much of it coming during the last Internet boom. VentureWire (subscription required) first reported the funding news.

The company has struggled, flirting at times with profitability. Women-oriented sites are experiencing robust growth, as noted in previous coverage, suggesting this is a good a time as any for the company to get a second wind.

CafeMom’s action comes from participation with in certain groups, for example “Stay At Home Moms” which has 16,000 members. Users offer tips and practical advice. Other popular groups are “Toddler Moms” and “Raising Boys.” The company says it expects two million unique users in August. Some of that traffic is being bought with advertising on search engines. This morning, when we searched for “social network mothers” on Google, for example, CafeMom was advertising on the right hand side.

MomJunction.com, a similar company, raised $1.5 million in a first round of capital.

Other backers of CMI marketing over the years were Himalaya Capital Ventures and Perseus.

Updated

Investors have poured $30 million more into video site Metacafe, the popular online video site.

This is a significant amount of money for a company that already raised $15 million. But the support may be necessary if Metacafe is to stay among the front-runners. It is the seventh most popular video site, according to Nielsen/NetRatings, behind companies with many more resources, such as Google’s YouTube and the video sites of other giants such as Yahoo, MSN and MySpace. (Update: Hitwise, meanwhile puts Metacafe in eighth place. See below)

YouTube used only $11.5 million in venture backing, before it was bought by Google for $1.6 billion.

The round was led by new investors Highland Capital Partners and DAG Ventures. Existing backers Accel Partners and Benchmark Capital also contributed to the round, first by VentureWire today (subscription only).

[Update: We just talked with chief exec Erick Hachenburg. He says Metacafe is arguably the largest independent video site. While Veoh rivals Metacafe on some metrics, Veoh doesn't focus as much on short-form video. Metacafe's traffic has doubled in the U.S. so far this year, to more than 6 million uniques a month, from 3 million, Hachenburg notes. Globally, uniques climbed to 26 million from 17 million.]

[Update II: The company wouldn't comment on valuation, but says it is higher than when the company raised its previous round.]

The Tel Aviv, Israeli company moved its headquarters to Palo Alto, Calif. last year to partake of Silicon Valley’s technology savvy.

We wrote about Metacafe here, explaining how it filters videos before they hit the front page. It relies on a technology called “video rank,” which watches how users interact with a video for signs suggesting popularity (for example, if they watch it several times). It also relies on a community of a 100,000 review panelists to provide a thumbs-up on a popular video.

Several months ago, there were rumors that the company was selling itself. The company’s founder Arik Czerniak stepped aside earlier this year.

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Moka5, a Redwood City, Calif. startup that wants to give businesses and consumers a way to carry a virtual computer around with them on an iPod, USB stick or other storage device, has raised $15 million more in a second round of financing.

The round was led by Highland Capital Partners and included an additional investment by existing investor Khosla Ventures. We first mentioned this company last year, when it raised $3 million from Khosla. The company also announced Bill Demas, a former Microsoft and Yahoo executive, is chief executive.

We talked with Demas today, and he made clear the company is in its early days. It is still testing its product with a limited number of people, and will launch openly later this year or early next. We’ll be getting a USB stick so that we can test it out. We’ll be sold if Moka5 can really let us carry around the contents of our dream computer — from operating system, to applications, to files — on a little stick. Just think if we never have to worry about configuring a new computer again. Moka5 would let us insert the stick in any computer — new or old — and voila, our system is up and running.

Demas clearly tried to underplay the ability of the company to deliver on that vision right away. There’s a lot of work required to let us tailor our system like that, not to mention to be able to take our content from an existing computer and put it into the USB stick. The company currently has a limit on storage it can support. The consumer test version will come out later this year. Right now, it has let developers create their own configurations for a computer, which Moka5 calls LivePC (more details here).

Demas also stressed it will be secure. If a virus hits your system, Moka5’s virtual technology can rewind so that you can get to a place before the virus hit.

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Aveo Pharmaceuticals, a Cambridge, Mass. cancer-drug company, raised $53 million in a fourth round of funding from a coalition of mostly blue-chip life-science investors.

New investors included Biogen Idec, Bessemer Venture Partners, Merlin BioMed Group, Mitsubishi UFJ Financial Group and Vatera Holdings, an investment vehicle owned by Kos Pharmaceuticals founder Michael Jaharis. Schering-Plough also provided a $10 million equity investment as part of a collaboration agreement.

The round also included new funding from existing investors Highland Capital Partners, Venrock Associates, MPM Capital, Prospect Ventures, Flagship Ventures, Oxford Bioscience Partners, Greylock Partners, Lotus Biosciences and GE Capital.

Founded in 2002 by a pair of Harvard cancer researchers, Aveo claims to model tumor biology in sophisticated ways that allow it to identify more effective cancer drugs. Its lead candidate, AV-412, takes aim at epidermal growth-factor receptor, or EGFR, the same cancer-growth protein targeted by current drugs such as Erbitux, Tarceva and Iressa. Aveo says its models show that AV-412 is more potent than other EGFR drugs and appears to be active against tumors that are resistant to Tarceva or Iressa. AV-412 was in-licensed from Mitsubishi Pharma, and is currently in early-stage human testing.

Aveo, formerly known as GenPath Pharmaceuticals, has previously raised roughly $65 million. See the company’s release here.

Qihoo, a fast-growing but controversial Chinese search engine for Web 2.0 content, has raised $25 million more in a second round of venture capital from credible U.S investors.

This is significant because Qihoo has launched a new kind of search engine, dedicated to Web 2.0 content — focused on blogs and forums, for example — that has seen its traffic spike in China. Page views have grown from tens of millions of page views a day, to a hundred million page views by the end of this year, the company says. If true, after a mere year’s operation, Qihoo is about a third the size of Chinese industry leader Baidu. The funding brings Qihoo’s total to a whopping $45 million, a significant amount of capital for a Chinese company.

This is a victory for Qihoo’s chief executive and founder, Hongyi Zhou (pictured left), who has come under fierce personal attack from Jack Ma (pictured below), chief executive of rival, Alibaba. We reported on the controversy here, and many people told us Zhou’s fight with the Ma would tarnish his reputation — because of Ma’s clout. Alibaba operates its own search property, Yahoo China, which has sued Qihoo, and has been readying a suit against Zhou directly.

However, U.S. venture capital firm Highland Capital Partners has braced itself and taken the lead to invest in the company. Also investing are Redpoint Ventures and existing investors Sequoia Capital China, CDH, Matrix Partners and IDG Ventures. Sequoia and Matrix have historically been among the best performing venture capital firms. As reported, Alibaba and Yahoo exerted pressure on investors, including Sequoia, to avoid backing Qihoo. VentureBeat reported that Yahoo’s co-founder Jerry Yang and Sequoia’s Michael Moritz were even forced to a meeting over the dispute.

VentureBeat just spoke with Dan Nova (below) of Highland, who will be joining Qihoo’s board. Nova is experienced in search, having co-founded Lycos and invested in Ask Jeeves. His firm has traveled frequently to China and met with more than a hundred companies there, Nova said.

He said ironically, the media attention generated by the Ma-Zhou fight has not hurt Qihoo, rather helped it.

“This is a classic David versus Goliath story,” he said. “The more press we continue to get, the more traffic we get — the traffic is through the roof.”

He hopes the legal disputes can be resolved, he said. “They didn’t serve the purpose they’d intended, which was to make investors nervous about investing in Qihoo,” he said of Alibaba’s legal moves and other threats.

Nova said he is not concerned about potential lawsuits. Zhou is not a liability, he said, noting that Zhou has demonstrated his prowess and integrity by founding search company 3721 (later bought by Yahoo), and by the fact that his backers at 3721 (IDG, for example) are backing him again at Qihoo. “He’s a rock-star among Chinese entrepreneurs,” Nova said.

He said Qihoo is pioneering a new kind of search, focused on unstructured, user-generated content of the type found on blogs and Chinese online bulletin boards, which is more dynamic, and something Google’s Blog Search has been patchy at, he said. He said Qihoo’s architecture is its secret sauce, but that it takes the best of Digg, Google and Technorati and rolls them up into one. He said Qihoo is not trying to duplicate Google’s main engine search, but that the Chinese users are interested in lighter subjects, such as lifestyle and entertainment — a strength of Qihoo, he said. (Politics is avoided for obvious reasons).