VentureBeat

Openlane, an Internet company that helps auction off automobiles, is just the latest old “B2B” company starting to thrive after struggling in the wake of the first Internet boom.

The company saw 60 percent growth in revenues last year, for a total of more than $60 million, and that growth is accelerating — according to its executives. So the company has just taken $25 million in financing to help maintain momentum.

Openlane is one of those early Internet “back-end” companies, serving businesses that do transactions with each other. Specifically, Openlane acts as the middle-man in selling cars that are no longer used by car rental companies, or by other companies with large leased fleets such as Ford, Chrysler and Chase Bank. Those partners use Openlane to sell cars in bulk to dealerships around the country, leaving the shipping and financing arrangements for Openlane.

This so-called “wholesale used-auto market” in the United States is around 21 million vehicles, according to Openlane’s CEO, Roger Butterwick. Of that total, Openlane has gotten about a two percent market share.

The Menlo Park, Calif.; year-over-year growth was 60 percent in 2007, Butterwick says, and the growth rate has continued rising in the first quarter of this year.

That’s a big change from a a few years ago when, after the first Internet bubble burst, fewer people trusted Internet companies to do B2B.

Another survivor that emerged in the past few years as viable businesses is MFG.com, which sources parts.

To date the company has taken seven fundings for a total of $66.5 million. That included the current $25 million round, which was led by Meritech Capital Partners, with previous investors August Capital, RPM Ventures and Zilkha Venture Partners participating. Openlane employs about 450 people.

updated
1. Apple may exercise tight control over iPhone developer kit
2. George Bischof joins Meritech Capital Partners
3. “The many challenges of widgets”
4. Google’s Andy Rubin shows off Android
5. LiveJournal lands top advisers
6. Arrington holds forth
7. Did Wordpress’ Mullenweg slap Fox News? Don’t think so


Apple may exercise tight control over iPhone developer kit – The company may make the iTunes store the hub for downloading and installing third-party applications for the iPhone. But it will have total say over which applications are included in the store; Applications also won’t have access to some iPhone accessory features. Also, the iPhone’s final software developer kit (SDK) may not be available until June, although there’s some sort of related event planned for March 6. The rumors surfaced on the iLounge blog, here. MG Siegler has more, blogging as ParisLemon.

Meritech Capital Partners names George Bischof as a managing director — Bischof was formerly a general partner at Focus Ventures, and had a hit with his investment in data storage company EqualLogic, which was bought by Dell for $1.4 billion in cash last November. The deal was the largest all-cash acquisition ever for a venture-backed firm (our coverage). Among other companies, he also invested in Wily Technology, which sold to Computer Associates for $375 million. He tells VentureWire that he will continue to invest in enterprise infrastructure, along with digital media and technology services, and that Meritech will give him “a broader platform” to do late-stage investing.

The many challenges of widgets — Forrester analyst and new media marketer Jeremiah Owyang posts a laundry list of problems facing widget-makers, from poor metrics to rule-changes on developer platforms, to weak monetization options. My view is that the problems reflect the early, sloppy stages of experimentation, and will matter less as widget companies evolve.

Meanwhile, Facebook continues to clamp down on spammy applications, to try to force application developers to only create apps that are good for users. It is reducing the number of invites a user can send friends for a given application, and it is making a “stop email” link appear above email messages sent via an application. More at Inside Facebook.

Google’s Andy Rubin shows off its mobile platform, Android, to the BBC — Here’s the video.

LiveJournal lands top advisers — The company, which sold to a Russian media firm last year, is making a point of stressing its independence. It is creating an advisory board that include sStanford law professor and digital activist Lawrence Lessig, tech visionary Esther Dyson, social network researcher Danah Boyd, along with LiveJournal founder (and current Google employee) Brad Fitzpatrick. ReadWriteWeb has more.

Michael Arrington holds forth — In this interview with Portfolio about life, Silicon Valley, and everything.

Wordpress’ Mullenweg quoted as snubbing Fox, but misunderstood — Matt Mullenweg was quoted by CNET’s reporter somewhat strangely during a talk at the Future of Web Apps in Miami today. Mullenweg said Wordpress now powers more than 2.5 million blogs, But then here’s what CNET reported, suggesting Mullenweg was taking a swipe at Fox:

“All these old-media companies are adding blogs like it’s going out of style,” he said, talking about how WordPress now powers blogs for The New York Times, CNN, and Fox News (”unfortunately,” he added on that last one).

Our own Matt Marshall was down in Miami, however, and interpreted Mullenweg’s comments much differently. Marshall knew the context because he’d caught up with Mullenweg during a five-hour delay on the tarmac up in SF on the way down. The conversation between the two Matts naturally turned toward blogging and how early bloggers such as Marshall (VentureBeat), GigaOm, Techcrunch and other were now being swarmed by blogs from large news organizations. So Mullenweg, later talking to a mass of small bloggers was basically empathizing with the small blogger just as he was with Marshall, saying it was unfortunate for them, the bloggers, but it was not intended to be a negative comment about Fox.

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.”

updated

San Francisco’s Prospser, which appears to have gained a leadership position in person-to-person lending, has raised $20 million in its third round of financing.

Prosper is one of three upstarts in the person-to-person lending market, where borrowers request loans and have ordinary people bid to finance them. The market is still relatively obscure, but its participants have ambitions of replacing banks as the de facto source for small-to-medium sized personal loans. It’s a multi-billion dollar dream.

Prosper, which we’ve previously covered, says it has had over 330,000 people transact around $70 million in loans.

Zopa has had success in the UK, garnering around 150,000 users, according to its newsletter last month, but has yet to make its move into the U.S. It has has raised serious money to do so.

LendingClub, which just launched with the Facebook Platform, (see coverage here) recently announced that it had closed 13 loans for a total of $39,650 and processed 200 loan applications in about a month.

Prosper’s new round, led by DAG Ventures and Meritech Capital Partners, brings the total invested in the company to $40 million. Previous investors, including Accel Partners and Benchmark Capital, also participated.

Updated: Corrected funding reference to $20M