VentureBeat

According to a research report cited by Mountain View-based Teneros, the average business experiences seven hours of email downtime each year.

Can you survive without your email? Apparently those businesses can’t, and they hire firms like Teneros to provide “application continuity” for Microsoft Exchange, the software back-end behind the email systems of most corporations.

The product itself is a plug-in appliance, the Application Continuity Appliance (ACA) that kicks in within moments of a system failure, keeping the network moving until it can be repaired.

Teneros launched the ACA in August 2005, and appears to have made good headway since against more expensive competing options. It’s generally used by small- to medium-sized businesses.

The $40 million financing was led by Advanced Equities, with participation from previous investors Goldman Sachs, New Enterprise Associates, Sevin Rosen Funds and Star Ventures. It was Teneros’s fourth funding so far; the company has now raised a total of $84.5 million.

Alder Biopharmaceuticals, a Bothell, Wash., developer of antibody drugs, raised $40 million in a third funding round. Investors included Delphi Ventures, TPG Biotech, Sevin Rosen Funds, Ventures West, H.I.G. Ventures, and WRF Capital.

Alder develops antibody-based drugs for inflammation and autoimmune disease. The company’s lead candidate, ALD518, is currently in clinical trials as a treatment for rheumatoid arthritis and cancer, although neither Alder’s Web site nor its statement disclose when the drug began human tests.

Alder’s work is also noticeable because it produces its antibodies in genetically modified yeast cells, a new manufacturing technique that the company claims is faster and cheaper than traditional genetic-engineering methods involving mammalian cells. Not only does production in yeast allow companies to sidestep the need for expensive patent licenses that cover traditional methods, Alder claims it can speed the development process to months from years, making it possible to evaluate a much wider range of antibody candidates.

Alder also claims that ALD518 is the first full-length functioning antibody to be made on an industrial scale in yeast. For an additional information on the merits of yeast-based antibody manufacture, see our previous coverage of Adimab, a startup developing its own yeast-production system for similar reasons. If you’re a technical-detail junkie, don’t miss the discussion in comments.

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Airwalk Communications is part of a wave of companies developing “femtocell” technology, which lets your cell phone run on your home WiFi networks (update: the company only works on CDMA networks, not WiFi), and allows you to route calls over your land-line too. The Richardson, Texas company has just finished raising $25 million in a second round of financing.

Deploying femtocell access points is expected to be a major trend this year and next. Airwalk faces competition from a range of players, including Ubiquisys, based in Swindon, UK, and backed by Google, among others.

Others competitors include RadioFrame Network and Airvana, not to mention large companies Alcatel-Lucent, Sony Ericsson and Samsung. Airwalk hopes to go to market in early 2009.

Airwalk has now raised $33 million in total. The latest round was led by Sevin Rosen Funds. Other investors include Alta Berkeley Venture Partners, Duchossois Technology Partners and TL Ventures.

Here’s our earlier coverage of Ubiquisys, which has now raised $37 million.

Femtocell technology is just one of the alternatives to fixed-mobile convergence, a trend toward a world where you can call over both your fixed or cell line, whatever is cheaper. Most competing technologies, however, require a new (dual-mode) handset, whereas Femtocell doesn’t. It can be used with existing devices (cellphone) and operate on local home networks, and be hooked up with the home’s land-lines or through VoIP. Carriers would sell the technology to consumers, pitching it as a way they can lower mobile subscription costs. Sprint already is testing femtocell in some areas. The femtocell technology also promises to improve transmission of IPTV and high-bandwidth services.

The holiday break felt especially long this time, so here’s a longer roundup than usual — of everything you may have missed over the last few days:

Ebay’s Kijiji tries to tar Craiglist’s reputation — The NYT has a story about Kijiji, a competitor to online classifieds company Craigslist. The remarkable thing about the story is that it lets Kijiji executives associate Craigslist with offers of “sadomasochistic encounters and prostitutes,” without some sort of response from Craiglist. Kijiji, meanwhile, is positioned as family friendly.

Nokia has agreed to acquire Apertio, a UK mobile data network management provider for about €140 million — Details here.

IBM has acquired Israel’s data storage technology company, XIV for a rumored $350 million — Details here.

Venture firm Sevin Rosen splitting apart — All four of the venture capital firm’s Silicon Valley firm are leaving the Texas-based firm, including Nick Sturiale, the investor in Xensource, the virtualization company recently acquired by Citrix for $500 million. Sturiale will be a managing director at Carlyle Venture Partners, we’ve confirmed. The split was first reported by PEInsider.com. It’s part of a longer process of decline at the firm, and of general hardship in the venture industry right now.

Blekko is the umpteenth start-up to go after Google — Never mind that Google has won the search engine wars, or that Microsoft and Yahoo have poured tens, if not hundreds of millions, into trying to keep up, or that scores of other companies have launched to fulfill every conceivable search engine niche. Start-ups trying to take on Google keep coming. The latest is Blekko, a secretive company to be launched by Rich Skrenta, who co-founded the Open Directory Project and news site Topix. Skrenta says Google doesn’t have any competition, but we’re wondering where he was when a tsunami of search engines that hit in 2006, not to mention new ones like Mahalo last year and now Wikia Search to emerge in a few days. Anyway, it’s always great to see people think big, and we wish him well. He’s raised $2 million in seed funding from Ron Conway’s Baseline Ventures and two early Google employees, David DesJardins and Jeremy Wenokur. [Image is from the placeholder on Blekko's site]

Peter Thiel says venture industry need to be shaken up — The WSJ has a notable story about Peter Thiel’s view on the weaknesses of the traditional venture industry. However, the piece also says the value of his seed investment in Facebook has increased more than 50 times, which seems understated based on Facebook’s reported valuation of $15 billion now. You’d think the a seed investment would have been made at far less than $100 million, and that the value of his investment may have increased 1000-fold or so. We’ll do some checking on that…

Google’s corporate blogging outshines most others — Here’s a piece about how well Google’s corporate blogging effort is doing, and how few others are manging to do the same.

Marc Canter gets $400,000 for his PeopleAggregator.com — Canter has been working his platform, which is supposed to encourage more open social networks, for some time now. Here he writes his latest thoughts, and discloses his funding. See our previous coverage.

Dash Express, the Internet-connected GPS navigation device for your car, to sell for a whopping $600 — The Silicon Valley company, Dash, has raised closed to $42 million in backing from big-name venture capital firms Kleiner Perkins and Sequoia Capital. But who is going to buy this device at such a price, when you can get mobile phones or devices that offer much the same thing — more phones are GPS enabled and they’re sporting services like Google which provide increasingly accurate local search? And the Internet connection on Dash is unlikely to reliable while driving around. Dash lets you do things like find a Chinese restaurant while driving somewhere, but you can do that easily on a phone. In addition to the $600, Dash charges fees of between $10 and $13 a month, GigaOM reports. (Our previous coverage ).

The Google investing Mafia — The New York Times has the story about all of the former Googlers who left to start investing in companies, including Chris Sacca, Aydin Senkut, Paul Buchheit, Georges Harik, Satya Patel, Salman Ullah, Sean Dempsey, and Andrea Zurek. Only PayPal has rivals Google in spawning so many eager investors and entrepreneurs in the Internet industry. Particularly noteworthy is the example of Meraki Networks, the WiFi router company, which is both co-founded and backed by ex-Googlers.

Edgeio’s asset sold — Looksmart acquired most of the assets of Edgeio, the online classifieds company that shut down a couple of weeks ago.

Google Android smartphones phones could launch in February, according to rumors by APC — Although, while Google’s Android is stumbling on deadlines, phone standards around Linux are being rolled out by a consortium including Orange, France Telecom, MontaVista, and Access. The group has included an APIs for telephony, messaging, calendar, instant messaging, and presence functions, as well as new user interface components.

Netcape dies, while co-founder Jim Clark stumbles in real estate pursuit — Netscape, once a leading Web browser, has finally shut down. This comes, coincidentally, as one of its co-founders, Jim Clark, who left Silicon Valley a few years ago saying the tech industry boom was over, stumbles on his subsequent endeavor: real estate. The founder of Silicon Graphics, Netscape, and WebMD went to build condos in Florida, starting a company called Hyperion. The New York Times reports about problems the company is having repaying a $110 million loan and with customer complaints.

Google about to sign deal with Japan phone giant NTT DoCoMo — This will give Google a potential 48 million in a market where Yahoo has traditionally dominated. Details here.

Innovalight, a Silicon Valley company that says it has come up with new solar cell with nano-particles of silicon, has raised a large $28 million round of capital and said it plans to open a 30,000 square foot manufacturing facility next year.Innovalight is still being very vague on the details of its technology, and it’s very late to the game. There are already more than a dozen other large companies and start-ups that are developing new solar energy modules.

Innovalight’s claim to differentiation is that it won’t use silicon in its costly, inflexible crystalline wafer state. It will reduce the silicon to nanosize crystal dots (see our earlier coverage), so that it can be used as a sort of ink, where it can be painted onto surfaces. At this point, though, being late may not matter as much as getting it right. The market for solar is expected to be huge (the market is predicted by some to more than double to $36 billion by 2010), as long as the price of the product can get low enough to be competitive with competing sources of energy.

The company hopes to take the efficiency properties of silicon and outperform other start-ups companies that are working on flexible, ink technologies based on materials other than silicon, such as CIGS. These companies include Konarka, Nanosolar, Miasole, Solyndra, SoloPower and Heliovolt. Many of these companies have made promises about their technology, but have failed to deliver on their declared time frame. They’ve also been soaking up engineering talent in the sector, making it harder for late companies such as Innovalight to hire the people they need.

It is the Sunnvale, Calif. company’s third round of funding, and it was led by Norway-based investor, Convexa Capital and supported by Scatec AS. Existing investors Apax Partners, ARCH Venture Partners, Harris & Harris Group, Sevin Rosen Funds and Triton Ventures also participated in this financing. The company, founded in 2002, previously raised $14 million.
CEO Conrad Burke wrote a guest column for VentureBeat in March.

Sevin Rosen Funds, the venture capital firm that roiled the industry last year when it decided to return its funds to its investors, citing a fundamental crisis in the industry, has changed its mind and is raising money again.

The decades-old firm, based in Dallas, Texas and Silicon Valley, said last year that the venture capital model was broken — too many firms investing too much money into companies that didn’t really need it. The firm said profits were too low to justify staying in the market, and so returned the money it had been given by its large investors. IThe firm’s argument resonated with many people, because there’s evidence of a shakeout happening in the industry. Poor performing venture firms are struggling to stay in business, and the partners who don’t produce are getting fired.

However, Jon Bayless, the partner who announced the depressing news last year, said in a New York private equity conference yesterday that the firm will begin talking with its investors (so-called limited partners, or large institutions such as university endowments and pension funds) about a new strategy: More later-stage venture deals, non-technology deals such as energy and health care, and overseas deals, perhaps in Europe or Israel.

“We’re counting noses among the partnership to see who’s going forward,” Bayless was quoted by VentureWire (subscription required) as saying during the conference. He said the firm probably will do some hiring to fill vacancies, but that it would remain the same size overall.

He said the fund would remain around the same $300 million size as its most recent fund.

Splunk, a San Francisco company that offers a search engine for IT data across corporate networks, has raised $25 million in a third round of funding.

Company IT professionals benefit from the search engine, because it scours technical data across a business operatings, from hardware to software, letting them track logs, messages and other data.

It comes at a time when competitors are entering this area, including Network Chemistry, which two months ago said it was throwing its resources into a new search engine that does something similar.

The funding was led by Ignition Partners, and included existing investors August Capital, JK&B Capital and Sevin Rosen Funds. Unconfirmed reports put the company’s valuation at $120 million.

Splunk offers a free download for its service, which has helped it grow. In 18 months since the formal launch of its first product, the company has added 450 customers, including Visa and the U.S. Department of Justice, it says. It claims more than 100,000 user downloads.

This funding round follows Series A investment of $5 million in December 2004 from August Capital and Sevin Rosen, and $10 million Series B in January 2006 led by JK&B Capital.

Ntag, a Boston company that makes interactive name badges for people to wear at conferences and other events so that they can interact socially with people with similar interests, has raised $8.3 million in a second round of funding.

A helpful demo on the company’s home page shows how it works (see “networking” chapter for basics). A conference attendee signs up online before an event, enters his occupation, experience and other interests. Ntag then provides him with a badge carrying this info, which interacts wirelessly with an Ntag server during the conference. The badge vibrates when the attendee comes into proximity of another attendee with similar interests (the attendee selects the sort of people he wants to meet beforehand). The attendee can also type info into the badge on a small keyboard — about a conversation with a cute sales representative he just met, for example — which is then recorded by Ntag’s servers, so that all the information is available online even after the attendee leaves the conference.

The company says it has conducted events for companies like IBM, Freescale, Pfizer, Alcatel-Lucent and General Electric.

A number of companies have rushed into this area, including Charmed Technology, of Los Angeles, Shockfish (maker of SpotMe), of Switzerland, and SmartBadge, of Laguna Hills, Calif.

Ntag is well-backed. It has raised a total of $23 million. Previous investors Sevin Rosen Funds and Pilot House Ventures provided the latest funding.

The company says the conference business is a $168 billion market.

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Citrix Systems is acquiring XenSource, an open-source “virtualization” company that lets multiple operating systems operate on a single server, reducing costs.

The price, at $500 million, is a whopping return for Palo Alto Calif.’s XenSource, which formed less than three years ago, and raised $40 million in financing. The company was spun out of Cambridge University effort. It competes directly with VMware, the hot industry leader that went public yesterday with tremendous interest from investors.

The market is huge, because less than 10 percent of Windows-based servers have been “virtualized” and so these companies have plenty of room to grow without having to claw at each other.

Citrix is a large company that delivers Windows applications to large companies, and it has long sought a server virtualization technology to complement its offering in order to speed up the delivery of those applications from more efficient servers. (Citrix also plans to move to virtualize the desktop itself, which is considered another huge, lucrative market but is essentially unserved right now.)

Besides saving costs through consolidating the amount of hardware you use, virtualization also helps with things like disaster recovery of files.

The deal is a big win for Nick Sturiale, partner at Sevin Rosen Funds, and Kevin Compton, a former partner at Kleiner Perkins Caufield and Byers, who seeded XenSource with its first financial backing. Compton invested on behalf of that Kleiner, but also Radar, his own firm (Radar invested more money than Kleiner, so this is a big win for Compton personally). It’s a big deal for Sturiale, too. He’s one of the younger partners at Sevin Rosen, a firm that has struggled for direction of late, and which recently decided to not raise a new fund. This deal helps give Sturiale the track record needed to continue in the competitive venture industry, even if it’s without Seven Rosen. Other investors include Ignition, New Enterprise Associates and Accel Partners.

The key connection, though, was Compton. He’s a board member at both Xensource and Citrix, which certainly must have helped things along.

Update: As of this writing, Compton’s bio — link above — still says he’s on the board of Citrix. However, we’ve been informed by Nick Sturiale that Compton is no longer a board member there. We’re not sure when exactly he left.

Update II: Compton left the board two years ago. He’s had less to do with Kleiner recently, so it doesn’t surprise us that he failed to update his Kleiner bio. More notably, it turns out that Sevin Rosen had a partner who was a board member at Citrix (see comment below), which really does make this a shot-gun wedding, doesn’t it ;-)

San Diego-based Slacker, the company that wants to take on the iPod with a new type of music recommendation service, has raised $40 million in a second round of funding.

The company, which we first covered in March, is launching in two stages. First, it launched its online player, which we’ve been listening to for several days now (image below), and have enjoyed. This part is similar to Last.fm, in that you can vote what music you like or dislike, and it will personalize a radio station for you based on those choices. It submits other music to you, based on what other people showing similar tastes have also selected.

The second phase will be the launch of a device, later this year, which will be always on through satellite and Wifi connections, and therefore it hopes to trump the iPod and its iTunes service — which are not so connected.

The round was led by Centennial Ventures and Rho Ventures, and go repeat investment from Austin Ventures, Mission Ventures and Sevin Rosen Funds.

This follows $13.5 million in a first round, as earlier reported.

Last.fm, of course was recently sold for $280 million to CBS last week, after raising a mere $5 million. Slacker, with its hardware, is much more ambitious.