Fund Raising News

Eric Lefkofsky and Brad Keywell, two of Chicago’s leading technology entrepreneurs are looking to support other Mid-west talent by providing up to $10 million per year in early stage funding. In addition, they plan to guide and nurture their entrepeneurs through their early years.

Press release: CHICAGO–(BUSINESS WIRE)–Eric Lefkofsky and Brad Keywell, two of Chicago’s leading technology entrepreneurs, plan to invest as much as $10 million annually in early-stage technology companies through a new fund called Lightbank (www.lightbank.com). The entrepreneurs behind Groupon, MediaBank, InnerWorkings (NASDAQ:INWK) and Echo Global Logistics (NASDAQ:ECHO) have already raised over $150 million and generated more than $1.5 billion in investor returns through their existing ventures.

With the launch of Lightbank, Lefkofsky and Keywell will contribute their resources and expertise to foster a vibrant, active community of Midwest technology entrepreneurs who are short on capital, but flush with innovative ideas.

“Chicago is full of untapped entrepreneurial talent that just needs a little support,” said Lefkofsky. “Lightbank will be a driving force behind break-through ideas and help establish this city as a technology hub.”

In addition to investing capital, Lightbank will take an active role in guiding and nurturing companies through all stages of growth, from effectively scaling technology and finding the optimal business model to securing further growth investment and ultimately exiting the business.

Lefkofsky and Keywell, who met at the University of Michigan, have a history of starting new ventures that have shaken up industries with long-standing business models.

In 2001, Lefkofsky founded InnerWorkings, a print and procurement company that was taken public in 2006. In 2005, Lefkofsky and Keywell started Echo Global Logistics, a transportation and logistics management company that went public in 2009. In 2006, they co-founded MediaBank, a data-driven media-buying platform that now processes nearly 20 percent of the media purchased annually in the United States. In 2007, they co-founded Groupon, a collective buying site and their first foray into a consumer-facing business. Groupon now operates in over 40 cities, has more than three million subscribers and has raised $36 million from New Enterprise Associates and Accel Partners.

“Our success with Groupon has created a tremendous amount of interest from consumer-facing Internet-based start-ups in search of funding and support,” said Keywell. “Our formula for high-growth, high-return firms in business services has translated very well to the consumer market, and we believe there are many opportunities to further build on our skills and resources.”

Lightbank will focus on venture investments in early-stage companies in a number of industries. “So far we’ve only scratched the surface of industries that follow antiquated business processes, where technology can be leveraged to realize cost-savings and create value,” said Lefkofsky. “Lightbank will allow us to identify and invest in promising business model innovations and quickly take them to market.”

About Lightbank

Lightbank is a Chicago-based fund focused on early-stage technology companies. Founders Eric Lefkofsky and Brad Keywell, who started Groupon, MediaBank, InnerWorkings (NASDAQ:INWK) and Echo Global Logistics (NASDAQ:ECHO), will invest up to $10 million annually and take an active role in helping entrepreneurs turn early-stage ideas into successful businesses.

Related Fusion DigiNet Article: Groupon has raised a Series B financing round of $30 million, 2nd December 2009

The Vendors have agreed a lock-in such that they will not sell any of the Consideration Shares unless and until either Neville Buch or Douglas Emslie sell any of their own ordinary shares in Tarsus, in which case the Vendors will be entitled to sell the same percentage of their Consideration Shares as the sale (by Mr Buch or Mr Emslie as the case may be) represents to their combined shareholdings in Tarsus. The Vendors are also permitted to dispose of their Consideration Shares in certain other limited circumstances, including if there is a change of control involving a change in the existing management of Tarsus.
 
Details:  Tarsus Group, the international business-to-business media group,  has entered into a conditional agreement with Dr Robert Goldman and Dr Ronald Klatz  to acquire from them the remaining 20% interest in MCI not already owned by Tarsus Group for a consideration of US$ 10.75 million (£6.6 million). MCI, founded by the Vendors in 2003, is an organiser of medical sector events in the fast growing anti-ageing and preventative medicine market. MCI organises three key sector events in the USA annually: in Orlando (April), Chicago (October) and Las Vegas (December). 

Following the MCI Acquisition, the Vendors will both remain with the business and their current consulting agreements with MCI will be revised and extended by 10 years to 2026. The terms of the deferred consideration/ revenue incentive payable under the terms of the 2006 MCII Acquisition agreement have been extended, but subject to more demanding financial thresholds, and aggregate deferred consideration payments remain subject to the existing cap of $10.0 million.
 
Link: The London Stock Exchange’s Regulatory News Service (RNS)  

Background to the MCI Acquisition

On 16 November 2006 Tarsus Group announced that it had entered into an agreement with the Vendors to acquire from them 80 per cent. of the issued share capital of Medical Conferences International Inc (“”MCII”") for a total consideration of up to $46.0 million.  This comprised $36.0 million payable in cash upon completion, up to $10.0 million payable as deferred consideration and $2.9 million consideration for the net assets of MCII.

Following the completion of this transaction the Vendors retained ownership of 20% of MCII, (now “”MCI”").

 As at 31 December 2009, the gross assets of MCI were $19.4 million, and MCI generated profit before tax of $6.3 million for the year ended 31 December 2009.

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Last Week’s Fund Raisings

1. Autoquake has raised £6 million

• Details : Autoquake, the online retailer set up to sell used cars from large corporate fleet and leasing companies to consumers,  has raised £6 million is a mixture of venture capital and venture debt financing.
• Investors:  The capital was provided by previous investors Accel Partners and Highland Capital Partners , who put in £4 million raised last year. The debt came from Kreos Capital.
• Contacts: Dermot Halpin, CEO Autoquake: Fredrik Skantze, co-founder and CMO Autoquake: Ross Ahlgren, General Partner at Kreos Capital
• Location: UK, London
• Category: Auto, Retail
• Link: Autoquake Blog Announcement, Twitter

2. Chomp.com has raised £2 million

• Details: iPhone apps review site Chomp.com has raised £2 million in funding. Launched just 8 weeks ago, Chomp has 300,000 users and 1.5 million reviews.
• Investors:  BlueRun Ventures, SV Angel partners Ron Conway and David Lee and former SV Angel, now CEO of DailyBooth, Brian Pokorny.
• Location: USA, San Francisco, CA
• Category: Apps, Reviews

3. DataXu Secures $11 Million in Series B Funding

• Details: DataXu, provider of the leading real-time bidding platform for online display advertisers, today announced it has closed $11 million in Series B funding. The proceeds will be used to fund new product development, sales and marketing, and international expansion. John Jarve, Managing Director of Menlo Ventures, will join DataXu’s board of directors.
• Investors:  Led by Menlo Ventures. Atlas Venture and Flybridge Capital Partners, who provided DataXu’s Series A funding in April 2009, also participated in the round.
• Contacts: Mike Baker, President and CEO of DataXu: John Jarve, Managing Director of Menlo Ventures.
• Location: USA, Boston, MA
• Category: Advertising
• Link: Press Release

4. DoubleVerify Raises $10 Million in Series B Funding

• Details : Online advertising verification company DoubleVerify has closed a $10 million series B financing round
• Investors:  Led by Institutional Venture Partners (IVP). The round included participation from existing DoubleVerify investors. DoubleVerify had previously closed a $3.5 million Series A financing in May 2009 led by Blumberg Capital, with participation from First Round Capital, Genacast Ventures and private investors.
• Contacts: Oren Netzer, Co-Founder and CEO of DoubleVerify: David Bell, a DoubleVerify board member: Dennis Phelps, General Partner of IVP: David Blumberg, Managing Partner, Blumberg Capital
• Location: USA, New York, NY
• Category: Advertising
• Link: Company Announcement

5. FirstRain raises $7.3 million

• Details: FirstRain, a business that offers a research engine that intelligently filters information and trends from the web about companies, the markets they operate in, and the business trends impacting their market, has raised $7,296,727 of a $8,815,242 equity round.
• Contact: Penny Herscher, President and CEO
• Location: USA, San Mateo, CA
• Category: Research, Search
• Link: Regulatory Filing

6. LivingSocial Raises $25 Million

• Details: LivingSocial, the social commerce business behind LivingSocial Deals and Facebook applications Visual Bookshelf and Pick Your Five, has completed a $25 million Series B round of venture funding. With this round of funding, LivingSocial Deals is launching in four additional cities: Chicago, Denver, Raleigh Durham and San Diego, making the program live in 13 markets across the USA
• Investors:  Led by U.S. Venture Partners, with Grotech Ventures and Steve Case’s Revolution, LLC participating
• Contact: Tim O’Shaughnessy, CEO of LivingSocial
• Location: USA, Washington D.C.
• Category: Ecommerce
• Link: Company announcement

Competitor news on Fusion DigiNet: Groupon has raised a Series B financing round of $30 million, 2^nd December 2009.

7. Plancast has raised $800,000

• Details : Worldly Developments, the consumer internet startup behind Plancast has raised $800,000. The founders are Mark Hendrickson (who previously worked at TechCrunch) and Jay Marcyes.
• Investors:  SoftTechVC, True Ventures, Founders Fund Angel, and Zelkova Ventures. As well as individual angels, Aydin Senkut, Saul Klein, David Cohen, Joshua Schachter, Dave McClure, Dan Martell, Ron Bouganim, and Paige Craig.
• Location: USA, San Francisco, CA
• Category: Social Network
• Link: TechCrunch

8. SeaWell Networks Secures $7 Million in Series A Funding

• Details: SeaWell Networks Inc., an emerging provider of Internet video distribution products, today announced that it has secured a $7 million Series A round of investment, including the conversion of seed funding. SeaWell will use the funds to expand development and marketing efforts of their Internet video streaming solutions that will redefine how video content is delivered over the Internet.
• Investors: Led by BDC Venture Capital, the round also included Northwater Intellectual Property Fund and Ontario Centres of Excellence.
• Location: Canada, Toronto
• Category: Video
• Link: Company Announcement

9. Todacell secures additional $1 million funding from existing investor

• Details: Todacell, the mobile display ad network for optimizing publisher ad performance, has raised an additional $1 million round of funding. Monies from this round of funding have been earmarked for sales and marketing, with five new sales offices opening in New York, Los Angeles, Toronto, London and Bombay.
• Investors:  Raised from existing investor AfterDox. Previously Todacell has secured $2 million from AfterDox and others, including $350,000 seed funding from the Fore Group.
• Location: Israel, Tel Aviv
• Category: Advertising, Mobile
• Link: Company Announcement

10. TripIt receives $7M third round of funding

• Details: TripIt, the trip management company, has closed a third round of funding, receiving $7 million from a group of investors. These funds will be used to accelerate TripIt’s cloud-based web service to reach more business travellers, as well as new services for mobile and enterprise collaboration at global companies.
• Investors:  Led by Azure Capital Partners and O’Reilly AlphaTech Ventures. TripIt has now received $13.1M in total investment, including $1M when it launched in 2007, $5.1M in 2008, and $7M in this third round of funding, which was oversubscribed by interested investors.
• Location: USA, San Francisco, CA
• Category: Travel
• Link: Press Release

Fund Raising News

1. Berlin: Team Europe Ventures starts €6 million investment fund for Internet start-ups, Reported on Fusion DigiNet on 10^th March 2010.
2. Battery Ventures Closes $750M Fund

• Details: Battery Ventures, a multi-stage investment firm focused on technology and innovation worldwide, today announced that is has closed its ninth fund, BV IX, at its $750M target. BV IX Will focus on Technology-Related Investments from Seed to Growth Equity and Buyouts. The firm invests worldwide, with the majority of its investments in North America, Israel and India.
• Location: Battery Ventures invests out of offices in Waltham, MA, Menlo Park, CA and Herzliya, Israel. 
• Link: Press Release

Aprox. Value:  Undisclosed
 
Details:  HootSuite Media, Inc. have acquired Swift App, Inc. a company specializing in Android™ App development, notably their flagship product “Swift App,” a Twitter client for Android. The acquisition means quicker development for the growing Android market and is a show of support for the emerging mobile platform. The acquisition sees Swift App developer Sebastian Delmont joining HootSuite as a mobile adviser.
 
Links: 

• Company Announcement  
• HootSuite blog post

News Corporation is considering the sale of Berlin based Jamba (Jamster) according to a Merger Markets report in the Financial Times. Jamba is a mobile content provider. It is thought that News Corp want to concentrate their digital businesses around MySpace.

The report cites bankers as saying that Spanish entertainment company Zed is a likely buyer and also lists Italian mobile companies Buongiorno and Flycell, plus mobile music business Dada.net as other possible buyers.

Link: Financial Times article

 Other News Corporation articles on Fusion DigiNet

• News Corporation acquires a stake in Rotana Group - 23/2/2010
• CME buys 90% stake of the Dow Jones Indexes business for $607.5 million - 12/2/2010

• Evri’s company announcement  
• Press Release 
• Twine CEO Nova Spivack’s comments and analysis of the acquisition
    

Funding News

Over the next three years, Team Europe Ventures intends to invest €6 million in startup financing for Internet businesses, and has set up a fund for this purpose. The fund focuses on the seed-stage; initial investment is up to €500 K per company. The fund is focused on Internet and mobile Internet.

Location: Germany, Berlin

Other Team Europe Ventures news on Fusion DigiNet: SponsorPay Acquires GratisPay 

Link: Press Release 

About Team Europe Ventures:

Team Europe Ventures invests in promising internet companies in early stages of development. Team Europe’s industry focus is consumer internet and internet technology; the goal for Team Europe’s companies is to generate revenues in the millions within a few years after founding. Team Europe Ventures is managed from Berlin by the its four partners Lukasz Gadowski (founder of Spreadshirt, co-founder of StudiVZ), Kolja Hebenstreit (early employee at Spreadshirt, seed investor in StudiVZ), Pawel Chudzinski (formerly Grennhill & Co.) and Steffen Hoellinger. Team Europe is shareholder in 15 self founded companies or lead investments as well as 40 co-investments. Regional focus of the investments are the EU and the US.

• Picnik’s Blog Announcement 
• Google’s Blog Announcement

Other recent Google acquisitions

• Social search engine Aardvark has been acquired by Google  
• Google is acquiring AppJet, the small startup that builds the popular collaboration tool EtherPad  
• Google has acquired DocVerse
   

Aprox. Value:  Undisclosed
 
Details:  Team Europe Ventures company SponsorPay has acquired GratisPay. The consolidation of the two enterprises creates Europe’s leading provider of advertisement-based payment systems, monetizing virtually all of the major European online and social games publishers.Both companies were founded in 2009.
 
Link: Press Release

Aprox. Value:  Undisclosed
 
Details:  ngmoco, the  iPhone and iPod touch game developer and publisher, has acquired game-maker Freeverse. ngmoco also announced Series C funding of nearly $25 million. Investors include Kleiner Perkins Caufield & Byers, Maples Investments and Norwest Venture Partners.
 
Link: Press Release