Venture Capital News
Wireless Deals Rise in Venture Capital Funds
Venture capital investment in IT totaled $3billion in the first quarter of 2006, according to new research.
The figure is slightly down from the same quarter last year when $3.2billion of investments were made in the technology sector, according to a report from Datamonitor.
The area that has attracted most attention is wireless technology, which received $216m of investment in the first three months of 2006.
The Datamonitor report shows that while the value of total investments has gone down slightly, the overall number of deals has risen significantly.
Frederic Court , a partner with London-based technology VC firm Advent Venture Partners, says this increase in deals can be attributed to pre-dot com boom levels of confidence returning to the market.
Patrick Sheehan, a partner at international venture capital firm 3i, says VCs are communicating well at the moment but warns this can result in technologies being overhyped.
Datamonitor technology finance analyst Tom Jowitt believes debates over future standards help fuel investment, which is highest in the wireless sector at the moment.
"The wireless sector for the past four or five months has been a fairly consistent target for the VC community," he said. "There is a huge debate going on at the moment on the wireless side: is it going to be WiMax, is it going to be WiFi? "
"We have been seeing a lot of investment going into content providers and even location-based services for mobile phones," said Jowitt.
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Targacept Launches IPO, But at Less Than Hoped for Amount
Targacept, the biopharmaceutical spinoff from RJ Reynolds, made its long-delayed public debut on Wednesday.
Targacept went public with an initial public offering of 5 million shares at a price of $9 a share. Its shares are now listed on the Nasdaq under TRGT.
The US$45 million IPO was much less than the $11-13 per share Targacept had hoped for when it decided to restart IPO efforts that were launched initially in 2004 and then delayed due to market conditions.
Shares fell 34 cents to $8.66 by the close of trading.
Targacept is developing drugs based on research into nicotine. It has raised more than $120 million in venture capital financing.
The IPO was underwritten by Deutsche Bank Securities, Pacific Growth Equities, CIBC World Markets and Lazard Freres & Co.
Targacept recently received a $10 million payment from AstraZeneca for development of one of its compounds. The two companies signed a drug development deal in December that could be worth up to $300 million for Targacept.
The target of the deal is Targacept's compound known as Ispronicline, or TC-1734, which could prove to be effective in the treatment of Alzheimer's disease and other cognitive disorders. Targacept focuses on drug compounds targeting central nervous systems diseases and disorders.
The deal also calls for a four-year research collaboration through which Targacept will seek to discover other compounds and receive some $26 million in funding.
Targacept was launched in 1997 as a subsidiary of R.J. Reynolds Tobacco Company. It became an independent company in 2000 and since then has raised more than $120 million in venture funding. It has 74 employees.
TC-1734 acts on neuronal nicotinic receptors, or NNRs, that are key regulators of the central nervous system, according to Targacept. Targacept already has a Phase II clinical trial for TC-1734 underway, targeting age associated memory impairment
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Zoom Systems Announces $10 Million Financing to Fuel Automated Retail Expansion
Representatives Zoom Systems announced Wednesday the company has closed a US$10 million Series C financing round led by Goldman, Sachs & Co. that will speed deployment of the company's network of 40 square foot robotic stores that place iconic brands and high demand products directly in the path of consumers.
The company's "state-of-the-art" robotic stores are located in high traffic areas and use technology to provide consumers simplicity, speed and easy access to popular brand products. Leading consumer product brands can sell their latest products through Zoom Systems' channel to generate incremental revenues, powerful branding and perfect execution of their brand strategy. Shoppers select products via an easy to use touch screen graphic interface, finalize purchases with a credit or debit card and receive products immediately via a robotic arm. All of Zoom Systems' robotic stores are networked and centrally monitored, ensuring high reliability and customer service levels.
Goldman Sachs, through a spokesperson, stated, "Zoom Systems has a very large available market, and a highly talented management team. We are pleased to be involved in the company at this stage of its growth."
Sierra Ventures and NeoCarta Ventures led earlier rounds of financing for Zoom. Jeff Loomans and David Schwab of Sierra and Peg Jackson of NeoCarta serve on the board; Ram Venkateswaran of Goldman Sachs will now serve on the board. Also participating in the round was Zoom Systems' Chairman of the Board, Bruce Quinnell, former Vice Chairman, President, and COO of leading retailer Borders Group.
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Indicative Software Attracts $6 Million
Representatives of Indicative Software, Inc., a privately held IT service management software company, announced the completion of its Series B financing totaling $6 million dollars. Original investors, Sutter Hill Ventures, Sequel Partners and Vista Ventures, each participated as well as a new investor, WW Ventures. Indicative will use the funds for substantial expansion of its worldwide sales operations. Indicative sells its all-in-one service management product through a network of resellers and direct sales around the globe.
"Sutter Hill continues to invest because of our strong confidence in the market, technology and team behind the company." said Ron Bernal, Venture Partner of Sutter Hill Ventures. "The traction with major customers is impressive."
Indicative Software also announced the appointment of Wallace Whitley to the company's board of directors. Mr. Whitley's operational experience in guiding fast growing companies will add a valuable perspective to Indicative's board.
