PE Week Wire: Wed., Feb. 27, 2008

Ok, it seems I was wrong about having scoopiness today (save for some tidbits in the news section). But soon, dear reader, soon. In the meantime, links links links:

* Tom Allchorne wades into the venture stream at Super Return, which I had ignorantly thought was all buyouts all the time. And he has a question: Can venture capitalists still be generalists?

* More from Super Return: David Rubenstein of Carlyle. Jon Moultonof Alchemy. Leon Shahanian of CalPERS. Guy Hands of Terra Firma.

* Five Questions for David Jones of Chrysalis Venture Partners, which today will announce that it has closed its fourth fund with $163 million. Of particular interest to me: Why VC firm expansion has not yet reached the Ohio Valley.

* Michael Arrington on the backstage drama and stupidity that led DivX to shutter Stage6. Arrington notes how venture capitalists once offered to carve Stage6 out of DivX, and leave the former parent with a 20% ownership stake. But the DivX board apparently had a last-minute change of heart, and now the whole effort is scrapped. As a quick addendum, it’s worth noting that the DivX board is stacked with other VCs…

* The family origins of modern private equity.

* How the credit crunch is squeezing small and mid-sized banks.

* A push is on to let debt issuers buy it back.

* Yelp reportedly raises $15 million at a $200 million valuation. Remember when Web 2.0 companies came cheap and sold fast? I thought that was the reason VCs were doing them in the first place.

* In about an hour I’ll be heading downstairs for VC in the Rockies (have some magazine stuff to finish first). Hope to see some of you there, and later plan to walk away with your chips at this evening’s poker tournament…

Top Three

The Blackstone Group and First Reserve have announced a $2 billion partnership with Petroplus Holdings AG (SWX: PPHN), to acquire crude oil refineries in the United States. Each partner has committed $667 million, with PetroPlus to assemble a small group of professionals to examine potential opportunities. It will be led by Petroplus chairman Tom O’Malley.

Proofpoint Inc., a Sunnyvale, Calif.-based provider of email security and data loss prevention solutions, has raised $28 million in Series F funding. DAG Ventures led the round, and was joined by return backers Benchmark Capital, Bridgescale Partners, Inventures Group, JAFCO Ventures, Meritech Capital Partners, Mohr, Davidow Ventures and RRE Ventures. The company has now raised $86 million in total VC funding since mid-2003.

Raynard Benvenuti and Noah Roy have joined Greenbriar Equity Group as managing directors, while Arvind Krishnamurthy has joined as a director. Benvenuti has been an advisory director with Greenbriar since last year, and previously was president and CEO of Stellex Aerostructures. Roy was previously with Goldman Sachs, as head of its aero space and defense I-banking group. Krishnamurthy was previously with Veritas Capital Management.

VC Deals

Kilopass Technologies Inc., a Santa Clara, Calif.-based developer of non-volatile memory solutions, has raised $17.9 million in a Series C round extension, according to a regulatory filing. Return backers include BlueRun Ventures, Pitango Ventures and U.S. Venture Partners. The company had previously raised around $22 million since 2002.

Panther Express, a New York-based global provider of digital content delivery services, has raised $15.75 million in Series B funding. Index Ventures led the round, and was joined by Gold Hill Capital and return backer Greylock Partners.

TidalTV Inc., a Baltimore-based startup bringing the television experience to PCs, has raised $15 million in Series A funding. New Enterprise Associates and Valhalla Partners co-led the round. TidalTV chairman Scott Ferber was a co-founder of, while its CEO Mollie Spilman was’s former top sales and marketing executive., a China-based online retailer of diamonds, has raised over $10 million in VC funding. Backers include Kleiner Perkins Caufield & Byers, Qiming Venture Partners, Zero2IPO Group and Papaport.

Cianna Medical, an Aliso Viejo, Calif.-based BioLucent spinoff focused on breast brachytherapy devices, has raised $9 million in Series A funding. Backers include BioLucent, Fog City Fund and Windamere Venture Partners.

Obalon Therapeutics Inc., a San Diego-based drug startup, has secured $4.7 million of a 7.7 million Series A round, according to a regulatory filing. Domain Associates led the deal, and was joined by Okapi Ventures and Phagia Technology Inc. The company does not have a website.

HiveLive Inc., a Boulder, Colo.-based provider of an enterprise social software platform, has raised $5.6 million in first-round funding. Grotech Capital Group led the round, with general partner Joe Zell taking a board seat.

CrunchyRoll Inc., a San Francisco-based video sharing site focused on anime, has raised $4.05 million in Series A funding, according to a regulatory filing. Venrock led the round, with partner David Siminoff joining the board of directors.

Adnavance Technologies Inc., a Vancouver-based developer of direct detection molecular diagnostic tests for medical applications, has raised Cnd$3.7 million in Series B funding. GrowthWorks Capital led the round, and was joined by JovInvestment Management and the Business Development Bank of Canada. In other Adnavance news, the company has named Randy White as CEO. His former CEO roles have been with Nanogen (Nasdaq: NGEN) and Xenomics (OTC BB: XNOM).

TrueDemand Software Inc., a Los Gatos, Calif.-based provider of supply chain management software, has secured $2.7 million of a $4.4 million Series C rounds, according to a regulatory filing. Return backers include Bay Partners, CMEA Ventures and Mayfield Fund. The company had previously raised $14 million.

Alamofire Inc., a Southlake, Texas-based social gaming startup, has raised $2 million in Series A funding from The Founders Fund and Alsop Louie Partners, according to a regulatory filing.

Fanzter Inc., a Collinsville, Conn.-based new media development startup, has raised around $1.87 million in Series A funding from Second Avenue Partners, Curious Office Partners and Rich Barton) , according to a regulatory filing. The company had previously announced the round, but not the dollar amount.

NanoImaging Services Inc., a San Diego-based provider of molecular imaging services, has raised $1.5 million led by Merck Capital Ventures.

ActaCell Inc., an Austin, Texas-based developer of high-power lithium ion batteries, has secured $1 million of a $5.1 million Series A round, according to a regulatory filing. Backers include DFJ Mercury, Applied Ventures and Good Energies.

Buyout Deals

Arlington Capital Partners has acquired Virgo Holdings, a Phoenix-based publisher and trade show organizer. No financial terms were disclosed, although LBO Wire puts the transaction value at around $100 million.

Mainsail Partners has sponsored a management-led buyout of IPSolutions Inc., a San Mateo, Calif.–based provider of corporate education and training. No financial terms were disclosed. IPS was advised on the deal by Venturi & Company.

Sorenson Capital has acquired an undisclosed stake in Michael’s Finer Meats and Seafoods, a Columbus, Ohio-based purveyor of meats and seafoods to high-end restaurants, hotels, casinos, resorts, country clubs and caterers. No financial terms were disclosed.

PE Exits

AAR Corp. (NYSE: AIR) has agreed to acquire Avborne Heavy Maintenance Inc. from Trivest Partners. Other sellers include Allied Capital and PNC Equity. No financial terms were disclosed. Avborne is a Miami, Fla.–based provider of aviation maintenance, repair and overhaul services.

Newell Rubbermaid (NYSE: NWL) has agreed to acquire Technical Concepts Holdings LLC from Liberty Partners. No financial terms were disclosed for the deal, which is expected to close by the end of Q2. TCH is a Mundelein, Ill.-based provider of restroom hygiene systems, and had net 2007 sales of approximately $137 million.

Firms & Funds

Chrysalis Ventures has closed its fourth fund with $163 million in capital commitments. Limited partners include Morgan Stanley, Credit Suisse and the Kentucky Teachers’ Retirement System. The Louisville-based firm focuses on early-stage opportunities in the Midwest, Ohio Valley and South.

Foundation Capital has begin approaching investors for its sixth fund, according to Private Equity Insider. The Menlo Park-based firm closed its fifth fund in 2005 with $525 million, and is expected to seek around the same amount.

Mainsail Partners has raised $110 million for its second fund, according to a regulatory filing. The San Francisco-based firm focuses on growth equity, recap and management buyout opportunities. Its debut fund closed in 2005 with around $30 million.

The Riverside Company is targeting $900 million for its latest buyout fund, according to Private Equity Insider. It also has raised its fee structure from a 2% management fee and 20% carry to a 2.5% management fee and a 25% carry.

Riverlake Equity Partners has held a $62 million first close for its second fund, which is being marketed with a $150 million target and a $175 million hard cap. E.L.K. Capital Advisors is serving as placement agent.

Human Resources

Gerhard Kurz has joined Avista Capital Partners as an industry advisor, focused on the offshore energy services and marine transportation markets. He is the former president and CEO of Seabulk, which the Avista team invested in while still with DLJ Merchant Banking Partners.

Nate Mitchell has joined Index Ventures, as a Geneva-based associate with the firm’s new $600 million growth equity fund. He previously was with Draper Fisher Jurvetson in Silicon Valley and, before that, with Summit Partners.

Keith Garrison has left his position as managing directors of external private markets for Teacher Retirement System of Texas, according to LBO Wire. His new job is with former colleague Jim Hille, at Texas Christian University’s $1.2 billion endowment.

Stephen Hochschuler has joined HealthPoint Capital as a senior advisor. He is co-founder of the Texas Back Institute, and is a board-certified orthopedic surgeon.