Private Equity Week Wire for Monday 7/23

MILPITAS, CA — Velio Communications, a leader in high bandwidth communications semiconductors, today announced its third round of funding, raising $45 million and bringing the total investment in the company to $95 million. This round is led by Redpoint Ventures. Other investors in this round are Sequoia Capital, Institutional Venture Partners, Global Catalyst Partners, Capital Research Group and HarbourVest Partners, all participants in Velio’s earlier rounds.

NEW YORK — Innovation Advisors Inc., announced the launch of its North American mergers and acquisition advisory service focused on technology, communications, and media companies for $10M-$50M transactions. Innovation Advisors also announced the opening of its corporate headquarters at One Penn Plaza in New York. Innovation Advisors is the first M&A advisory firm to identify the need for combining experts from top technology-focused investment banks with executives from public technology companies to fulfill clients’ strategic needs for mid-sized transactions.

STAMFORD, CT — Whitney & Co. announced today the pricing of its most recent investment vehicle, Whitney Private Debt Fund LP (“WPDF”). WPDF will be a $322 million fund that will invest primarily in mezzanine debt securities and institutional bank loans by means of a leveraged partnership capital structure.WPDF will increase Whitney?s assets under management to over $5.5 billion and will become Whitney?s 17th investment fund under management since 1990 when Whitney began managing outside capital. WPDF is also the sixth fund that the firm has successfully launched or acquired in the past nine months. The other funds include two public equity hedge funds, two structured debt funds, and one private equity fund.

MARLBORO, MA — Egenera Inc., a data center infrastructure company, today announced that it has raised $30 million in a second roundof venture financing. With this transaction, Austin Ventures, which led the round, has joined the Egenera investor group. In addition, each of Egenera’sinitial backers–Spectrum Equity Investors, Kodiak Venture Partners, CSFB Private Equity, Goldman Sachs and YankeeTek Ventures — participated in the funding. This influx of capital provides Egenera with resources to bring its BladeFrame system to market, ramp its sales and customer-service functions, and continue developing futureproducts.

SAN FRANCISCO — Blueprint Ventures announced today that it hadjoined in a $19.5 million Series B Round for BayPackets, a developer and marketer of a network independent and carrier-grade system that accelerates network-based voice serviceimplementation and OSS/BSS integration. Blueprint Ventures was joined in this round of financing by lead investor Lucent Venture Partners, along with Diamondhead Ventures, INC3 Ventures Series I and MentmoreVentures. Existing investors TeleSoft Partners and Antillion Capital II as well as other private investors also contributed to this round of funding. Founded in February 2000, BayPackets is a privately held company based in Fremont, Calif., which has raised $24 million in funding to date. This round of financing will enableBayPackets to further expand its engineering, sales and marketing operations as the company prepares to launch its solutions in Q3 2001.

WALTHAM, MA — -Charles River Ventures (CRV) today named Mike Ahearnrecruiting partner. In this role, Ahearn will focus on providing CRV’s portfolio companies with guidance on critical recruiting and human resources issues, including executive search,compensation, organizational structure and staffing. Ahearn joined CRV in May 2000 with more than 20 years of experience in human resources and executive recruiting for emerging and high-growth technology companies. SinceMay, he has directed the firm’s CRVelocity Executive Recruiting and CRVelocity Human Resources services. In that role, Ahearn has advised CRV portfolio companies on strategicissues such as defining and planning for executive openings, assisting with selection of appropriate recruiters, recruiting and retaining key executives, staffing, developing strategiesand effective human resources programs, and providing industry data about current compensation and benefits best practices.

BELMONT, CA — PowerMarket Inc., a leader in value chain intelligence solutions, announced today the completion of its Series B fundinground. Building on its first close of $12.5 million announced May 2, the company raised an additional $3.6 million, including $3 million from RSA Ventures. PowerMarket combinessupply chain management and business intelligence technologies to help companies improve direct materials procurement management and decision-making. RSA Ventures joins leading PowerMarket investors Norwest Venture Partners, Kleiner Perkins Caufield & Byers and RRE Ventures. PowerMarket has now raised $26.2 million intotal capital.

ACTON, MA — Trebia Networks Inc., an emerging leader in the development of innovative network processors for storage networkapplications, has secured over $30 million in funding from premier venture companies. Atlas Venture led Trebia Networks’ second major funding round and was joined by KodiakVenture Partners, Raza Foundries, BancBoston Ventures, VantagePoint Venture Partners, Allianz of America Inc., Deutsche Banc Alex Brown, and others. The funding will be usedfor continued product development as Trebia readies for first product shipment. Coupled with Trebia Networks’ initial seed funding round from Kodiak Venture Partners and a $9 million round from Kodiak, Raza Foundries and BancBoston Ventures, thecompany has raised over $40 million in venture capital.

PHOENIX — InfoImage, developer of the leading enterprise portal platform for e-business applications, today announced that it has received additional funding from several of its existing investors, bringing the current investment in InfoImage’s patent-pending software to $43 million. Long-term investors Tudor Ventures, Boston Millennia Partners, Geocapital Partners, meVC and other high-profile investors provided the majority of funding.
MENLO PARK, CA — Lightspeed Venture Partners, a leading early stage technology venture capital firm, announced today that Isaac Applbaum and Peter Moulds have joined the firm as venture partners.Isaac Applbaum will drive the firm’s efforts in identifying and pursuing new investments in Israeli technology companies. Peter Moulds will counsel Lightspeed portfolio companieson sales strategy and business development. Messrs. Applbaum and Moulds’ combined 40 years of entrepreneurial and corporate leadership experience complement the currentpartners’ areas of expertise and will enhance the array of services Lightspeed provides its portfolio companies. Prior to joining Lightspeed, Applbaum was the founder and CEO of Concorde Solutions Inc. (CSI), a developer of applications which enable financial institutions to bringcomplex products to the Internet. In 1998, CSI was acquired by Bank of America, where Applbaum became responsible for the bank’s E-ventures group, served as an advisor tothe strategic investments group and was instrumental in the development of Bank of America’s operations in Israel. Applbaum’s experience also includes running U.S. operationsfor Advanced Technology International, a large Israeli software development company. Peter Moulds will counsel executives of Lightspeed portfolio companies in the communications sector. He will work with the other Lightspeed venture and business partners toensure that portfolio companies build relationships with potential strategic customers, partners, investors and employees. Moulds brings to Lightspeed more than 20 years of marketing, sales and management experience in the computer industry, including 15 years in the networking sector. Prior tojoining Lightspeed, he was the vice president of worldwide sales for FreeGate Corporation, a manufacturer of Internet servers for small businesses. Mr. Moulds spent seven years atAscend Communications, now Lucent Technologies, where he served as vice president of sales.

SANTA CLARA, CA — Sanctum Inc., the established leader in Web application control and security software, today announced it has secured $30 million in financing, which will be used towardscontinued product development, sales outreach, global expansion and operations. New investors include Dell (Nasdaq:DELL), Fidelity Ventures, Gemini Israel Funds, First UnioneVentures Group (NYSE:FTU) and Hitachi, Ltd. (NYSE:HIT). These companies join a strong list of existing investors, led by Sprout Group, with Mofet Israel Technology Fund andWalden Israel, which have reinvested in the current round. This round increases Sanctum’s total funding to over $54 million since May 1997. Additionally, Sanctum announced that John Dillon, CEO of Salesforce.com, will become chairman of the board. Simon Davidson, principal of Fidelity Ventures, and Tali Aben,general partner, Gemini Israel Funds, have also been named directors of Sanctum.

AUSTIN, TEXAS — Works, a leading provider of procurement applications for midsize businesses, today announced that it has secured $15 million in additional funding. Adams Capital Management, a national venture capital firm that invests in telecommunications and information technology companies, led the funding round that also included investments from Kemper Ventures, Trellis Partners and members of the Works management team. The investment will be used by Works to continue marketing, sales and development of the Works Procisa(TM) procurement application. Besides securing the funding, Works announced that Joel Adams, General Partner of Adams Capital; John Reynolds, Founder and Managing General Partner for Kemper Ventures; and Leland Murphy, Co-founding Partner of Trellis Partners; have all joined the Works board of directors. Works also announced that Martin Neath, current Works board member and President and COO, was elected to the position of Chairman.

PITTSBURGH & BOSTON — Demegen Inc., a biotechnology company specializing in the development of antimicrobial peptides for the treatment of infectious diseases and oncology, announced today that Joseph F. Lovett, a Boston area healthcare executive and venture capitalist specializing in the life sciences, has been elected to Demegen’s board of directors. Lovett, who previously served as a director of Periodontix, Inc., a Watertown, Mass., clinical stage biopharmaceutical company whose assets were recently acquired by Demegen, is President of Beacon Life Sciences, a recently formed venture capital development corporation focusing on photonics for use in life sciences, and is a general partner of Medical Science Partners.

SAN FRANCISCO — MyFamily.com Inc., the leading online source for connecting families and generations, today announced it has closed a $15 million round of financing. This latest round of investment was led by EsNet Ltd. and included three other new equity investors: vSpring, Sorenson Media and Canopy Group. Also participating in this round of funding were CMGI @Ventures Fund and Wasatch Venture Fund, both previous investors in the company and company co-founder Paul Allen. As part of the new investment, Dave Moon of EsNet has joined the MyFamily.com board of directors and has been elected its chairman. Individual details of the transaction were not disclosed. As with previous rounds of financing, this latest series was oversubscribed. This brings the total amount of private placement funding raised by the company to $90.5 million.