Private Equity Week Wire for Tuesday 1/22

REDWOOD CITY, CA — Postini Inc., the leader in the seamless delivery of email management tools and applications functionality, today announced it has closed a $10 million series C. Led by investor Mobius Venture Capital (formerly SOFTBANK Venture Capital), the funding round also included new investors AltoTech Ventures and Pacifica Fund, as well as existing investors.

NEW YORK — Apollo Management LP, a leading private investment firm, announced today that Cheryl G. Gordon has joined the firm as a Partner. Ms. Gordon had been Senior Managing Director of Rothschild North America and Chief Executive Officer of Rothschild Asset Management Inc. Ms. Gordon’s responsibilities will include participation in the strategic planning for the future of the Apollo franchise. She will also head Apollo’s investor relations, including marketing and sales of new funds.

NEW YORK — GivingCapital Inc., a privately held company that partners withorganizations to develop and market complex wealth management products andservices, today announced that it has successfully concluded its Series Cfunding round and secured an additional $4.2 million in capital from existinginvestors.

This third round of funding follows GivingCapital’s recent announcement thatit has partnered with American Express, Morgan Stanley and Salomon SmithBarney to develop, distribute, and process donor-advised funds for the firms’clients. Other GivingCapital clients include JP Morgan Chase, CSFB and theAmerican Bar Endowment.

NEW YORK — The Cypress Group, the New York-based private equity firm, announced today that it has named Christopher B. Harned a Managing Director and member of the firm’s Management Committee. In addition, Cypress named Gene Lee, Brian M. Moloney and David C. Sullivan associates of the firm.

Chris Harned joins Cypress following a 16-year career at Lehman Brothers, where he had been a Managing Director and Head of Lehman’s Global Consumer Products M&A practice. He also served on Lehman’s Investment Banking Business Development Committee and spearheaded the development of Lehman’s European consumer franchise. AUSTIN, TX — AV Labs, the venture capital accelerator based in Austin, Texas, announced today that Steve Manweiler has joined the fund as a Venture Fellow. The Venture Fellow program is unique to AV Labs, providing portfolio companies in its acceleration process with access to world-class entrepreneurial operating talent.

Manweiler was the first employee hired by Vignette founders Ross Garber and Neil Webber, and was most recently CTO of Vignette. While there, Steve helped develop the company’s original management and workflow architecture, and went on to lead product architecture over the entire family of Vignette products. He was instrumental in the early growth of the company and contributed directly to its product strategy, direction, and merger and acquisition activity.

BURLINGTON, MA — InvisibleHand Networks Inc., a leader in the bandwidth solutions market, announces James Earl (“Jim”) Brown III has accepted the position of chief executive officer and president. Brown joins InvisibleHand from the venture capital firm, Polaris Venture Partners, where he served as general partner specializing in information technology investments.

Brown replaces Glenn Ricketts in the chief executive role. Ricketts will remain with the company during the transition through the end of January, when Mr. Ricketts and his family will return home to New Zealand. Ricketts will remain on InvisibleHand’s Board of Directors.

HOUSTON — Advanced Reality, Inc., the company that makes applications collaborative, today announced that it has raised $1.8 million from private investors in a first round of financing. The company will use these funds to grow its product development and customer support resources, as well as accelerate sales and marketing activities for Presence-AR, a peer-to-peer collaboration platform that embeds secure real-time collaboration capabilities directly into existing and new applications. The round was led by Advanced Reality executives and a group of prominent Houston-based angel investors. Advanced Reality recently signed its first customer, chemical giant Rohm Haas.

CAMBRIDGE, MA — Navigator Technology Ventures LLC (NTV) announced today the selection of Alain Hanover as Managing Director and CEO of NTV. Hanover brings to the position 30 years of experience in venture capital, executive management, software development, and engineering. NTV is the Venture Capital subsidiary of The Charles Stark Draper Laboratory, Inc. of Cambridge, Mass. Founded in 2000, it focuses on early stage investments.

Hanover co-founded InCert Software Corp. in 1997 and led the company as President and CEO from 1997-2000. He wrote the business plan and set the strategy for this patented software technology developer, recruited all executives, raised $15 million in venture capital, and launched two products. From 1984-97, Hanover co-founded and served as President, CEO, and Chairman of Viewlogic Systems Inc., an electronic design automation software company. He recruited the team, set the strategy and led the company since inception. He raised $16.5M of venture capital in 4 rounds and led marketing and sales growth to representation in 28 countries.

CHICAGO — ABN AMRO North America today announces theformation of Neogration, a provider of proven software and services thatsimplify business process optimization and systems integration. Neogrationoffers Global 2000 companies a highly efficient platform for integratingdisparate legacy systems as well as a suite of open outsourcing solutions forpayments, accounting and other financial administration processes. ABN AMRO North America will maintain an equity position and be a strategic partner with Neogration. Initial funding was provided by BlueStar Ventures, an early stage venture capital firm based in Chicago.

SUNNYVALE, CA — MontaVista Software Inc., the company powering the embedded revolution, today announced it has secured approximately $28 million in its third round of funding. New investors include IBM and Sony Corporation. Previous investors, US Venture Partners, Alloy Ventures, Intel Capital, RRE Ventures and WR Hambrecht & Co., also contributed to this funding round. The total investment in MontaVista Software, since it was formed in 1999, is now more than $60 million.

SAN FRANCISCO — Quiver Inc., a premier provider of categorization software for enterprise and online content, announced today that its has completed the first close of its Series C financing. To date, the round has secured approximately US$5 million which will be used for aggressive market penetration in 2002, bringing Quiver to profitability in 2003. The round will remain open for additional investments through February 2002. Current participants in the Series C financing include LMS Capital — a subsidiary of London Merchant Securities plc, El Dorado Ventures, Hummer Winblad Venture Partners and Partech International.

ATLANTA — KnowledgeStorm, the most efficient resource for connecting IT buyers to IT providers, today announced the company has closed $5.25 million in new venture funding. Sterling Venture Partners led this second round of funding with participation from Apex Venture Partners, Imlay Investments, Live Oak Equity Partners and Total Technology Ventures.

OTTAWA — Optiwave Corp., a world leader in the development of optical simulation software for the fiber optics telecommunications industry, today announced that it has secured $7 million in financing from VenGrowth Capital Partners and the Business Development Bank of Canada (BDC). This financing builds upon the company’s solid foundation and will support Optiwave’s long term growth and strategic goals. This marks the first time in seven years of operation that Optiwave Corporation has received external funding.

SAN FRANCISCO — CommerceFlow, a leading developer of enterprise software for automated online selling, today announced it has secured $5.3 million in third round funding, led by Prism Venture Partners. The company also announced the appointments of Nelson K. Chen as vice president of sales, Robert Finnell as general counsel, William B. (Bill) Lipsin, CEO of Ironside Technologies, to its board of directors, and the creation of an advisory board of seasoned technology leaders. CommerceFlow has received a total of $13.8 million in funding from Prism Venture Partners, Sagus Ventures, International Capital Partners Inc., and numerous individual investors.

ATLANTA — Web security software developer SPI Dynamics, Inc. today announced that is has received Series A funding in a round led by the Southeastern Technology (SET) Fund, a venture capital firm that teams with talented entrepreneurs to build industry-leading technology companies located primarily in the Southeast. The Series A round also included investments from Gray Ventures, C&B Capital and Jemison Investment Company.

HYANNIS, MA — Taqua Systems Inc., a leading provider of next-generation Class 5 alternative switching platforms for voice and data convergence, today announced that it has secured $18.5M in its fourth round of venture capital funding, propelling the Company’s total financing raised to date to nearly $120M. The investment was made by two of Taqua’s incumbent investors, Bessemer Venture Partners and Columbia Capital, as well as Court Square Ventures, a first-time investor in the company.

OR YEHUDA, ISRAEL — Aryt Industries Ltd. has announced that it has completed its acquisition of control of Pionet Venture Capital Investments (“Pionet”). Aryt has invested approximately US$ 1,000,000, granting it 52% of Pionet’s issued share capital. Investment in Pionet serves as an acquisition of a “shell company” and is part of Aryt’s reorganization plan to merge the activities of its medical division, which includes ElscinTEC and Sygmed Ltd., into the acquired “shell company”.
FREMONT, CA — Sygate Technologies today reported its fourth quarter results for the period ended December 31, 2001. The Company reported its third consecutive quarter of record revenues, achieving growth of more than 23% over the same quarter last year. The Company closed several strategic deals, including the U.S. Postal Service and Ericsson Global Services A.B.

Sygate Technologies also announced it has received an additional $5 million in funding from two significant international investment corporations. The financing round was lead by Cirlab, a venture investment group that is part of the De Benedetti Group in Italy, and IpropertyNetPteLtd., an affiliate of Bank of Singapore. These investment partners saw the unique and highly differentiated value proposition of Sygate’s enterprise-focused security solutions and wanted to be part of Sygate’s global growth.

LOWELL, MA — Storigen Systems today announcedthe completion of its $25 million Series B round of funding with an additional$10 million from investors including Thomas Weisel Venture Partners andexisting Series B investors Battery Ventures, Charles River Ventures andOneLiberty Ventures. These organizations join Pilot House Ventures inproviding second-round capital for Storigen as the company prepares to launchits distributed storage system, which will enable new data-intensiveapplications and services while vastly improving the economics and performanceof enterprise and service-provider networks. Storigen has now raised morethan $34 million since its inception in early 2000.

LONDON — Intuwave, a leading developer of middleware software for mobile devices, today announced it has received (pound)7.75 million ($11 million) in a second round of funding. The investment will allow Intuwave to complete development of its sophisticated wireless middleware product- m-Network(TM).

Intuwave’s technology will enable wireless developers to build compelling applications that take advantage of the improved performance of GPRS and third generation networks and next generation mobile devices. The funding was led by leading venture capital companies 3i Group plc, GIMV and Sum International Holdings Ltd.

DALLAS & AUSTIN, TX — Hughes & Luce, LLP announced that it has become a stakeholder in STARTech Early Ventures, a technology business accelerator with offices in Richardson and Austin. The relationship between the organizations gives STARTech-funded companies access to Hughes & Luce’s 25 years of technology know-how, including technology licensing and contracting, intellectual property, tax, executive compensation and equity financings.

ATLANTA — Fast-Talk Communications, creator of the world’s only high-speed audio searching technology, announces the successful closing of its second round of funding. This Series B round, totaling $8.5 million, will fuel Fast-Talk Communications’ growth in the government, call center and digital media markets. The new backers include lead investor Boston Millennia Partners, SAIC Venture Capital Corporation (SAIC-VCC), a subsidiary of Science Applications International Corporation (SAIC), Cordova Ventures, and the Atlanta Technology Angels (ATA). The company’s original investor, H.I.G. Ventures, also participated.

SAN JOSE, CA — Alacritech Inc., the innovator of accelerator solutions that enable fast and efficient servers and storage systems, today announced the completion of its Series C financing. Led by returning venture capital investor Berkeley International Capital Corp., the $13 million round also includes Munder Capital Management, Needham Capital Partners and Quantum Technology Ventures. This round brings the total investment in Alacritech to more than $35 million, demonstrating the confidence investors have in Alacritech’s continued leadership position with innovative TCP acceleration solutions for networked storage.

GERMANTOWN, MD — Megisto Systems, a leading developer of carrier-class Mobile Internet infrastructure equipment, announced today that it has completed the closing of its Series B round of funding, raising an additional $28.2 million dollars and exceeding the initial amount the company anticipated. With this announcement, Megisto has closed $50 million in funding since the company’s $12 million Series A in June 2000. The round brings Megisto’s total funding to more than $60 million since its founding in May 2000, making it the best-funded startup in its market.

The company will use the new capital for product development and sales, including an investment in both sales and service presence in the European market. Venture capital firm Norwest Venture Partners was the lead investor for this round and was joined by new investors New Enterprise Associates (NEA) and Grotech Capital Group. The company’s existing investment team of Columbia Capital and Bessemer Venture Partners also participated in the second closing.

PALO ALTO, CA — Metreo, the leader in profit optimization software — providing an integrated price planning and price execution solution — today announced that it has closed a third round of financing totaling $15 million. This Series C round was led by Redpoint Ventures, which is joined by current investors Sequoia Capital, Prospect Venture Partners, and Mentor Capital Group. Stanford University also participated in this round.

SAN FRANCISCO — CMEA Ventures, a venture capital firm focusing on information technology and life sciences companies, named Faysal Sohail as Venture Partner. Mr. Sohail brings to CMEA more than a decade of senior executive experience in engineering, marketing and business development. He was CEO of Cadabra Design Automation and managed its acquisition by Numerical Technologies (NMTC) where he served as Senior Vice President of Worldwide Field Operations. Prior to Numerical Technologies, Faysal was Senior Vice President of Corporate Strategy for Synopsys Inc. (SNPS). In 1990, he co-founded Silicon Architects, which was acquired by Synopsys in 1995. Earlier in his career, Faysal spent several years in integrated circuit design engineering and marketing positions with Actel Corporation (ACTL) and LSI Logic Corporation (LSI). Mr. Sohail holds a Bachelor of Science degree in computer engineering from the University of Illinois (Urbana-Champaign) where he also serves on the College of Engineering Advisory Board (CEAB).

CHARLOTTE, NC— Waveguide Solutions Inc., a leader in the development of printed monolithic optical circuits, today announced that it has completed an initial close on its latest round of venture financing (Series B). The round was lead by Southeast Interactive Technology Funds (“SEI”) of Raleigh, NC, and Academy Venture Funds of Raleigh and Charlotte, NC. Waveguide anticipates that additional financial and strategic investors will participate in this round. Proceeds will be used to support continued product development based on the company’s innovative technology, which enables printing of passive and active optical circuits onto semiconductor devices.

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