Private Equity Week Wire for Wednesday 8/15

BOSTON — IntelCore Technologies, a provider of innovative specialty optical fiber and fiber-based solutions for the Photonics industry, announced today that it raised $25 million in second-round funding. This latest investment, led by Tudor Ventures Group, includes investments from Technology Venture Partners, St. Paul Venture Capital and Megunticook Management, bringing IntelCore’s total financing to $30 million. The investment adds to IntelCore’s initial $5 million round of financing from Megunticook Management, Beacon Telco, and other investors.

ALAMEDA, CA — Sage Systems, a leading provider of narrowband technology for networking everyday devices via the Internet, today announced it has closed its third round of funding. The funding was led by new investor Nth Power, a leading venture capital firm focused on the energy sector and dedicated exclusively to high potential investments resulting from the restructuring of the global energy industry. In conjunction with the recent investment, Tim Woodward, managing director of Nth Power, has joined Sage Systems’ board of directors. Other investors include participants from previous rounds, including Cardinal Venture Capital. The financing will be used to deploy Sage’s Aladn products and network services through utilities and energy service providers.

WESTBOROUGH, MA — InfiniSwitch Corp., a market leader in developing InfiniBand(TM) switching solutions, today announced a $26 million Series B financing. Bessemer Venture Partners led the round, with significant participation from founding investors OneLiberty Ventures and NewcoGen Group and new investors Columbia Capital, TL Ventures and Moore Capital Management. The Series B financing is one of the largest early stage financings in the InfiniBand space this year. InfiniSwitch has raised total capital of $30 million since its founding in Fall 2000. Bessemer Venture Partners, Columbia Capital and TL Ventures will join InfiniSwitch’s Board of Directors. The capital will be used to continue InfiniSwitch’s technology initiatives – further development of InfiniBand switching products and solutions. The capital will also be invested in adding talent to the seasoned management and engineering teams already in place, rounding out the sales & marketing infrastructure and promoting the InfiniSwitch brand.

PALO ALTO, CA — H&Q Asia Pacific appointed Paul Adkins and David Kao as Managing Directors in the company’s Japan and Greater China operations, respectively. Adkins will be the Lead Partner of H&QAP’s $200 million Japan Technology Fund — the company’s recently closed technology sector fund — while Kao has been appointed as a Managing Director in the company’s Greater China team, which encompasses China, Taiwan, and Hong Kong.

As a Managing Director based in H&QAP’s Tokyo offices, Adkins will be a key member of the firm’s technology team and will be directly responsible for formulating, sourcing, analyzing, and developing investment opportunities for the Japan Technology Fund. Recently, he was the general manager of Openwave Systems Inc. Asia Pacific Region, the world’s leading supplier of software for wireless Internet and messaging solutions. David K. Kao joins H&QAP as a managing director starting September 1, 2001, based in Hong Kong. Prior to joining H&Q Asia Pacific, Kao was a director of Merrill Lynch in charge of investment banking activities in Taiwan since 1997.

ATLANTA — While most companies are struggling to acquire additional financing, there is one that seems to have cracked the code on the venture capital vault. Integration software provider Covast Corporation announced today that it closed out its first round of funding with an additional $1.5 million adding to the $4.5 million raised in February. Strategic investors in Covast include Gilde, Wellington, and LogiSpring. The additional $1.5 million comes from LogiSpring, an independent, globally active venture capital firm, investing in companies with innovative technologies, products and/or service offerings. The firm’s anchor shareholders are TNT Post Group (TPG) and Booz-Allen & Hamilton. LogiSpring specifically focuses on global express, logistics, supply chain management and mail industry sectors, and companies with technologies, products or services addressing these industries.

SAN JOSE, CA — Hybrid Networks Inc. (Nasdaq: HYBR), the worldwide leader in high-capacity MMDS fixed broadband wireless Internet access systems, today announced it has revised the terms of the February 2001, $7.5 million investment in Hybrid by the Halifax Fund, L. P., managed by The Palladin Group. The Company believes the revised terms will help it meet Nasdaq’s equity listing requirements. Under the terms of the revised agreement, Hybrid has completed an exchange of shares of a new series of convertible preferred stock for the $7.5 million convertible debenture, and related adjustment warrant, issued to Halifax Fund, L. P. in February 2001. The previously issued debenture and the related adjustment warrant will be cancelled as a result of the exchange and Hybrid will issue in exchange 7,560 shares of its new Series K convertible preferred stock. Each share of the new preferred stock has a nominal face value of $1,000 and will accrue additional liquidation value at the rate of 6 percent per annum. If not previously converted or redeemed, the preferred stock must be redeemed in 2006 at its liquidation value, with the holders having the right to delay redemption for up to one year. The redemption price is to be paid in cash, but Hybrid may elect, provided certain conditions are satisfied, to pay the redemption price in shares of its common stock, valued at 95 percent of the market price as determined over a specified pricing period at the time of the redemption.

HERNDON, Va — Ikimbo Inc., a leader in real-time communication solutions, today announced that Riggs Capital Partners invested in its third round of venture capital funding announced earlier this month, raising the total funding to $10.25 million dollars for the oversubscribed round.

PALO ALTO, CA & ATLANTA — Garage Technology Ventures announced the completion of a $10.5 million Series A funding for its Portfolio company, Digital Envoy. Digital Envoy, the global Internet infrastructure provider, announced it has secured investments from strategic partners Siemens Venture Capital, AOL Time Warner Ventures, and H&Q Asia Pacific in the company’s Series A Funding round, adding to its previously announced venture investors which included Frontier Capital, Cordova Ventures, and CrossBow Ventures.

CORDOVA, MD — The start-up company Downeast Gifts, located on Maryland’s Eastern Shore, is currently making the rounds of venture capitalists in Maine and Southeastern Pennsylvania to raise money for an ambitious expansion that will see sales of their handmade gifts and crafts on the Internet, through 25 retail stores from North Carolina to Nova Scotia, 75 mall kiosks in the Northeast and Midwest and some 10 million catalogs sent to targeted households throughout the U.S. and Canada. Downeast Gifts sells only products made by hand which sets them apart from Internet gift leaders, Red Envelope and The two major sites that do sell handmade gifts and crafts are Eziba and Novica, but they sell only a very few products produced in North America.

WILLIAMSTOWN, MAMA — The Berkshires Capital Investors (BCI), a four-year-old early stage venture capital firm with $21MM under management that is part of the Village Ventures network of funds, announced today that Peter Willmott, an original investor in BCI, has become a Managing Partner of the firm, replacing the late Taylor R. Briggs. Willmott, whose distinguished career in corporate America includes multi-year tenures serving as President and CEO of Zenith Electronics and Carson Pirie Scott, and as President and COO of Federal Express, has been an active supporter of BCI as a member of its advisory committee. As a Managing Partner, he will take a more hands-on role in the fund’s investment portfolio. Willmott joins George Kennedy, Robert McGill and Matt Harris as Managing Partners of BCI. BCI also announced that Brad Svrluga has been promoted from Principal to Partner. Svrluga has been with BCI for 2 years and has played a major role in fund investment decisions and portfolio company support and management. Before joining BCI he was a senior consultant with Monitor Company, a leading international strategy consulting firm. Svrluga and Russ Howard, BCI’s Managing Director, are BCI’s fulltime investment managers.

BOULDER, CO — Intrado Inc. (Nasdaq: TRDO), the nation’s leading provider of sophisticated solutions that identify, manage and deliver mission-critical information for telecommunications providers and public safety organizations, today announced that it has secured a $15 million revolving line of credit with GE Capital. The three-year agreement will provide Intrado with greater flexibility to fund the capital requirements that support continued growth as the company offers new solutions to existing and future customers, aggressively pursues international market opportunities, and further develops its range of commercial location-specific services and database solutions.

SAN FRANCISCO — CMEA Ventures, a venture capital firm that manages separate funds focused on life sciences and IT companies, said it named David J. Collier, M.D. as general partner to its newest life sciences fund. Previously, David had been a managing director at Burrill & Co., a private merchant bank focused exclusively on life science companies, where he played a leading role in the management of the company’s life sciences venture capital funds.

For yesterday’s Wire, click here