Following up last week’s front-page article on Songbird Hearing Inc., PE Week has confirmed that previous Songbird backer Oak Investment Partners declined to participate in the company’s most recent round of venture funding. The $25 million deal included all of the Burlingame, Calif.-based company’s other past investors, although Songbird is hoping for a new investor to participate in a still-open $5 million tranche.
Ann Lamont, a general partner with Oak, says the decision not to invest had nothing to do with Songbird’s recent decision to rework the marketing strategy on its disposable hearing aid products. Instead, she says that Oak is no longer investing in medical device companies.
“We have a $1.6 billion fund to invest, so it doesn’t make much sense to be investing in something like medical devices,” she explains. “We now usually need to put between $20 million and $60 million into a deal.”
Lamont adds that Oak has become a very passive investor in Songbird, and that she no longer sits on the company’s board of directors. Oak had originally invested in Songbird during a 1998 Series B round, when the Westport, Conn.-based firm was still working on its $275 million seventh fund. When the firm had raised its $1.6 billion tenth fund last spring, the plan had been to continue investing in at least some early-stage deals, but that strategy seems to have been discarded along the way.
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