Category Archives: Funding

Advertising, Funding, Internet, Investments, Marketing, Media, Money, Sequoia Capital, Software, Technology, Web 2.0

Sequoia Funding for Search Engine Marketing (SEM) Firm Kenshoo

Leave a comment

Kenshoo, a search engine marketing firm, has received an undisclosed amount of funding from Sequoia Capital. The end-to-end search marketing solution aimed at advertisers and ad agencies operates on an automated technology for advertising campaigns, and a core feature of the company’s suite of offerings relies on the longtail keyword expansion. It is an exclusive search formula using patented multilingual keyword expansion, automatically identifies thousands of related keywords from real user search terms with no need for manpower and hours of effort. Updates are provided on a constant basis on the campaign ensuring updated information on the exact keywords.

The basic idea behind their concept is to minimize the amount of man power needed to run a successful and informed advertising campaign online. Running an AdWords or related CPC text ad campaign is a time consuming and hard science process

Those advertisers that are savvy into it run up against the mind numbing tasks to entering data over and over again so they can run side-by-sides and constantly improve their dollar efficiency, and changes based on one cent’s move in either direction can sometimes mean the difference between a profitable ad campaign and one that ends up losing tons of money.

So it seems there is a growing need for automated tools in regards to online advertising and marketing, especially with the growing number of ways in which campaigns can be distributed across the web.

Their flagship product is called KENSHOO SEARCH(tm) and provides automated management for campaigns across multiple search engine platforms such as Google, Yahoo and MSN.

KENSHOO SEARCH(tm) is an end-to-end SEM platform, which automates the process of building and optimizing cross channel search campaigns.

Quality Management with KENSHOO SEARCH

Quality Management is a unique approach which automates all aspects of Search campaigns. Bid management is not enough anymore! In today’s search engines arena, creating a successful SEM campaign consists of a wide array of elements;

  • Selecting relevant keywords
  • Updating deep links URL’s
  • Creating effective ads
  • Providing and constantly updating bids
  • Monitoring the traffic
  • Structuring cross platform campaigns
  • Reporting and analyzing data on-time

Long-tail keyword expansion

Kenshoo’s exclusive search formula guarantees every search engine marketing campaign a long tail. By using patented multilingual keyword expansion, KENSHOO SEARCH(tm) automatically identifies thousands of related keywords from real user search terms- with no need for manpower and hours of effort.

Dynamic Sites

Website content perpetually shifts as new and improved products reach the cyber-shelves. The need for updating multiple campaigns is vital in order to keep up with this ever-changing environment. With the unique ability to automatically update itself as web content changes, KENSHOO SEARCH(tm) enables the client high ROI SEM campaigns. By staying in tune with this constantly changing environment, KENSHOO SEARCH(tm) seamlessly index a site and upload the exact model/brands or other keywords and data together with the deep link URL to the search engines. This enables the upload of the merchant’s products onto the Search engines as well as updating it as the site changes. The added bonus is the low cost per click, high CTR, high conversion rates and maximized ROI that result from the highly relevant landing page.

Intelligent Bid Management

Featuring an easy-to-use and configurable Bid Management solution, KENSHOO SEARCH ™ allows your bids to be flexible, applying its’ logic to all major search engines, it even allows you to create your own bid policy. Whether your products require maximum exposure or a positive ROI on any level, KENSHOO SEARCH(tm) follows campaign behavior in real time, detecting changes and reacting to the competition, insuring high ROI on your SEM campaigns.

Click Fraud

KENSHOO SEARCH(tm) offers the invaluable asset of identifying click fraud in real time. With the ability to manage multiple campaigns all at once, KENSHOO SEARCH(tm) reports the detection of Click Fraud immediately, protecting advertisers from over clicking, and allowing clients to obtain a refund. In addition, KENSHOO SEARCH(tm) has ability to pause campaigns when sites malfunction.

Quality Reporting

Stay on track with comprehensive reporting of your campaigns. KENSHOO SEARCH(tm) understands the importance when it comes to reporting. With Kenshoo search, in-depth reports are created that analyze traffic from different networks, displaying click distribution and ROI geographically, daily, and hourly, to take your campaigns to the highest level of success.

Kenshoo’s service enables advertisers and agencies to reach high volumes and optimize campaigns.

To utilize their services you simply give them your URL, and a designated account manager will assist you wit the process. They work hard to understand your targets and goals, analyze your website, assess your campaign, and optimize it to suit your individual needs.

The company is based in Israel. In August 2007, Kenshoo began applying its search engine marketing analytics on behalf of its first large client, AOL-owned IM company ICQ, also based in Israel. It also works with agencies such as McCann-Erickson and AlthogetherDigital. A representative for the company said one-year-old Kenshoo is focused on bringing its business to the UK sometime early next year. Once it’s up and running in Europe, Kenshoo then plans to build a U.S. presence.

Yoav Izhar-Prato, CEO and co-founder of Kenshoo adds, “We are thrilled to be joining forces with Sequoia, a partner with an unsurpassed track record of successful Internet investments such as Yahoo!, Google, Apple, PayPal and YouTube. Kenshoo is determined to be the leading provider of innovative Search Marketing solutions; harnessing our in-depth knowledge of the industry, our clients’ constructive feedback, technological strengths and continuous innovation- I believe we are well positioned to do so.”

Sequoia Capital is the Google backer and it is coming as no surprise they are funding a company that is helping in particular users and customers that are spending their ad money on Google.

Although Moritz sat on the evaluating committee, he is not the investing partner from Sequoia. Yuval Baharav, a partner in Sequoia’s Israeli office, is the one who invested and will take a board seat. This is Kenshoo’s first venture round. Terms were not disclosed, although one report in an Israeli paper puts it at a few million dollars. Previously, the startup raised about one million dollars from angel investors, and has been funding itself from operations.

More about Sequoia Capital

Since 1972, Sequoia Capital has provided startup venture capital for very smart people who want to turn ideas into companies. As the “Entrepreneurs Behind the Entrepreneurs,” Sequoia Capital’s Partners have worked with innovators such as Sandy Lerner and Len Bozack of Cisco Systems, Jerry Yang and David Filo of Yahoo!, Gaurav Garg of Redback Networks, Larry Page and Sergey Brin of Google, Dan Warmenhoven of Network Appliance, T.J. Rodgers of Cypress Semiconductor, Lou Tomasetta of Vitesse Semiconductor, Steve Jobs of Apple Computer and Larry Ellison of Oracle. The companies organized by Sequoia Capital now account for about 12% of the value of NASDAQ.

More about Kenshoo Ltd

Kenshoo is a provider of end-to-end search marketing automated technology for advertisers and agencies worldwide.

The company’s flagship product KENSHOO SEARCH(tm) provides automated Quality Management for cross- platform search campaigns. Kenshoo’s unique technology and approach enables advertisers and agencies worldwide to reach high volumes, optimize campaigns and to boost ROI.

Kenshoo is an innovator in Search Engine Marketing with extensive industry knowledge and a dynamic approach. Kenshoo’s strength is in developing SEM technology to increase ROI on search campaigns.

Kenshoo’s flagship product, KENSHOO SEARCH(tm) is an end-to-end SEM platform, which automates the process of building and optimizing cross channel search campaigns. KENSHOO SEARCH?utilizes Quality Management, the company’s unique approach to search marketing that automates much of the labor intensive search marketing operations.

As a Google Qualified Company, a Yahoo! Ambassador and Microsoft adExcellence, Kenshoo provides its licensed SEM platform and services to publishers, agencies, blue-chip advertisers, and affiliate marketers world wide.

Management Team

Yoav Izhar-Prato, CEO & Co-Founder- As a founder of several start-ups around the globe and former manager of ECI Thailand, Mr. Izhar-Prato brings over ten years of business management to Kenshoo. Mr. Izhar-Prato carries an Executive B.A., Business management from Ruppin College.

Alon Sheafer, VP Marketing & Co-Founder- Mr. Sheafer brings over ten years of internet experience to Kenshoo. Alon has a strong Technological background combined with sales and marketing experience. Formerly founder and CEO of Bazman, a price comparison website. Mr. Sheafer holds a B.Sc in Computer Science from the Academic College of Tel-Aviv Jaffa.

Nir Cohen, CTO & CO-Founder- As former founder and CTO of Bazman, a price comparison website, Mr. Cohen carries years of experience in leading design and development teams for companies such as Demantra and Imperva. Mr. Cohen holds a B.Sc in Physics & Computer science from Ben Gurion University, Israel.

Andrey Shirben, Head of Campaigns- A former VP in marketing with Storewiz Ltd, Mr. Shirben brings a history of technology experience to Kenshoo. As Head of Campaigns, Mr. Shirben’s background lies in business management and computer science with a BA in Management & Computer science from Open University in Israel.

Udi Broyer, CFO & COO- Mr. Broyer brings over ten years of Financial and operational experience to Kenshoo. Mr. Broyer previously served as the Director of Finance of Metacafe a leading UGC Video web site. He held various executive financial positions such as financial consultants for JVP a Venture Capital firm and VP of Finance at Fundtech. Mr. Broyer is a CPA and served as a Senior Audit Manager in the high-tech group at “Ernst & Young” Israel. Mr. Broyer holds a B.A in Accounting and Economics at the Hebrew University in Jerusalem, Israel.

The market

SEM (Search Engine Marketing) is the younger brother of SEO (Search Engine Optimization). In general who fails to perform well on the SEO scene is forced later to rely on the SEM. SEO promises organic results and traffic while SEM does that for paid campaigns. On the other hand we think there are thousands of large-scale corporations and millions of small ones that have little to no ideas on how to develop white-hat SEO practices for their web based businesses and are in one way or another going to rely and depend on SEM and companies like Kenshoo for instance.

Otherwise the SEM market is very crowded and the environment is extremely competitive; there are literally thousands of small and mid-level SEM firms in the sector, yet having Sequoia on your side might be one step in the right direction for Kenshoo. I remember one firm in particular called Fathom Online. Fathom Online received $6 million in financing in its first round of venture funding a few years ago. The financing came from Constellation Ventures and private investors. As part of the funding, Constellation managing directors Virginia Turezyn and Dennis Miller have joined Fathom’s board of directors by that time. What we know Former Ask Jeeves executives Chris Churchill and Chris Raniere founded the San Francisco-based search engine marekting firm in 2002. Fathom also helps clients design and run paid search campaigns as clients include Hilton, Covad and Microsoft..

More

[ http://www.kenshoo.com/ ]
[ http://www.kenshoo.com/blog.asp ]
[ http://www.kenshoo.com/news_sequoia_invest_in_kenshoo.asp ]
[ http://www.linkedin.com/pub/0/172/967 ]
[ http://mashable.com/2007/12/13/kenshoo-funded/ ]
[ http://www.venturecapitalupdate.com/node/970 ]
[ http://www.techcrunch.com/2007/12/10/sequoia-invests-in-sem-automator-kenshoo/ ]
[ http://www.paidcontent.org/entry/419-israel-sem-provider-kenshoo-secures-first-round-in-support-of-european-/ ]
[ http://biz.yahoo.com/prnews/071211/uktu014.html?.v=101 ]
[ http://www.fathomonline.com/ ]
[ http://www.webmasterworld.com/forum5/5033.htm ]

Business, eCoast Angels, Entertainment, Funding, Intel Capital, Internet, Investments, Money, Shopping, Technology, Web 2.0

MyPunchBowl gets angel funding, relies on algorithm to recommend best dates

Leave a comment

MyPunchBowl, the event planning site that has joined the new crowd of Evite rivals, has recently been angel funded. According to some sources like VentureBeat and Mashable, the exact amount of funding has not been disclosed, but it’s less than $1 million, and is enough to keep the team in development for another year, at least.

MyPunchBowl is known to have had a pretty good year, with several developments and feature upgrades to its event-planning service. More niche templates have been added to its collection, and they released their new Facebook application called “Party Animal.”

Partnerships with traditional media companies like the Boston Globe could also help to establish MyPunchBowl as a viable option for planning your next event.

In technological aspect they’ve been building out tools for each step of planning a party: finding supplies, inviting friends, setting a date, and the after party. MyPunchbowl has also made setting a date that much easier through the help of an algorithm that recommends the best date for your party. Connecting party organizers with suppliers in an algorithmic approach (supplies on-demand, recommendations in context of the party, individuals, events, at the right time and place etc.) could be a viable business model in our understanding and this is where the site is planning to make money from, see below comments.

More about Punchbowl Software

At Punchbowl Software, we believe that planning an event or party should be enjoyable and easy.

For the host, there are typically lots of pieces to organize: picking a date, sending invitations, choosing catering and entertainment, purchasing party supplies, and renting party equipment just to name a few. It can be a time-consuming process, and it usually isn’t much fun.

To solve this problem, we’ve created MyPunchbowl, a new web application for event and party planning. MyPunchbowl provides software for every stage of planning. With MyPunchbowl.com you’ll actually enjoy planning while saving time.

“They are the developers of one of the hottest websites in America and around the world. These are the folks that are at the vanguard of web development” – one reads at CNBC. 

For now, MyPunchbowl is avoiding monetizing the site through display ads. Instead, it plans to open partnerships with vendors, helping users secure any party supplies they need. To make money, the site is working on opening more relationships with vendors. A guest asked to bring the turkey to a Thanksgiving event, for example, might receive a targeted offering from Butterball.

According to Quantcast the site’s reach is less than 12,000 American visitors per month and compared to Evite.com’s 7 million uniques / mo MyPunchbowl looks like it has way too much to do in order to be called even close competitor to Evite, despite the press attention it gained over the past year http://corp.mypunchbowl.com/news.php. 

The company was founded by software and user interface experts who are fanatics about simplicity and ease of use. As they say “they were frustrated with the current tools, and knew there had to be a better way”. The funding came from Intel Capital and eCoast Angels.

As far as we know MyPunchBowl’s competitor Planypus has recently been funded as well.

Other competitors include Skobee or Renkoo although they have differentiated themselves by helping plan the casual outings for drinks or dinner. Socializr is taking a social networking approach.

The company’s founder is Matt Douglas. Douglas, whose principal offices are based in the Boston Metrowest technology center (Natick, MA), has three employees for now. Formerly of Adobe Systems and Bose Corporation, Matt Douglas has 12+ years in product management and marketing with expertise in software product development. At Adobe, Matt was responsible for Adobe Premiere where he grew revenue from $15M to $50M in four years. At Bose, he was a senior manager in the professional division where he led a hardware and software product team. Matt has a degree in music from the University of Rochester and an M.B.A. from UNC Chapel Hill. Matt’s favorite reason to party is Groundhog Day–he and his wife held their 11th annual Groundhog Day party in 2007.

Otherwise Punchbowl Software is a privately held Delaware Corporation.

The competition in the event planning sector looks intensive, but the vast majority of the startups being active in the arena have chosen specific niches, and will be trying to secure their own markets without invading each other’s territory.

More

[ http://www.mypunchbowl.com/ ]
[ http://corp.mypunchbowl.com/ ]
[ http://venturebeat.com/2007/01/15/mypunchbowl-joins-growing-list-of-evite-rivals/ ]
[ http://mashable.com/2007/10/02/mypunchbowl-funded/ ]
[ http://venturebeat.com/2007/10/02/mypunchbowl-lands-seed-funding-for-online-invitations/ ]
[ http://www.quantcast.com/mypunchbowl.com ]
[ http://www.quantcast.com/evite.com ]
[ http://www.techcrunch.com/2007/05/21/mypunchbowl-the-algorithm-schedules-your-event/ ]
[ http://www.boston.com/business/technology/articles/2007/07/22/will_boston_ever_catch_up/?p1=MEWell_Pos5 ]

Acquisitions, Business, Funding, Ingenious Media, Internet, Media, Money, Social Networking, Sports, Web 2.0

Sportingo has raised $3.2 in funding, moves to London

Leave a comment

Sportingo, a sports fan portal and blogging community, has raised $3.2 million in funding from London-based Ingenious Media. 

Launched early this year in Israel, Sportingo is a site where users can write their own match reviews and commentary, and discuss others’ content. With the type of content that’s created on Sportingo, this is very much a blogging community for users to contribute to the larger discussion around different sports. A wide range of sports is covered on Sportingo, from cycling to swimming, cricket and rugby to soccer and beyond.

Sportingo is known to have already acquired a UK soccer blog, CaughtOffside, in June. The site has since opened an office in London. This deal could be classified as employment through acquisition this way effectively hiring the CaughtOffside’s author Chris Toy as chief editor.

The founder of the company is the Israeli Ze’ev Rozov who has recently moved from Israel to London, UK.

About Sportingo

Sportingo is all about sport. Whether we follow football, cricket, rugby, tennis, golf, cycling, darts or tiddly winks, as fans, the main thing that we all share, is a passion for our sport. This passion has led to many late nights, arguments over pints of beer and cups of tea and neglect of partners and friends, whilst we debate the greatest sporting moments of all time, the top football players and their monetary worth, the virtues of one day international cricket matches and the need to retain the tradition of Rugby Union and Rugby League as 2 different games.

Sportingo is about fans sharing their opinions with the sports community. All fans are invited to register and write articles about any sport related event ranging from match reviews and team performances to nostalgia articles about memorable moments in sport.

Sportingo is about fans writing for fans; fans commenting and ranking the articles of other fans; fans deciding what are the topical and important stories of the day, fans setting the sport agenda.

Sportingo recently acquired the award winning football blog CaughtOffside. CaughtOffside was founded in 2006 and quickly became a leading football blog in the UK and across the world. The site focuses primarily on English football clubs and has developed a strong culture and reputation amongst the online football community.

Sportingo exists for the fans and because of the fans. As fans you are part of the website’s success. We welcome you and look forward to your contributions.

About Ingenious

Ingenious is an independent and integrated group of companies advising and investing solely in media, thereby providing a unique service to clients and investors.

Founded in 1998 by Patrick McKenna, Ingenious is one of the leading investors in the UK’s creative industries.

Our collective knowledge and experience has positioned us as the market leader in media investment and strategy and through our extensive network of relationships we are able to provide an unrivalled service to our clients.

We have the necessary depth of professional experience and expertise to provide both a high level of advisory services and investment to companies operating in the film, television, music, games and publishing sectors.

Our independence and impartiality allow us to work with a broad spectrum of other advisers, companies and financial institutions. We understand the needs of both the media sector and the investment community, thereby enabling us to work easily with both.

Alongside our private equity investments and project financing capability, we offer a range of media consultancy and corporate finance services and, through our asset management division, provide innovative solutions to the private investor.

More

[ http://www.sportingo.com/ ]
[ http://mashable.com/2007/10/02/sportingo-funded/ ]
[ http://www.paidcontent.org/entry/419-sports-fan-portal-sportingo-wins-65-funding-for-marketing-and-developme/ ]
[ http://www.ingeniousmedia.co.uk/flash.htm ]
[ http://www.sportingo.com/about_us/1001,4 ]
[ http://www.paidcontent.co.uk/entry/419-sports-fan-portal-sportingo-wins-32-funding-for-marketing-and-developme/ ]
[ http://sportingoblog.blogspot.com/2007/10/new-round-of-funding.html ]
[ http://sportingoblog.blogspot.com/2007/09/move-to-london.html ]

Azure Capital Partners, Business, Crosspoint Venture Partners, eCommerce, Funding, GRP Partners, Internet, Money, Public Companies, Shopping, Technology

BillMeLater – $1 Billion in funding so far

Leave a comment

By putting different pieces together we have just realized that all the funding for the so called credit card alternative BillMeLater totals $1 Billion. Pretty impressive at first sight but on second reading we guess it is in norms for a financial company with such ambitious goals and operations.

BillMeLater is a young seven-year-old company that is taking on the major competitors, including MasterCard, Visa and PayPal, which made its name as an online payment provider. BillMeLater has landed as merchants some of the most popular on-line retailers like www.Overstock.com, www.Walmart.com, www.usairways.com, www.officemax.com, www.brookstone.com, www.continental.com, www.etoys.com, www.hotels.com, www.1800flowers.com among others. Amazon will be offering the payment option as well.

The company incorporated initially as I4 Commerce and has changed its name to Bill Me Later, Inc. in 2007.

Bill Me Later, Inc. has developed and operates the PayCapture® technology platform and its suite of credit tools including its flagship Bill Me Later®–the first new payment method since credit cards to be broadly available within the United States.

Managed by a team of industry leaders, the Bill Me Later® Payment Suite allows merchants to leverage payments as a strategic tool to enhance customer loyalty, drive higher sales and expand profit margins.

Bill Me Later, Bill Me Later Business, the Preferred Account Program, and Promotional Financing tools are the first in a series of solutions designed to help merchants meet the demands of an increasingly competitive marketplace.  Leveraging existing infrastructures, most merchants can fully deploy these next-generation credit tools in a matter of weeks as opposed to the months it can take to set up other payment methods or private label accounts.

Millions of consumers rely on the safety and convenience of Bill Me Later, Inc.’s payment solutions when shopping online, via catalog and in-store to help save both time and money. 

On the consumer part it is:

Bill Me Later is the new way to pay that’s simple, fast and secure. 

Easy and Convenient
Bill Me Later is a convenient and secure new payment method designed for purchasing on the web or over the phone. As a credit account, Bill Me Later provides you with the flexibility to purchase without using your credit card. To request a Bill Me Later account, you do not have to complete a lengthy application prior to making a purchase. Simply select Bill Me Later at checkout to complete your request.

Security You Can Count On
With no card number for making purchases and no physical card, Bill Me Later gives you an extra level of security. Plus, Bill Me Later offers “zero fraud liability” protection, which means you are not responsible for unauthorized charges.

It operates much like a credit card company largely because its founder and chief executive Gary Marino has a long credit card pedigree, having served as chief credit officer for both First USA/Bank One and Citigroup. He started Bill Me Later after an investor suggested that online billing options be as simple as the “bill me later” tear-out form that comes inside magazines.

Revenues

It is the sixth-fastest-growing company in the country by revenue – on track to bring in more than $100 million this year – according to Inc. magazine’s September issue. No information publicly available whether the company is profitable.

The People

Gary Marino is the company’s chief executive officer and founder.  Gary has over 20 years of experience in the credit card industry with expertise in credit management, marketing, Internet strategy development, and general management.
Prior to joining Bill Me Later, Inc., Gary was Executive Vice President, Chief Credit Officer, and Chief Marketing Officer of the consumer lending division at First USA/Bank One. Gary also held numerous executive positions in his 13 year career with Citibank’s European and North American Card Division. These include Chief Credit Officer and member of the Bankcards Executive Planning council.

Other executive include

  • Steve Burleson – Chief Financial Officer
  • Craig Eckstrom – VP Sales and Account Management
  • Carolyn Groobey – Head of Consumer Strategy
  • Adam Joffe – Chief Information Officer
  • Tom Keithley – VP Credit and Integration
  • Mark Lavelle – VP Corporate Development & Strategic Planning
  • Bill Seligman – VP Credit Operations
  • Bill Shupert – VP Human Resources
  • Vince Talbert – VP Marketing
  • Marita Ventura – Chief Technology Officer
  • Chris Williams – VP Consumer Marketing

Investors & Tranches

The company, which is about 7 years old, has received $200 million in venture capital funding from investors such as Chase Paymentech and Azure Capital Partners, as well as a $640M credit line from Citigroup. The past month BillMeLater raised a whopping amount of $72 Million as well. The past week Amazon.com has just put yet another amount into the company as terms of the deal were not disclosed. Earlier last year the company secured $27.4 Million in Venture Funding.

Some of the investors as included below with short bios and company information.

ChasePaymentech is the payment solutions company of choice for online and offline transaction processing. A leader in the industry for more than sixteen years, ChasePaymentech processes one out of every two U.S. Internet transactions. ChasePaymentech is also a strategic investor in Bill Me Later, Inc.

Azure Capital Partners was founded in April 2000 with a focus on infrastructure technologies. Their philosophy of investing is to support and accelerate companies throughout their lifecycle of growth, ranging from early seed stage through maturity in the public markets.

GRP Partners is a global venture capital firm focused on retailing, retail technology and financial services technology. With $650 million under management, GRP finances early-stage and late-stage companies that develop solutions meeting pressing customer needs.

First Data Corporation processes payments for 312 million accounts around the world. As the leader in payment services, First Data serves approximately 3 million merchant locations and 1,400 financial institutions. First Data also provides consumer account processing services for Bill Me Later® and is a strategic investor in Bill Me Later, Inc.

Crosspoint Venture Partners invests in virtual service providers and broadband infrastructure. With over $1 billion under management, Crosspoint was recently named the #1 venture capitalist based on three – year returns.

CIT Group Inc. (NYSE: CIT), a leading commercial and consumer finance company, provides clients with financing and leasing products and advisory services. CIT, a Fortune 500 company and a member of the S&P 500 Index, holds leading positions in cash flow lending, vendor financing, factoring, equipment and transportation financing, Small Business Administration loans, and asset-based lending. With its global headquarters in New York City, CIT has approximately 7,500 employees in locations throughout North America, Europe, Latin America, and Asia Pacific.

Citigroup Corporate and Investment Banking is the most complete financial partner to corporations, financial institutions, institutional investors and governments in the world. As a global leader in banking, capital markets, and transaction services, with a presence in many countries dating back more than 100 years, Citigroup Corporate and Investment Banking enables clients to achieve their strategic financial objectives by providing them with cutting-edge ideas, best-in-class products and solutions, and unparalleled access to capital and liquidity.

Citigroup (NYSE: C), the leading global financial services company has some 200 million customer accounts and does business in more than 100 countries, providing consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, and wealth management. Major brand names under Citigroup’s trademark red umbrella include Citibank, CitiFinancial, Primerica, Smith Barney and Banamex.

Equifax is today’s number one provider of real-time consumer information with the world’s largest repository of consumer credit information.

T. Rowe Price: Founded in 1937, Baltimore-based T. Rowe Price is a global investment management organization that provides a broad array of mutual funds, subadvisory services, and separate account management for individual and institutional investors, retirement plans, and financial intermediaries. The organization also offers a variety of sophisticated investment planning and guidance tools. T. Rowe Price’s disciplined, risk-aware investment approach focuses on diversification, style consistency, and fundamental research.

Legg Mason, Inc.: Legg Mason, Inc. is a global asset management firm, with over $1 trillion in assets under management as of September 30, 2007. The Company provides active asset management in many major investment centers throughout the world. Legg Mason is headquartered in Baltimore, Maryland and its common stock is listed on the New York Stock Exchange (symbol: LM).

Via

[ http://www.bill-me-later.com/wss/help/aboutus.do ]
[ http://www.techcrunch.com/2007/12/11/amazon-invests-in-bill-me-later/ ]
[ http://biz.yahoo.com/bw/071211/20071211005292.html?.v=1 ]
[ http://www.corporate.billmelater.com/billmelater/Content.do?pageID=15 ]
[ http://corporate.billmelater.com/ ]
[ http://www.bill-me-later.com/wss/index.do ]
[ http://www.baltimoresun.com/business/bal-bz.billmelater04dec04,0,4892376.story?page=1&coll=bal-technology-headlines ]
[ http://www.fool.com/personal-finance/credit/2007/11/26/profit-from-holiday-credit.aspx ]
[ http://www.washingtonpost.com/wp-dyn/content/article/2007/11/27/AR2007112702246.html ]
[ http://corporate.billmelater.com/billmelater/FilesInline.do?file=Citi Financing (2).pdf ]
[ http://corporate.billmelater.com/billmelater/FilesInline.do?file=funding03_28_06.pdf ]
[ http://corporate.billmelater.com/billmelater/FilesInline.do?file=Bill Me Later Inc. Announcement.pdf ]

Alexandra Investment Management, Funding, Internet, Investments, Search Engines, Semantic Apps, Semantic Web, Social Search Engines, Software, Technology, Web 2.0

Hakia takes on major search engines backed up by a small army of international investors

1 Comment

In our planned series of publications about the Semantic Web and its Apps today Hakia is our 3rd featured company.

Hakia.com, just like Freebase and Powerset is also heavily relying on Semantic technologies to produce and deliver hopefully better and meaningful results to its users.

Hakia is building the Web’s new “meaning-based” (semantic) search engine with the sole purpose of improving search relevancy and interactivity, pushing the current boundaries of Web search. The benefits to the end user are search efficiency, richness of information, and time savings. The basic promise is to bring search results by meaning match – similar to the human brain’s cognitive skills – rather than by the mere occurrence (or popularity) of search terms. Hakia’s new technology is a radical departure from the conventional indexing approach, because indexing has severe limitations to handle full-scale semantic search.

Hakia’s capabilities will appeal to all Web searchers – especially those engaged in research on knowledge intensive subjects, such as medicine, law, finance, science, and literature. The mission of hakia is the commitment to search for better search.

Here are the technological differences of hakia in comparison to conventional search engines.

QDEX Infrastructure

  • hakia’s designers broke from decades-old indexing method and built a more advanced system called QDEX (stands for Query Detection and Extraction) to enable semantic analysis of Web pages, and “meaning-based” search. 
  • QDEX analyzes each Web page much more intensely, dissecting it to its knowledge bits, then storing them as gateways to all possible queries one can ask.
  • The information density in the QDEX system is significantly higher than that of a typical index table, which is a basic requirement for undertaking full semantic analysis.
  • The QDEX data resides on a distributed network of fast servers using a mosaic-like data storage structure.
  • QDEX has superior scalability properties because data segments are independent of each other.

SemanticRank Algorithm

  • SemanticRank algorithm of hakia is comprised of innovative solutions from the disciplines of Ontological Semantics, Fuzzy Logic, Computational Linguistics, and Mathematics. 
  • Designed for the expressed purpose of higher relevancy.
  • Sets the stage for search based on meaning of content rather than the mere presence or popularity of keywords.
  • Deploys a layer of on-the-fly analysis with superb scalability properties.
  • Takes into account the credibility of sources among equally meaningful results.
  • Evolves its capacity of understanding text from BETA operation onward.

In our tests we’ve asked Hakia three English-language based questions:

Why did the stock market crash? [ http://www.hakia.com/search.aspx?q=why+did+the+stock+market+crash%3F ]
Where do I get good bagels in Brooklyn? [ http://www.hakia.com/search.aspx?q=where+can+i+find+good+bagels+in+brooklyn ]
Who invented the Internet? [ http://www.hakia.com/search.aspx?q=who+invented+the+internet ]

It basically returned intelligent results for all. For example, Hakia understood that, when we asked “why,” I would be interested in results with the words “reason for”–and produced some relevant ones. 

Hakia  is one of the few promising Alternative Search Engines as being closely watched by Charles Knight at his blog AltSearchEngines.com, with a focus on natural language processing methods to try and deliver ‘meaningful’ search results. Hakia attempts to analyze the concept of a search query, in particular by doing sentence analysis. Most other major search engines, including Google, analyze keywords. The company believes that the future of search engines will go beyond keyword analysis – search engines will talk back to you and in effect become your search assistant. One point worth noting here is that, currently, Hakia still has some human post-editing going on – so it isn’t 100% computer powered at this point and is close to human-powered search engine or combination of the two.

They hope to provide better search results with complex queries than Google currently offers, but they have a long way to catch up, considering Google’s vast lead in the search market, sophisticated technology, and rich coffers. Hakia’s semantic search technology aims to understand the meaning of search queries to improve the relevancy of the search results.

Instead of relying on indexing the web or on the popularity of particular web pages, as many search engines do, hakia tries to match the meaning of the search terms to mimic the cognitive processes of the human brain.

“We’re mainly focusing on the relevancy problem in the whole search experience,” said Dr. Berkan in an interview Friday. “You enter a question and get better relevancy and better results.”

Dr. Berkan contends that search engines that use indexing and popularity algorithms are not as reliable with combinations of four or more words since there are not enough statistics available on which to base the most relevant results.

“What we are doing is an ultimate approach, doing meaning-based searches so we understand the query and the text, and make an association between them by semantic analysis,” he said.

Analyzing whole sentences instead of keywords would indefinitely increase the cost to the company to index and process the world’s information. The case is pretty much the same with Powerset where they are also doing deep contextual analysis on every sentence on every web page and is publicly known fact they have higher cost for indexing and analyzing than Google. Taking into consideration that Google is having more than 450,000 servers in several major data centers and hakia’s indexing and storage costs might be even higher the approach they are taking might cost their investors a fortune to keep the company alive.

It would be interesting enough to find out if hakia is also building their architecture upon the Hbase/Hadoop environment just like Powerset does. 

In the context of indexing and storing the world’s information it worth mentioning that there is yet another start-up search engine called Cuill that’s claiming to have invented a technology for cheaper and faster indexation than Google’s. Cuill claims that their indexing costs will be 1/10th of Google’s, based on new search architectures and relevance methods.

Speaking also for semantic textual analysis and presentation of meaningful results NosyJoe.com is a great example of both, yet it seems it is not going to index and store the world’s information and then apply the contextual analysis to, but rather than is focusing on what is quality and important for the people participating in their social search engine. 

A few months ago Hakia launched a new social feature called “Meet Others” It will give you the option, from a search results page, to jump to a page on the service where everyone who searches for the topic can communicate.

For some idealized types of searching, it could be great. For example, suppose you were searching for information on a medical condition. Meet Others could connect you with other people looking for info about the condition, making an ad-hoc support group. On the Meet Others page, you’re able to add comments, or connect directly with the people on the page via anonymous e-mail or by Skype or instant messaging.

On the other hand implementing social recommendations and relying on social elements like Hakia’s Meet the Others feature one needs to have huge traffic to turn that interesting social feature into an effective information discovery tool. For example Google with its more than 500 million unique searchers per month can easily beat such social attempts undergone by the smaller players if they only decide to employ, in one way or another, their users to find, determine the relevancy, share and recommend results others also search for. Such attempts by Google are already in place as one can read over here: Is Google trying to become a social search engine.

Reach

According to Quantcast, Hakia is basically not so popular site and is reaching less than 150,000 unique visitors per month. Compete is reporting much better numbers – slightly below 1 million uniques per month. Considering the fact the search engine is still in its beta stage these numbers are more than great. Analyzing further the traffic curve on both measuring sites above it appears that the traffic hakia gets is sort of campaign based, in other words generated due to advertising, promotion or PR activity and is not permanent organic traffic due to heavy usage of the site.

The People

Founded in 2004, hakia is a privately held company with headquarters in downtown Manhattan. hakia operates globally with teams in the United States, Turkey, England, Germany, and Poland.

The Founder of hakia is Dr. Berkan who is a nuclear scientist with a specialization in artificial intelligence and fuzzy logic. He is the author of several articles in this area, including the book Fuzzy Systems Design Principles published by IEEE in 1997. Before launching hakia, Dr. Berkan worked for the U.S. Government for a decade with emphasis on information handling, criticality safety and safeguards. He holds a Ph.D. in Nuclear Engineering from the University of Tennessee, and B.S. in Physics from Hacettepe University, Turkey. He has been developing the company’s semantic search technology with help from Professor Victor Raskin of PurdueUniversity, who specializes in computational linguistics and ontological semantics, and is the company’s chief scientific advisor.

Dr. Berkan resisted VC firms because he worried they would demand too much control and push development too fast to get the technology to the product phase so they could earn back their investment.

When he met Dr. Raskin, he discovered they had similar ideas about search and semantic analysis, and by 2004 they had laid out their plans.

They currently have 20 programmers working on building the system in New York, and another 20 to 30 contractors working remotely from different locations around the world, including Turkey, Armenia, Russia, Germany, and Poland.
The programmers are developing the search engine so it can better handle complex queries and maybe surpass some of its larger competitors.

Management

  • Dr. Riza C. Berkan, Chief Executive Officer
  • Melek Pulatkonak, Chief Operating Officer
  • Tim McGuinness, Vice President, Search
  • Stacy Schinder, Director of Business Intelligence
  • Dr. Christian F. Hempelmann, Chief Scientific Officer
  • John Grzymala, Chief Financial Officer

Board of Directors

  • Dr. Pentti Kouri, Chairman
  •  Dr. Riza C. Berkan, CEO
  • John Grzymala
  • Anuj Mathur, Alexandra Global Fund
  • Bill Bradley, former U.S. Senator
  • Murat Vargi, KVK
  • Ryszard Krauze, Prokom Investments

Advisory Board

  • Prof. Victor Raskin (Purdue University)
  • Prof. Yorick Wilks, (Sheffield University, UK)
  • Mark Hughes

Investors

Hakia is known to have raised $11 million in its first round of funding from a panoply of investors scattered across the globe who were attracted by the company’s semantic search technology.

The New York-based company said it decided to snub the usual players in the venture capital community lining Silicon Valley’s Sand Hill Road and opted for its international connections instead, including financial firms, angel investors, and a telecommunications company.

Poland

Among them were Poland’s Prokom Investments, an investment group active in the oil, real estate, IT, financial, and biotech sectors.

Turkey

Another investor, Turkey’s KVK, distributes mobile telecom services and products in Turkey. Also from Turkey, angel investor Murat Vargi pitched in some funding. He is one of the founding shareholders in Turkcell, a mobile operator and the only Turkish company listed on the New York Stock Exchange.

Malaysia

In Malaysia, hakia secured funding from angel investor Lu Pat Ng, who represented his family, which has substantial investments in companies worldwide.
From Finland, hakia turned to Dr. Pentti Kouri, an economist and VC who was a member of the Nokia board in the 1980s. He has taught at Stanford, Yale, New York University, and HelsinkiUniversity, and worked as an economist at the International Monetary Fund. He is currently based in New York.

United States

In the United States, hakia received funding from Alexandra Investment Management, an investment advisory firm that manages a global hedge fund. Also from the U.S., former Senator and New York Knicks basketball player Bill Bradley has joined the company’s board, along with Dr. Kouri, Mr. Vargi, Anuj Mathur of Alexandra Investment Management, and hakia CEO Riza Berkan.

Hakia was on of the first alternative search engine to make the home page of web 2.0 Innovations in the past year… http://web2innovations.com/hakia.com.php

Hakia.com is the 3rd Semantic App being featured by Web2Innovations in its series of planned publications [  ] where we will try to discover, highlight and feature the next generation of web-based semantic applications, engines, platforms, mash-ups, machines, products, services, mixtures, parsers, and approaches and far beyond.

The purpose of these publications is to discover and showcase today’s Semantic Web Apps and projects. We’re not going to rank them, because there is no way to rank these apps at this time – many are still in alpha and private beta.

Via

[ http://www.hakia.com/ ]
[ http://blog.hakia.com/ ]
[ http://www.hakia.com/about.html ]
[ http://www.readwriteweb.com/archives/hakia_takes_on_google_semantic_search.php ]
[ http://www.readwriteweb.com/archives/hakia_meaning-based_search.php ]
[ http://siteanalytics.compete.com/hakia.com/?metric=uv ]
[ http://www.internetoutsider.com/2007/07/the-big-problem.html ]
[ http://www.quantcast.com/search/hakia.com ]
[ http://www.redherring.com/Home/19789 ]
[ http://web2innovations.com/hakia.com.php ]
[ http://www.pandia.com/sew/507-hakia.html ]
[ http://www.searchenginejournal.com/hakias-semantic-search-the-answer-to-poor-keyword-based-relevancy/5246/ ]
[ http://arstechnica.com/articles/culture/hakia-semantic-search-set-to-music.ars ]
[ http://www.news.com/8301-10784_3-9800141-7.html ]
[ http://searchforbettersearch.com/ ]
[ https://web2innovations.com/money/2007/12/01/is-google-trying-to-become-a-social-search-engine/ ]
[ http://www.web2summit.com/cs/web2006/view/e_spkr/3008 ]
 

Acquisitions, Funding, Internet, Money, Software, Technology

Rackspace jumps on the web acquisitions bandwagon – snatches Webmail.us

Leave a comment

During the past 2 years the Web’s M&A market is very intensive. In what is known to be the RackSpace’s first web acquisition the company has acquired Webmail.us, a business web email service provider for an undisclosed sum.

At the time of the deal Webmail.us provided email hosting services to more than 80,000 small to medium size businesses totaling 600,000 users. Also recently Webmail.us made the Inc 500 list as the #217 fastest growing private company in America. Webmail.us already had a successful partnership with Rackspace – their entire email hosting infrastructure is hosted by Rackspace and Rackspace is their largest reseller. Webmail.us’s CEO Pat Matthews makes a note that “the market is really going to open up, leaders are going to emerge, and followers are going to fall behind.” He said that Webmail.us decided to sell to “make sure we’re positioned to be the leader in our space”.

Webmail.us is known to be using the Amazon S3, The Simple Queue Service and the Elastic Compute cloud to run its operations.

In the Webmail.us’s blog we read about the reason why they did this.

Why are we doing this?

We are committed to building the world’s most trusted provider of business email hosting. Rackspace very much believes in our mission and wants to help us make it a reality. They have done a phenomenal job of building one of the world’s greatest service companies and their experience and expertise will be invaluable as we grow our business.

We are natural business partners. In fact, we’ve been partners for more than three years. Rackspace already hosts our entire email hosting infrastructure and has become the largest reseller of our email hosting services.

Both companies see the world in the same way. Unlike other companies that sell technology-based solutions to businesses, we both believe that great service is what really matters. Since our inception, we’ve been committed to delivering great service to our customers and Rackspace only raises the bar. Experiencing Fanatical Support first-hand has proven to us that Rackspace is a different kind of company—one that is truly dedicated to its customers. We are eager to raise the bar as we bring Fanatical Support to our customers.

Our cultures are very similar, which has made integration easy—and exciting! Both companies are filled with amazing, passionate people that love what they do. And you can’t deliver great service unless you have great people that love what they do!
We believe in Rackspace. We share their vision for what email and IT hosting will look like in the future. We believe in their leadership team and their ability to execute. We love their people. We believe in Fanatical Support. And most importantly, we believe in our ability to achieve greatness—TOGETHER!

Nonetheless Webmail.us is a great example of a small company in the Web 2.0 age that is relying subscription based business model rather than on advertising even though having less user base when compared to the gigantic free email providers like Hotmail, Yahoo! Email and Gmail. That raises the interesting question what would it be if Google or Microsoft, for example, decide to jump on the same business model and turn just 1% of their free email users into recurring paying customers by adding and offering them some featured extras above the free accounts.

After the deal the company is going to stay in Blacksburg, Virginia. However, they  will now be able to leverage several locations for hiring — including Blacksburg, San Antonio, and the United Kingdom. The company was first incorporated in 1999, then raised about $140,000 in seed capital over the next three years, mostly from friends and family. But once it proved itself, it was time to look for more funds to expand the business. Alec Siegel, director of operations for MBA Management Group in Blacksburg, was one of the first angel investors. He invested $20,000 of his own money after meeting Matthews and the Webmail team. (MBA provides some staffing for Matthews’ company.)  David Sabotta, vice president of federal market development for G3 Systems in Blacksburg, also put up $20,000 of his own money. He discovered Webmail after reading Matthews’ blog, which includes Matthews’ commentary on the company and his vision for it. Then Sabotta got to meet the company. Webmail.us has then raised more than $400,000 in what represents its first round of financing – all from private investors.

Webmail.us used to be Excedent Technologies before they have changed the name in 2005.

Today Webmail.us stands at:

  • 100% focused on business email services
  • Headquartered in Blacksburg, VA
  • Employs over 60 employees
  • Hosts email for over 80,000 companies
  • Manages over 600,000 email accounts
  • Partners with a network of 325 resellers
  • On target to generate over $6M in sales in 2007
  • Over 100% year-over-year revenue growth, four years running
  • Voted best technology company to work in Southwest Virginia for the past two years
  • Voted #217 on the 2007 Inc. 500 list of fastest growing private companies in America

Based on everything we see above it appears that Webmail.us is not the usual Web 2.0 company, if at all.

About Rackspace

Rackspace Managed Hosting is a recognized leader in the global managed hosting market. They deliver enterprise-level managed services to businesses around the world. Serving more than 15,000 customers in eight data centers worldwide, Rackspace integrates the industry’s best technologies for each customer’s specific need and delivers it as a service via the company’s award-winning Fanatical Supportâ„¢.

They serve as an extension of their customers’ IT departments, enabling them to focus on their core business. They got started in 1998 and since then Rackspace has grown more than 50 percent a year. There are currently 1,800 Rackers around the world serving customers.

Via

[ http://www.readwriteweb.com/archives/webmailus_acquired_by_rackspace.php ]
[ http://www.webmail.us/blog/a/2007/10/we_are_merging_with_rackspace ]
[ http://www.webmail.us/about-us ]
[ http://www.tmcnet.com/usubmit/2005/feb/1119735.htm ]
[ http://www.businesswire.com/portal/site/home/index.jsp?epi_menuItemID…&newsId=20071127005923&newsLang=en ]
[ http://www.roanoke.com/business/wb/xp-21688 ]

Funding, Intel Capital, Internet, Jeff Clavier, Ron Conway, RSS Investors Fund, Technology, Transcosmos & Business Development Inc, Web 2.0

Edgeio closes doors after burning $5M in one year

Leave a comment

In a final board meeting last evening Edgeio’s board members have decided to shut down operations of the company.

This failure is sort of symbolic for the Web 2.0 sector. Why? What Edgeio is interesting with? First off it has been co-founded by Michael Arrington from Techcrunch, an influential, probably the most, blog that is symbolic itself for the web 2.0 age and Arrington himself is the editor there and one of the most influential people on Web today, according many sources, including but not limited to Wired and Forbes. He is also mentoring, advising, consulting and probably brokeraging companies across the Silicon Valley and is generally well known technology evangelist. He expanded his Crunch Network with Crunchboard, Crunchgear and Mobilecrunch and is rapidly becoming the most influential journalist in the tech scene nowadays.

Aside Edgeio Michael Arrington is also having active participations in the following companies.

  • He is an investor in a stealth company called Daylife, based in New York.
  • He became an investor in Dogster on September 14, 2006
  • He is also an investor in Omnidrive since December 2006.
  • He is also an investor in Dancejam since the spring of 2007 and
  • An investor in Seesmic from November 2007, a video upstart launched by a French entrepreneur.

Aside Michael Arrington the company was also co-launched by Keith Teare and is said to be a great tool for bloggers and buyers alike. Using content from RSS-enabled sources, Edgeio is able to take millions of listings and categorize them in a central location. Early employees of Edgeio also include Vidar Hokstadt, Matt Kaufman and Fred Oliveira. Michael Arrington was not an executive but instead he served the company as a board of directors’ member.

Edgeio is all about edge publishing. It is Edgeio’s belief that services that try to restrict how users create and consume information cannot ultimately be successful. Users own their data, and services exist not to silo that data, but rather to add value to it. That is what Edgeio is setting out to do. Good mission. Simply put Edgeio will be focusing on classified listings of any type to start.

Blogs and other websites syndicating their content through RSS are an ideal place to post classified listings. Not only is the publisher in complete control of the content (what to include, when to change or update it, when to delete it and how to syndicate it for other services), but the website itself gives valuable context to readers of the listing. Unlike anonymous listing services, listings on blogs controlled by the publisher give readers an idea of who they are dealing with. That additional information is an important factor for readers in deciding if and how to interact with the publisher.

Very few blogs publish classified listings today. Most blogs have a relatively small group of readers, including friends and family, and are not able to effectively reach the larger audience needed to effectively market their listings.

That’s where Edgeio comes in. They promised to find edge published listings if they include the category or tag “listing” within the post or content. The listings will be indexed through the blog’s RSS feed and aggregated with other “listings from the edge”. Users of the Edgeio service will be able to search through listings and communicate directly with the publisher. Edgeio will also make aggregated listings available though a web service to other Internet sites and services that would like to include edge listings.

Edgeio promised to never attempt to silo or control publisher data, or restrict the ways that listings can be used by others.

The company has also launched a Chinese language version of its web site named mulu100.com (which in Chinese means catalog of catalogs). The Chinese service has initially formed a partnership with edeng.cn, a China based listings site, similar in many ways to craigslist.com.

Edgeio recieved $1.5 million in angel funds from the likes of Louis Monier, Frank Caufield, the RSS Investors Fund, Jeff Clavier, Ron Conway, Michael Tanne, Auren Hoffman, Sam Perry and Bill McCabe.

In October 2006 Edgeio Closed $5 Million Series A Funding led by Intel Capital and also included an investment from Transcosmos & Business Development Inc, a Japanese public company with a Silicon Valley investment arm focused on Internet-based U.S. technology companies expanding into the Japanese marketplace.

The company burned through that money according to plan, meaning they ran out this month. The product roadmap was fulfilled; meaning development lags didn’t hurt the company. No revenues came in and the user/partner milestones weren’t met and no one else was going to put more money into the company.

Employees will be let go but will be fully paid according Michael Arrington.

When being asked from a commenter on his blog what the company spent the money for Michael Arrington jokingly replied “parties, scotch, hookers, blow. You know the usual.”

The company seems to have failed even though Edgeio got a serious amount of coverage and in-context mentions on Techcrunch over the past years. All entries can be found over here: http://www.techcrunch.com/tag/edgeio

De-facto it also affects another initiative of Techcrunch the Crunchboard.com, which will also undergo restructuring in the next days as they say. 

Michael Arrington also has said ”it is unwise for a company to spend a lot of money building out infrastructure before a product proves itself as well as they always had problems with the PayPal API, which is a total piece of crap”

Here are some more interesting thoughts for food.

Advertising on TechCrunch is not cheap – $10,000 per month and Edgeio is known to have been an advertiser at TC for quite long period of time. The site was also used in TC’s job site www.crunchboard.com, which in our understanding did also cost money for the Edgeio. Having an influential company the rank of TechCrunch adopt and use your company’s services or products in our view is more expensive than having a banner rotating on the TC’s blog network.

The company was recently caught (September 2007) to be spamming Bloggers, which was even criticized by Arrington himself calling it ”Bad Idea”.

It is really interesting to see how things in SV tend to work. You have an idea, find an angel or two, prepare for the series A funding, raise the money, give it a try, if it work things out fine, if not then also fine, you close shop, go home, take some rest and try again later with another start up.

Indeed the company looks very good and healthy to us. Well done technology, good idea/concept, good numbers, was well funded, high-profile people involved and engaged and beyond. Quantcast reports for over 150,000 unique visitors from US alone while Compete is showing very healthy number of visitors – 348,797. Edgeio has access to over 100 million listings in 1,484,953 cities and 166 countries, 9,190,705 listings from 1,405 edge-direct feeds and 2,736 listings from 134 Classified Boards.

So what went wrong?

Why the company did not take a series B round of funding or tried to sell itself before crashing down? The business plan to start generating revenues was too pushful and unrealistic, in less than one year after funding? The company seems to have been given with less than a year to break-even? By contrast I remember another company that got coverage on Techcrunch Mahalo, started out by Jason Calacanis and was said that the company is having enough money to survive for at least 5 years without making any money at all. The company could have even been sold or profitably liquidated in one way or another and not simply closed.

So is there anything behind the scene that the public is not aware of?

Well, the very simple conclusion we can draw here is that a company success is not always guaranteed solely by who the investors or founders are… The DNA of the success with a company probably lies somewhere else and is a complex of factors, interests and events. 

Via

[ http://www.edgeio.com ]
[ http://wiki.edgeio.com/display/ExternalWiki/Home ]
[ http://blog.edgeio.com/2006/10/23/series-a-financing-china-web-site-and-patent-filing/ ]
[ http://www.techcrunch.com/2007/12/06/edgeio-to-shut-down-in-the-deadpool/ ]
[ http://www.crunchbase.com/company/edgeio ]
[ http://www.techcrunch.com/2007/09/30/edgeio-spams-bloggers-bad-idea/ ]
[ http://www.techcrunch.com/tag/edgeio ]
[ http://www.techcrunch.com/2006/10/24/edgeio-closes-5-million-series-a-financing/ ]
[ http://venturebeat.com/2006/10/23/edgeio-gets-5-million-to-expand-web-20-classifieds-site/ ]
[ http://www.businessweek.com/the_thread/techbeat/archives/2006/10/edgeio_has_been.html?campaign_id=rss_blog_blogspotting ]
[ http://gesterling.wordpress.com/2006/10/24/edgio-gets-5-million-in-vc-money/ ]
[ http://www.quantcast.com/edgeio.com ]
[ http://siteanalytics.compete.com/edgeio.com/?metric=uv ]
[ http://www.zoominfo.com/Search/CompanyDetail.aspx?CompanyID=49351685&cs=QGC8QwFIE&pc=compete ]
[ http://rexdixon.wordpress.com/2006/10/24/edgeio-secures-5-million ]
[ http://www.techcrunch.com/about-techcrunch/ ]
[ http://www.crunchboard.com/ ]
[ http://en.wikipedia.org/wiki/Michael_Arrington ]
[ http://www.teare.com/category/keith-teare/edgeio ]

Bay Partners, Bessemer Venture Partners, Business, Customer Relationship Management, Funding, Investments, Public Companies, Software, Technology

Force.com takes $25 million from Bay Partners & Bessemer Venture Partners

Leave a comment

Bay Partners and Bessemer Venture Partners have teamed up with Salesforce to invest $25 million in businesses building on the recently announced Force.com application platform over the next three years. Investments will be around $500,000 each where some convertible notes are also included. Investments may go as high as $2 million depending on the company’s stage and needs.

Force.com is owned by Salesforce.com, Force.com is presented and offered as platform as a service (PaaS).  Force.com is the world’s first Platform as a Service (PaaS), enabling developers to create and deliver any kind of business application, entirely on-demand and without software. It’s a breakthrough new concept that is making companies radically more successful by letting them translate their ideas into deployed applications in record time.

With Force.com Salesforce is planning to enter the custom software market. It is a new platform that will allow developers to create database driven applications and deploy them as services. So if Salesforce doesn’t offer what you are looking for, and no one has built it for you on Salesforce’s AppExchange, you can simply build it yourself using the Apex framework.

Basically there is a number of rival start-ups that are focused on offering users easy way to create and deploy database driven applications – DabbleDB, Zoho Creator, Rollbase (from former Taleo executives), LongJump, Coghead  and WyaWorks, among others. Unlike some experts predicting that this is sort of game ending for some of the start-ups above, we think this is just a step towards improving the custom software market’s environment and competitiveness among the players from which the end users would only benefit from. Also, some of the smaller companies within the sector are cost-effective and are positioned towards different market niches by targeting different customers when compared to the Salesforce.com. To me it looks more like a beginning of the game.

Many experts in enterprise SaaS right now know that ultra-configurable platforms such as Force.com are the envy of the industry for many reasons. Suffice it so say they enable extremely rapid expansion of the core and beyond into adjacent market segments as well as completely new markets – even long-tail micro-markets driven and executed entirely by end-users.

Bottom line is that users are being given more and more power to develop their own on-demand apps. This is a mega-trend in enterprise software and all significant players will need a strategy to deal with it. Users are becoming much more empowered to design, build, deploy and even distribute their own custom business apps without even knowing how to program.

Highly configurable do-it-yourself SaaS for business users is the future of software and Force.com is a fantastic example of where things are headed. Just about every enterprise software company, especially those targeting SMBs, will want to be running on their own version of this kind of platform over the next several years in order to compete.

Again, this is by no means a game-ending proposition for any of the companies working in this space. Oppositely, some great strategic acquisitions will emerge here as enterprise software companies figure out how to deal with this phenomenon. Multi-tenant, meta-data-driven, configurable SaaS is difficult stuff to build right. The startups that can and are doing a good job now will command a premium in the near future.

On the other hand Salesforce.com has always been seen and known as an aggressive company.

Salesforce.com is the worldwide leader in on-demand customer relationship management (CRM) services. More companies trust their vital customer and sales data to salesforce.com than any other on-demand CRM company in the world.
 
Why? Perhaps it’s because we deliver integrated, completely customizable enterprise applications for companies of all sizes. Or maybe it’s because Salesforce is so easy to learn and use, and thanks to the power of the on-demand Force.com platform, it can be up and running in weeks or days—not the months or years required by traditional client/server CRM software. Or it could be the unprecedented speed with which our customers see real, tangible ROI. Or maybe it’s because of our 100-percent dedication to the success of our customers.

In fact, more than 35,500 companies worldwide depend on Salesforce to manage their sales, marketing, customer service, and other critical business functions. We are proud to be contributing to the success of companies of all sizes, in all industries, around the globe including:

  • Corporate Express
  • Daiwa Securities
  • Expedia Corporate Travel
  • Dow Jones Newswires
  • SunTrust Banks
  • Kaiser Permanente

Salesforce.com was founded in 1999 by former Oracle executive Marc Benioff, who pioneered the concept of delivering enterprise applications via a simple Web site. Salesforce.com is constantly building on that legacy by improving and expanding our award-winning suite of on-demand applications, our Force.com platform for extending Salesforce, and our one-of-a-kind AppExchange directory of on-demand applications.

Salesforce.com has received considerable recognition in the industry, including:

  • Technology of the Year (InfoWorld, 2004, 2005, 2006)
  • Editors’ Choice Award (PC Magazine, 2002, 2003, 2004)
  • Visionary Award (SDForum, 2004)
  • Best of the Web (Forbes, 2003)
  • CRM Excellence Award (Customer Inter@ction Solutions, 2003, 2004, 2005, 2006)
  • Top 100 Innovators Award (BusinessWeek, 2006)
  • Innovation Award (AMR Research, 2005)
  • CODIE Award for Best CRM (2002, 2003, 2004, 2005, 2006)

The growing list of global business partners dedicated to providing complementary products and services to salesforce.com customers includes IBM, Microsoft, BEA Systems, Sun, TIBCO, PricewaterhouseCoopers, Miller Heiman, and dozens more.

It is believed that the partnership will provide Bay and Bessemer early leads to new companies and Saleforce’s assistance during due dillegence.

Bay Partners have already invested in many Appexchange integrated companies (Xactly, Eloqua, Cornerstone, eProject) and are looking to get in earlier this time around. Notably, Bay Partners has also invested in Facebook’s platform by putting aside funds for 50 investments. So far they’ve closed three, as far as we know.

The investment program has been underway over the past couple of months. Bay has been looking at 12 deals and already committed to one. The deals are judged on a case by case basis.

The Force.com venture program is being led by Neil Sadaranganey and Salil Deshpande from Bay Partners and Byron Deeter from Bessemer Venture Partners.

Saleforce.com is one of the first web based companies to go against the practice to sell software as a product. Instead, they do believe that the software is best to be offered as a service – Software as a Service or so called SaaS. Marc Benioff is salesforce.com’s Chairman & CEO. 

The company is publicly traded on NYSE.

 SALESFORCE.COM INC (NYSE:CRM)  
 
After Hours: 56.73 0.00 (0.00%) on 11/30/07
 
Last Trade: 56.73
Trade Time: 4:02PM ET
Change:  1.47 (2.66%)
Prev Close: 55.26
Open: 55.62
Bid: N/A
Ask: N/A
1y Target Est: 59.36
 
Day’s Range: 55.29 – 57.73
52wk Range: 35.55 – 58.00
Volume: 3,314,902
Avg Vol (3m): 1,694,100
Market Cap: 6.70B
P/E (ttm): 630.33
EPS (ttm): 0.09
Div & Yield: N/A (N/A)

The company’s current market capitalization is more than $6 Billion. Larry Ellison is one of the early investors in Salesforce. 
 
Ok, when people speak for SaaS (Software as a Service), we should take into consideration the following aspects, as some SaaS entrepreneurs are pointing out.

1. Enterprise Software companies which have not yet switched to SaaS are feeling the pressure and in many cases this is already affecting their bottom lines.

2. In order to adopt a SaaS strategy a quick way to do this is to partner with SaaS and build on the Force.com platform, but this is not an end-game strategy, it is a stop-gap measure. Ultimately Salesforce will want to own all major categories, Benioff (Salesforce.com’s Chairman & CEO) wants to build the next SAP/Oracle/PeopleSoft on – demand and why wouldn’t he? However, this causes a fundamental conflict with a partner who would ever consider Force.com their primary platform.

3. It is hard to believe that other enterprise software companies out there are going to bow down to Force.com, give up, and hand over the keys to Benioff. Every enterprise software company will need a strategy to compete with this kind of platform and allow their own applications to be customized, expanded, and even new apps created in an ecosystem, in order to remain competitive. And there is much more of a business case for a successful stand-alone enterprise software company to build or buy to get there versus give up and run on Force.com. There could also be a number of consolidations within the sector of some of the smaller players.

Force.com is a fantastic platform, but it represents a very new very big change that is happening in enterprise software today. It represents an incremental shift in power to end-users in terms of their ability to customize and build applications specific to their business needs. It is the intersection of the do-it-yourself web with enterprise software (e.g. YouTube ==> YouSoft). To say that Salesforce.com has and will continue to have a monopoly on this sector is short-sighted.

Some of the Salesforce.com’s latest press releases, news and announcements:

Salesforce.com CEO Marc Benioff Named 2007 Agenda Setter and Top Ten Business Leader for Championing Software-as-a-Service (http://investor.salesforce.com/phoenix.zhtml?c=141811&p=irol-newsArticle&t=Regular&id=1081407&)

Salesforce.com CEO Marc Benioff Named 2007 Agenda Setter and Top Ten (http://investor.salesforce.com/phoenix.zhtml?c=141811&p=irol-newsArticle&t=Regular&id=1081140&)

Salesforce.com CEO Marc Benioff Named 2007 Agenda Setter and Top Ten Business Leader for Championing Software-as-a-Service (http://investor.salesforce.com/phoenix.zhtml?c=141811&p=irol-newsArticle&t=Regular&id=1080863&)

Salesforce.com Executive Vice President of Products and Marketing to Present at the Credit Suisse Technology Conference
(http://investor.salesforce.com/phoenix.zhtml?c=141811&p=irol-newsArticle&t=Regular&id=1081140&)

Toyota Motor Europe Standardizes on Salesforce across Europe (http://investor.salesforce.com/phoenix.zhtml?c=141811&p=irol-newsArticle&t=Regular&id=1080863&)

Via

[ http://www.techcrunch.com/2007/09/30/bay-and-bessemer-add-25-million-in-monetary-muscle-behind-forcecom/ ]
[ http://www.salesforce.com/company/investor/ ]
[ http://www.techcrunch.com/2007/09/13/salesforce-enters-custom-application-market-with-forcecom/ ]
[ http://www.salesforce.com/company ]
[ http://www.salesforce.com/platform/ ]

Accel Partners, Business, Funding, Greylock Partners, Hutchison Whampoa Limited, Meritech Capital, Money, Peter Thiel, Social Networking, Technology, Web 2.0

Hong Kong billionaire Li Ka-shing Invests $60m in Facebook. Funding totals $338.20M to date

Leave a comment

Hong Kong billionaire Li Ka-shing Invests $60m in Facebook. Facebook now has $338.20M in cash to play with. Plans are the company to go public in 2008 or 2009 according to some rumors within the sector.

Facebook is hugely popular social networking site, second only to MySpace in terms of users. Other popular social networking sites are Bebo and Friendster, the second one tried to acquire Facebook in 2004 for just $10M.

The latest comScore metrics, we have seen, revealed that Facebook is actually site #16 (others claim it is #6 today) in US with nearly 70M unique visitors per month and more than 50M registered and active users.
 
Peter Thiel, cofounder of PayPal and managing partner of the Founders Fund was the first angel investor in the company. He invested $500,000 into Facebook in early 2004. Later Accel Partners poured $12.7 million more in funding, at a valuation in the $100 million range.

The next year [2006], Facebook received $25 million in funding from Greylock Partners and Meritech Capital, as well as returning investors Accel Partners and Peter Thiel. The pre-money valuation for this deal was in the $525 million range.

Facebook is reported to have turned deals down from Friendster, Yahoo, Viacom  and the mighty Google a couple of months ago when Zuckerberg has chosen Microsoft to partner with. Microsoft de-facto has invested $240 million into Facebook for just 1.6 percent of the company in October 2007. This put the company’s valuation at over $15 billion on just $150 million in annual revenues.

Mr. Li Ka-shing is the Chairman of Cheung Kong (Holdings) Limited and Hutchison Whampoa Limited. Cheung Kong (Holdings) Limited is the flagship of the Cheung Kong Group which has business operations in 55 countries around the world and employs about 250,000 staff. In Hong Kong alone, the Group includes eight listed companies with a combined market capitalization of approximately HKD981 billion (31 October 2007). Hutchison Whampoa Limited is a Fortune Global 500 company.

It would be interesting to find out what’s the equity position Mr. Li Ka-shing has secured for his $60M considering what Microsoft has bought for their $240M. 

Via

[ http://www.crunchbase.com/company/facebook ]
[ http://www.techcrunch.com/2007/11/30/another-60-million-for-facebook/ ]
[ http://kara.allthingsd.com/20071130/facebook-nabs-60-million-investment-from-li-ka-shing/ ]
[ http://www.hutchison-whampoa.com/eng/about/chairman/chairman.htm ]

Advertising, Funding, Galleon Crossover Fund, Rho Ventures, VantagePoint Venture Partners

ReachLocal Stands at Good Chances When it Comes to Location Based Advertising

Leave a comment

As we wrote yesterday a couple of months ago a company called ReachLocal raised a massive amount of money – $55 million at a pre-money valuation in the $300 million range.

ReachLocal provides online advertising services for small businesses. The company’s investors include Rho Ventures, with Galleon Crossover Fund also participating, and VantagePoint Venture Partners as return investors. This recent round of funding comes after the $12.7 million the local ad company has raised since its inception in 2004. This gives ReachLocal an estimated valuation at $305 million, which is $55 million more than its previous valuation.

With that amount in its pockets ReachLocal stands at very good chances to reach a good market share in the location based online advertising market where mature companies like Yellowpages and SuperPages dominate the sector. Nokia has recently been seen to deploy location based mobile services and ads.  Google and Yahoo are also serious about serving ads on the local markets too.

On the ReachLocal’s video, it seems that their real value proposition is that they’ve integrated online and offline touch points (points of contact), and can track and report on this for small & medium businesses, which in most cases do not have high hurdles of integration.

ReachLocal has only one purpose as they claim: getting businesses in front of local buyers and converting “searchers” into customers.

The company is said to have patent-pending campaign optimization, management and tracking technologies, which offer unique benefits for advertisers and make it possible to follow a prospect’s progress from searcher to customer in unprecedented detail.

ReachLocal is a privately held, venture capital-backed company headquartered in Woodland Hills, CA.

Competition include Yodle, SquidBids and upspring.

[ via Mashable ]

[ via MarketingPiligrim ]

Advertising, Bessemer Venture Partners, Draper Fisher Jurvetson, Funding, Galleon Crossover Fund, Rho Ventures, VantagePoint Venture Partners

$12 million more for online local advertising. No it’s not ReachLocal it is now Yodle

1 Comment

Yodle has raised a whopping amount of money in its second round – $12 million for its web-based local advertising business. The company manages online advertising campaigns for small businesses on all of the big search engines and drives traffic to pages designed specifically to attract new leads. Yodle also employs customer management tools for tracking both incoming calls and emails that your small business is generating from its web presence.

Yodle helps your company generate new business by connecting you with customers searching online for the services you offer. First, Yodle advertises your business online to customers in your local area. Second, Yodle directs these customers to your website so they can learn about your business and view your offers. Third, interested customers call into your business to set an appointment.

According to the company, Yodle grew 400% in the third quarter. The company also estimates that every dollar spent with them generates an average of $8 in additional profit for small businesses. Yodle’s new round of funding was led by Draper Fisher Jurvetson, with Bessemer Venture Partners also participating in the round. Yodle got founded under the name Natpal in 2005.

A couple of months ago a major competitor called Reach Local raised a massive amount of money – $55 million at a pre-money valuation in the $300 million range.

ReachLocal provides online advertising services for small businesses. The company’s investors include Rho Ventures, with Galleon Crossover Fund also participating, and VantagePoint Venture Partners as return investors. This recent round of funding comes after the $12.7 million the local ad company has raised since its inception in 2004. This gives ReachLocal an estimated valuation at $305 million, which is $55 million more than its previous valuation.

On the ReachLocal’s video, it seems that their real value proposition is that they’ve integrated online and offline touch points (points of contact), and can track and report on this for small & medium businesses, which in most cases do not have high hurdles of integration.

The location based advertising market seems to be hot these days after Nokia snatched Navteq for $8B and is seen to be using some of the technologies in an effort to tap into the huge market of mobile value-added services, both location based mobile services and location targeted mobile ads.

Other similar companies include SquidBids and upspring.

Leaders in the location based online advertising and leads are Yellowpages and SuperPages (owned by Idearc Media). Superpages.com is the expert in local search receiving over 17 million monthly unique visitors and completing over 200 million searches per month. Idearc Media has also recently acquired LocalSearch.com.  

[ via Mashable ]

[ via Mashable ]

[ via MarketingPiligrim ]

[ via Private Equity Hub ]

Ban Capital, Brookside Capital Partners, Charles River Venture, Funding, Sutter Hill Ventures

China-based video-sharing Youku takes $25 million, totals $40M

Leave a comment

In its the third round of funding for the company Youku raised $25 million which is pretty large amount for a China based web site. We remember large scale funding happened before for a couple of other China Internet companies one of which is Maxthon, the China based browser organized as donateware (part of Charles River Venture’s portfolio). Brookside Capital Partners, a subsidiary of Ban Capital, led the round with previous investors Sutter Hill Ventures, Farraloon Capital Management and Chengwei Ventures also participating. Youku’s previous two rounds were for $3 million and $12 million, giving the video-sharing site a total of $40 million in funding to date.

Youku.com is a rapidly growing Chinese YouTube-style video sharing site. It is one of the larger Chinese video sites, with more than 70 million video plays a day according to Pacific Epoch. Youku also has a lot of big-time connections. Victor Koo, the chief executive of Youku, used to be the chief executive of Sohu, and the two companies have a business relationship. Farallon Capital, the hedge fund, led an initial round of $3 million in March 2006. Bain Capital venture subsidiary Brookside Capital Partners led this latest round, with other investors including Chengwei Ventures and Sutter Hill Ventures. Also the well-known Sutter Hill partner Len Baker is on Youku’s board.

The investment money is said to be used towards infrastructure and operations, according to the company. There is a belief that part of the money will go for improving the copyright protection methods, which for a country like China are more than important. Google’s YouTube is also heading towards the Chinese market trying to increase its market share there.

The site was hard to open from outside China.

In other news Sohu.com Inc. (Nasdaq: SOHU), China’s leading online media, communications and search company and Youku.com, China’s leading online video website, announced today that they entered into strategic cooperation to jointly foster the development of the online video industry in China and to promote video-based citizen journalism and user generated content among Chinese online users.

[ via Mashable ]

[ via Paidcontent ]

[ via Venturebeat ]

Draper Fisher Jurvetson, Funding, Sequoia Capital

Meebo received funding from Sequoia Capital and Draper Fisher Jurvetson

Leave a comment

Meebo confirmed (Dec ’05) that they have received funding from Sequoia Capital on their blog. Meebo.com is a website for instant messaging from absolutely anywhere. Whether you’re at home, on campus, at work, or traveling foreign lands, hop over to meebo.com on any computer to access all of your buddies (on AIM, Yahoo!, MSN, Google Talk, ICQ and Jabber) and chat with them, no downloads or installs required, for free!

Meebo launched in September 2005 and received funding from Sequoia Capital in December 2005 and Draper Fisher Jurvetson in January 2007. Today, Meebo’s users exchange over 100 million instant messages daily.In early 2007, Meebo gets another $9 million from Draper Fisher Jurvetson and Sequoia Capital. Skype’s lead investor and YouTube’s lead investor are teaming up. Tim Draper, one of the early investors in Skype, did the deal for DFJ. Meebo’s total funding is now $12.5 million.

Please note this posting is reporting a funding which happened in 2005 and 2007. Web 2.0 Money is a new initiative of Web 2.0 Innovations to discover, report and analyze the money behind the Technology and Internet Industries. We start from some of the earliest funding deals we know about.

[ via meebo.com’s blog ]

[ via business2.com ]

[ via Techcrunch ]

Acquisitions, Funding, Uncategorized

Web2Innovations.com Launches Web 2.0 Money

Leave a comment

Web 2.0 Money is a new initiative of Web 2.0 Innovations to discover, report and analyze the money behind the Technology and Internet Industries. We will start from some of the earliest funding deals we know about as discovered by us at the following web addresses through out the past year and a half:

Web 2.0 Innovations We do believe there is a significant correlation between the web 2.0 industry at all and the money within. Although the vast majority of the great web 2.0 innovations that took place over the past 2 years were either funded or acquired we still see a pretty large number of web 2.0 innovative projects, start-ups and companies with little to no money allocated to them.

Based on our observation and despite that many people are claiming that no location plays any role where innovation happens (although some do), it appears that 90% of all funding and acquisition deals that took place within the web 2.0 industry sector since 2005 happened to be in California and Silicon Valley in particular. 5% or something did happen in the rest of US as again only a few states dominated like New York, Massachusetts, Illinois, Virginia, Texas and one, as far as we know, in Indiana, a deal on a company, which many IT experts and influencers disagreed to be considered web 2.0 innovation. The rest of the deals appeared on the business map of just a few more countries such as U.K., Sweden, Norway, France, China and one in Singapore.

Basic conclusion: while it might be true that web 2.0 innovation is happening all over the world, it clearly seems the money from web 2.0 innovations can only be made within the US.