Venture
Update Vol III, #9, September, 1999
Durham—Red Hat, Inc. (www.redhat.com), a developer and provider of open source Linux-based operating system (OS) solutions, made the eighth-largest first-day gain in Wall Street history, 272 percent, in its initial public offering on August 11, 1999. The initial offering price was $14. Contact: Melissa London (919.547.0012).
Durham—Alternate Realities Corporation (www.visiondome.com), a developer of software and hardware for 3D visualization, closed on $2.5 million in venture funding in August, 1999. Investors included BancBoston Ventures, Newlight Associates and Southeast Interactive Technology Funds. Contact: Mike Odell (919.596.8900).
Silicon Valley—BOPS, Inc. (www.bops.com), a developer Digital Signal Processor (DSP) technology for high-volume manufacturers of System-On-Chip (SOC) semiconductors, closed on $9.5 million in second round of investments. Investors included Pequot Capital, VantagePoint Venture Partners and Band of Angels Venture Fund. The company's product development offices are located in Research Triangle Park. Contact: Steven Walsh (919.403.6757).
Raleigh—Cherokee Investment Partners, a private investment firm, raised $259.1 million for its second fund, Cherokee Investment Partners II. The fund will focus on acquiring industrial sites across the country that have polluted soil and groundwater, and cleaning those sites to sell at a profit. The fund closed on $180.1 million raised from investors in December and an additional $79 million in August 1999. Contact: Thomas Darden (919.743.2500).
Cary—Newtonian Software (www.newtonian.com), a developer of software for interactive selling systems (ISS), was acquired by Clarify Inc. of San Jose, Calif., for $16.5 million in cash and stock in August 1999. Clarify is the No. 2 supplier of "front office" software that performs functions such as sales and marketing, customer service and logistics. Contact:Chaz Henry (919.790.8894).
Durham—Imaginis.net (www.imaginis.net), an Internet "ehealth" service for information on medical imaging, wellness and healthcare issues, closed on $500,000 in interim funding in August 1999 from undiscloed investors. Contact Shawl Lobree (410.519.8276).
Research Triangle Park—Sciquest.com (www.sciquest.com), an Internet source for scientific products and electronic purchasing, acquired San Jose, California-based Internet Auctioneers International, Inc., (dba Going, Going...Sold!SM), in a stock swap of undisclosed value in July 1999. Going, Going...Sold! (www.going-going-sold.com) specializes in the online auction of used and refurbished laboratory equipment. Contact: Peyton Anderson (919.659.2100).
Raleigh—Halifax Capital Partners, an investment firm with offices in Raleigh, had a first closing of $150 million in financing from investors in August 1999. The fund's total goal is $250 million. Halifax plans to make $10 million to $40 million investments in small and midsize companies. Contact: Jim Lumsden (919.743.2525).
Apex—Epiteleo, a developer of personal information management software with a pen-on-paper-based user-interface, closed on a seed round from an undisclosed private investor in August 1999. Contact: Greg Clary (919.387.1831).
New Developments
Winston-Salem—Pilot Biotechnologies,
Inc. (www.pilotbiotech.com),
a nutriceutical discovery and development company,
has formed an agreement with Quintiles Inc. Under the
agreement, Quintiles will preform tests in the
development process of Pilot's first product, a
nutraceutical for treating asthma. Contact: Sara
Brooks Creagh (336.716.8721).
Research Triangle Park—The Council for
Entrepreneurial Development (www.cednc.org)
showcased two companies to present at the STREAK
luncheon on September 2, 1999. The companies
were:
NewEraCom, a wireless networking service
provider that offers high-speed Internet access
through SKYRunner, the Company's unique, proprietary
wireless network topology.
Saffron Technology, Inc., a software company
that has created an agent-based software for Internet
personalization.
Research Triangle Park—The Council for Entrepreneurial Development, in cooperation with Kenan-Flagler, has selected demo companies to present at InfoTech '99, the Southeast's premier Information Technology industry conference showcasing the best of North Carolina's $5.1 million IT industry, on October 27, 1999. For a list of the demo companies, visit the InfoTech '99 Web site at www.cednc.org/infotech/99.
On The
Up
INDUSTRIAL MICROWAVE SYSTEMS, INC.
Manufacturing companies like microwave technology
for the same reasons you do -- it's fast, energy
efficient. But until recently, there were
technological barriers and high costs associated with
applying microwaves to industrial processes.
Enter RTP-based Industrial Microwave Systems, Inc., which uses innovative technology to make microwaves cost-effective. IMS was founded in 1997 by J. Michael Drozd, Ph.D., who developed the three patents forming the company's foundation.
"Our heating and drying systems utilize patented microwave technology for continuous flow manufacturing processes," explains Jay Borkowski, executive vice president. IMS' products provide uniform heating, sterilization, catalyzation and decontamination of materials like paper, textiles, foods/beverages, chemicals and biosolids.
IMS received $135,000 in SBIR grants from the USDA and EPA as well as $125,000 in seed capital from the N.C. Technological Development Authority in 1998. Earlier this year, IMS received a $400,000 grant from the Department of Energy's NICE3 program to develop energy efficient, clean producing manufacturing processes, and a $415,000 grant from DOE's Agenda 2020 program to develop technologies for the paper industry.
The company closed Series B fundng in June. Martin Marietta Technologies Corp. was the lead investor in the $2.2 million round. The balance was raised as convertible debt from TriState Investment Group and other angel investors as well as a follow-on investment from the TDA. The funds are being used to round out the management team, build and install demonstration systems and move into new offices later this year. "We expect to seek Series C funding next year and achieve profitability in 2001," Borkowski says.
Featured Fund
Monarch Capital Partners
In 1995, Rob Guyton created a company that enables
Internet users to find information stored on any Web
page on the 'Net -- a search engine. Today, Inktomi
Corporation's market cap is $5.2 billion and it's the
backbone of the search and directory services behind
Yahoo, Microsoft, Hotbot, America Online, @Home and
others.
For an encore, Guyton launched a venture fund in 1998 to help bright entrepreneurs build fast-growing, market-leading technology companies in the Southeast. Today, Monarch Capital Partners is the first venture fund in the Southeast to focus strictly on wireless and Internet technologies.
Guyton and partners Bennie Bray, John Brewer and Dick Williams raised its first $30 million and closed the fund in December 1998. "We have proved we can invest money at Internet speed," Brewer recalls, investing in seven companies in eight months. "Today the time between seed financing, venture rounds and IPO can be measured in months instead of years. We are moving aggressively to see new markets first, find developing companies that serve those markets, and provide those companies with the funding and management expertise necessary to develop quickly."
In June, Monarch's $2 million investment in Durham's ClinEffect Systems was the firm's first Triangle investment. Monarch generally invests between $500,000 and $3 million in any one deal. "We prefer to be the lead investor in deals," Brewer says, "but we also have enjoyed partnering with some of the leading venture funds in the country."
Monarch has offices in Atlanta and Dallas but finds itself spending a fair portion of time in the Triangle. "We are in the Triangle almost every week," notes Brewer, a North Carolina native. "The Triangle is gaining ground on Austin and Atlanta as a place for up and coming wireless and Internet deals in the Southeast." Visit Monarch at www.monarchpartners.com.
Corporate Partnering Seminar
September 9, 1999
1:30-5:00 p.m.
Attracting
the Right Investors
September 28, 1999
1:00-5:00 p.m.
NCBC
InfoTech
'99
October 27, 1999
8:00 a.m.-5:00 p.m.
Friday Center, UNC-Chapel Hill
For more information about these events or to register, visit the CED Web site at www.cednc.org or call 919.549.7500.
CED is a private non-profit organization supported, in part, by corporate contributions, including funding from Atcom Business Telephone Systems, Carolina Power & Light And Capitol Broadcasting Company, Inc.
Research Triangle Venture Update is published by
the Council for Entrepreneurial Development (CED), a
non-profit organization located in Research Triangle
Park, N.C.
Editor Carolyn Foy, CED
P.O. Box 13353
RTP, NC 27709
Phone: 919.549.7500
Fax: 919.549.7405
Email: mcfoy@cednc.org