Start-Ups
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Digium, the company that spawned open source PBX and telephony software, Asterisk, has received $13.8 million in Series A funding from Boston-based telecom specialist venture fund, Matrix Partners.
Digium is the latest amongst a growing list of VoIP-related venture investments, and perhaps the most prestigious. David Skok, a general partner at Matrix Partners who won his VC stripes by backing JBoss, an early Open Source software company joins the board of the company. Digium is one of the early pioneers of the open source telecom movement.
This also marks the latest chapter in the amazing story of Digium founder Mark Spencer and by extension, the Asterisk PBX software. In 1999, Spencer started the Huntsville, Alabama-based operation with his savings and a few thousand dollars in investment from his parents.
Since then, the simple little PBX he wrote has become a rebel yell for telecom hackers, and Spencer a rock-star at VoIP conferences such as VoN. While it is not the only open source PBX, it certainly is one of the most popular.
The company turned profitable in 2002, and remains so. Digium has experienced break neck growth over past few years. Today Asterisk boasts over one million users. Nearly, 1000 copies of the software are downloaded every day. The profitable status of the company, however made me wonder why does Digium need VC dollars?
Spencer explains that the company will use these funds to expand its operations by selling a variety of Asterisk-based IP-PBX systems to small business and large corporations. In doing so, the company might end up competing with others who base their products on Asterisk. Fonality, a Los Angeles-based company, for instance sells Asterisk-based PBX systems to the very same small and medium sized businesses.
“To me, Digium has the same, perhaps even better characteristic than that of JBoss,” says Skok, “It has a highly seasoned product, market leadership, and is profitable.” And it is also one of the hottest VoIP plays around.
Skok may have scored a coup, even if it might have cost Matrix some serious dollars in terms of valuation. Digium, he says has everything to make it one of Matrix’s most successful open source companies. With many old-styled PBX phone systems being replaced by new VoIP-based systems, a low cost offering based on Asterisk can be very attractive for buyers. Fonality, for instance, has quickly garnered 10,000 users for its ultra low-cost Asterisk-based devices.
Though he only has known Spencer for a few months, Skok says his big epiphany came when he downloaded and installed Asterisk on his computer, went overseas, and plugged into his broadband connection. He was soon making calls all over the US, as if he never left his Boston office. The Asterisk became his extension, and he was hooked. “Digium is definitely in a position to become the next big open source company, behind Red Hat, JBoss and MySQL,” says Skok, clearly smitten by his latest investment.
Also, A Short Q&A with Digium founder Mark Spencer.
Written by Om Malik on August 9th, 2006 with no comments.
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TripHub, a Seattle-based online travel service is incorporating community and social networking features to cash in on the ongoing online travel boom. The year-old startup has also raised an undisclosed amount of funding from its current backer, Seattle-based Madrona Venture Group. MVG is well known for its early stage investments in Amazon.com, and Classmates.com.
Unlike pure online travel e-tail services, TripHub.com is trying to diversify its business through event-planning and blogging of trips that require a lot of organizing — those kind that your mom or grandma spent a year planning. The community-based travel market is becoming a bit of an investment theme. Yesterday we wrote about Wikia and 43Places. TripHub service has been online for a few months, but the company recently added “event planning” and “trip-blogging” sections to its pages.
The day after I spoke with CEO Josh Herst on the phone about the company’s update, I attended a 120-person family reunion in the Rocky Mountains that could have sorely needed TripHub’s help. TripHub’s target audience, Mom’s and post-college planners, seemed to match the demographic of my trip’s group and I was definitely sick of receiving mass emails about the weekend’s plans. (If anyone has used TripHub to plan big trips, add your thoughts below and give us a good idea of why this service stands out!)
Still, I am inclined to stick with larger online travel sites like Yahoo Travel that are adding the vital social and community features. TripHub’s site is easy to use it will fight for attention in an increasingly crowded market that includes startups like Gusto, RealTravel, and TravelPost, as well as the giants Expedia, Yahoo Travel.
Written by Katie Fehrenbacher on August 8th, 2006 with no comments.
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ThisNext, an online shopping discovery start-up, Katie wrote about last month, has launched. Erick Schonfeld, over at the Business 2.0 Blog has a detailed review of the service, which is backed by Clearstone Ventures.
Erick says the company makes it “as easy to create and share online product playlists as it is to share music playlists. The site just launched a few weeks ago in a closed beta, and will open up a public beta in late August.”
The company has lined up a lot of famous people to create their product lists, much like celebrity playlists on iTunes store. Perhaps star power will help the company fight off an increasing number of competitors entering the same space.
Written by Om Malik on August 7th, 2006 with no comments.
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Wikia, a company founded by Jimmy Wales (Wikipedia) has launched a new effort called World Wikia, which aims to create an editable worldwide guide of places to go and things to do. The company wants to leverage the expertise of the locals to build better travel resources than what is out there.
There is a lot of things I like about this service, such as that all the content is available under GDFL. Still, like most companies that plan to make money off the “user generated content,” Wikia doesn’t clearly say how it is going to share the profits with those who are writing the wikias! The commerce-community conundrum continues.
Wikia still has ways to be called user friendly! 43Things and 43Places are much easier to use. Photos and real world testimonials that are updated daily are easy to consume. Those two resources are more organic, and feel alive compared to other travel resources including Wikia. See it for yourself: Vancouver, one of my favorite cities on 43Places versus Wikia.
Written by Om Malik on August 7th, 2006 with no comments.
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Mobile people are all abuzz about Jaiku, that marries social networking with mobile presence. They call it rich presence.
Rich presence on Jaiku includes an IM-style away line, your phone profile (ring volume, vibrate), location (country, city/region, neigborhood), Bluetooth devices around, upcoming calendar events, and the duration how long your phone has been idle.
Though it works only on Series 60 phones (though not on S60 version 3) it has some serious potential of keeping track of your friends and family. Nice app to build a micro social network. You can put your presence button on your blog, MySpace page or whatever. I still think it is best suited for on the go presence. We will follow these guys closely. Meanwhile, try it out and let us know what you think. (via)
Written by Om Malik on August 6th, 2006 with no comments.
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Larry Braitman and Richard Thompson, who had started Flycast Communications, an early ad-network in 1996, are back for an encore: this time with San Bruno-based Adify. Right in time to cash in on the ongoing eyeball boom and a sharp upswing in online advertising which is going to top $16 billion according to eMarketer. The company, which is expected to launch on Monday has also raised $8 million in Series A funding led by leading venture capital firm Venrock Associates.
The Flycast duo have developed an online advertising platform that puts publishers in charge, giving them tighter control over their ad-inventory. Typical online advertising network is essentially a way to monetize publishers’ unsold ad space. The advertisers and publishers have very little control. Hence, the need for Adify, according to the co-founders, who are already blogging.
As part of the platform, Adify will give publishers a specialized advertising page where they can fill out the details about what inventory is available, in what formats, and at what price. Adify will provide all of the back office functionality needed to execute the transaction, including ad management, tracking, reporting, billing and payment.
In order to get traction with some of the smaller publishers, the company has come up with highly vertical advertising networks, that match advertisers and publishers more effectively. The two networks that are currently on offer are “Clip-Ins,” for the cycling community, and “Top Dog Network” for dog loving publishers and advertisers. Feedburner might be moving along the same path.Brad Feld has set-up a VC network which well, aggregates feeds from various VC bloggers. Selling advertising against the network is part of the plan.
The idea of connecting niche communities to potential advertisers is an interesting one. Google AdSense has been successful way to put dollars into the pockets of small publishers, but the display advertising and sponsorship opportunities have been elusive. The publishers, including bloggers might give the service a shot, but will advertisers show up in large numbers? That is the make or break issue, not only for Adify, but anyone with online advertising ambitions.
PS: In case you were wondering, Flycast was bought by CMGI for about $690 million in stock back in 1999. Not sure how much of that turned into real money for Braitman and Thompson.
Written by Om Malik on August 5th, 2006 with no comments.
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Mike Arrington is slowly expanding his empire. He launched CrunchBoard, a job board fine tuned for his community of reader. My congratulations to Mike on making the move, and putting together a good resource for his readers. He explains his reasons here.
CrunchBoard, 37Signals and PaidContent - they are all bringing attention to the fact that narrow niche sites work, and the job boards don’t seem to have the necessary impact or perhaps get the right kind of users. These three sites have very strong communities, and as a result their job boards work and will continue to work. These three boards should enjoy success, because the number of technology job listings in on an upswing. Indeed.com reports that there are 121 job listings per 1000 people in San Jose, and 74 job listings per 1000 in San Francisco.
As we have previously noted, the online jobs segment is attracting a lot of entrepreneurial attention, and of course venture capital. makeover of sorts. From vertical search plays such as Indeed, to new players such as TheLadders, and Jobster are trying to address some of the inefficiencies of the current online job model.
Many recruiters have privately expressed their dissatisfaction with some of the older models. TheLadders’ for instance is a model which works even though job seekers pay to find their dream jobs. TheLadders’ founder Marc Cenedella, who was in town recently shared with me some eye-popping data, all for a cup of coffee. That merits a post in itself, but not today!
Written by Om Malik on August 4th, 2006 with no comments.
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Kevin Rose is worth $60 million (Read), his little start-up, Digg is worth more than Google (Read), and he is the new Web 2.0 poster boy. Everyone is talking about this story, mostly because of a misleading cover headline in this week’s Business Week. “Valley Boys: How this kid made $60 million in 18 months,” has even Rafat, normally very mild mannered upset, enough to write: “it sounds like a parody of a parody.”
However, as Rafat says, we should separate Digg, the company, from Digg, the headline. As a company, Digg’s story exemplifies some of the big trends that have reshaped Silicon Valley. (Business 2.0 has kept you upto speed on these trends for past three years.) Rise of the Instant-Companies and The New Road To Riches, identified that cheap hardware, cheap bandwidth, open source software and special idea = low cost way of starting a company. Digg did exactly that.
In the fall of 2004, Rose withdrew $1,000 — nearly one-tenth of his life savings — and paid a freelance coder $12 an hour to mock up a Web page. He got a deal on server space over the Web for $99 a month.
Digg, had initially shunned venture capital investment, boot strapped before taking a few millions from VCs. Okay not exactly the path 37Signals took, but fairly close. Digg has $3 million in revenues and is going to break even soon - in two years with about 15 employees. That can’t be a bad thing.
What’s terrible: the the vapormillionaire concept, for I fear, this is going to the attention of the Khaki-Blueshirt crowd, who will book a ticket on JetBlue, and head out West. Or as they say, there goes the neighborhood … again!
Written by Om Malik on August 4th, 2006 with no comments.
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EverNote, a startup founded by Stepan Pachikov, is about to announce that it has raised $6 million in a series A funding and has added Esther Dyson and Max Levchin, founder of PayPal and Slide, to its board. The money came from equity investment firm J.F. Mackie & Company, and will help EverNote continue to build its software that CEO Tom Garland calls “a photographic memory for everyone.” The funding is likely to be announced next week.
Evernote is a note-taking application - that allows you to notes, clip websites and other such random stuff.
The current version of the company’s technology is a desktop application that enables users to capture information through a button on a web browser, or through Outlook. The company sells a premium version of the product for $35 a copy. Mac users already have access to many similar applications such as Aquaminds’ Notetaker, Yojimbo and StickyBrain.
The company plans to launch future versions of the software over the coming months, which will include mobile and web access. Camera phones could be the real key to the usefulness of the application. But alas, while the desktop version is available now, it’s just for Windows PC.
Written by Katie Fehrenbacher on August 4th, 2006 with no comments.
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Peer-to-peer (P2P) networking is once again catching the imagination of the venture capital community in Silicon Valley. RedSwoosh, BitTorrent, Pando, and dozens of others have come out with different twists on the core concept of peer-to-peer networking, and have raised millions. SkyRider, a Mountain View, Calif.-based start up is the latest to join the party, having raised $8 million from white shoe venture funds, Sequoia Capital and Charles River Ventures.
SkyRider was started by telecom veterans Ori Cohen and Stas Khirman (also co-founders of packet inspection company, Narus and VDOnet) in 2003, and has operated in stealth mode, finessing a new peer to peer networking platform. The company is keeping mum about its technology and strategy, and will offer its first product in Fall 2006.
“We are developing a commercial grade P2P networking platform, which we will offer to other companies,” says Ed Kozel, CEO of SkyRider, who previously had worked for Cisco Systems and Yahoo! He says that the four big P2P networks - Gnutella, Ares, Kazaa and eDonkey – continue to grow in popularity, yet there has been very little innovation around these networks. They are essentially used for swapping either music or video files.
Amongst other issues around these networks is that they still remain silos. SkyRider, has developed amongst other things a technology that will allow it to act almost like a bridge between those networks. By doing so, the company is opening up an opportunity for cross platform search – rather better P2P keyword search. According to some estimates there are 12 million simultaneous P2P users on the P2P networks, and there are nearly half-a-billion queries on these networks. That, according to ComScore data, it close to the number of daily searches on Google and Yahoo.
The big opportunity, Kozel says, is to bring the web-like ease to the P2P networks, and looking beyond video and music file sharing. SkyRider also has plans to apply P2P technology to user-generated content.
Written by Om Malik on August 3rd, 2006 with no comments.
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There is a lot of debate over whether city-wide WiFi, or WiMAX, will replace or cannibalize high speed cellular networks. Telecoms and mobile handset makers talk about an era of seamless connectivity and painless switching between cellular and WiFi networks. Never mind the inherent conflicts with the harsh realities of their business. And while they talk, debate and pontificate, the real wireless-wireline convergence is happening inside the enterprise, thanks mostly to the slow spreading tentacles of IP telephony.
This is a trend which is quite likely to gain momentum. One of the start-ups betting on this trend is DiVitas, a Mountain View-based company that recently raised $15 million in Series B funding led by Menlo Ventures. Previous investors like Clearstone Venture Partners also invested in this round. The company has raised a total of $23 million so far. DiVitas’ technology gives a business the ability to cut costs on wireless services, by switching company cell phones onto the corporate wireless network while inside the office, and to the cellular network when outside. That also includes access to all of the company’s business applications.
DiVitas CEO Vivek Khuller says the technology can be used over any carrier and any WLAN hardware. Cell phone manufacturers could be really interested in this technology as a way to directly reach business customers, though right now only eight handsets are compatible with the technology. The company is currently shipping its products to corporations for beta testing.
DiVitas might be a young gun slinger in the space, but it will also have to watch out for Waterloo, Ontario-based Research In Motion, more known for its Blackberry devices. The company has been making quiet moves, including its acquisition of Ascendant Systems, that allows it to become a big player in the enterprise convergence market.
While we are not dismissive of the telco convergence the current state IP Multimedia Systems doesn’t really instill confidence in the market just as yet. Some startups, such as BridgePort Networks have done a good job of lining up the corners of this extremely complicated jigsaw puzzle, but it will be a while before we all see the upside of their work.
Written by Katie Fehrenbacher on August 2nd, 2006 with no comments.
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“The whole world is drunk and we’re just the cocktail of the moment. Someday soon, the world will wake up, down two aspirin with a glass of tomato juice, and wonder what the hell all the fuss was about.” — Dean Martin, in The Rat Pack.
That’s perhaps the most appropriate description of what is going on in the online karaoke space. In less than a month we have seen two start-ups throw their hats in the ring. Bix, which we wrote about a few days ago, and now SingShot, a San Francisco-based start-up is offering all budding Taylor Hicks’ to find fame and fortune.
The company offers a cross platform, cross-browser tool that uses Adobe Systems’ Flash technology. The tool allows users to “record their own personal versions to backing music and lyrics from the service, and share them with friends, family and the rest of the web.” Others can listen, rate and comment on the recordings ala, Simon Cowell. Mike has all the details.
Unlike most new online services, SingShot is not free. After free 2 weeks, SingShot charges a $9.95 monthly plan, but prices fall to $7.95-per-month if you sign up for a quarterly plan, and a $4.95-per-month for an annual billing plan.
Thinking about revenues - that’s a good thing, but the biggest question is how will the company compete with deep pocketed rivals such as Fox Interactive Media’s kSolo. FIM plans to use the kSolo service in conjunction with other FIM properties such as MySpace and American Idol. FIM can also offer the service for free, and pose challenges to SingShot.
“While MySpace is definitely the big dog of the social networking sites, there are a lot of other great sites to work with on the web,” says Ranah Edelin, founder of the company. Edelin used to work for Listen/Rhapsody and claims that partnerships worked for that company, and similar strategy would work for SingShot as well.
Edelin thinks because his service has a lot more features than kSolo, he can win against kSolo/MySpace combination. Maybe for a while, because in the end “I also think that the opportunity is bigger than just “online karaoke” because with the user ratings and comments, the site really becomes an online talent platform, thus broadening the scope of potential offerings (a la American Idol.)”
Even if the service does manage to overcome those challenges, the big question is will they sing? Your thoughts people?
Written by Om Malik on July 31st, 2006 with no comments.
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iSkoot, a startup that connects Skype over regular cell phones, just upgraded beta software on its site that lets users receive Skype calls, add and remove contacts, and set an online status. The upgrade also adds support for phones like the Motorola RAZR, SLVR L7, PEBL, v557, Nokia 6021, 6030, 6102 and the Sony Ericsson v600i and w600i.
Other startups like Soonr let users Skype over mobile by accessing a users PC and Eqo also turns Skype mobile over a lot of cell phones. There’s many ways to mobilize Skype, so come back for a review of these competing services next week.
Written by Katie Fehrenbacher on July 28th, 2006 with no comments.
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Last week Digital Chocolate was reported to have raised a new round of funding. When I talked to CEO Trip Hawkins last week he said that the reports were slightly inaccurate and that the company would announce the news this week. So today the company said it has raised $22.5 million (not the previously reported $18.3 million) led by Bridgescale Partners, bringing the company’s total funding raised to $43.8 million.
“D-Choc,” as Digital Chocolate employees call the company, is ranked #9 in the top ten mobile game publishers according to M:Metrics, with 2.3% of the share of mobile game downloads. Electronic Art’s mobile arm is far and away the leader with 28.8% of downloads. Digital Chocolates other new investors include Outlook Ventures, Montagu Newhall, DN Capital, Glynn Capital Management and CHI Capital, and previous investors include Sequoia Capital, Kleiner Perkins Caufield & Byers, Sutter Hill Ventures and Chengwei Ventures.
Written by Katie Fehrenbacher on July 26th, 2006 with no comments.
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Limelight, the CDN darling for hot content startups, announced a monster round of $130 million in funding from Goldman Sachs Capital Partners, which we heard was in the works earlier this month. Limelight said it will spend the money on building out it’s infrastructure. The Tempe, Arizona-based company has been hit by a patent infringement lawsuit from old rival Akamai.
Limelight has been on a tear recently, signing up key customers like YouTube, much to the dismay of Akamai, and reported second quarter revenues of $14 million, up 40% from the first quarter of 2006, and over 200% from the second quarter in 2005.
Limelight’s massive fundraising doesn’t come as a suprise, and as Limelight grows rapidly, it needs significant cash to continue moving at that pace. With investors and venture firms debating over the business models for startups running video content over the web, both Akamai and Limelight have been the infrastructure companies that are already seeing the benefits.
Written by Katie Fehrenbacher on July 26th, 2006 with no comments.
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Garageband.com, a San Francisco-based music community, holdover from Internet 1.0, has raised $2.5 million from Vinod Khosla’s Khosla Ventures and Bob “Daily Candy” Pitman, co-founder of MTV and former head of AOL. Other investors include Herbert Allen III of Allen & Company. Khosla and Bob Pittman will join the company’s Advisory Board alongside Talking Head Jerry Harrison, legendary producer Sir George Martin, and David Goldberg, head of Yahoo! Music.
The company is preparing to launch “iLike,” a new social music discovery service. The new iLike service will expand the company’s existing services by including mainstream artists, incorporating links among friends, and offering tools targeted at the iPod and MySpace generation. These new services, to be offered at iLike , will include a companion app for iTunes that allows consumers to organize their digital music libraries and discover new artists based on their listening habits. iLike will help consumers discover music based on what they and their friends like.
Written by Om Malik on July 26th, 2006 with no comments.
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Seattle-based real estate information service, Zillow.com raised $25 million, nine months after it raised $26 million. Think about it this way - Zillow has raised $3 million (or about $57 million) for every month of its 19-month existence.
The new cash comes from Boston-based Par Capital Management and others such as Benchmark Capital and Technology Crossover Ventures. The company wants to be the biggest real estate site in the world – we shall see! How long before you figure some of its rivals will get similar, if not bigger, trucks stopping outside their offices and dumping some cash?
Zillow.com is the latest start-up to become part of a late 1990s trend that is making a comeback: return of the big money VC round. Last week, Seattle-based Jobster raised $18 million from Reed Elsevier Ventures and other existing ventures. Earlier in the month, MobiTV raised a whopping $70 million from the likes of Oak Investment Partners. As we had reported earlier, Limelight Networks is in the process of closing a monster round, which would make some of these investments look like chump change.
In the second quarter of 2006, venture capitalists invested $6.3 billion - the highest dollar amount into the most deals since the first quarter of 2002, according to the MoneyTree Report by PricewaterhouseCoopers and the National Venture Capital Association.
“It appears as if the venture capital industry is slowly ratcheting up investment levels for the first time in four years, and these increases seem to be directed in a prudent manner,” Mark Heesen, president of the National Venture Capital Association said in a press release. That might have been true, but the recent trend of big money investments shows that prudence might be giving away to old-fashioned avarice.
You can almost expect this trend to continue, and perhaps accelerate in coming months. Silicon Beat reports that Silicon Valley-based VCs are raising new money from their limited partners – some have already raised billions – and that would have to be deployed soon.
Before they can go out and raise cash for new funds, many of the firms have to invest the remnant money from their circa 2000-2001 funds. Otherwise, Limited Partners might be asking them the difficult question: Why should I give you more cash when you are sitting on a pile already? A good example would be Oak Investment Partners, which raised $2.56 billion to become the largest venture capital fund ever. It also invested $70 million in MobiTV. Coincidence?
Expect more big-ticket fundings!
Written by Om Malik on July 25th, 2006 with no comments.
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Veeker, a San Francisco-based stealth mode company is working on a mobile video sharing offering that combines two of the hottest Silicon Valley start-up themes: user generated video and wireless. The company has just started showing off its alpha offering to potential investors.
A dinner companion tipped us off about the company, “which focuses on mobile and Internet videos, based around social interactions.” I phoned up the co-founder Marcus Yoder, (you know a company is small when the founder answers the corporate line) and he refered me to Veeker’s chief marketing officer Rodger Raderman.
Rodger says the 15-person San Francisco-based company is “creating a mobile and Internet-based experience surrounding the behavior patterns that will emerge as mobile video cameras become ubiquitous.” That’s a lot of buzz words in one sentence, but it is also indicative of the current thinking in Silicon Valley.
Investors have already stuffed online video sites with cash, and are now turning their attention to mobile video. A truly mobile YouTube - with little or no copyright hassles can be alluring to the VC community. Today IDC released a report that says 24 million US mobile users will pay for video/TV over mobile by 2010.
Veeker didn’t give me a chance to check out the service, but it sounds similar to what French vPod.tv is building for 3G networks. VPod.tv raised $5.1 million last May. Some Internet-based user-generated video sites are starting to eye mobile given cell phones with video cameras are starting to become common. YouTube already enables users to upload video with camera phones, and it would be natural to start building a better mobile access portion. Photobucket, which concentrates on photos and recently expanded into video hosting, is working hard on mobile.
The hard part is that the mobile component for user-generated videos is tricky to do and expensive to do well. I surveyed several user-generated Internet video sites over the past few weeks and most like Blip.tv and Google Video are staying away from investing in mobile for now.
Maybe Veeker will have something that will wipe out the competition, but the service will have to be pretty compelling. Rodger says Veeker’s engineers come from MobiTV, Digital Chocolate, Hands-On-Mobile, Amp’d and Kodak Mobile, and that the company is both building and buying technology that ranges from mobile video upload and download, to mobile presence, to mobile/online networking and collaboration.
PS: If you know of any startups pushing mobile social networks around video, add your list below!
Written by Katie Fehrenbacher on July 25th, 2006 with no comments.
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Last week we unearthed a few details about the stealthy search startup SPOCK, backed by Clearstone Venture Partners. (The company says its officially all-caps for the name, given it was first an acronym. Well, OK!) This morning SPOCK CEO Jaideep Singh emailed us with some more information about the company and the team he’s accrued.
Jaideep (co-founder and CEO) was formerly a VC at Clearstone, and says he has teamed up with Jay Bhatti (co-founder and VP of Product), a Microsoft alum. The two turned to Jeff Winner to be the founding VP of Engineering, who was an exec at Friendster, eGroups, DemandTech, Netscape, Verity, and Oracle. Hongche Liu (from Yahoo), is the founding chief information architect.
Jaideep still won’t tell us more about the technology for “competitive reasons,” but says an alpha product will likely be available in a few months.
Written by Katie Fehrenbacher on July 24th, 2006 with no comments.
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Even though trains and planes have already become mobile hotspots, very little attention has been given to mobile access to say users in their cars. That might change soon, thanks to Broadband Antenna Tracking Solutions (BATS), a start-up founded by few professors from Purdue University.
The company is reportedly testing wireless antennas that can automatically track and link users. The idea behind these antennas is to basically connect boats and moving vehicles to wireless networks. In tests, the antenna system prototypes have been able to connect 12 miles over water and nearly 9 miles over land, reports say. The tests were conducted using the 900-MHz Motorola Canopy radios, over Lake Michigan.
Network World says the company launched in January with seed money from the university. The patent belongs to the university, but three Purdue professors own the global licensing rights. The company is supposedly looking for investors, so companies interested in wireless hardware–Motorola, Tropos, Earthlink?–or interested VCs, get your checkbooks out.
Written by Katie Fehrenbacher on July 24th, 2006 with no comments.
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Vyatta, a San Mateo, Calif.-based start-up is close to releasing an open source router platform, that runs on standard x86 hardware and can perform equally well as some of the more commercial products. Vyatta plans to target the corporate market with its own devices, but anyone can download the software, officially called, the Vyatta Open Flexible Router (OFR), and roll their own … router.
“Open source has had a tremendous impact on other markets, and if Vyatta’s community gains traction, the same could happen in networking.,” says Matthias Machowinski, Directing Analyst of Enterprise Voice and Data for Infonetics Research.
Vyatta’s software and platform could prove to be attractive to small and medium sized enterprises. Even smaller ISPs could find the offerings more affordable than some of the other products on the market. Vyatta officials say their biggest competitor will be Cisco Systems, currently the 800-pound gorilla in the $8 billion a year enterprise router market.
Vyatta is amongst many telecom and networking companies that are taking the open source route to up-end the existing players. I have previously written about Vyatta for Business 2.0. While researching that story, I saw the parallels between early open source telecom software and Linux. They both started at the bottom, and are now inching higher-up the food chain.
Asterisk has had a perceptible impact on the PBX market. Other open source products are having an impact in firewall, DNS devices and many other product categories. (Details are here.) IBM has built a fault tolerant version of the Asterisk PBX System as well. Since then, I have learnt about many more open source projects. Sangoma Technologies backed Yate, for example. Last week, we reported that an Open Source Wireless Mesh project had received financial backing from the National Science Foundation.
Networking Pipeline reports that a new project dubbed Freeswitch is planning to build a highly scalable switching platform that is meant to meet the needs of carriers. The telecom open source is likely to gather more momentum in the emerging telecom markets where money is tight but desire to build broadband networks is high. Open source can fill in those gaps … perhaps!
Written by Om Malik on July 23rd, 2006 with no comments.
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Spock describes themselves as a personal search company that’s in super stealth mode. The startup won’t talk about what it’s doing, but they’re not so stealthy that they don’t reveal on their web site that they are incubated and funded by Clearstone Venture Partners.
This must be Clearstone’s next big consumer Internet push, after finding success from funding companies like PayPal and Overture. The site also says they’re looking to hire a few positions: “Information Retrieval Engineer” and “Hands-On VP/Director Marketing.” I chatted a bit with Spock CEO Jaideep Singh at a dinner last night and he said the company is going to talk more in the near future. I guess stealth is the new black, again! O.K., we’ll wait, but this better be good or as logical as the wily Vulcan! (If you know more about Spock, let us know.)
Written by Katie Fehrenbacher on July 20th, 2006 with no comments.
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Amazon founder and chief executive officer Jeff Bezos has invested in 37 Signals, a Chicago-based software-as-a-service company. The investment comes from Bezos Expeditions, a personal investment company of Jeff Bezos. The company has steadfastly refused venture capital investments, but I guess changes are in order.
Since we launched Basecamp we’ve been contacted by nearly 30 different VC firms. We’ve never been interested in the typical traditional VC deal. With a few exceptions, all the VCs could offer us was cash and connections. We’re fine on both of those fronts. We don’ t need their money to run the business and our little black book is full. We’re looking for something else. What we’ve been looking for is the wisdom of a very special entrepreneur who’s been through what we’re going through.
37Signals makes products such as the Ta-Da List, Basecamp, and BackPack.
Written by Om Malik on July 20th, 2006 with no comments.
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The easy availability of broadband and the sharp increase in the number of high-speed Internet users makes it a perfect time for entrepreneurs to experiment with content in general, and user generated content in particular, despite the lack of what could be sustainable business models.
The venture investors are happy to back these plays, because many believe that we are seeing a fundamental shift in the media consumption methods. From online video to online curators such as Digg and are all part of this trend. Add Bix, a start-up previously known as 900 Seconds, to this list.
The company was started by Mike Speiser, co-founder of Epinions.com and has raised $6.77 million from Sutter Hill Ventures, Trinity Ventures and a gaggle of individual investors including ex-Yahoo Geoff Ralston.
Bix is a platform for creating contests online much in the mold of American Idol. From singing contests, photo contests to video shootouts, the company will allow end-users to become their own producers and editors. Speiser says the company was inspired by the growing popularity of contents such as American Idol, and Top Model.
Here is how it works - I create a contest inviting participants to submit their photographs of San Francisco. The community can then vote and pick their favorites. The photo submission with most votes bubbles up to the top. You can also have a head-to-head competition between various photos as well. You can do the same for picking say the top videoblogger or what not. Basically Bix is using community to do the editing and selection - off loading all the cost of creating and managing content.
Speiser says the fact nearly 500,000 people camped out to tryout for American Idol, shows that there is a large number of people who are waiting to be discovered. “Internet is perfect for the discovery of the microstars, such as the Chinese BackStreet Boys,” he says. He thinks that there are more such acts waiting to be discovered.
Bix will compete with the likes of kSolo, a company acquired by Fox Interactive Media earlier this year. Like kSolo, it will provide lyrics for online karaoke and has licensed those rights from various music labels. Speiser says they have more features. For instance a Java-based online tool will allow users with video cameras built into their laptops to record video in addition to audio clips. Bix, works with a Mac as well as a PC, which at least gives the company a shot at acquiring customers from the “creator class.”
The company plans to allow end-users to download their own audio clips and use them as ringtones for a small charge. Eventually the same content could be sold to others, and at that point the company is going to split the proceeds with the creators. Of course, like all eyeball-based start-ups, Bix is hoping to cash in on the shift of ad-dollars to the online medium. Speiser says that these contests will be ideal vehicles for brand advertising.
Written by Om Malik on July 17th, 2006 with no comments.
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It’s no secret crazed eBay bidders generate a lot of sales in the last few minutes of an auction–maybe other Internet sites can add that same money-generating frenzy.
The mobile commerce startup behind eBay’s last-minute cell phone bidding system, UnWired Buyer says it has received a second round of funding for $6.1 million that will expand its current offer with eBay and could eventually help add more Internet commerce partners.
UnWired Buyer’s President and CTO Eric Smith says that the company’s auction service is already being used by “tens of thousands” of bidders through eBay, and that the company is looking to add more partners in the future. While Eric didn’t confirm any deals, he mentioned Google, Amazon, Yahoo, and even business-to-business sites, as possible targets for partnership.
Expanding beyond eBay might not be too hard. The service is flexible and easy to use for a lot of applications, given the company uses basic phone calls, out-bound-only calls, and VoIP for part of the back-end infrastructure to keep costs down. For any application that requires time sensitivity and inventory scarcity the service could add that last minute bidding craze over mobile.
For eBay, Smith says UnWired’s data shows that the service adds 17% to the value of the auction in the last 3 minutes–in addition he says when an UnWired bidder enters the bid, 26% of the time that auction had no bidders before it.
On those figures alone, Smith says the service helps Internet commerce sites by bringing in more sales. But eBay also takes a fixed fee every time an actionable auction happens. And the ebay users that are turning to UnWired are the hard-core users that buy on average 14 to 36 items per year, the company says. That gives Internet commerce companies a high incentive to keep those customers happy.
The company, which was formerly called gNumber, has now raised a total of $7.5 million to date, from Texas-based firms, Accent Texas Fund I, Aegis Texas Venture Fund, and DFJ Mercury among others. Not all the money being thrown around comes from the Valley, the Long Star state has been heating up too!
Written by Katie Fehrenbacher on July 17th, 2006 with no comments.
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Jangl, a Pleasanton, California-based VoIP app start-up that marries presence and privacy functions to VoIP has raised $7 million in Series B funding.
Cardinal Venture Capital has led the round, with previous investors, Storm Ventures and Labrador Ventures participating in the round. The company officials could not be reached for a comment. I will follow-up with an extended version of this post later today.
Written by Om Malik on July 15th, 2006 with no comments.
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Dodgeball is so New York! In Silicon Valley, its all Twttr!
Twttr is a new mobile social networking application written by Noah Glass (and team), an Odeo-guy, a long time compadre of Blogger founder Ev Williams. (Twttr is a side project.) It is not a very complicated application - and which is what makes it so addictive and at the same time annoying.
Twttr has married Short Code Messaging, SMS with a way to create social groups. By sending a text message to a short code (for TWTTR) you can send your location information, your mood information or whatever and share it with people who are on your social-mob! Best part - no installation necessary!
Jason Goldman, Blogger product manager calls is presence tense blogging. (Pyra, the company behind Blogger that Ev started did not start doing blogging software. A mutation of Odeo in the near future?) Glass, says that it started off as a conversation between him and Jack Dorsey, “in a car parked on Valencia and 14 in san francisco” after a night of Vodka drinking!
While I was smoking/talking outside the Zoomr/Valleyschwag party last night, I was introduced to Glass by Nitin Borwankar, a good pal of mine. “It’s presence+real world status over text messaging,” he said. Glass added me to his group, and now my damn Nokia E61 is twttring all the time. Ross Mayfield invited me to his group, and we are off to the races. Who else is on this .. not saying. It is spreading like a virus, and it is very viral.
The annoying SMS messages from nocturnal friends is not the only thing which bothers me about this service, but also the fact, that the texting a message(reply) to twttr ends up on their website. Best thing is to allow users to create micro groups, and give users the options of picking topics and setting rules to maintain privacy and control over the service. If Glass can do that, well, it be pretty awesome.
“Then it can also be adapted for keeping distributed teams in sync,” says Nitin, who is one sharp cookie., “Unlike, IM, text is lightweight, ubiquitous and viral.” Also, no smart phones required! (PS: You can put it on your Live Journal, MySpace page and blog as well!)
Written by Om Malik on July 15th, 2006 with no comments.
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John Furrier didn’t listen to various speculation to snap up ex-Rocketboom’s Amanda Congdon for PodTech’s video content, he found something better. I just chatted with Geek Entertainment TV co-founder Irina Slutsky–a friend and former co-worker of mine–and she said that she and co-founder Eddie Codel start work tomorrow for PodTech. Reporting to new boss Robert Scoble at 9AM sharp no less! That was fast.
GETV will be PodTech’s first branded video content, and likely the first of many content deals for Furrier. The deal has been in the works for several weeks and was sealed in the past few days. The pair will produce around a clip a week of the same lovable video content and Irina says they’re going to keep doing what they’ve always done–just with some new funds to do it! GETV’s brand was just too irresistable in this hearty tech climate. Congrats Irina and Eddie. Check out their photo and what others are saying here.
Written by Katie Fehrenbacher on July 12th, 2006 with no comments.
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Feedster, the San Francisco blog search engine has raised a new round of funding, mostly internal and is about to announce a new president. Sources say the amount of funding is in seven figures - between $1 and $5 million.
Tyler Goldman is going to join as Feedster’s president, replacing Chris Redlitz, who has left the company. Ex-Googler Aydin Senkut, who has joined as an advisor to the company, is also one of the new investors. Goldman, in the past has worked at various content-related companies including Broadband Sports. Feedster, has also received new funding from ex-Googler Aydin Senkut.
Given Senkut’s background - he was one of Google’s key people in Asia Pacific - I bet Feedster will make a strong push to China, Japan and other high growth Internet markets in Asia.
Written by Om Malik on July 12th, 2006 with no comments.
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In the words of Yogi Berra, its like déjà vu all over again. Back in the first Internet bubble, we were all entertained and amused by legal wranglings of various content delivery networks. For a while it was all quiet, but the fireworks are starting again. Limelight Networks, a Tempe, AZ.-based start-up that is quite the buzz amongst digital content players has been sued by old dog, Akamai Technologies and the Massachusetts Institute of Technology for patent infringements.
Chief executives of both companies, Paul Sagan Akamai and Bill Rinehart of Limelight have been contacted and we are waiting to hear from them about these lawsuits. Nevertheless, court documents show that, the lawsuit was filed in the US District Court in the State of Massachusetts in late June 2006. MIT and Akamai allege that Limelight is infringing on Patent # 6,108,703 and patent # 6,553,413. Both patents were issued to MIT and are licensed exclusively to Akamai.
The lawsuit comes at an awkward time for Limelight Networks, which is the CDN for hot young start-ups such as You Tube among its 500 customers. Other notable customers include Brightcove, and CBS Sportsline.
Well-placed technology sources say that Limelight is in the process of raising a monster round of financing, which would value the company well in excess of $200 million. Goldman Sachs’ private equity arm is said to be the driving force behind the round, and we will report more details as they become available, but at this point consider this reports as “highly rumored.”
Still, the word of this monster round should not come as a surprise. Limelight has been one of the few beneficiaries of the digital content boom. Their customers, swear by the company’s technical capabilities. In a press release, the company claimed that its first quarter (2006) revenues had reached $10 million, up 40% compared to the fourth quarter of 2005. Limelight says that first quarter was its 10th consecutive quarter of net income profitability and monthly revenues exceeded $4 million for the first time in March 2006.
In the past, Akamai and MIT have aggressively protected these patents. The two sides were locked in a legal wrestling match with Cable & Wireless. Akamai had also sued Speedera, another CDN, but in the end bought the rival company. We have said in the past, the eyeballs are back, and so are the CDN lawsuits. Let the fireworks begin.
Written by Om Malik on July 11th, 2006 with no comments.
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Mobile commerce might be getting a lot of attention today, but the reality is that mobile commerce in the U.S. gets very little foot traffic, and might not gain ground for years to come. That leaves some room for a startup like Frucall that offers cell phone users a way to compare the price of goods through just a basic low-tech phone call. It’s not mobile payments yet, but its a step toward easier shopping via wireless.
The way it works is that a Frucall user calls the 1-800 number, types in the barcode of the product, and listens to a list of price quotes from Amazon, Yahoo Shopping and, just added today, Streetprices.com. The service might not convince the early adopter types, given mobile data users could easily get sick of listening to automated voice messages. I know I do.
But CTO Nasser Manesh says the service is targeted at the mainstream cell phone user that favors “good-old voice interface,” as he puts it. It could become popular with thrifty U.S. shoppers because its simple to use and of course it is free. That’s the niche the company wants to fill, given comparison-shopping on the web could be pretty easy to port to a web-based mobile phone. Nasser says the service, which is still in beta, has 700 registered users, given word of mouth.
Frucall also uses SMS to help users create a social network around shopping. Next week the company is turning a group-based voice messaging system on, that records voice messages and saves them for your Frucall peers. I’m not sure how the social-networking function will do, given a lot of social networks are based on the allure of checking out visual profiles. A mobile social network that doesn’t emphasize images, and is based on voice and SMS messaging, might not keep its users happy. But Frucall also has more tech-savvy mobile commerce plans in the pipeline, including a WAP site.
Update: Mobile commerce in the U.S. is getting hot enough to deliver $10 million more to mobile coupon startup Cellfire. Menlo Ventures led the deal, which will help the company market its cell phone coupon service to more users. (Cellfire is a GigaOm advertiser)
Written by Katie Fehrenbacher on July 10th, 2006 with no comments.
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With every teenager sporting a cell phone these days, the college dorm phone is quickly being relegated to the closet. Rave Wireless, a New York city-based startup that makes mobile software, saw this coming, and has started creating applications for cell phones that could help college kids wirelessly manage their social and academic lives.
Rave co-founder and CEO Rodger Desai says the company will launch with 15 universities for the Fall school year and another 20 or so in the months after that. The company already runs its service at Montclair State University in New Jersey, which the AP talks about a bit in an article this weekend. With the way things are moving along, he says the company will be profitable by the end of next year. The company uploaded a promo video on Google video this morning.
To meet that time frame, Rodger’s been busy signing up universities like Georgetown, doing deals with all the carriers, and even has the ear of Microsoft, who wants to get its software on college kid’s phones. That’s because the company has a savvy business model–position itself between these three deep-pocketed giants, and get parents of the college kids to cover the cell phone bill. Now that’s smart. The company does a deal with a carrier, which can build out the cellular network around the school, ensuring students can get phone coverage. Microsoft, the universities and the carriers are desperate for ways to reach these young mobile subscribers. Parents just want to be able to reach their kids.
The company’s service creates mobile channels that can be used by the university to send messages and updates to students. Students can use the service to socialize with each other. One of the more interesting applications the company has developed is a mood-based presence function. A student can set messages such as “I’m bored,” or “I’m hungry,” and these messages can be combined with GPS-based location services that help you find close-by friends that feel the same way. Another application somewhere down the road could sync with connected laundry machines that alert the students to open washers and dryers, or when your laundry load is done. A few months ago I talked with a student who was writing a mobile blog he called “Bored in the Dorms.”
Out of the 15 universities that will launch in the Fall, 6 of them require students to purchase a Rave-managed cell phone. When colleges mandate that students buy cell phones with the Rave service, the company gets a deal that can be worth around $2 million. That’s a nice deal, but the downside is that Rave has to open a store on campus to manage the handsets, which can cost significant capital.
When the college doesn’t mandate a phone, but decides it wants the service as a mobile option for students, the deal is more like $500,000. With that option the university and students still have access to all the mobile campus channels, just over student’s personal phones. To do all this, Rave has already raised $17 million from venture firms like Bain Capital Ventures, Sigma Ventures, and RRE Ventures.