Private Equity Week Wire for Friday 10/12


KANSAS CITY – HandSignal Inc., a provider of wireless data delivery technology, today announced the closing of a $1.35 million Series A round of financing. The funds will be used to further enhance the product development efforts for INFOlaunch, HandSignal’s proprietary push wireless architecture solution, extend the sales and marketing of the company’s products, and add staff.

Telecommunications Development Fund (TDF), a Washington, DC-based venture capital firm that finances early stage telecommunications technology companies, led the Series A round. Joining TDF in this round are Kansas Technology Enterprise Corporation (a seed investor in HandSignal), Bi-State Investment Group, and individual investors.

WINDSOR, CT — Protedyne, a leading provider of integrated automation solutions for genome-based drug discovery, announced today that it closed a $12 million private round of financing. The Sprout Group, a venture capital affiliate of Credit Suisse First Boston, led the institutional placement.
Protedyne will use the proceeds to further commercialize its current portfolio of BioCube System products that optimize the entire discovery process in academic and commercial laboratories. The company also will use the funds to develop new BioCube products and BioResearch Contract Services for additional molecular biological applications.

MARLBOROUGH, MA — Cetek Corp. announced today that it has closed on a $14 million private equity financing to discover new natural product drug candidates using its patented capillary electrophoresis (CE) screening technology. Investors included Stata Ventures Partners, John and Stephen Davis, Gainesborough Investments, and James L. Waters.

MINNEAPOLIS — Net4Music Inc. (Nasdaq:NMUS) announced today that it has completed a private placement of $1.5 million of its securities with both new investors as well as some current investors and employees.

CHANTILLY, VA — Blue Ridge Networks, a leading provider of high security outsourced Virtual Private Networking solutions, today
announced the completion of its second round of funding, securing an additional $10 million, including a $2 million line of credit. SpaceVest led the
Series B round, and the syndicate included North Atlantic Venture Fund III and Knickerbocker Capital, LLC. PNC Bank is providing the credit
facility. Blue Ridge will apply the money raised to expanding sales and marketing efforts, scaling support infrastructure and further development of
its outsourced VPN service offering.

SAN DIEGO — Wireless Facilities, Inc. (WFI) (Nasdaq: WFII) today announced that it has reached an agreement to sell $35 million of its
preferred stock in a private placement to investment funds managed by Oak Investment Partners. Oak Investment Partners was also the
Company’s largest source of pre-public venture capital. All of the shares of preferred stock will be sold by WFI.

Pursuant to the agreement, upon the completion of certain closing conditions, affiliates of Oak Investment Partners will purchase shares of Series
A preferred stock for a common stock equivalent price of $5.50 per share. The shares of Series A preferred stock will not be registered under the
Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration
requirements. Holders of the Series A preferred stock may convert those shares into shares of WFI’s common stock at any time. After 33
months, the Series A preferred stock will automatically convert into shares of WFI’s common stock once it trades above $11.00 per share for 30
consecutive days. The purchasers of the Series A preferred stock have agreed to a lockup with respect to the shares (and the underlying
common stock); the lockup will expire in stages beginning 18 months from the date the shares are purchased.


SALT LAKE CITY — DoBox Inc., a leading Internet gateway software developer, Wednesday announced it has received additional financing to support the market penetration of its Internet gateway and Internet access management software, including Family Firewall(TM), Smart Firewall(TM), SchoolWall(TM) and the Secure Channel(TM) remote upgrade system.
This round of funding fuels DoBox’s continuing growth and allows the firm to take advantage of immediate opportunities in the home and education markets for its patent-pending technologies.
Contributing to this round of follow-on financing is the same select group of investors that supported DoBox’s initial financing, including: Richard A. Marin, co-founder and managing director Beehive Ventures Inc.; Frank S. Trumbower, president of Cambridge Technology Partners Inc.; Bruce Tully, co-founder of Beehive Ventures Inc.; Peterson Capital, a Utah-based private equity firm that focuses on backing talented entrepreneurs; Josh Weinreich, significant shareholder in Jupiter Communications and head of Deutsche Asset Management Americas; Arthur Shoen, managing director in Corporate Finance at Deutsche Bank Alex Brown, and AK Holding Company, LC.

MOUNTAIN VIEW, CALIF. & NETANYA, ISRAEL — Mysticom Ltd., the leading provider of semiconductor IP for high-speed data transmission at the physical layer, today announced it has raised $28 million in funding from several significant strategic and financial investors worldwide. New investors include Lehman Brothers (NYSE:LEH), a global investment bank, ABN AMRO Capital (NYSE:ABN), the investment arm of ABN AMRO, the leading global bank with Dutch roots, Royal Philips Electronics of the Netherlands (NYSE:PHG), whose Semiconductors Division is already a strategic partner of Mysticom, Israeli-based venture fund Giza Venture Capital and Koor Corporate Venture Capital, the venture capital arm of Koor Industries (NYSE:KOR). Existing investors Cisco Systems, Eucalyptus Venture Funds, J.P. Morgan Partners (NYSE:JPM) (formerly Chase Capital Partners), Newbury Ventures, Pitango Venture Capital (formerly Polaris Venture Capital originating in Israel) and Texas Instruments (NYSE:TXN) have also participated.

The impressive size and global reach of the new investors provides significant financial, strategic and geographic resources to Mysticom, and should enable the company to significantly expand its presence in the data communications market. With the new funding, Mysticom will diversify its technology and product development by applying its patented signal processing and mixed-signal expertise to address bandwidth bottlenecks across multiple points in the network infrastructure. The company also plans to expand its development and sales efforts worldwide.


SAN FRANCISCO — SealedMedia, providers of cross-media Digital Rights Management (DRM) technology for security applications and online publishing, today announced new funding of $16.5 million, which is projected to sustain the Company on its path to profitability. The new investment, from Pond Venture Partners, Crescendo Ventures and 3i, hinged on SealedMedia’s impressive recent successes securing commercial DRM deployments.

As part of the plan moving forward, the Company intends to relocate its U.S. headquarters to the East Coast, in order to be closer to its customers in the publishing world. SealedMedia will continue to address both the U.S. and European markets, with sales and marketing initiatives that drive adoption of its Enterprise Server.

SAN JOSE, CALIF. — LGC Wireless, the leading supplier of products for optimizing the deployment of metropolitan wireless networks and for providing reliable in-building access to high quality voice and wireless data, has received $19.3 million from a group of investors led by Allegis Capital, who will take a seat on the board of directors. Crystal Internet Ventures also joined as a significant new investor in this round and will take a seat on the board of directors. OMERS continued its relationship as an ongoing investor in LGC Wireless by contributing a significant portion. LGC expects to raise an additional $10.7 million by December 2001 when it will close the round. The new financing will fund expansion and operational costs as well as launch the new distributed wireless capacity product line, significantly increasing addressable markets for the company.

SANTA FE SPRINGS, CALIF. — IP MobileNet, Inc., the leading designer and manufacturer of advanced mobile wireless communication products for the private radio market, today announced that it has completed an $11.0 million growth equity round of venture capital funding. IP MobileNet has been shipping their new INVADR product line since last November, and recent customer wins include the nation’s largest Sheriffs department and two of the largest taxi & shared ride transportation companies in the U.S.

The lead investor was Kline Hawkes & Co., a Los Angeles based venture capital firm that manages approximately $400 million of capital invested in mid to late-stage technology companies. Other venture capital investors included FA Technology Ventures (Boston), Sorrento Ventures (San Diego) and E*Capital (Los Angeles).

MONTREAL — Galileo Genomics Inc., a Montreal-based genomics company, announced today it has secured $16.5-million in equity funding. The lead investor, Investissement Desjardins of Montreal, was joined by other major investors, BTF of the Netherlands, MVI of Europe and HBM BioVentures of Switzerland.

Galileo will use these funds to search for genes associated with 25 common and economically important diseases. The research will be carried out with approximately 50,000 members of the Quebec population. The company will also use some of the equity funding to further develop its technology platform for the discovery of disease genes, using rapid and inexpensive scans of candidate regions and of the whole genome with high density marker maps. The company’s research relies on the study of genetic data collected from the Quebec founder population, a population of six million distantly-related individuals descended from a small group of approximately 2,600 common ancestors that arrived from France between 1608 and 1760. Founder populations contain a relatively homogeneous gene pool, a distinct advantage that is being pursued by several leading genetic research companies to link genes with the diseases they cause.

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