Livescribe To Seek About $20M in Fall, After Locking Down $7M

Livescribe — which makes a revolutionary pen with an onboard computer — raised a total of $7M for its third round and will go back out in the fall for a fourth round in the “$20 millionish range,” according to a source familiar with the latest deal. Blueprint Ventures led the round and was joined by new-kid-on-the-block Greenhouse Capital Partners and a couple of family offices, the source says.

My colleague Connie Loizos broke the news about the third round on July 14. At that time, the round was reported to be $6.4M, but some additional investors came in and brought it up to $7M, our source says.

VantagePoint Venture Partners, which led Livescribe’s first two rounds, didn’t participate in the third, according to the source, who says VantagePoint already has a large equity stake in the company, having contributed about $23M of the $35M Livescribe has raised to date.

There were rumors that a large European consumer company participated in the round, but those discussions never came to fruition, our source says.

The source would not disclose the pre-money valuation, but says it is in the “tens of millions” of dollars. “The valuation was fairly high, but interest was fairly strong,” the source notes.

Now that the company is ramping up production and sales — its devices went on sale in Target stories and on Amazon.com last month — it expects to hit up investors for a fourth round in the fall, likely in the range of $20 million.

Livescribe hopes to post revenue in the tens of millions by the end of the year, aided by back-to-school and Christmas sales and be on track for annual revenue in the range of a couple of hundred million by 2010, which would put it in position to go public, the source says.

Livescribe makes a device called the Pulse Smartpen, which automatically captures everything a person writes and draws. The 1 Gbyte version goes for about $150 and the 2 gig version goes for about $200 on Amazon.com.

The pen is expected to be a hot item among high school and college students. We should know by Christmas if Livescribe has an iPod-like success on its hands — or if teens are plenty happy with their BICs. A box of 12 BIC Round Stic ballpoint pens goes for less than $1.50 on Amazon.