Private Equity Week Wire

NORTH ANDOVER, MA — Response Networks, Inc., the leading provider of proactive service level management solutions, today announced that it secured a fourth round of funding, closing $4 million now and an additional $1 million rolling close by year end. Lead investor Zesiger Capital Group LLC, a money management firm based in New York City, is joined by existing investors including Blue Rock Venture Capital, Cisco Systems Inc., Hickory Venture Group, Keystone Venture Capital, and Mid-Atlantic Venture Funds.

MARLBOROUGH, MA — Cereva Networks Inc., developer of Internet storage systems for service providers and large enterprises, today announced that it has secured approximately $51 million in funding from the issuance of shares of its Series E Convertible Preferred Stock.
Participating investors in the round include Matrix Partners, North Bridge Venture Partners, Oak Investment Partners, Goldman Sachs, Intel Corporation, Worldview Technology Partners and Sumitomo Corporation, all earlier-round investors in Cereva. Cereva will use the funding as working capital and to complete its beta trials, as well as to expand sales and marketing and all related programs associated with the commencement of product shipment.


Crystallize Inc., a leading provider of software that enables companies tore-organize their business without re-implementing their enterpriseapplications, today announced it has raised $18.5 million in venture financingfrom a group of investors led by Battery Ventures. The funds will be used to accelerate the company’s growth by expanding itsmanagement team, intensifying its sales and marketing activities andincreasing the functionality of the Crystallize Enterprise Change Solution tomeet a broader market of customers. Local investors M Group and WaypointVentures participated with Battery Ventures in the new round of financing.

HOUSTON — Acorn Systems, providers of Enterprise Profit Optimization software, announced today the closing of its Series `A’ funding round. The investment represents validation by industry leaders of the value that Acorn’s technology brings to the growing number of companies seeking to increase their bottom line operating profits. Insight Capital Partners is the lead investor, followed by Pennell Venture Partners. Acorn will use the funds to further develop distribution channels and promote its suite of corporate enterprise software products.
Acorn Systems has also named Leland Putterman to the position of chief executive officer. Putterman was originally an angel investor of Acorn’s and has been brought on to lead the strategic direction of the company and continue driving customer growth and sales.

STOCKHOLM — Ledstiernan portfolio company The PhonePages of Sweden AB today announced that Siemens Mobile Acceleration GmbH (smac) has acquired shares in the company. In addition to the investment, smac will assist in utilising the strong telecom sales and market position of Siemens and further in implementing phonepage technology into Siemens mobile devices.
Siemens Mobile Acceleration GmbH (smac), Germany, has initially acquired a 10.7% share of the PhonePages of Sweden AB for 10.8 MSEK. In addition to the investment, smac will assist in utilising the strong telecom sales and market position of Siemens. One part of the cooperation that has already started is the implementation of phonepage technology into Siemens mobile devices. Plans are to have prototypes for evaluation ready within a few months and terminals commercially available within a year.

MacroGenics Inc., a newly formed biotechnology company focusing on the development of immunotherapeutics for the treatment of cancer and inflammatorydiseases, announced the appointment today of Scott Koenig MD Ph.D, as President and Chief Executive Officer. The company, whose scientific foundersinclude Drs. Jeffrey Ravetch, LeRoy Hood, Ruedi Aebersold, and Alan Aderem,was incorporated in August 2000. MacroGenics also announced the completion ofseveral key license agreements relating to its core intellectual property. As a result of these accomplishments, the company closed the second tranche of its Series A financing of $13.5 million with InterWest Partners, MPM Capital andOrbiMed.

CHICAGO — Centerpost Corp., a leading provider of multi-channel electronic messaging services, today announced that it has closed $12.5 million in a third round of financing from new and existing investors. Financing was provided by existing backers Motorola (NYSE:MOT), Draper Fisher Jurvetson, and Portage Venture Partners as well as by new investors Tribune Ventures, the strategic investing arm of the Tribune Co., and Keystone Venture Capital.

ACTON, MA — Pirus Networks, a next-generation storage networking company, today announced that it has closed an additional $9.5 million in funding from JAFCO Ventures as part of a Series B round, which brings the total raised by Pirus to-date to more than $55 million. In March 2001, the company announced the first stage of its Series B funding that included investments from storage industry leaders StorageNetworks, Inc. (Nasdaq: STOR) and VERITAS Software (Nasdaq: VRTS), venture investment from BlueStream Ventures, and additional funding from first round investors Bessemer Venture Partners and Charles River Venture Partners.

WALNUT CREEK, CA — Softface Inc., the first company to deliver software solutions that automatically extract precise, domain-specific information from plain text, today announced that Donald L. Lucas has accepted the role of Chairman of the Board. Don Lucas, an initial investor in such successful Silicon Valley companies as National Semiconductor, Oracle Corporation, Macromedia, and Cadence Design Systems, has chosen to invest his time and energy in Softface, Inc. Don is currently Chairman of the board at Cadence Design Systems, Inc., and iReady Corporation. Additionally, he is Chairman of the Executive Committee of the Board Of Directors of Oracle Corporation, and a Director of PDF Solutions and Tricord Systems, Inc.

MENLO PARK, CA — Canaan Partners, a national venture capital investment firm, today announced it has closed Canaan Equity III, a $700 million equity fund. This represents Canaan’s sixth venture investment fund raised since its inception in 1987.
Investors include a diverse cross-section of foreign and domestic corporations, foundations, pension funds, institutional investors, and high net-worth families. Leading participants include Bank of Boston, First Union, General Motors Pension, Harbourvest and Robert Wood Johnson Foundation.

Canaan also announced today the appointment of three new investment professionals — Thomas Mawhinney, Dr. Andrew Firlik and Mark Mangiola — to assist in managing new, as well as existing, investments. New principal Tom Mawhinney brings to Canaan 11 years of industry experience
in enterprise and Internet software, IT infrastructure and venture capital.
Before joining Canaan, Mawhinney was founder and chief operating officer of
North Systems, Inc., a venture-backed provider of supply chain enterprise
software solutions for the manufacturing sector. Previously, he was a senior
associate with Summit Partners, a $6 billion venture capital firm based in
Boston, MA and Palo Alto, CA.

Andrew Firlik, MD, was recently named principal in the firm’s Rowayton, CT
offices. Earlier this year, Firlik engaged with Canaan as venture associate,
while continuing to practice as a physician specializing in neurological

Venture Partner Mark Mangiola has an extensive background in the broadband communications
industry and will begin leading investments in this area immediately for the
venture capital firm. For more than twenty years, Mangiola has held leadership
roles in the broadband and cable industry marketplace, in both the technology
and operations/customer interface functions. Most recently, Mangiola was CEO
of @Home Solutions, where he was responsible for raising $40 million dollars
in funding and establishing the company as a leader in deploying DSL in rural

WEXHAM SPRINGS, UK — Red-M, a pioneer in advanced wireless networking solutions, announces today that it has received an investment from Intel Capital. Financial details were not disclosed.
Red-M develops and markets hardware and software product solutions that enable mobile data, voice and video communications inside buildings and public concourses to a range of devices including computers, personal digital assistants (PDAs), phones, and handheld computers. At the core of Red-M’s products is its Genos software platform that enables a secure and fully manageable commercial wireless network infrastructure to be deployed. The company is an acknowledged leader in the Bluetooth networking market.

WASHINGTON — U.S. Technologies Inc. (OTC: USXX) today announced that Portris, a U.S. Technologies associated company, has appointed John J. McLaine Chief Executive Officer. Phil Garfinkle, the former Yazam chief who had served as executive advisor to the company, moves to Chairman.
The announcement comes on the heels of Portris’ recently introduced timeAGENT, a new billing application that allows professional service providers to capture and record the precise amount of time spent in specific software applications, thus assuring accurate billing.

OTTAWA — has received seed financing from its parent company is forming one of the biggest ad networks (Canada and United States), providing clients with advanced targeting solutions.

SEATTLE — Headsprout Inc., which has developed a web-based technology for teaching fundamental academic skills, has secured $2.1 million in additional funding from Roser Ventures, Sofinnova Ventures, and other private investors. The funds, which will be applied toward its upcoming venture round, will be used for working capital and to roll out the company’s first product, Headsprout Reading.

SAN FRANCISCO — Bigstep, a leading web services company dedicated to helping small businesses successfully extend their presence to the Web, today announced new investments totaling $6.5 million from new investor VeriSign Inc. (Nasdaq: VRSN), and a group of existing investors including Mayfield , U.S. Venture Partners and Partech International.

Other existing Bigstep investors participating in company’s fourth venture capital round were The Washington Post Company, InterWest Partners, Worldview Technology Partners and Staenberg Venture Partners, bringing the total amount of capital raised by Bigstep to $72 million.

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