Private Equity Week Wire for Monday 8-6

SOUTH PLAINFIELD, NJ — Kodeos Communications announced today that it has raised $12 million in Series A equity funding led by Jerusalem Venture Partners (JVP) and Highland Capital Partners. The capital will help Kodeos accelerate development of the industry’s first transponder subsystem for substantially increasing the capacity and distance of transmissions on fiber optic networks.
The company was co-founded by Gadi Lenz and Jason Stark. Lenz was formerly a member of technical staff in the Optical Physics Research department at Bell Labs and is co-inventor and developer of the optical all-pass filter, a tunable dispersion compensator. He holds 7 communications patents. Stark was previously the head of Lucent Technologies’ Advanced Modulation and Coding project and a researcher at Bell Laboratories, focusing on high-capacity optical communications. He co-authored landmark research on the information carrying capacity of optic fibers whose findings were recently published in Nature Magazine.

CAMBRIDGE, MASS. — Ember Corp.,
started with patented technology from the MIT
Media Laboratory, announced that it has received
$3 million in a seed round led by Polaris
Venture Partners, with DFJ New England, Stata
Venture Partners and Bob Metcalfe. Ember is
building a low-cost, low-power wireless embedded
networking platform.

The company also announced new board members,
including Metcalfe, Ethernet inventor and 3Com
founder; Dr. Rebecca Henderson, the Eastman
Kodak LFM Professor of Management at MIT’s Sloan
School of Management; and Todd Hixon, managing
director of DFJ New England, an affiliate of
Draper Fisher Jurvetson, a leading early-stage
information technology venture capital firm.

RICHMOND, CA — Onix Microsystems Inc., a developer and manufacturer of optically transparent switching engines for communications networks, recently completed its final close of Series C funding, having raised over $95 million in equity and debt financing.
Participants in this final close, led by JK&B Capital, included Deutsche Venture Capital, DRW Venture Partners, Merrill Lynch Ventures, Taiwan Special Opportunities Fund III, and other strategic institutions. Participants in the first close of this series included Analog Devices Inc., Alliance Select Investors, Essex Private Placement Fund, Millennium Technology Ventures, Randolph Street Partners, Sinwave Venture Capital Limited, Trust Company of the West, and Zimmer Lucas Partners. Previous-round investors Bank of America Venture Partners, Advanced Technology Ventures, and Azure Capital also participated. Onix also secured a $20 million capital equipment loan agreement with Western Technology Investments, Silicon Valley Bank, and GATX Ventures Inc.

MENLO PARK, CA & CLEVELAND — Morgenthaler, a leading venture capital and buyout firm, announced today the closing of its seventh fund with total committed capital of $850 million. The Morgenthaler VII Fund will be dedicated to a range of investments including: early-stage technology startups in the software, communications, and health care sectors — as well as — middle-market management buyouts and recapitalizations in the industrial growth, communications, and health care areas.
The firm also named former Atria Software CEO Paul Levine and former Morgenthaler Venture Partner Greg Blonder general partners in the new fund.

CAMBRIDGE, MA — ChannelWave Software Inc., a leader in partner relationship management (PRM) solutions, today announced that it closed a $26.5 million round in venture financing. Led by SOFTBANK Venture Capital (SBVC), this most recent round includes increased investments from ABS Capital Partners, Lazard Technology Partners (LTP) and Ironside Ventures LLC. Capital raised in this round brings total ChannelWave financing to $59 million.
ChannelWave will use the new capital to bolster its sales and marketing programs, increase customer service and support, broaden its product line and strengthen product development efforts for its market-leading PRM solutions, and bring the company to profitability in 2002.

SAN MATEO, CA — @TheMoment, Inc., the leader in dynamic trading solutions for Global 2000 enterprises, today announced the successful completion of its fourth round of venture funding totaling $7 million. The round was led by new investor Voyager Capital and included continuing investments from Tarrant Venture Partners — an affiliate of Texas Pacific Group; TIBCO Software Inc. (Nasdaq:TIBX); and VantagePoint Venture Partners.
The new financing will be used by @TheMoment to expand its product development, sales and marketing efforts into key industries such as energy. Online wholesale energy trading will reach $3.6 trillion in 2005, according to Forrester Research. Other target vertical markets include high-tech manufacturing, chemicals/petro-chemicals, retail, telecommunications and travel industries. @TheMoment’s real-time trading platform allows these industries to respond faster and more effectively than ever before to challenges such as distribution channel shifts, new or varying regulatory pressures, or new regional competition.

CAMBRIDGE, MA — RealityWave Inc., developer of the leading Internet-architected platform powering industrial data collaboration applications, today announced the closing of a more than $1.1 million convertible note financing provided by Echelon Ventures, a leading venture capital firm making investments in New England-based, early stage technology companies. The investment provides RealityWave with the capital needed to continue its impressive penetration into the design, manufacturing and construction collaboration space.

PORTLAND, OR — Cenquest, a leading provider of company-customized graduate degree programs over the Internet, today announced it has raised an additional $6 million in third round VC funding.
The new funding follows the company’s recently announced partnership with the TRIUM global MBA program, and further positions Cenquest as emerging leaders in a potentially explosive market.
The investors, led by Sevin Rosen Funds, also included Venture Partners and new backing from Excelsior Venture Partners III, LLC, a newly formed venture capital fund managed by U.S. Trust Company of New York.

MOUNTAIN VIEW, CA — After nine months of operating in stealth mode, Kontiki today publicly announced the formation of the company, funding of over $18 million, an exceptional engineering team, the filing of several technology patents and the creation of a secure media delivery network which will help make the use of digital media — video, audio, images and software — pervasive on the Internet.
Kontiki has created a secure, software-based media delivery network called the Kontiki Delivery Network to bring the digital assets of enterprises and media companies directly to users’ PCs in ways that haven’t been available before. Its revolutionary patent-pending new technology, called Bandwidth Harvesting, utilizes the untapped bandwidth of millions of networked PCs at the “outer edge” of the Internet, controlled by a series of redundant and fault-tolerant network management servers directly attached to the Internet backbone.
Backing the company are blue chip venture capital firms including The Barksdale Group, Benchmark Capital and Angel Investors. To date, Kontiki has raised $18 million in its Series A round.
Additional investors and advisors include individuals from a variety of well-known enterprise, media and Internet companies including Marc Andreessen (Chairman, Loudcloud and Netscape co-founder), Jeff Berg (CEO, International Creative Management, Inc.), John Giannandrea (CTO, Tellme Networks), Randy Komisar (Virtual CEO), Chris Lochhead (CMO, Scient), Stratton Sclavos (CEO, VeriSign) and Larry Sonsini (Partner, Wilson Sonsini Goodrich & Rosati).

BRISBANE, CA — Trigo Technologies Inc., the innovator of supplier-focused software designed to optimize multiple online sales channels, announced today that it has received $14 million in a second round of venture funding. The round, led by Mayfield, also includes existing Trigo investors: The Valent Group (a joint venture between Bessemer Venture Partners and Accel Partners), Bessemer Venture Partners, and JAFCO America Ventures. The company’s flagship solution, Trigo Enterprise, is the first comprehensive software platform to automate and tightly integrate critical supplier business processes, enabling suppliers to manage and optimize multiple online sales channels with industry-leading, enterprise-class technology. This impressive round of funding, combined with Trigo’s momentum with Fortune 1000 companies such as Staples and Moore, and partnerships with Ariba, Commerce One, and webMethods is evidence that as an eCommerce innovator, Trigo has the right ingredients to thrive in this tumultuous economic environment.

For yesterday