Private Equity Week Wire for Tuesday 10/16

NEWARK, NJ — For the second quarter in a row, annual returns for the U.S. venture capital and private equity industry were in negative territory, according to Venture Economics and the National Venture Capital Association. Venture Economics’ Private Equity Performance Index (PEPI) shows the preliminary one-year return for venture capital of -18.2% at the end of Q2 2001. At the same time, private equity showed a -11.3% one-year return, declining further from last quarter’s one-year return of -8.2%.

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STOCKHOLM, SWEDEN — Xelerated Packet Devices, leading the development of high-speed network processors, announced today that it has successfully completed a $12 Million Series B financing round with Atlas Venture, Alta Partners and Startupfactory.
This second round of financing will bring Xelerated’s product family, the Xelerator, to the market and enable the company to expand according to plan throughout 2002. The company also announced its plans to establish a strong presence in the US in the near future.

SAN JOSE, CA — SOFTonNET Inc., announced today it has secured a private equity placement in the amount of $2 million in Series B funding.
SOFTonNET’s Z!Stream technology makes it possible for the first time to stream and run any Microsoft Windows (Nasdaq:MSFT) application efficiently over the Internet, or any network, using absolute minimum bandwidth. Led by STIC IT Venture Capital with participation by LG Venture Investments, the funding provides additional resources to advance SOFTonNET’s distributed computing solutions and to secure additional global 5000 customers.

ABINGDON, ENGLAND — Celoxica Holdings PLC, a supplier of products and services for the rapid design of reconfigurable hardware, today announced the completion of its fourth round of private investment. The company has raised $30 million. Investors include Advent Venture Partners, Cazenove Private Equity, Intel Capital, the Isis College Fund, Quester Venture Capital Trust and Wind River Ventures. UBS Warburg acted as sole financial adviser to Celoxica on the private placement.

BOXBOROUGH, MA — Coriolis Networks Inc., an innovative provider of metro optical networking solutions, announced today it has secured $32 million in the first portion of its third round of funding bringing its total funding raised to date to $74 million. The round was co-led by new investors TL Ventures and EnerTech Capital, and included incumbent investors Bessemer Venture Partners, New Enterprise Associates and Columbia Capital. Coriolis plans to use the investment to support global operations and to continue to enhance its flagship product line, The OptiFlow Network.

CHELMSFORD, MA — e-StudioLive Inc., the leader in enterprise Webcasting systems, has received $2.5 million in third-round funding, the company announced today. It will use this money to expand its Webcasting distribution channels. The Series C funding underscores investor confidence in e-StudioLive and the Webcasting market even in the midst of a challenging venture capital market.
Putnam Investments of Boston, Mass., Apex Investment Partners of Chicago, Ill., and several private investors spearheaded the latest round of funding. Putnam Investments is a global money management firm with $345 billion in assets under management.

REHOVOT, ISRAEL — D-Pharm Ltd., a biopharmaceutical company focused on the rational design and development of innovative drugs for treatment of central nervous system disorders, cancer, and autoimmune diseases, today announced the closing of a $30 million private placement of its Series D Preferred Stock.
The financing, led by Care Capital LLC, includes commitments by Morgan Stanley Venture Partners, Rho Ventures and Quintiles Transnational Corporation. Returning investors include Clal Biotechnology Industries Ltd., the Gemini Group, Denali and Vertex. SG Cowen was the exclusive placement agent for the equity financing and its venture capital group, SG Ventures, also participated in the round.

SAN DIEGO — Hamilton Technology Ventures LP announced today that it has named two new general partners to its management team.
Joining the fund at the end of the year to focus on an ever increasing life science portfolio is David Coats, 36. Currently a venture partner at Windamere Venture Partners (the San Diego satellite fund of St. Paul Ventures), Coats has been involved in identifying, creating and managing a number of seed-stage healthcare portfolio companies. Also joining the fund is Dr. Sandra K. Moon, 42. Previously affiliated with Apex Venture Partners and Unitech Research, both of Irvine, Calif., Dr. Moon has an extensive background in artificial intelligence, computer data bases, and software programming language, analysis and design.

LEXINGTON, MA — eHealthDirect Inc. developer of a comprehensive Internet-based health plan administration platform, today announced it has secured $43.8 million in second-round financing — the largest venture capital financing this year in the e-health field, and the second largest non-biotechnology round in the healthcare industry overall, according to Venture Wire.
The company also introduced its new corporate name, deNovis Inc.

RESTON, VA — New Enterprise Associates (NEA) announced today that John Sidgmore will join the venture capital firm as a Venture Partner in the information technology practice.
Mr. Sidgmore has been an active participant in the information technology industry both nationally and in the Washington, D.C. region for 20 years, currently as Chairman and CEO of eCommerce Industries, Inc. a Vienna, VA based firm which is the leading provider of ecommerce solutions for the office products and related industries, and Vice Chairman of WorldCom, one of the largest telecommunications service providers in the world.

NEW YORK — FirstRain Inc., the leading provider of standards-based software products that enable the timely access, monitoring and delivery of information from the Internet and corporate Intranets, announced today that it has secured $11 million for its Series A financing from four industry-leading venture capital firms.

The Company had been seeking $8 million in funds to fuel its next stage of growth. It is intended that the funding will be used to further the development of its software technology and to bring its first products to market starting this fall.
Allegra Partners and Diamondhead Ventures are leading this first round of institutional investment for firstRain, which also includes investment from St. Paul Venture Capital and Myriad Investments. Previously, the company had raised $2.3M in seed investment for the development of its core technology from individual investors that includes Rajat Gupta, CEO of McKinsey and Company, John Hennessy, President of Stanford University, and Greg Papadopoulos, Chief Technology Officer of Sun Microsystems (NASDAQ: SUNW).

OTTAWA — Kyberpass Corp., a leading provider of e-security software for trusted e-business, today announced that it has secured US$4 million in a third round of venture capital financing.
This investment will be used to further Kyberpass’ go-to-market strategy for its e-security products targeted to Identrus and B2B markets.
The investment was led by NB Capital Venture Partners of Toronto and Montreal, and includes Covington Capital and McLean Watson. All three firms were existing investors in Kyberpass and participated in the company’s second round of financing in June 2000.

CRANBURY, NJU — BaseCamp Ventures, a premier early-stage venture capital firm, today announced the closing of a $4 million investment in ExpertPlan Inc., $2 million of which will be funded immediately. ExpertPlan is a leading Internet-based provider of retirement plan administration to financial institutions, which in turn sell 401(k) plans to employers. The investment was led by BaseCamp and also included funding from Seacap Ventures, Gamma Investors, Meridian Venture Partners and Paddington Venture Capital.

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