April « 2009 « TechPulse 360

In A Slow M&A Market, Companies Like ShotSpotter Make Discriminating Buyers

April 20, 2009

It is no secret that many venture-backed startups would give their first-born children to be acquired.

That’s because the alternative is bleak. VCs are handing out cash slower than they have in a decade, and many companies without suitors are forced to close their doors.

"People approach us monthly, if not weekly," looking to get acquired, says James Beldock

Unfortunately for many of these partner-hungry startups, the deal flow also is at a low. In the first quarter, only 68 venture-backed companies were sold, down 35 percent from 104 a year earlier.

That makes ShotSpotter’s deal announced Tuesday all the more worth looking at. ShotSpotter announced the acquisition of Planning Systems, a unit of QinetiQ North America, for an undisclosed amount.

“People do approach us monthly, if not weekly,” says James Beldock, CEO of ShotSpotter, referring to the stream of startups eager to sell themselves.

But instead of a deal simply to increase the company’s size, Beldock settled on a merger with hands-down strategic value.

ShotSpotter sells technology that enables police departments in cities around the country to pinpoint the location of gunshots. It uses sensors, as many as 20 per square mile, to continuously monitor troubled areas.

Planning Systems makes a similar technology for military and defense markets. And it has key sensor patents.

“It clearly is a buyer’s market,” says Beldock. And that buyer is more discriminating than ever.

1 Comment | hardware, news, startups, venture capital | Tagged: Mergers, ShotSpotter, startups, venture capital | Permalink
Posted by Mark Boslet

Cisco Sees LTE And WiMAX Coexisting In A 4G World

April 20, 2009

The move from 3G to 4G wireless networks will be less an evolution and more a transformation, says Cisco System’s Kittur Nagesh.

The volume of mobile data will grow 66 times in the next five years, says Kittur Nagesh

Data will fly through the air at greater speeds and in much higher volumes, says this director of service provider marketing.

Nagesh, who spelled out Cisco’s view on the 4G migration in a recent interview, said demands for network bandwidth will skyrocket.

Over the next five years, the amount of data traveling over wireless networks will grow 66 times – or at a 120 percent annual pace, he said. About two thirds of it will be video.

As wireless carriers prepare their networks for the coming onslaught, there will be roles for both LTE and WiMAX, says Nagesh. Many people see LTE – an abbreviation of the long-term evolution technology many wireless carriers expect to use for the cellular networks – and WiMAX – a long-range successor to Wi-Fi – as competitors locked in a boxing match. “We feel that is not true,” he said. “Both have a place.”

Over time, LTE will probably be the dominant of the technologies. But it will take years for this to play out.

In the meantime, WiMAX will be strong in emerging markets and take root as well in markets in the U.S. where the necessary spectrum is plentiful.

And with tens of billions of wireless devices in use by 2013, the dual role could be a good thing. All that data will need wireless roads to follow.

1 Comment | communications, news, wireless | Tagged: 4g, Cisco Systems, Mobile Data, Wireless Networks | Permalink
Posted by Mark Boslet

Venture Investing Collapses In The First Quarter

April 18, 2009

The plummeting economy put a hold on venture activity in the first quarter, a pair of studies show.

U.S. venture capitalists invested only $3.9 billion during the period, down 50 percent from a year ago, according to one of the studies from Dow Jones VentureSource. It was the lowest quarterly total in a decade – from before the burst of the dot-com bubble.

Decline in venture activity accelerates. Source: Dow Jones VentureSource

A similar study from the National Venture Capital Association, PricewaterhouseCoopers and Thomson Reuters found that only 549 deals were signed, a plunge of 37 percent. Every major industry sector saw double-digit declines in activity, the firms said.

The surveys confirm what venture capitalists have been saying for months, that they industry has essentially ground to halt.

“Venture capitalists have slowed their investment pace in order to work with existing companies that are not able to exit the venture portfolio due to the shuttered IPO window and the weakening acquisitions market,” said Mark Heesen, president of the NVCA. “While this drop in investment is significant, we are not forecasting levels to continue to fall further. We would expect a mild and steady increase in investment throughout the rest of the year.”

No industry was immune to the fall off. Investments were down 42 percent software startups, 46 percent, in biotechnology companies and 31 percent in Internet businesses.

Even trendy clean-tech saw a plunge. Investments of $154 million put into 33 deals fell 84 percent.

A large share of the money spent during the quarter went to established portfolio companies. Late-stage deals accounted for 55 percent of the total, compared with 47 percent a year ago, said VentureSource.

Seed and first-round companies received just 18 percent compared with a quarter of all funding last year.

California dominated the spending, with 47 percent of the nation’s total.

Leave a Comment » | economy, news, startups, venture capital | Tagged: Dow Jones VentureSource, Downturn, First Quarter, Investments, National Venture Capital Association, PricewaterhouseCoopers, startups, Thomson Reuters, venture capital | Permalink
Posted by Mark Boslet

AMD Pumps Up The Volume On Intel Legal Woes

April 17, 2009

Intels alleged anticompetitive have attracted the interest of governments around the world

Intel's alleged anti-competitive practices have attracted the interest of governments around the world

A Sword of Damocles is hanging over Intel’s head; and it knows it!

Speaking last night at the International Press Club of California, AMD’s top lawyer Tom McCoy provided an overview of Intel’s various legal woes around the world.

“It’s 0 for everything,” said McCoy, referring that Intel lost every investigation on its business practices, in Japan, Korea and in more recently in the EU, when it issued a statement of objections to Intel in 2007. And the U.S. could be the next frontier.

Despite remaining mum on the EU investigation outcome, the longest standing member of AMD’s executive team did explain why the Sunnyvale, Calif.-chipmaker decided to go after Intel and its alleged anti-competitive practices.

It all started in Japan in 2002, when in just one quarter AMD’s market share suddenly dropped 70%.

“We decided to sue Intel in Europe when we saw that they did not contest or fight the Japanese FTC findings of anti competitive practices involving five Japanese OEMs. We thought there was something wrong going on”, added McCoy who then discovered some of Intel’s selling tactics.

From Japan, Intel woes then quickly spread to the U.S. where AMD sued the Santa Clara, Calif.-chipmaker, then raised scrutiny in Europe and Korea.

But the EU commission’s upcoming ruling might affect Intel’s business the most, imposing a maximum monetary fine equal to 10% of Intel’s global turnover for all products and services for the prior fiscal year, topping $3 billion!

Last February, in its annual report Intel said it received a letter from the European Commission that “it cannot be excluded at this stage of the procedure that the [EC] may adopt a decision adverse to Intel”.

Tick-Tock. The clock is ticking.

Leave a Comment » | chips, hardware, news | Tagged: AMD, Intel, mccoy | Permalink
Posted by TechPulse 360

Googler Reports 20% Time Rule Still In Place

April 17, 2009

Google may be cutting costs to lift its profits.

But according to one Googleplex insider, the company’s 20 percent time rule hasn’t yet been sacrificed on the Wall Street alter.

The 20 percent rule, of course, is the employment clause that lets Google employees spend 20 percent of their time working on projects of their own design.

John Skidgel of the app engine team, said his goal last quarter was to make something useful with Python and JavaScript and to “prove that 20% time is alive and well.”

In a Friday blog post, Skidgel said he created “CaptionTube,” an application used to create captions for YouTube videos. It has been launched on TestTube.

The goal was to use publicly available Google APIs and put “me in the shoes of our customers who build products on top of Google’s products,” he said.

In announcing earnings on Thursday, Google said its cost cuts included laying off several hundred employees.

John Skidgel created CaptionTube with his 20% time

Leave a Comment » | economy, news, web 2.0 | Tagged: 20% Time Rule, Cost Cutting, Google | Permalink
Posted by Mark Boslet

Tough Times Continue For Solar Industry

April 17, 2009

Solar prices are down and utilities can’t get the financing to build large-scale solar installations.

A change in Spainish tariffs have slowed the market

Times have never been tougher. Solar-cell producers have responded by reining in growth projections and cutting production.

One big reason for the industry’s turn of fortune is the Spanish market. Spain soaked up about 50 percent of worldwide solar demand in 2008. But a change in tariffs has slowed the market.

As a result, there is excess inventory – despite better incentives in the U.S. and Japan. France and Italy also have attractive investment climates.

ISuppli on Friday offered a projection for the troubled market. It estimated the average price per solar watt will fall 12 percent this year and revenue generated by photovoltaic systems will fall 40 percent to $18.2 billion.

That’s a sharp contrast to the $30.5 billion in 2008.

That means globally the industry will install 3.5 gigawatts in 2009 compared with 5.3 GW last year. That’s a 32 percent decline.

The number of new suppliers will fall and the addition of new production capacity will slow, says Senior director Henning Wicht. It will be a little like the PC market shakeout of the mid 1980s, when the industry excess disappeared.

The question is whether this will lead to a more stable and mature market in the years to come. Don’t count on it.

Photovoltaic projections from iSuppli

Leave a Comment » | Alternative Energy, Clean Tech, news | Tagged: 2008, 2009, isuppli, Photovoltaics, Solar Industry, Solar Market, Spain, Tariffs | Permalink
Posted by Mark Boslet

Collective Media Projects Targeted Display Ad Market To Grow 60%, Raises Additional $20 Million

April 17, 2009

For Collective Media CEO Joe Apprendi, the targeted ad market is experiencing hyper-growth

If you ask Collective Media CEO Joe Apprendi, the online ad market is healthy and growing; even convincing venture capital firm Accel Partners to invest $20 million in a second round of funding.

For Apprendi, the online ad market will do so well in 2009 that he expects budgets flowing to online ad networks leveraging contextual, behavioral and demographic targeting to grow 60 percent or more.

Apprendi also told me in a phone conversation that Collective Network has been profitable for the last 2 year and a half with a revenue run rate of $100 million. The company’s revenue grew 210 percent last year and again 65 percent in the first quarter of 2009, compare to the year before.

Not an easy thing to do in this down environment.

The 100-people New York startup also claims to be the 16th largest ad network in the U.S. focusing exclusively on on unsold or unreserved premium ad space (or “remnant”) and competing with Specific Media as well as the big four ad networks: AOL, Google, Microsoft and Yahoo.

Here’s an excerpt of my conversation with Apprendi:

So what’s all the fuss about the downfall of online advertising?

Apprendi: The reason why we are growing fast in a rather flat U.S. display media business is because there is more ad dollars flowing to ad networks leveraging contextual, behavioral and demographic targeting, and less to specific sites with premium CPMs, which is dropping.

What about advertising budgets?

Worst case scenario, the advertisers’ display budget is flat year over year, and they are spending more in this audience centric way which offers marketers better efficiency and targeting. I think the slower ad economy has accelerated the shift away from premium sites towards more behavioral targeting.

Why would a brand or an advertiser use Collective Media for its marketing campaign rather than its competitors?

First and foremost is our eco-system of publishers: 100% comscore 500, brand name, reputable publishers, the Tier-1 marketplace for inventory. Which is very different from Google or Yahoo for that matter, which is more long tail beyond their own and operated inventory.
Two, our targeting. Our behavioral and contextual targeting is heads above the competition in terms of its reliability and accuracy.

And then lastly, our analytics. Advertisers get a lot greater insight on what audience segments are performing vs others based on a variety of performance metrics, above and beyond just impressions and clicks, which are not available with other ad networks, let alone Google, Yahoo and Microsoft.

Google?

We work with Google in a number of different way. Our underlying ad technology is DART from DoubleClick, on which we built our AMP ad platform. And then we also work with them on their ad inventory exchange, as a component of our overall eco-system. There are good partner and technology provider, but also we compete with them for media spend.

Leave a Comment » | news, software, startups, web 2.0 | Tagged: accel, advertising, analytics, AOL, apprendi, dart, DoubleClick, Google, Microsoft, Specific Media, yahoo | Permalink
Posted by TechPulse 360

VC Offshoring On The Rise As US Investing Slips

April 17, 2009

Venture capitalists continue to look abroad for opportunities to invest – at the expense of fueling companies in the United States.

The impact on the U.S. economy may be modest at present because the majority of venture money still is placed domestically. But the trend should alarm entrepreneurs who continue to see Silicon Valley, Route 128 and the Austin vicinity as the world’s hives of startup activity.

Venture investors, such as Robert Ackerman at Allegis Capital, have recently raised warning flags that the industry has become too risk adverse. Many investors chose to weather the downturn by hording funds for their existing portfolio companies instead of planting the seeds for a new wave of innovation.

Others have more willingly looked abroad to sidestep financial markets at home that seem uninterested in IPOs – the most lucrative way for VCs to recoup investments in risky startups.

Figures from Dow Jones VentureSource show the severity of the trend. In 2005 for instance, only 4.8 percent of the world’s venture money went to startups in China. Last year, 10 percent did. India has seen a similar uptick in venture investing.

Meanwhile, U.S. startups received 71 percent of venture money in 2007. By 2008, it had fallen to 67 percent.

The entrepreneurs starting many of the companies overseas were educated in America and previously employed by U.S. technology companies. “They are returning to their roots, and the capital is following them,” Ackerman said in a recent interview.

The migration is shifting innovation from the U.S. to foreign nations, just as a share of the country’s manufacturing went to China. If the U.S. is to counter this trend, it needs to create a more inviting environment for the technical vanguard.

And VCs need to build new companies at home.

Leave a Comment » | news, startups, stocks and investing, venture capital | Tagged: Allegis Capital, China, India, U.S. Investing, venture capital | Permalink
Posted by Mark Boslet

Peer-To-Peer Lending Club Promises High Returns To Investors

April 16, 2009

With the consumer lending business in the “shambles”, more people are willing to turn to peer-to-peer lending to borrow money, amid a slightly higher interest rates.

Which is in part why venture capitalist Rebecca Lynn think her investment last month in Lending Club – which was a series B technically but probably more of a series C – was such a deal; leading the Sunnyvale, Calif.-startup $12 million investment round.

“There are 2 cornerstones in what you invest in any economy: a disintermediate play and a large market,” explains Lynn of Morgenthaler Ventures.

And Lending Club do both.

It disintermediates banks with a more efficient way to lend money to borrowers and reward investors. And given that the consumer lending market is worth more than $1 trillion, the peer-to-peer lending business has the potential to quickly grow to be a $1 billion industry.

“Lending Club focuses on people that are prime borrowers with a credit scores of 720 or above, with average loans of about $10,000. And on the lender side, they were returning to lenders – even in a down economy – an average of 9.1 percent,” adds Lynn.

Pretty amazing indeed. But wait, there’s more: hyper-growth!

Since it started as a Facebook application in May 2007, Lending Club made more than $33 million in loans. This year, the startup expects that to jump to $150 million and then $350 million in 2010.

Leave a Comment » | economy, news, startups, venture capital, web 2.0 | Tagged: lending, lynn, Morgenthaler | Permalink
Posted by TechPulse 360

TechPulse 360

In A Slow M&A Market, Companies Like ShotSpotter Make Discriminating Buyers

Cisco Sees LTE And WiMAX Coexisting In A 4G World

Venture Investing Collapses In The First Quarter

AMD Pumps Up The Volume On Intel Legal Woes

Googler Reports 20% Time Rule Still In Place

Tough Times Continue For Solar Industry

Collective Media Projects Targeted Display Ad Market To Grow 60%, Raises Additional $20 Million

VC Offshoring On The Rise As US Investing Slips

Peer-To-Peer Lending Club Promises High Returns To Investors

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