San Diego Firms Attract $332M in
Venture Capital Funds
In a sale that gives some inkling about how valuable a good dot-com name is, a local firm sold a domain name for a cool $1 million earlier this month.
Venture Catalyst, a Nasdaq-traded high-tech incubator based in Rancho Bernardo, sold its rights to Cyberworks.com to a subsidiary firm of a Hong Kong technology conglomerate.
According to a recent Reuters news story, the price paid for the domain name was the ninth largest of all time. The most ever paid was the $7.5 million paid for Business.com last November.
The hefty price was the result of a just completed merger between Pacific Century Cyber Works and Cable & Wireless HKT, a Hong Kong-based telecom firm. When some investors mistakenly assumed the Venture Catalyst subsidiary was involved in the proposed $28 billion merger, the Hong Kong conglomerate decided it better acquire the name, said VC spokeswoman Angelyn Lechman.
Coincidentally, Venture Catalyst had made the decision to dispense with the names of its subsidiaries and use the single brand name.
VC got the name when it purchased Cyberworks.net a few years ago and subsequently purchased and registered the domain name.
It paid about $30,000 for that, meaning it netted a nice $970,000 on the deal.
Eric Opel, VC’s director of online marketing, said his company has about 200 different registered domain names, most of which have some connection to VC’s business branding strategies or that of its customers.
Opel said past sales of the domain names owned by VC netted only a few thousand dollars.
The market for domain names is so heated, there are many sites that specialize in their sale, such as domainbook.com, or domainreseller.com, and the prices rise according to who’s buying and how badly they determine the domain name is needed for their business, Opel said.
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VC Firms Invest Heavily Here: Thirty-nine San Diego companies attracted $332 million in venture capital funding during the second quarter ended June 30, according to the latest PricewaterhouseCoopers Money Tree survey.
While both the number of companies getting money and the total amount was lower than the first quarter, both categories were up from last year’s second quarter when 29 firms attracted $199 million in funding.
Companies in the networking and telecommunications industry were the largest funding recipients with a total of $103 million, a 268 percent increase from the $28 million that sector received in the first quarter.
The company that took in the largest single investment was Optical Micro-Machines Inc., which received $75 million. Next were EduPoint.com Inc. and E-closer.com, which each received $15 million.
Jim Ingraham, a partner at PricewaterhouseCoopers, said among the factors contributing to the decrease in total VC funding during the second quarter compared to the first was the volatile stock market and media focus on failed Internet startups.
Second Round Of Funding: San Diego-based Online Asset Exchange, which dubs itself as the world’s largest used industrial equipment marketplace, said it closed a second round of funding of $25 million earlier this month.
Nomura Securities International Plc led the round with nearly $10 million, and was accompanied by Sigma Partners, JafcoAmerican Ventures, Athena Technology Ventures and Delphi Ventures.
Norm Bastin, Online Assets executive vice president and co-founder, said with the latest round, the company has attracted some $40 million since its launch last October.
“This additional funding will be used primarily to expand our presence both domestically and internationally as well as for acquisitions and to break into new vertical markets,” Bastin said.
Currently, Online Assets has more than $11 billion in used manufacturing and medical equipment for sale on its site, or about 20 times more than its closest competitor, Bastin said.
Online Assets’ success is in stark contrast to the failure of a similar local B2B surplus online site, Equip.com, which filed for bankruptcy in June. After Equip folded, Online picked up about a dozen of its employees.
It now has about 100 on its staff, up from only three at the end of last year. About 60 of those are in sales and customer service, Bastin said.
Online Assets chief spokesman and a member of its board is Lee Iacocca, the former Chrysler chairman and still a legend in corporate America.
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ECloser Finds Money: ECloser, a developer of a credit operating system targeting the financial services industry, said it has obtained $15 million in funding led by Dorset Partners, a Toronto-based investment bank.
“ECloser enables financial institutions engaged in every capacity of consumer lending to close loans quickly while generating additional revenue and simultaneously reducing costs,” said Thomas Deutsch, the company’s chief information officer.
Along with more money, the company that launched last October found more space , some 12,000 square feet at 8885 Rio Vista Plaza. The company’s move to its new office from La Mesa was made to give it an edge in an expected hiring push to triple the current staffing of 21 to about 65 employees.
The company also announced Nicholas Whittemore is its new president and CEO. Whittemore was formerly senior vice president, chief commerce officer and managing director for the technology finance group of Newcourt Credit Group, a New Jersey firm.
AT & T;, Motorola Invest In Nuera: The Strategic Ventures arm of AT & T; and Motorola, the world’s second largest manufacturer of mobile phones, each invested $10 million in Nuera Communications Inc., a local wireless infrastructure provider.
The total amount of venture capital financing obtained was $28.5 million round. In addition to AT & T; and Motorola, the remainder of the investment came from private investors.
The most recent VC round brings the total invested in Nuera to about $50 million.
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WebSideStory To Go IPO: San Diego’s WebSideStory.com, one of the few dot-coms to show profits and revenues, said it plans to issue 5 million shares in an IPO it originally scheduled for this spring. The latest filing said the company expects to net nearly $35 million on the IPO, which may go out anywhere from $7 to $9 per share.
WebSideStory is a tech firm that tracks Internet traffic, allowing customers to see how much a site is visited, who visits it, and other data culled by the use of “cookies,” or data-gathering mechanisms attached to the site.
The latest filing noted the firm changed the lead underwriter from Robertson Stephens to Lehman Brothers.
In the company’s original filing, it was looking to raise about $57 million.
New Bluetooth Member: Widcomm Inc., a private software maker for the wireless communications industry, said it was selected as an associate member of the Bluetooth Special Interest Group. Bluetooth is a technology that allows mobile phones, PCs and other electronic devices to talk to each other.
Send any tech finance news to mallen@sdbj.com.
