Archive for the ‘Startups’ Category

Zynga Valued Over $7 Billion, Will The Company Go Public?

Wednesday, February 16th, 2011

Zynga Inc., the social gaming company, has already raised $360 million from venture capital and investment firms, not including an undisclosed amount from Google. The company recently began raising another $250 million in a new round of funding in hopes to value the company between $7 billion and $9 billion. By publishing titles like FarmVille and CityVille, which have 96 million and 51 millions active players, respectively, the company has made $850 million in revenue, and $400 million in profit. Hiring Dave Wehner from Allen & Co. as their chief financial officer last year has increased interest from potential investors who believe the company will go public soon. Many investors wish to get a piece of the company through privately negotiated deals with current or former employes, or by investing in limited liability companies. Larry Albukerk, managing director of the San Francisco based investment firm, EB Exchange Funds, says he has gotten many requests from wealthy clients hoping to invest in Zynga even before it goes public.

Social-gaming company Zynga Inc. is holding discussions with potential investors about raising around $250 million in new funding in a deal that could value the three-year-old start-up at between $7 billion and $9 billion, according to people familiar with the matter.

In April Zynga filed papers authorizing the issuance of new stock that valued the company at about $4 billion.

The discussions are the latest sign of the investor frenzy around a small class of large, fast-growing Web start-ups focused on the consumer market that have yet to go public. Facebook Inc., Twitter Inc. and the group-buying service Groupon Inc. have all recently raised large rounds of funding at sky-high valuations, with some recent discussions concerning Twitter valuing the micro-blogging service at $8 billion to $10 billion. The business social network Linked In Corp. and Internet radio service Pandora Media Inc. recently filed to go public.

Any decision to raise a fresh round of funding by San Francisco-based Zynga, which sells virtual goods in Facebook games, could be weeks away and may not happen, said the people familiar with the matter. Although valuations of the most successful Internet start-ups are getting pricey—topped by Facebook’s eye-popping $50 billion value in its latest round of funding—part of Zynga’s appeal is that it has tapped into a lucrative method of making money online.

The company makes an addictive array of games like FarmVille and CityVille in which people spend real money to buy virtual goods, such as seeds to produce crops in FarmVille and virtual cash to construct buildings in CityVille. Using the social connections people maintain on Facebook to spread virally, City Ville and Farmville now have 96 million and 51 million active monthly players, respectively, according to AppData.com, which tracks Facebook statistics.

The huge audience for its games—Zynga has a total of 275 million active monthly users across all its titles—helped Zynga generate about $400 million in profit last year on approximately $850 million in revenue, said another person familiar with its finances. A spokeswoman for Zynga declined to comment.

The company has no immediate need for financing because it is profitable and has raised a sizable war chest already, several people familiar with the matter said. Zynga has said it has raised $360 million from a range of venture-capital and other investment firms. That figure doesn’t include an undisclosed amount from search-giant Google Inc.

Zynga is in conversations with at least one major bank about raising financing, as well as mutual funds and others, according to people familiar with the matter.

According to a person familiar with the company, Zynga has been barraged with interest from potential investors, who view the company as a likely candidate to go public within the next one to two years.

Zynga last year hired investment banker Dave Wehner from Allen & Co. as its chief financial officer in a move that was seen as readying itself for an eventual initial public offering.

One financing method Zynga will likely avoid is a “special-purpose vehicle” akin to the one Goldman Sachs Group Inc. created to allow wealthy foreign clients to invest in Facebook during the social-networking company’s recent round of financing. Goldman teamed up with Russian Internet investment firm Digital Sky Technologies to invest $500 million in Facebook in January and raised an additional $1 billion through the special-purpose vehicle.

But Goldman decided against letting U.S. clients invest in Facebook because it feared it could run afoul of certain regulations relating to private placements of stock. The episode has soured people on structuring such deals, and Zynga isn’t seriously looking at that option, according to a person familiar with the matter.

Zynga could use any new financing to help fuel its torrid acquisition pace. The company has averaged one acquisition a month for the past nine months, most of them involving smaller game developers. The company hired more than 800 people last year and now has roughly 1,500 employees.

The heat around Zynga is creating a frenzy among investors who are trying to get a piece of the company in the private-company share market, otherwise known as the secondary market. Some investors can purchase stock of private companies by investing in limited liability companies created to purchase such shares, or through deals brokered with current or former employees.

Larry Albukerk, the managing director of San Francisco-based investment firm EB Exchange Funds, has already brokered tens of millions of dollars of such deals for shares of hot private Internet start-ups such as Facebook, LinkedIn and Twitter. He finds employees who want to sell and then connects them to interested buyers, helping to negotiate the deal at an agreed-upon price.

Mr. Albukerk said he has gotten calls about Zynga lately from more than 100 wealth managers and professional investors. After Facebook, Mr. Albukerk said, Zynga is the hottest company. “Guys call me up and tell me just go out and get it,” he said. “The number of requests and activity is crazy compared to last year.”

Groupon Raises A Billion Dollars

Wednesday, January 12th, 2011

Analysts are debating whether or not Groupon’s capital raise sets the record for the largest raise by a private company in a single venture capital round. However, until it is revealed how much of the financing was new equity capital, we cannot know for sure. Groupon did not detail how the company plans on spending the money, besides using it to “fuel global expansion, invest in technology, and provide liquidity for employees and early investors.” In the past year, Groupon has expanded from 1 to 35 countries, launched in almost 500 new markets, up from 30 markets in 2009, increased subscribers by 2500% reaching over 50 millions users, saved consumers 1.5 billion dollars, and worked with 58,000 local businesses, serving over 100,000 deals worldwide. The Company’s success stems from its ability to offer small businesses that don’t usually advertise online a way to reach local markets. Their success has attracted big investors, including Andreessen Horowitz, Battery Ventures, Greylock Partners, Maverick Capital, Silver Lake, Technology Crossover Ventures, and DST.

Groupon, the site that sells daily coupons for local businesses, has raised $950 million from investors, the largest amount raised by a start-up.

The investment follows Google’s $6 billion bid for Groupon, which fell apart last month. The list of new investors in the company include some of Silicon Valley’s hottest names, like Andreessen Horowitz and Kleiner Perkins Caufield & Byers.

Groupon, which is just over two years old and based in Chicago, has quickly catapulted into the ranks of the top tech companies. By selling coupons, like ones that offer $20 worth of books for $10 at a local bookstore, it gives small businesses a way to advertise and find new customers without spending money upfront.

“They’ve cracked the code on a formula for how to basically give access on the Internet as a marketing channel for offline merchants,” said Marc Andreessen, co-founder of Andreessen Horowitz and a veteran of Silicon Valley. “It’s a very, very big deal because there are a lot of offline merchants that have not been able to use the Internet as a marketing vehicle.”

Mr. Andreessen said Groupon can play the same advertising role for small, offline businesses, like dry cleaners and cafes, that Google’s AdWords has played for online businesses.

“That’s why Google was interested,” he said.

Some analysts have questioned whether Groupon, whose revenue has been zooming upward, can continue to grow at the same rate. Local businesses usually heavily discount their products on Groupon, so they may not want to sell coupons more than once or twice, and some businesses have complained that they lost money on Groupon and that the people who bought the coupons did not become repeat customers.

But in an interview last week, Rob Solomon, Groupon’s president, said there were so many small businesses worldwide that Groupon can continue to grow rapidly, expanding beyond businesses like restaurants and yoga studios to law firms, for instance. He also said the company planned to offer other services to small businesses, like tools to manage their relationships with customers. These include running promotions themselves.

The record-breaking amount of money that Groupon has raised gives the company the ability to expand into those new areas — and to cash out earlier investors who may be getting impatient after the company walked away from Google’s buy-out offer.

For the venture capital firms, the investment is a way to get into one of the fastest-growing companies. Kleiner Perkins, which made a name for itself last decade with investments in Google and Amazon.com, has been slow to social media, but is turning that around with recent investments in Twitter and Groupon.

Mr. Andreessen said he considered Groupon, Facebook, Skype and Zynga — all companies in which his firm has invested — to be the four most promising companies in this era of Web start-ups, comparable to Google, Yahoo, eBay and Amazon a decade ago.

Other investors include Battery Ventures, Greylock Partners, Maverick Capital, Silver Lake, Technology Crossover Ventures and DST, the Russian investment firm that previously invested in Groupon.

Google Alumni Fund Angel Investment Deals

Saturday, March 20th, 2010

Google’s founders are funding 200 startups as angel investors.  These investors are using $170 billion in capital Google has generated for employees over the last decade.  More than 40 ex Google employees funded over 200 firms since 2005.  These deals have very high IRR hurdles, but high risk for their financiers.  Google alumni have backed Twitter, Tesla Motors, and Tapulous Inc. Senkut is the name of a middle aged product manager of Google who had made investments between 20-200,000 in 65 startups.  Chris Sacca is another successful angel investor who put in $50,000 into Twitter in 2007 as it was starting.  He has backed 31 startups since then.

According to Mr. Ante of Bloomberg, “during the holidays last year, Aydin Senkut and Elad Gil gathered 50 of their friends at a health- food restaurant in Palo Alto, California. Over turkey burgers and tofu wraps, they talked about technology trends and how to get rich. Or, more precisely, how to get richer.

Senkut, Gil and their dining circle are alumni of Google Inc. Since going public six years ago, Mountain View, California-based Google has generated more than $170 billion for its employees and investors. Many of the millionaires the company has produced are active angel investors, attempting to add another zero to their bank accounts and another company to their list of accomplishments, Bloomberg BusinessWeek reports in the March 8 issue. “I feel like we have such a strong network, it’s almost like we’ve recreated Google outside of the Google walls,” says Andrea Zurek, a 39-year-old backer of 26 startups and, until 2007, regional sales manager at Google

More than 40 ex-Googlers have invested in about 200 fledgling companies since 2005, according to the research firm YouNoodle Inc. and reporting by Bloomberg BusinessWeek. At least a half-dozen current Google executives, including Chief Executive Officer Eric Schmidt and co-founders Larry Page and Sergey Brin, are also financing young companies. YouNoodle defines people as Google angels if they’re investing their own money, investing out of a firm that uses only their money, or investing out of a firm in which a majority of partners are ex- Googlers.

‘Very Risky Deals’

Numerous angel-watchers say the Google group has more in common than just pedigree. The alumni are getting into “very risky deals that can be extremely rewarding,” says Jeff Clavier, a venture capitalist who founded Palo Alto-based SoftTech VC in 2004. “They have been very active as a group over the past two to three years.”

Companies backed by Googlers include Twitter Inc., Tesla Motors Inc., and gamemaker Tapulous Inc. “As Google matures, its alums are continuing to have a huge impact on Silicon Valley and the tech industry,” says Ron Conway, one of the Valley’s most active angel investors, who has backed 190 companies, including Google, Facebook Inc. and Twitter.

One reason for the Google angels’ success, say entrepreneurs, is that they have more to offer startups than just money. Bart Decrem, a 42-year-old Stanford University law grad, says he turned to the Google network when he was starting Palo Alto-based Tapulous in 2008. The company’s Tap Tap Revenge game requires players to tap on-screen balls to the beat of a song — not exactly a sure thing of an idea.

Tap Tap

Decrem says he thought the game might become a substantial business by selling it on Apple Inc.’s iPhone. He says he raised $500,000 from a dozen angels, including Senkut and Zurek, who advised on strategy, connected the company with new partners in Asia, and helped it explore platforms for mobile phones that use Google’s Android software. Today, Tap Tap games have been downloaded more than 25 million times and Tapulous is profitable, says Decrem, without providing specifics about the company’s finances.

Google’s angels dabble in a wide variety of businesses. Zurek says she has money in a premium vodka maker and a South Korean frozen yogurt emporium. Yet the angels tend to concentrate their cash in what they know — search technology, mobile computing and the consumer Internet. Twitter, backed by former Google executive Chris Sacca, is pioneering a new field of real-time communications. The online personal-finance service Mint.com, with money from Senkut, was bought by Intuit Inc. last year for $170 million. Search provider Powerset, backed by Senkut, was acquired by Microsoft Corp. in 2008, and its technology became a part of the Bing search engine, according to a post on a Microsoft blog.

Lamborghini

Senkut, a 40-year-old native of Turkey, has made investments of between $25,000 and $150,000 in 65 startups, by YouNoodle’s reckoning. Senkut joined the company in 1999 as a product manager. He left in 2005 and promptly took his mother to Paris for her 60th birthday — and treated himself to a Lamborghini.

With that out of his system, he set about becoming a full- time angel. Eleven of the companies he has invested in have been acquired by Google, AT&T Inc. and Microsoft, according to his Web site.

Senkut also organizes two regular networking events for fellow alums, one for angels and entrepreneurs, and another for all ex-employees, at spots such as the Calafia Café in Palo Alto, owned by Google’s first in-house chef.

Twitter

Senkut is raising money for his firm, Felicis Ventures LLC, according to two angel investors, and declined to comment on his investments for this story. (Securities laws prevent the public solicitation of funds.) In an interview last October, after he had sold seven of his companies, Senkut said his investments had produced double-digit annualized returns and that he was being pitched new business ideas several times a day.

If Senkut is the established star among the Google angels, Chris Sacca is the up-and-comer. The 34-year-old Georgetown University law grad joined Google in 2003 and left in 2007. Of the 31 startups he says he’s backed, his biggest hit is Twitter, in which he invested $50,000 just as it was getting started in 2007. Sean Garrett, a Twitter spokesman, declined to comment on the company’s finances.

Working out of a 3,000-square-foot home in Truckee, California, a ski town near Lake Tahoe, Sacca hikes and snowshoes most mornings before breakfast and commutes to San Francisco for three days every two weeks. It’s an unconventional way to supervise investments — Sacca has an unconventional approach to investing, period.

‘No-Brainer’

One Friday night in December 2008, he posted a message on Twitter asking if any startups were working late.

“We tweeted back, ‘We’re FanBridge and we work hard every Friday night,’” says Spencer Richardson, its 25-year-old co- founder. New York-based FanBridge makes software that helps musicians manage marketing and relationships with their fans.

A few weeks later, Sacca flew to New York and met with the company’s founders. “They had day jobs and built this site that had 20 million users, adding 100,000 users a day,” says Sacca. “It was a no-brainer.”

Sacca invested $50,000 and pulled in several hundred thousand dollars from other angels. Last year, FanBridge’s founders say they considered offering their products to authors, comedians and other artists; Sacca advised them to stay focused on the music industry. Today, FanBridge is profitable and used by 55 million music fans, according to the company. “The feedback from him was, ‘Start by being the best at something, then branch out,’” says Richardson.

Breakout Companies

The Google angels may have several more breakout companies developing in their portfolios. Sacca has invested in San Francisco-based Lookout, a developer of security software for mobile phones. According to YouNoodle, several ex-Googlers and current Vice President Marissa Mayer are behind San Francisco- based Square Inc., which aims to displace credit-card swiping machines with a cheaper payment system that works through smartphones. And current Google engineer Joshua Schachter helped finance Foursquare, a New York-based mobile-phone service that lets friends share tips on local hotspots and is being used more than a million times a week, according to YouNoodle.

“There is an ecosystem for capital in the Valley, and Google is a part of it,” says Schachter.

Paul Graham, who co-founded the Mountain View-based startup incubator Y Combinator, says the tech industry has just begun to appreciate that Google’s wealthy ex-employees may have not just a single innovative second act, but potentially hundreds of them. “When people write the history of Silicon Valley 20 years from now,” says Graham, “the true impact of Google could come more from all the things that Google people go on to do after they leave Google.”

Intel Funds Startups

Saturday, March 13th, 2010

As the economy improves and VC firms have been unable to raise capital, Intel’s internal VC firm has decided to start a new $200 million technology fund.

According to Bloomberg, “Intel Corp., the world’s largest chipmaker, and a group of 24 venture-capital companies will invest $3.5 billion in U.S. technology companies over the next two years to spur domestic job growth.

The effort includes a new $200 million technology fund by Intel Capital, the company’s investment arm, Intel Chief Executive Officer Paul Otellini said in a speech today at the Brookings Institution in Washington. The investments will be focused on information technology, biotechnology and so-called clean technology.

Intel takes stakes in companies that have technology that can be used to increase future processor sales. Intel’s microprocessors run about 80 percent of the world’s personal computers. Otellini also said Intel is part of a group of companies that agreed to increase hiring of U.S. college graduates, creating as many as 10,500 jobs in 2010.

“We cannot afford to let our future scientists and engineers sit idle after graduation,” Otellini said.

Microsoft Corp., Google Inc., General Electric Co., Hewlett-Packard Co., Cisco Systems Inc. and Dell Inc. are part of the group that will boost graduate hiring, focusing on people with engineering and computer science degrees.

Intel, based in Santa Clara, California, fell 48 cents to $20.39 at 4 p.m. New York time on the Nasdaq Stock Market. The stock is little changed this year.

Lobbying Efforts

Intel Capital has invested about $6.2 billion over the past 20 years in U.S. companies, according to Intel. The company, which competes against Advanced Micro Devices Inc., spends about $5 billion a year on research and development.

U.S. semiconductor companies including Intel have lobbied the government to raise standards in math and science education, increase funding for research at universities and cut corporate taxes to promote domestic investment.

Intel, which gets three-quarters of its sales overseas, has manufacturing plants in the U.S., Israel, Ireland and is building its first in China.

Advanced Technology Ventures, Kleiner Perkins Caufield & Byers, Menlo Ventures and Mohr Davidow Ventures are among the firms that will contribute to the $3.5 billion of investments, Intel said.”

Venture Capital Firms Struggle Without Capital

Thursday, March 11th, 2010

Although strategic acquirers and PE firms have seen some respite this year, venture capital firms are still hurting.  They are struggling to raise cash after poor returns.  Last year, 125 venture funds raised 13.6 billion, down from $28.7 billion in 2008 and $40.8 billlion in 2007.  This makes sense, since the VC industry is driven by IPO exits.  Highland Capital was able to raise a $400 million fund last year, half of what it raised in 2006.

According to Mr. Tam of WSJ, “The technology bubble popped a decade ago, but the venture-capital industry that helped finance the boom stayed largely intact. Now venture-capital firms are going through their own brutal culling.

Venture firms are struggling to raise new cash, hampered by poor investment returns and a difficult economy. Last year, 125 venture funds in the U.S. collected $13.6 billion, down from 203 funds that raised $28.7 billion in 2008 and down from 217 funds that raised $40.8 billion in 2007, according to data tracker VentureSource.
The Next Big Thing

“There are a lot of firms that have dropped off,” says Rebecca Lynn, a principal at venture capital firm Morgenthaler Ventures in Menlo Park, Calif. “We’ll see a continued shakeout as a lot of firms that aren’t the top firms won’t be around.”

There were 794 active venture-capital firms in the U.S. at the end of 2009, meaning they have raised money in the last eight years, down from a peak of 1,023 in 2005, according to Thomson Reuters and the National Venture Capital Association.

Amid all the gloom, some start-ups are still managing to find backers. Pacific Biosciences Inc., which makes DNA sequencing instruments, has raised more than $260 million and tops a list of 50 venture-funded companies compiled by research firm VentureSource, a unit of Wall Street Journal owner News Corp. (See the complete list.)

Many venture firms—which put money into young companies with the aim of profiting later when those firms are sold or go public—profited handsomely in the boom years in the late 1990s and early 2000, when the industry fueled the dot-com bubble and spawned hits such as eBay Inc. and Yahoo Inc. Even when the boom went bust, venture firms kept going because their funds typically are set up as long-term, 10-year investment vehicles that don’t quickly close down like a hedge fund might.

Pacific Biosciences is working on a DNA sequencing process that it says will allow a person’s genome to be sequenced in under an hour for less than $100 making a future of personally tailored genetic medicine more feasible.

But in the past decade, many start-ups have flopped or have struggled to go public amid an unwelcoming market for inital public offerings. The tough environment has been exacerbated by the credit crunch, which makes it difficult for many start-ups to obtain bank lines of credit, say venture capitalists.

While failed start-ups aren’t new, some of the busts have been particularly big recently, with the investments selling their assets for just a tiny fraction of the amount they raised.

Take, for example, Copan Systems Inc. The data-storage company, based in Longmont, Colo., raised more than $107 million in venture capital over the past eight years, according to VentureSource. Despite all the cash, the start-up fizzled: Late last month, Copan’s assets were sold in a private foreclosure sale to Silicon Graphics International Corp. for $2 million.

“The company had some traction but it just required too much money to get there,” says Phil Siegel, a partner at venture-capital firm Austin Ventures, which invested in Copan. Silicon Graphics acknowledges that it got a good deal.
Journal Community

The market has been lukewarm toward venture-backed initial public offerings since the dot-com bust in 2000 and 2001. And while some venture capitalists have profited in recent years by selling start-ups for big sums—think of Google Inc.’s $1.7 billion purchase of video site YouTube in 2006—the returns from such deals typically aren’t as lucrative as those generated by IPOs.

Overall, venture-backed companies generated $17.1 billion in IPOs and mergers and acquisitions in 2009, down 34% from $26.1 billion produced in 2008, according to VentureSource.

Many venture capitalists—especially those working at lesser-known firms that don’t have the same access to the best deals as high-profile firms such as Sequoia Capital and Accel Partners—don’t have much of a track record to show investors as they try and garner new cash. As a result, some venture firms are winding down.

Frazier Technology Ventures late last year said it didn’t plan to raise a new fund. Len Jordan, a partner at the Seattle venture fund, says the firm “concluded it wouldn’t be successful in raising a new fund after we had spent some time trying.”

Frazier Technology is continuing to support the start-ups it has invested in out of its current $104 million fund, says Mr. Jordan.

Other venture firms are lowering their fund fees or are raising smaller funds than in the past. Late last year, venture-capital firm Highland Capital closed a $400 million fund, half the size of its previous fund, which was raised in 2006.

And Draper Fisher Jurvetson, Battery Ventures and Opus Capital have all offered lower fees to investors in recent months as they have pursued new funds.

In response to the tough environment, some venture firms are searching for better returns in new areas. While Steamboat Ventures, an affiliate of Walt Disney Co., has continued to have exits in the U.S., it has also focused overseas in the past four years, particularly in markets like China, says John Ball, a Steamboat managing director.

The venture firm today has a third of its capital allocated to Asia, with two thirds in the U.S., he says. “It’s a useful way to diversify across markets,” says Mr. Ball.

Meanwhile, Austin Ventures has de-emphasized its investments in young companies and is instead focused on larger private-equity deals that take $15 million to $25 million of capital, says Mr. Siegel.

That arena is less crowded, he says, which means there’s more opportunity. “We’re moving to where the puck is going,” says Mr. Siegel. “

Sahara Desert Solar Project

Wednesday, March 10th, 2010

Solar projects have been rampant since 2006.  After slowing down in 2008, projects in the solar space, despite declining subsidies in Germany and Spain, have been getting more and more attention.  The latest news involves, Siemens and Munich Re (A REINSURANCE COMPANY!) teaming together to launch solar fields in the Sahara desert that could generate power for European countries.  Morocco would be the first target for the venture.


According to Jeremy Van Loon of Bloomberg,  “Siemens AG and Munich Re’s plan to develop solar-electricity generators in the Sahara Desert aims to win above-market prices for the energy they would export to Europe, the project chief said.

The Desertec Industrial Initiative will work with Morocco in the next month to arrange negotiations with the European Union to provide so-called feed-in tariffs for electricity produced by using large mirrors in the desert, Paul van Son, who heads the initiative, said today in an interview.

“We’re just at the beginning of this, and we’re putting together a work package with Morocco first,” he said in Berlin. “The difficult part is putting all the pieces together while dealing with so many different governments and structures.”

Feed-in rates, or above-market prices subsidized by consumers, are used in most EU countries as incentives for producing more electricity and heat from wind turbines, solar panels and wood pellets. Currently there are no such premium prices available for renewable energy exported from North Africa to the 27-member European bloc, van Son said.

Desertec is part of a plan to reduce Europe’s dependence on fossil fuels such as coal and natural gas for power generation. The developers plan to use curved mirrors that focus sunlight to heat liquids and turn power turbines. The 400 billion euro ($546 billion) plan must also obtain backing from European and African governments as well as investors.

Loan Guarantees

Germany is considering seeking loan guarantees for the project through the European Investment Bank, the country’s economy minister, Rainer Bruederle, said today in Berlin. Part of the goal of Desertec is also to provide energy for North Africa, he added.

“This is the kind of large-scale infrastructure project that the European Investment Bank was created for,” Bruederle said at a press briefing, without providing details.

The project may create as many as 2 million jobs and provide 15 percent of Europe’s power demand by the middle of this century, Siemens and Munich Re have said.

Generating electricity from the desert and delivering it to Europe will require high-voltage cables to move power from sparsely populated areas of North Africa under the Mediterranean Sea to Europe, whose transmission grids already struggle to accommodate power increasingly supplied by solar and wind farms built in the last few years.”

ADC2: Video Compression Startup in Boston

Sunday, January 17th, 2010

video tech

ADC2 was founded in 2008 by Sunil Reddy, Angel Decegama, and Lewis Stoller.  It is a startup aiming to improve the speed of online video by enhancing compressing technology for high-definition movies.  In 2006 Angel and Lewis launched TrueLight Technologies, which was based on wavelet transformation processing, a process that was developed in the 1980s to manipulate the data in the individual image frames of a video file.

Truelight was started simply to serve the security market, where resolution is a paramount concern.  ADC2′s potential customers are Comcast, Motorola, and AT&T.  AT&T recently asked the firm if it could move forward and provide pricing for its new products.

ACD2′s process can take a HD video that would be about 500MB normally and compress it down to 140MB or even 73MB, keeping almost the same resolution.  At 140MB, the HD video could play across a 1.5 Mbps connection.  The five person team has been funded solely by its partners.

For more information, please refer to Mass High Tech…

~IS

Venture Capital Startup: SQUEELR

Monday, November 30th, 2009

squeelr-txt

On a quiet day in 2009, Matt Mankins of Boston began his work on two Internet starups, while running a bookstore…this is the kind of motivation and drive we promote at LA, LLC.  The latest startup was called SQUEELR, an anonymous microblogging platform written for the iPhone.  Mankins got the idea after working for the MIT Media lab and watching protesters in Iran sidestep censorship using Twitter.  Microblogging began a tool for Mankins to promote anonymous whistleblowing.  Markets for this tool include Iran and China, where censorship is still very common.

SQUEELR is based in Cambridge, MA., 20 minutes from LA, LLC headquarters in Boston.  Originally, the founder chose to charge 99 cents for 5 posts and $5 for 20, in order to keep away spam.  The way the technology works is that posts, or Squeels are tagged by time of post and by location.  Matt expects future squeels to use location based technology more heavily.  This way, viewers will be able to see squeels by the location they are in, or could have emergency squeels streamed to their phones.  The SQUEELR platform is currently integrated with the iPhone camera, so that pictures can be taken and immediately streamed.

Matt’s bookstore, Lorem Ipsum Books, unfortunately is not doing so well.  Sales have plummeted since the recession, giving Matt even more drive to focus on the startups.  Kudos to this young entrepreneur!  I hope he gets funding….

~IS

For more information, please check out the latest MHT release…