Philly Tech TidBits 1/30/2011

SAP is spinning out its venture arm, SAP Ventures, as a separate company, though one it will still be in control of as sole limited partner. SAP is contributing $353 million to a new fund, SAP Ventures Fund I LP, of which about two-thirds is new money and one-third reflects the value of existing portfolio companies that will be transferred to the fund, Dow Jones Venture Wire reports. SAP Ventures says the new funding will enable it to invest at slightly above its current run rate, and that it may add one to three new investment professionals in either California or Germany.
SAP Ventures has a stake in LinkedIn, which last week filed for an IPO, though that stake is presumed to be less than 5% since SAP Ventures was not specifically named in the filing.


According to the Business Insider, the price Adobe paid to acquire First Round Capital portfolio company Demdex recently was $58 million. Comcast-associated Genacast Ventures was also an investor in Demdex, a provider of online advertising technology.


A recent blog post by Forbes' Maureen Farrell has Cross Atlantic Capital Partners of Radnor listed among "Zombie" VC firms, a reference to firms that haven't announced a new fund since 2005. The firm is still actively making some investments, as my profile of Cross Atlantic last year discussed, recently saw one portfolio company (GAIN Capital Holdings) exit with an IPO, and they didn't sound to me to be a firm that is winding down. However, Cross Atlantic has depended heavily in the past on the Pennsylvania Public School Employees' Retirement System (PSERS) as a source of funding, and PSERS has indicated that it is reducing the percentage of its investments going towards venture capital. Cross Atlantic did not respond to requests for comment, according to Farrell.


Conshohocken's WizeHive has raised between $1 and $1.5 million of funding from Robin Hood Ventures, the Mid-Atlantic Angel Group, Ben Franklin Technology Partners of Southeastern Pennsylvania and some private investors, according to CEO Michael Levinson (also a founder of DreamIt Ventures). WizeHive shifted its focus last year to gearing its software towards managing the grant and scholarship review process. It started as a more general web-based collaboration tool, but found its niche after using WizeHive to manage the application process for the TechCrunch50 show in 2009 and TechCrunch Disrupt, as well as for DreamIt Ventures' own review process.


Gabriel Weinberg's decision to rent a Bay-area billboard to take on Google and promote his Valley Forge-based Duck Duck Go search engine and its privacy features was a PR move somewhat reminiscent of Josh Kopelman's buying the rights to rename a small Oregon town Half.com. At a cost of $7,000 for four weeks, Weinberg got much more than the visual impressions of the billboard, but an enormous amount of coverage from the national tech press and the reinforcement of Duck Duck Go's David vs. Goliath image. The search engine's traffic has reportedly almost doubled to about 5 million queries per month aided by the billboard and the launching of donttrack.us (also emphasizing the privacy aspect), although that is still a miniscule portion of the search engine market.


Some ask why Philadelphia can't be more like Silicon Valley. Well the difference in VC funding shows just how wide the gap is: according to the latest MoneyTree report, the Philadelphia region last year saw an investment of $431 million in venture capital vs. $8.5 billion for Silicon Valley, the Philadelphia Inquirer reported.


Look for SaaS/Cloud billing vendor Aria Systems of Media and San Mateo CA to announce a new round of funding very soon.



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