A look back at PTN's "Young Companies To Watch" from a year ago: 10 of 30 acquired

Tom Paine

Young

Companies

To Watch



Taking a look back at Philly Tech News' "Young Companies To Watch" list as it stood in July 2011, 10 of the 30 startups have been acquired since then, including the top four. I'm guessing that Accenture's recently announced acquisition of Octagon Research Solutions will be the largest exit in terms of valuation, though no word from principal investor Edison Ventures yet. myYearbook was acquired by Quepasa Corp (now MeetMe) for $100 million, though that was mostly in stock. Estimates I've seen from the Indian press for the price CSC paid for AppLabs, the software testing firm founded by Sahsi Reddi and co-headquartered in Philadelphia but having most of its headcount in India, suggest it might have been as high as $200 million. Portico Systems was acquired by McKesson for $90 million.

Active Network acquired StarCite, the once high-flying corporate meeting management site that had faltered a bit durng the recession, for about $51 million in stock and cash. Philly-based cloud unified communications provider Alteva was acquired by New York-based Warwick Valley Communications, an old-line local telco that is essentially remaking itself in Alteva's image, for $17 million. Mobile payment startup Venmo moved to New York last year and was recently acquired by Braintree for $26 million. Yardley-based MobileMD was acquired by Malvern-based Siemens Healthcare for a price that hasn't been disclosed, but the exit probably produced a good IRR for its investors. Safend was acquired by Massachusetts-based Wave Systems for $12.8 million. SEO software vendor ClickEquations was acquired by ICG partner company Channel Intelligence for an undisclosed amount and subsequently sold to Acquisio.

Mortgage tech startup ISGN moved its headquarters to Florida. appMobi appears to have moved at least in part from Lancaster to San Francisco. Exton-based iPipeline received a $71.4 million VC investment earlier this year.

Philly Tech News' "Young Companies To Watch" is my somewhat objective, somewhat subjective, imperfect ranking of Philly area startups in terms of their potential. I use whatever bits of financial data that are available, and other metrics that are indications of market acceptance. Also considered are factors such the background of founders, quality of investors, amount of investment (though not always a good indicator), the quality of their proprietary intellectual property, and industry recognition. Not interested in revenue for its own sake, but rather the potential for profitability, competitive advantage and market value. It includes only privately-owned companies or firms in which publicly-traded companies have a minority interest. You can see the current version on the right sidebar.

I'm always interested in hearing from anyone who wants to provide information that helps me provide a more accurate picture.




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Philly Tech News VentureWatch 6/29/2012

Tom Paine

ISGN, the heavily funded and expanding mortgage technology company that had been based in Bensalem, apparently picked up and moved its headquarters early this year to Melbourne, Florida. I can find no trace of the company in Pennsylvania now (other than a location in Pittsburgh), and received no response to an email to the Florida headquarters. My guess is that the headcount in Bensalem wasn't that large, since many of its operations were acquired and located in various parts of the country, as well as in India. ISGN's most recent announced equity raise was a $30 million round announced last August. Another promising startup that departed the Philly scene (actually last year-I'm late in catching up on that one) is Venmo, the company that created the peer-to-peer mobile payments app of the same name that launched this Spring and is backed by Accel Ventures. Its headquarters is now in New York.

To replace these two on Philly Tech News' "Young Companies to Watch" list, I've added two other promising companies: Unirisx, the Philadelphia-based SaaS property & casualty-oriented insurance platform headed by former Harleysville Group CIO Akhil Tripathi, and CloudMine, the Philly-based "backend as a service" provider for mobile and web apps, which though still early stage appears to have generated considerable traction.

A couple of items relating to Radnor-based NewSpring Capital: the Boston Business Journal reported earlier this month that Bedford, MA-based FirstBest Systems, in which NewSpring is an investor, is "well into the double digit millions" for revenue, according to its CEO, and looking toward an eventual public offering. It aims to serve as the "Bloomberg for insurance". Also, LLR Partners' recent investment in Columbia, MD-based Message Systems returned an unspecified amout of liquidity in a partial exit for NewSpring, which had invested in 2010. LLR paid double the price NewSpring paid in 2010 on a per-share basis, reported the Inquirer's Joe DiStefano, citing sources.

Princeton-based DoughMain, a startup that helps families and children learn how to better manage money, has received an investment of unspecified size from a private equity fund managed by former auto executive Lee Iacocca’s family. DoughMain recently acquired Allowance-Plus, a similar company founded by Iacocca son-in-law Ned Hentz, who will serve as Chief Creative Officer and have a board seat.

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Philly VC Deals flat vs. last year; longer term funding may be concern

Tom Paine

Venture Capital investment in Philly Metro area companies was just under $120 million in the third quarter of 2011, according to the PricewaterhouseCoopers/National Venture Capital Association MoneyTree report based on data from Thomson Reuters, released Wednesday. This was more than the $89 million reported in Q2, but less than the $124 million reported in the same quarter last year. Total investment for the first three quarters of 2011 was $337 million, compared to $334 million for the first three quarters of last year. Thirty-six deals were reported in the quarter.

In terms of individual investments, there were no surprises; all the large deals had previously been announced. ISGN, the Bensalem-based mortgage processing technology business, was the largest recipient, raising $30 million. Boston-based OpenView Venture Partners' trio of area investments, Monetate, NextDocs, and Xtium, which I wrote about here, accounted for about $31 million (though I believe these numbers don't reflect another $5 million invested in Xtium).

Other IT-oriented investments included Instamed ($5.5 million), GreenPhire ($1.5 million), Lightning Gaming of Boothwyn ($1 million), Cross Current Corporation of Doylestown ($800,000), Vita Products of Philadelphia ($700,000), and Sanovia of Philadelphia ($500,000). PlaySay, which the report says raised $250,000, has since moved to Washington DC and now has raised a total of $550,000 from Bethesda, MD-based Novak Biddle Venture Partners. AssetVUE and MobileReactor LLC both recently raised $200,000 from Ben Franklin Technology Partners, as was announced ealier this week. Connectify raised an unspecified amount from an investment firm related to the US Intelligence comunity, and recently launched spare space rental site Storably is also reported to have raised funds.

Some angel investments and other larger private equity investments may not be included in the MoneyTree report.

Nationally, VC investment was up 31% over the prior year"s third quarter. Software investments reached $2 billion, the highest level in nearly a decade.

The biggest concern going forward is whether the current level of funding can be maintained. Venture Capital fundraising hit an eight year low in the third quarter, dropping 53% from the prior year, according to the National Venture Capital Association, and VC investments are far outpacing fundraising as many firms are working downs funds they had previously raised.



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Daily Links 9/15/2011: Google said to be spending hundreds of mllions on video content

September 2011 Business Outlook Survey (Philly Fed)
"Responses to the Business Outlook Survey this month suggest that regional manufacturing activity is continuing to contract, but declines are less widespread than in August."

Manufacturing in Philadelphia-area Contracted in September
(Bloomberg)

Netflix Cuts Its Guidance By 1 Million Subscribers (All Things Digital)
Netflix ended the day down 19%.

Big cable is facing an ‘affordability crisis’ (Gigaom)

Google Is Secretly Spending Hundreds Of Millions Of Dollars Turning YouTube Into A Cable Alternative (Silicon Alley Insider)


NBCU's conference highlights the growing buzz of social media (Philadelphia Inquirer)

Bentley Invests in Philadelphia-based TEEC, Developer of SpecWave Software to Intelligently Manage AEC Project Specifications (Business Wire)

ISGN Stresses Smartphone/Tablet-Access (National Mortgage News)

Growing Greenphire: KOP clinical research firm doubling staff (Flying Kite)

Integromics Announces New Version Of SeqSolve™ NGS Analysis Software (Integromics Press Release)

SAP's HANA Is Hot, but Still in Early Days (PC World)

Philly's Startup Scene: A New Underdog Story? (Keystone Edge)

Health IT: Is the U.S. in the middle of a bubble? (MedCity News)



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Daily Links 8/10/2011: Bensalem-based mortgage tech company ISGN raises $30 million

Bensalem-based ISGN Raises $30 Million from Investors (PR Newswire)

Checkpoint Systems under pressure to seek sale
* MMI Investments sends letter seeking strategic review
* Earlier recommendations rebuffed by board (Reuters)
Checkpoint's response: Its all just a misunderstanding.

DirecTV Defeats Comcast Bid for Court Order Blocking Ads for NFL Programs (Bloomberg)

NBC Sports Group Agrees to Multi-Year Partnership With Major League Soccer
NBC, NBC Sports Net to air 49 games per season (Broadcasting & Cable)

U.S. subscribers hang up on cable, satellite; economy, streaming to blame (Globe and Mail via CTV News)

Cablevision and Viacom make peace in iPad dispute (LA Times: Company Town)

Clearwire names CEO and asks him to raise $900M (Gigaom)

Here Are The 13 Startups Presenting At NYC Dreamit Demo Day Today (Silicon Alley Insider)


Verizon goes to court over workers' strike in East
(AP via CNBC)


SAP Will Launch New Smart Grid Software
SAP Smart Meter Analytics is going to handle a whole lot more than meter data and do it faster. (Greentech Media)

Mistras Group, Inc. Delivers Strong Revenue and Earnings Growth as FY 2011 Revenue Increases 24%, Adjusted EBITDA Up 33%
(GlobeNewswire)
Mistras Group is based in Princeton.

FCC announces plan to update 911 to receive texts, video
(The Hill)
FCC Chairman Julius Genachowski made announcement at the Association of Public-Safety Communications Officials International Conference in Philadelphia on Wednesday.

Orbitz and StarCite Launch Orbitz for Business Meetings (PR Newswire)



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