Venture Update Vol III, #1, January, 1999
Morrisville—Inspire Pharmaceuticals signed an agreement with Japanese pharmaceutical company Santen worth $6.25 million in December 1998. Under the agreement, Santen will gain exclusive marketing rights in 10 Asian nations for INS365, a drug currently in development by Inspire for the treatment dry eye disease. Contact: David Drutz (919.941-9777).
Research Triangle Park—Unitive Electronics, Inc., a supplier of advanced semiconductor processing services, received a $2.5 million working capital loan from Imperial Bank. Contact: Joseph W. Baggs (888.286-7464).
In the
Pipeline
Raleigh—LIPSinc., developer
of software that synchronizes the lip movements of 3D
animated characters to human speech, spun out of
North Carolina State University in November 1998. The
company's software is based on voice digital
signaling processing technology. Contact: Michael
Zapata (919.303-8499).
New Developments
Morrisville—Technauts Inc., a
developer of a prepackaged small business Internet
server, was named among the "Top 25 Hot Startups of
1998" by Data Communications' magazine. Contact: Ravi
Perisamy (919-462-1713)
Research Triangle Park—MCNC, a non profit research center released its first MEMs commercial product in December 1998. The product is a microlay to be used in the telecommunications, testing and automotive industries. The product will be marketed by a spin-off for-profit company. Contact: Robert Bratter
On The
Up
Paradigm Genetics
Raleigh's Paradigm Genetics is committed to getting
at the roots of agricultural chemical discovery to
enhance food and fiber production. "We're looking for
better and safer compounds to protect crops against
weeds and diseases," says Paradigm founder and CEO
John Ryals. The company also strives to improve the
quality of seed stock by developing more efficient
breeding tools and discovering new genes. Paradigm is
the first genomics or agricultural biotech company to
apply the tools of molecular biology and genomics to
agricultural chemical discovery.
The 50-employee company was founded a year and a half ago as a spin-out from Novartis - most of its management team is made of up ex-Novartis staffers. Paradigm completed its first round of financing in May, securing $6 million from Polaris Ventures of Boston, Intersouth Partners of R.T.P. and Innotech Ltd. of Britain. "The funding was used to establish our research platform," Ryals notes. That platform consists of an extensive intellectual property portfolio including patents on genes, validated targets, assays, lead chemicals and enhanced breeding tools collected using a series of proprietary analytical processes: GeneFinderTM, FunctionFinderTM, TargetFinderTM and LeadFinderTM. The resulting information is collated in a master bioinformatics relational database called AgDBTM.
In addition to the intellectual property, the company collaborates with research partners. "We have a $40 million contract with Bayer to develop herbicides and a similar deal to develop a fungicide," Ryals notes. "This allows us to produce targeted products using the considerable skills of our scientific team." It also enables the resulting products to get to market - a daunting task for a small biotech company without the massive distribution channels of a large, multinational company.
"While our market is truly international, we really like being based in the Triangle," Ryals says. "It's a good place for agricultural biotechnology because of the research universities, the quality of life and skilled work force."
Featured Fund
Telos Venture Partner
Telos is the Greek word for successfully reaching
one's ultimate destination. And it's an apt name for
this Santa Clara, Calif. venture capital fund. Telos
Venture Partners are not merely passive investors.
Rather, they actively participate, shepherding their
portfolio companies through the business development
process into profitability.
Telos was founded by Bruce Bourbon in 1995. A year later, he was joined by General Partner Athanasios "A.K." Kalekos. Together, they share more than five decades of experience in the high tech industry. The sole limited partner is Cadence Design Systems, of San Jose, Calif.
"We are early stage investors in high tech start-ups," Kalekos explains. "Our operating experience allows us to bring significant value to portfolio companies, post investment. When you think of Telos, it is most important to think of the benefits our experience brings to the companies in which we invest."
Telos invests in three broad markets: information technology, semiconductors and communications. Their focus is on the advanced, power-enhancing technologies that drive the high-tech industry. Its portfolio includes:
-
Information Technology: Conduct Software Technologies, Inc., Extricity Software, Inc., Intraspect Software, PDF Solutions, Inc. and Preview Systems.
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Semiconductors: DynaChip Corporation and Integrated Memory Logic, Inc.
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Intellectual Property: iReady Corporation.
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Telecommunications: SwitchSoft Systems.
Until recently the Telos fund was largely rooted in Silicon Valley. However, their recent deal with Raleigh's Microcosm Technologies heralds their arrival in the Triangle.
"Microcosm is our first investment in a Triangle company," says Kalekos. "But, we are actively looking for additional investment opportunities in the area."
Kalekos sees the Triangle as a fertile, yet under-cultivated ground for venture capitalists.
"The Triangle area is very active in incubating and developing high tech start-ups; second only to the Silicon Valley," he notes "We see the Triangle as having all of the benefits of the Silicon Valley, although the infrastructure to support start-up companies is less developed."
Venture
'99
The Council for
Entrepreneurial Development has selected the
first round of presenters for Venture
'99, the premiere Southeast venture capital
conference, to be held on April 28-29, 1999 in Chapel
Hill. First round companies are:
Marathon Group of Research Triangle Park provides clients with e-commerce solutions for business-to-business and business-to-consumer applications using SmartPath, its Web-based process management technology, which will be released as a commercial product in Q2, 1999. Marathon Group currently has $2.5 million in venture backing from Intersouth Partners and private investors and seeks $5 million.
Xanthon, Inc. of Research Triangle Park is a biotechnology company developing micro-electrochemical systems with broadly enabling applications in genomics, drug discovery, and clinical diagnostics. The core XANTHON technology was developed at the University of North Carolina at Chapel Hill. With existing funding of $3 million from Franklin Street Fairview Capital, Intersouth Partners and the NC Technological Development Authority, Xanthon seeks $6 million.
InvoiceLink Corporation of Greensboro develops software products for Internet bill delivery and payment (IBDP) that helps help billers move customer operations functions to the web through licensed software rather than service bureau relationships. InvoiceLink received an initial round of $1.25 million from Intersouth Partners.
Insect Biotechnology Inc. of Research Triangle Park is developing the next generation of safer, environmentally friendlier, biorational insecticides based on patented peptide-based technology from the University of Florida. IBI received $1.4 million in funding in 1998, lead by the Aurora Funds, and seeks $3 million.
LendingTree, Inc. of Charlotte is an online loan center that connects borrowers to a network of lenders who compete for their business. LendingTree's proprietary filtering software matches borrowers and lenders in order to maximize approvals across all loan types and enables lenders to respond to loan applicants in minutes. Funded at $10 million by Phoenix Home Life Insurance and wealthy individuals, LendingTree projects revenues of $16 million in 1999.
Technauts, Inc. of Charlotte provides a small business Internet server that comes prepackaged with web services, email services, file services, print services, and more. With $13 million in projected revenues in 1999, Technauts is seeking a second round of $6 million to follow initial funding of $2 million received from Cordova Ventures, Timark LP, Gray Ventures, Aurora Funds and others.
OpenSite Technologies, Inc. of Research Triangle Park is the market leader in offering a comprehensive solution for hosting online, interactive Internet auctions on customers' own Web sites. OpenSite's first round of financing raised $4 million in September 1998 from a group of investors including Noro-Moseley Partners, Intersouth Partners and Southeast Interactive, and the Wakefield Group.
Mark Your
Calendar!
Conference on
Entrepreneurship
February 6th, 1999
8:00 am to 5:00 pm
Duke University's Fuqua School of Business
Venture
'99
April 28-29, 1999
Friday Center on the Campus of University of North
Carolina at Chapel Hill.
For information call CED (919.549.7500) or visit the
CED
Venture '99 Web site.
CED is a private non-profit supported, in part, by corporate contributions, including funding from Alltel, Alston & Bird LLP, AON Group and Bowne of Charlotte.
Research Triangle Venture Update is published by
the Council for Entrepreneurial Development (CED), a
non- profit organization located in Research Triangle
Park, N.C.
Editor Carolyn Foy, CED
P.O. Box 13353
RTP, NC 27709
Phone: 919.549.7500
Fax: 919.549.7405
Email: mcfoy@cednc.org