Saturday, October 25, 2008

Private Equity and E-Learning: What Gets Funded in Turbulent Economic Times?

Despite what one might expect, private equity funding has not dried up for developers of applications, platforms, and infrastructure for e-learning, mobile learning, and other web techology products. In general, the type of funding and the kinds of projects receiving funding have changed. In general, the funding falls into general categoies (listed below). Here are a few examples of funding announced after October 20, 2008.

Cheaper alternatives for "must-haves" such as textbooks, learning management systems (Brightstorm's new LMS, Flat World Knowledge's open source textbooks, HowCast.com's instructional videos)

Sales-boosting software (Shopit.com, AdMob mobile advertising marketplace)

Efficiency-boosting software and hardware (Acerno's online shopping aggregator)

Bargain business units (VBrick's networked video solutions)

Bargain inventory of material to sell (Jupitermedia's online images, Ray Flame's gaming solutions)

Extremely useful mobile applications (BlackBerry's JumpStart program for useful applications)

Social networking that helps individuals get ahead (LinkedIn.com's professional networking platform, mail.com's portals)

Podcast: http://www.beyondutopia.net/podcasts/capital-october2008.mp3

Funding Details

Brightstorm, a San Francisco-based online learning network for teens, has raised $6 million in Series A funding from KTB Ventures. On October 20, Brightstorm launched a new online learning network for teens that offers video-based courses designed and taught by expert classroom teachers from across the U.S. The company also announced that it has secured $6M in Series A financing from KTB.
http://www.pehub.com/21198/brightstorm-raises-6-million-series-a/

Flat World Knowledge, a publisher of open-source college textbooks, today announced the completion of a $700,000 funding round, bringing total funding to date to $1.4 million. The new funding was provided by several independent angel investors, among whom included media executives, educators, authors and technology entrepreneurs. The company expects to conclude a larger Series A round from venture investors and/or strategic partners within the next six months. “We're pleased to complete this funding round under favorable terms, especially in light of the uncertain economic environment,” said Jeff Shelstad, co-founder and chief executive officer of Flat World Knowledge. “Our investors recognize that higher education is one of the few markets that actually benefits from recessionary economic environments. Our unique business model of selling high quality, low cost, open source textbooks is ideally suited to price-conscious students and educators.” www.flatworldknowledge.com

LinkedIn, a San Francisco-based operator of a professional networking platform, has raised $22.7 million in additional Series D funding. It had previously held a $53 million first close at a valuation of just over $1 billion. The new tranche came from Goldman Sachs, McGraw-Hill Cos., SAP Ventures and return backer Bessemer Venture Partners. The original tranche had been led by Bain Capital Ventures. LinkedIn Corporation today announced that it has secured $22.7 million in new funding from world-leading strategic investors Goldman Sachs; The McGraw-Hill Companies; and SAP Ventures, a division of SAP AG; as well as a re-investment by Bessemer Venture Partners. This financing is a follow on of the Series D fundraising round LinkedIn announced in June of 2008, in which the company raised $53 million in funding led by Bain Capital Ventures. The valuation for the Series D was just over 1 billion dollars for the $75.7 million raised. Over 30 million professionals use LinkedIn to solve business problems, manage their professional relationships and control their professional identities online. LinkedIn members represent more than 170 industries, 150 countries, and include executives from all of the Fortune 500 companies. LinkedIn is currently growing at a rate of half a million new members a week. Members experience the benefits of the purpose-driven network by finding new ways to interact and do business. While standard LinkedIn accounts are free, the company earns revenue through advertising, premium subscriptions, corporate solutions, and job listings. LinkedIn recently added a new line of revenue with LinkedIn Surveys.
http://www.pehub.com/21338/linkedin-raises-additional-227-million/

Jupitermedia Corp. (Nasdaq: JUPM) has agreed to sell its online images business to Getty Images Inc. for $96 million in cash. Hellman & Friedman took Getty private earlier this year for $2.3 billion. Jupitermedia Corporation (Nasdaq: JUPM) (“Jupitermedia”) announced today that it has entered into a definitive stock purchase agreement to sell its Online Images business to Getty Images, Inc. for an aggregate purchase price of $96 million in cash. Under the terms of and subject to the conditions set forth in the stock purchase agreement, Jupitermedia has agreed to sell all of the outstanding capital stock of Jupiterimages Corporation (“Jupiterimages”), an Arizona corporation and a wholly owned subsidiary, to Getty Images, Inc.
http://www.pehub.com/21502/getty-buys-jupitermedias-online-images-biz/

Akamai Technologies (Nasdaq: AKAM) has agreed to acquire Acerno, an aggregator of online shopping and purchase data for advertisers, from i-Behavior. The deal is valued at approximately $95 million in cash. I-Behavior will continue to run its offline marketing business, and has raised over $8 million in VC funding from firms like JEGI Capital, Angel Investors LP, Morningside Ventures and Stockton Ventures.
http://www.pehub.com/21186/akamai-buying-acerno-for-95-million/

AdMob, a San Mateo, Calif.-based mobile advertising marketplace, has raised $15.7 million in Series C funding. Sequoia Capital’s Growth Fund led the round, and was joined by Accel Partners. The company had previously raised $18.6 million from Accel and Sequoia.
“Today AdMob reaches more consumers on their mobile phones through our publisher network than any of the major Internet portals or search services, and this is just the beginning,” said Omar Hamoui, Founder and CEO, AdMob. “We chose to raise this new round of funding to continue to grow both the mobile advertising market and AdMob’s clear advantage in it by investing in the technology, operations and team that have set the bar for the mobile industry.”
http://www.pehub.com/21178/admob-raises-157-million/

Mail.com Media Corp., an El Segundo, Calif.-based operator of digital media portals, has raised $35 million in Series D funding at a pre-money valuation of approximately $109 million. Quadrangle Capital Partners, an affiliate of Quadrangle Group, led the round, and was joined by WI Harper Group and Novel TMT Ventures. Mail.com provides free web-based email services to over two million users, and has the exclusive ability to offer over 400 specialty email addresses like yourname@lawyer.com. The Mail.com portal is a content distribution platform that partners with leading content publishers. The company also operates a series of leading vertical content destination sites such as HollywoodLife and OnCars.com. Founded in the late-1990s, Mail.com was re-launched by founder and current CEO Jay Penske in May of 2007.
http://www.pehub.com/21105/mailcom-raises-35-million/

VBrick, a Wallingford, Connecticut based developer of online networked based video solutions has raised $10.4 million out of the planned $15.7 million in Series F from Adams Capital Management, Menlo Ventures, Morgan Stanley Venture Partners, Redshift Ventures and Two River Associates. This takes the total funding raised till now to $50 million since 1999.
http://startup.wirememe.com/vbrick-raises-104-million-for-network-video-streaming/

Shopit, a social shopping service that works with popular social networks and e-commerce sites, announced today that it raised $2.5 million in Series B funding from Emerson Ventures and Propulsion Ventures. The company wants to raise a total of $7 million before it closes the round. Shopit harnesses the popularity of social networks to entice sellers to use its service. After creating a store on Shopit's site, sellers can direct potential customers to their Shopit profile to buy their goods or post their store's widget anywhere on the Web. More importantly, Shopit stores can be integrated into social networks like Facebook, MySpace, and Hi5, along with sites like Craigslist and Amazon. Once the customer buys a product, Shopit's e-commerce platform provides identity management features and shipping solutions to streamline the post-purchase process. http://news.cnet.com/8301-17939_109-10073749-2.html?part=rss&tag=feed&subj=Webware

HowCast Media, a New York based video startup focused on instructional videos, has raised $2 million in first round of funding from private individuals in the media industry. The deal takes the first round total to $10 million with participation of Tudor Investment. Howcast has a huge inventory of how-to video categorized into different sections such as pets, parenting, fitness and food.
http://startup.wirememe.com/howcast-raises-2-million-for-how-to-videos/

Blackberry Partners Fund has awarded $150,000 prizes to three makers of applications designed to work on the BlackBerry handheld.
# Multiplied Media’s Poynt search service, which uses GPS to connect users with local businesses
# Strands’ Social Player, a social-networking music player that connects users and recommends songs based on their tastes, soon to be released
# Nobex Technologies’ Radio Companion, an app that tells users what’s playing on 2,700 radio stations and gives them the ability to buy the songs.
http://venturebeat.com/2008/10/24/blackberry-awards-150k-to-three-mobile-apps/

Blackberry's JumpStart Financing Initiative Continues
Get the jump on the competition and start working with the BlackBerry Partners Fund™ to launch your company. The Jump Start initiative is designed to help you focus on developing your Smartphone application and getting it to launch stage – often the most critical time for a young start-up company. We have made it really easy. If we like your concept, the BlackBerry Partners Fund™ may provide up to CAD $250,000 of seed capital to your company in the form of a Convertible Debenture. This provides you with the capital to get started and prove out your concept before raising larger amounts of equity from venture capital firms.
http://www.blackberrypartnersfund.com/jumpstart

Ray Flame Entertainment Inc., a Cypress, Calif.-based MMO gaming startup, has raised $800,000 in Series A funding led by InnoBridge Ventures, according to a regulatory filing. http://lord.webmmo.com

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