Startable - Healy Jones’ & Prasad Thammineni’s Blog

The folks over at Wordstream have just raised additional capital. $6 million in a Series B from Sigma and Egan Managed Capital. Sigma is the return backer; the Egan is the new player in the deal. MediaPost has an interesting story about one of the reasons Egan decided to invest. Worth a read. And congrats to Wordstream, another Boston area company, on the fund raise.

Congratulations to Ben and Josh, founders of Woburn HQ’ed Incentive Targeting on their $2.35 million angel round! This is a great outcome for a group of entrepreneurs with a cool idea who have been working hard for the past few years. I first got to know Ben and Josh when I was with Atlas Venture, and I’m very pleased they fought hard and long enough to pull together such a big angel round.

Incentive Targeting helps grocery stores and other retailers make better targeted promotional decisions. It’s a bit like Google Analytics for retailers. Very innovative stuff in the retailing industry!

Something interesting on this round, and quoting directly from their press release:

The Series A round was syndicated across eight angel investor groups in the New England area.  The angel group syndicate, coordinated by River Valley Investors of South Hadley, Mass., also included Walnut Ventures, Hub Angels, North Country Angels, Boston Harbor Angels, Northeast Angels, Granite State Angels and Boynton Angels.

Wow, that’s a lot of angels! Getting a single group to make an investmetn is hard - pulling together 8 groups is pretty amazing. I now know who to call if a herd of cats breaks lose from any local animal shelter!!

I woke up this morning and realized I needed to check to see if I could use the water out of my tap to brush my teeth. We are under a boil order here in Boston due to a major water pipe break. Of course, I’m not going to go outside to get a paper before brushing my teeth. So I did what I think a large number of technically literate people did - grabbed my iPhone and went to Boston.com’s mobile site to see what the status was.

And I saw a huge fail.

Boston.com #Fail

Boston Globe's Mobile Site Fail

Scrolling down didn’t really help either:

No where on the first page of their mobile site did the Globe decide it was important enough to talk about the DECLARED STATE OF EMERGENCY IN BOSTON. That’s awesome. As if people care if they could get sick from drinking their water. Car bombs in NYC, Pops and the Celts losing (sigh) are all sort of important, but I’m pretty sure the fact that the governor has declared a state of emergency and that people are not supposed to drink tap IS MORE IMPORTANT THAN any of the stuff you put above it (with the possible exception of the Sox/Orioles pre-game coverage.)

It’s clear that the mobile site is tailored to a local audience - three of the four first things were about Boston area themes (Sox, Pops and Celts.) But if you are going to bother to “be local” why not include the most important local news? I’m pretty sure people care.

If news papers want to continue to exist they need to do better than this. The Globe has recently been in the hot seat, with threats from their owner the Times to shut the paper down and tense negotiations with different unions. People in Boston were pretty upset that we might lose our major paper. But guess what - if the paper can’t deliver the news effectively in today’s mobile world, I’m not sure it’s really adding that much value. I realize that a major component of news papers’ declining fortunes is that they are losing paper-based ad dollars and that the ad dollars from their online properties can not replace the revenue decline due to lower CPMs. But unless I’m mistaken, it’s the content that drives readers - online, on paper or on the phone - and if you can’t deliver good content quickly in the right medium then you have no reason exist.

At least the regular Boston.com had coverage front and center on the water issue this morning. Maybe the team that runs the mobile site should connect with the web site’s team and find out what’s really going on - then publish that so that people like me, who want to use your mobile site - can actually know what is going on.

I’ve got news for Wade Roush of Xconomy - the Barron Building in Central Square better not be the new Boston “startup hub.” Because otherwise, we are all going to die.

See the following tweet stream captured in my Tweetdeck account, from 9:42 to 9:51 pm tonight:

On the plus side, there is AT&T reception in the elevator. Maybe the only place in Boston where you can get 3 iphones all online at the same time!

Good news for the New England early stage startup community - venture capital investing rebounded from last year’s lows. $789 million in VC was invested in New England in Q1 2010 vs. only $408 million in Q1 2009. This is a significant pop, and gets us closer to the 2008 and 2007 totals of $872 and $984 million. I’ve pasted in a couple of charts from data I took from the spreadsheets posted on peHUB.

Overall, peHUB says:

Venture capitalists invested $4.7 billion into 681 U.S. companies during the first quarter of 2010, according to MoneyTree data released today by PricewaterhouseCoopers, the National Venture Capital Association and Thomson Reuters (publisher of peHUB). This represents a decrease in both deals and dollars from the preceding quarter — by 18% and 9%, respectively — but an increase over the first quarter of 2009.

Zapoint, a private recruitment/job website based in the Boston area, supposedly has recently purchased Jobster, a heavily funded Seattle area recruitment site/company. I think Jobster raised over $50 million in venture capital! I read somewhere that Zapoint, founded in 2007, raised a more modest $5 million and that this acquisition was an “asset purchase.” FYI, asset purchase is VC talk for acquired for peanuts.

A couple of key take aways - one, how come I’ve never heard of this Boston area firm? Sounds like Zapoint is doing ok. Secondly, it’s not always the highly funded company that makes it. Sometimes smart, lower burn is a better way to grow a startups.

I’m not the biggest fan of the recruitment site/tool market. It’s really competitive and hard to gain traction/differentiate. Of course, I’m at an online document management startup, so perhaps I am the pot calling the kettle black. Anyways, I hope that Zapoint is able to take advantage of the marketing dollars spent and the technology developed by Jobster and create a cool, big technology company right here in new England! Good luck to them!

Congratulations to Mike, Bruce, Sandro and Bill of DataXu for raising a Series B investment from Menlo Ventures, a well known Silicon Valley venture capital firm. Atlas Venture and Flybridge, the Series A investors, invested in this round as well. I got to know the DataXu team when I was with Atlas and worked on the Series A investment. Mike has a great team and some solid technology.

I think it is great that important West Coast VCs are making follow on investments in the  Boston area - another prominent investment like this is Scale Ventures investment in Hubspots most recent round. When Boston companies are doing well enough to attract capital from outside the region then you know something good is happening.

Also important - while Boston may the the number 2 venture capital pool in the world, it is nothing compared to the capital available in Silicon Valley. When venture firms from San Francisco supplement local New England funds this means that there is more early stage capital available in the region to support innovation - a really good thing! Let’s hope for some more great companies like DataXu and Hubspot. Actually - let’s try to make them ourselves!!!

Congrats to William and the great guys at AccelGolf for formally announcing their seed funding. Will did a great job leveraging his experience at TechStars into some solid angel funding, which should really help him grow the business. This is another TechStars Boston company doing really well! I hope the new class will also have a successful company forming session…

Dharmesh Shah (a longtime lurker on my blog - but he did comment once!) made a seed investment in Backupify, a provider of backup services back in June. Backupify has just received a larger angel investment of $900k from First Round Capital & General Catalyst (as well as some other really well known angel investors like Jason Calacanis).

Why am I mentioning this? Because it’s important to get the word out about Boston’s angel investment community. Dharmesh and the other initial angels invested $125k in the first round, and Dharmesh is a pillar of the Boston startup community.

I was out with a well known startup’s development group the other night, and one of their VCs from the West Coast was out with them. He and another investor (acting individually, not as part of a VC fund) invested over $500k in a young developer’s startup after just a couple of breakfast meetings. Obviously this was in Silicon Valley. There is just not a lot of this fast decision making angel investing in New England. The West Coast VC made it pretty clear that he thought that investors in Boston would never be able to make these sorts of fast, company forming investments.

He’s correct, in that we don’t have a lot of the “have breakfast, get a check to start a company” investors in NE. So I think it’s important to celebrate the investors who do make company forming investments. I don’t know how much research/effort went into Dharmesh making the initial investment in Backupfiy, but regardless, he helped get something going and we should all be proud that there are investors in Boston who do this sort of a thing.

Finally, TC mentions that Backupify is looking to move HQ…  Let’s make them feel welcome in Boston and see if they will move up here!

Xconomy has a great piece on Carbonite, a Boston based SaaS provider of online PC backup services. The company is known as a great local software company, and it’s good to hear that growth continues to be strong. Let’s hope David Friend, founder and CEO, is able to keep the company on track and doing well despite the tough economic climate.