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In the News

August 3, 2004

What’s Up Cuban’s Sleeve?
Dallas Mavericks’ owner, Reality TV star, blogger, and former Yahoo scam artist, Mark Cuban has made another investment in the C-tier meta-search engine market. Last year Cuban invested in Mamma.com – although he divested at the start of July 2004 – and today he has announced an investment in IceRocket.
icerocket.gif
Crap Rocket?
These investments appear particularly contrarian given painfully low valuations for B-tier search companies like Lycos, sold to Korean Daum for just $95.5M and Looksmart (LOOK) which has a valuation of $190M even though it enjoys a pile of cash in the bank. Niche search companies like Eurekster or Topix.net which don’t compete head-to-head with Google and Yahoo would seem to be better acquistion candidates and may well provide bigger pay-offs. The a:c doesn’t get Cuban’s game and projects that Bottle Rocket will fizzle.
VC Funds on the Rise
VC funds crossed the $3B threshold for the quarter, up from $2.8B last quarter and $2.6B in the prior year’s quarter. More importantly, the data indicates that VCs are at last turning back around to early stage companies. VC firms focused nearly 80% of their funds last year on expansion and late-stage funds, whereas in this quarter they invested a full 53% in early stage funds. We will have to wait for next quarter’s numbers to prove this hypothesis, but it seems that this quarter is shaping up to be the summer of investing in Wireless startups.
Fresh Deals
Wayport
Sector: Wireless
HQ: Austin, TX
Action: $20M investment.
Investors: Undisclosed
Danger
Sector: Wireless Hardware & Software
HQ: Palo Alto, CA
Action: $37M Series D
Investors: Mobius Venture Capital, Redpoint Ventures, Softbank Capital Partners and T-Mobile Venture Fund.
OpenWave Systems
Sector: Enterprise Software
HQ: Redwood City, CA
Action: Acquires Magic4 for $82.6M.
SugerCRM
Sector: Enterprise Software
HQ: Cupertino, CA
Action: $2M Series A
Investors: Draper Fisher Jurvetson
EWI Holdings
Sector: Enterprise Software
HQ: San Diego, CA
Action: Series D (undisclosed amount)
Investors: National City Equity Partners, Darby Technology Ventures.
Avaya
Sector: Networking
HQ: Basking Ridge, NJ
Action: Acquired Spectel for $103M.
Total Systems
Sector: Electronic Payment Processing
HQ: New York City
Action: Acquired Clarity Payment Solutions for $53M in cash.
JDS Uniphase
Sector: Networking
HQ: Ontario, Canada
Action: Acquired Advanced Digtial Optics for $12M in cash.

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