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Digital Video Consolidation: Avail-TVN Picks Up $100M From Carlyle, Buys UK’s On Demand Group For $27M

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A double-whammy in the digital video space today: Avail-TVN, a video services provider that works with companies like NBC, Univision, and brands like Mattel, has announced that it has picked up $100 million in financing led by the Carlyle Group, and it is using those funds to make an acquisition outside of the U.S., buying rival video service provider On Demand Group in the UK from its existing owner, SeaChange International, for $27 million. Avail-TVN says that the deal will make it the largest provider of digital video services in the world.

The move is a sign of how the digital TV industry is already fairly large in its geographical reach, but in many cases is still only providing incremental revenue on top of more traditional TV revenue streams — and so companies that work in this space, which can be capital intensive, are best suited to bulk up their scale to survive.

Carlyle is leading the round that also includes existing investors Columbia Capital, Valhalla Partners, Novak Biddle and Pioneer Ventures. With the round of financing Carlyle, which already has an extensive amount of holdings in the media industry, becomes Avail-TVN’s largest investor. Avail-TVN will also use the funds for product development and for wider international expansion targeting content providers and multichannel video service providers.

Avail-TVN already had a customer base extending outside of its U.S. headquarters, but this deal will extend that even further: it will now have customers in 25 countries covering 70 million households. Regions covered will be North America, Caribbean, Latin America, Europe, the Middle East and Asia.

“Our strategy has been to invest in leading players across the digital media ecosystem and incorporate them into one company to build Avail-TVN into the largest provider of advanced digital video services worldwide,” said Ramu Potarazu, Avail-TVN’s chief executive officer, said in a statement. “The Carlyle Group’s investment supports that vision, and provides the capital and global network to build upon this foundation both domestically and internationally.”

Avail-TVN already works with provides to provide enhanced interactive digital TV services: for example, it is powering the multi-platform video coverage that NBC will run during the London 2012 Olympics this summer. Adding ODG to the mix will bump up the kinds of services it can offer to customers: ODG helps broadcasters with a range of things from content acquisition and strategic consulting services, through to powering video-on-demand services for mobile, online and digital TV services. Its customers include Virgin Media in the UK, Disney, Cablevision and others. Its existing CEO, Tony Kelly, will stay on and become a part of the bigger executive management team, and will now report to Avail-TVN’s CEO, Ramu Potarazu.

There is also some debt funding involved in this deal from  Silicon Valley Bank, RBS Citizens, N.A. and Bank of America, N.A.


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Vancouver Startup Accelerator GrowLab Reveals Second Batch, Hires Super Angel Mike Edwards

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When you think entrepreneurial ecosystems, you probably think Silicon Valley (and the Bay Area), New York, and London. But Canada has something to say about that. In Startup Genome’s list, one finds three Canadian cities in the top 25. Naturally, startup accelerators have been taking off in Canada of late, with FounderFuel and Year One Labs opening their doors in Montreal, Extreme Startups off and running in Toronto, and last year, Vancouver got its very own accelerator in GrowLab.

GrowLab, which officially launched last May, has been off to a good start, launching 5 companies since its program began. And, today, the accelerator is ready to announce the five companies chosen to participate in its spring 2012 program, its second cohort, which kicks off tomorrow.

For those unfamiliar, GrowLab was founded by Boris Wertz (W media ventures), Lenonard Brody (Clarity Digital), Debbie Landa (DealMaker Media), Jason Bailey (East Side Games), and offers up to $25K in equity investment for its portfolio companies (in exchange for a 5 to 9 percent stake), plus a $150K convertible loan (backed by the Business Development Bank of Canada) upon completion of its 12 week program.

Startups spend 10 weeks at the accelerator’s headquarters in Vancouver, where the accelerator hosts its “Demo Day,” after which the startups travel to San Francisco, where they are led through two weeks of targeted introductions to Bay Area investors. According to co-founder Boris Wertz, the team founded GrowLab to give growing Canadian tech companies a mechanism an opportunity to leverage their extensive network and to help them secure follow-on funding to execute as they grow.

Wertz tells us that the GrowLab founders are each successful entrepreneurs in their own right (Jason Bailey sold SuperRewards to Adknowledge, Len Brody’s NowPublic was acquired by The Examiner, and Wertz sold AbeBooks to Amazon, for example) and are all actively involved in the program as mentors.

The accelerator is also announcing today that it has hired Canadian super angel Mike Edwards as executive director. Since 2010, Edwards has invested in more than 40 technology startups, including Punch’d (sold to Google), Summify (acquired by Twitter), as well as LaunchRock, Wander, and 500 Startups VC fund, to name a few.

But what is the accelerator looking for in its participating startups? Wertz tells us that the accelerator had hundreds of companies from all over the world apply (as far flung as Eastern Europe), but when it came down to it, GrowLab chose four Canadian startups (all of which are from Vancouver) and one San Francisco-based team.

As one might guess, GrowLab gives preference to strong Canadian companies, but is open to startups from all over the map. The accelerator primarily focuses on mobile, social gaming, eCommerce, SaaS, and enabling technologies companies, though, again, there are no set boundaries. Teams can be at any stage of development, but the program centers on agile development processes and building and developing MVPs.

With that in mind, here are the five companies chosen as members of GrowLab’s second cohort:

BlueBat Games, the team behind BlueBox, an engine that allows game developers to easily build on social platforms Cinecoup aims to disrupt how feature films have been created, financed and distributed Food.ee, a new product from Invoke Media, the maker of HootSuite, Food.ee simplifies group ordering of delivery food for offices Skyscrpr makes it easy for bloggers to sell ads directly to advertisers with a user friendly interface and automated media kits Wantering, lets you visually browse, find and buy the latest trends from fashion blogs and curation networks

GrowLab’s program concludes with its invitation-only Demo Day, which kicks off Vancouver’s third annual Grow Conference on August 22nd. That same weekend Edwards will host an Accelerator Symposium, bringing together Executive Directors at accelerators and incubators from all over the globe to discuss best practices and challenges these organizations face in the ever-changing landscape of scaling companies.

For more, find GrowLab at home here.


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Google Missed The Boat On Buying Twitter. “Hasn’t Been Interested Since They Committed To Google+” -Fred Wilson

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Google got the chance to buy Twitter, but the search giant passed, says Michael Arrington. “Google hasn’t been interested in buying Twitter since they committed themselves to Google+” says Fred Wilson, Union Square Ventures founder and former Twitter board member, in his fireside chat this morning with Arrington at the TechCrunch Disrupt New York conference. Now Google+ is widely seen as a ghost town, and not buying Twitter could be a mistake that haunts Mountain View for years to come.

Wilson has one of the most envied portfolios in venture capital, with Union Square Ventures getting in early on Twitter, Zynga, Etsy, and Tumblr. But the future might not be as bright. “I don’t think I’m going to be very good at investing in the next big thing. I don’t come from it. I didn’t work in it. The next thing isn’t going to be evolutionary. It’s going to be something completely different.”

Arrington poked Wilson about writing “Silicon Valley could become the next Detroit” a recent AVC blog post. Wilson explains “I didn’t mean to say [that]. Silicon Valley is the center of the digital revolution. If there’s another revolution, [like] the teleportation revolution, and teleportation is invented in Mumbai, Silicon Valley might not be the locus of the next big thing.”

Google Lost The Flock

On the war for the future of social, Arrington asked “Do you think Facebook is overvalued?” Despite the newly public company’s share price dropping over 10% from its Friday close price, Wilson defend Mark Zuckerberg’s product. “Markets come and go, good companies survive. The price of Facebook stock is no that important. Mark built an incredible platform and organization. I don’t think it matters that much if it’s trading at $25 or $50.” But Arrington pressed “Is it going to be a half-trillion dollar company?” Wilson admitted “They’re going to have to grow into that.”

Google had a big opportunity to compete with Facebook, but that’s passed. Arrington cites a rumor that Twitter CEO Dick Costolo took the company to Google saying it was raising this big a round at this valuation, and gave the search giant a chance to acquire Twitter, but  ”Google pooh-poohed it”. Wilson, who’s Twitter investment and former board seat must have made him familiar with the discussion, said Google decided to build social, and hasn’t considere buying something as big as Twitter in the space ever since.

That’s turned out poorly. But Twitter might not have been the right fit. Google needed a social layer that could integrate into all its product, not just a micro-blogging platform. Still, Google is now a distant third in social, and Twitter’s off the table. Wilson says Twitter’s founders and board are now deadset on it staying independent.

What’s The Value Of Angels?

“I’ve never seen angels being lazy” says Wilson , refuting Ben Horowitz’s claim that angel investors make too much money for too little work. Wilson released a flood of insights into Facebook’s valuation, and the future of Silicon Valley

“Venture capital is not the most risk-taking part of the equation. We wait until things are more developed” says Wilson. He trusts angels and the early legwork and diligence they do. “I don’t know where ‘lazy’ comes from. They’re probably the most important part of the capital stack because they believe in entrepreneurs before VCs do. ”

[Image Credit: Joi Ito]


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With Its Hotspot Shield Hitting 60M Downloads, AnchorFree Lands $52M From Goldman Sachs

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This morning AnchorFree, the makers of the popular virtual private network Hotspot Shield, is announcing that it has raised $52 million in series C financing from Goldman Sachs. All in all, this brings the Mountain View-based startup to over $63 million, following the $11 million the company raised in series A and B rounds, dating back to 2006.

As part of its whopping series C round, Goldman is joined by existing investors former chairman and CEO of MCI Bert Roberts, RENN Capital President Russell Cleveland, angel investor Esther Dyson, former president of the Huffington Post Greg Coleman, Doug Maine, the former CFO of IBM, Rick Roth, and Kevin Cook, to name a few.

Updating in realtime.


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Xfire Raises $3M To Expand Gamer Social Networking In Asia

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Xfire, which offers social networking tools for gamers, just announced that it has raised $3 million in new funding.

The round was led by Singapore-based IDM Venture Capital. It’s apparently targeted specifically at expanding Xfire’s presence in Asia — the company recently announced that it’s partnering with China Youth Goyor Technology company to bring its services into the Chinese market.

The company’s services include a gamer profile, in-game voice and instant messaging, and live broadcasting. It has changed hands several times in the past few years, getting acquired by Viacom in 2006, then by Titan Gaming in 2010. Xfire became independent again last fall. At that time it also raised $4 million from Intel Capital and others.

Xfire says this funding will probably be part of a larger round.


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Bankers Got Too Aggressive With Pricing Facebook As Shares Barely Break Above $38

Facebook Closing Share Price

The underwriters of Facebook’s $16 billion debut on NASDAQ fought to the finish to keep the company’s shares above last night’s final price of $38 a share. Shares closed at $38.23 today. Sources tell us that the syndicate of banks underwriting the deal have been putting in buy orders to keep its price afloat. It’s not necessarily a bad outcome for Facebook as the company didn’t leave any money on the table, but bankers are sure to be unhappy. Plus, the company’s tepid premiere is killing the performance of tech stocks across the board.

Basically, what we hear is that the underwriters including Morgan Stanley, JPMorgan and Goldman Sachs, just got too aggressive in the final days before the IPO about pricing. Earlier this month, the company was slated to open at a $28 to 35 price range, but that range was pushed up to $34 to 38 a share. Then Facebook priced at the very high end at $38 last night.

“The only thing keeping it at $38 are support mechanisms,” a source tells us. “There just wasn’t the institutional investor demand that people thought there would be.” They added that about 20 percent of buying orders seem to be coming from retail investors (e.g. regular people), which is “unprecedented.”

Because prices are being held up to avoid a negative finish, shares might dip lower into early next week. Already, we’re seeing the impact on other stocks across the board. Zynga is down 13.4 percent to $7.16. LinkedIn is down 5.9 percent to $99.02. “They’re all in the shitter because now they look expensive since Facebook didn’t go anywhere,” we’re told.

From Facebook’s perspective, the company shouldn’t care. The company and its early shareholders raised $16 billion at the very best price they could, leaving no money on the table for the underwriters’ wealthy clients to scoop up and sell for a quick profit.

Indeed, CEO Mark Zuckerberg has warned investors from the very beginning that Facebook was originally not meant to be a company. He even said today before the market opened, “Going public is an important milestone in our history. But here’s the thing: our mission isn’t to be a public company. Our mission is to make the world more open and connected.”


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Explainer: What Happens In The 15 Minutes Before Facebook Shares Start Trading

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Facebook shares are supposed to go live on the NASDAQ market in about 20 minutes. But what happens in the next crucial 15?

We caught up with NASDAQ’s Bruce Aust, who is the executive vice president and head of the global corporate client group there. After several years of carefully courting the company’s management, NASDAQ beat out rival New York Stock Exchange for Facebook’s hand. NASDAQ is usually is the exchange of choice for most tech companies like Google and Apple, but NYSE has snuck away with a company or two in the last year like LinkedIn.

Companies generally go live after market opening at around 10:30 or 11 a.m. Eastern, he said. About 15 minutes before shares start trading (e.g. right now!), the underwriters of Facebook’s offering like the offering’s lead Morgan Stanley get together and discuss current market orders, he said.

“The market makers have a chance to work on price discovery to find the opening price,” he said. “If there are more orders coming in than they expected, they may choose to delay it in five minute increments.”

This has happened in very recent, popular IPOs like Splunk. So while Facebook is expected to go live at 11 a.m. Eastern, it could get delayed if there is insanely high demand. Over the past few days, the market makers have had a chance to sort out orders at Facebook’s final price of $38 a share. But right around market opening, many new orders often flood in amid the hype.

It can be a little unpredictable. But after that opening price is settled, Facebook will move forward just like any other stock traded on the exchange.

“Once we’ve got the buyers and sellers matched off, it’s off to the races,” he said.


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Charts: Facebook’s IPO In Historical Context And Its Share Price Over Time

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Facebook will be the largest tech IPO in history today as the company and its early shareholders raise about $16 billion at the final price of $38 a share. There is also an allotment for them to sell up to $2.4 billion more in the next 30 days. Here’s how it compares to other historical IPOs, according to NASDAQ data.

Then here’s how it compares to how much Google and Microsoft each raised in their respective IPOs.

We also have historical price data from SecondMarket, which is a private secondary market that became popular among former Facebook employees who wanted to offload part of their stake in the company.

Facebook has outperformed many of the largest tech companies in the world over last few years. (That’s not totally surprising though since they started from a much lower base.)

Here’s how the number of transactions has scaled up on SecondMarket over the last few years.


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Backed By Mark Cuban, WhiteyBoard Launches v2 Of Its Paint That Turns Walls Into Whiteboards

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Two years ago, WhiteyBoard founders Saachi Cywinski, Sherwin Kim and Jason Wilk set out to re-think those clunky, inflexible whiteboards found in classrooms and offices around the country. They developed a portable, flexible alternative: An inexpensive, “instant” plastic board that weighs less than two pounds and adheres to any surface without screws.

The idea, and the fact that co-founder Jason Wilk was (at the time) hard at work on a Y Combinator backed startup, quickly attracted $500K in seed funding from serial entrepreneur and founder of popular European professional network Xing.com, Bill Liao. The startup used the funding not only to to continue developing their whiteboards, but to develop a new product, called WhiteyPaint, which they launched late last year.

Wilk tells us that WhiteyPaint has since found an eager audience, leading to the fortunate problem of demand quickly outpacing supply. Struggling to finance demand on a bootstrapped budget, the founders reached out to Dallas Mavericks owner, Shark Tank investor, and HDNet Co-founder Mark Cuban. Seeing a billion-dollar market dominated by a few bloated players, Wilk said, Cuban believed WhiteyBoard was onto something.

So, today, the startup is officially announcing that it has raised an undisclosed round of seed financing from the billionaire entrepreneur. Wilk tells us that WhiteyBoard has already sold to over 10K businesses, and smaller versions of the product are currently in stores at retailers like Urban Outfitters and ThinkGeek as well as at fulfillment centers around the world. (What’s more, its products are now made exclusively in the U.S. of A.)

Since last November, he says, sales for both its whiteboard and paint have quadrupled, and with the new funding from Cuban, the team is this week launching version 2 of its WhiteyBoard paint, which the founders say not only has better performance and more durability, but is “the best dry-erase product the world has ever seen.

That remains to be seen, but it certainly helps in the validation department to have Cuban on your side. For now, WhitePaint is for sale on the startup’s website here.


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And The First Facebook IPO Hackathon Photos Roll In

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Hundreds of Facebook employees congregated at ‘Hacker Square’ at the company’s Menlo Park headquarters this evening ahead of the company’s insanely-hyped initial public offering. Now, some of the first photos are starting to trickle in. There was a standing ovation for chief executive Mark Zuckerberg, who gave a talk before several long-time engineers bounced in while wearing capes or bringing boomboxes.

Tonight Facebook is having its 31st Hackathon to celebrate the IPO. Hackathons are a company tradition. They’re a place where engineers and other non-technical employees get to stay out all night building concepts into real products that sometimes eventually get shipped. Some of the big products that have come out of earlier Hackathons include Facebook chat and an early version of Timeline.

The company got its employees together around a big yellow crane that’s in the center of their ‘Hacker Square.’ The crane came from their old Palo Alto headquarters where it was originally put in by Agilent Technologies (the company that spun out of Hewlett Packard — arguably, the company that made Silicon Valley what it is today).

Here are some of the photos that have come in so far! The best photos are actually from Facebook product designer Francis Luu. But because we are trying not to be super lame, like various slideshow-addicted blogs that shall not be named, here is the link to his photo album. If you are a Facebook employee and are not living in ungodly fear of having your RSUs, options, etc. revoked on this special day, feel free to send us more photos at tips@techcrunch.com.

Here’s the crowd that gathered before Zuckerberg’s talk:

Here’s a new poster from Facebook’s analog research lab:

Here’s the commemorative T-shirt for the Hackathon:


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