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HipChat raises funding for instant messaging service
SAN FRANCISCO (Private Equity Week) - Sunnyvale, California-based HipChat (www.hipchat.com/), which has developed an instant messaging service designed for small and mid-sized business, recently announced it raised $100,000 in angel funding from the Founders Fund TechFellow's inaugural 2009 award program.
The funding includes $50,000 from the TechFellow program, which is sponsored by the Founders Fund and online news site TechCrunch to honor tech startups. San Francisco-based Founders Fund matched the TechFellow award with an additional $50,000 and has the added right to invest more if the company raises a next round of financing.
However, HipChat co-founder Pete Curley said that he's not certain if the company - which already boasts such customers as Mozilla, AOL and event organizer TEDx - will need additional financing.
"We made what we believe is a great product that businesses use to help improve the way people work," Curley said. "We prefer the lean-and-mean approach to funding our business."
Curley and HipChat co-founders Chris Rivers and Garret Heaton previously founded HipCal, a provider of an online calendar service, which was acquired by Plaxo in 2006. The threesome, who were previously fraternity brothers at the Rensselaer Polytechnic Institute when they founded HipCal, then created a social network aggregator called Plaxo Pulse. That system was acquired by Comcast in 2008 and a year later, the team split off to work on HipChat, which they had bootstrapped themselves.
HipChat provides a secure environment that allows employees to chat privately or in groups and share files from their desktops, Web browsers, or smartphones, such as iPhones and Androids.
Curley said that although he and his co-founders hadn't planned on raising capital, they will use the $100,000 in seed funding to pay for operational costs and advertising. Curley said the company has relied primarily on word-of-mouth, although they're considering purchasing a billboard off Highway 101.
In regards to the funding, Curley said: "It'll be nice to pay the bills with someone else's money for a bit."
In addition to HipChat, other startups to raise capital recently include the following:
BIOTECH
Swift Biosciences Inc.
Ann Arbor, MI
Amount/Round: $3million/Series A
Investors: DFJ Mercury (led) and undisclosed firm
Details: Develops molecular biology reagents for research and diagnostic applications. The company says the purpose of its product is to detect genes and gene products.
CLEANTECH
EcoATM
San Diego, CA
Amount/Round: NA/Series B
Investors: Coinstar Inc
Details: Develops automated systems for recycling cell phones and other consumer electronics. The company said in February that it raised an undisclosed amount in its first round of institutional funding from Jens Molbak, founder of Coinstar, and Tao Venture Partners.
INTERNET
Empire Avenue
Alberta, Canada
Amount/Round: $200,000/seed stage
Investors: Angel investors led by Boris Wertz of W Media Ventures
Details: Empire said in its blog last week that it raised seed funding, but it did not disclose the amount. Online news site TechCrunch reported that Empire raised $200,000. The company, which is in beta mode, bills itself as "a revolutionary online influence stock exchange combined with an advertising platform that allows individuals and organizations to convert their online influence and reach into revenue." Empire says it has 15,000 registered users in more than 95 countries and that over 750,000 virtual share trades have occurred on the site in the past three months.
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My Damn Channel Inc.
New York, NY
Amount/Round: $4.4 million/Series B
Investors: Intuitive Venture Partners (led) Okapi Venture Capital and Sunshine Wireless Co
Details: Operates an entertainment studio and media platform created to have artists co-produce, distribute and monetize original video. The 3-year-old company raised a $2.5 million Series A round from Okapi in August 2007.
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TransFS Inc.
Chicago, IL
Amount/Round: $510,000/seed stage
Investors: Hyde Park Angels and 500 Startups
Details: Operates a comparison shopping site for credit card processors. The 2-year-old company says it employs instant reverse auctions to negotiate deals, automated bill analysis software to identify unnecessary or undisclosed fees, a stringent certification program and online ratings and reviews.
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WePay
Palo Alto, CA
Amount/Round: $7.5 million/Series B
Investors: Highland Capital Partners (led) and August Capital
Details: Operates online payment service that makes it easy for groups to collect and manage money. The company previously raised $1.65 million in funding.
MESSAGING
HipChat
Sunnyvale, CA
Amount/Round: $100,000/seed stage
Investors: Founders Fund and Founders Fund TechFellow program
Details: Provides instant messaging services for companies. The company raised $50,000 from the TechFellow awards, which is sponsored by VC firm Founders Fund and online news site TechCrunch to honor tech innovators. The Founders Fund matched the TechFellow award with an additional $50,000, and has the additional right to invest more when the company raises a next round of financing. Co-founders Pete Curley, Chris Rivers and Garret Heaton previously founded HipCal, a provider of an online calendar service, which was acquired by Plaxo in 2006.
MOBILE
Medialets Inc.
New York, NY
Amount/Round: $6 million/Series B
Investors: Foundry Group (led), DFJ Gotham, 500 Startups and individual Chris Saridakis
Details: Developer of an advertising technology platform for iPhone, iPad and Android applications. Customers include publishers, developers, advertisers and agencies. The two-year-old company previously raised $4 million.
SOFTWARE
G5
Bend, OR
Amount/Round: $15 million/Series A
Investors: Volition Capital
Details: Makes marketing software for vertical markets. Volition Managing Partner Roger Hurwitz and Principal Sean Cantwell will join G5's board.
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Ciespace Corp.
Pittsburgh, PA
Amount/Round: $4 million/Series A
Investors: Arch Venture Partners (led) and the University of Tokyo-Edge Capital (led)
Details: Develops and markets advanced 3D digital modeling and analysis software for the aerospace, automotive, industrial, and government markets. The company says its software dramatically increases the speed and quality of the engineering design process for applications such as automobile crash simulation. Founded in 2004, Ciespace previously raised a combined $300,000 in seed funding from Innovation Works Inc. and Honda Strategic Venturing in separate rounds in 2006 and 2007.
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MedNetworks Inc.
Newton, MA
Amount/Round: $5 million/Series A
Investors: Excel Venture Management
Details: Develops technology for analyzing real-life social networks. The company says its technology maps, analyzes and activates social networks across the health care sector, including consumers, patients, health plan members, physicians and hospitals. MedNetworks works with a broad range of data types, including medical and pharmacy claims data, using software developed by professor Nicholas Christakis and colleagues at Harvard University, according to the company.
(List of deals compiled by Lawrence Aragon)
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