Category Archives: Venture Capital

amp’d poised for growth?

amp

Daniel Primack sums up in his newsletter the story of MVNO Amp’d:

“It’s been four months since I first began researching and writing about Amp’d Mobile Inc., the Los Angeles-based virtual mobile network operator (MVNO) targeting teenagers and young adults. My original prompt was the company’s massive Series A funding, which totaled $67 million (including the rollover of $7 million in loans). My continuing interest, however, was twofold. First, I believed that MVNOs/MVNO infrastructure would become a very hot VC sub-sector, due to its advantages for both brand-conscious multimedia content providers and capacity-loaded mobile carriers. Second, Amp’d seemed to have the right management pedigree (particularly Boost Mobile founder Peter Adderton) and the right target audience (let’s face it, senior citizens don’t want/need Larry King streaming through mobile phones).

For the uninitiated, MVNO is a term that loosely means reseller. MVNOs buy or lease unused mobile carrier spectrum at wholesale prices, and then sell the “minutes of use” to retail consumers with a device that can access specified content. Perhaps the best-known example of an MVNO – although it’s not typically thought of as one – is OnStar, the automotive communications companion that uses extra Verizon capacity. More “traditional” MVNOs would include things like Virgin Mobile or Disney Mobile.

So why did yesterday change everything? First, it signed the best possible branding partner for the youth market: MTV Networks, which includes MTV, Nickelodeon, Comedy Central, Spike TV, etc. Not only will MTV content/branding be prominent on Amp’d products, but Amp’d will become very visible on MTV Networks products. This obviously will include traditional advertising, but I’d also expect it to eventually include various product placements (“For winning today’s Real World/Road Rules Gauntlet, you win an Amp’d Mobile handset…”). The deal also has effectively blocked MTV from offering its own MVNO, since MTV now has an equity stake and board seat with Amp’d. Why compete against yourself?


And then there is the cash. The MTV deal includes an initial $50 million investment, and this is only the beginning. Amp’d already has a much larger financing set up, of which the MTV infusion is just an opening tranche. A secondary close is likely will occur within the next 30 days (which would include original backers like Highland Capital Partners, Columbia Capital, Redpoint, etc.). If it manages to close by year-end, expect Amp’d to jump from #7 to #3 in terms of the most VC dollars raised in 2005. This certainly will help with product rollout, which begins today. Oh, as an unrelated funding note, MTV Networks now has an Amp’d minority equity stake approximately equal to most of the Series A backers.”

Amp’d is certainly not in for the cheap – $67 million for a first round is not exactly nothing as they do not build any communications infrastructure but us an existing network.

zag.com with $9 Million round

image001

So you are planning to revolutionize the car retail market online which apparently has had little online/offline conversion so far. What you need to do - think big and spend some money!

And as testament to that you raise three rounds while still being in stealth mode:

“SANTA MONICA, Calif.–(BUSINESS WIRE)–Dec. 14, 2005–Capping off a successful year of fundraising, recruiting and business development, Zag (www.zag.com) announced today that the company has raised an additional $9 million in equity financing from a group of business and technology investors. Leading the round is GRP Partners, accompanied by Capital One Financial Corp., Anthem Ventures and Arcturus Capital as co-investors. This latest round brings Zag’s total financing to $32.7 million.

Zag is building an end-to-end online auto buying platform that will significantly improve the shopping and buying experience for customers, while providing a more efficient sales and fulfillment process for dealers. Zag provides this platform as a private-label turnkey solution to auto dealers and affinity buying groups.

Zag will support its growth by using the proceeds for ongoing development of its technology and services platform and for expansion of its national dealer network.

“This is a validating step for Zag, one that provides the financing necessary to finish building out the best technology and services solution currently available,” said Scott Painter, Zag founder and CEO. “Consumers and dealers are ready for a better experience — one that puts the customer in greater control of the process while enabling the dealer to focus on sales, rather than simply chasing Internet leads.”

Amazing!

Webshastra with $10 million round

logo

Interesting private equity investment by Warburg Pincus in solely India based web marketing firm Webshastra.“Webshastra aims to be India’s leading provider of online media advertising solutions to publishers, advertising agencies and advertisers. Headquartered in Bangalore, Webshastra would subsequently create an online media-buying vehicle for the advertising industry in India.

Webshastra plans to leverage technology and media expertise to unleash the power of the Web for branding, selling products and building relationship with customers. We hope to make advertising work on the web,” says Vinod Nambiar, managing director of Webshastra.”

There seems to be an extraordinary cash flow in the company. Warburg Pincus is also invested in Indian companies Rediff.com, indiamarkets.com, Bharti Televentures, HDFC, Nicholas Piramal and UTV.