[July 24, 2007]

FreeWave's $113M investment leads U.S.

(Daily Camera (Boulder, CO) (KRT) Via Thomson Dialog NewsEdge) Jul. 24--For the second time in just over two years, a Boulder technology firm holds the honor of landing the largest investment in the country, according to a quarterly survey that tracks venture capital funding.

FreeWave Technologies bested other venture financings during the second quarter with a $113 million round, according to the Quarterly Venture Capital Report released Monday by Ernst & Young LLP and Dow Jones VentureOne. Twenty-seven months earlier, anti-spyware firm Webroot Software accomplished the same feat -- in the first quarter of 2005 -- after it received $108 million.

Including FreeWave's deal, nearly $285 million was invested in 22 Colorado companies during the quarter, showing up a lukewarm first quarter and bringing the total amount of venture-capital funding invested statewide this year to $392.9 million, only about $80 million shy of the $473.7 million invested in all of last year, according to the report.

Nationally, venture-capital investment continued its growth trend, with a recorded $7.4 billion invested during the second quarter. The amount of venture investments total $14.5 billion so far this year, the highest since 2001, when Colorado companies raked in $1 billion in venture funds, according to the report.

Colorado is well on its way to recording the highest annual dollar amount of venture financings in six years, said Mike Schoenfeld, Ernst & Young's venture-capital advisory group leader for the Rocky Mountain region.

"We're at the halfway mark, and if we continue this, we can far exceed any year going back to the bubble year of 2001," he said.

A blockbuster deal like FreeWave's could help make that happen, he said.

"It has a very positive effect on venture-capital raising," he said. "When (venture-capital firms) go out to raise funds, especially those that are housed and have their headquarters in Colorado, they have a much better story to tell."

The variety of companies that received investments is another testament to the state's investment-friendly environment, Schoenfeld said.

Other Boulder-area companies to receive investments during the quarter include:

--Me.dium, a Boulder developer of an Internet browser extension designed to create a social network, raised $15 million;

--Zolo Technologies, a Boulder-based maker of laser-based grating systems, raised $13 million;

--BaroFold, a Boulder company that has a technology to help produce and refold proteins, raised $12 million;

--Lijit Networks, a Louisville software firm focused on using a social network to enhance search, raised $3.3 million;

--and Umbria Communications, a Boulder-based market research provider, raised $2 million.

Now, more than a month after FreeWave Technologies announced its behemoth investment -- made by a private equity and buyout firm, Boston-based TA Associates -- it's still somewhat business as usual, said Colin Lippincott, the data communication radio maker's vice president of sales and marketing.

But that could change within the next couple of weeks when FreeWave, its investors, executives and employees will weigh in on the strategic direction of the company, he said.

"We'll examine a lot of the options before we make a choice," he said. "We're very conservative in our decision-making. We're going to consider lots of points of views."

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Copyright (c) 2007, Daily Camera, Boulder, Colo.
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