Sunday, August 24, 2008

Big Tech Companies in New England: An Impossible Dream?

Last Sunday's column focuses (again) on New England's penchant for selling start-ups short rather than building what I call "pillar companies."

From the column:

    Maybe I'm a glass-half-empty sort. Maybe I refuse to acknowledge the reality of the financial markets, and the need for entrepreneurs to deliver a return for their investors within a reasonable time.

    But I can't help feeling that, whenever a New England company is sold to an out-of-state acquirer for big bucks, we've missed another chance to build a "pillar" company of our own.

    When Dell Inc. pays $1.4 billion in cash for New Hampshire's EqualLogic Inc. this year after the storage start-up had filed to go public, it feels as if we've missed the opportunity to cultivate another EMC Corp. in our backyard. When VeriSign Inc. buys m-Qube Inc., one of the pioneers of content delivery to cellphones, for $250 million, that's a potentially significant anchor tenant we've lost for the mobile software com munity here. When Microsoft Corp. buys Softricity Inc., that's a pioneer in application virtualization - delivering software over a network connection - no longer seen as a leading player in the field, and headquartered right here in Boston to boot.

The column includes a chart of some recent acquisitions by out-of-state buyers, and also a video from the recent Y Combinator "Demo Day," where fledgling start-ups show their stuff.

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Wednesday, February 13, 2008

Same Story, Ten Years Later?

Some historical parallelism struck me this morning as I was thinking about yesterday's acquisition of Maven Networks by Yahoo, for $160 million.

Almost ten years ago, Maven founder and CEO Hilmi Ozguc sold an earlier company, Narrative Communications, to @home Corp. Narrative harnessed new technologies, like animated and interactive banners, to make ads more compelling; Maven focuses on delivering video, and integrating advertising into it.

The purchase price of Narrative was $89 million (in stock).

Around that time, the Web portal Excite was in play, and the two suitors were Yahoo and @home. (Running Excite at the time was George Bell, now a partner with General Catalyst, the Cambridge venture capital firm that originally backed Maven.) @home, which had just bought Narrative, prevailed, and the merger took place in early 1999. It's now widely considered one of the worst combinations of the dot-com era. The newly-renamed Excite@Home saw its stock plummet, and declared bankruptcy in October 2001.

Kind of interesting, don't you think, that the latest acquirer of a Hilmi Ozguc start-up, Yahoo, is also in the thick of some merger discussions of it's own...

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Friday, December 21, 2007

SideStep, Kayak Get Over It and Get Hitched

Kayak, the "meta" travel search site based in Concord, MA and Norwalk, CT, is merging with SideStep, based in Santa Clara, CA, according to GigaOM and Kayak co-founder Paul English. From the Wall Street Journal report:

    Analysts aren't convinced the deal will greatly benefit consumers -- or Kayak. The market appears to have plateaued, says Henry Harteveldt, an analyst with Forrester Research Inc., noting that 12% to 15% of online leisure travelers use meta sites, roughly the same share as in 2006.

I wrote about the two companies two years back, when SideStep founder Brian Barth told me about some fishy meetings he'd had at General Catalyst while that firm was incubating Kayak.

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Wednesday, October 31, 2007

Zipcar and Flexcar merge

Cambridge-based Zipcar is merging with Seattle-based Flexcar. Scott Griffith, CEO of Zipcar, will stay on as CEO -- and they'll keep the Zipcar name.

From the San Francisco Chronicle::

    In addition to San Francisco and Washington, Zipcar operates in New York, Boston, Chicago, Vancouver, Toronto and London. Flexcar locations include Seattle, Portland, Ore., Los Angeles, San Diego, Atlanta and Pittsburgh. Both companies also provide car sharing on dozens of college campuses.

There's also a story in the Globe that notes that the new Zipcar will have 5000 cars in its fleet.

Also a short item in the Boston Business Journal.

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Monday, October 22, 2007

Una Ryan's Biotech Co. to Merge with NJ Company

Avant Immunotherapeutics, the Needham vaccine developer run by Una Ryan, a former chair of the Mass Biotech Council, is merging with a New Jersey company called Celldex Therapeutics. From CNN Money:

    Following completion of the transaction, Avant shareholders will own 42% of the combined company and Celldex shareholders will own the remaining 58% on a fully diluted basis.

    Avant, which plans to effect a reverse stock split as part of the deal in order to maintain its Nasdaq listing, expects the transaction to close in the first quarter of fiscal 2008.

    The combined company is in the process of developing a number of products, including vaccines for cholera and Salmonella typhi, the cause of typhoid fever, as well as a brain cancer immunotherapy. It will also have a commercialized product, Rotarix, an oral vaccine developed in collaboration with GlaxoSmithKline. (NYSE:GSK)

Here's the official press release and Webcast about the deal. Ryan remains CEO. Sounds like Celldex's vaccines will now be manufactured at Avant's facility in Fall River, MA.

In August, Avant received a delisting notice from Nasdaq, when its market value fell below $50 million.

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