Two Southeast Deals a Good Week Amid Weak Venture Market

RALEIGH … The quarterly MoneyTree Survey last week corrected pegged the odor coming from the technology industry of late: The venture capital market stinks.

The number of companies being funded and the dollars they’re raising are at levels not seen in five years or more … long before the Internet bubble ever inflated. Even with the lousy numbers out of the Southeast, Georgia and North Carolina ranked 11th and 14th nationally in the latest MoneyTree report … an indication of how putrid the market is across the country.

The two states closed one deal each in the past week. Durham-based MediaSpan Group of Durham nabbed another $4.5 million from existing investors as it completed a major acquisition and shuffled its management. Auctionworks of Atlanta obtained $2 million from an undisclosed source.

The two deals bring the Carolinas and Georgia to 29 for the year, totaling $235 million. That compares with more than $300 million in 43 deals at this point a year ago.

Here is LTW’s exclusive list, ranked according to the size of the deal, for the Carolinas and Georgia:

Company; Sector; Amount (Round)

1. New South Communications, Greenville, S.C.; Telecommunications; $63.5 million (NA)

Investors: Kohlberg Kravis Roberts, M/C Ventures, Quadrangle Group, Vaxa Corporate Partners and Wachovia Partners

2. TransTech Pharma, High Point, N.C.; Pharmaceutical; $24 million (2nd)

Investors: MacAndrews & Forbes (lead), Cephaton and Novo Nordisk A/S

3. Prenova, Atlanta; IT services; $15.5 million (3rd)

Investors Frontenac (lead) Austin Ventures and River Cities Capital Funds

4. Targacept, Winston-Salem, N.C.; Biotech; $14 million (2nd)

Investors: Nomura International Healthcare Private Equity Group (lead), Bison Capital, Cogene Biotech Ventures, JAFCO, Oxford Bioscience Partners and Rock Castle Ventures

5. STI Knowledge, Atlanta; Software; $14 million (1st)

Investors: Satish Sanan (individual lead) BV-Cornerstone Ventures and Mellon Ventures

6. nuBridges, Atlanta; Software; $11 million (2nd)

Investors: hf Flagship Investments (lead), C&B Capital, GMT Capital, Noro-Moseley, Tycho and Marie Hawle Foundation and individuals

7. Arsenal Digital Solutions, Cary, N.C.; IT services; $10.5 million (4th)

Investors: Covestco, Southeast Interactive Technology Funds and Southern Cross Capital

8. Ephinay, Charlotte; Services; $10 million (1st)

Investors: Chrys Capital

9. StemCo Biomedical, Durham; Biotech; $9.8 million (2nd)

Investors: Aurora Funds (co-lead), Intersouth Partners (co-lead), BD Ventures, Tall Oaks Capital and Trelys Venture Partners

10. OrthoNeuro, Charlotte; Medical; $8.5 million (NA)

Investors: New Enterprise Associates

11. Venetica, Charlotte; Software; $7 million (1st)

Investors: Charles River Ventures and General Catalyst Partners

12. Brickstream, Atlanta; Software; $6.2 million (1st)

Investors: Columbia Capital and Mohr Davidow Ventures

13. Lancope, Atlanta; IT Services; $5 million (2nd)

Investors: HIG Ventures and GMG Capital Partners

13. Oculan, Raleigh; Networking; $5 million (4th)

Investors: Soros Equity Partners

15. MediaSpan Group, Durham; IT services/software; $4.5 million (1st)

Investors: Covesco-Seteura, Rustic Canyon Group and Southeast Interactive Technology Funds

16. USA Staffing, Greensboro; Services; $4 million (NA)

Investors: Argosy Investment Partners II and Venture Capital Partners

17. Q1 Labs, Atlanta; Software; $3.3 million (1st)

Investors: Business Development Bank of Canada and New Brunswick Investment Management

18. Flexlight, Atlanta; Networking; $3 million (2nd)

Investors: Coral Ventures and Concord Ventures

18. Quellan, Atlanta; Hardware; $3 million (2nd)

Investors: Cordova Intellimedia Ventures, Greenspring Ventures, ITU Ventures, National Semiconductor, University Financing Foundation and Yamacraw Seed Capital Fund III

20. Qcept Technologies, Atlanta; Hardware; $2.1 million (NA)

Investors: Pittco Capital Partners (lead), Atlanta Technology Ventures and Bergman & Associates

21. Relativity Technologies, Cary, N.C.; Software; $2 million (4th)

Investors: Noro-Moseley Partners and Wakefield Group

21. AvidXchange, Charlotte; Software; $2 million (2nd)

Investors: Charlotte Angel Partners, Piedmont Angel Network and and individuals

23. Auctionworks, Atlanta; Software; $2 million (2nd)

Investors: Undisclosed

24. RSS Solutions, Greenville, N.C.; Software; $1.6 million (1st)

Investors: EdgeStone Capital Partners

25. LiveWire Logic, Morrisville, N.C.; Software; $1.5 million (3rd)

Investors: Gray Ventures and Research Triangle Ventures