In April we reported that San Francisco based mobile startup Kadoink was heading towards the deadpool. Not because they ran out of money, but because Hercules Technology Growth Capital, one of their backers, had seized the company and was shutting it down.
CEO Scott Cahill confirmed the shutdown yesterday in an email to investors, saying that Hercules had “foreclosed on its collateral and has sold the company’s intellectual property to a third party”:
Kadoink, a text messaging marketing startup based in San Francisco, has been seized by creditor Hercules Technology Growth Capital after failing to maintain the financial requirements of a $2.5 million line of credit. CEO Scott Cahill says that there is still a “substantial amount of cash remaining” that is being returned to Hercules, and that they are looking for a strategic buyer to keep the service alive.
The company has announced just $5 million in funding from Sutter Hill Ventures, but they may have burned through substantially more than that. There was rumored to be a previous angel round of nearly $2 million, and the founders took $3 million or so off the table in 2008. Sutter Hill may also have bridged the company an additional $2 million Along with the venture debt, the company may have raised as much as $14 million in capital. At this point, all equity holders other than the cashed-out founders are wiped out.
The startup provided text messaging based marketing services on behalf of brands, similar to competitor Mozes. We’ve added it to the deadpool.
I feel like today is Virtual World Day. We started off the morning covering the public beta launch of Vivaty, then Second Life and IBM announced that they bridged two virtual worlds, and Google launched its own version of virtual worlds with Lively.
If it seems like everybody is starting their own virtual world, it is because they are. A report put out today by Virtual Worlds Management tracks $161 million put into 14 virtual-world investments during the second quarter of 2008. In the first quarter there was even more activity, with $184 million put into 23 virtual worlds and supporting technology companies. That brings the total this year alone to $345 million across 37 deals. Some notable deals (you can see the full lists by clicking on the last two links above):
Second Quarter 2008
Grockit——————-MMO Learning Game——-$8 million——-Integral Capital and Benchmark
Nurien Software——–3D social networking——-$15 million——-Northern Light, Globespan, NEA
PrimeSense————-Gestural Interface———-$20.4 million—–Led by Canaan Partners
Realtime Worlds———-MMOG Developer———$50 million——–Maverick Capital, NEA
Stanford Parallel —-Parallel Processing————–$6 million——-Sun Microsystems, AMD, Nvidia, IBM,
Processing Lab for Virtual Worlds HP, and Intel
Turbine———————-MMOG——————-$40 million————–Time Warner and GGV Capital
First Quarter 2008
9You———–Virtual World/Casual Games——$100 million——–Temasek Holdings
Dizzywood —————Youth World————— $1 million——-Shelby Bonnie, Charles River Ventures
EveryScape————— Mirror World————–$7 million——–Dace, Draper Fisher Jurvetson
Fix8 ———————- Avatar Content————$2 million ——–SK Telecom
Gizmoz ——————- Avatar Creation ———- $6.5 million——-DoCoMo Capital, ngi group
iOpener ——————–Mixed Reality ————-$6 million———Triangle Venture Capital
Sparkplay Media——Casual MMO with Games—–$4.25 million—–Redpoint, Prism Ventureworks
Unisfair ——————–Virtual Events Platform—–$10 million——-Norwest, Sequoia Capital
