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Venture Capital Drawn to Biotech-Related Firms

Southern California’s venture capital investments totaled $482.5 million for the second quarter, mostly in biotech-related companies, according to data compiled by the SoCalTech.com e-mail newsletter.


That’s a 15.4 percent increase from the $418 million logged in the like period a year earlier and a 69.8 percent increase from the first quarter of this year.


Leading the pack were San Diego’s Mission Ventures LLC and Domain Associates LLC, each making four biotech investments. Altogether there were 42 deals in the April-June period.


“The tech sector was growing so fast in the 1990s that many venture capital funds split up into a biotech/medical devices fund and a tech fund,” said Mariana Danilovic, managing director of Hollywood Portfolio LLC, a Pacific Palisades-based digital media incubator. “Tech funds were showing much greater returns at that time, but that’s changed over the past few years. Biotech is now going really strong.”


Danilovic said her firm has been involved in two new ventures in the biotech and life sciences arena so far this year, a departure from her usual digital media fare.



Posted Earnings


Online postage provider Stamps.com Inc.’s PhotoStamps program, which allows consumers to make custom stamps with their own images, has gotten lots of attention since being reintroduced in May.


But it’s the core product PC postage for offices that’s always brought in the most revenue. Now that software has been upgraded, giving customers the ability to send mail internationally and give delivery-time estimates.


In the first quarter, before PhotoStamps returned to the market, the plain-vanilla office product led to net income of $1.5 million, compared with a loss of $4.5 million in the year-ago period. Revenues jumped to $11.8 million from $7.6 million.


“We still expect our core business to be 90 percent of our revenues,” said Kyle Huebner, vice president of marketing and strategy.


In April, the company estimated that PhotoStamps would contribute $5 million of its estimated $65 million in revenues for 2005. Huebner said guidance is expected to be updated for PhotoStamps at the end of July, when it reports second quarter earnings.


An agreement already has been worked out to offer PhotoStamps through online photo service Snapfish (owned by Hewlett-Packard Co.), which claims 13 million customers.



Mouse Phone


The wireless phone service announced last week by Walt Disney Internet Group, the North Hollywood-based division of Walt Disney Co., will be focused squarely on Disney’s core customer base of families.


The partnership with Sprint Corp., called Disney Mobile, has done extensive research on what families want from plans. “It’s about more than just price plans,” said George Grobar, senior vice president and general manager of Disney Mobile. “We understand what we need to do.”


Disney Mobile will use the Sprint PCS wireless phone network, but Disney will handle billing, content and customer relations. Grobar said the company is in the design phase for a line of mobile phones tailored to the family. No word on which Disney characters will make the cut for their own phone.



*Staff reporter Hilary Potkewitz can be reached by phone at (323) 549-5225, ext. 226, or by e-mail at

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