Hello, Boston: Our capital is here to stay.

Hello, Boston. Thanks for the business.

As you may have heard, we’ve been spending time in the U.S. over the past few months for a bunch of obvious reasons.  U.S. VCs have been particularly welcoming of our team. The questions we get from them are appropriate and straightforward:

• what vintage is your fund?
• do you use leverage from outside lenders to provide financing to our portfolio companies?
• do you outsource any of your due dili?
• do you close on your original terms?
• send us some references from prior deals…. 

Our first Fund III financing for a U.S. headquartered firm closed last summer, when we provided WatchGuard Technologies of Seattle, Washington US$7.9 million to help finance its acquisition of BorderWare. WatchGuard is backed by Vector Capital and Francisco Partners. Then we opened up our California office in November, and Eric Speer has already issued a term sheet for a very cool VC-backed tech company based in the Los Angeles area.

Our second Fund III U.S. deal closed just before the end of 2009, and was press released earlier today: a US$5 million growth / working capital combo financing for VC-backed Ember Technologies of Boston, Mass.

Ember is our latest in a series of “green economy” deals. Ember’s smart grid solutions are on the leading edge of next generation wireless, low power mesh networking technologies.  Ember’s ZigBee networking systems – CMOS wireless semiconductors, ZigBee protocol software and tools – are extensively used in the smart grid – smart meters, home area networks (HANs) and automatic meter reading applications.  These applications enable consumers, utilities and businesses in better managing energy resources, saving costs and reducing carbon footprint.

With this new capital, Ember can focus on the global opportunity that is represented by the smart grid. And we’re honoured to join existing investors Polaris Ventures, Grand Banks Capital, RRE Ventures, Vulcan Capital, DFJ ePlanet Ventures and New Atlantic Ventures. Craig Netterfield has been particularly focused on the Boston area, and this deal is just the first of many we expect to close during 2010.

Congrats to all.  We appreciate the confidence shown in our firm by the Ember management team and its Board of Directors.

MRM