BlueRun Ventures preps fourth fund

BlueRun Ventures, formerly the corporate venture arm of cell phone company Nokia Corp. (NYSE: NOK), is about to launch a $350 million fund-raising drive for its second independent fund.

The fund’s target is slightly higher than its previous $315 million fund, which was raised in 2005, but smaller than its vintage 2000 fund, which weighed in at $500 million.

Previously known as Nokia Venture Partners, BlueRun moved away from Nokia three years ago when the phone maker launched a growth fund called Nokia Growth Partners. The growth fund continues to share offices with BlueRun in Menlo Park, Calif., and manages $200 million in assets, split across a late stage fund and a fund of funds focused on early stage firms.

Although BlueRun has dropped the Nokia name, it kept the Finnish company as its largest limited partner in its third fund, which also raised money from BMC Software, CDBWebTech and Goldman Sachs Group. It’s believed that Nokia will also invest in the new fund the firm is about to raise.

BlueRun has backed several startups that have recently either went defunct or sold for undisclosed amounts. The most notable failure was SunRocket. The Vienna, Va.-based Internet telephony company shut down in July, three years after it was launched. The company raised about $80 million in venture funding from BlueRun and other investors starting in 2004.

Among the firm’s exits has been Bitfone Corp., which Hewlett-Packard Co. (NYSE: HPQ) bought for an undisclosed amount in December 2006. Bitfone, a Laguna Niguel, Calif.-based provider of mobile device management software, raised more than $86 million from BlueRun and others.

Another portfolio company, WLAN technology provider Airgo Networks Inc., was sold to Qualcomm Inc. (Nasdaq: QCOM) for an undisclosed amount in December 2006. Airgo had raised about $144 million in VC funding from BlueRun, Accel Partners, OVP Venture Partners, Oak Investment Partners and Sevin Rosen Funds.

BlueRun has had a few liquidity events this year. The firm sold laser networking company Apogee Photonics to CyOptics for an undisclosed amount in March. Apogee had previously raised about $53 million in funding. Also, Nokia agreed to buy mobile advertising and marketing company Enpocket for an undisclosed amount in September. Enpocket had raised $17.5 million in VC since mid-2002. Another portfolio company, Internet acceleration developer Netli, was bought by Akamai (Nasdaq: AKAM) for 3.2 million shares of stock valued at $177 million as of last February. Netli had previously raised $47 million in venture funding.

BlueRun has bolstered its investment staff of late. It added Sash Mirchandani as a senior investment director this summer to focus on consumer, mobile, media, entertainment and services investments out of Mumbai, India. And in October, the firm announced that William Qu and Mike Ding had joined as investment directors focused on new media, wireless and consumer services investments in China. —Alexander Haislip