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Seven X $42M

Wireless email startup Seven Networks Inc. is back on the VC trail again with $42 million in funding and a new CEO on its books, just a couple of years after it had originally plotted an IPO.

This new round of "expansion capital" is in line with some of the large chunks of change that Seven's rivals have pulled down lately. For instance, Seven's closest rival Visto Corp. has garnered over $230 million in 10 years of operation with its last round, in September, weighing in at $51 million. Visto recently won a patent infringement judgment against Seven, which the Redwood City, Calif.-based firm is currently appealing. (See Jury Vindicates Visto .)

Seven itself has so far raised at least $97 million -- and likely more since it never disclosed the total raised in its third round back at the end of 2004.

That was when the company decided against a planned IPO. The firm initially filed with the Securities and Exchange Commission (SEC) in March of 2004 but pulled the planned out of the planned float in favor of more VC lucre. (See Seven Plots $115M IPO and Seven Ducks Float.)

In that respect, Seven has been a pioneer in the industry, previewing the actions of other big VC draws such as Clearwire LLC (Nasdaq: CLWR), which also ducked out of a planned IPO in favor of more funding last year. (See Clearwire Nabs $900M, Nixes IPO.)

Seven now claims to be the second-largest mobile email firm in the world after BlackBerry citing an October 2006 UBS Research report as proof. It says that it now has 108 wireless carriers worldwide using its cellphone email system. Probably the best known in the U.S. is Sprint Corp. (NYSE: S)

Since the acquisition of Good Technology Inc. by Motorola Inc. (NYSE: MOT) the mobile email has become even more frenetic than usual. BlackBerry , Nokia Corp. (NYSE: NOK) (which acquired Intellisync in Nov. 2005), Microsoft Corp. (Nasdaq: MSFT), and Motorola are duking it out for a greater share of the enterprise email market that the BlackBerry currently dominates. Meanwhile, niche brands like Seven and Visto are trying to bring mobile email to the masses through systems that wireless carriers can brand as their own.

It is not surprising the market is so hotly contested. IDC has predicted that the worldwide market for mobile middleware -- software that enables legacy corporate systems, including email systems, to talk to mobile devices -- will climb to $1.4 billion a year by 2009, up from $535.9 million in 2004.

Certainly this is one of the reasons that additional funding is not so difficult for even relatively young mobile messaging and email startups to acquire. So it makes more sense for email firms to approach venture backers rather than brave the choppy waters of the IPO market for the moment. (See OZ Locks Down $34M.)

The firm's new CEO, Ross Bott, was formally on the company's board of directors. Kent Thexton, Seven’s current chief will assume the title of executive chairman. Bott was formerly the CEO of Onebox.com, another company started by Seven founder Bill Nyugen. Onebox was bought by Openwave Systems Inc. (Nasdaq: OPWV) in 2001 and Bott stayed on as COO.

— Dan Jones, Site Editor, Unstrung

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