Liberate Forms $50M Venture Fund

SAN CARLOS, CALIF. -Liberate Technologies Inc. said it has formed a $50 million venture capital fund, which it will use to invest in other interactive television companies.

Liberate launched the fund, called the Liberate Corporate Venture Fund, with a $7 million investment in Two Way TV. That company creates interactive TV games such as arcade games, trivia challenges, word puzzles and observational games.

The fund has $43 million left for investments in other ITV companies, a spokesman said.

Liberate has invested previously in ITV companies, including ICE Interactive Ltd., Diva Systems Corp. and Everypath Inc.

Liberate will take minority stakes in developing, privately held companies that are in the mid-to-late stages of financing, have exceptional management teams with proven records and have developed proven technology, the company said in a prepared statement.

The company will co-invest with other top-tier venture capital funds and, in most cases, will not seek a seat on a company's board of directors. The sizes of the investments will generally run between 15 percent and 25 percent of any given financing event, the company said.

Liberate also plans to enter into strategic relationships with each company it invests in. Specifically, Liberate said it would work closely to further develop and integrate those companies' ITV applications and technologies with its platform, technologies and products. The company also plans to guide its investment partners in and participate in co-marketing activities such as joint press releases and joint trade-show participation.

"In creating the Liberate Corporate Venture Fund, we are building on our momentum as the leader in the interactive TV market," Liberate CEO Mitchell Kertzman said in a statement. "We have the proven know-how to identify all of the critical technologies and companies that will propel interactive television into the mainstream."