The Phoenix Business Journal is the No. 1 source in Arizona for business news and information, publishing a new edition in print every week, and a website with live updates on breaking news and trends.  The article focused on Arkayne’s fundraising efforts, and how most of our investments came at a time “where little to no venture capital or angel investing was going on in Arizona.” You can read the article in its entirety below:

Arkayne Inc. has received $1 million in angel funds, bucking the trend of technology startups struggling to find capital during the recession.

With help from the Arizona Technology Investor Forum, the Scottsdale company raised about 80 percent of the funds from in-state sources. The money will help the fledgling interactive marketing agency as it looks to link Web pages via a social network.

“I’m a Silicon Valley and New York guy, but we wanted to do this locally,” said Arkayne CEO Nicholas Aretakis. “I’ve been involved with ATIF, and the talk has been about getting investment locally.”

The company went looking for financing last spring, just as the market bottomed out. Officials secured about $250,000 from investors at ATIF and got the rest through other angels.

Arkayne may have been at the leading edge as other, more polished deals come through the pipeline, said Paul Winandy, executive director of ATIF.

“With the drop in (venture capital) funding for seed/early-stage ventures, we are seeing true Series A-level deals,” he said. “So Arkayne was good, but it was pre-revenue and still building its technology. The bet was on the Arkayne team, very strong, and the market growing rapidly.”

That money came during a stretch where little to no venture capital or angel investing was going on in Arizona because of the national financial meltdown.

About $116 million went into VC deals in 2009, but angel funding statistics are much more difficult to track.

“I think even if you had the best business plan, it was still difficult to raise money in late 2008 and early 2009,” Aretakis said.

Arkayne’s focus is developing technology to interweave Web pages to create a network similar to online social networks. The company’s software was developed by founder and Chief Technology Officer Paul Kenjora and a handful of other designers. It allows users to link blogs and social postings to other blogs, social networks and sites to drive page views and content consumption.

The company has an application for bloggers and now is focusing on large companies to help them create better brand awareness and drive traffic to their Web sites, Aretakis said.

That niche may be a good one as more companies invest in their online presence.

For the first time, U.S. companies are expected to spend more this year on online marketing (about $119 billion) than on print media ($111 billion), according to Outsell Inc., a consulting firm based in Burlingame, Calif.

Arkayne’s commercial project launched in October. Aretakis said it takes two to four months to get a network built, so the first efforts are just starting to come online. Arkayne is expected to start developing revenue streams this month, and to be profitable by the end of the third quarter.

The investors probably will fund Arkayne’s operation and growth through this year. Aretakis said the company may begin looking at a Series A offering in the third quarter. Officials would like to keep it Arizona-based, though he said that offering may include out-of-state investments.

http://www.bizjournals.com/

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