General Magic Inc has raised another round of funding ahead of its July 30 release of Portico, its value-added network service, on which the company’s future is pinned. Portico enables users to access, retrieve and redistribute voicemail, e-mail, address book and calendar information, as well as news via the company’s magicTalk voice user interface using any phone. The new money will be used to further develop the service. The Sunnyvale, California company, which attracted a $6m investment from Microsoft Corp for an almost 12% stake, completed a $5m private placement soon after that. This time, it has raised a total of $35m through two financing deals with investment funds managed by the Palladin Group LP, Rose Glen Capital Management LP and Promethian Investments Group LLC. First off, General Magic agreed to sell those companies $30m of preferred convertible series C stock, which can be converted into common stock at 135% of the market price at the time of closing, or at a price of the common stock prior to conversion, whichever is less. The series C stock is convertible after a five month period – the idea being that the stock will have risen more than 35% by then. The same investors will exercise their right to convert their series B stock from a March arrangement, to the tune of $2m. They will also get 150,000 three-year warrants and 160,000 five-year warrants to purchase more shares at an unknown premium to the stock price at the time of issue. The other $3m comes from Silicon Valley Bank’s Software Capital Practice Group.
