E-Color Draws $24M Series B Deal

San Francisco-based E-Color Inc. struck green last week, closing on an oversubscribed $24.6 million Series B round of venture financing.

New investors Enterprise Partners and Reuters Greenhouse Fund led the deal with a $15.2 million commitment. Existing investors 2M Invest, Axiom Venture Partners, The Invus Group and FGII Ventures also participated in the funding.

To date, the provider of Internet color quality standards to e-commerce providers and Web portals has closed on approximately $34 million of private equity commitments. The company announced the close of a $9 million Preferred Series A deal in November.

At the time, investors handed the company a pre-money valuation of $31 million. The company would not disclose its current valuation. E-Color Chief Financial Officer Michael Choy said each of the existing investors increased their pro rata shares in the second round.

Founded in 1993, E-Color began shipping color enhancement products late the following year. The company was self-funded until its Series A round, just before it announced its first live customer Bloomingdales.com in December. Since then, as the company gained momentum and signed on additional retailers and hardware manufacturers, investors gained confidence in the product and upped the company’s valuation.

The latest equity infusion will propel the E-Color’s drive into new markets. It will add to its research and development efforts, hire a team of software engineers and build a dedicated sales force to support its newly opened New York and London offices. Currently, the company’s software applications target the online retailing efforts of the home, beauty and apparel sectors to preserve a product’s color on the Web.

E-Color hopes to leverage relationships with Reuters and Enterprise portfolio companies to expand its reach deeper into the b-to-c and b-to-b space.

“We’re really looking at increasing our revenues here, having a clear path to profitability, and setting ourselves up for a possible IPO,” Choy said.

He added that the company expects to tap the public markets for capital within the next nine to 18 months.