Jumping on the business-to-business venture train, The EC Company raised $6.5 million in its first institutional round of financing, and Chief Financial Officer Dave Warner said the company intends to raise $20 million in a second round financing in the next few months.
The Palo Alto, Calif.-based company provides outsourced back-end solutions to both e-commerce divisions of existing bricks-and-mortar retailers as well as enterprises conceived on the Web. This is the company’s first financing since reorganizing late last year.
Talkot Capital, a Sausalito, Calif.-based hedge fund that allocates 20% of its capital to early-stage venture deals, led the Series A round, which closed in September. Additional investors include Wasserstein Adelson Ventures, White Rock Capital and Invemed Associates.
Proceeds from the round will be used for sales and marketing and infrastructure costs, including maintaining its Internet-based electronic transaction exchange manager.
“While the digital marketplace is doing a wonderful job bringing buyers to purchase online, there is no electronic support on the back-end,” Warner said. “With our tools, transaction costs go down and there are less errors.”
The EC Company’s customers include Ace Hardware, Food Lion and Safeway.
“I used to be in the B-to-B world before there was such a thing as the Internet,” said Talkot Partner Steve Carnevale. “Now things are coming full circle, and this is the company we were looking for.”
Warner said the company is recruiting venture firms, strategic partners and investment banks to invest in its next round.