FirstRain Inc. recently rolled into New York with a little thunder behind it. The company, which develops software that enables employees to customize the information they access online, has locked up $11 million in its first round of institutional financing.
FirstRain originally sought just $8 million to fund its next stage of growth, but decided to raise the extra capital in order to beef up its business, due in part to feedback it had received from customers and investors.
“They all felt a more aggressive model was in order. With this current climate, we decided to take the extra money, which leaves us in a strong position when we look for our next round,” said Gaurav Rewari, firstRain’s founder and chief executive.
Its latest venture infusion is slated to finance the further development of its software technology and help usher its first products to market this fall. The company is expected to hit the venture capital campaign trail again next summer, as its business plan calls for additional capital to fuel its expansion into new countries and ramp up its workforce, he added.
A Do-It-Yourselfer’s Dream
FirstRain’s customer sweet spot is any Fortune 2000 company “looking to improve the quality of work conditions for its workers,” Rewari said. “These portals would be alive on workers’ desktops, pulling together snippets of relevant information.”
Similar to myYahoo!, firstRain’s software enables employees to obtain customized information from the Internet or their company’s intranet based on their individual preferences. However, instead of having to execute exhaustive Internet searches or scroll through their company’s entire intranet site to find what they’re looking for, employees can download specific information onto their desktops.
For example, one employee may choose to have a ticker providing analyst reports and company stock information running continuously on his desktop, while another may only opt for alerts that pop up only when his employer’s stock reaches a certain price.
“There have been many promises of a single dashboard, but many of the systems that are already built are brittle in the face of change. We have changed all of that. You can visually select just the snippets you need without anyone’s help,” said Rewari.
Allegra Partners and Diamondhead Ventures co-led the Series A transaction. Although Allegra’s $4 million contribution was slightly larger than Diamondhead’s $3 million input, both VC firms put their two cents worth into the term sheet.
St. Paul Venture Capital and Myriad Investments also participated in the round.
Previously, firstRain had raised $2.3 million in seed money from individual investors to develop its core technology.
Rick Smith, a managing partner at Allegra, said the company’s main goal is to be a profitable business, a milestone he expects firstRain to reach in about 18 months.
If all goes as planned, the company may entertain a possible initial public offering sometime in 2003, he added.
“The market will be back by then,” he said. “Actually, there is an IPO marketplace today if you have a viable company. FirstRain has unique technology and the quality to think about a IPO in a few years.”
In related news, the company also announced that it recently signed on Steven Walske as its chairman. Prior to joining firstRain, Walske was CEO at Parametric Technology Corp.
In his current role, Walske will head up firstRain’s board of directors, which in addition to Allegra’s Smith, also includes Raman Khanna, a managing director at Diamondhead Ventures and Jennifer Smith, a general partner at Myriad Investments. St. Paul Venture Capital’s Jim Simons will also participate on the board as an observer. All received board seats as a result of the financing.
Danielle Fugazy can be contacted at:Danielle.Fugazy@tfn.com