Gilde Investment Management made five investments totalling $10 million (ecu 9.2 million) in the business applications and Internet sectors between October and February.
According to Gilde, the five investments reflect the group’s “underlying vision of investing in companies that have the potential to dramatically change the effectiveness of the core business processes of their customers by delivering product differentiation and business intelligence – a strong departure from IT’s traditional role in merely improving the efficiency of existing back-office operations”.
The five companies backed are: Customer Dialogue Systems (CDS) of Belgium; SLP InfoWare of France; Riverton Software Corporation and Live Picture of the US; and Data Distilleries of the Netherlands.
The Gilde IT Fund led the fundings for CDS and Data Distilleries. CDS develops applications for the financial services market that are bringing the Virtual Financial Institution one step closer. Globally, the sales process for financial products is growing ever more complex and, in terms of liability, dangerous. The company has developed an interactive software package, Customer Dialogue Assistant (CDA), an intelligent tool which supports and in some cases automates the on-to-one marketing of financial products, ensuring that each dialogue is based on the profile, needs and concerns of the customer. CDS’s turnover leapt from $1.7 million in 1996 to $3.5 million in 1997, and sales of $8.5 million are forecast for the current year. Together, the Gilde IT Fund and Advanced Technology Ventures of the US provided funding of $4.5 million to support CDS’s rapid growth and further internationalisation.
The Gilde IT Fund invested DFl 2.5 million (ecu 1.1 million) in Data Distilleries, which has established itself as the Netherlands’ leading provider of data-mining solutions in the two years since it spun out from the Dutch National Centre for Mathematics and Computer Science. The company’s range encompasses both consulting services and software. Its core business is the development and marketing of Data Surveyor, a flexible data-mining tool based on the company’s data surveying methodology. Data Distilleries was selected as one of Tandem Computers Corporate’s five vendors for its worldwide object relational data-mining programme, while Oracle Corporate chose Data Distilleries as the first data-mining vendor to have its technology embedded in the new Oracle8 release.
The investment in Live Picture was co-led with Partcom and totalled $3 million. Live Picture, which recently merged with RealSpace, develops and markets software for creating Internet graphics. The company is a pioneer in the development of open standard file formats and imaging protocols for presenting high-resolution images over low bandwidth network connections. It developed the FlashPix file format and Internet Imaging Protocol in partnership with Eastman Kodak, Hewlett Packard and Microsoft. Its product range, which includes image servers, photo imaging software and image viewers, is based around these emerging open standards.
Gilde IT’s investment in SLP InfoWare as part of a $2 million funding round was co-led with a group of private investors. SLP InfoWare provides data-mining-enabled customer retention applications, principally for the telecoms industry. Its Churn/CPS application is designed to combat churn while at the same time enabling organisations to increase the value of their clients through efficient intervention actions and individually tailored marketing campaigns. The company was founded in 1989 and has offices in Paris and Chicago.
For its investment in Riverton Software Corporation, Gilde IT Fund followed OneLiberty Ventures of the US. Massachusetts-based Riverton Software is a leading provider of component-oriented development technology for business applications. It provides tools for component-based development which run on popular platforms such as Visual Basic, Java and PowerBuilder and enable users to built Internet and n-tier, multi-platform client/server applications with their existing developer population. Now two years old, Riverton began shipping its flagship product, HOW, a component modelling tool and deployment framework for building applications from reusable components, in January 1997.
Toon den Heijer of Gilde reported that these five most recent investments take the $100 million Gilde IT Fund to around 40% invested. The IT fund absorbed Gilde’s IT portfolio at the time of the merger into Rabobank in 1996 (EVCJ August/September 1996, page 4); since then, it has made new investments totalling some $25 million. Toon den Heijer confirmed that both the quality and volume of European IT investment proposals has improved vastly over the past couple of years.