Now this is due diligence. In the process of closing its latest round of venture financing, Cambridge, Mass.-based Instinctive Technology Inc., and its venture backers employed the company’s collaborative software, eRoom, to ease the closing process.
“With our attorneys in New York and theirs in Boston, we used eRoom for the closing process,” said Alex Rogers, associate at HarbourVest Partners, the round’s lead investor.
Rogers added that analysts as well as current and prospective Instinctive customers said globalization is driving the need for collaboration software, which Instinctive’s product addresses.
Instinctive raised $16 million in the Aug. 31 round that included Credit Suisse Capital and Essex Investments, as well as Boston-based HarbourVest, said Jeffrey Beir, Instinctive’s founder, president and chief executive. Each existing investor also participated in the financing, including New Enterprise Associates, Atlas Venture and first round investors Matrix Partners and North Bridge Venture Partners. Since its formation in 1996, Instinctive has raised $30 million in venture capital.
“Proceeds from this round will predominantly go into increased market presence in the U.S. and international markets,” Beir said. “We will also invest on engineering, but the goal of the round is to ramp revenue in anticipation of an IPO sometime next year.”
Currently in the fourth release, eRoom emanated from Beir’s frustration at the inability to expedite projects, while working at Lotus. Originally conceived as a product that could tie businesses together through e-commerce, in the course of development Beir identified the opportunity to put the service in the control of end users.
A Web-based application, eRoom serves as a portal for the management of every aspect of a distributed project. Residing on a server within either an enterprise or an Internet service provider, eRoom enables project participants to access the information from any location.
“This is becoming a must for the companies we are targeting, because it lets project teams expand quickly,” Beir said. “That is the value proposition that is gaining attention.”
Instinctive has primarily targeted consulting and technology companies as customers and has contracted with more than 200, including 3Com, A.T. Kearney, Diamond Technology Partners, KPMG and Pfizer.