Rebounding from last year’s pulled initial public offering, Intralinks Inc. last week used its own digital workspace platform to secure $40 million worth of venture capital financing. The oversubscribed Series F deal was originally launched as a $10 million bridge loan last October, but was quickly expanded as it became obvious that the IPO window was unlikely to open any time soon.
Rho Ventures led the deal and was joined by fellow new investors Soros Private Equity Partners, Emigrant Capital Corp. and Lago Ventures. Existing backers Patricof & Co. Ventures, Reuters Group and Euclid Partners also participated, but on the initial $10 million tranche.
“An IPO is still in the cards at some point, but we felt that another private round was needed at this point due to current market conditions,” said Joseph Simon, chief financial officer with Intralinks.
As for the present, the New York-based firm is concentrating on building up its revenue stream by pitching its Web-enabled financial services beyond its Wall Street base and out to the insurance, health-care and legal markets. Successfully penetrating such markets may prove vital when Intralinks restarts conversations with underwriters.
“Right now the Intralinks solution is being used by [all] 10 of the largest banks that do syndicated loans,” said Thomas Courtney Jr., managing director with Emigrant Capital. “Once a company like this starts to take over a vertical market, it’s very hard to dislodge them.”
One such market could eventually prove to be venture capital itself. A number of venture firms are already on record as preferring the Intralinks technology to traditional FedEx-based due diligence, including some of those involved on the Series F deal.
“We loved it, we were able to get the due diligence done in half the normal time because whenever we needed to get a document or revise one we were able to do so almost instantaneously,” Emigrant’s Courtney said.
Another investor involved on the deal said he doubts the transaction would have even closed yet if the Intralink’s system had not been employed.
“It’s one thing to invest in technologies that you know you will use someday,” he said. “It’s quite another to invest in something you can use today.”
Dan Primack can be contacted at Story Feedback.