Investors Follow $10M Deal Lead

Intent on expanding the focus of an emerging consumer-to-business marketplace that has, to date, been mostly concentrating on a handful of niche industries, goRefer.com recently netted $10 million from its first round of venture capital fundraising.

Apax-Patricof led the online sales lead aggregator’s Series A financing with a $3 million investment. Polaris Venture Partners and Star Venture Management each contributed $2.5 million. The balance of the offering came from additional participants Wolfson Group and the three founding partners of Check Point Software Technologies Ltd.

“The whole round happened in stages,” said Gil Levi, chief executive and co-founder of goRefer.com. “Four months ago, we closed an initial round of $2 million [from Apex-Patricof], and I had wanted to keep it close to the $3 million to $4 million range, but it just kept going up and up because it’s so hard to refuse top tier funds offering you capital.”

The New York-based issuer operates a Web site where people can provide almost any type of purchasing lead information in exchange for a nominal fee of $2 to $25 depending on the particular lead’s objective value. The company then passes the information onto registered vendors and merchants within the goRefer.com network who attempt to make the sale.

In other words, if a person hears that his company is looking for new office desks, he enters that information into the goRefer.com Web site and receives cash, whether or not the lead results in a sale.

“People are frequently hearing about purchase intentions of businesses, whether through work or other relationships, and this information is valuable to many people but usually goes unused,” Levi said.

He added that goRefer.com has created an intricate technical system to help ensure lead quality. Indeed, people that provide uncredible information will be prevented from future system access. Conversely, people with strong track records may be rewarded with increased finder’s fees.

Proceeds from the transaction will be used for product development and marketing. D.P.