Straddling the categorical fence between pure start-up and tangible enterprise software provider, ListenPoint is expected to announce tomorrow that it has raised $7.4 million in its first round of institutional venture capital funding. The San Ramon, Calif.-based company was launched last year on its founders? financial bootstraps, but quickly proved itself adept at setting up meetings with potential Fortune 1000 customers and pushing its product planning solution into beta testing.
Sigma Partners led the deal with a $6 million commitment. The remainder was provided by wealthy individuals and company management.
“If you look at the amount they raised, it would have been hard to syndicate the deal,” said Mark Pine, a general partner with Sigma. “If the company had been a little earlier in its development I would have recommended taking more money and bringing on a couple more investors, but because [ListenPoint] has shown some customer traction and is on its way down the path, it made sense to do the deal the way we did.”
ListenPoint CEO and Co-Founder Scott Seaton added that the issue of signing on “smart money” was key, citing Pine?s executive experience with OnDisplay Inc. and Sybase Inc.
That operating know-how could prove invaluable to ListenPoint, which is hoping its software will be able to help enterprise marketing directors automate the array of surveys, visits, focus groups and support training sessions that are currently used to gather information about their customers? needs and opinions. More specifically, it helps corporations increase market acceptance by enabling all of its departments to get a comprehensive understanding of customer needs and requirements.
Steve Richard, ListenPoint co-founder and chief technical officer, said becoming customer-centric is essential to a company?s success, but that it is traditionally very hard to accomplish.
“One of the major companies we talked to about the issue said it had tried to do 5,000 customer visits last year with a marketing department of 50 people. That?s the story we heard over and over again, so we feel what we offer is really being considered a mission-critical need,” Richard said.
Seaton added that the ListenPoint solution should become increasingly important as product life cycles continue to shrink. “The first person to get to market has a shot at the largest market share, but they still need to be able to hit a bull?s-eye,” he said.
The company expects to complete testing and put its highly-customizable product on the open market near the end of Q1 2002. The Series A financing is expected to last for 18 months, although ListenPoint does plan to once again tap the venture market before that drop-dead date.
Dan Primack can be contacted at: Daniel.Primack@tfn.com