Outsourcer Dials Up $4.8M

Not every American company is racing to capitalize on lower labor costs by exporting and outsourcing customer service functions to India and other parts of South Asia.

In fact, one company hopes to offer an alternative to sending so many jobs overseas. Alpine Access, which manages outsourced customer service functions through telephone representatives, last week got a boost in its cause with a $4.8 million venture investment.

Stolberg Equity Partners led the round. Other investors included 5280 Partners and Holden Capital. The funding included a recapitalization and while it was the fifth round of venture funding the company has received, the deal is classified as a Series 3 round by Alpine and its investors. It is a slightly down round with a post-money valuation of about $11 million and brings the company’s total funding raised to date to between $16 million and $17 million.

Unlike the growing number of competitors who base operations in India, Alpine Access uses a network of 3,000 part-time, home-based employees in the United States.

Chairman and CEO Reg Foster says that Alpine Access’s principal advantage over offshore BPO companies is the quality of its customer service workers, who it calls agents. He says the typical customer service agent is a suburban mother working from home. According to the company, about two-thirds of Alpine’s agents are college educated and two-thirds are over the age of 34.

The Golden, Colo.-based company, which was cash flow positive in Q4 2003, decided it needed to raise money due to rapid expansion. Alpine doubled the number of clients it served last year. Starting this quarter, the company will count the U.S. Internal Revenue Service as a client and begin a pilot program with a large retailer. Current clients include 1-800-Flowers and Pizza Hut.

U.S. venture capitalists put over $2.89 billion into BPO companies in 2002 and over $783 million into the space in the first half of 2003, according to Thomson Venture Economics (publisher of P.E. Week).

Among Alpine’s competitors are Pembroke Pines, Fla.-based Willow CSN, whose backers are Easton Hunt Capital Partners, Gemini Investors and Hunt Capital Group.