Armed with a distribution agreement with Microsoft Corp. to provide business planning software for more than 75 enterprises, Pacific Edge Software Inc. of Kirkland, Wash., raised $6 million in its first round of venture financing.
The Series A round was led by two funds managed by Northwest Venture Associates, and also received investments from Fluke Venture Partners and Matthew G. Norton Co. Incorporated in January 1998, Pacific Edge had previously been funded with founders’ capital and through sales of its software.
“It is better to go after money when you don’t need it,” said Chief Executive Lisa Hjorten. “Our industry is growing too quickly to for us to continue to build off cash flow.”
Pacific Edge sells software to companies of all sizes, from Fortune 500 companies like Microsoft, BellSouth and Bank of America, to small businesses with as few as five employees.
Proceeds from the investment will primarily target sales and marketing, product development and continued distribution relationships with Microsoft and other software developers. Pacific Edge plans to grow to 65 from 40 employees by the end of the year.
Hjorten said the company’s primary competition comes from in-house office management software developed by its potential customers.
“Our product is scalable and is easily configured to a company’s own requirements,” she said. “Providing lead integration with Microsoft is no small feat, most companies cannot provide this application.”
She added that Pacific Edge currently has no plans for future venture financing.
“Pacific Edge came to me in the early stages of developing its product, but was not ready for institutional funding,” said Northwest General Partner Tom Simpson. “They have hit every one of the milestones they outlined for me more than one-and-a-half years ago.”
As part of the deal, Simpson joined the company’s board of directors. Simpson invested through the $34 million Northwest Venture Partners II and $6 million Inland Northwest Investors funds. The funds invest between $250,000 and $2.5 million in seed and early-stage investment opportunities in Northwest-based companies from all industries.