When is the enterprise software market coming back? Not anytime soon, says Gary Little, a general partner with Morgenthaler. He expects the sector to remain stagnant for a while, so there’s no use avoiding it, he says. Morgenthaler didn’t – it instead embraced the sector, by putting $6 million into Panscopic’s $10 million Series B round, which is expected to be announced today. The deal closed around Thanksgiving.
“Things are really not that bad,” Little says. “Some people are spending. Companies can indeed survive and even thrive right now.” Little took a board seat with the company.
The San Francisco-based company provides users with a self-serve platform for interactive reporting and analytics. “We’re a new player in business analytics. We analyze ad-hoc information for the masses. Your everyday people can have better data because of Panscopic,” says Al Campa, president and CEO of Panscopic. “Our system lets sales reps work much more effectively by accessing all a company’s data on a self-serve interface.”
Other than Morgenthaler, previous investors Doll Capital Management and Discovery Ventures came in for their pro-rata share this round. At roughly the same time of Panscopic’s founding in February 2001, Doll Capital and Discovery put $5 million into the company.
Proceeds from the Series B financing will be used to expand product development, sales, marketing and customer support operations. Panscopic is already shipping its product to six paid customers and is booking revenue, the company says.
The company has 23 employees and is expecting to grow that number this year. “With the new money we will recruit the best sales reps and really work on sales,” says Campa. He expects this round to be Panscopic’s last and that the company will reach breakeven next year – possibly even this year.
“We will be spending it conservatively based on the climate, but we should be able to break even,” he says. “Our next fund-raising effort will be an IPO – should the market come back.”
Little agrees that an IPO is in Panscopic’s future. “We wouldn’t invest in a company that’s only option is being acquired,” he says. “We expect Panscopic to be a standalone public company. That can take five to seven years, but we think it will happen.”
Campa says Panscopic’s main competition comes from corporations’ own information technology departments, which are trying to build their own solutions.
Actuate Corp., a publicly traded company with 2002 sales of $109.2, would be considered a competitor, but no one is doing exactly what we are,” contends Campa. Whether or not that’s true may not matter, because query and reporting is growing 22% per year, making it the largest and fastest growing segment in the total business analytics market, according to a 2002 IDC report.
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