Proving that online b-to-b plays can still receive venture funding so long as they move their revenue model away from a reliance on Web site sponsorship, TechOnLine Inc. recently closed its Series C offering at $7.5 million. The Boston-based firm, which provides e-learning and education resources to the electronics community, has now raised a total of $19 million.
“We are evolving from a promotions and marketing model into a company where a lot of our revenue will come from private solutions we develop for high-tech companies in which we can help them educate and train sales forces, engineers, distributors and select customers,” said Amnon Aliphas, founder and vice chairman of TechOnLine. “This type of product is relatively resistant to market forces.”
Moreover, online education is both more convenient and cost-effective than the more traditional offline classroom approach. After all, why spend time and money on air travel, seminars and hotel bills when people can simply plug in a lesson from their home or work computer?
Finally, the third party TechOnLine approach helps companies maintain firewalls by not granting server access to clients or freelance engineers.
Indeed, it is the increasing popularity of Web-enabled technical education solutions that helped convince investors to participate in the Series C round. A pair of Safeguard Scientifics Inc. affiliate funds led the deal, with SCP Private Equity Partners pumping in $3 million and Churchill Investment Partners committing $1 million. SCP itself is in the midst of fund raising as its $600 million-targeted second fund has already secured over $500 million worth of commitments with one month to go in the offering process.
Additional participants included JB Partners, Templeton Direct Advisors and Andrew Viterbi, co-founder of Qualcomm Inc.
Proceeds from the deal will be used to help propel the issuer?s “private campus” business, as well as expand its engineering community-based Web site of industry information and industry information.
“Senior engineers need to be conversant with everything going on in the industry so it makes sense for there to be a central clearing house,” said Winston Churchill, managing partner of SCP Private Equity Partners and chief executive of Churchill Investment Partners. “TechOnLine acts as an honest broker for everyone in the business.”
The new funding will likely be the firm?s final foray into the private equity pond as TechOnLine expects to reach profitability in the fourth quarter. No initial public offering is currently in the works.
In related news, TechOnLine announced yesterday Derek Dunaway has been named its new chief executive. He comes to the company from Series A investor Selway LLC, and had previously worked with AppNet and PricewaterhouseCoopers.
Dan Primack can be contacted at Story Feedback.