TechTarget announced it raised a $70 million Series B last week to help it expand through acquisition in Europe and Asia. Technology Crossover Ventures (TCV) and Polaris Venture Partners funded the round with $50 million and $20 million, respectively.
TechTarget operates a network of conferences, magazines and Web sites. It’s bread and butter is targeted advertising aimed at IT professionals, who research products on the Internet.
The Needham, Mass.-based company was founded in 1999 and raised $12 million in seed funding that year. Polaris led the company’s $30 million Series A round in 2001 and TechTarget raised a small $1 million Series A extension last year, which was used to finance its acquisition of Information Security Magazine. TechTarget’s recent $70 million funding is expected to fuel more acquisitions like this.
Greg Strakosch, TechTarget’s CEO, says that the greatest opportunity now is in the online advertising space. He notes that a growing number of people go online to research their purchases before they buy. This is particularly true with large IT purchases, he says, and that this is where much of TechTarget’s future opportunity lies.
Strakosch declined to disclose the post-money valuation of the round, but said it was “a public company valuation” that was “way over $100 million.” TCV founding general partner Jay Hoag, who has joined the company’s board of directors, confirmed that the valuation was close to the $200 million mark.
The post-money valuation of the Series A round in 2001 was $57 million, according to Thomson Venture Economics (publisher of PE Week). Strakosch confirmed a Wall Street Journal report that lists TCV’s share in the company as 28% and Polaris’ stake as 25%. The CEO said that TCV was the company’s choice of a new investor because of its technology expertise and the fact that it is TechTarget’s first West Coast investor.
TechTarget boasts 1,500 advertisers and Strakosch expects the company to bring in $50 million in revenue this year, up from $33 million last year. The company has reportedly been profitable since early 2002.
Strakosch expects staff to grow modestly from 275 now to about 300 by the end of the year.
The company will use the recent funding for expansion by acquiring media companies in the IT space and recently announced an aggressive expansion into Asia through partnerships with China’s ChinaByte and Taiwan’s New Era International. The company says it expects to make multiple announcements over the next 12 months in Europe and Asia.