Big solutions to three-letter acronyms are becoming more and more popular within the venture capital community. Last week, Metastorm Inc., whose flagship e-work product is a software platform for business process management(BPM), secured $20 million.
“I am so glad we managed to avoid the collapse. This is a dramatic time to produce money,” said Brian McPhee, Metastorm?s vice president of marketing.
The Series B deal, agented by CIBC World Markets, was led by UBS Capital Americas II with additional participation from Ironside Ventures and existing backer 3i Group. Lawrence Handen, a partner at UBS Capital Americas, joined the board, which now has seven directors. According to Boston-based AMR Research, the BPM market is expected to reach $800 million this year.
The Severna Park, Md.-based issuer claims e-work allows organizations to achieve their objectives by simplifying, automating and integrating people, processes and systems.
Many of Metastorm?s current customers are government offices, such as the Maryland Department of Justice and The Small Business Administration, although the company also touts household name clients including Disney, Wilmington Trust, British Telecom, FIAT and Cornell University.
After closing the slightly oversubscribed round, Metastorm?s game plan is to reach profitability by the end of the year. “We shouldn?t need more financing. We expect to have significant revenue, somewhere between $25 million and $30 million this year,” McPhee said. “An IPO is a possibility and we?re open to an acquisition. But we haven?t figured out what happens next.”
David Alpert, a managing director with Ironside, agrees with Metastorm?s strategy. “They took enough capital to get them deep into profitability. They are good enough for an IPO and they are also good enough to be acquired, but we are building the company. And we?ll let the exit strategies take care of themselves,” he said. “Getting sales and marketing ramped up is the priority.”
Founded in 1996, with about 250 customers split between the U.S. and the U.K., the new funds will be used for sales, marketing, distribution and customer support in North American and international markets, expanding the company?s presence in Germany, Italy, South Africa, Australia, France, Spain, and Switzerland.
Danielle Fugazy can be contacted at: Danielle.Fugazy@tfn.com