Vision Conjures Up $15M Mezzanine Round

Oakland, Calif.-based Vision Software closed a $15 million mezzanine round of financing earlier this fall that the e-business automation developer intends to use as working capital while preparing for an initial public offering in early 2000.

“Our next step is the public capital markets very early next year,” said Mike DeVries, vice president at Vision. “We are in final consideration [for an underwriter] as we speak.”

To date, the company has raised more than $50 million in private equity from its syndicate of investors that includes second round lead Goldman, Sachs & Co., BancBoston Robertson Stephens, Dain Rauscher Wessels, Loewenthal Capital and early round investors Charles River Ventures, Hambrecht & Quist, Morgenthaler Ventures and Vulcan Ventures.

Having used the funds from its $11 million first round, which closed in January, to propel its business through a substantial staff increase, to 170 from 70, and establishing strategic partnerships, including IBM Corp., Vision plans to use proceeds from this round to augment its sales and marketing efforts. In addition to those expenses, DeVries said the company intends to target three main areas: increased international presence, development of its systems integration sales channel and increased demand generations.

DeVries also said the company has seen quarter-to-quarter growth of 50% over the last four quarters, and the company is on track for “mid-teen” annual revenue, which he said would be a 350% increase versus 1998.

Included in Vision’s partnerships is a research and development marketing relationship with IBM’s WebSphere application server.