Private investors plant $33 million on Sequoia Software
By Matthew A. DeBellis, Editor
Redherring.com, December 04, 1999
Sequoia Software develops technology that lets large corporations get with the Internet age without throwing away their legacy systems.
The Columbia, Maryland-based company has built an Internet browser-based application that lets organizations create custom corporate portals that can read documents and information from different computer systems and databases, says Mark Wesker, Sequoia's cofounder and president.
Sequoia is expected to announce Monday that it received $33 million in third-round funding led by Baker Communications Fund. Divine Interventures, Anthem Capital, Mid-Atlantic Venture Funds, and Flanders Language Valley Fund also participated in the round. Andrew "Flip" Filipowski, the CEO, president, and founder of Divine Interventures, and Sequoia CEO Rick Faint are individual investors.
A LEGACY OF NEUTRALITY
Part of Sequoia Software's strategy to conquer the corporate intranet technology market is to remain neutral. "We want to be Switzerland," says Mr. Faint. "We don't want to favor one legacy system or another."
Companies like Sequoia and its competitor Plumtree Software are poised to make it big because most corporations are going to stick with their older computer systems instead of spending big bucks on slick new ones, according to Mike Maziarka, a director at CAP Ventures, a market-research and consulting agency. "Companies have invested a lot in their systems," he says, "so they are hesitant to scrap them."
Sequoia began in 1992 as a computer services firm that tailored technologies to clients' specific needs. Company founders cleaned out their 401K accounts and maxed out their credit cards to get the venture off the ground.
THE IDEAS AT WORK
Sequoia quickly became profitable and was humming along when in 1995 it started working on a custom application that would allow doctors and medical workers at Kaiser Permanente, a not-for-profit health maintenance organization, to access patient and health-care information from various computer systems.
The three-year programming deal with Kaiser brought the services firm about $1.5 million. But more importantly, executives seized the opportunity to develop a proprietary technology that can read and transmit data and documents from various systems that users throughout an organization can access with just an Internet browser. The software that Sequoia installed in 13 Kaiser hospitals in Ohio a few years back is still being used, and Kaiser remains a Sequoia client.
To transform from a technology-services company to a software vendor, the company needed cash to more fully develop its application. It raised $2 million in November 1996 and $6.5 million in September 1998. The product, the Sequoia XML Portal Server, can now crawl computer networks and retrieve information and documents from intranets, extranets (networks accessed by business partners), and the Internet. The application is based on the programming language XML, which can code documents to be transferred more easily between applications.
According to Mr. Faint, Sequoia will spend the latest round of $33 million mostly on sales and marketing and less on product development. |
