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To: stockman_scott who wrote (25093)	8/4/2005 5:56:50 PM
From: stockman_scott	Respond to of 57684

Serus collects $5.3M _____________________________________________________ by Paul Bonanos TheDeal.com 3 Aug 2005 Seeking to fund growth through a more potent sales and marketing plan, outsourcing management software maker Serus Corp. has raised money from outside investors for only the second time since its founding in 2001. The startup looked to lead investor Diamondhead Ventures, of Menlo Park, Calif., as well as a handful of other individual investors, in the round. Also contributing were first-time backers Prabhu Goel, the chairman of firewall developer iPolicy Networks Inc. of Fremont, Calif.; Naren Gupta, the vice chairman of Wind River Systems Inc. of Alameda, Calif.; and Zap Ventures of Los Altos Hills, Calif. A group of angel investors that supplied $540,000 to Mountain View, Calif.-based Serus in February 2002 also provided follow-on funding. Cellmania Inc. chief executive Ronjon Nag joined company founders, friends and family in that round. Chief executive Indu Navar said that the company sought a new round of funding although it had already reached positive cash flow. "We were really looking for strategic helpers," she said. "We didn't need $5 million. We wanted partners who were experienced in operations and execution." She added that other firms were also interested in leading the round, producing multiple term sheets. She would not discuss the terms, including the valuation, except to say that it had risen significantly. "The first round of funding helped us with cash flow," Navar said. "Our first product was built in my dining room and sold to Quantum Corp. We had a quarter of a million dollars before we had an office space." Serus' products are typically used by U.S.-based companies that have remote manufacturing operations in other countries. The software enables them to collect and analyze data regarding the manufacturing process, simulate potential situations, make decisions based on available data points, and process transactions. The company has 11 customers, including networking equipment giant Cisco Systems Inc. and storage systems developer Quantum Corp., both of San Jose, Calif., and chipmaker Advanced Micro Devices Inc. of Sunnyvale, Calif., as well as several smaller companies. Navar said Serus will soon expand beyond its current base of semiconductor, high-technology manufacturing and contract manufacturing companies through pursuit of retail product, medical device and automobile manufacturers. Navar stressed that Serus had grown slowly on purpose, allowing it to outlast its competitors. "Our product line has evolved based on response from our customers. We did not want to spend $20 million to find out if there was a market or not." Contrasting this approach are several competing supply-chain management companies that have gone out of business. Navar pointed to Valdero Inc., also of Mountain View, which she said plans to wind down operations. Trinity Ventures, Integral Capital Partners, Mohr, Davidow Ventures and Kleiner Perkins Caulfield & Byers, all of Menlo Park, Calif., were among Valdero's investors. Other supply-chain management software companies include publicly traded i2 Technologies Inc. of Dallas and Manugistics Group of Rockville, Md., although neither specializes in outsourced manufacturing. In the near term, Serus intends to spend much of its new capital on sales and marketing efforts. The company expects revenues of $6 million to $7 million in 2005, building on about $5 million in cumulative revenues through the first quarter of this year. It will roughly double its 23-person staff, as well as add offshore employees of its own. Navar said the company is likely to sustain positive cash flow throughout the process of investing in future goals. Paul Shinn of law firm Wilson Sonsini Goodrich & Rosati counseled Serus, which used no financial advisers.