'Software as a Service' company SpringCM raises $8 million
BY BRAD SPIRRISON
Chicago Sun-Times Columnist
October 30, 2006
suntimes.com
While mashing up a distribution partnership with WebEx Communications earlier this month, content management software developer SpringCM closed on $8 million in new financing. SpringCM charges monthly and annual subscription fees to organizations including Cox Communications and Rush University Medical Center to help their employees manage and share documents online. The software is distributed and managed via the Internet, a delivery model commonly referred to as "Software as a Service." Publicly traded WebEx, which programs online meetings, agreed to market SpringCM services to its 2 million users.
Since incorporating early last year, SpringCM has raised more than $10 million in venture capital and debt financing. The most recent round was led with an equity investment from Menlo Park, Calif.-based Foundation Capital, an existing investor, and also included debt financing from Silicon Valley Bank and VenCore Solutions.
"My goal is not to spend it right away and make it last until profitability," said CEO Christine Mason McCaull.
Mason McCaull, who commutes between Chicago and northern California, said investment proceeds will be used to grow the company to 40 employees from 27 by year-end. The focus will be on hiring sales and marketing professionals.
Serial entrepreneur
Before being recruited to run SpringCM, Mason McCaull was the CEO of Open Road Technologies (now Intellext), which developed the Watson search engine out of Northwestern University. Before that, she advised seed-stage technology companies as a managing director of ClickMarkets. In 1999, she co-founded and served as chief marketing officer for Internet supply chain MetalMaker.com.
Mason McCaull and SpringCM founder Greg Buchholz have raised more than $60 million for a number of Internet ventures since 1999. Both note a decidedly different fund-raising environment now compared with the dot-comedy days of the late '90s.
"Back then, we raised our money off a power point," Mason McCaull said. "It was a really heady time. The message was different. 'Get traction and go fast.'"
Today, she said, companies with innovative ideas and disciplined business models can attract funding, albeit, in SpringCM's case, from outside the region.
Buchholz, a serial entrepreneur who raised more than $44 million to fund online purchasing hub FOB.com in February 2000, added that in the years after the Internet bubble burst, "viable companies could not get funded." The belief is that today's market for early stage fund-raising is more balanced.
"If you have a good idea, you'll get funding," he said. "If you don't have a good idea, you won't get funding."
Foundation Capital, which in March closed on a $525 million fund, was an investor in FOB before the company went DOA during the bust. Foundation is also an investor in MSDSonline, a spinoff of FOB that develops software that manages material safety data sheets. MSDSonline shares office space with SpringCM, and Buchholz sits on both companies' boards. Foundation's other Chicago-based portfolio company is Investnet Asset Management, which has 300 employees and $30 billion in assets under management.
"I like the long-term views that Chicago executives and entrepreneurs bring to the table," said Bill Elmore, a founding partner at Foundation Capital who sits on the board of SpringCM. "We see fewer Chicago companies that are pure technology-based. But they are well-grounded in building products and services for customers."
Advisers from Kellogg and U. of C.
Kellogg Graduate School professor Mohan Sawhney and University of Chicago Business School professor Kaplan are members of the company's advisory board. The professors were advisers to FOB, and have worked with a number of local early stage software and technology companies.
Al Wasserberger succeeded Mason McCaull as CEO of Intellext in January 2005. Wasserberger said he's been traveling heavily and, with his team, logging 70-plus-hour weeks since the Watson search tool converted to a free, advertising-supported product earlier this year.
"Look for a couple announcements in the coming weeks," he said.
Once Watson is installed on a personal computer, it automatically searches and aggregates related information without being prompted by a formal search. The company's technology was developed at Northwestern's DevLab by professors Kristian Hammond and Jay Budzik. Intellext is funded by Motorola Ventures, LaSalle Investments, Northwestern University, Palomar Ventures and University Fund.
Intellext was an honoree at the 2005 Chicago Innovation Awards. This evening, 10 local innovations will be honored at the fifth annual awards ceremony at the Goodman Theatre.
On Wednesday, venture capitalists from all over the region will survey business plan presentations from companies seeking institutional financing at the Midwest Venture Summit ( midwestventuresummit.com ). There will be a separate track for companies seeking seed and angel investments. The Midwest Venture Summit will be held at the Michigan Avenue Marriott. |
