DEAL OF THE DAY: REPLICON, $2M
Replicon CEO John Eddy is, to coin a phrase, an anti-spin-ite. He holds views that are anathema to the high-tech PR establishment. “I don’t use the words B2B and ASP to describe my business,” he says. Instead he concerns himself with asking questions like: “What are a business’ migraine headaches?” and finding cost-saving answers.
Mr. Eddy reckons that simple everyday processes like time sheet management and expense reports cause major problems. So Replicon’s founders went about building two Web-based applications to relieve the stress on businesses and optimize workforce productivity.
The Calgary-based company (replicon.wpengine.com) made its first sale in 1998 and has since brought in another 299 customers, including HP, Lucent Technologies, and Kraft. The software is sold through a traditional licensing model or through an ASP-type model.
The company pulled $540,139 in revenue last year and, until now, Replicon has built and financed its business on internal cash flow. This first round of outside investment was brought in by Mr. Eddy to finance marketing and sales initiatives in the U.S. VCs might find his philosophy on fund raising equally heterodox: he prefers angel investment to institutional venture capital because it has “no strings attached.” “I just want enough money to get the fire going,” Mr. Eddy says. “When you’re sitting on $100 million you have to worry about how to spend the money.” Replicon will be profitable by second quarter next year, he says.
INVESTORS: BDCVenture Capital ($500K, lead); Private investors
SOURCE: Red Herring