Irvine’s WebVisible Inc., an online advertising search company for small businesses, raised $12 million in a second round of venture funding.
Palo Alto-based Sutter Hill Ventures led the round with $8 million. Los Angeles-based Redpoint Ventures contributed $4 million.
The money is set to go toward beefing up the company’s sales and marketing staff and expanding in Europe, Asia and South America.
“We feel extraordinary about this,” said Kirsten Mangers, cofounder and chief executive. “We have had the advocacy of one of the largest venture capital firms in Silicon Valley.”
Sutter Hill managing director James White is set to join WebVisible’s board. Two directors from Redpoint Ventures joined after the company’s first round, which totaled $5 million in 2005.
The startup has raised a total of about $17 million.
WebVisible’s services target smaller businesses,from those that are a one-person shop to companies with 250 workers.
Its software, called Geneva, automates the process of buying online advertising. Instead of business owners sorting through all the online ad options and processes, WebVisible’s software asks for some simple information and places online ads for a company.
Small-business owners historically have relied on placing ads in local newspapers and phonebooks, Mangers said.
“All of a sudden that’s changed. We have Google and Yahoo and the big ad networks,” she said. “The small-business owner says, ‘I have to start marketing myself online.'”
The type of online advertising doesn’t matter,it includes “pay-per-click” models, similar to Google Inc.’s AdSense program, banner advertising and other formats.
WebVisible’s customers essentially are resellers of the service.
They use the software to create a custom advertising strategy for small businesses, which includes buying keywords, placing ads and analyzing the revenue they generate.
“Our premise has always been that we needed to be in a position to empower small-business owners to be able to market themselves online,” Mangers said. “Local business owners are too busy minding their stores to successfully navigate the complexities of buying and managing their own online advertising.”
Resellers of WebVisible’s software fall into some big categories: telecommunication companies, newspapers, Web site hosting services and online phone books.
Big Customers
Customers include AT & T; Inc.’s Yellow Pages, British Telecom Group PLC, EarthLink Inc. and more than 50 major newspapers, including New York Times Co.
It’s also pursued partnerships with companies looking for small-business customers, including American Express Inc.
Privately held WebVisible doesn’t disclose sales. The Business Journal estimates yearly revenue at about $10 million. It’s set to turn a profit by 2009, Mangers said.
Competitors include Woodland Hills-based ReachLocal Inc., which has raised some $55 million, Santa Monica’s Matchcraft Inc. and Seattle’s Marchex Inc., a publicly traded company with a division that goes after small businesses.
WebVisible, which got its start in 2001, has some 60 workers in Irvine and is looking to hire an additional 30 by the end of the year.
Recent layoffs at Yahoo Inc. have spurred “a lot of phone calls” from people looking for jobs at WebVisible, Mangers said.
“The company is attracting incredible talent,” she said.
It’s working closely with graduate students at the University of California, Irvine, on predictive modeling,tracking a person’s Web use so he or she can be targeted with the right ads,and related technology that could further improve its software.
WebVisible has guidance from some longtime Orange County technology veterans, including Ted Smith, founder of Costa Mesa’s FileNet Corp., a database software maker that was bought by IBM Corp. a couple of years ago. Smith is on the company’s board.
The company has had a lot of interest from potential buyers, Mangers said.
“We were approached by buyers in our first month of business,” she said.
But WebVisible is eyeing an initial public offering in two to three years.
“This company behaves as a company that will have an IPO,” Mangers said. “We are very well-run from a fiscal perspective.”
It doesn’t plan to look for more funding.
“This should be the last (funding round) this company needs,” Mangers said. “We are going to spend it wisely.”
