BELLEVUE, Wh. – DigiMine, a provider of data mining and analytic services, is expected to announce it has raised $20.3 million is Series C round financing. New investor Mohr Davidow Ventures led the round with $10.7 million after following the company for nearly two years, according to Bill Ericson, general partner at the venture firm. The rest of the Series C financing came from all existing investors and several other new investors, including American Express, Gulf International Bank, Rolling Thunder Network.
Mayfield increased its stake with $4 million in this round and holds its place as the largest shareholder in digiMine. All other prior investors – Angel Investors LP, Cedar Grove Investments, Deutsche Bank Technology Fund, Kellet Investments, and Second Avenue Partners – reinvested in the round, though at diminished equity stakes.
DigiMine CEO Usama Fayyad said the company had a target of 10% million when it began raising the round at the end of December but, due to interest from VCs, the company raised the target to $14 million, then $18 million, and finally capped Series C at $20.3 million. Company valuation was at “a reasonable market price that wasn’t wildly off the last round,” according to Mr. Ericson.
Although Mohr Davidow usually focuses on seed and early stage companies, the venture firm took the lead in this round. Mr. Ericson estimated the firm has invested in five to eight companies in the data mining and business analytics arena. DigiMine has proved its business model and has more than 20 customers, he said. Mr. Ericson said the strongest competition comes from home-grown services that companies develop themselves based on existing software tools.
Mr. Ericson joins the board of directors as a result of the round; digiMine is also searching for an independent director. In addition, Mohr Davidow general partner Nancy Schoendorf and venture partners Donna Novitsky and Geoffry Moore have joined the advisory board.
The next step for digiMine, which has been generating revenue since 2000, is to target larger customers and become profitable, which the company expects to happen early next year. DgiMine will devote the financing to sales, product development, and new staff. The company has manufacturing portals, content portals, and retailers as customers, but will expand into additional market verticals later this year. Mr. Fayyad said the firm will look toward insurance, manufacturing, and healthcare.
DigiMine will also expand its present in U.K. and Germany and move into western Europe, South America, and Australia. The Far East would be the last market, Mr. Fayyad said. Customers include Palm, Xbox, CBSMarketWatch, Dow Jones & Co., Wall Street Journal, J. Crew, Barnes and Noble, and Nordstrom.com. With nine offices in the U.S and one in Frankfurt, Germany, digiMine has a combined 120 employees and will add another 30 to 50 people in the next year.
The company has raised a total of $45.3 million in funding.
By: Michelle Tsai
Source: venture wire