In just three weeks, former Microsofties Usama Fayyad and Bassel Ojjeh have started a company, bought another company and raised nearly $5 million in seed finding from some very high profile angel investors. Being early to market is especially important for Web-based businesses but even so digiMine.com’s bolt out of the start-up gate is unusually fast.
Within days of leaving Microsoft, Fayyad and Ojjeh were negotiating to purchase an electronic commerce consulting company as the quickest route to employing the high-tech workers they needed. The acquisition reaped nine employees specializing in e-commerce data analysis.
They also picked up a nifty company name as part of the deal – digiMine.com. Terms of the cash and stock transaction were not disclosed.
Additionally, their initial seed round at about $5million was oversubscribed with the two turning away some interested venture investors. Fayyad told dbusiness.com.
Investors in the seed round include former Microsoft group vice president Pete Higgins, who recently formed the investment company Second Avenue Partners with several other high profile local executives; Sam Jadallah, managing director of Internet Capital Group, Silicon Valley Angels; Deutsche Bank Technology Fund; Cedar Grove Investments; and Kellett Investments.
Among the members of digiMine.com’s advisory board are Higgins; Nick Hanauer, chairman of Avenue A and Gear.com; Keith Grinstein, vice chairman of Nextel International and director of Madrona Venture Group; Mike Slade, former chief executive of StarWave; and Rajeev Motwani, Standford University professor and angel investors.
digiMine.com is in the hot data mining segment where Web-based business use special software to track visitors through their sites to deduce their interests for more targeted, personalized advertising.
For example, a visitor pulling up information on ski resorts, will be shown ski boots instead of shorts and, perhaps, offered special discounts to close the sale as he continues through the site. Electronic retailers, which are converting surfers into shoppers only about 2 percent of the time, are hoping such personalized advertising will result in higher sales.
Co-founder and chief executive Fayyad was head of Microsoft’s Data Mining & Exploration group, leading development efforts to embed data mining in upcoming releases of AQL Server 2000 and Commerce Server 4.0.
Meanwhile, co-founder and chief operating officer Ojjeh oversaw the development of Microsoft Commerce Server 4.0 and built some of the earliest Web data warehouses for MSN’s internet properties.
Executive vice president of sales and marketing Nick Besbeas helped develop direct and Web marketing analysis and tracking systems for Microsoft’s MSN Internet properties and most recently led marketing research for desktop and server applications in the company’s applications division.
digiMine.com will operate as an application Services provider renting its data mining software to customers and providing hosting for warehousing their customer data.
“A lot of companies in this space try to follow the model of going in-house to build a solution. But what I find invariably is what I call data warehouse rot – they can’t maintain the data and, it gets old and in a week or two dies away. Soon enough their investment of several hundred thousand dollars or several million is useless. These technologies are too complicated for end users to use,” Fayyad told dbusiness.com, explaining why digiMine.com has adopted the ASP model.
The company (http://www.digimine.com) has 20 employees today with offers outstanding that likely will raise that total shortly to 30 employees. Fayyad said the company plans to have 50 employees by the end of its first six months.
He expects a beta launch of the company’s data mining software Services within the next three months.
By: Jeanne Lang Jones