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$13M burnishes valuation of IDE
by Jeff Miller
Integrated Development Enterprise Inc. in Concord expects to reach profitability this quarter. So why would the 4-year-old software company raise a $13.25 million fourth round of funding?
"Every prospect wants to know your cash balance, how much you burn and how close you are to profitability," said Richard Moore, chief executive at IDE. "They don't want to be left unsupported."
IDE makes software that aims to automate the process of developing new products such as scheduling, projections, event timing, meeting milestones and deliveries.
"Most enterprisewide application companies have automated the stovepipe of the income statement," Moore said. "We automate the development chain."
The company, founded in March 1998, claims more than 50 customers worldwide, including Chrysler, Wrigley, Hasbro and Honeywell Automation and Controls.
In the past 18 months, later rounds have largely been insider affairs, with previous investors providing all the cash. Although an insider round means that existing investors don't have to share the company with another player, it also makes assigning an updated valuation to the company a difficult task.
Buoyed by its near-term profitability, IDE was able to land a new investor, Tudor Ventures, to lead the round. Previous investors Flagship Ventures, Dominion Ventures, HarbourVest Partners and PRTM, a management consulting company, also in- vested. The company has raised $48 million to date.
"There aren't many financing rounds getting done," said Steve Ricci, a managing director at Flagship. "But companies showing progress are able to attract capital."
IDE plans to hold on to most of the new cash as a confidence builder for prospective customers. Nevertheless, IDE will make use of some of the capital to add a few more employees to its headcount of 65.
Specifically, IDE plans to hire an executive vice president to build sales operations in Europe and Asia, a couple of new sales representatives and a chief financial officer.
"We don't have a CFO," Moore said. "We've got a very strong operations head. But at some point we'll need someone to complement him."
Source: Mass High Tech, 12/9/2002
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