Bizanga makes highly scalable email management software that it sells to large telcos and other service providers. On February 17, 2009, it announced it had raised new equity funding of $8M.
Products and Competitors:
- Sells email processing software to large telcos and messaging services providers.
- Highly scalable, runs on loosely linked commodity PCs, works with a variety of third-party products to address such issues as spam and virus control, encryption, and archiving.
- Main competitors are IronPort, Message Systems, and Openwave. Critical Path and Mirapoint are secondary competitors.
- Acquired its first customer in November 2004; first U.S. customer, Cox Communications, a year later.
- Company has healthy growth and has consistently operated at close to breakeven.
Funding History and Transaction Summary:
- 2003: Founders provide $1 million.
- 6/2006: 1 million euros/$1.5 million from Galileo Partners.
- 12/2008: $8 million from Credit Agricole Private Equity, Galileo Partners.
Investor Interest and Motivations:
- Companyâ€™s success with Tier 1 service providers, such as Comcast and Telefonica, in North America and Europe.
- Caliber of Bizangaâ€™s management team.
CEO Jerome Lecat’s advice to other fund-seekers in today’s climate is:
- Funding marketplace will take a long time to revert to normal, probably not until late 2010.
- Most U.S. funds are now investing only in their portfolio companies and early-stage ventures. European funds are more likely to invest in mid-stage companies.
- Valuations are down. Had the round closed in June rather than December 2008, the valuation would have been 20% higher. Given that Bizanga is growing quickly, this may translate to Series B and C valuations being down 50% on six months to a year ago.
- Series A funding valuations may be more or less unaffected, since investors recognize that the entrepreneur has to be properly motivated.
- It appears that valuations are down less in Europe than in the United States: perhaps 20% down in Europe, compared with 50% down in the United States.
- If at all possible, show a business that is profitable or that can be profitable if management chooses.
- Expect the funding process to take at least six months.
- Donâ€™t be too greedy with valuations.
- Look to your earlier investors as a very good source for additional funding.