MarketTools Inc, an application services provider for web-based research, has closed a round of funding worth $30m. The Sausalito, California-based company said its latest financing includes $25m in equity, led by Dominion Ventures Inc, Oak Hill Venture Partners, InterWest Partners, and Monitor Clipper Funds, plus existing investors Capstone Ventures and ComVentures. An additional $5m in lease and debt financing was provided by Comdisco Ventures.
MarketTools bills itself as the leading ASP for the eResearch industry. In addition to providing comprehensive research software for research partners and corporate clients, it is also the parent company of Zoomerang, a free internet service designed to enable small businesses and individuals to easily create surveys and collect real-time feedback.
David Brogan, chief operating officer of MarketTools, says the company will use the proceeds of the funding round to grow its client base and to expand its suite of hosted services; to drive home the message, to a $10bn market research industry and the seven million small businesses and individuals it has identified who want immediate feedback to improve their decision-making process.
The company began operations nearly two years ago, with $450,000 in seed funding from Silicon Valley’s Band of Angels group. The first year, Brogan says, was mostly spent on development work. The next year, which included a $4m funding round, saw MarketTools build its infrastructure and its business. This year alone, the company increased its staff from 18 to 65 people and hopes to be in the 150-to-200 range by the end of next year.
Brogan explains that the company is more or less neutral when it comes to partnering. It has deals with major research firms such as AC Nielsen, International Data Corp, Intercom, Merrill Research and Total Research. MarketTools’ software is fully customizable, so that companies looking to extend their research efforts to the web have access to a one-step solution which can be easily integrated with their existing operations and carry their own brand.
MarketTools also just announced its largest customer win to date, with MyPoints.com. The deal is significant in two ways, Brogan explains, because it gives the company access to the MyPoints currency as well as an opt-in user base of over four million people. Under MarketTools business model, the company licenses its platform to partners on an annual basis and will carry out any customization work necessary, although Brogan declined to divulge specifics about pricing.
The company plans to continue investing heavily in technology, infrastructure and branding. At present, MarketTools can handle over 500,000 surveys per hour and aims to be capable of four times that next year. On the financial side, the company has no specific timetable for profitability and reckons the latest funding should fuel operations for well over a year. Creating the number one brand in its space – which has no clear competitors for the time being – is the primary goal for now, Brogan insists. An initial public offering by the company could be possible in about 18 months or so.
