NetProspex raises $5.5M for auto lead-gen

NetProspex raises $5.5M for auto lead-gen

NetProspex Inc. has raised $5.5 million in a Series B round led by Edison Venture Fund. Some of the angel investors who backed the Waltham B2B lead-generation company in its 2009, $2 million Series A returned to participate in the second round of equity financing, which brings Netprospex’ total investment to $7.5 million, to date.

NetProspex provides a web-based software as a service that generates leads for business-to-business sales and marketing. The company operates on a crowd-sourced model, wherein users may pay for leads, or submit unused business cards – gleaned, for example, at trade conferences – and exchange them for fresh leads. The company works to keep names and contacts current and clean through a combination of software and human intervention.

CEO and co-founder Gary Halliwell declined to specify NetProspex’ revenue, but said it is under $10 million. The company has doubled its top line every year since its founding in 2006, he said, and is now close to break-even with about 20 employees. That headcount will double in the next 12 months, he said, with hires taking place in engineering, as the company focuses on building integration with existing CRM (customer response management) offerings, and in sales and marketing, as it seeks to expand its community of contributor/customers.

“The most notable thing is the growth in the (leads) database. In the past year, we’ve grown from about 8 million contacts in the database to 16 (million),” Halliwell said. “All of that growth I mentioned this year has been through the organic barter system. 100 percent of it.”

Edison Venture Fund, a New Jersey venture capital firm, makes $5 million to $10 million growth-equity investments in interactive marketing, health care IT and financial services IT companies that have not previously taken institutional capital. The firm is four deals into its $250 million seventh fund, closed earlier this year.

General Partner Michael Balmuth, formerly partner at Mainspring Capital and Summit Partners, opened the firm’s Boston office three years ago. So far, the office has done four deals in New England in 2010 – two of which were out of fund VI. Edison is planning to add to the office with the hire of an associate or principal.

“We see a lot more CMO (chief marketing officer) accountability across the board to drive the top line, supporting, so to speak, the full CRM cycle. The market opportunity is pretty compelling,” Balmuth said. “Online is more measurable, more effective, and people are spending their time there.”

Edison was the sole institutional investor in this round for NetProspex. American City Business Journals Inc. (ACBJ), a subsidiary of Advance Publications Inc., the parent company of the Boston Business Journal and Mass High Tech, had backed NetProspex in its first round as a strategic investor. ACBJ did not return to participate in the round. Other private investors, including UK-based angel Richard Tahta, did participate, a NetProspex spokesman said.

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