Despite facing a bleak future and major staff layoffs two years ago, Seattle-based eProject plans to announce Monday that it has secured...
Despite facing a bleak future and major staff layoffs two years ago, Seattle-based eProject plans to announce Monday that it has secured $8 million in venture capital to continue developing and marketing its innovative software.
The company, founded in 1997, began to flail by the early millennium during the tech downturn. During 2003, the company’s chief executive left and half of the employees were laid off to save costs.
“Yes, we probably should have been dead and buried 12 times over,” said current Chief Operating Officer Steven Anderson, who stepped in two years ago to head the company.
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What Anderson said he saw was “a viable company that needed to make some changes.” He also saw the potential for a “crystallizing” market in which complicated project-management tools could be simplified and be used online.
Anderson said eProject is doing better than before. Though he would not disclose financial numbers, he said the company began to make a profit in 2004, and is now realizing a 70 percent annualized revenue growth.
The comeback can be traced to a shift in leadership and the development of a new type of software called Mid-Market Portfolio Project Management (PPM). The software helps companies organize and track their projects on the Web. About 350 customers in various fields, ranging from Honeywell to T-Mobile, use Mid-Market PPM.
Next week’s announcement marks the first financing round for eProject since the turnaround, and is led by Kennet Venture Partners, a trans-Atlantic venture-capital firm. Switzerland-based Genevest, a global technology investment firm, also participated.
eProject’s software is designed to let an employee from any department in a company — including marketing, management or customers — check other departments’ progress on a project as easily as they could check a Yahoo! homepage. Other project-portfolio management tools often depended on users having technical experience. The new software by eProject is cheaper than the larger, leading tools produced by big names such as Microsoft and Primavera.
“We saw a ‘sweet spot’ that we recognized we were perfectly positioned to fill,” said Christian Smith, eProject vice president of sales and marketing. “We’ve figured out the market, the solution, and that’s driven toward huge customer wins.”
Evan Quinn, global vice president of applications software at IDC, the market research company, said there is a movement among application buyers who prefer the so-called on-demand software that eProject offers. But despite eProject’s jumpstart in on-demand software, Quinn warned the company “can’t just be a one-trick pony.”
“The first mover has the advantage in terms of on-demand, but let’s be honest, no one is that asleep at the switch,” said Quinn.
The project-management market reached $2.15 billion in 2003 and analysts project it to climb to $2.67 billion in 2008, according to the IDC.
Quinn said eProject was smart to build in flexibility, but its ability to stay ahead hinges on developers continuing to be innovative.
“[Mid market PPM] gives eProject a chance to compete … so here they are,” said Quinn. “We will see if they can remain nimble enough.”
Javier Rojas, managing director of Kennet in Silicon Valley, said he is confident in the team’s ability to stay fresh — and isn’t afraid of the company’s previous problems.
“I think a lot of companies had trouble after the bust. I think what we are seeing is a wave of companies that made it through that tough time,” he said. “To me, it’s a testimony that they weren’t the nine out of 10 companies that didn’t make it.”
The company has 50 employees and is hoping to push the number of employees to 75 by the end of the year.
Christina Siderius: 206-464-5066 or firstname.lastname@example.org