Advanta Corp.'s venture capital arm has added Brightware Inc. to its investment portfolio.
Undaunted by talk that a sale of its parent company is imminent, Advanta Partners LP bought $5 million of Series B preferred stock in Brightware, a Novato, Calif., company developing automated sales and marketing tools for the Internet.
Advanta Partners thus took the lead in an $11.5 million venture financing with five others: Hambrecht & Quist, Norwest Corp.'s Norwest Venture Capital, TTC Ventures, Venrock Associates, and Wilson Sonsini Goodrich & Rosati.
Norwest Venture Capital and Venrock, which is affiliated with the Rockefeller family, were among the first investors in Brightware and remain the largest. TTC Ventures is owned by Thomson Corp., a Canadian publishing company whose holdings include American Banker. Wilson Sonsini is a prominent Silicon Valley law firm.
Advanta announced plans in 1994 for a limited partnership that would put as much as $100 million into information-based businesses. By late 1995 it had taken positions in HNC Software Inc., a provider of fraud prevention software to the credit card industry; Innovative Services of America, a telemarketing service company; and Great Expectations Creative Management Inc., a video dating franchisor.
Analysts viewed Advanta Partners as a creative way to stay on top of, and get early looks at, advances in information technology that were at least peripherally related to Advanta's credit card and home equity businesses. But attention has more recently been focused on a downturn in Advanta's profitability and persistent acquisition speculation.
"Advanta is highly selective in the ventures it chooses and has a strong track record," said Advanta Partners managing director Mitchell Hollin. "Our focus on the information services industry and strong affiliation with our primary funding source, Advanta Corp., will prove extremely beneficial to Brightware."
Brightware, founded in 1995 and with revenues of $13 million in the fiscal year ended last June, is staking out a position in what it calls sales servers-automated agents that use inquiries from customers to develop sales leads. Wells Fargo & Co. was among the early buyers of Brightware 1.0, seeing it as a way to deal with the customer service demands in its fast-growing on-line banking program.
"Brightware now has the capital to dominate the sales server segment of the Internet packaged applications market, which IDC Research has forecast to be $6 billion by 2000," said Brightware senior vice president Michael P. Thoma. "With this investment we can specialize our products for key vertical segments, build on our dominant market share in financial services, and grab first-mover advantage in the high-technology sector."
