InQuira Finds Financing, Plans Expansion
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Enterprise search specialist InQuira has raised $9.25 million in second-round financing to better compete in the growing customer self-service search niche.
Specifically, the round, which was led by Sutter Hill Ventures, will be used to expand in the United States, and possibly in Europe, as well as bolster sales and marketing programs.
"We've really built a business foundation and now we want to build on it," Chuck Williams, president of the San Bruno, Calif., firm told internetnews.com.
InQuira will also bank a good portion of the cash to strengthen its balance sheet. The most recent round should see the company through to profitability, which it predicts in mid-2004. About 10 people will join the staff because of the stepped up sales and marketing effort, bringing the total to about 65.
Other backers include repeat investors Bank of America (also a customer), Partech Ventures and Walden Ventures also participating.
"Serving customers on the Web has become part of many companies core business," said Jim White, a Sutter Hill managing director, who joins InQuira's board as a result of the investment.
Companies in several sectors, most notably financial services, telecommunications and retail, are investing in self-service help. The advantages are two-fold: deflecting calls to customer service centers (which are considerably more expensive than answering queries online) and winning new business by presenting potential customers with the information they are seeking.
By 2008, companies will spend nearly $19 billion on online customer relationship management, compared to $9.6 billion last year, according to Jupiter Research (an IT research firm owned by the parent of this site). In 2008, the amount will include 15 percent spent on search self-service services, up from 11 percent last year.
"Natural language search provides the best opportunity for companies to understand customer inflection points, and to learn from--and influence--customer behavior," said Matthew Berk, a Jupiter Research senior analyst.
InQuira, whose software combines natural language processsing with automated retrieval technology, has had a good year. In April, it introduced version 6 of its product, and last month it closed a six-figure deal with Yahoo!, adding the Internet portal giant to a customer list that already includes AT&T, General Electric and Fidelity Investments.
Among the firms competing with InQuira are iPhrase Technologies and Endeca, both of Cambridge, Mass., and EasyAsk of Littleton, Mass.
Williams said he is pleased with the progress the company is making. If the IPO markets rebound, and the expansion goes well, InQuira could be in a position to go public.
The other possible exit strategy is an acquisition. Like the paid-placement search engine market, consolidation is will come as companies begin to turn profits. There is also Yahoo!, an InQuira customer, which has been snapping up search technology firms lately.
Williams declined to say if he views that as a possible outcome.