RealTime IT News

ValueStar Closes on $2.45 Million in Financing

ValueStar Corp., which provides customer satisfaction ratings of local companies via the Internet, said its has raised $2.45 million in seven-year senior debt financing with warrants from three institutional investors.

The investment was led by Seacoast Capital Partners' $1.5 million investment and included participation by Pacific Mezzanine Fund and Tangent Growth Fund.

The net proceeds will be used to expand operations into five new markets during the next four months (making a total of eight markets). The company currently rates local service and professional businesses in the greater San Francisco, Los Angeles and Chicago markets.

ValueStar delivers its ratings free to consumers on the Internet at valuestar.com. Top-rated companies are awarded the ValueStar Certified mark and use it to differentiate their business from competitors.

"ValueStar provides Internet content enabling e-commerce for local services on the Web," said Jim Stein, ValueStar's president and chief executive officer. "ValueStar's content appeals to a wide range of users, like Yahoo!. And, we are building a powerful recurring revenue model with high renewal rates like America Online."

ValueStar began operations in the greater San Francisco area in 1992. In July 1998, it launched its national rollout by expanding to Southern California. In February 1999 the greater Chicago area became the first market region opened outside of California. Five other (unspecified) regions are targeted for expansion during 1999.

ValueStar uses the Public Research Institute of San Francisco State University to audit its customer satisfaction studies.