RSS specialist NewsGator raises $12M, targets biz customers

As part of the financing, Lisa Reeves, a general partner at Vista Ventures, will join the company's board of directors.

Denver-based NewsGator develops RSS, or really simple syndication technology, and other "Enterprise 2.0" applications geared to help businesses improve the way they find information and communicate. The company's products allow businesses and consumers to subscribe to news, information, podcasts and other relevant content more efficiently and effectively than with traditional channels.

Founded in 2003, NewsGator markets its services via three primary channels: software licenses and subscription services to individual users, enterprises as server product, and as a service to content publishers, who pay NewsGator on a per-subscriber or per-view basis.

NewsGator's president and chief executive J.B. Holston said the company has raised a total of $30 million in venture capital, including a first round in summer 2004 and a second round in spring 2005. Holston also expects the current round to carry the company to profitability in the next 12 to 18 months.

Although NewsGator still has consumer offerings, it has found that corporate customers are its biggest growth area. "We really pointed the business toward the B-to-B market," said Holston. "We found the real demand for our software is from businesses, making sure that their brand gets to wherever the attention is going has become strategically important to [our clients], and we enable them to do that."

"We add about 7 million articles a day into our system, so we have clients accessing the content and the metadata around consumption of that content via API, so they can use that data in lots of ways depending on what business they're in," Holston continued. "Media companies are also using our archives and tools to add features and widgets to their properties across the Web."

The new capital will go primarily toward ramping up NewsGator's worldwide sales efforts targeting corporate customers.

As the RSS sector has consolidated over the past two years, NewsGator became a big acquirer of technologies. In the period between 2005 and 2006, the data syndication software maker acquired the SmartFeed and SmartRead technologies, applications that gather news and podcasts; blog editing tool MarsEdit; NetNewsWire, another application that gathers news and podcasts; and Bradbury Software's FeedDemon, a former competitor that delivers syndicated information to a Windows desktop.

Most of NewsGator's acquisitions centered on user interfaces that can be synchronized with other outlets for syndicated information as the company has made a strategic push toward the mobile sphere, and ensured that it could deliver information on every device.

Howevers in the last year NewsGator hadn't picked up any new companies or technologies. Holston said that while the company is always looking for ways to expand its business more acquisitions "aren't a primary focus that informed the financing round."

Paul Koenig of Kendall, Koenig & Oelsner PC provided financial advice; Cooley Godward Kronish LLP was counsel.