The labor-intensive, inefficient, technology averse -- and frequently corrupt -- printing industry seemed a perfect fit for overthrow by well-funded Internet competitors, but when "dot-com" became a dirty word, companies that made early inroads backed off. Despite making steady gains all along, market leader Mimeo Inc. has limped along, putting only $17.8 million in new investment into the company in the last five years, after raising $33.5 million in its first two rounds starting in 1999.
That thriftiness has come to an end, as investors led by Goldman Sachs Principal Strategies Group have now committed to $25 million in new investment to consolidate gains with an additional fulfillment center and entry into the European market, along with a revamped sales operation. Longtime investors Draper Fisher Jurvetson, DFJ Gotham Ventures, Harbourvest and even strategic investor Hewlett-Packard Co., all reinvested in the new round at full shares, happy to go forward on a larger scale to boost sales that already have topped $50 million.
CEO Adam Slutsky, co-founder and
former chief financial officer of Moviephone, which he took public in 1994
before a 1999 sale to AOL, joined Mimeo in 2005. He has directed the company's expansion largely
on profits it has generated the last two years, and the executive is eager to speed things up.
"We are going after a $30 billion digital printing market,
and we had to figure out how to grow even faster," Slutsky says. "The things I
want to do involve a lot more than the free cash flow from last month, and all
the major investment banks had been talking to us about new investment."
Slutsky says the company was in a position to
narrow talks to about 10 large private equity and venture capital firms, each
of which submitted term sheets. He would not disclose a valuation for the
round, but he said it came at "many, many multiples" of the company's previous
investment round. - Clifford Carlsen
See Sept. 19 story from TheDeal.com
See July 2003 story from TheDeal.com
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