One of venture capital’s big boys is playing with one of the Southeast’s youngest entrepreneurs.
New Enterprise Associates, a suburban Washington, D.C.-based firm that has backed such technology heavyweights as 3Com, Ascend Communications, Uunet Technologies and TiVo long before they became known, is now placing a bet on wireless software firm Pinpoint Networks and its 21-year-old founder and chief executive, Jud Bowman.
NEA has put $4 million into Pinpoint’s second funding round, adding to the $8 million the company closed on in August from investors such as Noro-Moseley Partners of Atlanta, Wakefield Group of Charlotte and Massey Burch Capital of Nashville, Tenn.
“It’s an achievement to bring in a national VC player like that,” says Bowman, who notes that Pinpoint is the NEA’s first software investment in North Carolina. “We have a strong set of existing investors … (but) they’re part of a class of investors that we haven’t seen before. They’re a major early-stage investor and a major late-stage investor.”
NEA manages about $5 billion in 11 venture capital funds, including a record $2.2 billion early-stage fund it closed two years ago. More than a quarter of the 500-plus technology startups NEA has backed over the past two decades have gone public.
Bowman says Pinpoint and NEA have been mulling a possible deal for months, and he was struck by the references NEA provided to him during his own review of the firm as a potential investor.
“What really struck me was how they help build companies and work with entrepreneurs,” he says. “It helps to have someone with their background, especially in these turbulent and challenging times.”
NEA Partner Suzanne King, who now will join Pinpoint’s board of directors, said in a statement that her firm was attracted to Pinpoint because of the sector in which it operates.
“Pinpoint’s innovative Fuel platform fills a crucial gap between mobile operators and application providers, enabling the management, delivery and monetization of premium mobile data services to subscribers,” King said.
The Fuel software allows wireless providers to develop fee-based data services, such as specialized messaging and games, and generate revenue when customers access the services over their mobile phones.
The platform already has attracted deals with Verizon Wireless and Rogers AT&T Wireless in the United States and Canada, and Pinpoint two months ago signed up O2, one of Europe’s largest mobile operators, as well.
Bowman says Europe is a key market for Pinpoint, with some 40 million mobile phone users, and s Some of the new funding will be used to expand the company’s presence there.
“We want to extend our road map,” he says, adding that the venture round also will help the company refine and enhance the Fuel platform.
The three-year-old firm now employs 37 people, but Bowman couldn’t provide a projection of how much that will increase as sales and marketing efforts ramp up.
Pinpoint Networks: www.pinpoint.com