The Deal
Monday, October 6, 
10:52 am

by Clifford Carlsen
[Posted on January 2, 2008 - 5:29 PM]

Tech support startup HiWired Inc. has raised $9 million in a second round of venture capital to take advantage of the fast growth of so-called white-label software and services, which allow service providers and retailers to offer customers off-site, on-demand help in connecting and deploying digital equipment and services.

The three-year-old Needham, Mass.-based company landed North Hill Ventures of Boston as lead investor in the round. Also participating were Kodiak Venture Partners of Waltham, Mass., and Sigma Partners of Boston, which backed the company's $5 million Series A round of April 2006.

The new round will allow the company to expand sales and marketing to broaden its partnerships and to expand features in its proprietary screen-sharing technology that allow it to offer sophisticated technology support services remotely.

HiWired founder and president Singu Srinivas said he founded the company in early 2004, raising $1.2 million from angel investors to follow the success of tech support services such as Richfield, Minn.-based Best Buy Co.'s Geek Squad subsidiary and Richmond, Va.-based Circuit City Stores Inc.'s Firedog services. The company began offering services directly to consumers on a fixed-rate basis using credit card billing in late 2004 to build credibility, then began marketing to service providers, electronics manufacturers and retailers in late 2005.

"[Co-founder] Michael Wexler and I had been at IBM [Corp.] and had done a ton of work with Thinkpad and other consumer devices, and saw an opportunity around enabling digital devices and services," Srinivas said. "There really wasn't someone thinking about getting all the new technologies working together, and while we always thought there was an opportunity going directly to consumers, we saw a larger opportunity helping companies offer white-label services."

Robert Davoli, a general partner with Sigma Partners, said he has invested in a number of service companies and was attracted to HiWired and the chance to build a business based on integrating new devices and services as they become available. He said the company had not fully designed its technology at the time of the Series A round but that it has completed development of proprietary software and techniques to allow fully hosted technical support from remote locations.

"People don't want products so much as they want solutions, and with the myriad of consumer products that have hit the market the last couple of years, the whole landscape has gotten a lot more complex," Davoli said. "HiWired has developed very sophisticated software that allows them to enable technology without going on-site."

Srinivas said the company began its first white-label programs on a pilot project basis in late 2005 with cell-phone manufacturers Sony Ericsson Mobile Communications AB of the U.K. and Motorola Inc. of Schaumburg, Ill., and signed Naperville, Ill.-based OfficeMax Inc. as its first retail partner in 2006. The company offers services for OfficeMax customers in all 50 states and has a major partnership with cable television and Internet provider Cox Communications Inc.

North Hill Ventures managing director Shamez Kanji said he had been following HiWired for the last six months and that the company has successfully delivered on all its technology and market goals. He said the current round is positioned to dramatically increase the company's partnerships and expand technology but that it likely will raise additional money before reaching profitability. He said the success of high-profile tech support services at major retailers has driven demand for others to offer similar products and that HiWired's remote technology allows for easy deployment of branded services.

"Best Buy's Geek Squad has grown from $2 million two years ago to about $1 billion and has become a pretty big brand in its own right, and HiWired does everything they do but remotely," Shamez said. "We see a significant growth opportunity in digital home services and HiWired has quickly emerged as one of the industry leaders and experts in this space."

Srinivas would not disclose a valuation for the new investment, but said it came at an increase to the company's initial institutional round.

HiWired did not use an outside financial adviser in putting the round together. It had legal work on the deal from Mark Spoto of Cooley Godward Kronish LLP in Reston, Va. Investors were represented by Doug Zingale of Foley Hoag LLP in Boston.



Post a comment




Search


The Tech Confidential Network
The Tech Confidential Network unites the leading voices from around the Internet on the topics of high-tech startups, venture capital and investment exits. Bloggers and publishers that want to expand their readership and monetize their content are encouraged to apply to join the Tech Confidential Network.


Video

LiveWorld's Peter Friedman helps brands reach 'Generation C'

peterfriedman200.gif
LiveWorld's CEO Peter Friedman on social networking.
 




Windward Ho!

Startups In New York




Syndicate


Recent Entries

©Copyright 2008, The Deal, LLC. All rights reserved. Please send all technical questions, comments or concerns to the Webmaster.
Sponsored by