Bowstreet Gathers $20M, Hires CEO

Seeking to continue its rapid progression, Bowstreet Software Inc. of Portsmouth, N.H., followed up its securing of a $20 million second round of venture financing with the hire of Bob Crowley as chief executive officer.

Integral Capital Partners of Menlo Park, Calif., and Pequot Capital Management of Westport, Conn., led the Aug. 19 financing that also included Charles River Ventures, Kleiner Perkins Caufield & Byers and Matrix Partners, who participated in the $7 million first round financing held in April 1998.

Proceeds from this financing will serve as working capital to support Bowstreet’s marketing efforts as well as for further technical development, said Craig Muzilla, vice president at Bowstreet. The company’s market entry plan includes four elements beginning with direct sales to corporations, followed by a push into the original equipment manufacturer space. The third leg of the strategy will target resellers with the ultimate step being the development of a portal distribution facility.

Bowstreet developed an XML-based application intended to serve the needs of companies that require mass customization for their e-commerce initiatives. Muzilla said the company has launched a Lighthouse program that identifies various industry sectors that will benefit from the company’s web services architecture.

“We spoke with companies that need mass customization for business-to-business e-commerce and want to set up a unique experience for each partner, we do that for them,” Muzilla said.

Thus far, the company has contracted with companies that include Merrill Lynch, Neilsen NetRatings, Thomson Financial (the parent of Private Equity Week) and Travelers Property & Casualty. In addition, Microsoft, IBM, Novell and Sun-Netscape have established relationships to support Bowstreet’s architecture with their directory products. The company has targeted financial services, media and computer companies as initial customers.

“We are at a stage where we need to get traction in these markets by spending aggressively and creating brand awareness,” Crowley said. “Also, we have to get our distribution out and spend on the technical side to make [the product] easier to use on all levels.

Crowley comes to Bowstreet with the experience of managing three start-up operations, one of which went public and was sold, another was bought out by Lucent and the third raised more than $12 million in the year he spent with the company.

“We will likely do a mezzanine round midyear, next year,” he said. “My specialty is helping companies scale in order to dominate a market.”