Edocs Raises with $18M Second Round

With 36 North American-based enterprises in the utility, financial services and telecommunications industries currently signed on as customers, Edocs, a developer of electronic bill presentment and payment software, sought second round investors to help with international expansion and a likely initial public offering.

The Wayland, Mass.-based company raised $18.6 million in its Series B round. Jafco America Ventures, a $300 million venture affiliate of Japanese venture firm Jafco Co., led the round that saw first-time commitments from Goldman Sachs and Comdisco Inc and pro rata investments from existing investors Charles River Ventures and Sigma Partners. The two combined to invest $4 million in Edocs’ first round of financing in May 1998.

“We selected Jafco because of its tremendous contacts in Asia, and Goldman because of its pristine reputation,” said Edocs’ co-founder Jim Moran. “The public markets are not far off.” Moran indicated Edocs will likely go public next year.

Edocs develops software that links its customers billing systems to the Internet, thereby reducing print, postage and remittance processing costs. Moran said the company expects to recruit its first international customer later this year.

Proceeds from the investment will be targeted toward research and development as well as sales and marketing expenditures. The company uses an in-house direct sales force as its primary distribution channel and plans to increase its market presence through print and banner advertising.

“Our strategy is to invest in U.S.-based technology companies, and help them develop an Asian market strategy,” said board member and Jafco Managing Director Andy Goldfarb. “Edocs will benefit companies by lowering their transaction costs and enhancing lifetime customer value.”