MySimon Says $21M Venture Round

Everyone’s mother tells them to comparison shop, but the hassle involved in finding comparable quality and value for products deters even the most ardent value hunter.

MySimon Inc. wants to use the Internet to solve this problem. So, the Santa Clara, Calif.-based company raised $21 million June 4 in a first close of its fourth round of venture financing to further development of its service that aggregates 1,300 Web-based merchants to find the best price for shoppers.

“The round was well oversubscribed, and while we are doing a second close for strategic partners … this is the bulk,” Goldman said.

Brentwood Venture Partners and The Sprout Group co-led the Series D offering, each committing $10 million. Marquette Venture Partners invested $1 million as the third venture firm in the round, Goldman said.

MySimon has now raised a total of $26 million in private equity to date.

Ernst & Young acted as adviser and agent to the company on the financing.

Goldman said the bulk of the proceeds from the financing will serve as working capital for an increased marketing campaign, which will include a $10 million expenditure over the next six months to augment the company’s branding effort. Additional funds will be used to increase staffing to 100 from the current 50, to develop MySimon’s technology and as dry powder for potential acquisitions.

“MySimon says that Web buyers know what they are looking for, so now they can check multiple [retailers] to shop for that item,” said Alex Rosen, a vice president at Sprout and MySimon board member. Jeff Brody, a general partner at Brentwood will also join the board in conjunction with the deal.

The company aggregates only those retailers that have online shopping sites. Goldman said the firm has no intention to ever add offline merchants to its portfolio. Through its independence, the company can access any number of merchants, and it provides links to the site where the consumer decides to buy. In addition, the company’s technology can link to the Palm VII, allowing consumers to compare prices online while in the aisles of a physical store.

Goldman said the company hopes that this will be the last private round the company holds, although he acknowledged that market conditions will hold sway over the final decision.

In a separate transaction, Sprout and Marquette took part in the $25 million second round of NetLibrary Inc. of Boulder, Colo. Other investors in the round included Barnard & Co., Sequel Venture Partners and the Anschutz Family Investment Co. The company provides information and electronic books over the Internet. NetLibrary currently offers 10,000 volumes online.