Portland’s Janrain lands $15.5 million venture round for its social networking …
August 3, 2011 by admin
Filed under Lingerie Events
Sign in to your Sears account with your Facebook ID, or log on to LadyGaga.com with your Twitter handle. Either way, the connection is made by a downtown Portland company called Janrain.
Social networking is the hottest investment property going, and Janrain is the latest beneficiary of that fervor. The company plans to announce $15.5 million in new venture capital today, making it one of the biggest venture rounds for an Oregon software company in many years.
Janrain partners with all the big social networks so their members can take their online identities to sites across the Internet. Those identities also bring with them a wealth of personal data, which Janrain analyzes so its clients can tailor their websites and marketing to each visitor.
“We’re an enabler for them to get further on the Internet and do more with their customers,” said Larry Drebes, who started the company six years ago.
Janrain began as a vehicle to promote a universal login standard known as OpenID. The vision back then was that users would be able to create one identity based on a set of open standards that would be employed across the Internet.
Instead, social networking sites and Web portals such as Google and Yahoo began making their own proprietary user IDs available as logins on other sites. There’s no single protocol for these logins, so Janrain built software to interface with several of the biggest membership sites.
After a few years of slow growth, Janrain’s business has taken off along with the broader social networking market. The company said revenues tripled last year, and Drebes forecasts similar growth in 2011.
“We have a passion for this technology and this marketplace,” Drebes said. “It has taken longer than we had hoped.”
Silicon Valley-based Emergence Capital Partners, a specialist in software investment, led Janrain’s funding round. Other backers include participants in Janrain’s last round, $3.25 million late in 2009.
The company had a dozen employees at that time. Today it’s got 60, and Drebes said he expects to add 20 to 40 more by year’s end.
Facebook and Twitter firmly established the appetite for social networks, but LinkedIn demonstrated investors’ apparently boundless enthusiasm for the market. When that company held an initial public offering in May, offering shares at $45, the price immediately soared above $90. On Tuesday, they closed at $101.76.
Several companies in Portland have capitalized on the popularity of social networking. Those include Jive Software (social networking for business), ShopIgniter (retail over Facebook) and Webtrends (analytics for social networking activity.)
Janrain, whose clients range from big retailers to large media companies, continues to sign up new customers in the U.S. and abroad. But Janrain hopes to keep up its rapid growth by helping customers analyze and manage the personal data associated with visitors’ online IDs.
“The big question is: What do you do with all that data?” said Lisa Hannah, Janrain’s marketing director. “I really think that’s where the story is going to go in 2012.”
Privacy settings remain a hugely controversial issue on social networking sites, and Drebes said Janrain encourages its clients to be clear with online visitors just what information they’re sharing when they log in.
“Trying to get uplift,” he said, “you don’t want to get backlash.”
Web surfers need to be conscientious, too, Drebes said, and pay close attention to where they’re using their online IDs.
“Don’t say yes if you don’t intend for that data to be used,” he said.
Janrain will apply today’s investment across the company, Drebes said, from engineers to sales. Janrain had been running close to break-even, he said, but now has the resources to develop new markets and capabilities as opportunities arise.
“We’re going to be measured in our approach,” Drebes said. “When the time is right to hit the gas, we will be very well positioned to do so.”
– Mike Rogoway; twitter: @rogoway; phone: 503-294-7699
