InStranet valuation soars in Series C round.

Byline: Lou Whiteman

After two years spent building its product and marketing it overseas, a New York-based software company has raised $14.7 million to turn its attention toward winning customers at home.

InStranet Inc. raised the funding in a Series C round that valued it at $50 million, an increase of about 40% over its $35.3 million pre-money valuation. New investors Benchmark Capital and private shareholder Donald L. Lucas, the former chairman and a current director of Oracle Corp., led the new round.

Existing shareholders Business Objects SA, Apollo Invest, RSA SA and Galileo Partners also contributed. Mark A. Bertelsen of the Palo Alto, Calif., office of Wilson Sonsini Goodrich & Rosati pc, represented InStranet.

The funding did not come easily. InStranet senior vice president Tony Jewitt said the company originally had hoped to close this round by the end of the first quarter, but uneasy economic markets slowed the process. To cover expenses until the funding could be completed, InStranet's returning shareholders provided the company with a bridge loan, he said.

"We took the loan because we didn't want to be under any pressure to close the round early," Jewitt said. "There is no question that it requires more time, more due diligence and more reference calls to raise money now than it did a year ago."

With this round, the company has taken in about $23 million since its founding in spring 1999. It was originally funded with $75,000, and then secured $7.5 million in a Series B last year led by Paris-based Galileo.