With $10 million in hand, Performix looks to expand
Monday, April 26, 2004
With $10 million in hand, Performix looks to expand
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Performix Technologies Inc. in Burlington has raised $10 million in a
third round of funding to expand beyond the call center for its employee
performance management (EPM) software.
In the call center, Performix has
emerged as the market leader for the EPM niche, a segment that the company
essentially created, said Paul Stockford, chief analyst at Saddletree
Research, an Arizona-based analyst firm that follows the space.
“I
don’t see any evidence of this type of system prior to Performix showing up in
the late 1990s,” Stockford said. “They’ve paved a new market that has all of a
sudden become a hot, hot topic. This is something that has legs to it and has a
direct, measurable impact on productivity.”
Performix has about 30
percent of the call center market for the EPM segment, according to DataMonitor,
a London-based research and consulting firm.
Performix’ product taps
into the reams of data that call centers routinely collect on their employees’
performance such as quality, length and number of calls, and successful sales.
The software then not only makes the data available to managers in a dashboard
format but also gives that data to employees to show them how they’re measuring
up and how they can improve.
All we do is say (to employees), ‘We’ll
show you how you can be more successful,’” said Cathal McGloin, CEO of
Performix. Employees can see potential problems before they come to the
attention of a supervisor, he said, and monitor their progress toward earning
bonuses.
But McGloin believed Performix’ software had applications in
other areas, such as processing documents in the financial services market.
Internally, Performix even uses the software to measure its engineering
staff, McGloin said, though the data is more qualitative than quantitative —
emphasis is on meeting development goals, not on churning out lines of code.
The board liked the idea, but before it gave the full OK, McGloin said,
it wanted to see customer buy-in.
So Performix closed a deal with Wells
Fargo, which uses the software to improve the performance of its mortgage
processing employees. But McGloin wanted to secure new venture capital financing
to fund the expansion, even though the company was already cash-flow positive.
“We had a number of term sheets coming in from different firms,” said
Bob Davis, a venture partner at Highland Capital Partners and a member of the
Performix board of directors.
Performix has a knack for serving as the
first investment for operating veterans who have recently joined a VC firm.
In early 2002, Davis, founder of Lycos.com, made Performix his first
investment at Highland.
This time around, Performix was the first deal
for Eric Hjerpe, who joined Atlas early last year after a seven-year career at
Siebel Systems, where he held a number of senior positions. Hjerpe founded
Siebel’s online subsidiary, SiebelNet.
Hjerpe’s experience at Siebel was
a reason for Performix’s choice of Atlas, McGloin said. First-round investor ICC
Software Partners Ltd. also invested.
"Siebel has a product in this
space, though it’s a top-down approach,” said Hjerpe, a partner at Atlas. “Top-
down isn’t data-driven but is driven by objectives from the CEO. Performix has
business intelligence components where it grabs specific data and allows you to
look at employees via that data.”
Although Performix is the current
leader in this emerging space, it’s not lacking similar competitors.
Other players in the space include: Blue Pumpkin Software Inc., a
Sunnyvale, Calif., company backed by a large investor syndicate that includes
local firm Summit Partners; Aim Technology in Menlo Park, Calif.; Merced Systems
Inc. of Redwood City, Calif.; and Witness Systems, a publicly traded company
based in Roswell, Ga.
