IPO Interrupted: ExactTarget Hits Capital Target

Email service provider ExactTarget, which has withdrawn its application to go public, said Wednesday that three venture capital firms have infused it with $70 million in capital.

The company said the funds amount to "a similar level" of funding to what it expected to raise in its initial public offering, which it announced it was pursuing in December 2007. The three investors are Battery Ventures, Scale Venture Partners and Montagu Newhall.

ExactTarget said this week that it added more than 250 new clients and upped sales by 40% in the first quarter, although it did not provide a revenue figure. Clients with which agreements were reached in the quarter include Pier 1, SkyMall and The Minneapolis Star Tribune.

CEO Scott Dorsey said the company has been profitable for three straight years, but "we know a significant amount of market opportunity remains both domestically and internationally" and the $70 million will help accelerate growth. The company said it will announce the location of its first international office in the next 30 days.

ExactTarget has pulled its application to go public on the NASDAQ in the face of difficult market conditions. Fellow email service provider Constant Contact's stock was trading in the $16 range Wednesday, down from a 52-week high of $21.24 -- but up from a low of $10.32.

Battery Ventures' Michael Brown, who will join the board of directors, said: "ExactTarget is enjoying a lot of momentum and has the right ingredients to continue to dominate a large and growing market."

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