Austin startup Wisegate raises $4 million for expansion

Dec 16, 2014
Austin American Statesman

Austin entrepreneur Sara Gates founded her startup Wisegate with the idea that senior IT professionals get the best business information from peers at other companies, instead of from market research reports


Over the past three years, the company has built an invitation-only online community that is open only to senior technology managers (marketers and vendors can’t join). The service provides matching capabilities so that members can sort content by their industry and meet people with specific experience in similar roles. The company generates revenue by selling memberships to its service


A year and a half ago, the company raised $3 million from a syndicate of angel investors including Atlanta Technology Angels, Cowtown Angel Network, the Central Texas Angel Network and Golden Seeds. Prior to that it had raised $1 million from individual investors


On Monday, Wisegate announced a new $4 million round led by Arcus Capital Partners with participation from previous investors


Prior to launching Wisegate, Gates was a vice president of identity management at Sun Microsystems. Before that she was director of product marketing at Austin-based Waveset Technologies, which was acquired by Sun Microsystems in 2004


In addition to providing a discussion forum, Wisegate hosts live web sessions with members and facilitates one-on-one conversations between IT experts, which it then curates and makes available to subscribers


The service generates revenue through subscription rates ranging from $10,000 for an individual membership to $25,000 to $50,000 for an annual group package. Renewal rates are at 90 percent, Gates said


The 30-person company doesn’t disclose how many participants it has, but companies and organizations with memberships include Brown University, City of Tampa, Samsung Research America and DynCorp International


The company competes with market research firms such as Gartner Group, which conduct product reviews and track technology trends


Ross Singletary, managing partner of Arcus Capital Partners, said, “The traditional analyst firm model of research and reporting cannot move at the pace of technology today, leaving a gap in the market that Wisegate’s social and matching algorithms help to fill.”


Wisegate doesn’t share specific financial information, but Gates said the company is nearing profitability






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