WealthEngine has secured $5 million in venture capital funding, the first round ever of institutional fundraising for the Bethesda, Md., company. The Series A financing, announced March 1, came from Novak Biddle Venture Partners (NBVP) and QED Investors (QED).
The wealth research services firm for nonprofits and financial services companies was founded in 1992 and has almost 2,000 nonprofit clients. The venture funding will allow WealthEngine to “accelerate product development, enhance its service offering, and expanding marketing and geographic reach,” according to a statement from the firm.
Novak Biddle partners Jack Biddle and Janet Yang, and QED partner Frank Rotman will serve on the company’s board of directors. QED managing partner Nigel Morris, co-founder of Capital One, will serve as an advisor. NBVP was among the early Series A financing investors for Blackboard Inc., an enterprise software firm for education that was founded in 1997 and went public in 2004. QED will be an operating partner to help build statistical modeling and predictive analysis on top of data.
WealthEngine recently increased its contract with Dunn & Bradstreet to go from 16 million private business records to 150 million, according to CEO Tony Glowacki, with plans to develop data analytics within the company. Glowacki expects to release the Dunn & Bradstreet data this month, with product releases on a quarterly basis.
“Many of our clients are ready for this evolvement, in terms of ways they use this data. What the market needs is the capability to take the data in, large or small, and segment it into workable groups of who your prospects are,” he said.
Asked whether the company could be a target for acquisition or going public, Glowacki said that’s at least four to five years away. First, he plans to build out the market. “If only 5,000 or 6,000 nonprofits are doing this today, the market is not even touching these types of services yet and they’re extremely valuable,” Glowacki said. “The first step is getting the broader market to see the value in these services and integrate that into what they’re doing,” he said.
“We’re going to invest in this product, further educating the marketplace to how these things can provide return on investment,” Glowacki said.
Founded in 1992 as Prospects of Wealth and Resources, the company was reinvented as Wealth Engine when Glowacki arrived 10 years ago. “What’s interesting about what we’ve been able to do, when I came to this, everybody was focused on the bigger clients. No one was trying to talk to the local food bank or museum,” Glowacki said. “That’s where we established a footprint, and continue to have great deal of success at that end,” he said.
WealthEngine signed World Vision, with annual revenue in excess of $1 billion as a client last month, but continues to serve medium and small nonprofits. “That’s a big part of our story and we continue to do that,” he said.