It has been a busy fall for JanRain. The Portland, OR-based software startup is announcing today it has closed a $3.25 million Series A financing round led by West Coast firm DFJ Frontier. RPM Ventures and Anthem Venture Partners also participated in the round, which had its first close in late summer. The company also has been signing up new corporate customers for its flagship product, which lets websites register visitors so they can sign on more easily using secure, universal logins, instead of needing a separate password for every site.
First-round venture investments in software companies have been few and far between in the Northwest, especially in Portland. The money should help JanRain expand its efforts in online identity technologies, and will allow it to make new hires in sales, marketing, engineering, and customer support. The company, which has been supported by angel investors to date, currently has 12 employees.
“As an angel-backed company, we’ve had to constrain ourselves. Our [new] investors got excited by the traction we have in the market,” says Brian Kissel, the CEO of JanRain. “Our big challenge and opportunity is execution.” He adds that the company can now tackle its business opportunities “with more bravado.”
Kissel talked about the respective strengths of the company’s new venture investors. DFJ Frontier offers hands-on expertise and the huge network of Draper Fisher Jurvetson. Anthem is a strong presence in media and entertainment. And RPM has expertise in moving companies from the early technology stage to market adoption, as well as a deep understanding of how tech markets evolve.
As we reported in a profile back in April, JanRain makes software that helps website operators manage logins and helps consumers take their identities—including user preferences, demographic data, and social connections—with them wherever they go online. The company was founded in 2005 by Larry Drebes, the software entrepreneur who previously co-founded Desktop.com and Four11. (The latter was acquired by Yahoo in 1997 and was the basis for Yahoo Mail.) Drebes serves as JanRain’s vice president of engineering.
The company’s software-as-a-service technology is used by more than 170,000 websites worldwide. The software, called RPX, lets visitors login to a site using their accounts from Facebook, Google, Yahoo, Twitter, MySpace, AOL, or other OpenID accounts. Some of JanRain’s better-known customers include Sears, Kmart, FOX News, Universal Music Group, EMI Music, Qype, and online social technology platforms like Seattle’s Wetpaint. JanRain uses a software-as-a-service business model whereby companies pay for the startup to power their website registrations.
The big opportunity for websites, as Kissel explains, is to get more visitors to register, so they’ll spend more time on the site and presumably buy more products—all with a more personalized interface that remembers what you users like and don’t like. “At a fundamental level, users want a better experience. Website operators want to provide a better experience,” Kissel says. “You should be treated like a returning guest. This [software] empowers that to happen.”
JanRain’s most recent focus has been on letting website visitors share their experiences on social networks more easily. So if you sign on to a site with your universal login and see something you want to tell your friends about, you can just a click a button to publish your comments on Twitter, Facebook, MySpace, or Yahoo.
Kissel calls this “social publishing,” and says it could drive more trusted referrals to websites, and ultimately will change how people consume information and products online. Indeed, it’s already happening—and JanRain wants a piece of the action.
“This is social enablement of decision making,” Kissel says. “That will transform the way people do things on the Web.”
