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Deal Radar 2008: ON24

Posted on Wednesday, Aug 27th 2008

ON24, the global leader in webcasting and virtual events solutions, is headquartered in San Francisco, California. It was co-founded by Sharat Sharan in 1998 as Newsource, a distribution center for Internet-based video press releases. In 1999, it changed its name to ON24 and its focus to that of a financial multimedia company. Following the dot com-bust in 2001, the company started concentrating solely on its webcasting platform. Today, ON24 provides businesses with a range of scalable webcasting and rich media marketing solutions. ON24’s solutions can hold online events for hundreds or even thousands of people. While WebEx and other web meeting providers have a large phone component in tackling audio, ON24 delivers both audio and video through the Internet. The company’s reliable platform coupled with its professional support ensure that all online events run smoothly.

ON24 provides two service levels: self-service or full service, based on a company’s needs, resources, and volume of events or number of webcasts it plans to host in a year. In my interview with Sharat Sharan last year, he said that the self-service, which supports events with 500-600 people in each event, costs around $60,000. The full-service platform, which includes professional services, costs about 30-35% more.

In 2007, the company launched Insight24, a B2B rich media network. Insight24 aims to reuse the company’s existing rich media content – podcasts, webinars, online videos and more. Insight24 offers clients two options: they can either choose to work on a revenue sharing model, or if they are seeking sales leads, do a paid lead generation campaign with Insight24.

On June 30 2008, the company launched the ON24 Virtual Show. With Virtual Show, the company has expanded its focus to include trade shows, conferences, and events. From the production side, the ON24 Virtual Show could cost between $20,000-$50,000 depending on the number of exhibits and complexity of shows. I discussed ON24’s virtual conference solution in my Kill The Business Trip article in Forbes.

In May 2008, the company appointed Fergal Burke as director of sales for EMEA, and promoted Michael Nelson from senior director of channel sales to vice president of North American Sales.

ON24 focuses on five core industries: publishing, technology, life sciences, government, and continuing education, and has more than 600 global organizations relying on it. Organizations who have chosen ON24’s platform include Business Objects, Cisco Systems, IBM, Penton Media, UBM Media, and Ziff Davis. Interestingly, Cisco owns WebEx!

The company has raised more than $46 million: a $6.1 million Series A from Canaan Partners and Rho Management, and a more than $24 million Series B, a $5 million Series C, a $5 million series D, and an $8 million Series E, all from the same internal investors.

In his interview, Sharat Sharan said that the company had a revenue level of about $30 million. Currently, ON24 is growing 40% y-o-y and plans to continue at this rate with an aggressive expansion plan that includes international expansion, with new offices in London and Beijing, and new services and solutions. The company is already putting most of its revenue to expansion and raised the $8 million in July for this purpose.

It has taken ON24 time to find its niche, but now they have found it and are generating solid revenues. Valuation, at this point, would easily be in the $150 million range. I would like to see Sharat Sharan and his team build a big company out of the webcasting and virtual show products. In both markets – seminars and conferences – much resource wastage takes place. ON24 is positioned perfectly to build a compelling alternative. I really like the market and the company.

This segment is a part in the series : Deal Radar 2008


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