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BroadVision launches venture arm

Establishing a $10 million venture fund to help young companies using its e-commerce software seems remarkable for an outfit that's newly profitable.

BroadVision is creating a $10 million venture fund to help finance young companies that use its e-commerce software, a remarkable step for an outfit that's only just established itself as profitable.

The Redwood City, California, company is also offering new pricing packages designed to appeal to e-commerce start-ups.

Companies eligible for the venture fund include firms that would use BroadVision's personalization and e-commerce software directly in their businesses, systems integrators and value-added resellers that implement and build applications on BroadVision's platform, and application service providers that would rent out BroadVision's software to customers.

Big players like Microsoft, Intel, Adobe Systems, Oracle, and Network Associates have had venture funding arms for some time, but BroadVision is far smaller. Last year the company turned its first profit, $4 million, on $50.9 million in revenues.

Thus the $10 million fund represents more money than BroadVision has made in its entire history, although it's a relatively small portion of the $65 million it has in the bank from a secondary stock offering last year.

"Some of these start-ups may turn out to be the next generation of eBays or Amazons or E*Trades," said Perry Thorndyke, BroadVision's director of business development. "This program is an attempt to recast our standard pricing model in a way that would be palatable to start-ups in their early stages of planning."

BroadVision kicked off the new program, which it calls "BroadVision E-Everything/E-Everywhere" or BE4, this week with an event for venture capitalists and potential e-start-up customers, as it calls them. The company is stressing the new pricing arrangements--its average selling price today is $300,000--over the venture investment activity, which it will handle itself but incorporate traditional venture capitalists.

"This is not a general-purpose venture fund," Thorndyke said. "It's targeted specifically for companies that want to use BroadVision as part of their business." He expects the first participants to be up in 30 days.

The special pricing will be tailored to each company depending on its business, but generally it will include an annuity stream or percentage of transactions handled through BroadVision's software. The company has tested that approach working with Security First Technologies, which sells online banking software to financial institutions.

BroadVision's basic software is called One-to-One Enterprise, and it offers specialized applications for banking, sale of hard goods, and publishing.