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Kontiki lands $16 million in funding

Though times are difficult, venture capitalists smile on the content distribution software company, which was founded by a former Netscape executive.

Kontiki, a software company founded by former Netscape executive Mike Homer, announced Monday it raised a $16 million second round of funding amid difficult times.

This funding round comes at a time when venture capitalists have dramatically pulled back on investments, hitting levels not seen since 1998. But the cachet of Homer's name has helped set Kontiki apart from other potential investments under review by venture capitalists and corporate investors, said analysts.

"His name makes a difference in attracting further funding and helps in distributing the product. But, as they say in baseball: You can get on base, but it definitely doesn't guarantee you'll make it to home plate," said Jesse Reyes, vice president of research firm Thomson Venture Economics.

Kontiki, based in Sunnyvale, Calif., has developed its Delivery Management System software, which is designed to help corporations publish and deliver digital video and documents to their employees, customers and consumers.

The latest funding will be used to bolster the company's sales force, said Rob Selvi, chief financial officer at Kontiki.

Despite having Homer as a company founder and chief executive, raising the second round was far from a cakewalk when they began late last year.

"We talked to a few financial venture firms along the way and found, like everyone else did, that the market was tough. But since we had such a strong degree of support from our existing investors, it was somewhat easier," Selvi said. "Basically it was as we expected, given the environment."

Adobe Ventures and VeriSign contributed to the latest round, as did previous investors Benchmark Capital and The Barksdale Group.

Kontiki has now raised a total of $34 million. Selvi declined to comment on whether the company received a higher or lower valuation with the second round.

"We could have raised slightly more in this round, but this was well above the minimum that we set for the round," Selvi said.

He also agreed with Reyes that Homer's name helped draw in investors.

"It helped a ton," Selvi said. "A great idea will get you big market opportunities, but the other fundamental requirement (from venture capitalists) is a strong management team."

While at Netscape, Homer held such positions as executive vice president of Netscape Netcenter and executive vice president of sales and marketing. After America Online acquired Netscape, he served as a senior vice president.