New York entrepreneur Jeff Dachis has landed $50 million from Austin Ventures to fund a comeback — but not as a New York entrepreneur. He's trading a 212 office line for one in the 512, to launch a new company promising to bring the Web 2.0 revolution to businesses. Despite the change in venue, and the new version number, that sounds eerily like the premise of Razorfish a decade ago — the digital consultancy which Dachis launched, and whose value he watched plummet from $5.5 billion at the height of the 2000 bubble to $8.2 million in a 2002 fire sale. So what is Dachis's company, if not simply Razorfish 2.0?
So Dachis persuaded Austin Ventures to hitch itself to his star, which is unusual. (If convenient for Dachis personally; he has a child who lives in Texas, and he has been commuting there to visit for some time.) Venture capitalists rarely write a blank check to make things convenient for their entreprenurs. Dachis's company, as yet unformed, promises to be "an industry leading strategic consulting practice and an enterprise class Social Software-as-a-Service (SaaS) suite." Stripped of the jargon, that means Dachis plans to charge companies for advice and rent software to them over the Web. Specifically, "social software"; the most reasonable guess for that is something like Marc Andreessen's Ning, a service which allows users to create their own miniature social networks.
The Facebookification of business may be an inevitable and proftiable trend. Yet it is dangerous for Dachis to launch this so amorphously. He may never live down the time, almost a decade ago, when, faced with a CBS News cameraman, he fumbled at explaining to 60 Minutes II what, precisely, Razorfish did. "We've asked our clients to recontextualize their business," he said. "We've recontextualized what it is to be a services business. We radically transform businesses to invent and reinvent them." He could say the same thing for his career.
Austin Ventures Announces Partnership with Jeffrey Dachis to Create Social Enterprise Software and Services Company
Digital Services Pioneer Secures $50 Million Commitment
AUSTIN, Texas - April 28, 2008 - Austin Ventures, ("AV"), one of the nation's largest venture capital firms, announced today that it has entered into a partnership with Jeffrey Dachis to form a new company which will focus on creating an industry leading strategic consulting practice and an enterprise class Social Software-as-a-Service (SaaS) suite. AV has committed up to $50 Million in capital to support management's strategy to build and grow organically and through acquisition. Mr. Dachis will serve as Chairman and Chief Executive Officer for the new firm.
Prior to establishing the new firm, Dachis' leadership and vision helped establish the digital services industry when, as co-founder, CEO, President and Chairman of Razorfish, Dachis profitably grew the company revenues to over $250 Million, expanded its talent base from 2 to 2,200 employees with offices in nine countries, completed over 25 M&A transactions, lead its IPO which raised $55 Million, and catapulted Razorfish's public valuation to over $5 Billion. Over the last decade, as the recognized leader in the digital services industry, Razorfish has won numerous performance, design, and professional service awards. Continuing its growth, although Dachis left the company in 2001, Avenue A | Razorfish now part of aQuantive, was recently sold to Microsoft for $6 Billion in May 2007.
Dachis is also a Senior Partner at Manhattan based Bond Art + Science, an Experience Architecture firm specializing in information architecture and user experience design for digital media and information services. He serves as an advisor to companies including: Bazaarvoice, Waterfall Mobile and Swapagift.com. Dachis also serves as the Co-Chairman and national board delegate of the Producer's Guild of America New Media Council East, and is on the Board of Directors of Austin's ArtHouse.
Recognized as a leading expert in digital technology, media, and business, Dachis was awarded Ernst and Young's Entrepreneur of the Year award in 2000, and has frequently appeared as a speaker at industry conferences, and in publications such as the New York Times, the Wall Street Journal, Business Week, and Wired Magazine, and on television shows such as CNBC, CNN, CNNFN, MSNBC, 20/20, and CBS 60 Minutes.
"I believe there is enormous opportunity in helping companies devise and implement a strategy to engage their constituents in a meaningful dialog throughout the enterprise. As companies begin to see the benefits of utilizing "social" technology to engage their customers, employees, suppliers, shareholders, and communities in an active and transparent dialog, they will need a trusted partner to help them navigate the opportunities, and an integrated set of scalable, robust, and secure enterprise class tools to implement them. We are here to provide both expertise and implementation," said Jeffrey Dachis.
Dachis added "Austin Ventures' considerable resources, experience, commitment, as well as their quality relationships with entrepreneurs, in addition to an unparalleled track record, gave me a high degree of confidence that this was the firm to work with."
"Through his leadership at Razorfish, Mr. Dachis was instrumental in helping enterprises leverage the web during the early phase of the Internet. The proliferation of social networks has created another paradigm shift wherein enterprises need to drive commercial benefit from the evolving social fabric of the Internet. We believe Mr. Dachis' experience and vision are ideal to take advantage of this most recent shift. The relationship with Mr. Dachis is part of AV's ongoing strategy of partnering with talented, proven executives to pursue investment opportunities. We continue to build relationships with executives who share our passion for growth businesses and are energized by the partnership we build with them," said Chris Pacitti, General Partner, Austin Ventures.
The new company will be headquartered in Austin, Texas.