It wasn’t huge news Sept. 27 when BidPal Network announced it had landed a $5.6 million investment from two venture capital firms, one in Carmel and one in suburban Chicago.
Rather, the investment in the local software firm was just the latest in a chain of events that started more than 20 years ago when Don Brown and Joe Adams started Software Artistry. That help-desk software maker spawned at least 15 tech startups here, BidPal among them, and unleashed a torrent of investment capital and talent that continues to fuel a critical sector of the local economy.
The profound effect of Software Artistry on our tech sector—and perhaps our psyche—was explored in a story and chart in last week’s IBJ by reporter Chris O’Malley. The tale of Software Artistry, which IBM bought for $200 million in 1997, is enough to have locals rethink the knee-jerk negative reaction that most people in the business community have when they hear the word “takeover.”
Can Indianapolis really come out the winner when a big company swoops in and gobbles up one of our home-grown firms? Maybe not in the old-line world of banking and manufacturing, where the acquiring firm typically drains the local operation of jobs and decision-making authority and the proceeds of the sale seem to be scattered by the wind.
But the tech sector is a different animal, at least where software is concerned. The Software Artistry operation was ultimately absorbed by IBM, but co-founder Don Brown, who had left three years before the sale, created Interactive Intelligence, now a publicly traded local software firm with annual sales of more than $160 million.
Former Software Artistry CEO Scott Webber, now CEO of BidPal, put some of his sale proceeds into Volatus Advisors, a local investment firm he chairs that has invested in and advised dozens of other local tech firms.
One of those is Aprimo Inc., founded by former Software Artistry Marketing Director Bill Godfrey in 1998 using some of his proceeds from the sale. Aprimo was sold in January to the Ohio firm Teradata for $525 million, money that local tech-sector advocates fully expect will be recycled here via investments in other software startups.
No fewer than 10 former Software Artistry executives have redeployed their talent and treasure here, in turn attracting more talent and more treasure, like the capital infusion just announced by BidPal.
Jim Jay, president of TechPoint, an organization that’s an advocate for the local tech economy, says the success of the sector is such that he has trouble keeping track of the newcomers.
All that success creates demand—demand for more capital. Capital that creates jobs. In this day and age when job creation is everyone’s priority, the success of the sector is an argument for restoring at least some of the budget of the state’s 21st Century Fund, which invests in tech firms but has been cut in half in recent budget cycles.
But that’s an argument for another day. For now, we’re content to enjoy some good news. In an economy that seems to generate a relentless parade of bad news, it’s refreshing to read about something that works.•
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