Voyager Capital Entrepreneur Spotlights

Tom Romary co-founded Voyager Fund III portfolio company Yapta in July 2006, drawing on his experience in both the travel and Ecommerce markets. Prior to starting Yapta, Tom served as a marketing and general management executive for some of the nation's premier consumer brands. Tom was Vice President of Marketing at Alaska Airlines (NYSE: ALK) with responsibility for over $250 million in annual revenue and over 2,400 employees. He led Alaska's frequent flier program, customer care call centers, product marketing, advertising and promotions, airport club rooms, and in-flight service and catering. He also launched numerous product innovations, including the digEplayer, an award winning hand-held in-flight entertainment system.

Prior to Alaska Airlines, he was Vice President of Consumer Marketing at Real Networks, where he helped launch the company's music and premium video subscription services. Before his years at Real Networks, Tom served as Vice President of Marketing at Fogdog, Inc. (NASDAQ: FOGD), helping the sporting goods e-retailer grow annual sales from $100,000 to over $30 million and playing a key role in its successful 1999 IPO. Earlier in his career, he held various management roles at Electronic Arts/Walt Disney Software and General Mills.

Tom has an engineering degree from Duke University and an MBA from Harvard. He is an avid traveler and outdoorsman, having climbed Mt. McKinley in Alaska, Cho Oyu in the Himalayas and he recently led a team of other Seattle area technology professionals on an ascent of Mt. Rainier. He lives in Seattle with his wife and three boys.

Why We Invested

There are over 100 million travelers globally who begin their travel planning online. In the US alone, $80 billion is spent annually by over 60 million consumers who plan and book leisure and business travel online. Airline and hotel bookings together make up 83% of total online travel spending. Given that only 41% of airline tickets and 25% of hotel rooms are currently booked online, there is significant room for growth in the online market.

Yapta is a disruptive solution that offers real price transparency to frequent travelers before they buy their flights, as well as refunds or credits from airlines post-purchase. Yapta delivered significant savings to the 100 million plus people who plan travel online globally. Yapta’s trip tagging and price tracking service has the potential to disrupt entrenched online agencies such as Expedia, Orbitz and Travelocity, and travel search engines Kayak, Farecast, and SideStep.

Why It's Working

Yapta continues to refine its innovative tracking and alert service that helps frequent business and leisure travelers optimize the value of their online travel planning. Since its launch in May 2007, Yapta has alerted hundreds of thousands of travelers to more than $66 million in potential airfare savings. It was named one of the “Best 50 Websites in 2007” by Time.com, named by AlwaysOn as a “top 250 private firms to watch” in 2008 and won the “2008 Consumer Product of the Year” award from the Washington Technology Industry Association. The new website was released in summer 2008 which will allow travelers to plan their trips directly from the Yapta site.

The Background

When Dan Shapiro was graduating from Harvey Mudd College with a degree in Engineering, he remarked to a friend, “If I ever go work for a software company, do me a favor, shoot me. Put me out of my misery.” Two months later he moved to Seattle to work at Microsoft. While there, he ran a broad swath of projects ranging from the recesses of the Win32 driver model to the familiar Windows XP user interface. He also met colleagues with great passion in other divisions – Expedia, Office – that would form the core of an all-star team a decade later.

With Windows XP behind him and an “18 month project” called Longhorn ahead, Dan stepped out of the product team and tried something different. He prepared a report analyzing Linux as a competitive threat to Windows for Bill Gates and Steve Ballmer. The report was well received and Dan left to go work for a company building a Linux-based cell phone.

Wildseed was a pioneering company on many fronts. “Identity,” the first commercially available phone to run Linux, didn’t look like a Linux phone – or much of any phone for that matter. It was curved like a banana, had keys on the top and a screen on the bottom, and taco-shaped faceplates that snapped on and off, bringing digital content along via an embedded smartchip. Dan had responsibility for the software stack, from kernel drivers to video games. The phone was a hit with teens and critics, but the company was snapped up by AOL before it hit mass production.

Dan then spent a year at Real, running the RealArcade software product. The software storefront sold casual games like Bejeweled and Solitaire in record numbers – 70% to the heretofore-unrealized market of 35-65 year old women. Even as he lead the team through a major release cycle, late night brainstorming sessions with an old friend Charles Zapata launched him down the path to found a new company. It was literally in his garage, in the middle of a woodworking project, covered in sawdust, when the flash of inspiration came that would turn in to Ontela.

Why We Invested

Where do all those pictures people take with the cameras on their cell phones go? A recent survey shows that while people are increasingly selecting camera phone handsets, they are frustrated by how hard it is to access the pictures and put them to use. The study also shows that 98 percent of all photos snapped with camera phones never leave the handset. Forty percent of mobile phone owners would consider changing wireless service providers in order to get a seamless photo sharing experience. Respondents overwhelmingly said that they would expect to pay for the service, leaving the door open for carrier-based photo sharing services that deliver images to users’ PCs and popular photo sharing web sites such as Windows Live Spaces, Facebook, Snapfish, Flickr and others.

Why It's Working

Ontela provides technology to wireless carriers and image service providers that allow their customers to unlock the photos in their phones. For the first time ever, mobile phone users have a way to save all their pictures to their PC, email accounts and favorite imaging sites without a single extra click. The company’s patent-pending technologies install in under 60 seconds and move images automatically and securely from camera phones to their destinations of choice. Ontela’s solution supports the leading wireless handsets and platforms.

The company launched their service commercially with their intial carrier, Cellular South, in late 2007. Cellular South is the nation’s largest privately held wireless provider. Additional carriers have been signed and will begin launching in early 2008.

Dan has maniacally assembled a team that beyond talented, is truly passionate about what they do. Passion to deliver can make all the difference.

Since the 1980s, San Diego has fostered a community of information technology experts in the field of enterprise-class analytics. The person most recognized for starting Southern California's analytics innovation cluster is Bob North, the founding CEO of HNC Software. From its founding in 1987, Bob grew HNC into a public company with 1,200 employees by 1999. Since HNC's acquisition by Fair Isaac in 2004, the former HNC employees have started a number of venture-backed companies in the analytics space.

Russ Mann was on the executive team of HNC working for CEO John Mutch when Fair Isaac agreed to acquire HNC for $800 million. In 2005 Russ was asked to lead the consumer-facing portal for Fair Isaac, MyFICO.com where he grew revenues 50% in his year-long tenure there before being recruited out by John Mutch to join the executive team of Peregrine Systems as SVP Strategy. Russ and team were asked to help turn around this struggling San Diego-based technology company. Less than 18 months later, Peregrine was righted, and then acquired by Hewlett-Packard for $425 million.

At HNC, Fair Isaac and Peregrine, Russ worked with many world-class people, several of whom he convinced to come on board his next endeavor.

First the connections. Russ Mann, Mike Galgon, and Voyager Managing Director Erik Benson, attended Harvard Business School together and moved to Seattle after graduation. Mike Galgon co-founded as President a startup called Avenue A, an early player in the online advertising technology market. Voyager Capital invested in Avenue A's first, and only, venture capital round in 1999 through Voyager Managing Director, Erik Benson's, connection with Mike. Avenue A went public the following year, was renamed aQuantive, and in 2007 acquired by Microsoft for $6.4 billion. Russ joined an existing venture capital-backed startup called ONYX Software as a Director of Product Marketing where he helped the company effectively compete in the enterprise CRM market, before ONYX went public.

Fast forward to March 2006. Russ had left HP after the Peregrine acquisition and was talking to the owners of Silicon Space, a company in San Diego that had a group/product called SEMDirector, about spinning out the technology and customers into a seperate company. Russ recognized that he could bring his enterprise CRM and financial services analytics domain (from ONYX and HNC, respectively) to bear on the emerging Interactive Marketing Analytics (IMA) market opportunity. He thought he could ultimately build, with the foundation of the SEMDirector spin-out, an enterprise-class "system of truth" to help Chief Marketing Officers better understand and calibrate their spending in all forms of interactive marketing, from search and display marketing, to social media and video advertising.

After spinning out SEMDirector from Silicon Space, Russ first recruited a management team from the executives he worked with at HNC, Fair Isaac and Peregrine. He then approached Jim Wu at Dubilier & Co. and Erik Benson at Voyager Capital for Series A venture capital funding, which closed in January of 2007. Soon after closing the first venture round, Voyager introduced Eric Byunn of FT Ventures to the company as a potential Series B lead investor, given Voyager's previous success in syndicating software investments with FT Ventures in the past including Global Market Insite and Capital Stream. The Series B venture round led by FT Ventures was closed in December 2007 and the company was renamed Covario. Today, Covario is the leading provider of enterprise-class software-as-a-service (SaaS) for Interactive Marketing Analytics.

Voyager Capital looked at the opportunity to invest in Covario through the same lens that they used to invest originally in Avenue A/aQuantive. Avenue A had built the first ROI-based online display advertising software-as-a-service platform that provided online banner ad serving and tracking to companies looking to transition a part of their traditional "offline" ad spend to the Internet. Similarly, Covario had built the first ROI-based Interactive Marketing Analytics software-as-a-service platform that provided broad advertising analytics to Global 2000 companies starting out with Procter & Gamble, Intel, and Hewlett-Packard as early adopting customers.

Why It's Working

Russ understood that as a first time entrepreneur and CEO, Covario's success would depend on not only a strong business concept and technology, but also on experienced investors to help guide the company through the competitive online marketing industry. Voyager's investment team had helped guide aQuantive from startup, to an IPO, and beyond, and intuitively understood the building blocks that would be required to help Covario rise above the noise.

Through Voyager's active board participation over the last year, Covario has received high level introductions to over 20 customers and strategic partners, helping to develop an ecosystem around the Interactive Marketing Analytics category. Furthermore, Voyager's Strategic Partners, Keith Krach (founding CEO of Ariba) and Chrismon Nofsinger (President of Nofsinger Strayer Consulting) were engaged as CEO advisors (helping Russ build a "High Performance Team") and Voyager 's Venture Partner, Tom Kippola, was engaged by Covario as a marketing advisor (helping Russ hone his "Go to Market" strategic plan).

From its spin-out formation in March 2006 to today, Covario has built a thriving startup focused on leading the Interactive Marketing Analytics market opportunity, with over 60 employees, $10 million in revenue bookings in 2007 and 30 Global 2000 enterprise customers. Covario is off to a great start under Russ Mann's leadership.