Calif. Startup Engineers an Unusual Sales Deal

SAN FRANCISCO (04/25/2000) - Aprisa, a startup which is creating an online engineering design-support center, is expected to announce a contract with VEBA, the German electronics distributor.

VEBA has agreed to sell $70 million in memberships to Aprisa's online service the old-fashioned way - through sales representatives. Aprisa plans to start accepting membership registrations in July. But the company expects the three-year deal with VEBA, the third-largest electronics distributor in the world, to be the prime driver of its sales. Target customers include Cisco, Nortel and other manufacturers of electronics equipment.

"Instead of counting on people finding out about CircuitNet (Aprisa's Web-based service) on the Web, we figured why don't we go and tell them so we can sell memberships?" said Martin Shum, president and CEO of Aprisa, which is based in Westlake Village, Calif. VEBA's application engineers already help customers with design support. Now instead of sending engineers to its 40,000 accounts, VEBA would be able to sell memberships to Aprisa's online service, Shum said.

This exclusive service would help VEBA differentiate itself in an industry in which five companies control 95 percent of the market, he added. Aprisa's service would enable engineers to get information for research and development of electronics projects.

Engineers would have access to reference designs, white papers and a database that would list prices, availability and manufacturers of components. The database also would help engineers identify which components meet design and function specifications. A search engine using patented CircuitNet technology would enable engineers to conduct rules-based searches using mathematical equations instead of just words. The Web site also would offer a drawing board, a design audit function and side-by-side comparisons of vendors' products.

Shum says the service would enable engineers to bring products to market faster because it would save them the trouble of querying multiple vendors. Customers would be able to buy annual memberships and pay $80 an hour, or about $1.33 per minute. Commercial customers would decide how many hours a year they want and then distribute account passwords to their engineers.

Aprisa just closed a second investment round of $5 million from VEBA, Siemens Venture Capital, Angel Ventures, Acclaim and others. Angel and Acclaim each invested $500,000 in the first round. Aprisa plans to hold a third round later this year and possibly go public thereafter, Shum said.

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