AV Earmarks $50M for Enterprise Social SaaS

Austin Ventures has set aside $50M for former Razorfish CEO Jeff Dachis to build an enterprise class social software as a service (SaaS) consulting and products business unit. This follows the same playbook as the earmarked funds for Elisabeth DeMarse who rolled up CreditCards.com, and Brian Sharples who rolled up the vacation home rental business with HomeAway.com. The price tag of $50M is kind of a red herring. The number really doesn’t matter, but you need to announce some sort of capital committment. HomeAway has over $160M of capital committed to that business. The reality is that Austin Ventures has the capability of committing as much capital to this new business as they want, it all depends upon the ROI.

AV committed capital to John Egeland to check out the online financial services market back in July 2006, and we can’t find anything related to the results of that effort. So this doesn’t always work out into a killer profitable company, like CreditCards.com and HomeAway which have been home runs for AV.

It’s getting some press today, including coverage from The Statesman, the New York Times Blog, and the Washington Post.

Between the press release and the media coverage, not a single person has written the words “Enterprise 2.0″ in relation to this deal. But isn’t that was social enterprise software is? We found this definition, “the use of freeform social software within companies.” We know of another Enterprise 2.0 company based in Austin, and they liberally use the Enterprise 2.0 term. The former BSG (and all their acquired companies) have re-branded under the name nGenera. They’ve raised over $73M to go after this market, and already have a run rate to see $75M in revenue for 2008 (larger after they close other acquisitions in 2008).

Perhaps one of these guys should gobble up Austin-based Small World Labs, which has just such a software platform.

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