Start-Up Niku Gets $20 Mln In 2nd Round Financing

PALO ALTO, Calif. (Reuters) - Niku Corp., a one-and-a-half-year-old Internet software start-up firm, is expected to announce Tuesday it received $20 million in a second round of venture capital financing.

The Redwood City, Calif.-based firm is being backed by venture capital firms J.H. Whitney and Venrock Associates. Also included in the funding are Comdisco Ventures, Hambrecht & Quist's venture fund, Access Technology Partners LP, The Phoenix Partners and Trust Company of the West.

Niku, which founder and Chief Executive Farzad Dibachi said in an interview will have revenues of $12 million to $14 million this year, is developing software and an Internet portal that lets service and consulting companies automate and streamline their businesses.

Customers include database software maker Sybase Inc., customer relationship management software firm Vantive Corp. and others. Niku now has 10 customers, said Anil Gupta, head of marketing, but that's expected to grow quickly.

Gupta said the market for Niku's software and its Internet portal designed for individual consultants and so-called virtual consulting firms would range from $20 billion to $60 billion in the next several years.

Software that helps larger, manufacturing-oriented companies perform ``back-office'' functions such as accounting, finance, human resources and supply chain management is sold by SAP AG, Oracle Corp., PeopleSoft Inc. and others.

Front-office software to help run sales forces, call centers and customer service functions is sold by Siebel Systems Inc., Vantive, Clarify Inc. and Oracle.

But consulting firms -- such as the Big Five accounting firms -- don't have software available to them now that is tailored to their business, which centers on knowledge, consulting and other types of intellectual capital, Dibachi said.

Niku is Dibachi's second start-up. He sold his previous company, closely held Diba, to computer maker Sun Microsystems Inc. in 1997 for slightly less than $100 million. Diba focused on developing next-generation information appliances.

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