Deal Radar 2008: Jigsaw

Jigsaw is an online directory of over 8 million business contacts, complete with full name, title, address, email address and telephone number. It works on a point system, where members exchange contact information they have for contacts they need. Members are given points for every contact they provide and for wrong contact information which is updated by them. On the other hand, points are deducted from their account for incorrect information they provide. It is like an online white pages with detailed contact and company information including phone numbers and email addresses, on private and public company executives. The service is used primarily by sales people.

Jigsaw was founded in San Mateo, California by Jim Fowler and Garth Moulton in 2003, at a time when venture capital investment was hard to come by. They received $750,000 to start out with and a year later in September 2004 received Series B funding of $5.2 million from El Dorado Ventures and Norwest Venture Partners. In March 2006, the company received $12 million in Series C financing from Austin Ventures and its existing investors El Dorado and Norwest.

In July 2005, Jigsaw celebrated the 1 million mark in number of contacts. In fifteen months, the number had grown to 7 million and now stands at 8 million, adding 12,000 contacts a day. The number of members has grown to approximately 400,000 most of them being salespeople or recruiters.

In March 2008, the company reported that over 50,000 recruiters use the online directory to recruit passive contacts and connect with leads. The company provides specific tools for recruiting purposes including LinkedIn integration. Different subscription packages are available for recruiters depending on their requirements.

In an interview on EnterpriseIrregulars last year, Fowler discusses the company’s “Pay or Play” business model, where members either pay $25 per month for 25 contacts or add 25 new contacts every month. In addition to individuals, Jigsaw has corporate accounts that buy subscriptions and data in bulk. They also make revenue cleaning out CRM databases. Other sources of revenue the company has not yet utilized are affiliate programs. He expected the company to be profitable by the end of 2007.

In all this the question remains – do companies like Jigsaw invade the privacy of companies or individuals? With social networking sites and online alliances becoming more popular, contact data is easily available. In an article on Entrepreneur.com, CEO Jim Fowler says the information in Jigsaw’s databases although possibly private is neither copyrightable nor a trade secret, thus making any government action unlikely.

On CNNMoney, CEO Fowler talks about his rivals which are companies like ZoomInfo, Dun and Bradstreet, Acxiom and infoUSA but insists the site is not for business networking like LinkedIn. The only common base with LinkedIn is the desire to take the company public soon.

We have no information on the company’s revenues, so it is very hard to gauge whether this is a realistic aspiration in the short term.

This segment is a part in the series : Deal Radar 2008