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DCA Capital in the News

April 10, 2006
Phoenix Business Journal

Software Firm Lands $8M in VC Funds

A Tempe company that designs software to help firms stay in compliance with environmental regulations landed $8 million in venture capital to expand its business in Arizona and overseas.

Environmental Support Solutions Inc. received the funding from a group led by Phoenix–based Grayhawk Venture Partners and DCA Capital Partners, a Sacramento, Calif., private–equity fund.

ESS Chief Executive Robert Johnson said the investment will be used to add to its local infrastructure, hire employees in Arizona and expand the business in other countries.

“We’ll be hiring about 20 more people in Arizona this year, and adding increased IT capabilities,” he said.

The company’s Essential Suite and Compliance Suite software and services helps users comply with international, federal, state and local regulations, and industry standards. ESS clients include British Petroleum, Dow Chemical and PetroChina.

Johnson said his company increasingly is hosting the software its clients use, and part of the financing ESS received will go toward adding to that technical infrastructure.

In addition to the new hires and infrastructure on the home front, ESS also is planning to open an office in Calgary, Alberta, Canada, and add to its European and Asian operations. “We’ve had quite a bit of growth overseas,” Johnson said.

Growth overseas helped the new investors put their money into ESS.

“We think the compliance and operational risk management concept is of critical and increasing importance … in today’s highly regulated environment,” said Jeremy Wolfe, a partner at DCA Capital Partners. “ESS has built a leading position in an important category within the broader enterprise software universe, and they have an experienced management team that can successfully take the company to its next level of growth.”

The ESS investment is one of the largest venture capital deals in the state in recent years. Arizona venture capital investments for 2005 totaled $165 million, up 115 percent from 2004, according to Ernst & Young reports.

Sherman Chu, managing member of Grayhawk Venture Partners, also cited ESS’ leadership in its sector as a reason the company was attractive for investment.

“We have known ESS for a long time, and it represents a great addition to the Grayhawk portfolio,” Chu said.

Johnson said his homegrown software company has flown under the radar.

“Sometimes, I feel that we’re Arizona’s little secret,” he said. “The state’s not that well–known for software.”

Article courtesy of the Phoenix Business Journal. Featured article by Staff Writer, Adam Kress. Article copyright © American City Business Journals Inc.
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