Monday, February 11, 2008

ByAllAccounts breaks away from State Street Bank, brings in $5M

By Christopher Calnan

A Woburn financial software division of State Street Bank has regained its independence and is moving out of the gate with $5 million in funding from Waltham's Commonwealth Capital Ventures.

ByAllAccounts has operated as a division of State Street Bank since being purchased by the bank in 2004, but it was originally founded in 1999 by its CEO James Carney and two partners. The Series A capital will be used to ramp up sales and marketing of its software-as-a-service product, which collects financial data from 2,700 sources to enable financial services firms to manage clients' portfolios, Carney said.

For example, the software can aggregate a client's IRA account information, pension payments and hedge fund investments without directly dealing with each of the individual sources. The company has 200 clients in a market with 10,000 potential customers, said Carney, and plans include growing to capture at least 10 percent of the market.

State Street initially made a minority investment in ByAllAccounts in 2002 and bought it for an undisclosed amount two years later.

When State Street officials decided recently that its customers, are not the same as ByAllAccounts, Carney said he and his husband-and-wife partners, CTO Martin Dickau and vice president of engineering Ellen Dickau, bought the company back for an undisclosed amount.

Commonwealth Capital general partner Justin Perreault said By-AllAccounts can increase business in two ways -- by expanding sales staff and adding distribution channels via partnerships with large financial services companies.

"It's already clear that there's strong market demand for the product," said Perreault.

Competitors in the account aggregator space include Yodlee Inc. of California, uMonitor of Tennessee and CashEdge Inc. of New York, according to Celent LLC, a Boston research firm.

Demand is expected to grow as financial brokers shift from client transactions to advice based on account information, said Matthew Bienfang, research director of the brokerage division of Needham-based Tower Group Inc.

ByAllAccounts is Carney's fourth tech startup company. He was CEO of Burlington's Workgroup Solutions Inc. for 12 years before it was acquired by Canada's BMO Nesbitt Burns Inc. for an undisclosed amount. He then launched Lexington's Workgroup Technology Corp., bought in 2002 by SofTech Inc. for $3.7 million.

In 1997, Carney founded Bidder's Edge Inc., an auction website aggregator that operated in Burlington until it closed in 2001 following a legal battle with eBay Inc. over Bidder's Edge accessing eBay's data.