Startups

Firefly acquired by Pegasystems

The Dorm Room Fund startup will be moving to New York City.

Applications are due by the end of May.

Mayor Muriel Bowser's office signaled another step toward creating an Inclusive Innovation Fund on Monday. The District issued a formal Request for Applications for an investment partner to develop and manage the new fund, which is designed to increase access to capital for companies led by underrepresented entrepreneurs, including people of color, women, LGBT individuals, and people with disabilities. It's focusing on tech, tech-enabled and non-tech businesses alike. Funding was identified as the biggest area of need by entrepreneurs who responded for a 2016 report titled Pathways to Inclusion. "The District's top priority is increasing access for underrepresented entrepreneurs who would not otherwise secure the investment capital they need," a description states. "The secondary priority is to enhance the ability of those underrepresented entrepreneurs who have had success in this regard." The new request follows a call for input issued earlier this year that officials said yielded 30 responses. According to the document released Monday, the District is committing to provide $1.5 million to seed the fund. It's seeking a professional investment partner who will privately manage the fund. Officials also want the fund to grow to at least $6 million through additional funds from private sources. "This investment professional partner would serve as the funding program manager and be charged with raising private capital, sourcing deals, managing the portfolio, and making a lasting improvement to underrepresented entrepreneurs’ access to capital in DC. The program could be brand new or a new component of an existing program," the document states. Applications are due by May 31. [link href="https://dmped.dc.gov/node/643662" text="See the Application"]

This disclosure: Technical.ly Media and Firefly are both tenants at First Round Capital HQ.

Co-browsing startup Firefly was acquired Monday by Pegasystems, a Cambridge-based, publicly-traded enterprise software company, for an undisclosed amount, according to a release.

Founded by a pair of Penn students while they were still in school, the University City-based Firefly lets users see what’s on another user’s browser. Their customers, which will become Pegasystems’ customers as part of the sale, include thousands of small and medium businesses, thousands of financial advisors, one top-10 U.S. retailer and the state of Washington, which uses Firefly for its healthcare exchange, said CEO Dan Shipper.

As a result of the sale, Firefly’s product will be incorporated into Pegasystems’ customer support platform, but it’ll also continue to be run as a standalone product, the announcement said.

The company was completely bootstrapped except for a $20,000 investment from First Round Capital’s Dorm Room Fund, a student-run firm that invests in student-founded companies. The Dorm Room Fund said it could not disclose numbers on a return.

Firefly’s two full-time staffers, cofounders Shipper and Justin Meltzer, will join Pegasystems in its New York City office, Shipper said. Its three contractors will join Pegasystems as contractors, he said. Founded in 1983, Pegasystems has more than 2,600 employees in offices around the world.

One reason the acquisition was the right move? Firefly will get access to Pegasystems’ 24/7 customer service line, which means that Firefly’s cofounders won’t have to play that role themselves, Shipper wrote on his blog.

Shipper, 22, graduated from Penn this spring. That Shipper and cofounder Meltzer did not drop out of college to pursue their tech company has been a point of pride for the cofounders, and First Round Capital partner Josh Kopelman. The company was headquartered in First Round Capital’s University City office.

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Read more on the Firefly blog.

Read more on Kopelman’s blog.

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