SYRACUSE - Syracuse-based Exponential Business Development, an early-stage venture-capital and development company, recently acquired stock worth more than $1 million in today's market with the sale of LeamLinc Corporation to Israeli Gilat Communications, Ltd., a developer and provider of interactive distance-learning systems.
Exponential is a business investment and development firm making startup investments in early-stage companies, primarily in technology driven industries.
Gilat purchased LearnLinc in a stock transaction for 1,386,449 shares of Gilat stock (NASDAQ: GICOF), which are currently trading at about $32 a share. It is the latest acquisition in Gilat's drive to become developer and provider of end-to-end interactive distance learning programs and systems. Gilat also operates satellite-based communications services including Internet, private data, and voice communications.
Degerhan Usluel, founder and CEO of LearnLinc, says that his company is providing interactive learning programs for Fortune 1000 and Global 2000 companies, as well as universities and government entities. The systems allow course instructors to control class presentations using synchr
onized multimedia available over the Web. It also enables instructors to capture screen shots of individual class members.
Usluel says that Exponential played a key role in his company's success by providing more than early-stage funding to develop and begin to expand the business. Exponential partners Robert Godgart and Michael Marvin, both based in the Capital region, served as advisers and mentors as LearnLinc began to market its products and services and to chart its growth for the future. Godgart remains an active board member of LearnLinc.
The merger with Gilat, Usluel says, is the next step in the growth of his company, which is based in Troy. "We will get to capitalize on Gilat's capabilities and delivery systems, as well as gaining increased marketing exposure around the world," he says. That, he adds, will accelerate LearnLinc's growth. Already, Usluel says he had been projecting that the company would double its employment this year, growing from its current 40 employees to about 80. Now, however, he says he expects LearnLinc: to have as many as 100 employees on staff by the end of the year.
Exponential partner Dirk Sonneborn declined to reveal just what kind of return on his company's investment the LearnLinc deal yielded; he did confide that the return was "in the seven-figure range." "This is the first one of our investments where the full system has had a chance to work through to its conclusion-the dollars and the mentoring that we provide, the added value of the connections that our partners offer, and the introductions to additional investors and business opportunities," Sonneborn explains.
Usluel agrees. He says that Godgart and Marvin offered advice and insight and helped him make important connections for financing and business growth.
"We were in the process of going to the market for our third round of financing, and Gilat was considering becoming a minor investor, but as we talked and they looked at our tools, people and capabilities, they apparently saw capabilities that fit with their strategy," Usluel says.
LearnLinc started as an idea in the mind of Jack Wilson, a professor at Rensselaer Polytechnic Institute, and two M.B.A. students in 1994, when Wilson approached Exponential for seed capital. Exponential's due diligence and decision to both invest in and advise LearnLinc Usluel says, was instrumental in enabling the company to win $4 million in funding from other venture-capital firms in its first round.
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