Direct Equity Partners LP, New York, has invested $4 million in Mascot Network Inc., a provider of intranet services to colleges and universities.
The investment marks the second for Direct Equity Partners, a fund established earlier this year to invest capital in direct marketing and e-commerce companies.
Founded in 1998, Cambridge, MA-based Mascot Network is a provider of campus-specific Web services. It plans to use the money to expand marketing to colleges and universities and to develop a sales force to recruit commercial partners interested in targeting college students.
The company’s intranet is used in more than 30 colleges and universities, reaching more than a quarter of a million students. Among the participating institutions are Arizona State University, Providence College, Merrimack College and Springfield Technical Community College.
Concurrent with the investment, Mascot Network named Patricia Campbell, president and managing director of Direct Equity Partners, to a seat on its board.
The $4 million infusion of funds now brings Mascot Network’s total venture capital investment to $11.2 million, according to Mascot chief operating officer Jason Palmer.
The company presents itself to college and university administrators and deans of students as a way to enhance communication among students, faculty and administration; a means to create affinity communities within the individual college campus communities; and an opportunity to leverage the school’s investment in technology and new media.
The commercial “partnerships” will be geared toward those looking to target college audiences at a point in the semester cycle when a student is most likely to want a particular product or service. For example, telecom or financial services might want to reach the freshman class at the beginning of the school year with credit card or phone card offers.
Ad placement, however, is carefully controlled, says Palmer. The home page, for example, does not carry banner ads, but links may lead a student to a trailer for a movie and the starting times of the film at a local theater.
Direct Equity Partners got off the ground with $100 million in capital that was provided by the parent company of investment banking firm Gruppo, Levey & Co., along with Chicago-based Madison Dearborn Capital Partners III LP.
Direct Equity Partners’ first venture capital investment of $18.9 million was in fine art publisher and direct marketer Atelier America Inc. of Markham, Ontario.
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