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By Barbara Darrow, CRN Online
11:55 AM EDT Wed. Apr. 27, 2005  

InnerWorkings thinks software developers learn by doing, and it hopes that channel players and corporate IT staffs will agree.

The Pleasanton, Calif.-based company offers a hosted developer-training system that teaches programmers while they’re plugged into live Visual Studio sessions, company executives said.

InnerWorkings charges $400 per Practice Set, comprising eight hours of programming time. The company recently received funding of $8.8 million from Benchmark Capital Europe and Mohr Davidow Ventures.

Unlike other computer-based training, InnerWorkings’ interactive model allows developers to work with real code and get feedback as they go. “This is an integrated, experiential-based developer training, very focused on [Microsoft’s] .Net,” said Sam Jadallah, general partner at Mohr Davidow Ventures.

Another plus is that users can pick a specific skill set and zero in on it, depending on their latest job requirements. There also are drills to learn skills and then apply that knowledge to real code and applications. “Maybe you use the compiler to do work, and then you run your work through a judging engine,” that provides feedback, Jadallah said. Also, for a manager with a large integrator, there is an accessible scorecard of how all the programmers are doing, he added.

Jadallah knows a little something about Microsoft and its channel partners, having led that company’s partner effort before becoming a venture capitalist several years ago. One thing he knows from his past life is that partners spend a lot of time and money on training and certification and want to accomplish it in a way that doesn’t needlessly impact billable hours.

“Training has to be highly flexible. The hard part is, in between contracts, you want them to learn,” Jadallah said. “They need to do it on their schedule, not when the trainer happens to be available.”

The hosted offering includes an online personal tutor and reference framework with content from MSDN and Safari Books Online, said John McIntyre, InnerWorkings’ co-founder and vice president of marketing and business development.

Elliott Whitticar, assistant vice president of Merrill Lynch Wealth Management Technology, Pennington, N.J., said he was impressed with an early version of the InnerWorkings system he saw last year and may end up using it.

“Most training software is a bunch of slides and bullet points with a quiz at the end. This is the first product I’ve seen that actually teaches programming by having you program. It’s a lot more engaging,” he said.

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Software Focus - Issue 177
April 21, 2005

The education of software staff has not kept pace with the advances in tools and technologies and the industry needs to take a completely different approach. This is the philosophy behind InnerWorkings, which was formed in late 2002 to create new methodologies. The company’s development group in central Dublin has designed a new type of training and assessment product for distributed teams of software developers who work on Microsoft’s .Net platform. Large enterprises in North America are the first customers to implement it.

The InnerWorkings Developer product offers practice sets that present learning challenges to developers who use Microsoft Visual Studio and write applications in C# or VB.Net. It provides them with guidance on best practices, access to technical support and context-sensitive links to trusted reference material. It also incorporates Inferent, a rules-based code judging engine that analyses their code and offers real-time corrective feedback. ‘The benefits of InnerWorkings’ solutions are carefully aligned with the needs of all primary stakeholders in the software development function, including development managers, training managers, HR professionals, senior executives and individual developers,’ director of product marketing Brian Finnerty explains.

According to chief executive officer Francis McKeagney, the company has positioned itself as a product developer rather than a service provider. Its customers obtain product licences by purchasing ‘keys’ that activate the learning challenges. He foresees opportunities to customise InnerWorkings Developer, but has not decided whether the company itself will carry out this work or should refer it to partners.

InnerWorkings cites Wells Fargo in the US as its primary reference customer. More than two dozen other companies participated in an early adopter programme for InnerWorkings Developer.

Commercial sales have followed, but so far these have all been in North America. The company plans to start direct selling to large organisations in Europe - probably within the next year. Francis McKeagney says that developers in small firms can also benefit from InnerWorkings’ methods. The company is just beginning to consider a business model that can cater for this population and he thinks that some form of e- commerce might be appropriate. ‘We absolutely intend to reach out and sell to small companies and individual developers,’ he asserts.

InnerWorkings announced a USD 8.8 million financing package from Benchmark Capital Europe and MDV earlier this week. It will use these funds to accelerate its development plans and to step up direct sales in the US. The company was set up by a management team that previously worked together at CBT Group - the e- learning pioneer later known as SmartForce. Microsoft has accredited it as a ‘gold certified’ partner and as a member of its Visual Studio industry partner programme. InnerWorkings carries out all of its research and development in Dublin, while its corporate headquarters in Pleasanton, California handles sales, marketing and client services.

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By Eric Lai, East Bay Business Times
April 18, 2005

InnerWorkings Inc., an Internet provider of training software with ties to both Pleasanton and Dublin, Ireland, said Monday that it received a first round of $8.8 million in venture capital funding from Benchmark Capital of London and Mohr, Davidow Ventures of Menlo Park.

That brings the total funding received by InnerWorkings to $11 million, according to CEO Francis McKeagney.

Founded in 2002, InnerWorkings offers a Web-based service that trains software developers working at large corporations on how to use Microsoft software products. The software is more effective than classroom lessons and even comparable training packages because it can correct errors in real-time and be targeted towards problems that developers will need to learn to solve in the near future, said McKeagney.

“There is a big gap between understanding programming concepts and writing the code,” he said.

InnerWorkings has 29 employees now, with 18 in its Dublin development office, and 11 in the United States, including 5 in its Pleasanton management headquarters. The company plans to add as many as twenty sales and marketing staff over the next several years in the United States, where most of its customers are.

InnerWorkings recently took a 3,000 square foot office in Hacienda Business Park, near where half of InnerWorkings top executives live.

InnerWorkings started its research and development center in Dublin because of the strong pool of Irish software developers, bolstered by techies coming from other parts of the European Union, said McKeagney, an Irish native.

And despite new-found wealth in Dublin that has brought a housing bubble similar to the Bay Area, salaries remain about 25 percent to 40 percent lower than the Bay Area, estimates McKeagney.

InnerWorkings had previously received funding from its founders as well as Enterprise Ireland, a government body.

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By Hope Glassberg, Dow Jones - VentureWire
April 18, 2005

InnerWorkings, a provider of training software for software developers, has raised an $8.8 million Series A round of funding.

Benchmark Capital Europe led the round with participation from Mohr Davidow Ventures.

As a result of the financing, Barry Maloney of Benchmark Capital Europe and Sam Jadallah, general partner at MDV, will join the board.

InnerWorkings Chief Executive Francis McKeagney said that the funding will be used for product development and to establish the company’s new corporate headquarters in Pleasanton, Calif. The company was originally based out of Dublin, Ireland, and will continue to house research and development facilities there.

In terms of product development, McKeagney said that the company will make its training software, which is offered via an ASP, available in more geographic areas and to more users. He would also like to expand its training capabilities; currently the program only works with the Microsoft .Net platform and InnerWorkings may add on Java training functionality as well.

InneWorkings’ software provides a software development code engine that analyzes inputted code in real-time and provides corrective and analytical feedback. The platform is intended for educational purposes and managers can use the technology to identify the capabilities of software developers and determine how to prepare them for projects.

Jadallah said the investment marks one of MDV’s first e-learning investments and that the firm was drawn to InnerWorkings because of its unique value proposition. He said that he knew of no other e-learning software products similar to InnerWorkings’ product.

“They’ve figured out how to bring a rich experience right to the developer,” Jadallah said. “The feedback we got from developers was very compelling. They enjoy being challenged and having mentors online.”

Customers include Wells Fargo & Co. and McKeagney said that the company is targeting Fortune 3000 companies in four sectors: financial consulting, financial services, technology and information technology consulting. InnerWorkings began commercial sales at the end of 2004.

The company has 29 employees and should have more than 50 by year’s end.

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Dublin, Ireland & Pleasanton, CA - April 18, 2005 - InnerWorkings today announced that it has secured $8.8 million in financing from marquee investors Benchmark Capital Europe and MDV-Mohr, Davidow Ventures. The company will use funds from this Series A round to accelerate its R&D capabilities in Ireland and expand its sales, marketing, and client services organizations in the U.S.

It is widely acknowledged that enterprises lose billions of dollars each year on failed software projects and flawed system design. In the U.S. alone, companies spend over $3 billion annually trying to solve the educational component of this problem. There is now a clear motivation within the learning industry to generate more powerful tools and methodologies to support this process. Today’s learning solutions need to engage the audience, change developer practices, as well as provide real-time code feedback. In addition, management needs to generate metrics to assess the performance and efficiency of their developer workforce.

“The dynamics of the learning industry indicate that we are at a major turning point,” said Francis McKeagney, CEO of InnerWorkings. “While the investment in corporate learning continues to grow, confidence in the effectiveness and value of existing solutions is at an all-time low. Customers are keenly aware that the education of developers simply hasn’t kept pace with the advances in software tools and technologies. We feel that now is the perfect time to introduce a completely new approach.”

“InnerWorkings is proposing a radical transformation of the way developers learn and are supported in the workplace,” said Barry Maloney of Benchmark Capital Europe. “This is, perhaps, not surprising given the pioneering role that many of Fran’s team played in the evolution of the learning industry over the past decade. The company’s structured practice methodology and tight integration with Microsoft Visual Studio are truly unique. In addition, its Inferent code-judging engine offers management real visibility into the performance of software developers and enables more powerful decision-making around the software function.”

“InnerWorkings is a company bringing the right product to the market at the right time,” said Sam Jadallah of MDV, a former executive and 12-year veteran of Microsoft. “Existing learning solutions to improve programmer performance and increase productivity simply do not deliver value to enterprises or developers. InnerWorkings has created a highly differentiated and scalable solution for software developers and their managers. I believe that InnerWorkings is uniquely positioned to be the industry leader in learning solutions that support the software function. The company’s focus on Microsoft .NET is perfectly aligned with the central role of the .NET Framework in Microsoft’s enterprise strategy.”

Over the past two years, InnerWorkings has worked closely with Microsoft to build on the company’s status as a Microsoft Gold Certified Partner and member of the Visual Studio Industry Partner (VSIP) program. “Developers will benefit greatly from having such an integrated learning solution for Visual Studio,” said S. Somasegar, corporate vice president of the Developer Division at Microsoft Corp. “The capabilities of InnerWorkings Developer are a natural complement to the powerful Visual Studio integrated development environment, and will help increase productivity for developers building applications with Visual Studio.”

InnerWorkings will use the capital from this financing round to validate the company’s enterprise learning approach and build towards its longer term aim of transforming the way developers learn and are supported in the workplace. In an industry where thought leadership and innovation are critical, InnerWorkings is ready to play its part in defining the next generation of learning solutions for software developers.

About Benchmark Capital Europe
Benchmark Capital was founded in 1995 to help talented entrepreneurs build great technology companies focused on long-term growth. Benchmark’s partners take an intensive, hands-on, team-oriented approach to venture investing to deliver a superior level of service to the firm’s portfolio companies. Benchmark’s portfolio includes franchise companies such as Alphyra (the leading pan-European electronic payments provider), Betfair (the world’s largest online betting company), eBay (Nasdaq: EBAY), Juniper Networks (Nasdaq: JNPR), Sulake (the “Habbo Hotel” leading online games community), and Red Hat (Nasdaq: RHAT). Managing more than $2.7 billion in committed venture capital, Benchmark focuses on investing in entrepreneurs with original ideas. Since setting up a fund in Europe in May 2000, Benchmark has made more than 30 investments across a variety of market sectors and geographies. The $375 million raised by Benchmark Europe II follows Benchmark’s first European fund of $500 million. For more information on Benchmark, visit its website at www.benchmark.com.

About MDV-Mohr, Davidow Ventures
MDV has built a reputation among entrepreneurs as a partner by taking a hands-on approach and working skillfully to build successful companies. MDV possesses an extended team of experts including the firm’s partners and an active network of seasoned entrepreneurs. Together they focus on early stage investments while bringing years of real-world experience to accelerate each company’s time to market and optimize its long-term success. Founded in 1983, MDV is investing its eighth fund in software, services, semiconductor, networking, energy, and life sciences companies. MDV investments include Agile; Brocade; Collabra (Netscape); Epigram (BRCM); FormFactor; Ipsilon Networks (NOK) Kalpana (CSCO); and Rambus. For more information, visit www.mdv.com.

About InnerWorkings
Founded in late 2002, InnerWorkings is a leading provider of pioneering learning and performance solutions for software developers and their managers. The company specializes in the delivery of practice-based learning solutions that address key coding techniques and enterprise application needs, thereby providing true visibility into developer performance. Inferent, the company’s real-time code judging engine, lets developers evaluate their performance and provides corrective feedback to advance the learning process. InnerWorkings’ goal is to transform the way software developers learn and are supported in the workplace, as well as enabling the accurate measurement of developer capabilities throughout an organization.

InnerWorkings’ Research and Development facility is based in Dublin, Ireland and the company maintains its corporate headquarters in Pleasanton, California. For more information about InnerWorkings and its services, visit www.innerworkings.com.

All products and company names herein may be trademarks of their respective owners.

Company Contact
Brian Finnerty
bfinnerty@innerworkings.com
+1 925 737 0600

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By Gavin Daly, Sunday Business Post
April 17, 2005

InnerWorkings, a young Dublin technology company, has raised $8.8 million in funding from Benchmark Capital and Mohr Davidow Ventures (MDV) in the US.

The company, founded in late 2002, has developed learning and analysis software which is used by software coders.

It employs 29 people in Ireland and the US and plans to hire another 20 people following the funding injection, according to chief executive Fran McKeagney.

“This is funding to build the company and go to market,” he said. “We will be doing a significant amount of recruitment as we accelerate our product development.”

The company plans to hire software development staff in Dublin and sales and marketing people in the US.

McKeagney said InnerWorkings had already released the first version of its software, and was generating revenues from a small number of customers.

“We wanted to have the product released and have a very clear strategy before we raised funding,” he said.

The development of the product was funded with “a couple of million” invested by the company’s founders and by Enterprise Ireland.

McKeagney said Enterprise Ireland had been a very supportive investor in the firm and had offered advice and networking opportunities.

McKeagney and InnerWorkings’ other founders and management previously held senior positions at Irish e-learning firm SmartForce and at Skillsoft, the US firm with which SmartForce merged in 2002.

McKeagney was executive vice president of research and development at SmartForce.

Bill Lewis, the chief operating officer of InnerWorkings, and Bobby Brady, its vice president of operations, held a range of senior positions at SmartForce. Scott Blake, InnerWorkings’ vice-president of North American sales, was head of global business development at Skillsoft.

McKeagney said the experience of the management team had been important when approaching funders.

InnerWorkings also has a close relationship with Microsoft, and has worked with the software giant’s emerging business team on the development of its product.

McKeagney said InnerWorkings started the funding process in the middle of last year and had raised slightly more money than originally planned. He would not comment on the valuation placed on the company by the funding, but said he was pleased with the outcome.

McKeagney said the company had targeted international funders because most of its potential customers were US companies or firms with a US presence.

“We put a lot of energy and focus into the funding round,” he said. “Our ideal scenario was to have two top-tier venture capitalists, and we got two great names with great reputations who can give us global support. We have clear metrics that we want to reach and the funding allows us to do that.”

InnerWorkings has its research and development base in the centre for education and learning technologies at the IFSC in Dublin and its US headquarters in California.

It also sells its software in Canada, under a licence to an independent company. That model allows the company to sell to customers without shouldering all the cost.

McKeagney said it had already won some business in Canada. He would not comment on revenue forecasts for InnerWorkings.

Benchmark partner Barry Maloney and Sam Jadallah of MDV have joined the InnerWorkings board following the investment.

It is the first investment in Ireland by MDV, which has just raised a new $400 million fund and has $1.4 billion under management.

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