MoneyStar, the Austin-based software sales and fund information distributor has finished its third round of financing with $20 million in investments from lead investor Century Capital Management as well as Deutsche Banc Alex Brown, Texas Growth Fund, Prime New Ventures and their existing investors. This round brings the total raised to $33.5 million.

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MoneyStar

MoneyStar produces two main products; LifeScript, a financial planning software package for financial intermediaries and MoneyStar/fn, an information delivery vehicle for mutual funds, variable annuities and related investment products, marketed to fund families.

With the third round of financing complete, the natural assumption is that the company will be preparing for an IPO in the near future. But Jeff Erramouspe, vice-president of marketing for MoneyStar says there is no time-table for a public offering -- for now MoneyStar is taking the line that the immediate concentration will be on expanding systems, marketing and building out the existing products' features.

"Although obviously, (an IPO) is one of the things we're working towards, we intend to focus on using the financing to extend our products' capabilities to allow institutions to become more multi-channel in what they do," Erramouspe told the MFWire.com, adding that the company saw its role online slightly differently than other Internet distribution and marketing companies.

"We see ourselves as the anti-disintermediary -- our focus continues to be on our clients and helping them do their job," he said.

MoneyStar's business model of selling to intermediaries, mostly banks with some broker/dealers, certainly has some advantages over an advice product such as those offered by more and more firms such as Financial Engines and 401k Forum. Studies have shown that intermediaries will pay for services such as MoneyStar's, while many in the industry are pessimistic about the retail investor shelling out anything for end-user advice. Only time will tell.

The company is also exploring the growing independent advisor channel, with more and more planners and even CPAs becoming involved in investment advice. Although MoneyStar has little exposure in these areas of yet, Erramouspe predicts inroads in the last part of this year.

He also predicts alliances with several content providers. Early in the year, it allied with Wiesenberger to include the HySales product with the MoneyStar/fn viewer. He added that the company was currently in discussions with several firms for similar deals.

"We provide the pipes and they provide the content," he said, stressing the company's continued focus on distribution.

MoneyStar's last round of financing brought in $9.75 million from GE Financial Assurance, Austin Ventures, Applied Technologies, Phillips Smith Retail, AM Fund and Solstice Capital in June 1998.  

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