Given the flood of owners scrambling to refinance their home loans, L.A.-based Internet leads firm LeadPoint Inc. figured there was a buck to be made.
The company announced Jan. 15 that it had launched a new product that would help marry those seeking a refinancing with brokers and agencies. In the past, the company primarily sold leads for mortgages and credit card debt consolidation. Chief Executive Marc Diana said the company projects it could net $5 million to $10 million a year in revenue from loan modification leads.
LeadPoint works this way: People looking for financial services on the Internet find a site that asks them to provide personal information and the kind of service they’re seeking. If they have landed on a LeadPoint partner site, that information is then sent to LeadPoint, which sells it to brokers. The brokers will then contact the customer.
For phone contacts, LeadPoint partner organizations air commercials on television or radio asking people seeking financial services to call a 1-800 phone number. LeadPoint’s technology then routes those calls to brokers, or to a LeadPoint call center where the information is recorded then sold.
Diana said the 50-employee company decided to branch into refinancing leads when it saw a 20 percent spike among customers who inquired about adjusting their loans, presumably because their adjustable loans were resetting at higher rates. It’s a challenging time for homeowners in that situation, because declining property values are making it more difficult to get loans refinanced.
“Our customers are driving this request,” Diana said.
Diana conceded LeadPoint’s new program would probably last only as long as the demand exists. The company will likely fold its loan-modification leads service when prices begin to rebound and the economy stabilizes.
This appears to be an opportunistic and shrewd move for LeadPoint, which is a private company founded in 2004. And it could help bolster the company during a down economy that has taken a toll on other Internet businesses.
For instance, Oversee.net, an L.A.-based firm that buys and sells Internet domain names, recently laid off workers who ran a Web site that relied on advertisements from mortgage companies. Chief Executive Jeff Kupietzky cited the state of the economy and declining ads sales for the move.
But Diana said low interest rates have been generating consumer desire to lock down favorable loans so his mortgage leads business is strong.
Up From Down Under
Altadena experienced an Australian invasion recently.
Several Australian Web and technology startups descended on the L.A. County Business Technology Center to pitch their businesses to local venture funds and angel investors.
The startups, which included a sports simulator company and a mobile technology business, were hoping to attract local dollars to do business in the United States.
And the Business Technology Center wants them in Los Angeles. The tech incubator seeks companies that bring both expertise and job opportunities, and would be willing to offer them office space, said Stan Tomsic, the center’s administrator.
“We’re hoping that some of them make the jump, and make it here,” Tomsic said.
The Australian pitch event which was put on by Advance, an Australian non-profit organization, and the state government of Victoria, Australia is part of a broader effort by the Business Technology Center to attract foreign companies to the county. Next month, the center plans to open offices for its first Japanese startup. And it recently signed an agreement with a Korean trade organization to bring in at least one startup.
At the Jan. 13 event, the Australians mingled over lunch and coffee with well-heeled local investors before they crammed into a conference room to pitch.
Each startup had five minutes to state its case. The first one to go after lunch was Nuix Pty. Ltd., an e-discovery firm. Chief Executive Eddie Sheehy closed his pitch with a PowerPoint image of a man sifting for a needle in a haystack to illustrate the idea of e-discovery. The picture drew laughs from the audience but not a lot of questions about investments.
“Well, I hope that means I answered everything in my presentation,” Sheehy said as he left the podium.
No word yet on whether any of the companies scored local funding.
Funds Raised
Mego Inc., an L.A.-based company that creates online avatars, has closed a $2.5 million fundraising round primarily from angel investors.
The Jan. 21 close was the second fundraising series for the startup, which previously raised $3 million when it was founded in November 2007. Mego allows users to create avatars online representations of themselves and plug them into popular social networking sites such as Facebook and MySpace.
The company said it plans to use its new funds to launch an iPhone application and make its avatars compatible with a wider range of Web sites and blogs.
Staff reporter Charles Proctor can be reached at [email protected] or at (323) 549-5225 ext. 230.
