Financial Software Pays For Firm’s Co-Founders

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Two decades ago, Dale Okuno and Dilip Sontakey co-founded finance software company E-Z Data Inc. with about $4,000. Now, thanks to the sale of the company, they’re multimillionaires.

Ebix Inc., a publicly traded Atlanta-based software and e-commerce company, announced Oct. 1 that it had bought Pasadena-based E-Z Data for $50.4 million. The deal will personally enrich both Okuno, the chief executive, and Sontakey, the chief technology officer, because each owns 50 percent of the company.

E-Z Data offers software for financial advisers and insurance companies that helps them manage clients’ contact information, and monitor the performance of investment and insurance products. Ebix, meanwhile, helps manage insurance transactions for numerous providers around the world. The merger puts complementary services together.

The multimillion-dollar deal came as something of a surprise for E-Z Data. The company was trying to raise money so it could acquire a smaller company, and Ebix offered a loan in exchange for a minority stake in E-Z Data. When E-Z Data executives eventually decided not to acquire their target, Ebix executives suggested the merger.

“They said they’d had their eye on us for quite some time,” Okuno told the Business Journal.

E-Z Data was launched in 1986 and has grown from a small startup to an international company with offices in India, China, Japan and Canada. It has 120 employees in Pasadena, and about 230 others in other U.S. locations and the foreign bureaus. Okuno said E-Z Data will probably lay off some backroom employees as a result of the acquisition, but he declined to say how many.

The deal yokes E-Z Data to one of Wall Street’s rising stars. Ebix’s stock price has soared from about $18 in March to more than $50 last week as the company’s earnings have climbed.

Okuno may be looking at putting some of his new money into L.A.-area startups.

He recently invested $100,000 in Freedom Speaks LLC, a Westwood-based startup that made a big splash at a prominent Silicon Valley conference last month. It was Okuno’s first investment in the L.A. area.

“I might be making more though,” he said with a laugh.

Tuned In to iTunes

MySpace Music, the popular music streaming service managed by Beverly Hills-based MySpace.com, recently made its first overseas expansion with its launch in Australia. But that wasn’t the news that caught analysts’ attention.

Instead, experts were tantalized by a brief mention in the Oct. 1 press release announcing MySpace Music Australia: The site will direct users who want to download a song to Apple Inc.’s iTunes instead of Amazon.com, which has been MySpace Music’s traditional partner. It’s also significant because it’s the first partnership between MySpace Music and Apple’s popular downloading platform.

MySpace Music is one of the fastest-growing music destinations on the Internet, with a 10-fold increase in Web traffic since the site was overhauled last year. ITunes is the largest retailer of music in the world, with more than 8.5 billion songs downloaded.

Meanwhile, MySpace Music’s partnership with Amazon, which was inked a year ago, could soon expire. By joining with iTunes for the Australia service, MySpace Music could be giving a hint of its future plans in the U.S. market, said Rob Enderle, principal at tech consulting firm Enderle Group in San Jose.

“This has the feel of a test for them at the moment,” Enderle said.

A MySpace spokeswoman declined to comment on the music division’s future plans.

A partnership between MySpace Music and iTunes could benefit both parties. Apple’s iTunes would get a direct connection to MySpace Music users who are inclined to purchase music online. MySpace Music would get an image boost by associating itself with a popular service such as iTunes, Enderle said.

“This relationship carries over some cachet from iTunes to MySpace and it helps make them seem relevant again,” Enderle said, “at least in Australia.”

Fund in the Sun

Solarmer Energy Inc., a startup that builds transparent, flexible solar panels, recently raised $4.3 million from investors, according to a document filed Oct. 1 with the Securities and Exchange Commission.

El Monte-based Solarmer was founded in March 2006 based on technology developed at UCLA. The company claims its light, thin solar panels can be installed on portable electronics, fabric tents, clothing and other material and equipment that can’t hold traditional solar panels.

Solarmer has 26 employees and a 9,000-square-foot research and development facility, according to its Web site.

The SEC filing did not specify who the investors are. Solarmer executives declined to comment.

Staff reporter Charles Proctor can be reached at [email protected] or at (323) 549-5225 ext. 230.

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