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WORLD-HERALD EXCLUSIVE
Vinod Gupta is back in the database business.
His resurgence comes less than five months after he resigned from the board of directors at Infogroup, the company he founded in 1972, and about two months after the company's sale to New York private equity firm CCMP Capital Advisors, from which Gupta made about $101 million.
His new online business, Database101.com, represents a fresh start for Gupta, who was forced out at Infogroup in the wake of lawsuits by institutional shareholders, allegations of misuse of company funds, investigations by an internal committee and the Securities and Exchange Commission, and millions of dollars in fines.
Database101 will operate from offices Gupta has leased at 11211 John Galt Blvd. He has hired 22 people in advance of the company's launch, which is expected to be sometime during the next two months.
Other than researching, compiling and selling the information online, Database101 is strikingly similar to the company Gupta founded in 1972 with a stack of telephone books and a small loan. American Business Information Inc. went public in 1992, was renamed InfoUSA in 1998 and became Infogroup in 2008.
Gupta said that when he started American Business Information his goal was to pay off an $8,000 debt from a failed business.
“I just wanted to sell enough lists to pay off that debt to the bank,” Gupta said. “This time around, with the knowledge and capital we have, we think there's a tremendous need in the marketplace for the type of technology we'll be offering. We feel really good about it.”
In the last week, the company's headquarters were outfitted with cubicles and computer equipment.
Gupta estimated that about 80 percent of the initial employees formerly worked for Infogroup. Those include former executives Monica Messer, who is president of product and technology at Database101; and Fred Vakili, president of customer experience.
Gupta expects to double the work force to about 50 people in a few months. The company could have 150 to 200 employees in a couple of years, he said.
He declined to give financial projections.
Database101 will connect its customers, mostly small businesses and sales professionals, with potential clients, Gupta said. Subscribers will choose the type of sales prospects they want based on demographic characteristics such as age, income, location and others.
The company will mine and analyze information from public databases, said Gupta, who described its services as “simple, basic, but valuable.”
“We are focused on being a technology company as opposed to a database compilation company,” Gupta said.
Infogroup has similar product offerings, he said, but he doesn't consider his former company a direct competitor.
“I don't see that,” he said. “I think Infogroup is into so many different businesses, and we will be strictly online.”
Gupta said he won't have a day-to-day role with Database101. He'll serve as chairman of the board of directors and will help guide long-term strategies.
Gupta said he began contemplating starting a new company two years ago, about the same time he was removed as Infogroup CEO and resigned as chairman of the board.
Unlike Infogroup, which grew through acquisitions and takeovers of other companies, Database101 will grow from within with an emphasis on technology, cloud computing and responding quickly to client needs and market forces, Gupta said.
“That's the only way we can cost-effectively meet the needs of customers.”
Because of the settlement with the SEC last March, Gupta isn't allowed to serve as an executive at a public company, so selling shares of Database101 to the public won't happen while Gupta is involved.
The SEC also ordered him to pay $7.4 million in penalties, on top of the $9 million he was ordered to pay Infogroup to settle lawsuits brought by two institutional shareholders.
They alleged that Gupta spent company money for personal use, on items such as cars, a yacht, private vacations and transportation for former President Bill Clinton and Secretary of State Hillary Clinton. Gupta said the expenditures were business-related and resulted in additional revenue for Infogroup.
Officials for Infogroup did not respond to requests seeking comment on Database101.
Contact the writer:
444-1414, ross.boettcher@owh.com
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