Vienna-based Convera Corp. raised $28.8 million last week through a private stock placement, money the company says it will use for development of its software to index the Internet.
Convera indexing software will be tailored for specific clients and rank search results by relevancy to the search term. Convera also will not sell advertising.
The company plans to launch the software in November.
"Our Web index has been built based upon a semantic approach aimed at relevancy, not based upon popularity," said John R. Polchin, Convera's chief financial officer.
Most of the Convera stock was purchased by the Legg Mason Opportunity Trust, which bought roughly 5.5 million shares at $4.50 each.
One million shares were purchased at $4.84 each by an affiliate of Herbert A. Allen. Allen is a member of the company's board of directors, and he and his family members are major stockholders, according to Securities and Exchange Commission records.
The transaction was handled by Allen & Company LLC, a firm headed by his son, Herbert A. Allen III, who is also a director of Convera, according to documents filed with the SEC. The younger Allen's company received a $1 million commission for the transaction.
Convera also is known for its RetrievalWare, software that allows an organization to search its own electronic databases for information. Clients include government and intelligence agencies.
The company's past earnings have been erratic; it reported a $2.5 million loss in its most recent quarter.
Convera stock closed at $5.29 a share yesterday, up 31 cents.