HotGigs Secures $5.3 Million in Financing from Updata Partners; Investment to Fuel HotGigs' Rapid Growth as the Leading On-Demand Staffing Exchange for Contract and Full-time Resources

Business Wire, July 17, 2006

MINNEAPOLIS -- HotGigs (www.hotgigs.com), the only On-Demand Staffing Exchange for both contract and full-time resources, today announced that it has secured a $5.3 million round of Series A financing from Updata Partners, a leading technology-focused venture capital firm based both in Virginia and New Jersey.

This marks the first round of outside equity funding for HotGigs, a company that is rapidly gaining prominence for its powerful business-to-business Staffing Exchange and related Software as a Service (SaaS) offerings. HotGigs will use the funding to expand its management team; scale its employee base; develop new product/service offerings; and launch significant national sales, support and marketing efforts.

"HotGigs has developed a distinctive value proposition and a unique business model," said Conor Mullett, co-founder and general partner at Updata Partners, who will join the HotGigs board of directors. "The company's On-Demand Staffing Exchange provides a powerful online portal that simplifies the tedious, cumbersome sourcing process for organizations that work with staffing firms, recruiters and independent contractors to hire contract and full-time workers. The Exchange also offers independent contractors a much-needed, cost-effective means for marketing themselves. We're impressed by the company's initial success, and we see tremendous potential for its unique approach to solving the sourcing problems faced by companies, staffing firms and contractors alike." Rich Erickson, a venture partner at Updata Partners, will also join the HotGigs board.

"We're excited to partner with Updata Partners, which has a long history of both investment and M&A activity in the consulting and staffing industry," said Ken Holec, HotGigs' chairman, who previously served as CEO of Lawson Software, Showcase, Inc. and PeopleClick. "This industry is terribly underserved in terms of inexpensive, easy-to-use tools; and Updata recognizes the inherent opportunity associated with that fact."

"This funding will be instrumental in supporting our aggressive plans to expand our Staffing Exchange and bring valuable new SaaS offerings to market for companies, staffing firms, recruiters and independent contractors," added Doug Berg, founder and CEO of HotGigs. Berg, who founded HotGigs in 2003, was previously the founder and president of techies.com, a highly successful national Internet company that helped companies hire full-time information technology (IT) talent online.

The HotGigs On-Demand Staffing Exchange streamlines and automates the sourcing process by connecting companies that are seeking contract and full-time talent with the independent contractors and staffing firms that provide qualified candidates. The Staffing Exchange allows companies to confidentially broadcast requirements to their private list of staffing firms--or to a vast network of local and national firms--and manage all ranked and sorted responses through a simplified interface.

Companies of all sizes--from small and medium businesses to Fortune 500 firms--can also use the Exchange's free search engine to conduct focused research on pre-qualified contract candidates and view hourly billable rates for contract talent from thousands of staffing firms. Already, the Exchange includes nearly 2,500 hiring companies, 8,000 staffing firms and more than 28,000 independent contractors in a variety of industries.

HotGigs also provides a full suite of on-demand SaaS offerings, including Staffing Relationship Management (SRM) tools that help companies manage their contract workforce, including sourcing, contract management and time/invoicing automation tools; an Agency Referral Program that provides companies a cost-effective alternative to recruiting firms by allowing the companies to post tough-to-fill positions online with pre-set referral fees; and a variety of services that help professional consultants market their profiles, broadcast their availability and win engagements online.

About HotGigs

Minneapolis-based HotGigs (www.hotgigs.com) is the most advanced provider of on-demand staffing solutions. The company's cornerstone product is the HotGigs On-Demand Staffing Exchange that automates and streamlines the entire sourcing process by creating a real-time online network among the hiring companies that need workers and the staffing firms, agencies and contractors that provide them. HotGigs' Exchange is free to hiring companies and is used by nearly 2,500 companies, 8,000 staffing firms and more than 28,000 consultants throughout North America. HotGigs also provides products in Staffing Relationship Management, career website optimization, recruiting micro-sites, an agency exchange and job content optimization. HotGigs is headquartered in Minneapolis and was founded in 2003.

About Updata Partners

Based in Reston, Va. and Red Bank, N.J., Updata Partners is a leading venture capital firm that invests in early- and growth-stage information technology companies with innovative intellectual property enabling market-leading products and services. Led by an investment team whose members average more than 20 years of operational and private equity experience in the technology industry, Updata seeks investments in which the combination of its financial backing and operating expertise will accelerate growth. With $250 million under management, the firm also selectively provides recapitalization and management buyout financing. Updata Partners is an affiliate of Updata Capital, Inc., a leading investment bank specializing in mergers and acquisitions for the IT industry. For more information, visit www.updatapartners.com.