Reply Inc., which provides online leads to businesses by fetching them prospective customers, has received a $17 million Series A round of funding led by Bank of America Inc.'s venture capital arm, BA Venture Partners.

Also participating in the round were Orix Venture Finance and private investors, including Reply Chief Executive Payam Zamani. Zamani told VentureWire that even after the $17 million round, he and fellow co- founders John Truchard and Behnam Behrouzi still own a majority stake in the company. He said the valuation is "significantly" more than $35 million, though he declined to get specific.

Reply will use the money to build out a more sophisticated Web site for its customers, and nearly double its staff through hirings in sales and client services. The company has call centers in California, Michigan and Arizona, where sales people call around the country to find local businesses who want to become Reply customers.

As a result of the financing, BA Venture Partners' Managing Director Sharon Wienbar was added to Reply's board. The other board members are Chairman Zamani; Jordan Spiegel, formerly of the leveraged buyout firm Giraudo Engmann Spiegel & Duvall; and Peter Sealey, Coca-Cola Corp.'s former head of global marketing.

Walnut Creek, Calif.-based Reply Inc. was founded by Zamani in 2001 as Next Phase Media. Using his experience in the online auto sector - Zamani co-founded and served as CEO of AutoWeb.com through its initial public offering before the company was sold to Autobytel Inc. in April 2001 - Zamani started Next Phase as an online auto leads service. The company has since expanded into other areas of e- commerce, including real estate, home improvement and insurance. In fact, real estate is now the company's largest and fastest-growing revenue generator.

People shopping for cars, homes or insurance go to reply.com, fill out forms, and then later get contacted via phone or e-mail by one of Reply's more than 13,000 customers.

Reply makes money each time a customer finds a business through the Reply portal. The Internet users shopping for homes and cars are not charged anything. The company's sales were about $20 million in 2004, and have grown at around 50% per year in each of the past three years, Zamani said.

The technology modifications, according to Zamani, will include things like a form that customers can fill out about their home to find out how much its worth instantly. "In the next 6 to 12 months we will be launching a whole series of features for consumers that takes us much closer to immediate gratification," Zamani said.

Reply has also purchased domain names from several well-known Internet sites - including iMotors.com, and iCastle.com - and operates those pages to help customers find businesses and vice versa.

Wienbar said that BA Ventures spent a lot of time looking in the broad area of Internet advertising and marketing companies, and decided that Reply's bridging of the online and offline world made the most sense as a business model.

"If you're a company generating a lot of leads for Netflix or Columbia Hourse, you run the risk that your customers [Netflix or Columbia House themselves] could be just as good at generating leads." She said that on the other hand, Reply's customers - mostly local businesses that do not have the time or money to spend on developing a comprehensive Internet site - would not be able to match Reply's lead generation skills.

Wienbar said BA Ventures sees a strong possibility of an eventual IPO by Reply, especially with the April hiring of Frank Siskowski, a man who helped bring E-Loan Inc. public as chief financial officer. But she also called Reply "the last acquirable independent company in this space."

Walnut Creek, Calif.-based Reply, which also has offices in Scottsdale, Ariz., and Walled Lake, Mich., said it has 200 employees, up from 135 in December 2003. Zamani said the company hopes to have nearly 400 by this time next year.