August is supposed to be a quiet month, but the tech deals just keep coming.
Whether it marks a recovery or not, money’s starting to flow, including a $14 million financing round that Bellevue enterprise startup Apptio is announcing today.
Apptio, which makes an on-demand system for chief information officers to manage the business side of their jobs, has signed up 36 mostly Fortune 1000 companies since it began in November 2007.
Co-founder and Chief Executive Sunny Gupta said Apptio could be profitable today but he’s opting to continue building and investing in what could become a major company. His goal is to reach $100 million in sales — enough for an IPO — and perhaps 500 to 700 employees within four or five years.
“We really want to go very big and build the next large software company in the Pacific Northwest,” he said.
Innovation often comes from smaller companies and after all the consolidation in the software industry lately there aren’t many left.
“There is a great opportunity to build these next-tier companies,” he explained.
Gupta has been involved in a series of profitable enterprise ventures, including iConclude, a Bellevue company he sold in 2007 to Opsware for $70 million. Opsware was led by Netscape co-founder Marc Andreessen, who funded Apptio as an angel investor.
Andreessen went on to form a venture capital firm with investment partner Ben Horowitz that raised $300 million and led the $14 million funding round that Apptio’s announcing today. Other investors include Shasta Ventures, Greylock Partners and Madrona Venture Group. The latter two invested $7 million in Apptio in 2007.
“Apptio has the right mix to become a major market force: a deep team with proven success in IT management, early technology leadership addressing real world problems, a $1 billion-plus market opportunity, and a winning SaaS [software as a service] delivery model,” Horowitz said in the release. “We’re excited to have them as one of our first investments in the new fund.”
Gupta said the $14 million will be used to double the company’s sales team — which now has offices in New York, Boston and Chicago — and add new product features and functions. He expects to add about 15 employees to the current 40-person team within three or four months.
Apptio launched its product in June 2008. Its customers include Starbucks, Cisco, Alaska Airlines, BNP Paribas and Blue Cross Blue Shield.