Bellevue enterprise software startup Apptio today is announcing a $50 million financing round, putting it in the upper echelon of the region’s startups.
The funding could help Apptio Chief Executive Sunny Gupta fulfill his goal of building the company into one of the region’s mid-size tech companies, comparable in scale to Redmond’s Concur.
It’s the largest funding round for a Washington startup in more than three years and one of only five state companies to receive $50 million or more in the last five years, according to stats provided by Apptio.
The company makes software that corporate technology managers use to manage, monitor and forecast their spending on technology, including online services.
Apptio will use the new money to expand its sales, product development and customer service efforts. It now employs more than 260 people and expects to have around 370 employees by the end of the year, according to Kurt Shintaffer, co-founder and chief financial officer.
“We took the money to really accelerate our ability to capture the market,” he said. “We think what we’re creating here is the next major enterprise software category – we belive it’s a multi-billion dollar market opportunity.”
T. Rowe Price is leading the new funding, which is also coming from existing investors Andreesen Horowitz, Greylock Partners, Madrona Venture Group and Shasta Ventures.
“Apptio has pioneered the creation of a new enterprise SaaS (software as a service)category for CIOs that enables them to manage the business of technology and clearly communicate its value to the enterprise,” John O’Farrell, Andreessen Horowitz general partner, said in the release. “This is a winning team that knows how to execute at scale. We are delighted to be participating in this latest funding round.”
Apptio claims that more than $101 billion in IT spending is being managed with its “technology business management solutions.” Customers include Bank of America, Boeing, Cisco, Clorox, Microsoft, Facebook and J.P. Morgan Chase.
Last year it had contract bookings of nearly $60 million, after seeing sales grow more than 100 percent. Apptio’s expecting sales to grow around 100 percent a year for the next several years, according to Shintaffer.
Altogether the company has raised $90 million since it was started in 2007 by Shintaffer and Gupta.
The last company Gupta started, Bellevue’s iConclude, was sold three years after it started for $60 million in 2007. He told me in 2008 that he doesn’t want to sell Apptio so early, and plans to build it into a large regional company.
Consumer tech companies have drawn more attention than enterprise startups recently. That’s partly because Oracle, Hewlett-Packard and Dell aren’t buying as many smaller companies to fill out their porfolios.
But legislation that may loosen rules for public stock offerings could put fast-growing, lucrative ventures such as Apptio back in the spotlight. Apptio’s also benefitting from the broad shift toward cloud IT services and the need for new tools to manage complicated systems combining online and offline components.
Shintaffer downplayed speculation about the potential for a stock offering, saying the company is now “focused on the market opportunity that’s in front of us.”
The new funding is “going to give us a lot of flexibility to operate the business without having to consider any kind of a timeline around a potential IPO, he said. “We’re truly not focused on that at this point.”