Investors Back Growing Bay State Software Firms Aveksa and Apparent Networks in Pair of Series C Financings

It’s no anomaly that two Massachusetts firms that provide software for big organizations—Waltham-based Aveksa, and Apparent Networks, headquartered in Wellesley Hills—are announcing the close of significant financings today. Both companies are commercially viable businesses with revenue streams, the types of operations that are attracting venture capital and private equity investments during this stormy recession.

Aveksa revealed this morning that it has closed a $10 million Series C round of financing led by return backer FTV Capital, of San Francisco and New York, with contributions from previous investors Charles River Ventures, based in Boston, and FirstMark Capital in New York. The company plans to channel the new capital into product development, global operations (particularly in Europe), and beefing up sales and marketing of its software, which enables big businesses to govern user access to their myriad information resources.

Similarly, Apparent Networks has rallied several previous investors—Egan-Managed Capital and Bain Capital Ventures, both of Boston, JMI Equity, of Baltimore and San Diego, and the Business Development Bank of Canada—to raise $12 million in a third round of financing. Apparent, which moved its headquarters to the Bay State from Vancouver in late 2007, is also spending the new cash to bolster its global marketing efforts, and to fund product development and operations expansion. The company sells software that enables large organizations to track IT services and applications across various networks and to quickly pinpoint the source of problems.

At both Apparent Networks and Aveksa, senior executives say that investors were willing to part with the capital because both firms are generating revenue and see opportunities to grow despite the depressed economy. Of course, it’s much more common for a software company to be generating revenue by the time of its Series C round than, say, a life sciences company grappling with clinical trials before it can launch its first product. But both these financings show that companies poised make money during the recession are having no problem drawing investment.

“I think the investors can see us growing into a very large company despite the economic headwinds, and that’s what helped us get the financing,” says Deepak Taneja, president and chief technology officer of Aveksa, who co-founded the company in 2004. Even during the recession, he adds, big companies in industries such as financial services understand that investments in access management and identify authentication are key to stay in compliance with regulatory authorities and ultimately save money by preventing costly breaches in security.

Jim Melvin, Apparent Networks’ president and chief of marketing, says that his company got a similar message from its investors, who were willing to re-up because the firm is poised for continued growth. In fact, company, founded in 2000, had originally set out to raise $8 million in its third round, but worked with investors to raise $12 million to support the company until it reaches profitability. Also, the firm expects to grow its workforce from 60 people to 100 workers this year, he says.

“The fact that we have a product on the market generating revenue was fairly critical,” Melvin says.

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