In Pursuit of Big Opportunity, Software Maker Apptio Raises $45M More
Apptio, which makes software to help corporate CIO’s manage IT operations, has filled up its coffers for a push into what it sees as a major untapped market.
The Bellevue, WA, company has raised $45 million in a Series E round led by new investors including Janus Capital and The Hillman Company, and returning backers Andreessen Horowitz, Greylock Partners, Madrona Venture Group, Shasta Ventures, and accounts managed by T. Rowe Price Associates.
“We are just super-bullish on our market opportunity,” says Apptio CFO Kurt Shintaffer. “Every day, we’re seeing the signs that we’re in the formation of a really large software category.”
Apptio has helped create the category, which it calls technology business management. The financing will help finance product development and international growth with a focus first on Western Europe.
Apptio’s software is meant to help chief information officers change corporate IT departments from technology operations who manage infrastructure to service providers that contribute to a company’s main line of business. Shintaffer says the software can help CIOs better understand and communicate the costs of IT services and how they can be optimized through things like more efficient utilization of IT resources and better financial planning.
“Every significant corporate function in the enterprise has to have a system for business management and analytics,” he says.
The company is targeting large enterprise customers, “because complex IT organizations are prime candidates for getting value from services like ours,” Shintaffer says.
Apptio claims 29 of the Fortune 100 as customers.
Apptio raised $50 million in March 2012 at a $600 million valuation. Shintaffer says the latest raise “was a substantially up round,” meaning investors consider the company to be more valuable now than it was at the last financing. Total investment in the company stands at $136 million.
The company is not disclosing its annual revenue, other than to say it doubled last year.
Shintaffer also would not comment on profitability. “We’re really focusing on what it takes to grow the business in the way that we think takes advantage of this great market opportunity,” he says.
The company is adding employees at a rapid clip. It has nearly 350 today, up from 115 at the end of 2010.
Asked whether there were concerns from existing investors about dilution as the company sought to raise the latest round of financing, Shintaffer says: “We firmly believe that we’ll be able to create a lot of value with each financing that we do.”
He adds that if the company is successful, “the dilution topic becomes less and less relevant.”
Many Northwest tech watchers are focused on Tableau Software’s impending IPO this week. Apptio is another local company on the short list for a public offering. Shintaffer says a private financing round was the best fit for where Apptio is in building its business. “We definitely consider every option at every turn,” he says.