Software as Services

VCs put big sums into SaaS

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Intacct
Venture capital
Xactly

Several SaaS vendors have announced some big funding rounds the past couple of weeks, which suggests that SaaS is still able to command strong VC support where vendors can show good traction for their offerings. The three rounds that caught my eye were:

Rearden Commerce, $100 million. Announced Tuesday, this substantial investment (PDF release) ~~appears to have been led by~~ features an important new backer: credit card powerhouse Chase, part of the JP Morgan Chase empire (the guys who bought Bear Stearns). Rearden [a past client, see disclosure] automates booking of a wide range of travel and entertainment in a way that integrates with employee workflow at the same time as complying with corporate purchasing policies. It already snagged a £22.5 million investment from American Express eighteen months ago, and Amex has put money into this round too, along with Rearden's previous VC backers. However it seems likely that the bulk of the money comes from Chase (PDF release), and if the Amex precedent is any guide, it's a prelude to Chase rolling out the Rearden service to its corporate cardholders (and perhaps ultimately consumers too). Rearden has built a broad customer base of more than 1,700 — mostly since it signed the Amex deal — and according to Techcrunch it has close to $1 billion worth of transactions going through its system.
Xactly, $30 million. Last week, sales compensation management and analytics vendor Xactly announced a new round of $30 million in revolving credit and equity to finance further global expansion and product development. Earlier in the week, Xactly had announced an analytics product that builds on the data collected in the course of enabling its core sales compensation functionality, and it has ambitious plans for further product announcements based on this core information store. Meanwhile, customer growth continues strongly, with the average customer having around 250 subscribers.
Intacct, $15 million (on top of $14 million secured last June). Recovering strongly from a period a couple of years ago when it lacked direction, venerable on-demand midmarket ERP vendor Intacct has seen something of a resurgence since Mike Braun took over as CEO. This is the second injection of finance negotiated by Braun and provides the fuel for some long-overdue expansion. Intacct is developing some interesting channel strategies, which I hope to discuss in a separate posting in the near future.

Of course, there is a school of thought that says that once a trend reaches the point where mainstream media (let alone bloggers) start to cite it, then you can probably bet that it's over. So I'm interested in feedback from readers here. Is it still possible to secure VC funding for SaaS ventures or has the funding climate tightened significantly in the past few months? Please post your views to Talkback.

posted by Phil Wainewright
May 9, 2008 @ 3:16 pm

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