The drive to bankroll some of the fastest-growing Cloud applications vendors has reached a milestone with at least $21 billion being raised so far. That includes recent investments from private-equity firms, venture capitalists, and sovereign funds as well as measures by these entities to place some vendors under their control often by going private.
One of the largest investments was the $2.3-billion purchase of Skillsoft in March 2014 by UK private-equity firm Charterhouse Capital Partners from Berkshire Partners LLC, Advent International Corp and Bain Capital LLC. That followed the $1.8-billion purchase of Applied Systems in November 2013 by PE firm Hellman & Friedman from Bain Capital LLC. There were similar purchases such as UNIT4, Active Network and Vocus as shown in the following table.
The majority of the transactions involved follow-on financing by new investors that are increasingly drawn to the Cloud applications space. Dropbox and Box Inc. were the shiny examples of over-the-top investments that VCs and PE firms have piled onto these collaboration vendors without blinking their eyes. Between them, investors have put in at least $1.6 billion in debt financing, direct and indirect ownerships. Box’s valuation has reached more than $2 billion, while Dropbox’s hovers around $10 billion.
The table shows 32 transactions with each Cloud applications vendor raising at least $100 million in recent funding rounds – mostly within the past three years. Not shown are more than 200 deals that other Cloud applications vendors have raised through the same period. The total amount of funding raised so far for these 230 vendors reaches more than $21 billion, or about $91 million for each vendor.
The outsized investment comes at a time when many of these Cloud applications vendors have begun to gain wide acceptance, albeit at a steep cost. Box, for example, has secured over 27 million registered users including 39,000 paying customers for its storage and collaboration offerings in the Cloud. Over the past three years, Box has secured about $207 million in aggregated revenues, but its sales and marketing expenses have exceeded $310 million during the same period.
It’s difficult to draw the conclusion that these vendors have been prodded by investors to spend lavishly on sales and marketing in order to succeed in the Cloud or if they have been emboldened to invest heavily in order to get the attention of customers and investors.
In either case, the piggybank of these Cloud applications vendors appears to show no sign of shrinking. Check back this space often since we are going to track and update the status of these big money grabbers in order to show the flow of money coming in and changing hands among investors in the coming quarters.
Cloud Applications Vendors With At Least $100M In Private Funding and/or Private-led Acquisitions
|Vendor||Amount Raised, $M||Market||Key Investors|
|Skillsoft||2325||eLearning||Charterhouse Capital Partners|
|Applied Systems||1800||Insurance ERP||Hellman & Friedman|
|Dropbox||1100||Collaboration||Black Rock, JP Morgan, Sequoia Capital, Accel Partners, Index Ventures, Benchmark Capital, Goldman Sachs, Greylock Partners, Institutional Venture Partners, RIT Capital Partners, Valiant Capital Partners.|
|Active Network||1050||CRM||Vista Equity Partners|
|SurveyMonkey||900||Collaboration||Tiger Global Management, ICONIQ Capital, Social+Capital Partnership, Laurel Crown Partners, TPG Growth, Google|
|Kronos||750||HCM||Blackstone, GIC, Hellman & Friedman|
|Box||546||Collaboration||Andreessen Horowitz, Bessemer Venture Partners, Draper Fisher Jurvetson, Emergence Capital Partners, General Atlantic, Meritech Capital Partners, Social+Capital Partnership, NEA, Scale Venture Partners, and U.S. Venture Partners, and strategic investors salesforce.com and SAP|
|Deem||467||eCommerce||Fidelity, Keating Capital, Foundation Capital, Oak Investment Partners, American Express, JPMorgan Chase & Co|
|Evernote||250.5||Collaboration||Meritech Capital, CBC Capital, Sequoia Capital, Morgenthaler Ventures, and DOCOMO Capital|
|P2 Energy Solutions||250||Energy ERP||Vista Equity Partners sold P2 to Advent International for undisclosed amount in October 2013|
|Domo||248.6||BI||Benchmark, GGV Capital, IVP, Greylock Partners, Founders Fund, Andreessen Horowitz, Hummer Winblad, WPP|
|Viewpoint Construction Software||230||Construction ERP||Bain Capital|
|Atlassian||210||PPM||T. Rowe Price, Dragoneer Investment Capital, Accel Partners|
|DocuSign||203.5||Collaboration||Kleiner Perkins Caufield & Byers, Accel Partners, Scale Venture Partners, Sigma West, Ignition Partners, SAP Ventures, Frazier Technology Ventures, Second Century Ventures, WestRiver Capital, Google Ventures|
|EventBrite||200||Collaboration||DAG Ventures, Sequoia Capital, T. Rowe Price, Tenaya Capital and Tiger Global|
|SilkRoad||192||HCM||Keating Capital, NTT Finance, Intel Capital, Crosslink Capital, Foundation Capital, Azure Capital and Tenaya Capital|
|HootSuite||189.9||CRM||Blumberg Capital, Hearst Interactive Media, Geoff Entress, Social Concepts, Millennium Technology Ventures, OMERS Ventures, Insight Venture Partners, Accel Partners|
|Lithium Technologies||151.7||CRM||Emergence Capital Partners, Shasta Ventures, Benchmark Capital, New Enterprise Associates, SAP Ventures, DAG Ventures, Tenaya Capital, Greenspring Associates|
|Anaplan||144.4||BI||Shasta Ventures, Meritech, Salesforce, Granite Ventures|
|SugarCRM||143.7||CRM||Goldman Sachs Group, Draper Fisher Jurvetson, Walden International, New Enterprise Associates|
|Intacct||139.8||Accounting||Battery Ventures, Costanoa Venture Capital, Emergence Capital, Sigma Partners, Split Rock Partners, Morgan Creek Capital Management, Silicon Valley Bank|
|Zuora||132.5||Subscription Management||Vulcan Capital, Northgate, Next World Capital, Benchmark Capital, Shasta Ventures, Tenaya Capital, Redpoint Ventures, Index Ventures, Greylock Partners|
|ServiceMax||122||ERP||Adams Street Partners, Crosslin Capitalk, Emergence Capital, Mayfield Fund, Salesforce.com, Trinity Ventures|
|Shopify||122||eCommerce||OMERS, Insight Venture Partners, Bessemer Venture Partners, FirstMark Capital, Georgian Partners, Felicis Ventures|
|MINDBODY||108||Healthcare ERP||Bessemer Venture Partners, Institutional Venture Partners, Catalyst Investors, W Capital Partners, Montreux Equity Partners|
|Ipipeline||104.4||CRM||NewSpring Capital, Technology Crossover Ventures, Volition Capital|
|Sage Nonprofit||101||Nonprofit ERP||Accel KKR|
|HubSpot||100.5||CRM||General Catalyst, Matrix Partners, Scale Venture Partners, Sequoia Capital, Google Ventures, Altimeter Capital, Salesforce.com, Cross Creek Capital|
|Avalara||100||Financials||Battery Ventures, Sageview Capital, Benaroya Capital, Buckhead Investment Partners, Pioneer Venture Partners|
|Dude Solutions||100||School ERP||Warburg Pincus|