Aras, a “product lifecycle management” software company based in Andover, MA, has raised $70 million in a Series D investment round led by Goldman Sachs. The deal is aimed at beefing up Aras’s enterprise software capabilities and expanding its reach farther around the globe.
Earlier investors Silver Lake Kraftwerk and GE Ventures joined in the latest funding, which comes a little more than a year after Aras raised a $40 million round last September. As part of the deal announced today, Goldman Sachs executives Hillel Moerman and Holger Staude, are joining Aras as a board member and an observer, respectively.
Aras—founded in 2000—makes software for large manufacturing enterprises like Airbus, GE, GM, and Microsoft to manage and track the design work of armies of engineers working on different aspects of a new product, says Aras CEO and founder Peter Schroer.
Consider when aerospace companies Airbus or Boeing design a new airliner.
“The whole thing takes three to five years,” he says. “How do you coordinate all those engineers so that all the parts of the plane come together, you can produce it cost effectively, and it’s really going to fly?”
The PLM system keeps all the documentation and product workflow data in a central vault for companies to reference during development and long after the product has taken off. The software helps manage things like manufacturing data, bills of materials, and requests to make changes to products. The idea is to help make product development and manufacturing more efficient, minimize errors, and reduce the time it takes to bring new products to market.
Schroer says the deepening complexity of these heavily engineered products, from Boeing planes to BMW cars, has ramped up the need to carefully document and plan their development—and put a lot of pressure on companies to reevaluate the capabilities of their current product lifecycle management (PLM) software.
“All the sudden this last year, it has become a hot topic: product compliance, complexity, and dealing with [the internet of things], big data. Put all that together and there is a compelling need to put a new PLM system in place,” Schroer argues.
Investors have noticed this too. Two weeks ago, San Diego-based PLM software company Propel raised $18 million from investors, and in October, Colorado-based PLM company Backbone closed an $8 million Series A funding round. Also in October, Aras competitor Arena Solutions acquired Omnify Software, also a Massachusetts-based PLM firm, for an undisclosed sum.
Aras says the $70 million will be spent on hiring more developers to build on more capabilities to the software, and the company will also look to snatch up other companies with attractive offerings. Since Aras’s 2017 funding it acquired an New Mexico simulation engineering company called Comet Solutions and a PLM business that was owned by Lowell, MA-based SofTech.
Schroer says supply chain management and product quality management are two areas of focus for the company to add capabilities to its software.
As for geographical expansion, Aras plans to make a sales push in China and South Korea, Schroer says.
Aras currently has 120 employees in Andover and expects to employ 450 people worldwide by the end of 2018, Schroer says. He hopes to boost global headcount by 50 percent in 2019.
He says adding Goldman Sachs as an investor can help the company position itself for a initial public stock offering in the next few years, and the banking and financial services giant’s connections in the industrial should will help Aras track down new customers.
