San Francisco-based AppDirect, which helps companies buy and manage their subscriptions to Web-based software, has raised $50 million in a Series D round led by Mithril Capital Management, a global firm co-founded by PayPal co-founder Peter Thiel.
The new financing round, AppDirect’s second in less than a year, brings the company’s total fundraising to $110 million and its valuation to $600 million, says co-founder and co-CEO Daniel Saks. AppDirect completed a $35 million Series C round in March last year.
AppDirect occupies a growing sub-sector within the SaaS (software as a service) industry, which is projected to reach a market size of $100 billion by 2016, Saks says. The market for cloud services brokers like AppDirect could grow to $5 billion by next year, he adds. The company helps traditional resellers of boxed software, such as Staples, to adapt to an era in which software is increasingly operated in a Web environment and sold as a monthly subscription.
Customers like Staples and Cloud Foundry use AppDirect behind the scenes to create their own online marketplaces where companies can search for business apps that help them operate, such as cloud storage services and Web-based software like Microsoft’s suite of office tools. With the proliferation of such apps, AppDirect’s customers also help companies manage their various app subscriptions though features such as single sign-on and bookkeeping that combines all app fees in a single bill.
AppDirect, founded in 2009 by Saks and his co-CEO Nicolas Desmarais, (pictured above, Saks on right) earned revenues of $18 million in 2014, doubling the $9 million reaped in 2013, Saks says. During 2014, AppDirect acquired international customers including Samsung of Korea and Telstra of Australia, Saks says. A key element of AppDirect’s mission is to increase global access to Web-based software. The company, which has offices in Munich and Montreal, works with regional partners to adapt its service to handle foreign languages and currencies, Saks says. That global focus was one top reason why AppDirect’s existing investors provided follow-on funding, Saks reckons.
Ajay Royan, Mithril’s co-founder and managing general partner, says AppDirect makes technology intuitive and easy to use. “AppDirect’s high-quality growth and expanded product capabilities have cemented its leadership position in the new category of cloud service commerce,” said Royan in a written statement.
Thiel said AppDirect is on track to create a durable franchise. “AppDirect opened a new market for software makers by helping small businesses find software and use it well,” stated Thiel, chairman of Mithril’s investment committee. San Francisco-based Mithril was joined in the Series D round by existing investors Foundry Group, iNovia Capital and StarVest Partners, and by new investors Henry Kravis and Paul Fribourg.
AppDirect plans to use its new capital to enlarge its staff, which now numbers about 200, to 300 employees; open a Sunnyvale, CA, office to attract Silicon Valley tech talent; and continue its global expansion in Europe, Asia, and Latin America, Saks says.
“We view ourselves as bringing the cloud to the world,” Saks says.
