C is for Cloud: Appirio raises Series C from GGV and Sequoia

February 25, 2009 Appirio

Chris Barbin

Given today’s headlines, we’re humbled to announce our Series C funding from GGV Capital(formerly Granite Global Ventures) and Sequoia Capital.  Amidst all the uncertainty confronting business and IT in today’s economic climate, one thing remains certain: enterprise IT is moving to the cloud.  That single idea is at the core of Appirio’s business, and is an idea that’s worth investing in precisely because we’re in the worst spending environment any of us can remember.

The headlines for most venture-backed startups are grim: “Tech start-ups call it quits,” writes the Wall Street Journal, as GigaOm describes “VCs sowing panic in their portfolio companies.”   We remember the buzz created by Sequoia’s all-portfolio meeting last fall, featuring a picture of a slaughtered pig with all the fat removed. 

Why is Appirio growing so dramatically in this environment?

  • Our market: Far more important than anything about Appirio’s business is the market opportunity that we’ve targeted.  Cloud computing will disrupt $1 trillion of IT spending– great things happen when you’re able to accelerate an industry transition of this magnitude.
  • Our model: New markets call for innovative business models.  Traditional wisdom says you have to choose whether to be a services company or a product company.  We believe that the availability of web platforms makes a truly hybrid business model not only possible, but advantageous.  Consider our new product offerings in 2009, Services Management and Facebook Referral Management —  neither would have been possible without the opportunity to directly serve and learn from leading customers in these markets.  Our model of delivering high end professional services, innovative software products and compelling cloudsourcing solutions is what we like to call a ‘next generation IBM without the baggage of hardware’.  Customers need alternatives to the Global SI’s and traditional enterprise software – our hybrid model directly addresses that need and has delivered repeatable results for our customers.
  • Our team: There’s something special created when you assemble a team of professionals passionate about transforming an industry.  We’ve been able to quadruple the size of our team in the last 12 months (and remain hiring now), because our #1 goal has been to hire the best and brightest change agents in the industry.  “The Appirio Way ” comes through in every interaction we have with customers and partners, whether through sales, services, support, or R&D. 

Its a cliche that the easiest time to raise money is when you don’t need it.  Appirio’s business model is strong and our services business has been profitable since our founding in October 2006.  We create substantial value for our clients and share in the rewards of their success.  

But it is still “early days” in the business of accelerating the adoption of on-demand in the enterprise, and we’re excited to have our new partners at GGV Capital on-board.  GGV specializes in deploying expansion capital, and today’s investment from GGV and Sequoia Capital will be invaluable in our continued efforts to invest in products built on Force.com & Google App Engine, supporting and evolving our team of cloud computing professionals and investing in and innovating along side our strategic partners Salesforce.com, Google and Facebook. 

Consider, for example, our other announcement today– Appirio’s expansion into Japan, the second largest IT market in the world, barely penetrated by traditional packaged application vendors.  We believe that Japan has the opportunity to completely leapfrog on-premise packaged software and migrate directly to custom applications developed on an on-demand platform.  Being part of this process (and the largest Force.com deployment in the world) is tremendously exciting. 

We invite you to get involved.  Schedule a discussion with us, take a trial of one of our products, look into joining our team, or even just contribute an idea.  The transition to cloud computing is one thing to be certain of, even in these very uncertain times.  We look forward to working together!

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