Cloud Startup Appirio Gets $60 Million In FundingMarch 15, 2012
Appirio, which is taking an innovative approach to cloud computing services, on Thursday announced it had completed a $60 million round of funding.
The lead investor is private equity investment firm General Atlantic, with participation from existing investors that include Sequoia Capital and GGV Capital. Appirio says it’s now secured a total of $80 million in funding overall.
Founded in 2006, San Mateo, Calif.-based Appirio calls itself a "cloud brokerage solutions provider." It works with cloud platform providers such as Google (GOOG), Salesforce.com (CRM), Amazon.com (AMZN) and Workday, and tailors specific products and services for customers…
Appirio’s clients include Facebook, Twitter, Home Depot (HD), Starbucks (SBUX), VMware (VMW), NetApp (NTAP) and BMC Software (BMC). It counts some 300 customers, helping them build, manage and improve their cloud computing infrastructure.
"This new investment takes us well beyond the proof-of-concept stage," Narinder Singh, company co-founder and chief strategy officer, told IBD. "Now we can expand our geographic reach."
Cloud brokerage, as Appirio defines it, helps companies hedge risks and clarify strategy as they expand into cloud computing.
Appirio sees itself as a new kind of consulting firm, in that it offers reward money to developers for creating custom applications, using a technique called crowdsourcing.
Through an affiliate website called CloudSpokes, Appirio challenges an estimated 35,000 developers from 65 countries to compete in the development of cloud applications for its customers. The applications Appirio selects get cash rewards.
In this way, Appirio says it will outperform competitors, including Accenture (ACN) and Deloitte.
"We have 500 employees today while the companies we compete against have hundreds of thousands," Singh said. "Crowdsourcing gets us what we need fast, and we’ve used it with great results. Our platform is disruptive, and crowdsourcing is key."
Singh says he believes the $60 million investment is the largest single round ever for a cloud computing startup. Venture capital firms have steadily increased investments in this field. In Q4, about 27% of VC investment deals for Web-based companies went to those focused on the cloud, according to CB Insights.
Said Appirio CEO and co-founder Chris Barbin in a statement, "Just as legacy software providers have struggled to add cloud to their legacy businesses, the global system integrators, including Accenture and Deloitte, will be challenged to overcome their on-premise dependency and adapt to the rapidly changing market."
In 2011, Appirio says it increased revenue by 80% from the prior year and expanded into Europe with its acquisition of Saaspoint. The new round of funding will be used for more acquisitions and product development.
Appirio has "helped us scale our operations and execute solutions as quickly as we can think of them," Adam Bain, president of global revenue at Appirio customer Twitter, said in the statement.
Lead investor General Atlantic manages $17 billion in capital. In the statement, it says it plans to help Appirio become "the pre-eminent cloud solutions provider to the world’s largest and fastest growing companies."