Foundry Portfolio Firm AppDirect Raises Funding To $245M

AppDirect, a cloud-based marketplace featuring hundreds of software-as-a-service (SaaS) apps, has closed a whopping $140 million Series E round led by J.P. Morgan Asset Management, with participation from all existing investors, including Foundry Group, iNovia Capital, Mithril Capital Management, StarVest Partners, and Stingray Digital. The recently announced Monetization Suite extends AppDirect’s capabilities to software vendors and Value Added Resellers (VARs) with services such as subscription billing, third-party distribution, reseller management, and marketplaces, enabling businesses to sell cloud software through all channels. The company now has about a million paid business subscribers on its platform – a roughly 300 percent increase year over year.

After AppDirect raised its $50 million Series D financing, which was announced in February, J.P. Morgan invested $30 million in what was originally a sort of annex to that round, Saks says.

AppDirect will use the money on worldwide expansion, product development and acquisitions, Saks said.

According to AppDirect investors and co-founder and co-CEO Daniel Saks, the company has purposely flown under the radar since it’s founding in 2009. It has offices in San Francisco, Sydney, Munich, Montreal, Ottawa, Boulder, London, Paris, Stockholm, Singapore, and Tokyo. The company’s total fundraising now stands at $245 million. Businesses are turning to the cloud, where software and services are delivered over the Internet via the browser or mobile device, to reap cost savings and enable their workers to be more product anywhere.

People in tech-savvy industries and urban centers, like San Francisco or New York, are quick to be the first to adopt new tools like Slack or Zenefits. The family furniture store that had been run by both Saks’s father and his grandfather had to shut down in 2008 because it was struggling to compete.

Mr. Saks said the $1-billion valuation of the privately held company is “great validation to the growth so far and the potential the company has in the future”.

The AppDirect business is rooted in acting as kind of an App Store for the enterprise software buyer.

AppDirect didn’t talk to anybody on the market for this round and instead kept it completely internal.

“With AppDirect empowering those partners, “[customers] have any business software at their fingertips”, he says.

“Most businesses internationally need that trusted advisor”, Saks says.

Bernadette Tansey is Xconomy’s San Francisco Editor.