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As Software Eats The World, Agile Tool Provider Hansoft Raises $8.4M To Steal Competitors’ Lunch

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Launched all the way back in 2005, Sweden-headquartered Hansoft provides tools to help teams collaborate and manage the development of products and services using “Agile software development” — the umbrella term for a group of software development methods based on iterative and incremental development. The goal with Agile is to enable code to be developed, improved and shipped quicker. Software is eating the world, after all.

Interestingly, however, though not wholly surprising for a company that’s generated revenue from the get-go, Hansoft has, until now, been entirely self-funded. Today that changes with the announcement that it’s raised a first round of funding.

The company has raised $8.4 million in investment led by Stockholm-based VC and early backer in Spotify Creandum. A number of private individual investors also participated in the round, including (and noteworthy) Mårten Mickos, the former CEO of MySQL and currently CEO of Eucalyptus Systems.

Although its legacy is in supporting largely console game studios, today Hansoft’s customers are companies making software and related hardware products and cloud services in a range of industries, such as telecom, game development, electronics, aerospace, space and defence.

What these companies have in common, says Hansoft co-founder and CEO, Patric Palm, is that they need to “not only scale Agile software development to very large teams, but also out-innovate their completion to stay competitive”. That’s the specific problem that Hansoft’s tools, which run on Mac, Windows and multiple Linux distributions, have been designed to solve.

“Most of our customers are trying to scale Agile development to large complex environments. Typically 5-10 scrum teams in each program and several programs making up a portfolio,” he adds.

My understanding is that this translates into a typical client buying around 1,000 “seats” — the company charges per-user — who are working on between 5 and 10 or so product programs, with 30-200 programmers working on the same product.

When Agile methods were conceived and become popular, however, one could argue they were never originally envisioned to scale up to such large development teams, but this is exactly the space that Hansoft and its competitors are playing in, although Palm says that Hansoft is also used by startups and other smaller teams. It’s free for up to 9 users.

I asked him why the company is only taking external funding now? “Our competitors are quite rich,” says Palm, adding that, while it’s been fun playing David and Goliath, “we’re not picking enough fights”. Those wealthy competitors include Jira (Atlassian), and IBM RTC, which Palm says many Hansoft customers migrate from. An even more direct rival is IPOed Rally.

Hansoft currently has 35 employees based in Sweden, with a second office in San Francisco housing 2 employees. With new funding, Palm says the company will expand the latter, including recruiting a Chief Growth Officer. Its distributed executive team will see Sweden focus on development, and San Francisco, sales.

(Update: Six months on, Hansoft extended the funding round to $10 million, adding Hasso Plattner Ventures, the VC fund started by co-founder and Chairman of SAP, as an investor.)