Fifteen years and one popped Internet bubble after it was first launched, the accounting software company Intacct is still alive-and-kicking… and raising new venture dollars.
The company, which was founded in 1999, has just raised $45 million in new equity and debt funding. This very late stage round was led by Battery Ventures and included a $15 million debt facility from Silicon Valley Bank, according to a statement from the company.
Intacct has remained intact and sees its business flourishing thanks to the software-as-a-service business model, according to Chelsea Stoner, Battery Ventures’ newest general partner and a new director on the Intacct board.
Falling prices for hardware and software development tools, and the use of the internet to distribute software has reduced the cost of IT for businesses significantly – giving small and medium sized companies the ability to buy technologies to simplify life for human resources, accounting, and resource planning folks which were previously only available for large enterprises.
Software applications that were built for businesses – like Salesforce, Workday, NetSuite and others – have already made venture capitalists billions of dollars, but investors said there’s still more growth ahead.
“The cloud market is still only 10% of the overall application software market today,” said Stoner. “Over the next ten-to-fifteen years that really is going to grow. It should be up to 50%.”
One of the categories of business user that has been slowest to adopt cloud-based technology is the chief financial officer, Stoner said.
Audit and accounting functions are considered so central to businesses that few companies were traditionally willing to let the tools that crunch their numbers be outsourced. But these days as long as the company holds the beans, they’re less concerned about where those beans actually get counted.
In fact, there are several younger companies pursuing the audit market with cloud-based offerings. Perhaps the most well-funded is New Zealand’s Xero, which raised $150 million in October 2013 from Matrix Partners and Peter Thiel’s Valar Ventures. That company, which is publicly traded in New Zealand and Australia, could hold a public offering in the U.S. in the not-too-distant future, according to people familiar with the company’s plans.
Intacct has raised $135 million since its launch from new investors like Battery and Morgan Creek Capital Partners and previous backers Bessemer Venture Partners, Costanoa Venture Capital, Emergence Capital Partners, Sigma Partners, Split Rock Partners and Silicon Valley Bank.
“[This] is mission critical software that folks need to run their companies,” Stoner said. “There’s going to be a shift of hundreds of billions of dollars [in IT spending] from the big client-server guys – Oracle, Microsoft, SAP – over to cloud offerings.”
Photo via Flickr user joebeone.