Service-now.com has raised $41M of a $66M funding round, the company disclosed in an SEC filing today. The company was founded by Fred Luddy in 2004 to provide on-demand Enterprise IT services and 2009 has been a boom year for the company. Service-now.com specializes in cloud-based Software as a Service (Saas) IT service management solutions. They cover everything from licensing compliance to the service desk all with a built in analytics system.
On July 21 of this year a company press release detailed some of the company’s accomplishments including: recurring revenue of more than $28 million, 105 percent growth in recurring revenue and a variety of accolades. We’re awaiting word from Service-now.com about the funding. In the meantime we can deduce that some of the funding is probably from Sequoia Capital. Douglas Leone, who may have already been an investor, has become a director and the page of Partner Patrick Grady has been updated to reflect a new involvement with Service-now.com (Nov 30 and now).
Interestingly, the company did not gain much capital from the funding. The SEC filing notes that $37M of the funding was used to repurchase shares of the Service-now.com’s common stock held by its CEO Frederic Luddy and CFO Andrew Chedrick. That is ~90% of the money received in the tranche and over 55% of the total round. From time to time discussion flares up about the idea of founders taking money off the table in funding rounds. It appears investors Sequoia Capital and JMI Equity were okay with it in a big way this time around.
Update: We’ve just received word from CEO Fred Luddy confirming that Sequoia led the investment and that the entire round went towards buying employee stock, not just his own and his CFO’s. He sounds excited about the involvement of Sequoia and Douglas Leone.