After booking 50% revenue growth in 2013, TrackVia is looking to grow its top line 100% in 2014. The company is on track to meet that benchmark, it told TechCrunch.
TrackVia is an interesting company, selling a product that lets companies quickly build mobile applications for their employees to use. Instead of hiring an application development team internally, TrackVia helps firms quickly build and deploy apps plugged into their information streams, for around $25 per-seat, per-month.
But now the company is worth another look, given its place inside the larger SaaS world. After funneling cash into companies that sell software to other businesses, it appears that the market is taking a moment to breathe. That shouldn’t impact TrackVia, given that it doesn’t plan to raise more capital until later this year, and, as it told TechCrunch over several interviews, only wants to raise around $15 million for its Series C.
Why so little? In the era of gigantic rounds for companies selling software as a service to large companies, TrackVia could likely pick up more if it wanted to. The firm, however, indicated that $15 million or so is their sweet spot when it comes to their needs and their valuation, and through obvious implication, their current appetite for dilution.
The new capital, when raised, will be aimed mostly at growth, with around 60 to 70% of the funds mentally earmarked for sales and marketing according to the firm.
It’s actually to its benefit that TrackVia is looking to raise in the third or fourth quarter. Given market wobbles from giants like Box, it might be able to command a higher valuation once the public markets untangle themselves. Dropbox, another company that vends SaaS products to large companies, put together a debt facility, giving it more time if it wants before it goes public.
TrackVia targets companies with between 100 and 1,000 users, the market spot where its offerings make the most sense. Smaller firms likely don’t need in-house mobile apps, and at some point the economies of scale work against a per-seat deal when you could hire your own team. The average company using TrackVia builds 3 apps.
The company is not profitable. In a written comment, TrackVia indicated the following: “We’re a growth-based, SaaS business with industry-leading SaaS metrics, which means we’re investing heavily in our growth and expansion. As they say, we’re hitting the ‘gas pedal.” That’s the current norm. Other similar companies looking to quickly grow are not profitable. Some are seeing the end of the tunnel, however, such as Egnyte, which expects to be profitable by the fourth quarter.
The new question is when do you ease up on the “gas pedal” and book profits? I was recently told the old paradigm required a firm to accrete 8 quarters of profits before it could go public. That’s no longer the case, and we’re still writing the new rules of business engagement.
TrackVia likely hasn’t yet hit its growth apex on a dollar-rate basis. How efficient TrackVia can be with its next round will be interesting. What sort of ROI it can derive from the new dollars, across several time frames, will help us better understand SaaS itself. Box took arrows for its losses, managing to spend more money on marketing than it brought in in revenue. SaaS advocates poo-poo such concerns, pointing out that spending heavily to purchase — essentially — annual recurring revenue (ARR) is more efficient than it looks using a GAAP microscope.
With TrackVia, it’ll be interesting to see how it deploys future capital, and how quickly. The company told TechCrunch that it has no thoughts on being acquired or going public. It’s very premature for the latter, certainly, but it’s not something that the company hasn’t thought about, I’d wager. (Egnyte has been inimitably clear about this, disclosing its revenues and plans to go public in 2015. Nexmo has also been delightfully limpid in discussing the financial metrics of its business.)
Regarding its product, TrackVia is looking to improve its integration points with other data sources to help its customers build more useful applications.
TrackVia isn’t too interested in pursuing professional services as a large part of its revenue. The company told TechCrunch in a sit-down interview that if “it doesn’t lead to recurring revenue, you shouldn’t do professional services.” The company would, with some established customers, be willing to lend a hand however, it indicated.
A final thought: who’s scared of TrackVia? Your filled-in blanks is their potential acquirer list.