Feeds

Salesforce rival SugarCRM scores $40m from Goldman Sachs

Will SaaSy player actually float this time?

Boost IT visibility and business value

Salesforce's customer relationship management (CRM) software rival SugarCRM has landed a huge chunk of Wall Street money, in a possible move closer to an IPO.

SugarCRM Wednesday said it’s taken a $40m equity investment from banker Goldman Sachs and named Goldman vice president Antoine Munfa as a board director.

The amount is half of the total that SugarCRM has raised to date; it has pulled in $79m since it was founded in 2004.

The cash will be used to expand the company’s “global reach”, it said in a statement. Translated, that’ll mean additional sales and support staff.

Goldman in a statement said SugarCRM is “very well positioned” as a leading CRM player thanks to the rise of social media and mobile.

SugarCRM claims more than 6,500 customers, having added 600 in the second quarter of 2013, and 15 consecutive quarters of growth.

And while Wall St will likely see this as SugarCRM’s last jumping off point to the big float, they shouldn’t.

When SugarCRM last raised venture backing in April 2012, pulling in $33m, chief executive Larry Augustin was reported to have said there was a “high probability” that it would be his company’s final funding round. Bloomberg rather helpfully filled in the gaps on a SugarCRM IPO.

But rather than float, SugarCRM’s taken another round – this time from Goldman.

In November 2012, Augustin reportedly said there was a “chance” of going public in 2013, but with August sliding to its stately end, the window on a 2013 IPO is slowly closing.

While Augustin has mentioned going public in the plan, he's in no hurry to blow the bolts. Rather, it seems he’s building a cash cushion to fund operations and expansion. In the same interview where Augustin hinted at a 2013 IPO, he said SugarCRM would "burn" some cash in 2012.

A veteran of a failed Linux IPO – Augustin had been CEO of VA Linux – he was brought in to stabilise SugarCRM. A SugarCRM board member, he replaced SugarCRM co-founder John Roberts as CEO who resigned abruptly in May 2009 and left the company.

There had been growing questions over SugarCRM’s growth, as the company had failed to follow the explosive trajectory of SaaS rival Salesforce and as a number of strategically important sales people departed, along with one co-founder. Augustin took on the CEO position full-time in November 2009 and has since developed a functioning and expanding sales operation and landed major partners, including IBM.

Under Augustin, SugarCRM has re-written its app to dump Adobe's Flash and embrace HTML5, bought a company that provides a plug-in to IBM's Lotus Notes, and delivered versions of its apps for Android, BlackBerry, and iOS. ®

Build a business case: developing custom apps

More from The Register

next story
Kate Bush: Don't make me HAVE CONTACT with your iPHONE
Can't face sea of wobbling fondle implements. What happened to lighters, eh?
Video of US journalist 'beheading' pulled from social media
Yanked footage featured British-accented attacker and US journo James Foley
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
Ballmer leaves Microsoft board to spend more time with his b-balls
From Clippy to Clippers: Hi, I see you're running an NBA team now ...
Online tat bazaar eBay coughs to YET ANOTHER outage
Web-based flea market struck dumb by size and scale of fail
Amazon takes swipe at PayPal, Square with card reader for mobes
Etailer plans to undercut rivals with low transaction fee offer
Assange™: Hey world, I'M STILL HERE, ignore that Snowden guy
Press conference: ME ME ME ME ME ME ME (cont'd pg 94)
Call of Duty daddy considers launching own movie studio
Activision Blizzard might like quality control of a CoD film
US regulators OK sale of IBM's x86 server biz to Lenovo
Now all that remains is for gov't offices to ban the boxes
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 10 endpoint backup mistakes
Avoid the ten endpoint backup mistakes to ensure that your critical corporate data is protected and end user productivity is improved.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Rethinking backup and recovery in the modern data center
Combining intelligence, operational analytics, and automation to enable efficient, data-driven IT organizations using the HP ABR approach.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.