Acumatica has raised $25 million in a new funding round led by the Accel-KKR private equity firm. With the funding, the Bellevue, Wash-based company plans to boost its headcount in the next year by many as 100 employees, or 40 percent, and escalate its challenge to rivals such as SAP, Oracle, Microsoft, Sage and others in the market for cloud-based enterprise resource management and financial software.
The announcement of the Series C funding round Monday morning comes nearly four years after Acumatica’s last funding round, and brings the company’s total funding to more than $55 million over its history.
Founded 10 years ago, Acumatica has been led since 2014 by CEO Jon Roskill, who previously oversaw Microsoft’s worldwide partner organization. The company has been fueling its growth through revenue for the past few years, but Roskill said he sees an opportunity to accelerate the business.
“For us, it’s really going to be taking Acumatica to that next level,” Roskill said in an interview with GeekWire.
Acumatica currently employs about 250 people worldwide, including 40 at its Bellevue headquarters. A major focus of its hiring push will be in software development, as the company seeks to build its capabilities in areas including machine learning and AI, while expanding the reach of its technology into new industry verticals. Acumatica launched its Construction Edition in January and has been working on voice technology in partnership with Amazon’s Alexa team.
The privately held company doesn’t disclose financial results, but Roskill said Acumatica’s revenue grew by more than 100 percent in 2017, and the company counts more than 4,000 businesses as customers. Roskill did say that the funding gives Acumatica a path to profitability. “We’re not profitable yet, although we do have an eye on profitability and my prediction there is that within three years, and maybe two, that’s going to become a very trendy thing again,” he said.
The new funding round reflects positive investor sentiment for cloud-based enterprise tech companies, which plays into a traditional strength of the Seattle region’s tech scene. Recent funding rounds include $93 million raised by Seattle-based hybrid cloud file storage company Qumulo, and $65 million by Seattle-based sales automation startup Outreach.
That’s in addition to IPOs by companies including Bellevue-based Smartsheet; San Francisco-based digital signature giant DocuSign, which has a large presence in the Seattle region; and Seattle-based tax automation startup Avalara, which went public just last week.
“You’re seeing Seattle continue to grow as a hub for enterprise cloud software workloads, and I think that’s really healthy and exciting,” Roskill said.
All of that funding also makes it even tougher to hire enterprise technology developers in the Seattle region, but Acumatica has already been looking outside the region for talent. The company opened a development center in Montreal two years ago, and another in Mexico City about six months ago, where it now employs about 20 people. The company also has an RD office in Moscow, a services and support office in Columbus, Ohio, and sales teams in McLean, Va., and Singapore.
A recent Gartner report gave Acumatica the highest score for customer satisfaction in a field of cloud business technology companies that included Oracle, Workday, Microsoft, SAP, Sage, Epicor and others.
One of Acumatica’s advantages is the fact that it relies heavily on its partner channel for sales, which means it doesn’t need to employ an expensive salesforce, but the Gartner report cautioned about the downsides of that approach: “Despite having overall broad geographic coverage, Acumatica’s coverage of many countries remains partial, and it relies on partners to help it meet the requirements for certain locations. Survey respondents indicated that partner capability is often inconsistent from customer to customer.”
In addition to the funding, Silicon Valley-based tech investment firm Accel-KKR bring key strategic resources in recruiting and other areas to help the company’s expansion, Roskill said. Acumatica’s existing major investors also participated in the funding round, according to Roskill, who described the financing as “massively oversubscribed.” He said they could have raised significantly more but instead decided to focus on “the amount of money we feel we can responsibly use at this point.”
“With the adoption of SaaS accelerating in the ERP market, we believe Acumatica is well positioned to capture a disproportionate share of the market growth,” said Greg Williams, Managing Director at Accel-KKR, in a news release announcing the investment. “Our growth equity investment will help the company’s operations scale to take advantage of this opportunity.”
Acumatica uses Amazon Web Services for its public cloud offering and offers customers the ability to run its software on-site or in their own data centers. The company was founded in 2008 by John Howell, Mike Chtchelkonogov, and Serguei Beloussov, who also founded companies including Parallels and Acronis.