AppDirect, a cloud-based market place with many SaaS apps, has secured $140 million in Series E round of funding led by J.P Morgan Asset Management along with all existing investors that include Foundry Group, iNovia Capital, Mithril Capital Management, Star Vest Partners and Stingray Digital. This funding round has increased the total funding of the company to $245 million.
Founded in 2009 and based in San Francisco, AppDirect makes a white-label app marketplace that allows businesses to sell software-as-a-service applications to other businesses. It now powers a large network of cloud service marketplaces like Comcast, Deutsche, Telekom, Telstra, ADP and FICO amd claims to reach 25% of small businesses through them. The startup claims to have more than one million paid business subscribers till date.
AppDirect has a revenue generating model that generates revenue from two sources. One, it gets a monthly fee from the software sellers that ranges from thousands of dollars to multiples of $100,000 for providing technology infrastructure. Another sources is the vendor also pay a transaction fee to the company for all the apps sold through its channels, said co-CEO of AppDirect, Daniel Saks.
With the fresh funds, the company plans to expand globally and also invest further in an infrastructure to make it simpler for businesses to manage various apps on any device. With the last funding round when it raised $50 million, the startup was able grow rapidly in the last 12 months and claims it has doubled its employees to 350 in North America, Europe, Asia and Australia.
During the press releasse, Larry Unrein of JP Morgan said, “The AppDirect team has taken a ‘under the radar’ approach that has enabled it to quietly build one of the fastest-growing businesses in the Bay Area. We have been interested in partnering with the team for some time.”
The latest Series E funding depicts the growing focus on cloud-based applications, with IDC recently forecasting that by 2018 the overall global revenue for the SaaS enterprise applications market would go up to $50.8 billion from $22.6 billion in 2013.