There’s apparently still some excitement to be found among investors in the business of customer relationship management software. Today, SugarCRM said it has raised $40 million in private equity funding from investment bank Goldman Sachs.
The new funding brings its total capital raised to about $83 million, including about $15 million in debt financing raised earlier this year. Its last venture round, a $20 million Series D, included Draper Fisher Jurvetson, New Enterprise Associates and Walden International.
Antoine Munfa, a Goldman Sachs VP, will join SugarCRM’s board of directors.
I talked with CEO Larry Augustin earlier this week, and he told me that recurring revenue – a key metric for software-as-a-service companies – grew about 30 percent in the second quarter, and has been growing for 15 straight quarters. It added about 600 new customers, bringing its total to 6,500.
SugarCRM’s approach is to offer CRM software that runs in the cloud or on-premise, or in a mixed manner as needed.
You’d think that between Salesforce.com, whose primary application is a cloud-based CRM application, software giant Oracle, and SAP, that the CRM market would be pretty much sewn up. But all those companies do other things, Augustin said.
“We’re focused on CRM, and that’s all we do,” he told me. “Salesforce does a lot of other things. They are expanding to be a broad-based provider of software-as-a-service. We think there is a lot of room for innovation around CRM. We’re not adding a marketing cloud or a service cloud, or things like Force.com. We think there is room for innovation around what CRM can do and how we can help individual seller when they are talking to their customers.”
The funding round, Augustin says, is intended to help SugarCRM get toward an initial public offering, though he wouldn’t say anything about timing for a filing of an S-1 with the U.S. Securities and Exchange Commission. “That’s the question everyone wants to ask, and we just can’t comment on it,” he said.