Cloud service marketplace AppDirect raises $35M

Steven Loeb · April 10, 2014 · Short URL:

AppDirect will put the funding toward platform development and international expansion

AppDirect, a cloud service marketplace and management company, has raised $35 million in Series C funding, the company announced on Thursday. The round was led by new investor Mithril Capital Management, with existing investors, including iNovia Capital and Foundry Group, also participating. 

The new funding comes only seven months after AppDirect last raised funding, a $9 million Series B this past September. The company has now raised a total of $60 million.

Founded in 2009, works with channel partners, such as large telecommunications companies, hosting providers and retailers, including Comcast, Deutsche Telecom, Rackspace and Staples. It then white labels app stores for them to offer apps to their business customers.

For example, a  business will go to Staples and, instead of buying Microsoft or Google apps on the shelf, will be able to select the apps they need, then offer them to employees to manage them all with a single password, Daniel Saks, co-founder and co-CEO of AppDirect, explained to me. Ultimatelty, this saves businesses both time and money, in that they will often get a discount, as it is cheaper to buy apps as part of a bundle. 

"They also don’t have to use additional services that then require a need to hire an IT administrator or support person," said Saks. 

The funding will go toward two goals. The first is platform development, including going deeper into billing and enterprise apps. The money will also go toward international expansion, notably countries in both Asia and Latin America, Saks said. 

"Right now AppDirect makes it easy for businesses to find buy and use tools they need," said Saks. "We want to get distribution around the world so we can continue to provide to that to the developer community."

AppDirect has seen a lot of growth in the past year, going from 12 to 20 million worldwide, and expanding from 80 countries to 150. The number of business users grew by 200%, and app sales on the AppDirect Network have grown by more than 25% month over month. The company also doubled the size of its team to 150 employees

"We see a world where businesses can access everything they need from trusted devices, and that we area critical piece toward enabling that," said Saks. "Without AppDirect there would be huge fragmentation. It would be hard to secure, and access, all these great tools from a single platform."

The San Francisco-based company's clients include Samsung, Staples, Deutsche Telekom, TeliaSonera, Rackspace, Swisscom, Cloud Foundry. Its solutions include Microsoft Office 365, Box, and Google Apps.

Last year AppDirect bought Boulder, Co-based Standing Cloud, a startup founded in the same year with a similar-though-complementary offering targeted at the same small- to medium-sized businesses (SMBs). Standing Cloud had raised $10 million in venture financing, from top VCs, such as Foundry Group.

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Where business can find, buy and manage web-based applications.

Our Business Application Network allows businesses to easily find the perfect software solution for their needs through our application marketplaces. Businesses can now benefit from one bill for all their applications and one portal to manage and use them. This allows greater integration, ease of use and security for application management.

The Story

We founded AppDirect in the summer of 2009 with a simple mission: improve the web-based enterprise experience. Our mission and enthusiasm attracted a leading team with over 55 years of collective on-demand e-commerce and software experience from HP, Oracle, Google, VMware, and Salesforce. In our first year, AppDirect grew into one of the largest independent software distribution channels through channel partners that share our vision and passion for web-based products.

Web-based software is better.

Web-based technology overcomes the barriers to entry that software companies face in the traditional packaged software market. This makes the software industry more competitive and businesses can now benefit from a greater range of products and services. It liberalizes software by allowing small businesses to access and afford enterprise grade solutions.

We make web-based software even better.

AppDirect promotes the ease of use, security and reach of web-based applications. Despite the growth in web-based applications over the past few years it remains difficult to find solutions and integrate them for unified management and use. We address this problem with our Application Marketplace, which makes it much easier for businesses to find and compare solutions. We also allow businesses to manage and use web-based software applications in a unified environment through our Business Application Manager.