Appfire, a Boston-based provider of software development apps, announced Tuesday that it has received a $100 million investment from growth private equity firm TA Associates.
Founded in 2005, Appfire was bootstrapped until it got $49 million from Silversmith Capital Partners last May. Since that time, Appfire has acquired six companies in the Atlassian “ecosystem,” including Botron, Beecom, Innovalog, Navarambh, Artemis and Bolo.
The Boston-based company has been profitable for over a decade, according to Randall Ward, co-founder and CEO of Appfire. And while Ward declined to reveal valuation or hard revenue numbers, he did say that Appfire has seen its ARR more than double over the past year.
Since last June alone, the company says it has experienced:
- A 103% year over year increase in ARR.
- A 258% YOY increase in enterprise subscription revenue (data center only).
- A 182% YOY increase in all subscription revenue (data center and cloud).
So why the need for institutional capital? With the latest funding, Appfire intends to extend its buying spree of complementary apps.
Appfire has been acquiring businesses every six to eight weeks, and it plans to continue scooping them up at that pace, according to Ward.
It’s also looking to let shareholders cash in on their options.
Fun fact: Atlassian itself was bootstrapped for nearly a decade. The Australian enterprise software company was profitable from its inception in 2001 before taking its first round of external capital, a $60 million financing led by Accel, in July 2010. The financing was primarily secondary.
Some context
Appfire was initially a professional services company before transitioning into products in 2013. The company says it has “developed domain expertise in creating, launching and distributing apps” through the Atlassian marketplace. Today, the company has 85 products on that marketplace and more than 110,000 active installations globally spanning workflow automation, business intelligence, publishing and administrative tools.
Specifically, the company’s Bob Swift, Feed Three and Wittified brand apps aim to help companies like Google, Amazon and Starbucks streamline product development through improved collaboration, security, reporting and automation.
“We started this business 15 years ago with the goal of building software applications for customers,” Ward told TechCrunch. “At that time, there were no marketplaces, so iTunes marketplace didn’t exist, Google Play didn’t exist, but yet we were seeing that applications were getting smaller in size, Mozilla was putting out plugins. My co-founder and I were sitting on the floor of a warehouse in Maynard, Massachusetts and we conceived of this company called Appfire, and boy did we pick the right name.”
The pair then stumbled upon a project by which a friend of a friend was looking for them to integrate two pieces of software with software from Atlassian.
“It was brand new to us — we had never heard of it — a software called JIRA and another piece of software called Confluence,” Ward recalls. “About three months later we launched a project and then got introduced to the co-founders of Atlassian.”
In 2017, Appfire decided it wanted to focus full time on becoming “the biggest app platform and aggregator.”
“So we decided to wind down all the other little special side projects for Atlassian delivering services to customers, and really put all of our eggs in this marketplace basket,” Ward recalls.
It was at that point the company began looking for external capital. With this last raise, though, Ward says Appfire was not necessarily looking for more cash.
When approached by TA, Appfire asked if it could create more employee equity programs so the company could be an employee-led business. It also asked if it could take 1% of its equity and contribute to the Pledge 1% initiative.
“They said yes,” Ward said. “So that led us to this latest funding.”
Appfire is also moving into business intelligence and data analytics apps for Tableau and Microsoft Power BI.
As mentioned above, some of its latest funding will go back to existing shareholders, Ward said. The remainder will go into continuing to grow the business.
“We have a lot of organic and inorganic growth opportunities,” he added. “…That obviously takes some momentum.”
Michael Libert, a principal of TA Associates, said his firm had been tracking Appfire’s progress for “quite some time.” The company’s apps, he said, do not require complex training, allowing customers to improve productivity “at a low cost,” leading to further customer adoption and enabling “a solid land-and-expand strategy.”
“We found the company’s high-quality business model, impressive organic growth and recent significant acquisitive activity particularly attractive,” Libert told TechCrunch.
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