Apptio Raises $14M to Expand, “Crush the Competition” in IT Financial Management

8/18/09Follow @gthuang

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enough capital. We had interest from a lot of venture capital firms, so we had a lot of choices.”

The reason for taking so much money, Gupta explains, is to build up the company’s capabilities “in a drastic way.” He says Apptio is in the process of expanding its staff by 50 percent—up to about 45 people, from 30 people last fall. Most of the new positions are in sales and in product development. “We felt, ‘OK, we have the right product, the right market, the right team, and given the great interest we had on the fundraising side, we should take more capital rather than less,” Gupta says. “We’ll scale the business much faster, it will get us to cash-flow positive, and we won’t have to raise money again. We could be profitable this quarter, but we are deciding instead to take more money, and really, really accelerate the growth of the business.”

Apptio’s competitors include big companies like HP and BMC Software, though Gupta says they don’t have much in the way of comparable products out there yet. “It’s a really, really hard problem to solve from a technology perspective. Other people have tried to solve it by consulting, or within the company through spreadsheets,” he says. “What’s also special is our business model—a quick, on-demand model, where you can get started with Apptio quickly, and within a matter of weeks you get your financials under control.”

Perhaps the most interesting (and surprising) point Gupta made was about Apptio’s culture. The company’s DNA largely comes from Opsware, Mercury Interactive, and HP, he says. But its attitude comes from its chief executive. “We are paranoid,” he says. “Even though we see success in the marketplace, we are always focusing on what we can do better. Things that are not working, we want to make them better. That’s how you go from being a good company to a great company. The phrase we use is ‘glass half empty.’ It’s not a negative connotation, it’s about how do we focus on things that are not working, and how do we get better.”

It also sounds like Gupta has helped cultivate a killer instinct in his company—one that should serve it well in its battles ahead. “We are all commonly united with the common purpose of winning,” he says. “We want to win, we want to be successful, we want to get the best customers. We’re not here to show up and get a paycheck. We really want to build a very large company. If there’s competition, we want to crush the competition.”

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com or call him at 617-252-7323. Follow @gthuang

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