It's game-on today as FinancialForce, the cloud-based enterprise resource planning (ERP) vendor, announces $110 million in funding aimed at helping it take on some of the big players in the space. FinancialForce itself is an interesting player - actually a subsidiary of a larger European ERP vendor, Unit 4, FinancialForce has somewhat cut the apron strings and gone out on its own - while Unit 4 still formally holds a stake in the company, it feels like FinancialForce is being given the freedom (or taking it in any case) to execute as it sees fit.
Part of that execution has been a deep commitment to Salesforce's Force.com platform. FinancialForce is built on Force.com and certainly sells itself as the logical ERP product for Salesforce customers. It has gone beyond this, however. While FinancialForce still works admirably well with Salesforce customers, it is a credible offering in its own right.
All of this success, and some smart early bets on Force.com have paid off. FinancialForce actually had early investment from Salesforce - over five rounds it had (until today anyway) raised around $110 million.
That cash is significantly being added to today with the announcement that FinancialForce has picked up $110 million in funding, led by Technology Crossover Ventures with all-important participation from Salesforce Ventures. This takes total funds raised to date to $220 million, a figure which John Bonney, FinancialForce CFO says is "in line with other high growth enterprise SaaS companies at comparable size." These investors see something they like - perhaps it is the $50 million annual run rate off of a 91 percent subscription run rate growth?
Or maybe it is the fact that FinancialForce is cannily building out its functional base through some smart acquisitions - far from being just a financials vendor, the company now offers standalone (and well integrated) professional services automation (PSA), supply chain management (SCM) and human capital management (HCM) offerings. Many of these were created through the acquisition of smaller ecosystem partners - generally low price tag, but high strategic value deals.
All of this means FinancialForce starts to become a credible alternative to other cloud-based (not to mention on-premises) ERP offerings. The company is starting to sound credible against its much larger (and publicly listed) competitor NetSuite. At the same time, it can do battle with other mid-market solutions generally.
The future looks rosy for FinancialForce, as they expand their horizons, there is the slight question about how they will play with their parent company, Unit 4. I'd suggest that at some point the two will actually compete and at that stage some hard conversations will have to be had. That is, however, a discussion for another day, for now, FinancialForce CEO Jeremy Roche will enjoy basking in the shiny reflection from his new found millions.
