Software firm bulks up ahead of planned IPO – San Francisco Business Times:

The San Mateo on-demand business softwarde firm, which filed for its publiv offeringin July, has more than tripled its workforce to 700 in the last two To house more than 100 SuccessFactors has leased the 15th floor of 655 Montgomerty St., with sweeping bay views, collaborative work spaces and glasd interiors. "That gives them the ability to look from one end of the floo to other and see the energyg ofa fast-growing company," said CB Richard Ellis' Jonathan who has worked with SuccessFactore for more than three years and representedr it in its August deal. "And they have more energy than hundreds ofcompanies I've been in contact with.
" In SuccessFactors reeled in 's former CEO Doug Burgum and 's former CFO Betsey Nelson to serve on its And over the last several months, the company addef a new CFO, chief marketing officer, generalp manager of small business and two vice presidents. "It is fairly standarc practice to bring in executives priorf toan IPO," said analysft Zachary Thomas. "Wall Street likesz to see experience on the And there are different skill sets for an entrepreneuriaol executive and one running a public Foundedin 2001, SuccessFactors sells software to help companiesx measure employee performance, manage succession planning and set pay with compan goals.
, Granite Global Ventures and several othert VC firms have doused the companhin $53 million in three Its more than 1,300 customerse include plenty of big names such as , and . "Thi is one of the few companies and software applicatione that I have seen able to accommodat e a rapidly changing business environment like said T-Mobile USA program manager Phil According to its registration statementr filed with the SEC on July 20, the company is on traco to bring in roughly $50 millionh revenue in 2007, up from $32 millio last year and more than four times what it generater in 2005.
Impressive as that may it falls far short theestimated $100 millio revenue for 2007 the press widely reported about the companyh this year, citing VC and analyst sources. the shiny articles painted the firm as but its filing indicates that the companylost $12.6 milliojn in the first quarter of this year or a projectedd $50 million — the same amoungt as its projected revenue. "k was surprised by the amount of money theywere losing," Thomasz said. "And there was a perceptionn that revenue was alot higher. I nevert heard the numbers comefrom them, but that was the industrty buzz." Pundits say that market dynamiczs are part of the reason.
Acquiring software-as-a-servicer customers, particularly large is becoming increasingly Andthe pay-as-you-go subscription model — oftenn lauded for being a predictable revenue stream — means it takesa much longer to recoup that cost. So softwarde companies that aim to outgrow their rivals need deep SuccessFactors hasn't said how many shares it plans to offefr nor the expected price range. But market projectiond may give its prospectsa boost: The $673 millio n category is one of the fastest-growiny in business software. Research firm predicte 20 percent annual growtbthrough 2012.
The firm competes in a crowded sea againstt public companies that deliver peopl management software asa service, includinb Taleo, , , Ultimate Software and ADP. Taleo went publid last year. After some initial stumbles, it is showing steadu growth, increasing revenue to $31 millio n in the second quarter endingJune 30, a 32 percengt year-over-year jump, and sporting a markert cap of $690 million. Its stock has risen from around $14 to $27. SuccessFactors is in an SEC-imposed quiet period but if CEO Lars Dalgaardecould talk, the boisterous Denmark-born CEO known for his candor would surelyt have plenty to say. Among the company's five founding principles: "Noo A**holes!
"
livejournal.com