Open source CRM software provider SugarCRM has closed $14.5 million Series D in a round that included original investors Draper Fisher Jurvetson, New Enterprise Associates and Walden International.
SugarCRM started as open source project on Sourceforge, and the company still maintains a fully open source version. Its revenue relies on professional editions and through the provision of support. Total funding to date for SugarCRM now stands at approx. $41 million.
Online jewelry store Ice.com has raised $47 million in “new venture capital” from Polaris Venture Partners. The online retailer opened its doors at the tail of the original web boom in 2001 and has grown to annual sales of $83.4 million.
Under the deal, Polaris managing general partner Alan Spoon will take a seat on the Ice.com board.
(via PEHub/ Internetretailer)
Maybe Sugar can finally afford a real office space instead of being crammed in some dirty looking asbestos hellhole.
$41 million to develop a CRM package that can be downloaded for free? $30 Million invested by Victoria’s Secret to develop an ecommerce system?
Is it just me or does this seem really outrageous? When I read things like this I start to think we’re heading for another tech bubble burst. It’s just nuts!
With all this money I hope that Roberts sticks to his creedo of a better product/engineering wins.
see here: http://news.zdn...22-5566775.html
‘Roberts asks, “Why can’t the best product win, rather than who spends the most on marketing and sales?” He boasts about never having made a face-to-face sales call. “We have disruptive business model because our focus is on building a great product, not on marketing.”‘
It will be very interesting to watch this page http://www.suga...leadership.html and see exactly where all this money goes. Without divulging insider info, I’ll just say that Roberts and company have not done the above.
I like Sugar, but can somone in god’s name please tell me WHY an online software company would need $41MILLION dollars? (and on that much money why are they in a “dirty looking asbestos hellhole”?) what are they spending it on??
Ice I totally get – inventory, distribution, personnel to manage it, rolling accounts payable etc.
I don’t work for SugarCRM but fwiw I believe Sugar has a pretty big team and they actively hire, scanning craigslist and you can find a lot of their posts. The office they’re in is in this old and cramped building next to a dead shopping mall. They also do quite a lot of marketing via Google, consistently see their text links when looking up products. I would love to find out how much their revenue is, in terms of CRM software there’s so many alternatives it’s hard to stand out without mucho cash.
They claim 100+ employees but when I was talking to someone he mentioned that they have 150 or so, with about 20-40 of those open source contributors that get a stipend. Their monthly burn rate could be anywhere from half a million and up to 1 million a month.
$41 Million and they reside in an old building next door to a dead shopping mall? You’re right about CRM packages – it is a crowded space, and their product, while feature rich, still looks bloated and ugly (not that I have ever seen a good looking CRM system). Not to mention their video demo’s … you’d think they could afford some professional voice overs. They must have one hell of a marketing and management team!
Quick stats from the corporate site.., over a 100 employees, opened a new office in Europe earlier in ‘07, and 13+ openings right now.
They spend just a fraction of the budget as the other enterprise software players, that is the whole biz pitch with having an Open Source model, you let the OS version be the majority of your lead gen.
Most of the $$$ is probably for growing head count and building out new regions until IPO or acquisition time.
Why would someone opt for their pay version when you can get an open source product that is very close to Sugar’s full pay version? Vtiger.com – in fact it was based on Sugar code.
Guess that’s why they needed the additional $14.5!
it’s easy enough to go and spend millions on advertising campaigns especially if they’re targeting enterprise accounts. But seems like they might have a tougher time overcoming the open source + enterprise – oil & water mix that many still perceive. I have used it and I like it, but still think of Sugar as a free, cool, open source project, and some stigma is still attached; so whether enough companies will leave SalesForce, NetSuite, Pivotal, Entellium, SAP, Sage, etc…..
Sugar CRM is really a great solution.. I think they deserve every dollar in this.
Ice is Nice, but nothing close to BlueNile. Someone is chasing their tails on this one.
Although for a company with over 100 employees, $14.5 Milion is a justifiable mount, I wonder how will they make up for it with added revenue.
Sugar is a open-source Web1 clone of Salesforce.com built by volunteers. And they have spent how much so far? $41M+. Good grief. Big Contacts, which I think is a much better web2 CRM, was built almost entirely by myself.
An unprofitable company raising a 14.5M series D? My guess is the founders don’t have much equity left, but that’s just a guess. This is a great example of old school statuping and investing.
Paul.., you probably should have spent some $$$ on hiring some devleopers to help you out instead of spending it on crack.
If you are claiming that your Big Contacts program IS a CRM app you should probably look at going into another sector/industry. CRM means more that just contact and calendar/task management…, it if didnt people would be saying that MS rules the CRM market with outlook.
And by the way.., Sugar isnt built by volunteers.., they have an engineering staff.., everything built by the community goes on their forge site a-la sourceforge
Sugar is cash-flow positive so this is a strong play to compete more aggressively. Nay sayers picked the wrong company to hate. Sugar is legit. If you want Saleforce.com-style hosting, get it from Sugar or other resellers. If you want to host yourself, that’s an option. As is custmization. It’s a pretty compelling proposition. And Sugar can easily make money even when a free, open source version exists.
Agree with pwb – people often mis-judge open source systems and say things like “I want it hassle free”, when they can get it from various places and various prices / vendors
I guess the FOSS community is by nature more technically minded and that’s where an open source product may loose head-to-head battle not in feature comparison but in customer perception. I still think that (unfortunatelly) people like salesforce and MS are better at product packaging and general offering.