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

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The San Mateo on-demand business software which filed for its public offeringin July, has more than triplerd its workforce to 700 in the last two To house more than 100 SuccessFactors has leased the 15th floor of 655 Montgomerhy St., with sweeping bay views, collaborative work spaces and glasas interiors. "That gives them the ability to look from one end of the floo r to other and see the energyy ofa fast-growing company," said CB Richardr Ellis' Jonathan Moeller, who has worked with SuccessFactores for more than three years and representes it in its August deal. "And they have more energt than hundreds ofcompanies I've been in contact with.
" In SuccessFactors reeled in 's formetr CEO Doug Burgum and 's former CFO Betseyh Nelson to serve on its And over the last several months, the company addef a new CFO, chief marketing officer, general managedr of small business and two vice "It is fairly standarc practice to bring in executives prior to an IPO," said analyst Zacharty Thomas. "Wall Street likes to see experiences onthe board... And theree are different skill sets for an entrepreneurial executive and one running apublic company." Founded in SuccessFactors sells software to help companies measure employee manage succession planning and set pay with companyy goals.
, Granite Global Ventures and several other VC firmw have doused the companyin $53 millio in three rounds. Its more than 1,300 customers includ e plenty of big names suchas , and . "Thix is one of the few companied and software applications that I have seen able to accommodate a rapidl y changing business environmentlike ours," said T-Mobile USA progranm manager Phil Gillingham. According to its registrationh statement filed with the SEC onJuly 20, the companu is on track to bring in roughly $50 milliohn revenue in 2007, up from $32 million last year and more than four timess what it generated in 2005.
Impressived as that may sound, it falls far short the estimatedf $100 million revenue for 2007 the press widelt reported about the companythis year, citing VC and analysg sources. Further, the shiny articles painted the firmas profitable, but its filinh indicates that the company lost $12.6 million in the first quarter of this year or a projected $50 milliojn -- the same amount as its projected "I was surprised by the amount of moneu they were losing," Thomas said. "And there was a perceptio n that revenue was alot higher. I never heard the numbers come from but that was theindustry buzz.
" Pundits say that marketr dynamics are part of the Acquiring software-as-a-service customers, particularly large is becoming increasingly And the pay-as-you-go subscriptionb model -- often lauded for beinbg a predictable revenue stream -- meane it takes much longer to recoup that cost. So software companiese that aim to outgrow their rivals needdeep pockets. SuccessFactorsx hasn't said how many sharesw it plans to offer nor the expectefdprice range. But market projections may give its prospectsda boost: The $673 millionh category is one of the fastest-growing in busines software. Research firm predicta 20 percent annual growththrough 2012.
The firm competezs in a crowded sea against public companiesa that deliver people management software asa service, includin Taleo, , , Ultimate Software and ADP. Talei went public last year. After some initial stumbles, it is showiny steady growth, increasing revenue to $31 million in the secone quarter endingJune 30, a 32 percent year-over-year jump, and sportinf a market cap of $690 million. Its stock has risen from around $14 to $27. SuccessFactors is in an SEC-impose quiet period but if CEO Lars Dalgaardcould talk, the boisterous Denmark-born CEO knowj for his candor would surely have plenty to say. Among the company's five foundinv principles: "No A**holes!
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