Canadian-Made AppDirect Raises $35M in Series C Money

AppDirect CEO Daniel Saks says his company doesn’t actually need the $35 million it just raised from Mithrill Capital this morning. (Show me a company that truly does).

But on the heels of a ton of growth in 2013, after doubling its headcount from 80 to 150 people, increasing its global reach to 20 million businesses and opening a new office in Montreal, Saks said it’s a good decision.

“We don’t need it, but we see so much value in the way we’re growing that we want to continue to accelerate that growth,” said the 29-year-old, originally from the Niagara Region in Ontario.

AppDirect is the Silicon Valley-based company that, as of today, has raised about $55.8 million in funding. Most of it came from Canada, from iNovia Capital. The Foundry Group also participated in the round.

AppDirect essentially uses cloud infrastructure to connect app developers with app-hungry businesses. Officially, the startup is a “marketplace and management platform makes it possible for companies of all sizes to find, buy, and manage the technology they need to be competitive.”

Following this month’s office opening in Montreal, the company now has a presence in San Francisco, Boulder, Ottawa, London and Munich.

Both cofounders are Canadian, as Sak’s partner Nicolas Desmarais is from Montreal. Saks said in 2009 he as still in school in Boston when he visited Desmarais in San Francisco to bounce a few ideas off of.

“We saw that great technologies emerging in Silicon Valley and there were business around the world that had no idea,” Saks told BetaKit. “We tried to figure out how we could connect these awesome developers with businesses and we realized it would be with the local software distributors, the local AT&T’s and the Bells of the world who have that trusted relationship with businesses.”

Thus, in 2011 their first big client they signed on was Bell Canada. The Canadian telecom giant began using the startup’s platform for its Bell Business Apps Store, which connects its SMB customers with the right cloud services.

A little bit after that they raised $3.25 million from iNovia Capital with Stingray Digital, followed by an $8.25 series A round. In October 2012 they used a bit of that money to acquire the open-source billing software, jBilling, an Ottawa-based company that would provide AppDirect with its Ottawa presence.

It continued the torrid pace in September of last year, when iNovia led a series B investment of $9 million into the company. That announcement also came with the acquisition of Standing Cloud, which packages apps for use with cloud services to ease the complexity of deploying and managing apps.

Now they’ve raised $35 million more dollars. “It’s an exciting round, we’re pumped about it,” said Saks. “Our founding vision was to make it easy for businesses to find, buy and use the great applications that they need and we want to continue to fulfill that vision. I think we’re really only at the tip of the iceberg of what we could become.”

I asked Saks where there is to go, now the the company has achieved so much traction. He laid it out in four key areas. He called AppDirect the leader of the “cloud service brokerage” space, but there’s still areas for improvement:

1) Distribution of software, or the ability to help businesses to discover and learn more about applications. It’s an area that AppDirect has been aggressive.

2) Billing, and growing off of the strength of the JBilling acquisition.

3) Identity, or everything from security to single sign-on, “so making it easy for businesses to access all the services they need with one password, in a central way.”

4) Anything around data management deployment, “so the ability to manage data across applications and leverage interoperability.”

The number of business users on AppDirect-powered marketplaces has grown by 200 percent in the past year.

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