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9/18/2009
10:49 AM
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VC Funding Is Dead? Tell That To Eight Newly Wealthy SaaS Startups

Venture capital funding is at a historic low, yet at least eight software startups announced VC funding in the past two weeks for a total of more than $60 million. Their products are all very different, but they have one thing in common: they're delivered in a software-as-a-service model.

Venture capital funding is at a historic low, yet at least eight software startups announced VC funding in the past two weeks for a total of more than $60 million. Their products are all very different, but they have one thing in common: they're delivered in a software-as-a-service model.This is significant, because it shows that when VCs are thinking about what software companies to fund, they recognize value in the SaaS model. Some apps are just easier to sell and deploy as a SaaS, and are likely to gain better traction in a tough economy.

And $60+ million in two weeks is impressive, considering the National Venture Capital Association reports that VC investments in the second quarter of this year dropped to levels not seen since 1996.

Here are eight SaaS companies that have publicly announced VC funding so far this month; certainly there are others:

1) Accept, a SaaS for idea and portfolio management, designed to help businesses quickly bring their best product ideas to market, raised $17 million in Series B financing from StarVest Partners, Jefferson Partners and the Entrepreneurs Fund.

2) Apptio, a SaaS for IT financial management, raised $14 million in Series B financing from Andreessen Horowitz Fund, Shasta Ventures, Greylock Partners and Madrona Venture Group.

3) Jobvite, a SaaS for job recruitment, raised $8.25 million in Series B financing from ATA Ventures and CMEA Capital.

4) NextBio, a SaaS used by life science researchers at universities, and businesses such as Eli Lilly, Merck, and Johnson & Johnson, to find and share information, raised $8 million in Series C financing in a round led by Newbury Ventures.

5) Sonian, a SaaS for data management, raised $5.6 million in Series A funding from Prism VentureWorks and Summerhill Venture Partners.

6) HealthHiway, a Bangalore, India-based SaaS for hospital patient data and billing, raised $4 million from Greylock Partners.

7) OptionEase, a SaaS for fair market value accounting and compliance, raised $3.5 million in Series A financing from Miramar Venture Partners and others. 8) A marketing-related SaaS provider has completed a round of Series C financing. The company and its VC will announce details on Sept. 22.

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