Startups raise $47.5 million in January

BOULDER – Boulder startups are beginning 2012 with a bang, as three locally grown tech companies announced they received a combined $47.5 million from venture capital firms in recently completed financing rounds.

SendGrid Inc. on Jan. 17 announced it has raised $21 million in a Series B round. The next day, Symplified Inc. announced it closed a $20 million Series C round in late December.

Next Big Sound Inc. on Jan. 3 announced it raised a $6.5 million Series A round. (See story, 7A.)

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All three rounds drew major investments from venture capital firms based outside Boulder.

SendGrid’s round was led by Bessemer Venture Partners, one of the most oldest VC firms in the nation. The company has offices in Silicon Valley, New York, Massachusetts, India and Israel.

The lead investor in Symplified’s round was Ignition Partners, a Seattle-based firm with a track record of investing in leading cloud-infrastructure companies.

IA Ventures, a New York City-based firm specializing in investments in “Big Data,” was the co-leader of Next Big Sound’s round.

The influx of capital, in particular the investment from Bessemer, is a sign Boulder companies are on the radar screens of major VC firms that invest globally, said Jason Mendelson, managing partner of the Foundry Group.

Foundry, which is based in Boulder, has invested in both SendGrid and Next Big Sound. Both companies were members of the Boulder TechStars Class of 2009.

Collectively, the investments are an indication tech startups are reaching the “critical mass” needed to create a self-sustaining ecosystem that can launch startups that mature into “world class companies,” Symplified founder and CEO Eric Olden said.

Olden is a Silicon Valley transplant who founded Securant Technologies Inc., which was purchased for $134.5 million by RSA Security Inc. in 2001. His contacts and colleagues in Silicon Valley originally were skeptical Boulder could nurture startups such as Symplified, he said.

“We’ve been able to bring in capital from outside to fuel this,” he said.

SendGrid

SendGrid has raised a total of $26.76 million, including $5.76 million in seed money and a Series A round.

SendGrid has developed a cloud-based platform that helps users improve email deliverability. Invoices, shipping confirmation and product updates are among the types of messages SendGrid helps ensure avoid the spam filters of their clients’ customers.

The new funds will be used to increase hiring, reach new customers and invest in the product, developer relations and customer support, the company said in a press release.

“This investment allows us to more quickly fulfill our original vision of making email simple and easy for developers everywhere,” cofounder and president Isaac Saldana said in a press release. “Although we intend to expand quickly, we will remain focused on developers by continuing the expansion of our market-leading platform, growing developer relations and providing outstanding support.”

Investors in the round include a major national VC firm and prominent local investors.

“SendGrid’s transactional email platform is emerging as a powerhouse in the platform-as-a-service space,´ said Byron Deeter, a partner of Bessemer Venture Partners. “SendGrid has solidified its category leadership position with a great platform and an outstanding team. We look forward to helping SendGrid grow and command even more market share in the future.”

Existing investors Foundry Group, Highway 12 Ventures, SoftTechVC, 500 Startups and Bullet Time Ventures, which was created by TechStars co-founder David Cohen, also participated in the round.

SendGrid said it is used by 40,000 web-application companies and developers and delivers more than 2.6 billion emails per month.

SendGrid has about 70 employees in Boulder and Anaheim, California, and is hiring in its sales, marketing, operations and engineering departments. This time last year the company had 19 employees.

Symplified

Symplified develops a cloud-based computer security platform. With its $20 million Series C round, the company has raised $38.8 million.

Olden said the growth stage investment will be used to expand operations, service and support and marketing efforts.

Symplified is approaching profitability, and the financing will give the company the wherewithal to expand and defend its position in the growing cloud-security industry, Olden said.

“My focus is on one goal, and that’s to get to $100 million in recurring revenue. We’re well on our way to do that,” Olden said.

“We’re in it for the long haul,” he said. 

Symplified was founded in 2006 and has grown to about 82 employees, with 62 based in the new Pearl Street office the company moved into in mid-2011. Its year-over-year revenue grew nearly 300 percent in 2011, and its adoption increased by more than 300 percent to 3.8 million licensed users.

Customers include HP, ESPN, Moody’s, Zynga and Netflix.

Symplified’s strategy is to help businesses secure cloud-based commercial enterprise applications like Salesforce.com and Google Apps, Olden said. Symplified’s service is based in the cloud and lets employees, customers and partners access the applications through a service that offers identity and access management, single sign-on capabilities and auditing.

Users log into Symplified once, which then grants them access to the several cloud-based applications their companies use, Olden said. Because it is based in the cloud, Symplified can be used on desktops, laptops and mobile devices. It works across software platforms and can be used on Apple or Android devices and even on the Amazon Kindle Fire , Olden said.

Secure data is never downloaded to the device, and access privileges can be revoked if a device is lost or stolen or an employee is terminated.

Symplified’s service is priced to be affordable for small- and medium-sized enterprises. It can scale up to larger companies, and it can be set-up in a single day, Olden said.

Symplified spent the first $20 million it raised to develop the platform, and now it will use the new $20 million to expand its customer base and add new features, Olden said.

The funding round, which closed in December, was oversubscribed and relatively smooth.

“We had a lot of interest. The trick was to find the right partner out there,” Olden said.

The round was led by Ignition Partners, a Seattle-based VC firm. Ignition Partners founding partner Cameron Myhrvold has joined Symplified’s board of directors.

Myhrvold was an executive at Microsoft Corp. and helped build the company’s relationship with independent developers, Internet customers and telecom providers.

“Symplified pioneered the market for cloud identity and access management with a cloud-delivered service that goes beyond single sign-on and is accessible to any sized organization. We were impressed by the company’s founders and their track record of innovation in the identity and access management space,” Myhrvold said in a media release.

Prior investors Granite Ventures, a San Francisco, California-based VC firm, Allegis Capital, a VC firm based in Palo Alto, California, and Quest Software Inc., a Seattle, Washington-based IT management software company, also participated in the round.