New Enterprise Associates Pours $37.5M Into Appian for Custom Business Apps
New Enterprise Associates, which has seen two portfolio companies that offer applications and software deliver $1 billion investment returns in the past two years, is now getting behind a different kind of software company.
The firm said it has provided a $37.5 million Series B round for Reston, Va.-based Appian Corp., developer of a platform that enables enterprises to build their own custom applications.
About $35 million of the round will go toward repurchasing shares of common stock, mostly from company founders and individual investors, the company said.
Appian was previously funded by Novak Biddle, which gave the company $10 million in 2008. The firm still holds a stake, Chief Executive Matt Calkins said.
Appian, which has a list of top-flight customers and is profitable, has a post-money valuation above $250 million, NEA General Partner Harry Weller said.
“It’s a huge opportunity, because this is a monster new industry,” Mr. Weller said. “Have you ever wanted to automate something? Did you ever just want to pay someone to do it, because the application just doesn’t exist? Enterprises have this same problem.
“Companies are trying to automate everything. This [custom software and applications] accounts for a third of the total software market. It is absolutely huge.”
Appian makes a cloud-based platform that enables enterprises to build their own custom applications for a variety of business tasks and processes. The platform is structured in such a way that, for each customer, apps become cheaper and easier to build over time, Mr. Calkins said.
Apps built on the platform have various layers, he said, which enable collaboration and socializing.
Starbucks Corp. uses Appian on the iPad to perform inspections of its 17,000 branches, the CEO said. Several top pharmaceutical makers have built apps that help report drug-trial progress to the Food and Drug Administration, while financial institutions have used Appian to create underwriting programs.
Appian’s other customers include the U.S. Army, vehicle-rental companies and financial institutions.
As more of the world’s business moves online, enterprises are finding that their needs frequently extend beyond the types of software and applications that can be bought off-the-shelf, Mr. Weller of NEA said.
“This company makes it easy to automate, but without getting rid of the human component,” he said. “People socialize around these apps. They get constant updates on how these apps are doing, like the updates you get on Facebook. Appian is the tools, but the software is created by people.”
Mr. Weller, who takes a board seat at Appian with the funding, previously invested in Groupon Inc. and Eloqa Inc.
New Enterprise Associates reaped more than $1 billion last year with the IPO of data-visualization company Tableau Software Inc., and saw a comparable exit in 2012 from human-resources application company Workday Inc., Mr. Weller said.