Cherwell Software Lands $25 Million From Insight Venture Partners
There has been a lot of attention recently on companies that build software to manage IT infrastructure and services, whether it’s on premise or in the cloud — bonus if the software can handle mixed environments and can run in the cloud, as well.
Cherwell Software, a company based in Colorado Springs, Colo., specializes in IT service management software that gets sold to enterprises. And it has been noticed for its growth — it recently quadrupled its annual sales (privately held, it doesn’t disclose the figure) and boasts solid profits and a few large customers, including NBC’s Weather Channel, AAA and a few universities, among them Texas A&M and the University of New Mexico.
The company has taken a $25 million investment from Insight Venture Partners, a New York-based venture capital and private equity firm. It’s a minority investment stake, but not a traditional venture capital deal. Richard Wells, a managing director at Insight, said the firm is often on the lookout for companies that already have both solid revenue and strong customers, but which, as he put it, “aren’t done growing yet.”
Cherwell is also unusual in that it was already well funded and had no real need for outside capital, Wells told AllThingsD. “They have a real product, 400 customers, they’re growing fast,” he said. “They agreed to take some of our capital because of our track record in helping companies in the IT services management space grow.” Wells led the deal for Insight, and will join Cherwell’s Board of directors.
Cherwell is often compared to ServiceNow, the cloud-based software company that specializes in IT automation, and which went public over the summer. Other players include BMC Software and CA Technologies. Its products provide a mixed software-as-a-service-based and on-premise approach to IT services management. Research firm Gartner gives it high marks and says that some customers have been known to switch from one to the other. It’s just not that well-known: Gartner knocked it for poor brand recognition.
Cherwell CEO Vance Brown said in a statement that Insight’s capital should kick things up a notch: “With Insight’s capital and its expertise working with fast-growth software companies, we will be able to achieve our customer and product goals more quickly to become the pre-eminent ITSM platform in the industry.”
Insight was an early investor in Quest Software, which went public in 1999. Earlier this year, Insight tried to acquire Quest in a bid to take it private, only to see it go instead to Dell, which was approached during a “go-shop” period. A bidding war ensued, and Dell won.