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Verivo Lands $4M to Chase Enterprise Mobile Market as iPad Gains Ground
by Scott Denne
Startups that sell mobile development software are racing to get into businesses now that corporations are becoming big buyers of iPads.
With $4 million in new funding from its prior backers, Verivo Software Inc. is one of several mobile app development startups that are raising more money to help developers build business applications.
Verivo’s software is built for customers building enterprise applications, which need features that most consumer applications don’t, including data integration and security.
Its new funding will be used to build on its progress last year when it saw recurring revenue grow by more than a third, said Steven Levy, its chief executive. It now has over 100 customers, a number that grew by 20% in 2012.
Governments and businesses around the globe spent $10 billion last year on Apple Inc.’s iPads, a 26% increase from the year earlier, according to estimates from Forrester Research Inc., which anticipates that amount growing to $13 billion by 2014.
As tablet computers become more popular for businesses, more startups are raising capital to target developers in that sector and there have been multiple fundings just in the last 12 months.
Xamarin Inc. raised $12 million for its software, which enables developers to write mobile applications in C#, a popular programming language among businesses. Another company, Magnet Systems Inc., an enterprise mobile development company from former BEA Systems CEO Alfred Chuang, raised $47 million. Also Perfecto Mobile Ltd. raised $15 million towards a service to test mobile applications.
Verivo Software was founded as Pyxis Mobile to build mobile applications for financial services companies. In its early days, it wasn’t so easy to sell businesses on the need for mobile applications, Mr. Levy said. “Even in 2009, 2010 it was an evangelical process to convince IT departments what mobility could do for them.”
That all changed with the popularity of the iPad, he said. Suddenly its market went from “a push to a pull” as customers became eager to build new mobile applications and with that the Waltham, Mass.-based company transitioned to a mobile development platform from an application company–a transition that was largely completed by early last year when it raised a $17 million Series E round.
The recent funding is an extension of that round from the same investors: Ascent Venture Partners, Commonwealth Capital Ventures and Egan-Managed Capital.
“Apple and Google [Inc.] have convinced everyone that building a mobile application is no big deal,” Mr. Levy said. And that’s true, but making it enterprise-ready is another story as many developers are learning the hard way, he said.
“Most of our competition is educational,” Mr. Levy said.