Company: SuccessFactors
Description: On-demand HR software
Competitors: Halogen Software, Authoria
Location: San Mateo
Amount Raised: $25 million
Round: Third
Date Announced: 5/23/06
VC Firms: Granite Global Ventures, Greylock Partners, Emergence Capital Partners, Canaan Partners, TPG Ventures, Cardinal Venture Capital
VC Directors: Dave Strohm
Quick Take: The tradeoff involved in late stage funding is lower risk for less reward. SuccessFactor's $25 million equity fundraising from five venture capital firms and $20 million in debt funding from Lighthouse Capital proves that out. SuccessFactors has carved out a lucrative niche in the on-demand software market in much the same way CRM vendor Salesforce.com did before it. Its human resources applications are attracting new customers and from the display of the easy to use and powerful application I saw at DemoFall last year, I see why. But, in light of SuccessFactor chairman Dave Strohm's comment that the latest round was completed at a respectable IPO valuation, the growth rate will have to continue for Granite Global to profit when an IPO or Oracle buyout does come. Either way, the startup's early stage investors are in very good shape.

Technology (1 out of 10): 5
Market: 6
Management: 6
Chances for IPO: 8
Overall VC Rating: 6

For more on SuccessFactors' funding, see:
The Deal
SuccessFactors' blog
The Human Capitalist

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