By: Benjamin Kuo | January 28, 2014 (Featured on socalTECH)
Think Southern California’s tech industry is all about fashion, Hollywood, and content? If you look at the last few weeks of deals here, you might be surprised: it’s almost been entirely enterprise software. Yesterday, TigerText, a developer of enterprise, secure texting tools, raised a big $21M funding and last week, the big funding round was for Kareo, which raised $29.5M for its cloud-based medical offices software. Before that, expense management and invoice processing vendor Chrome River raised $17.0M, and right before that Invoca brought in a big $20M funding round for its call marketing automation tools.
Why the sudden interest in cloud-based, enterprise software? TigerText co-founder and CEO Brad Brooks says if found that investors have recognized the company is at the intersection of a number of big trends in the market–the smartphone, text messaging, widespread enterprise adoption of SaaS solutions, and employees using their own devices at work. Invoca CEO Jason Spievak echoed that, saying that investors are now realizing that cloud-based companies are able to deliver 90 percent plus gross margins, something that traditional software companies struggle to deliver.