Michael Hindman/MuleSoft

The business software company’s latest round of $128 million was led by Salesforce Ventures and includes a new strategic backer, ServiceNow.

By Heather Clancy
May 19, 2015
May 19, 2015

Sometimes, the role of the middleman simply cannot be understated. MuleSoft, which sells software used to stitch together business applications and disparate data sources, has raised another $128 million at a valuation of $1.5 billion.

The lead investor is Salesforce Ventures and a new strategic backer is ServiceNow, both of which are also key sales partners for the nine-year-old company.

The round also includes three institutional investors: Adage Capital Management, Brookside Capital, and Sands Capital Ventures. Goldman Sachs was the exclusive placement agent. The new money brings total financing to $259 million.

Like the company’s last $50 million round disclosed in March 2014, the deal was oversubscribed, said MuleSoft CEO Greg Schott. “It is not too dissimilar from last time,” he said.

MuleSoft sells application programming interfaces that connect cloud applications—frequently services from Salesforce, ServiceNow, and Workday—with legacy software and databases. APIs underpin all manner of business services, such as the series of behind-the-scenes interactions and processes it takes for someone to hire a car using a ride-sharing app like Uber.

Historically speaking, this has required expensive, custom services and software from the likes of Tibco, IBM, Oracle or Informatica. What differentiates MuleSoft is its ability to accommodate both cloud and legacy software. “As might imagine, cloud applications are some of the biggest drivers of projects,” Schott said. “We take the heavy lifting out of integration.”

For example, MuleSoft’s work with the Sutter Health hospital system in California, which treats more than 10 million patients annually, ties together its electronic medical records with homegrown systems for diagnostics and research. It used to take at an average of nine months for the organization to deliver new applications, now it takes just one third of that time, Schott said.

MuleSoft counts more than 700 customers including named accounts like eBay, Mastercard, Nestle, Unilever, and Walmart. It also works with two of the top five global retailers, three of the world’s biggest banks, and two of the five largest insurance companies.

Aside from the companies already mentioned, the new financing includes existing backers Cisco Investments, NEA, Lightspeed Venture Partners, Meritech Capital Partners, Bay Partners, Hummer Winblad Venture Partners, Morgenthaler, and Sapphire Ventures.

MuleSoft’s latest round comes less than one month after the initial public offering of another API software company, Apigee, a relatively rare event so far this year.

When he spoke with Fortune last March, Schott predicted his company would reach at the “right scale” to go public by the end of 2014 but didn’t commit to any sort of timing.

MuleSoft reached that scale with an annual run rate of total bookings surpassing $100 million and subscription bookings growth of 110%. The company also more almost doubled its headcount to 500 employees in 10 locations globally. But don’t expect it to start using a ticker symbol any time soon.

“Frankly, the way the current funding climate stands, there are a lot of advantages to staying private,” Schott said. “It gives you the ultimate flexibility” in how you want to run the company and define strategy.

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