Last year was a good one for fast-growing local marketing software-maker Aprimo Inc. And this year could be even better.
"It's not the beginning of the end; it's the end of the beginning," said Aprimo investor Mark Koulogeorge, managing general partner of the Chicago-based venture capital firm MK Capital. "This is the second or third inning of a very long
In 2006, Aprimo quietly grew from about 220 to 300 employees and moved into a new headquarters just east of College Avenue on 96th Street. It also booked a 71-percent increase in sales. That marks Aprimo's seventh consecutive year of double-digit revenue growth. Aprimo declined to provide more specific figures.
"We're thankful we have a new building," said Aprimo Chief Marketing Officer Michael Emerson. "We don't have anyone sitting next to the copier anymore."
Aprimo also launched a major new edition of its software and expanded internationally by opening offices in Australia and Germany. Kimberly Collins, research vice president for Stamford, Conn.-based technology analysis firm Gartner Inc., believes Aprimo is poised to stage an initial public offering.
"I would say look within two years, and probably within 12 months for initial signs," she said. "Being one of the early and stronger players within their marketplace is going to bode well for them. I see them growing fast, but at the same time in a very smart way."
On Feb. 21, Gartner published a "Magic Quadrant" report for the marketing resource management software sector. It analyzes the first quarter 2007 market position of every major player. Aprimo is ranked as the clear leader. But the report notes that competition is gaining ground.
"Aprimo continues to demonstrate market leadership in marketing resource management, but is facing increasing competition from Unica, Assetlink, SAP and Oracle (Siebel) within their installed customer bases," Collins wrote. "New entrants include Orbis in the Asia/Pacific region and SAS and Alterian via acquisitions."
Marketing is one of the last major business areas to be computerized, and Aprimo was one of the first companies to try. Founded in 1998, its software allows marketing departments to manage their resources and measure their performance. This is a major change, because the results of a marketing campaign have traditionally been difficult to gauge.
Using software like Aprimo's, companies can budget their marketing dollars with much more precision, increasing the bang for their buck.
Aprimo's customers include Bank of America, Cummins and Sony. Koulogeorge notes that Aprimo's clients are increasingly mainstream companies, not just early adopters. Marketing resource management software now has a $1 billion annual market. And the market is still growing fast.
"These are not high-flying technology companies," he said. "These are companies that really rely on marketing and their brands as a core part of their value, and they rely on Aprimo."
As mainstream companies become increasingly aware of marketing software's potential, it creates sales opportunities, Emerson said.
"We're really moving beyond the idea that this is an experiment, to a very large percentage of marketers are actively thinking about this investment in technology" he said. "It's being approached much more the way a company would consider buying an accounting or supply chain software. It's very much a part of what an organization does."
And that's one of the reasons an analyst like Collins expects Aprimo to push for an IPO soon. Mainstream companies want to know as much as possible about their vendors so they can be sure the software they buy will be supported in the long term.
An IPO would give Aprimo a huge cash injection to finance its expansion-and pay back its early investors. But it would also create transparency. Potential customers could look at Aprimo's books and see the firm's stability for themselves.
Ever since Aprimo's rival, Waltham, Mass.-based Unica Corp., staged its own IPO in August 2005, the demand for Aprimo to follow suit has been mounting, Collins said.
"It puts some pressure on them from a competitive stance that, if both were private, wouldn't be there," she said. "Once one has gone public and you're not ... these industries use everything against each other in the marketplace."
Aprimo management won't talk about its possible IPO plans, citing Securities and Exchange Commission regulations. Koulogeorge acknowledged that an IPO is a potential exit event at some point for Aprimo's investors. But he declined to be more specific.
"When you're running a powerful cashflow-positive business, you don't need to do financings just for the sake of doing financings. But that being said, that is part of the long-term plan," he said. "Far too many companies in Silicon Valley aren't built to last. They're built to grow for a few years and get sold. We have the mentality we're going to be running this business in a decade. And that's already started to pay dividends."
More notice, more products
In the meantime, to gain more notice, Aprimo plans to focus in 2007 on submitting information for fastest-growing U.S. company rankings by major publications like Inc. or Fortune. Its last three years of spectacular growth should be enough to gain it significant attention, Emerson said.
Another way Aprimo is pushing into the mainstream is with the new professional version of its software. Aprimo had long sold an enterprise edition, which was intended for use by large companies.
The professional version is aimed at small or midsize firms. It can also be an entry product for large companies that desire to ramp up to the enterprise version later. Aprimo also offers a version of its software specifically for marketing agencies.
"We just need to keep those good 71 percent [revenue growth] numbers happening, and we know good things will happen to us," Emerson said.