Cross Atlantic Capital Partners-backed Amber Road primed for IPO (Update)

Esther Surden
Publisher & Editor, NJTechWeekly.com


Radnor-based Cross Atlantic Capital Partners-backed Amber Road (East Rutherford, NJ), which licenses software as a service (SaaS) software to automate international import and export processes, has filed for an initial public offering (IPO). The company is expected to begin trading March 21, 2014. Cross Atlantic owns about 35%.

Amber Road, which hopes to raise $75 million, will list on the New York Stock Exchange under the symbol AMBR.

The company announced its terms earlier in March. It will sell 6.5 million shares at a price range of $10.50 to $12.50 per share. According to an article on NASDAQ.com, at the midrange of this stock price Amber Road would command a fully diluted market value of $313 million.

James Preuninger of Amber Road / Courtesy Amber Road 

Amber Road was founded in 2002. According to an article on the website Seeking Alpha, Amber Road made two important acquisitions in 2005 to complete its global trade management portfolio: BridgePoint and NextLinx Corporation.

“NextLinx added 11 years of global trade compliance technology and content, which is Amber’s key selling point to customers. The company [which began as Management Dynamics] was rechristened Amber Road in 2011,” the article says.

The Seeking Alpha article notes that as of the end of 2013, Amber Road had 463 customers: 172 enterprise companies contributing at least $100,000 each in annual revenue and 291 midmarket firms contributing less than $100,000 each in annual revenue. The company employs some 500 people.

An article by Lawrence J. Aragon on Reuters PE Hub reports that Amber Road’s primary venture backers include Cross Atlantic Capital Partners, which holds 6,685,160 shares (34.8 percent of the total); Updata Partners (Washington, D.C.), 3,561,856 shares (18.6 percent); Goldman Sachs (New York), 2,987,756 shares (15.6 percent); NJTC  Venture Fund (Mount Laurel), 1,355,051 shares (7.1 percent); and Orix Ventures (Dallas), 245,946 shares (1.3 percent).

“As a group, the five investors own 14.83 million shares (or 77 percent of the total) prior to the offering. Assuming they don’t exercise options to buy additional shares, the investors collectively plan to sell about 1.2 million shares in the IPO,” the Reuters article states.

In January 2014, the NJTC’s TechNews interviewed Jim Preuninger, founder and CEO of Amber Road. Preuninger discussed some of the early challenges his company had faced, including selling a cloud product when no one else was doing so and convincing large companies like GE and Wal-Mart to buy it.

Another challenge he noted was that “one platform, a cookie-cutter approach, doesn’t work.” However, customization for each customer was unsupportable. The answer: “We had to develop a technology that was highly adaptable and had a high degree of configuration so it could be a tight-glove fit for Wal-Mart as well as a small company in a different industry,” said Preuninger.


Esther Surden is Publisher and Editor of NJTechWeekly, and a contributor to Philly Tech News. This article originally appeared in NJTechWeekly, and is republished here with her permission.

Update: Amber Road priced at $13, above the range, and now commands a $356 million market cap, Renaissance Capital reports.

Delco insurance software firm InsPro Technologies sees continued rapid growth

Tom Paine

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Eddystone (Delaware County)-based InsPro Technologies has flown under the radar among Philly area startups until recently, but now appears to be emerging as a significant factor in the insurance software industry, providing enterprise solutions to life, health and annuity providers. Revenue in the first quarter of 2013 grew 92% over 2012 to $4.6 million. Loss from continuing operations was $64,791 in the first quarter of 2013, compared to a loss of $744,517 in the first quarter of the prior year.

Bob Oakes

There may still be a certain uneveness to InsPro's financial results as it grows since revenue can vary widely depending upon the timing of when it brings new customers, some of whom can be quite large, online, so I would be careful about making straight-line projections going forward. Since InsPro has a small amount of its equity in publicly traded common shares (OTCMKTS:ITCC ) though most of the company is owned by investors holding preferred shares not publicly traded, CEO Robert Oakes is limited in what he can say about the company's growth prospects, but in a recent interview with Philly Tech News he was willing to repeat a comment he made to me late last year (see my previous article on InsPro ) that annual revenue growth of 50% over the next couple of years is achievable.

As it moves beyond the initial challenge of getting its first few major clients rolled out, Oakes says InsPro is gearing up and building the infrastructure for broader growth.

During 2012, InsPro brought onboard 40 new employees, bringing its total headcount to 115. It strengthened its senior management depth in areas such as customer service, strategic partnership management and marketing (InsPro's new Chief Marketing Officer, Sandra Taylor, has a Ph.D.; even though her's is more related to English literature than marketing, there are similarities between then two fields).

In March of 2013, InsPro announced the expansion of its Senior Market portfolio with the addition of fixed and indexed annuity product support, significantly expanding its addressable market. Fully integrated with InsPro Enterprise, the new capability recognzises the emergence of annuities as a preferred portfolio component for many seniors and the increasing need for tightly integrated insurance administrative systems' support.

In February, IGate, one of the world's largest business process outsourcers (BPOs), announced it had selected the InsPro Enterprise application suite to manage its Third Party Administration (TPA) business. The InsPro/iGate relationship dates back to 2010. InsPro said iGate went live with InsPro Enterprise in June.

Its a relatively small world among insurance software firms in the Philadelphia area, and many of the principals of the different firms know each other and have worked together before. Alumni of AdminSever, the Chester-based insurance tech firm acquired by Oracle in 2008, are sprinkled around Philadelphia startup Adminovate, InsPro and Exton-based iPipeline. While Adminovate and InsPro are competitors, both have working relationships with iPipeline and are listed as "solution partners" on iPipeline's website. While iPipeline's forte has been more on the front-end (enrollment) side of the business, Adminovate's and InsPro's strengths are more on the back-end policy administration side, and the two latter firms may eventually handle such functions for some iPipeline customers, although no deployments of joint customers have been announced yet by either InsPro or Adminovate.

Oracle remains a major competitor in the policy administration space. In March, SAP made a splash by acquiring Montreal-based Camilion, although Oakes says Camilion seems more property & casualty-focused and he hasn't seen much of a presence from SAP in the Life/Annuity/Health space yet. (Camilion also partners with Oracle in some areas.)

Global insurance IT spending is $140 billion annually, according to industry research firm Celent, and there is still considerable room for third party software solutions to replace inhouse systems. Also, under the Affordable Care Act, health insurers presumably face increased pressure to reduce administrative costs. InsPro at this point still has a fairly small number of customers, several of whom are quite large. The life/health/annuity industry is relatively concentrated universe of mostly large competitors, but Oakes says InsPro has just begun to broaden its scope to market to more potential customers. Areas he sees for expansion are the Blues (Independence Blue Cross is an investor in InsPro, for example) and international markets.

InsPro's technology platform is built around Java, is database agnostic, and uses thin clients as end-user devices. InsPro Enterprise is available on premise or as a remote hosted application.

InsPro Technologies has received total VC investments in the $12 to $14 million range, Oakes said. (My earlier article cited a higher figure based on past SEC filings, but when I asked for clarification Oakes said the additional amount was related to a predecessor firm which has since been sold.) Radnor-based Cross Atlantic Capital Partners has been a major funder. InsPro Technologies was ranked 140th on Deloitte's national Fast 500 for 2012, and Philly Tech News recently ranked InsPro 31st among Philly tech startups, which Oakes thinks is too low (and he may have a point).

Daily Links 5/22/2013: Workday tops estimates with 61% growth; ValueVision to drop ShopNBC brand name

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TruePosition Tackles Indoor Locating (Directions Magazine)

Alteva Announces Workforce Reduction (Marketwire)
Does not effect Philadelphia; reducing 20% of staff in legacy New York telecom business.

Interactions Secures $40 Million of New Financing (PR Newswire)
Radnor-based Cross Atlantic Capital Partners participates again in new round for Massachusetts-based Interactive Voice Response vendor.

Workday reports sales up almost 61% (MarketWatch)
Beats on revenue; posts slightly smaller loss than expected.

HP's Whitman reiterates 'multi-year journey' amid Q2 revenue miss
(ZDNet)
At least as long as her contract, I suspect.

Microsoft Unveils Xbox One Entertainment Console (Hollywood Reporter)

Pay TV is hurting, and even skeptics now admit cord cutting could be at fault (Gigaom)

Cable Companies Chafe as Low-Rated Channels Change Names (Advertising Age)

ValueVision Media to Rebrand Its ShopNBC Electronic Retail Operations as 'ShopHQ' -- 'Your Headquarters for All Things Shop' (Marketwire)
Comcast owns about 15% of ValueVision (inherited through its acquisition of NBCU) so it
remains to be seen what this means for Comcast's future interest in the home shopping channel. See more info on switch via Internet Retailer, as ValueVision reports first quarterly profit since 2006.

Comcast, the Mets, and Other Winners in the New Man City-Yankees MLS Franchise (Business Week)




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Daily Links 3/22/2013: Comcast finalizes $1 billion 30 Rock buy; FCC Chair Genachowski leaving

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Comcast’s $1B ‘Rock’ solid deal (New York Post)

Comcast's Brian Robert's interviewed at the Economic Club of Washington (Video)
Interesting perspective - looking both to the past and the future.


FCC Chairman Julius Genachowski Stepping Down After Contentious Term: Reports (Time)

Genachowski’s FCC Tenure Featured Push to Open Wireless Spectrum (Video) (All Things D)

SAP Lifts Co-CEO Pay by 41%, Beating Volkswagen CEO Pay
(Bloomberg)

Cross Atlantic Capital Partners’ Initial Venture Capital Fund to Wind Down; Sell Remaining Portfolio Assets (Business Wire)

Accel Closes $475M Fund To Invest Mainly In Europe And Israel, Focusing On Its Series A “Sweet Spot” (TechCrunch)
Cites QlikTech as one of its major European successes.

CEO Marc Benioff Says Chatter Will Become Primary Interface For Salesforce, A Bold Yet Risky Move (TechCrunch)

Journal Register Approved to Sell Assets in Bankruptcy Court (Bloomberg)




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Eddystone-based InsPro Technologies latest Philly-area insurance software growth story 140th on Deloitte Fast 500

Tom Paine
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In case you haven't noticed, the job of automating many tasks in the traditionally information and paper intensive insurance industry is a booming business in the Philly area. iPipeline is perhaps the hottest startup in the region, having received a $71 million VC investment earlier in the year. InstaMed has also gained prominence as a processor of healthcare payments. AdminServer sold out to Oracle a few years back, and its founders have a new startup, Adminovate, based in Philadelphia. Others to watch include Unirisx and Bethlehem-based Adaptik, which focus on property and casualty insurance. Given its extensive industry presence, Philadelphia has a deep pool of talent with an understanding of both the insurance business itself and its technology needs.

But another emerging player earning attention is Eddystone (Delaware County)-based InsPro Technologies, which serves the Health and Life insurance industries. InsPro was just named to Deloitte’s Technology Fast 500, ranking 140th in the US, with revenue growth of 694 percent from 2007 to 2011. It should rank about 7th on the Philly Fast 50 when Deloitte releases that.


View Larger Map

InsPro markets an integrated, comprehensive enterprise SaaS suite for companies marketing life and health policies, both to groups and individuals. When I asked CEO Robert Oakes whether there was overlap between what InsPro and iPipeline does, he replied that "iPipeline covers only a portion of what we do", and I don't think he was boasting. InsPro's technology platform is built around Java, is database agnostic, and uses thin clients as end-user devices. They provide hosting via Wayne-based SunGard Availability Services.

InsPro only has 15 customers, but they are among the big players in the insurance industry, and InsPro competes against companies such as Oracle. Its two largest customers accounted for 48% of revenue in the first nine months of this year. Revenue almost doubled in the 3rd quarter of 2012 from the prior year to $3.4 million. InsPro is still operating at a loss of over $1 million per quarter as it continues to invest in building out its software. Professional services fees account for about half of its revenues, indicating that considerable customization goes into its customer installations. InsPro had $2 million in the bank as of the end of September and shortly thereafter in October entered into a agreement with Silicon Valley Bank for a $2 million credit facility. It has about 110 employees.

InsPro has raised almost $30 million since 2007 according to SEC filings I can locate. Investors include Radnor-based Cross Atlantic Capital Partners, legendary tech investor Warren "Pete" Musser, and as of late 2010 Independence Blue Cross. Oakes indicated to me that one more substantial equity raise is in the works, after which the company should be over the hump in terms of funding. He suggested that revenue growth of 50% per year over the next two years is achievable.

InsPro Technologies was one of those consulting firms that eventually morphs into a software company. It was founded by Oakes in 1986 as Atiam Technologies, changing its name in 2009 to reflect that of its software suite. Health Benefits Direct acquired Atiam in 2007 for $3 million, and in late 2010 Health Benefits Direct changed its name to InsPro Technologies Corporation, having divested some other insurance related offerings. InsPro Technologies Corporation is thinly traded over the OTC Bulletin Board (ITCC), although the majority of its value lies in its preferred (not publicly traded) shares.

Oakes says the Affordable Care Act, as (and to what extent) it is implemented, should benefit InsPro's healthcare business by placing more emphasis on supplemental forms of coverage that some of its customers market. Oakes also see new product iniatives that should add to the life insurance side of the business as well.



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Daily Links 9/17/2012: Cross Altantic Capital Partners leads new round in Rootstock Software

Rootstock Software Closes Latest Round of Funding Led by Cross Atlantic Capital Partners
Continued Commitment & Investment to Support Expansion of High Growth Manufacturing Cloud Applications Company (Business Wire)
Cross Atlantic, which is based in Radnor, had previously invested in California-based Rootstock.

Second-Hand Software Sales Set to Soar on Oracle Ruling (Bloomberg)

Oracle buys SelectMinds to boost capabilities gained from Taleo acquisition (Computerworld)

SAP and Ariba: Waiting for in(Justice)? What the DOJ May Be Seeing (Spend Matters)

SAP CFO: Optimistic despite euro crisis (MarketWatch)

Trying to connect with customers (Philly.com: Philly Inc)
On Relay Network of Radnor.

Students hack for 48 hours in PennApps hackathon (Daily Pennsylvanian)

Comcast's IP Set-Top Club Expands (Light Reading Cable)

Cable Cuts a Clearer Path to CLEC Buys (Light Reading Cable)

Drexel Law Professor Creates First Massive Open Online Course (MOOC) to Teach Business Acquisition Skills (Drexel Now)



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Daily Links 7/12/2012: Poptent raises another $5.5 million

SAP Preliminary Second-Quarter Software License Sales Beat Analyst Estimates (Bloomberg)

SAP trousers €1bn quarter in software sales, fumbles profit
Prelims are best ever but net income can't keep up (The Register)
I love the way some Register journalists can bring humor to something as dry as an earnings release, while making sense of it at the same time.

SAP Appoints P&G Nordic CEO Deplazes Delgado As Personnel Chief (Bloomberg)
Becomes SAP's top female exec; also named to SAP's executive board.

Poptent Raises $5.5 Million to Support Continued Growth, Surpasses 50,000 Members and $5 Million in Creator Cash Payments (Business Wire)

With 50,000 Videographers, PopTent Raises $5.5 Million From MK Capital To CrowdSource Ads (TechCrunch)

Dell Offers Quickstart Data Warehouse Appliance
While not a complete business intelligence system, Dell's Quickstart 1000 appliance bundles Microsoft SQL Server 2012 database and Dell Boomi data-integration software. (Information Week)

Comcast’s TiVo isn’t the ultimate, but it’s close (Boston Globe)

Cable Ops Rooting For Aereo In Clash With Broadcasters
MSOs See Possibility That Startup's Legal Battle Could End Retrans Regime (Multichannel News)

Cook’s (TV) tour
Apple big huddles with media bosses (NY Post)


DuPont Kevlar advances telecommunication cables (Delaware Online: Delaware Inc.)
DuPont partners with Hatfield-based Fiber-Line.

Cross Atlantic Capital Partners Leads Series B Funding for Voxware (Business Wire)

SCVNGR's LevelUp Tries Dropping the Transaction Fee for Mobile Payment (New York Times: Bits)
Will try to make money from deals cut.

MicroStrategy goes visual with BI platform updates (Computer Business Review)
May enhance its ability to compete with QlikTech and Tableau. Also, CEO Michael Saylor apparently doesn't think too much of Microsoft Surface (or, more accurately, the product launch itself).

Former Birds employees launch fantasy front office football (Philadelphia Business Journal)



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Daily Links 10/25/2011: NBC Sports, including Versus, moving to Connecticut

NBC Sports may move its Phila., N.Y. operations to Conn. (Philadelphia Inquirer)

It's official: NBC sports coming to Connecticut (Connecticut Mirror)


Tech bubble 2.0, revisited (FT Blogs)

Who’s next on Oracle’s hit list? (Gigaom)

Dell Boomi gets a business rules engine (Computerworld)

Dell Boomi AtomSphere Fall Release Harnesses Power of World’s Largest Integration Cloud to Simplify Integration Complexity (Business Wire)

Modelling market for SAP heats Up (IT-Director.com)

Mainframes pump up profits at Unisys
Bucking Uncle Scrooge Sam (The Register)

Cross Atlantic Capital Partners Completes Its Most Recent Investment in Rootstock Software (Business Wire)
Saleforce.com also invests. See my post on Cross Atlantic's investment in Rootstock from June.

What I learned from raising venture capital (Gabriel Weinberg's Blog)
DuckDuckGo's reported funding is $3 million (actually, one dollar less), according to an SEC filing.

After Dismal Earnings Outlook, Netflix Loses $2.3 Billion In Market Cap (TechCrunch)

Netflix and the economics of nonrival goods (Felix Salmon/Reuters Blogs)

Who Will Own Your Living Room? (Silicon Angle)

AMETEK Announces Strong Third Quarter Results (PR Newswire)
Raises guidance for full year.

AMETEK Acquires EM Test (PR Newswire)
Continues to be acquisitive.

Nokia Maps plus HTML5 equals offline mobile maps (Gigaom)

Industry's First Integrated Wireless Receiver Gives U-Verse TV Customers More Freedom to Easily Watch TV Anywhere, in Any Room in the Home
(AT&T Press Release)

Health IT Wins More Venture Capital in 2011
Venture capital for healthcare software and IT services hit $207 million in the third quarter of 2011, a 14% increase compared to Q3 2010. (Information Week)



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Radnor's Cross Atlantic Capital Partners invests in RootStock Software, is raising new fund

Radnor-based VC firm Cross Atlantic Capital Partners, which I profiled last year, announced earlier this month it had invested in RootStock Software, a San Ramon, CA-based developer of SaaS (Software as a service) manufacturing software for the mid-market. The amount of the investment was not disclosed.


Founded in 2008, RootStock's principal go to market strategy to this point has been through a partnership with SaaS Cloud ERP vendor NetSuite. Cross Atlantic was also an investor in NetSuite prior to its going public, although that relationship is not how its investment in RootStock came about, according to Cross Atlantic (XACP for short) Chairman, CEO and founder Donald Caldwell. Rootstock currently has 12 employees and 24 customers, according to Pat Garrehy, its founder & CEO. NetSuite has been actively marketing it as a "white label" solution under the Netsuite umbrella for about six months.


While its relationship with NetSuite has limited the amount of resources RootStock has had to invest so far on client-side activities, Garrehy says the company is definitely looking to expand to other SaaS platforms, including those of Salesforce and possibly Workday. Caldwell says Cross Atlantic probably would not have invested in RootStock if it wasn't for the additional opportunities these other platforms offer.


Rootstock provides applications such as manufacturing requirements planning (MRP) and other functions related to production management for discrete manufacturers. Its principle (more) established competitor in the SaaS manufacturing space is Plex. Other more traditional competitors coming from the on-premise side are trying to make the transition to SaaS, with varying degrees of success. Of course, SAP AG, with its Business ByDesign platform, would like to become a major factor there. But everything I'm hearing about SaaS indicates that the pace of adoption is quickening, even in mission critical applications, despite the skepticism of some (see Is SaaS the key to cloud revenues? ).



Rootstock's value is in its very specific manufacturing expertise (Garrehy previously founded ERP software firm Relevant Business Systems, which was later acquired by Consona). Although Rootstock has been marketed through Netsuite, it built its own proprietary SaaS technology, one that "pushes a lot of data in-memory", Garrehy says. Although many applications probably don't do as much work in-memory as is sometimes implied, he says, in-memory techniques
have helped Rootstalk significantly reduce processing times for many tasks.


Although an article in Forbes early this year had listed Cross Atlantic among "Zombie Venture Capital Firms" because it had not announced a fund raise since 2005, Caldwell is at work on the early stages of raising a new fund. Pension & Investments reported (registration required) this month and Caldwell confirmed that a previous partner, the Pennsylvania State Employees’ Retirement System (PennSERS) has committed up to $20 million to Cross Atlantic Technology Fund III.


Two Philly-area portfolio companies worth watching are Voxware of Hamilton, NJ and InsPro Technologies of Eddystone, PA. Voxware, which provides a voice-picking application for warehouses, had gone public and perhaps expanded too quickly before its market was ready, so Cross Atlantic took it private again late last year, scaled it back and invested an additional $2 million. It remains a promising venture. InsPro Technologies grew out of an insurance agency for health, life, and annuities insurance; the company developed a SaaS platform to manage the sales/service process and eventually jettisoned the agency to focus on marketing the technology.


As for the "bubble" question, Caldwell thinks there may be signs of that in the social media and green tech sectors, but Cross Atlantic focuses mostly on the enterprise sector which has been relatively immune to this point.



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Daily Links 7/21/2010: Movitas raises $3 million

Mobile Technology Company Movitas Raises $3 Million for Travel Industry Focus (PR Newswire)
Mobile Technology Company Movitas Raises $3M, Goes After The Travel Industry (TechCrunchIT)

LoKast shares media between iPhones and Android phones (VentureBeat)

M&A exits abounded in 2Q (Philadelphia Business Journal)

Comcast Chases Big[ger] Business (Light Reading Cable)

Gartner calls for IT maintenance bill of rights (IDG via Bloomberg Business Week)

SAP Teams With Solution Provider For Health-Care Market Expansion (Channel Web)

arcplan's BI Integrated Planning Connector Extends Life of Companies' SAP BI-IP Investment (Marketwire)

Cross Atlantic Capital Partners Invests $2.8 Million in Interactions Corporation Series D Funding (Business Wire)

Ametek raises outlook for 2Q, year on order gains (AP via Yahoo Finance)




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