Sept. 3 (Bloomberg) -- Lithium Technologies Inc., a developer of social-networking software for companies, raised $50 million in a funding round, the latest business-technology provider to tap public-market investors in a private financing.
The investment came from a syndicate that included a mutual fund company with about $1 trillion in assets, said Lithium Chief Executive Officer Rob Tarkoff, declining to provide the name or Lithium’s valuation. New Enterprise Associates, a venture firm and existing investor, also participated.
Even with cloud software vendors like Workday Inc. and ServiceNow Inc. thriving on the public markets, Lithium is holding off on an initial public offering while adding customers such as EBay Inc. and Barclays Plc. Staying private enables the company to smooth out its business model without having to worry about quarterly earnings.
“This is an opportunity to take some capital from very sophisticated investors and continue to build the business for the long term,” Tarkoff, 44, said in an interview. “I want to have this well worked out and well tuned by the time we’re ready to go.”
Other business-technology startups that recently tapped large institutional investors for private financing include flash-memory provider Pure Storage Inc. and customer-relationship software provider SugarCRM Inc.
Lithium, based in San Francisco, competes with Salesforce.com Inc. and Jive Software Inc. in providing social-networking software to businesses. Founded in 2001, Lithium has more than 300 customers using its cloud technology to converse with customers, get feedback on products and attract fans. The company sells monthly subscriptions that vary in price based on the size of the deployment and number of products purchased.
Lithium has raised a total of more than $150 million, including $53.4 million last year from investors NEA, SAP AG’s venture arm and Benchmark, among others. Tarkoff declined to provide the company’s revenue. He said the company has doubled in every significant metric since he joined two years ago and now has several hundred employees.
The company also said today that former Yahoo! Inc. executive Tapan Bhat is joining as senior vice president and chief product officer. In December, Lithium hired former DemandTec Inc. executive Mark Culhane as chief financial officer, as part of its preparation for an IPO.
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