Monday, October 1, 2007

Authoria's recent moves may open up an exit

By Christopher Calnan

Human resources software maker Authoria Inc. has pocketed $22.5 million in venture capital and venture debt and hired a CFO known for his experience taking companies public -- two moves that may foreshadow an initial public offering, merger or acquisition.

The financing round, which increases the Waltham company's total outside investment to more than $100 million will be used to continue development of its on-demand delivery model, say executives.

Authoria's new CFO Stephen Lifshatz said the company was operating profitably until about 18 months ago when it switched business models from installed software to on-demand software. The latest investment is expected to tide Authoria over until it reaches profitability again, he said.

Lifshatz was named CFO earlier this month. His bio includes key positions in two public debuts. He served as senior vice president and CFO of Waltham software maker Lionbridge Technologies Inc. while it raised VC funding, completed an IPO and a follow-on offering. He also served as vice president and controller for Newton's Marcam Corp. from its founding to its own IPO.

He cautions, however, that it's still to early to speculate about a similar direction for Authoria.

"Have the (investment) bankers been calling? Absolutely," he said. "If a public offering makes sense in the future, certainly it would be something we'd take a look at."

New Authoria investor Jan Haas, president and co-founder of Velocity Financial Group Inc., said Wall Street favors the revenue predictability that on-demand subscriptions provide companies planning a "next event."

In addition to Velocity Financial, new investors are Horizon Technology Finance LLC, a Farmington, Conn., venture debt provider, and TriplePoint Capital, a California finance company.

Authoria is best known for its performance management software, or applications that track incentive compensation programs, said Paul Hamerman, an analyst for Cambridge-based Forrester Research Inc.

Authoria's top competitors include SuccessFactors Inc., a five-year-old California-based firm that registered for an IPO in July, but has yet to complete it.

New England competitors include Kronos Inc. in Chelmsford (acquired this year by affiliates of Hellman & Friedman Capital Partners VI LP), H3 Inc. of Cambridge, Softscape Inc. of Wayland, and HR Knowledge of Mansfield.