Friday, January 23, 2009

Centive bought by competitor Xactly

By Galen Moore

California sales software competitor Xactly Corp. has acquired Centive Inc. in a stock-based transaction, the San Jose-based company announced yesterday. Xactly will acquire all the assets and employees of Lowell-based Centive for an undisclosed amount. Both companies provide on-demand sales performance management software as a service.

Centive investor John Gannon, a partner at Polaris, said the combined company will be the "undisputed leader" in sales performance management software-as-a-service. "We believe that the combination provides investors with a significantly more valuable company with the resources to succeed in this rapidly growing market," he said by email. Gannon did not address questions about the potential for profitable exit from the combined entity.

Founded in 1997, Centive makes human resource software that tracks employee commissions. In 2005, the company completed a $10 million Series A recapitalization, which it extended by $2.3 million in March. Prior to the recap, the company had raised a total of $80 million during six rounds of financing.

In 2006, Centive sold its CompCentral division to Berggruen Holdings, a private company investing in direct private equity, public market securities and real estate. The deal indicated a shift by Centive to focus entirely on its software-as-a-service product and target midsize companies instead of larger enterprises.

Centive’s investors have included Key Venture Partners and Polaris Venture Partners, both based in Waltham, and San Francisco-based Venture Strategy Partners. Key’s board representative, managing director David Dame, left the venture firm in August.