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MuleSoft Is Valued At $1.5 Billion After $128 Million Raise By Strategics Led By Salesforce Ventures

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With easy money flowing to high-growth private tech companies, the IPO has made way for the triple-digit funding round. The money is like a public offering in scale, but without the strings attached. MuleSoft is the latest startup to go the private IPO route, raising a large $128 million funding round that easily vaults it into the ranks of unicorns, billion-dollar startups--or as CEO Greg Schott calls it, adding a horn to the mule.

The round values MuleSoft at $1.5 billion, nearly double its $800 million mark of a year ago. More important to Schott is who gave much of the money: strategic investors who recognize MuleSoft's ability to connect businesses by their devices and apps across any data source. "You win or lose with data you connect to other apps," Schott says.

MuleSoft has done it in part through APIs, sets of protocols that tell which pieces of the software to interact. That's critical for large businesses moving mobile and expecting to use data from on-premise sources alongside their programs in the cloud.

Salesforce.com, Cisco and ServiceNow need that capability themselves. So it's no surprise their investment wings would get involved. Salesforce Ventures took the lead, with ServiceNow and a return bet from Cisco Investments. They join VC firms NEA, Lightspeed Venture Partners, Meritech Capital Partners, Bay Partners and more in the nine-year-old company based in San Francisco.

MuleSoft's annual run rate for bookings is now past $100 million, Schott says, with 110% growth in Q1 year-to-year. The company's tripled its customer base in the past three years to more than 700, and employs 500 people worldwide.

Faster integrations mean companies like Salesforce can conduct more business with their own customers, says investor Chetan Puttagunta at New Enterprise Associates. "It's a way to ensure that customers are getting the full value out of that application."

To keep it up, MuleSoft will likely make acquisitions with the money from this raise, Schott tells Forbes. The company's finally big enough that Schott doesn't know everyone on his payroll--he gave up his longstanding practice of interviewing every new hire in Oct. 2014 (he says he had more than 600 interviews last year).

The market opportunity, MuleSoft believes, could be as great as $600 billion, the total networking layer market. Connecting all devices and data across the networking layer, Schott says, has never been adequately done before. MuleSoft's large amount of cash raised to date should insulate it against any possible tightening in fundraising in a possible market correction to come. But Schott says it's the addressable market, not fear of future market conditions, that encouraged MuleSoft to raise. "We're building a real company here," he says.

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