Sunny Gupta

Apptio founder Sunny Gupta doesn't hesitate when asked what he wants to accomplish with his latest software startup. The 39-year-old entrepreneur just lays it out, clearly stating a mission to build a very, very large enterprise software company in Seattle.

And now Gupta has the "gas in the tank" to do it. Apptio today plans to announce a $14 million second round of funding from Shasta Ventures, Greylock Partners, Madrona Venture Group and the Andreessen Horowitz Fund, the new investment firm of Netscape founder Marc Andreessen and Opsware founder Ben Horowitz.  

The venture round closed in a lightning fast four weeks at a significant uptick in valuation from the $7 million series A in 2007, a round that had yet to be entirely consumed.

Furthermore, Apptio -- which has developed an online software system to help CIOs get a better handle on their IT costs -- pulled in more capital than it initially planned to raise. 

So, if the company still had cash on the books, why raise even more money in these tough times?

"We felt this was the right time to press on the gas," Gupta says.

Apptio, which employs 40 people and plans to grow to 50 or 60 by the end of the year, is already moving fast. Gupta says the company has exceeded customer and revenue targets by 500 percent, which he thinks speaks to the $1 billion market opportunity that Apptio is trying to crack.  

Its 36 customers -- including Starbucks, Motricity, Alaska Airlines and others --  are paying anywhere from $50,000 to more than $1 million annually for Apptio's reporting tool.  

About 20 of Apptio's customers have IT budgets of more than $100 million, and Gupta believes many of those companies need help figuring out if they are spending their money wisely. In a way, Gupta thinks of Apptio as a SalesForce.com for CIOs, which he said now more than ever are trying to make better decisions about how IT resources are allocated.

In terms of competitors, Gupta said that that the biggest threat at the moment are CIOs using spreadsheets to try to figure out IT costs and forecasts. However, he notes that big players such as H-P and BMC are sniffing around the space.

What's most interesting about Gupta is a willingness to swing for the fences, and the latest venture round is certainly proof of that.

One gets the sense that Gupta wouldn't be content in simply repeating the successes he's had in the past.

Not that there's anything wrong with selling a startup company for a cool $70 million, as Gupta did when he unloaded iConclude to Opsware two years ago in a deal that made Madrona and other investors very happy. Gupta also fared well in 2003 when Performant -- where he served as vice president of marketing -- was sold to Mercury Interactive for $22.5 million. 

But this time with Apptio, Gupta is thinking even bigger. He talks of "scaling" the company significantly and says he wants to build a business in Seattle of "larger value" than his past two efforts.

"We find ourselves in a very hot area, and the goal is to take it all the way," said Gupta, adding that an IPO is not out of the question down the road if the market ever improves.

Of course, Gupta has partnered with some familiar faces to help get there, investors who may be along for the ride. Madrona has been a long-time supporter, and energetically ponied up capital to get Apptio off the ground.  (Madrona's Matt McIlwain once told me that Gupta has a "nose for money.")

Andreessen

Gupta also worked for Horowitz and Andreessen after selling iConclude to Opsware, a role where he got to know the tech executives quite well. Both Horowitz and Andreessen invested as angel investors in the first round, but with the larger participation this time Gupta said he's looking forward to tap more of their expertise. 

Horowitz also is excited about the prospects of working closely again with Gupta, noting in a press release that Apptio "has the critical application set to usher in a new era for IT management."

The investment in Apptio marks one of the first deals for Andreessen Horowitz, which formed last month with $300 million in backing.

Interestingly, the tech executives also are helping to bankroll another Madrona-backed startup: ExtraHop Networks.  Perhaps we'll see more of Andreessen and Horowitz in Seattle in the coming months.