Santa Monica-based Cornerstone OnDemand (www.cornerstoneondemand.com) is announcing today that it has raised a venture capital round, worth a healthy $32M, to help fund expansion at the software firm. We spoke with Adam Miller, the firm's CEO, about the company and its human resources software, its funding and its expansion plans. Ben Kuo conducted the interview.
Congrats on the new funding round. How much are you raising, and who is funding you?
Adam Miller: We are raising $32 million, and it's being led by Bessemer Venture Partners and Bay Partners.
Is this the first VC you've raised?
Adam Miller: This is the first venture capital round, but our company has been in operation since 1999. We were bootstrapped since the beginning.
Why did you decide to raise a VC round now?
Adam Miller: The market opportunity continues to grow. Our company is very well positioned in the talent management space, and we've been operating as an on-demand software company from day one. The adoption of on-demand software, combined with the rapidly increasing demand for talent management solution means we have a big market opportunity, and we want to capture that market opportunity. We were already profitable, and the funding will allow us to be much more aggressive with sales and marketing, and to expand our indirect channels and international expansion.
Describe to me how people use your software--what does "talent management" mean?
Adam Miller: It's not what most people in L.A. thinks it means. It's the management of people. It's everything from learning management--which helps with development of employees and dealing with compliance requirements, such as tracking if employees have met regulatory training or certification requirements--to performance management--setting goals and objectives for employees, and reviewing those objectives and competencies that a company deems important. It also helps with succession management, which helps employees move in their careers, to help companies identify high-potential employees, and to increase the ability of companies to really recruit and promote internally from the organization. It does everything you would do with an employee at the company--onboarding the employee, setting goals/objectives, assessing them, and promoting them. It handles the whole lifecycle of an employee.
You've got an interesting background in finance--how'd you end up starting a company in the HR area?
Adam Miller: I have always enjoyed education. I spent a lot of time in school, and I always had a strong interest in technology. I wanted to bring this together, and we started out as CyberU, which provided corporate training and education for adults. Our clients and prospects really asked us for incremental functionality around these other areas, and as we started to build this we began to see we were morphing into a different business. It's now well understood as talent management. It was really market driven. We have over 7,000 features in our software suite, all of which have been driven by our client base.
How difficult was it to land this venture round, we have been that venture capitalists still aren't too fond of funding enterprise software?
Adam Miller: What was different, was we are an on-demand software company, and that's very hot now. We're very profitable, with a significant backlog and good revenue visibility. It was a low risk. It was more of a function of why would we take the money at this point, which was to capitalize on this opportunity. We had strong interest in the round, it was a competitive process, and we chose the right two firms. Bessemer is arguably the oldest, largest, and best venture capital firm, and Bay Partners has a very strong portfolio in on-demand software. There are interesting partners.
How big is the company--and I imagine with this round of funding you are hiring?
Adam Miller: We have about 100 employees, and we're hiring a lot more. We have offices in Santa Monica, and sales offices across the world, which are all expanding.