Vista Equity Partners has acquired a majority stake in BetterCloud Inc., a New York-based startup that helps companies manage the software-as-a-service applications used by their workers.
BetterCloud announced the transaction this morning. The value of Vista Equity Partners’ investment wasn’t disclosed, but the startup did divulge that its existing investors will stay on as stakeholders. BetterCloud has raised more than $186 million in funding from Accel, Bain Capital Ventures, Warburg Pincus and other backers.
Large companies use upwards of dozens of cloud applications, each of which represents a potential cybersecurity risk. There are also other challenges involved, such as the need to avoid unnecessary spending on redundant software subscriptions. BetterCloud provides a platform that promises to help companies secure their cloud applications and streamline a raft of other maintenance tasks in the process.
“As the suite of SaaS applications for the enterprise continues to grow and is further integrated into operations, application management has become mission-critical for businesses,” said Patrick Severson, the co-head of Vista Equity Partners’ Foundation Fund and a senior managing director at the firm.
In the enterprise, workers often adopt new software-as-a-service applications without approval from the information technology team. BetterCloud can automatically detect such applications, which helps the IT team determine if workers may be using a service with insufficient breach prevention features.
BetterCloud also offers other cybersecurity features. Its platform can find sensitive data such as financial records that workers may store in software-as-a-service applications. BetterCloud points out cases where an important record is accessible to more users than strictly necessary, or if data is stored in breach of regulations such as GDPR.
Cybersecurity is not the only focus of BetterCloud’s platform. The startup also promises to help administrators with tasks such as removing unnecessary cloud subscriptions and giving new hires access to business applications. According to BetterCloud, its platform includes automation features that reduce manual work for IT teams.
BetterCloud has built up a customer base of several thousand organizations since launching in 2011. Its customers include major tech firms such as Block Inc., the company formerly known as Square Inc., and publicly traded food delivery provider HelloFresh SE.
BetterCloud plans to use the investment from Vista Equity Partners to continue expanding its feature set. Additionally, the startup will grow its international presence by expanding into new markets.
“From day one, we’ve been laser focused on enabling companies to adopt best-in-breed SaaS applications in a secure and scalable way,” said BetterCloud Chief Executive Officer David Politis. “This investment is a major milestone in that journey, and one that will allow us to continue to define and lead the SaaS Management category now and in the future.”
Vista Equity Partners is a private equity firm that makes investments in the technology sector. An investor consortium that included the firm recently inked a $16.5 billion deal to buy Citrix Systems Inc., a major provider of virtual desktop software. Earlier, Vista Equity Partners spent $3.5 billion to acquire IT training provider Pluralsight Inc. and purchased Apptio, a provider of business planning software, for $1.94 billion.