Web-software seller Acquia raises $55 million, staying private for now

Acquia chief technology officer Dries Buytaert and CEO Tom Erickson.
Acquia chief technology officer Dries Buytaert and CEO Tom Erickson.

One of Boston’s larger private tech companies is staying private for a while longer.

Acquia, which sells website-building software to business and government customers, has raised a $55 million investment round to help it bankroll sales, marketing, and product development.

The new private financing indicates that Acquia isn’t on the verge of filing for an initial public offering of its stock, a step the company has publicly contemplated for some time now.

Chief executive Tom Erickson said Acquia still plans to go public someday, but with private capital readily flowing into tech companies, the benefits of remaining private made the decision easy.

“Money is out there,” Erickson said. “It allows us the flexibility on that journey of becoming a public company, and deciding when we want to do that. That’s the key.”

Acquia has now raised nearly $189 million from private investors since it was founded in 2007, including a $50 million investment round last year. The company reported more than $100 million in revenue last year, and has more than 700 employees worldwide. It said it does not discuss profitability.

Its software helps customers build and operate websites based on Drupal, an open-source software program that was created by Acquia’s chief technology officer, Dries Buytaert.

Acquia’s customers include Stanford University, Warner Music Group, and the Emmy Awards. Boston Mayor Martin J. Walsh recently announced that Acquia would be used to overhaul the city’s website. The new investment was led by Centerview Capital, along with prior investors including New Enterprise Associates and Split Rock Partners.

Acquia is far from the only company deciding to stick to the private investment markets.

CB Insights, a research company that tracks venture and private equity investing, recently found that late-stage private financing rounds have grown substantially in the past few years, from fewer than 400 in 2010 to more than 950 last year. And the biggest single-year increase was in the past two years, with late-stage deals spiking 42 percent between 2013 and 2014.

That flood of investment cash has led executives to consider keeping their companies private longer than in previous years, which means less scrutiny from investors and the press about quarterly financial results.

“There are many advantages of being a public company. But there are some downsides,” Erickson said.

Some tech companies that amassed enormous private investment rounds and huge valuations have stumbled once they went public. Box, a company that sells corporate file-sharing software, is one high-profile example: its shares are down more than 40 percent since its first day of trading in January.

“If you’ve not built a real business, you could be in trouble because private market investors will eventually stop funding you,” CB Insights chief executive Anand Sanwal said. “And the public markets won’t buy what you are selling.”

Updated 10:30 a.m. with new detail on total amount raised.