Aras secures investment, poised for serious growth

Sep 11, 2017 | Hot Topics

Aras announced last week that is has secured $40 million in funding in exchange for a minority stake in the company and a board seat. Silver Lake Kraftwerk and GE Ventures partnered for the investment. Aras said it will use the funds to drive growth, expand operations in R&D, support and services, and to fund potential acquisitions.

Aras CEO Peter Schroer said of the investment, “Enterprises need a much more flexible, scalable and upgradable platform for the business of engineering. We help companies transform and optimize every stage of the product lifecycle – by enabling the digital thread which connects data and processes from systems engineering and simulation to smart manufacturing and predictive maintenance – and creating the digital twin, the exact digital representation of a car, ship or aircraft engine.”  The company sees its Aras Innnovator as an IoT enabler, since “everything from connected cars and smart homes to industrial equipment [means] global manufacturers are rethinking the technology that supports the business of engineering necessary to develop, produce and service tomorrow’s next generation products”.

For those keeping track, Aras has had several other rounds of funding, raising $4 million in 2003 from Greylock Partners and Matrix Partners and a further $12 million in 2004 from Oak Investment Partners, an early investor in PTC, Greylock and Matrix. Greylock funded such companies as SDRC and Mentor Graphics (both now part of Siemens PLM), while Matrix “contributed to the success of” Apple, FileNet (now part of IBM), eRoom Technology (part Documentum, which is part of Open Text) — and so on. Credible technology investors, all.

Silver Lake Kraftwerk is part of Silver Lake, the $39 billion fund that helped Michael Dell take Dell private and has invested in companies like Skype and Alibaba. Kraftwerk seems to specialize in technology, energy and tech-enabled companies like Tesla, and now, Aras. According to its PR, Kraftwerk “funds targets companies globally that leverage technology and business model innovation across a number of sectors, such as transportation, logistics, manufacturing, oil and gas, power generation and transmission, energy efficiency, waste, water, and agriculture, among others”. Kraftwer’s Managing Director, Martin Fichtner, said of Aras, “We invest in breakout companies that accelerate industrial transformation through a combination of technology innovation and disruptive business models. Aras embodies this strategy with a game changing platform and ‘SaaS Anywhere’ approach that have proven very compelling to customers, and we are excited about Aras’ next stage of growth.”

GE Ventures, part of General Electric, identifies, specializes in software, advanced manufacturing, energy and health care companies. Steve Taub, Managing Director, Advanced Manufacturing & Enterprise at GE Ventures, said of this investment. “To power the next wave of global industrial productivity, GE is investing in critical foundational capabilities for the Industrial Internet. Aras’ PLM platform delivers digital twin product configuration and digital thread traceability across the lifecycle which are critical to analyzing and interpreting data from products and the factory. As a customer, we have already seen the benefits of their PLM platform in action”.

When I spoke with Aras’ Marc Lind about the new investment, he told me that it was purely additive — no legacy investors were cashing out, no employees are taking buyouts, etc. Mr. Lind was genuinely excited about the potential this funding gives Aras to continue to take on what he calls the legacy providers, challenging them in the PLM world’s largest accounts. We joked about how an investee knows the funds have arrived (yes, even for a $40 million deposit, one has to keep hitting “refresh” on the bank balance) –now that the funds have arrived, expect expanded teams outside the Andover MA (US) headquarters as well as more R&D investment.

What I found so exciting about this announcement is that it means big-name investors are taking Aras and, by extension, PLM seriously once again. Arena announced an investment a few weeks ago that it says will help the business continue its “sustained customer expansion and evolution of our industry-leading product platform.” In addition, said Arena CEO Craig Livingston, he plans to take advantage of his investors’ expertise and industry network, which is likely also true for Aras — who can turn down an invitation to take a call from GE Capital, introducing Aras? Or from JMI, introducing Arena?

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