Redwood City, CA Ð Appsoft announced last month it has received "seven figure" venture-capital financing from Sequoia Capital, of Menlo Park, California. Appsoft will use the funds to expand its software-development efforts and beef up its engineering staff.
The new funding is Appsoft's second try at seeking venture financing, after having no success last year. "A year ago venture capitalists didn't find NeXT software a palatable basis for funding," said Randy Adams, Appsoft founder and president, who will retain a slim majority control after Sequoia's purchase. Up to now, Appsoft has been operating on regular infusions from Adams's personal assets.
Adams pointed out that this is the first venture funding for a company committed solely to the NeXT platform. Other venture-backed firms, such as Boss Logic and Pages, included multiple-platform strategies in their business plans.
"Maybe he [Randy Adams] found the one venture group in the world that is genetically unstable," said Sequoia Capital partner Michael Moritz jokingly. "We think NeXTSTEP will carve out a niche on the commercial desktop, and Randy Adams is our kind of guy."
Appsoft anticipates sales in excess of $30 million in five years. In its business plan, Appsoft projects one million NeXT users will buy $500 million worth of NeXT software by 1996. But Moritz said he thinks Appsoft can succeed even if NeXT sells only a few hundred thousand units over the next several years. "NeXT doesn't have to be the next Sun in order for NeXT, Randy Adams, and ourselves to do well," he said.
In addition to the engineers, the company will add four new sales and marketing employees, putting marketing muscle behind its planned product line. Appsoft's strategic plan is to use its software-development expertise to develop products as well as significantly enhance products it publishes from other developers.
The company considers user-interface design its greatest strength. The recently released Appsoft Draw sports a completely redesigned user interface. Appsoft Image, a pixel-based image manipulation tool written mostly internally but based on software from NeXT, is due to ship this year. Also underway is a new version of Appsoft's NeXT version of the WriteNow word processor.