Why an Austin software maker that’s been profitable for almost 24 years just raised $25 million

Source: Austin Business Journal

By Mike Cronin  –  Staff Writer, Austin Business Journal

Oct 12, 2017, 2:55pm CDT

A $25 million investment in Austin-based Baxter Planning Systems Inc. by Polaris Partners LP, a venture capital firm headquartered in Boston, will enable the company to expand in size and enter a new market.

Baxter Planning Systems software helps companies manage inventory in several ways, including “forecasting stock values and generating supply orders to make sure parts are available in the areas where they’re needed,” said Greg Baxter said, founder and CEO.

Clients include Finland-based Nokia Corp. (NYSE: NOK), New York-based Verizon Communications Inc. (NYSE: VZ) and Japan-based Fujitsu Ltd. Baxter’s competitors include Massachusetts-based PTC (Nasdaq: PTC) and Germany-based SAP SE (NYSE: SAP).

“We’ve been a 100-percent software-as-a-service company and now we’re moving into a new space by offering customers planning-as-a-service,” Baxter said. “We’ll be able to automate the majority of planning processes, add our supply-chain expertise, and provide the most value for our customers.”

A funding first

Except for an angel investment roughly 15 years ago, this round of funding is the company’s first, Baxter said.

The money will be used to increase Baxter Planning Systems’ sales and marketing activities, grow its international operations and enhance product development, Baxter said.

“Greg and his team have built a wonderful business that is an ideal fit for our later stage practice: a founder-led, emerging category leader with a strong track record of profitable growth,” said Bryce Youngren, Polaris Partners managing partner, in a statement.

Dan Lombard of Polaris Partners will join the Baxter Planning Systems board.

In addition, Polaris Partners executives recruited three other Baxter investors to join the board: Jim Martell and Sandy Smith, transportation experts who bring a combined 70 years of supply chain and logistics experience, and Bob Ranaldi, a 25-year sales veteran.

The company has other international offices in Australia, England, India, Portugal and Spain. Baxter intends to establish “a larger presence” and hubs in each country, he said.

About 45 of the company’s 55 total employees work in the Austin headquarters, Baxter said. He projects hiring roughly 10 more people during the next 12 months. Positions will be in sales and marketing, supply-chain expertise and Java software development.

Profitable almost since it launched in 1993, Baxter Planning Systems generates annual revenue “in the 10 figures,” Baxter said.

The possibility of a merger or acquisition “would trigger the next round of funding,” he said.