Investors Show Aras the Money

Aras has been going it alone for a while, compared to software companies that get loads of VC backing and support. Founder Peter Schroer even came up with the name on his own. In 2000, after two months of scouring the Internet for ideas, he used his then 3-year-old daughter Sara’s name backwards to name.

Matrix Partners General Partner David Skok wasn’t motivated to invest when he first met with company leaders last year, but that changed after they made contact with him again this March.

Skok was impressed after seeing that Aras created a finished product and gained customers such as Lockheed Martin and Rolls Royce. Matrix, along with Greylock was impressed enough to invest $4.2 million in a Series B round for the Lawrence, Mass.-based company. Greylock General Partner Bill Kaiser and Skok will join the Aras board of directors.

Aras raised an undisclosed amount of funding from individual investors for its Series A round in 2000. The funding was enough to allow the company to grow to 18 employees, acquire the assets of process planning software provider IDFM (formerly CimTelligence) in August 2000 and integrate its technology into its products.

Schroer says the company has 20 customers, many of whom are in the aerospace, defense and automotive industries. Aras has reported profitable quarters, intermittently, in the past and expects to reach profitability again in 18 months.

“The typical $2 million to $10 million big ticket sales are fundamentally gone from enterprise software,” says Schroer, who serves as the company’s chairman and CEO. “And what analysts are recommending is buying incrementally.” Schroer adds that Aras sells a suit of software, but sells it in components with average deal size for starting production is in the range of $200,000.

Schroer says that Aras will use the funding to expand domestically and would raise another round of funding if it were to expand into Europe or Asia.

The company plans to open sales and support facilities in Detroit, Las Angeles, Ohio and Texas in order to be present closer to U.S. manufacturing centers. Its staff of 18 employees will likely grow to between 35 and 40 by next fall with hiring focused on sales and customer support staff.

Email Matthew Sheahan