'Far in excess' of the $20 million it attracted 3 years ago, founder Angus Davis says.

Angus Davis, CEO of the Providence technology company Upserve, announced Thursday the company has secured an equity investment from Vista Equity Partners that's "far in excess" of the $20-million infusion the company attracted in 2014 when it was still known as Swipely.

When told that the National Venture Capital Association reports 28 Rhode Island companies attracted a total of $41.55 million in venture-capital investments last year, Davis said Vista's investment is larger. He said he's "pretty confident ... it's one of the largest private equity investments in a technology company in Rhode Island ever."

"We're in a very stable place financially," Davis told The Providence Journal. "We have a Rock of Gibraltar-level partner in terms of their financial stability and strength, and it's a relationship we expect to endure for a number of years and that we expect we will be able to grow over time."

But he told his nearly 200 employees at their monthly meeting Wednesday they shouldn't be distracted by this infusion of capital. Instead, he told them to focus on the work the money will help them do — grow the company, create more technology applications and products to help restaurants became more efficient and attract more customers.

Davis said he expects to hire about 25 more people by year's end, most of them in Providence. While the firm has opened offices in San Francisco and New York City in recent years, about 75 percent of its employees work in the company's Kennedy Plaza headquarters, Davis said.

Rhode Island technology firms have experienced "a dearth" of large venture-capital investment in recent years, said Rajiv Kumar, chief medical officer for Virgin Pulse.

Like Davis, Kumar founded his own technology company, which grew from a two-person nonprofit to a for-profit firm that employed 134 people. After ShapeUp attracted $15 million in venture-capital investment, the firm was acquired last year by British billionaire Richard Branson's wellness-technology firm, Virgin Pulse.

Kumar said he sees no competition in another Rhode Island technology company attracting outside investment.

"Its not easy in Rhode Island to get on the radar with a lot of these large firms around the country, and so any time a local company does that, it's exciting," Kumar said. "I think it's a rising-tide-lifts-all-boats kind of situation. It brings attention to our state and our technology community."

Traditionally, firms in California, New York and Massachusetts attract the most investment, according to the National Venture Capital Association.

Even so, "there is a misperception out there that you have to be an entrepreneur living in Silicon Valley, Massachusetts or New York to attract venture-capital investment, but that's just simply not the case," said association spokesman Ben Veghte.

Vista Equity Partners has offices in Austin, San Francisco, Chicago and Oakland. It manages more than $30 billion in capital and invests in software, data and technology-enabled organizations. Other firms joined in this investment round — including First Round Capital and Pritzker Group Venture Capital.

Davis said he remains CEO and retains his seat on the board of directors, which is not structured in the traditional hierarchy of chairman and other officers. Vista will join the firm's board of directors.

In the restaurant technology space, Davis said his firm's closest competitor is Boston-based Toast Restaurant POS, which bills itself as an all-in-one restaurant technology platform. In January, the firm announced it closed 2016 with more than $2 billion in sales transactions. It raised $30 million in financing early last year.

Open Table, the San Francisco-based restaurant reservations company, doesn't sell the same types of products as Upserve, Davis said. But the companies are of a similar scale: Upserve manages about 23 million meals a month, while Open Table makes about 22 million reservations a month, Davis said.

A year ago, Upserve acquired Breadcrumb from Groupon to create a cloud-based restaurant management system serving 6,000 U.S. restaurants. The financial terms of that deal were not disclosed.

Davis, who is 39, said he's committed to Rhode Island.

"We're not going to move our headquarters from Providence," Davis said. "I think it would be very unrealistic for a company of this size to change that."

No small windfall



Upserve founder and CEO Angus Davis says the investment by Vista Equity Partners in his company surpasses the $41.55 million that 28 Rhode Island companies attracted in venture capital investments all of last year, according to the annual report of the National Venture Capital Association.

The Washington, D.C.-based trade association represents the U.S. venture capital industry, which comprises more than 450 member firms.

In the first quarter of 2017, five Rhode Island companies attracted a total of $6.19 million in venture capital, according to the association.

Steady Growth

CEO Angus Davis founded Upserve's predecessor, Swipely, in late 2009. In early 2013, the firm employed 30 people. By 2014, it had attracted $40.5 million in venture capital.



In the spring of 2014, Davis said the privately owned company employed more than 100 people and managed more than $2 billion in annual sales for merchants using its technology.



Now, Upserve manages more than $11 billion in annual transactions, up from $7 billion in March 2016. The firm also manages more than 23 million meals per month, Davis said, up from 11 million a month in March 2016.



Davis said about 95 percent of Upserve's restaurant customers are outside of Rhode Island — which means the money they pay for Upserve products brings new revenue into Rhode Island. Some Rhode Island customers: The Malted Barley, Brass Monkey, Loie Fuller's and Jamestown Fish.

— kbramson@providencejournal.com

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