By Pacific Coast Business Times Staff Tuesday, August 18th, 2009

Santa Barbara-based software firm AppFolio has gained another $8 million in venture capital.

The investment came from the Investment Group of Santa Barbara, one of the company’s existing investors. It brings the total venture capital raised by the Web-based software company since last year to $30 million, more than any other investments disclosed by tri-county firms.

“We didn’t go out for a raise,” Brian Donahoo, chief executive of AppFolio, told the Business Times. “It wasn’t that long ago that we raised a big round, and our burn rate is super small, so we didn’t need the money. [Investment Group of Santa Barbara] came to us and said, ‘We think the terms are still good, and we want to be a bigger player in your company.’”

AppFolio makes Web-based software that targets niches. Instead of creating software that does one thing across a range of industries, AppFolio’s offerings aims to provide a one-stop solution for a single kind of business. Rolled out last year, its first service is for property managers with 150 to 3,000 units and handles features such as accounting, billing and vacancies.

“It is clear that the property management market is eager for a company like AppFolio, and we are sure that AppFolio has all of the right ingredients for long-term and successful growth,” Tim Bliss of Investment Group of Santa Barbara said in a release.

Venture capital funding has fallen sharply across the country, but tri-county companies have held their own in the first half the year. Collectively, they raised as much as $22 million in just a handful of deals in the first quarter, compared to about $23 million in last year’s second quarter, when AppFolio raised $17 million. In the second quarter, companies such as Santa Barbara-based RingRevenue, which raised a $3.5 million first round, also found success gaining capital.

• To read more about AppFolio’s deal, see the Aug. 21 print edition of the Business Times.

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