Centric Software Inc. announced on July 29 that it received $24 million in Series D capital funding.
The investment will help the Los Gatos, Calif.–based product lifestyle management (PLM) software provider to build a subsidiary office in China and to continue developing its Centric 8 software suite. Centric has already worked with fashion companies such as Balenciaga, Christian Louboutin, DSquared2 and Proenza Schouler.
China’s retailers are beginning to develop a need for PLM, said Chris Groves, Centric’s chief executive officer. “We did a market sizing. There are 30,000 prospective customers in China,” he said.
Leading the Series D financing was Fung Capital and Silver Lake Waterman, investment groups that focus on fashion businesses. Fung Capital is an investment arm of the Hong Kong–headquartered Fung family, whose holdings include Li & Fung Ltd., which is said to be one of the world’s largest suppliers of toys and clothes to retailers such as Walmart and Target.
Silver Lake Waterman is the growth capital division of Silver Lake, a private-equity group. In December, it partnered with William Morris Endeavor LLC to acquire an ownership stake in IMG, the producer of Mercedes-Benz Fashion Week, the circuit of high-end designer runway shows. Oak Investment Partners andMasthead Partners also participated in Centric’s Series D financing round.
The China gambit follows the development of a European subsidiary. The privately held Centric used its last round of funding, $19 million in 2011, to expand in Europe. Of his new investors, Groves said, “These are people who can add real value to our business every day.” Centric has not worked with Li & Fung in the past, but Li & Fung Group is considering Centric PLM for some of its future needs, he said.
John Seung, a partner in Fung Capital, will have a seat on Centric’s board. He also spent a career with a front-row seat to the growth of retail technology. He served as chief information officer to Li & Fung USA from 2002 to 2006. Fung Capital invests in business-to-business technology companies, which enable omnichannel retailing and supply-chain efficiency, he said.
“It’s for all of the right reasons,” Seung said of Centric’s Series D investment. “There’s not a big PLM presence in China, but things are changing quickly.”
Domestic apparel retail is becoming more competitive in China, and the most efficient companies will be the ones that thrive in China’s future market, Seung said. As Chinese companies become more sophisticated, they will need programs that can manage their growing businesses. “To manage complexity, you need a tool like this,” Seung said. “Centric’s PLM does everything from concept development to store management.”
Centric is on the right path, said Tony Zhang, president of Platform, a Chinese company with a Los Angeles office. “PLM is becoming a hot software in China now,” said Zhang, who has no business dealings with Centric. “More and more companies want to have it. But the challenge is how to integrate it with ERP, SCM and CRM,” he said, referring to other prominent back-office and supply-chain software, enterprise resource planning, supply-chain management and customer relationship management.
Seung said that he developed an interest in Centric because he believes that it is more flexible than other PLM software. “I have extensive experience with software,” Seung said. “It is notoriously tough to reconfigure once they are in place. Centric is very flexible.”
Centric’s future expansion might entail offering the Centric 8 suite of programs to mid-level businesses, Seung said. It also will develop more mobile apps, Groves said. “We’ve been the leader for mobile application for the market. We want to push innovation farther.”
Centric’s revenue grew by 80 percent since 2013, Groves said. However, he declined to quantify the company’s revenue.