Enterprise Supplier Collaboration Might Be The Next Big Thing: Cisco Makes A Big Investment in Aravo

Tuesday, Cisco raised some eyebrows when it led Aravo’s Series D funding round. Of late, the communications company has been making acquisitions hand over fist, mostly investing in enterprise-facing companies like Tandberg and ScanSafe. The Aravo investment isn’t an acquisition, but it is another enterprise-focused company, specializing in supplier information management (SIM); Aravo’s products are also entirely cloud-based.

The total funding from this round adds up to $27 million, and other participating investors include Charles Schwab/Big Sky Partners, Stephen Friedman (former Chairman of Goldman Sachs), and William Harrison (former CEO/Chairman of JP Morgan Chase). This round brings Aravo’s total funding to $50 million, and Cisco’s contribution is the first institutional investment for the company. Aravo execs say this latest round will be used to develop products, and to expand sales, marketing, and delivery channels. The Cisco factor will lead to an integration of their web meeting and collaboration platform, WebEx, with Aravo’s SIM platform; the ultimate goal is real-time collaboration between buyers and investors.

Cisco and Aravo have several high-profile enterprise customers in common, like GE, but this is most certainly a move on Cisco’s part to be the go-to source for enterprise collaboration. The enterprise supplier collaboration (ESC) market is growing quickly, and a product roadmap for the Cisco-Aravo venture will be available in early 2010. It will be interesting to see if this investment is Cisco’s way of priming Aravo for acquisition in the next year.

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