Goldman Sachs Group Inc (NYSE:GS) announced its equity investment of $40 million in sales-tracking software company SugarCRM.

Goldman Sachs

Goldman Sachs’ investment platform Private Capital Investing made the investment in SugarCRM to facilitate its global reach besides continuing its 15 consecutive quarters of growth. The Cupertino, California-based company will also use the cash to invest in research and development as well as sales and marketing.

Goldman’s reasoning for investment

Antoine Munfa, Vice President, Goldman Sachs Group Inc (NYSE:GS) points out the CRM market is ripe for technologies and products that change the face of how enterprises conduct business with their customers. With its user-centric vision and product design, SugarCRM has stepped up to meet a real market need.

Recently, two major players, Oracle Corporation (NYSE:ORCL) and salesforce.com, inc. (NYSE:CRM), announced the integration of all three tiers of cloud computing application, platform and infrastructure. The two companies announced the integration of Oracle’s HR software -Fusion Human Capital Management (HCM) & Financial applications with Salesforce.com’s CRM solutions.

450-500 million in customer facing roles

Highlighting the untapped potential in CRM, SugarCRM’s chief executive officer Larry Augustin highlighted they reckon around 450 million to 500 million people in the customer-facing roles while commercial CRM companies currently serves only about 20 million of them.

SugarCRM is set to release its latest version, Sugar 7, in October. The company aims to turn customer-facing professionals into customer experts.

Exuding confidence, Larry Augustin, CEO of SugarCRM, indicated the company’s consecutive quarter-over-quarter growth and its expanding roster of over 6,500 customer organizations will embolden the company to use Goldman Sachs Group Inc (NYSE:GS)’s funding to expand its global reach, drive channel growth and continue its product development.

CRM companies in the limelight

Considering vast growth potential, business software companies, including cloud-based providers such as Workday Inc (NYSE:WDAY) and ServiceNow Inc (NYSE:NOW) have fared admirably, with their stock rising since their initial public offerings last year. Even start-ups such as Box Inc, Zendesk Inc and New Relic Inc have raised equity from large institutional investors.

SugarCRM’s CEO indicated last year that the company might go public sometime in 2013, though declined to reveal additional details.