Cloud Sherpas, a designated reseller of Google’s online application suite for enterprise customers, announced today it has raised $1.6 million in its first round of funding.

The funding is pegged to help the company sell its Google Application implementation to new markets. Cloud Sherpas will also use the funds to develop its own cloud offering, SherpaTools, which serves as a companion application that helps manage Google’s cloud software.

“This is mainly working capital, but we are going to be investing more in our primary product, which is SherpaTools and (other intellectual property,)” said Cloud Sherpas CEO Jon Hallett. “The last round was more about paying down debt and cleaning up the tab.”

There are three ways Cloud Sherpas makes money. The company serves as a primary reseller of Google’s applications suite — including Mail, Docs and the like — to enterprise companies and gets a slice of that. Cloud Sherpas also offers IT support for enterprise customers, which includes migrating data from existing sources to the cloud. Finally, it sells and supports its proprietary SherpaTools software. SherpaTools has been installed at around 8,000 companies, said Cloud Sherpas CEO John Hallett.

The funding was led by Syncarpha Capital, Vento Security Holdings and Hallett Capital. Hallett said Cloud Sherpas was able to close the round in a little more than three weeks thanks to its growth rate, and has never had a client not renew its Google apps license through Cloud Sherpas.

Cloud Sherpas earlier raised $1 million in a seed round led by Hallett Capital, Hallett’s own investment portfolio. The Atlanta, Ga.-based company has 40 employees but expects to have 50 people on staff by the end of the month — and more than 100 by the end of 2011. It’s been cash flow positive for some time and grown from 80,000 users six months ago to 600,000 users today, Hallett said.


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