Cloudsnap, a fast-growing Austin-based software company, announced Thursday a $1.8 million funding round led by San Antonio venture firm Active Capital and Houston-based Mercury Fund as well as the hiring of former Rackspace executive Matt Bradley as its new chief executive officer (CEO). Both moves help position the software as a service (SaaS) startup for more aggressive growth.
Cloudsnap offers mid-sized companies a cloud-computing Platform as a Service (PaaS) system that automates the secure transfer of data between third-party software applications and a company’s enterprise resource planning or ERP business process management software. Companies use ERP software to manage and integrate their financial data, supply chain, operations, reporting, manufacturing, and human resource activities across a business.
Much of that data transfer is manual, and companies can either pay for costly customized integrations to automate data flow or take the much less expensive do-it-yourself approach, which can be less effective without expert support. Cloudsnap’s unique approach to application integration has enabled small businesses and global enterprises to automate high-volume e-commerce sites, automate inventory and vendor management processes, and automate back-office employee expense or employee management processes.
Bradley will take over from Cloudsnap founder and former CEO Rick Barkley, who will use his engineering and software development experience to focus on product engineering in his new role as the startup’s chief technology officer (CTO).
“We’ve built our platform with customized implementation in mind,” Barkley said. “This new platform is going to make implementation and integration much simpler.”
The latest funding brings the total investment in Cloudsnap to $4.1 million, Bradley told Startups San Antonio. Since launching in September 2018 and receiving a $500,000 pre-seed round, which Active led, the startup has grown to 28 employees.
“Come next spring or summer, we may choose to do a bigger round to ‘step on the gas’ on our growth,” Bradley said. “We raised what we thought would work for a more controlled growth trajectory for the company.”
With almost 15 years of experience leading high-growth, cloud-based businesses, Bradley most recently was chief strategy officer at Rackspace, a global leader in managed applications, data, clouds, and security. During his Rackspace tenure from 2009 until March of this year, the company’s revenue grew from $500 million to more than $2.5 billion, tripled its employee base, and launched several new managed service products.
Active Capital invests across the U.S. in early-stage SaaS startups led by founders offering business-to-business (B2B) services such as cloud computing, sales generation, and accounting technology. Pat Matthews, Active Capital founder and chief executive, has previously invested in Cloudsnap, one of 20-plus companies in Active Capital’s portfolio.
Bradley came to Cloudsnap through his connection to Matthews, who asked Bradley to start exploring Active Capital’s portfolio of companies. After realizing Cloudsnap’s potential for aggressive growth, Bradley started by working for Barkley as interim chief of operations for about three months before transitioning into the CEO position.
“Matt’s experience at Rackspace is very relevant to what Cloudsnap is building in the managed automation market,” Matthews said. “Growing companies and large enterprises are leveraging dozens, and in some cases, hundreds of software apps today. Cloudsnap is well-positioned to help the most important ones integrate at very customized workflow levels.”
Gartner estimates the Integration Platform as a Service (iPaaS) market is more than $1 billion in size and is growing more than 50 percent annually. Within that market, Cloudsnap integrates with nearly 100 mission-critical business applications and is growing its revenue more than 10 percent each month, the new CEO confirmed.
As for his long-range view, Bradley is bullish on the company’s future. Plans are to offer “an automation engineer experienced in the customer’s type of integrations who will learn your business, your sector, and your vertical market,” Bradley said.
“Because we’re going after the mid-market with our managed automation, we’ll also offer services for our customers based on usage and provide continued customer support,” he added.
Funding will go to building out more features in the company’s managed automation platform, and for hiring marketing, customer support, and implementation experts, Bradley said.
“Our customers are VPs of finance or comptrollers, busy people who are expected to manage business processes, so we’re making their jobs easier with quality automation by freeing up their time for more critical responsibilities,” Bradley said.
The Austin-based startup “completely fit our mold,” Matthews said in March after the previous $1.75 million funding round. The serial entrepreneur noted how Cloudsnap has been scaling to meet demand, yet staying disciplined with its spending.
“The company has been flying under the radar but is poised for breaking out,” Matthews said.”
Featured image is a screenshot of Cloudsnap’s website as of November 2019. Cloudsnap is a software startup that offers mid-sized companies a cloud-computing Platform as a Service (PaaS) system.