GV Tops Off $74.5M Haul for Paper Digitization Startup Ripcord
The co-founders of Hayward, CA-based startup Ripcord got together in 2015 to solve a mundane problem that plagues every office: big piles of paper records. To do that, they had to make use of the complete array of high-end tools in the advanced technology arsenal, from robotics and AI to computer vision and language processing. And oh, yes: techniques for plucking paper clips out of musty reports.
Ripcord unveiled its closet-sized robot document digitizing unit in March, and raised a modest $9.5 million that month to launch commercial operations as a service that scans mountains of paper records and converts them into searchable digital data. Since then, Ripcord’s outside capital has stair-stepped to include a Series B fundraising round that now adds up to $65 million, thanks to a $25 million expansion investment, led by GV (formerly Google Ventures), which the company announced today.
Ripcord is trying to bring off a classic Silicon Valley disruption story by replacing prevailing solutions to the massive burden of saved paper that is borne by most businesses: renting warehouses, or paying for costly digitization at established companies.
The startup’s goal is not only to speed up document scanning and lower its cost, but also to provide customers with ongoing Web-based management of their newly digitized records, alongside company data that was stored electronically from the start. Although Ripcord’s automated process starts by grappling with a pulpy mess of disused paper, CEO and co-founder Alex Fielding told Xconomy back in March that he sees Ripcord essentially as a software-as-a-service company.
At that time, Ripcord’s earliest investors were Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers, Lux Capital, Legend Star, and Apple co-founder Steve Wozniak, who had co-founded a previous startup with Fielding. Wozniak is on Ripcord’s board, along with KPCB partner Wen Hsieh and Peter Hébert, co-founder and managing partner of Lux Capital.
In mid-August, Icon Ventures led the first stage of Ripcord’s Series B fund-raising round, which brought in a total of $40 million ($25 million in equity financing and $15 million in debt.) Also participating in that round were Silicon Valley Bank, KPCB, and Lux Capital. Icon Ventures general partner Jeb Miller joined Ripcord’s board.
In the second installment of the Series B round, GV was joined by new investor Telstra Ventures, along with returning investors Icon Ventures, KPCB, Lux Capital, and Silicon Valley Bank. That extra $25 million brought Ripcord’s fundraising total to $74.5 million.
Ripcord says GV’s expertise in AI, as well as its money, will help support further development of the software features of Ripcord’s digital records management system, Ripcord Canopy. The software now includes a user dashboard, a chain of custody ledger for individual records, other security measures, and integrations so that data stored in Canopy can be used in business applications including SAP, Oracle, and NetSuite.
Ripcord, which has 70 employees, is planning to expand to an East Coast location in 2018.
Bechtel is a customer, but Ripcord is holding the rest of its customer base close to the vest, including its total number of paying customers.
By March, the company had already processed more than a million records in trial runs for clients, and it is predicting that by 2018 it will digitize 50 million records a day, far exceeding the pace of its established rivals. But Ripcord declined to state its current processing rate.
Ripcord estimates the total market for corporate records management at $25 billion. One of its biggest competitors, Boston-based Iron Mountain (NYSE: IRM) reported revenue of $3.51 billion in 2016.