Rackspace Veterans Reunite Years Later for Pingboard Seed Round
San Antonio and Austin—Almost two decades after Bill Boebel and Pat Matthews began a startup career that led to founding e-mail service Webmail.us, which was sold to cloud computing giant Rackspace in 2007, the college friends are working together again.
Matthews’s new venture capital firm, San Antonio-based Active Capital, is leading a $2.5 million investment in Boebel’s new startup, Pingboard, a software-as-a-service company that Boebel founded until 2013. Pat Condon—a partner at Active Capital, a co-founder of Rackspace, and an early investor in Webmail.us—is joining Pingboard’s board of directors.
Up until this year, Pingboard had raised $5 million in other seed funding to sell subscriptions for software that creates organizational charts for businesses. Boebel said he decided to seek another smaller funding round of $2.5 million from local investors, rather than a Series A round from larger Silicon Valley venture firms, in order to incrementally hire engineers to improve the product, and hire additional sales and marketing staff, with the goal of profitability in 2019.
Silverton Partners, Capital Factory, and other angel investors who previously contributed to two previous seed funding rounds also participated. (A filing with the SEC shows that the new round of funding may total as much as $5 million. Matthews and Boebel said only half of that amount will be new money. The rest accounts for $2.5 million of convertible notes that converted into equity when the new round priced.)
The idea behind taking another small seed round is that Boebel believes Pingboard needs only a small amount of capital over a long period to continue to experiment on and develop things that work, according to a blog post he planned to publish this morning.
Boebel founded Pingboard after working closely with Joshua Baer at the startup tech incubator and co-working space Capital Factory, which was founded in 2009. Pingboard said it now has more than 1,000 customers who subscribe to its service—in addition to a free basic organizational chart, the company charges anywhere from $29 to $100 per month for advanced services—giving it a couple of million dollars in annual revenue. (Boebel said he doesn’t disclose exact figures.)
Well-designed, functional organizational charts are something Boebel said he believes are a niche market that businesses lack, but want. The value is in the ability for different departments in an organization to manage, organize, and communicate with their various personnel, he said. Anyone from human resources personnel to department managers can view the need for new hires, reorganizing the employees in a company’s various departments, and perform other functions. He said Pingboard is using the new funding to continue to develop those features and add additional ones.
The software also lets managers give anyone in the company access to view the organizational chart, with different levels of permission. There are other applications that allow businesses to manage organizational charts, including flowcharting tool Visio, software from larger HR organizations like ADP, or even Excel spreadsheets. Boebel contends no one has yet developed a service like his, which can also integrate with existing HR systems.
“We kind of think of every user in the company as our customer, so you kind of have to take a consumer approach to user-interface design,” Boebel said over lunch in Austin this week. “Companies like Namely or Zenefits or Gusto, they all have created a better, easier-to-use interface for payroll and benefits. There’s been a bunch of niche tools that have followed. … Org charts, I kind of see, as one of those categories right now.”
Software-as-a-service startups that target an in-demand niche—a specific use like Pingboard with its organizational charts, or, say, trucking logistics—are what Matthews is seeking to fund with Active Capital. He said he wants … Next Page »