Drive Capital Reveals Previously Secret $12M Investment in Comply365
Drive Capital has been hush-hush about the identity of its second Wisconsin startup investment. The mystery was solved today when Beloit-based mobile enterprise software company Comply365 announced it received $12 million from the Columbus, OH-based venture capital fund.
Drive, founded by two former Sequoia Capital partners who moved to Ohio and launched a $250 million Midwest-focused VC fund this year, co-led Aver Informatics’ $8.5 million Series A round in May. A few months later, Aver revealed plans to relocate from Green Bay, WI, to Drive’s Columbus office.
Until now, Drive co-founder Chris Olsen has been cagey about the fund’s second investment. The Comply365 deal was also inked back in May, but the company was just waiting for the strategic moment to make a splash, co-founder and CEO Kerry Frank said.
“A lot of people didn’t know our company existed and our technology existed,” Frank said in a phone interview. Now, they wanted to “introduce Comply365 to the world, let them know we’re here, we’re ready to do business. It’s all about timing for us.”
The funding was announced in tandem with a new Comply365 product release, ProChat, that provides a secure, real-time chat function for internal communication through Web browsers or on mobile devices. For example, a pilot who notices an aircraft problem during a pre-flight check can easily send a picture message to the maintenance crew using the software, Frank said.
Frank is speaking this week at a Gartner IT conference with Samsung officials. The two companies struck a partnership to install ProChat on Samsung’s Gear 2 smartwatch for enterprise customers, she said. (In general, her company’s software is device and platform-agnostic, she added.)
Comply365 might have flown somewhat under the radar so far, but it has already made a name for itself within the aviation industry. It counts six of the top eight American airlines as customers, Olsen said. Comply365’s mobile enterprise software is also used in healthcare, education, financial services, and other sectors.
“What you’re seeing is this move to cloud software is changing every department inside of big corporate enterprises,” Olsen said. What Salesforce has done for customer relationship management, or CRM, Comply365 is doing for corporate operations departments, he added.
Frank founded Comply365 in 2007 in Rockford, IL with her husband, Dude, the company’s chief technology officer. They relocated the company across the Wisconsin border to Beloit in 2012 after being recruited by state officials who offered up to $150,000 in tax incentives, according to the Wisconsin State Journal.
Comply365 previously raised seed funds from angel investors, although Frank declined to name the investors or disclose the amount. She talked with more than 50 interested VCs regarding the company’s first institutional investment round. Drive and two California-based funds made the final cut, Frank said.
Comply365 went with Drive partly because they have West Coast experience but believe in building companies in the Midwest, Frank said.
“We had a lot of other people that wanted a piece of that pie, but Drive wanted the whole deal,” Frank said. “What I loved about Drive was they had the same passion and excitement that I did. I plan to build a billion dollar software company and solve big business problems.”
Comply365 is using the money for product development and hiring employees. It has about 75 employees, up 30 from a few months ago. It could double its staff over the next year, Frank said.
Despite Aver’s relocation, Olsen said Comply365 intends to remain in Wisconsin. “They’re going to continue to be there because it’s the right place for them to build their business,” he said. “They’ve found Beloit to be a great place to recruit talent.”
The Midwest has advantages over the coasts, like a lower cost of doing business, a central location, and a “great culture” with loyal workers, Frank said.
“We’re committed right now to staying in Beloit,” Frank said. “I think that we’ll be able to grow.”