Under New Leaders, Name, PegEx Raises $8M for Waste Removal Software
But one industry that still relies heavily on paper documents is regulated waste remediation, which involves removing hazardous materials from factories and other sites. That’s according to Eric Apfelbach, president and CEO of PegEx, a Fitchburg, WI-based software startup. The company, which last year changed its name from Pegasus Sustainability Solutions, is seeking to make it easier for organizations that produce waste to get it removed.
“You wouldn’t believe the mess that’s out there right now,” Apfelbach says. “Everything in the industry is on paper. Nobody can tap the right knowledge and integrate it into [the] documents and business processes” used by waste generators and disposers, he says.
PegEx recently raised more than $8 million from investors, Apfelbach says. The startup plans to use some of the proceeds from the Series B funding round to expand its 27-employee team and continue developing its cloud-based software applications.
Launched in 2012, PegEx has now raised about $15.9 million in outside investment, according to chief financial officer Wade Maleck. Apfelbach declined to name any of the firms or investors that participated in the financing round. However, Dan Einhorn, a general partner at Mequon, WI-based Capital Midwest, which had invested in PegEx previously, says his firm participated in the startup’s latest round of funding.
Apfelbach joined PegEx in September 2016, following the departure of founder and CEO Mark Hope. Apfelbach has served as CEO of several Wisconsin companies, including Alfalight, EnSync (NYSE: ESNC), and Virent, which was acquired by Andeavor (NYSE: ANDV) in 2016 for an undisclosed sum.
Another leader at PegEx who’s well known in the state’s tech community is chief product officer Jason Weaver. Weaver, who joined the startup in November, previously founded Shoutlet, a social media analytics and marketing business that he helped grow into an international operation before it was sold to Austin, TX-based Spredfast in 2015.
Apfelbach says Weaver’s experience in information technology has been a boon to PegEx as it’s shifted to a software-as-a-service business model.
Previously, the startup routed requests from waste generators through its proprietary reverse-auction software, which awarded waste-removal contracts to the bidder willing to accept the lowest amount in payment. Apfelbach says the auction format did not serve PegEx well. Part of the reason was that under Hope’s leadership, the company focused on connecting waste producers and removers, or vendors, in smaller metropolitan areas.
“The problem they ran into with the auction platform is in a given region, you might have three waste vendors that all know each other,” Apfelbach says. “The auction platform was in essence asking those three guys every other day to bid against each other for similar jobs. It just didn’t make sense.”
The process of getting waste removed through PegEx has changed, though not entirely, says Apfelbach. It still begins with the waste producer providing information about the type and location of waste it wants removed. The company collects this information over the phone, and also through its software applications for mobile devices and desktop computers.
But instead of letting vendors bid on the job, PegEx uses its database of 2,200 companies that provide waste disposal services to pick the best vendor for the job. PegEx, which says it’s facilitated more than 10,000 removals since launching, rates vendors on metrics such as price, responsiveness, and customer satisfaction, Apfelbach says.
PegEx’s database includes many of the larger players in waste removal, such as Lake Forest, IL-based Stericycle (NASDAQ: SRCL) and Norwell, MA-based Clean Harbors (NYSE: CLH), he says. Those companies could also end up paying to license PegEx’s software, Apfelbach says, meaning the startup would be selling to both sides of the waste disposal market.
PegEx’s software includes tools for managing documents and information on current and prospective customers, Apfelbach says.
After PegEx hired Apfelbach, he and other company leaders cut staff and spending by about half, he says. (The startup had about 30 employees as of April 2016.) But PegEx has since been growing, Apfelbach says. Revenues in 2017 were $7.45 million, he says, up about 65 percent from the previous year.
Now, with some new funding from investors at its disposal, PegEx will set out to persuade manufacturing companies and other waste generators that its software can save them time and money. And if the startup is successful in getting clients to move their waste removal record-keeping from paper to pixels, maybe some trees will be saved in the process.