Cloud Elements, a Denver-based startup that makes software that developers can use to integrate their custom applications with cloud services like Dropbox and Salesforce, has closed a $3.1 million Series A round.
Grotech Ventures and Icon Venture Partners led the round. Denver-based Galvanize Ventures also invested.
Cloud Elements co-founder and CEO Mark Geene said his company’s pitch to developers is that Cloud Elements makes it easier and cheaper for them to build applications or add features for customers who already use cloud services like Dropbox or Salesforce.
Cloud Elements does that by creating a single API (application programming interface) that can connect with multiple online software applications. For example, it offers an API through its “documents hub” that works with Dropbox, Box, Google Drive, SharePoint, and OneDrive. The API lets end users upload, search, delete, move, copy, and create documents across all the services.
There are similar hubs for marketing, customer relationship management, messaging, and help desk services.
Geene said it’s a faster, cheaper way for developers to create new applications without having to write and maintain APIs for each service.
“With the proliferation of cloud services out there, it’s a lot of work to have your application connect with everything that you want it to connect with,” Geene said.
The strategy is to help Cloud Elements customers “build an application that can cooperate with what the customers are already using,” Geene said.
“Businesses are going to select applications that already work with the things they use. Otherwise they won’t buy it,” he said. “What we’re enabling developers to do is fit into that ecosystem that customers or consumers already have and work seamlessly with that at the lowest cost possible.”
Geene said the money will be used to build up the sales and marketing divisions and keep developing the product by integrating with more cloud services such as Marketo, Hubspot, and Evernote. Cloud Elements already works with 30 services and will work with 50 by the end of the year, he said.
Geene founded the startup in 2012 along with Vineet Joshi, Atul Barve, and Gary Gaessler. It has grown to 22 employees and, while Geene wouldn’t give exact numbers, he said the company has hundreds of clients and revenue in the millions. The company has been profitable, he said.
This is the first time Cloud Elements has accepted outside capital, as the founders decided to build their firm’s foundation before turning to investors.
“We raised our Series A really on already having an established product and established customers in place before we went out to raise outside capital,” Geene said.
Geene’s breadth of experience likely helped. He was the CEO of Denver-based startup ChannelInsight from 2005 to 2012, and prior to that he was a vice president and manager at enterprise companies including Oracle and IBM.
Geene cited estimates that the application integration market could be worth at least a $5 billion within five years. He thinks it is driven by more companies turning to cloud applications, and that APIs will displace enterprise service buses and other methods as the preferred way to manage them.
For other views of the trend, check out this InfoWorld article and these posts about API management and service oriented architecture from Forrester.
