SmartUQ, a Madison, WI-based software developer whose digital tools allow users to test the performance of physical products and the parts they’re made of, has raised more than $1.9 million from investors.
Twenty-five investors participated in the equity financing round, according to an SEC filing. Peter Qian, who founded SmartUQ in 2014 and serves as its chief scientist, says that all of the money came from individual investors. Most participants in the round had backed the startup previously, Qian says, but some new investors also took part.
The value of the funding round could climb as high as $3 million, Qian says. SmartUQ plans to raise the remaining amount, he says, but he did not provide a timeline for doing so.
To date, SmartUQ has raised a total of more than $4.4 million from investors, according to documents filed with federal securities regulators.
“We’re using the proceeds from this round to add more people to the team,” Qian says. “Currently, we’re recruiting account executives, a marketing person, and an application engineer with an aerospace background.”
Aerospace is one industry that’s home to companies currently using SmartUQ’s simulation analytics software, Qian says. Other sectors include automobiles, oil and gas, and defense, he says, adding that “we are making inroads to other industries, such as medical devices.”
Qian, who is also a professor of statistics and industrial and systems engineering at the University of Wisconsin-Madison, declined to name any of his startup’s customers. However, he says some of them are among the 100 largest businesses in the U.S. The products SmartUQ’s customers make range widely in size—everything from aircraft to semiconductors.
From Qian’s experience, once a company has worked with large multinational corporations, it’s easier to scale down to smaller organizations than it is to go in the other direction.
“We do the difficult problem first,” Qian says. “We basically started with Fortune 100 companies [and] now we’re also moving on to [smaller] companies. Our tools work for all kinds of engineering companies—it doesn’t depend on size.”
Qian would not say what SmartUQ’s revenues were in 2016, or whether the company turned a profit last year.
He also declined to say how many employees SmartUQ has, but says the startup’s headcount has nearly doubled each of the three years it has been in business.
A number of SmartUQ’s employees are graduates of UW-Madison, he says: “We have lots of Badgers.”
Qian says that many of them studied disciplines like computer science, statistics, and engineering at the university. UW-Madison alumni with degrees in those fields typically “go to either the West Coast, East Coast, or Chicago to work,” he says, referring to a trend some have dubbed “brain drain.”
Even though SmartUQ is still a young and relatively small company, Qian sounds excited about the possibility that high-tech companies like his can convince more UW-Madison students to stick around after they graduate.
“We provide a unique opportunity for those graduates,” he says. “They can stay in Wisconsin, and still be very much on the cutting edge of engineering and analytics.”
