When Indianapolis-based cloud software company Zylo was making the rounds in the Bay Area last year, talking to potential investors, the company kept hearing that it should meet with Silicon Valley firm Bessemer Venture Partners.
Bessemer had never backed an Indiana tech company before but the meetings must have gone well, because Zylo has announced that earlier this month, Bessemer led its $9.3 million Series A funding round, with participation from Salesforce Ventures, Slack Fund, and repeat investors High Alpha Capital, GGV Capital, SV Angel, and Hyde Park Venture Partners. Bessemer’s Byron Deeter will join Zylo’s board as part of the deal.
Zylo is a cloud optimization company, offering its customers one system of record for all the software subscriptions and cloud-based services used across the organization. According to CEO Eric Christopher, Zylo’s platform enables its customers to see which software is being used the most, how much is spent on software subscriptions and services, and how to stretch IT dollars further. Christopher says Zylo currently manages more than one million unique software licenses, representing more than $1 billion in software subscriptions, for customers in the pharmaceutical, financial services, and IT sectors.
“Directionally, we’re still on the same path,” Christopher explains. “We’re helping companies monitor spending on SaaS products and identify what they have. With more than one million user licenses under management, we can start to build recommendations so customers can make better buying decisions, and we’re now able to handle the largest organizations with 50,000-plus employees.”
The 23-person Zylo team has doubled in size over the past 18 months, Christopher says, and it plans to double again in roughly the same timeframe. He says the company will spend 2018 further building the team and devoting its new capital to sales and marketing, as well as service improvements.
“Product engineering is priority one—we have to make sure we’re very differentiated [from competitors],” Christopher says. “We also want to keep the customer experience great, so we want to make sure we have enough folks to manage that. Given the nature of cloud, joint marketing and educational events are likely because I believe we’re building a new category of software, which requires some evangelizing.”
Christopher shared a statistic: According to Forrester, the total global public cloud market will be $178 billion in 2018, up from $146 billion in 2017, and is expected to grow at a 22 percent compound annual growth rate.
“It’s a big market, and the exciting thing about Bessemer is they make big bets,” Christopher maintains. “They look at these kinds of cloud software businesses across the country and they picked us, which is really cool. It’s a unique story, being based in the Midwest with such a massive global market. It made sense to pair the Midwest’s low cost and talent pool. Add strategic expertise from our investors and it’s a dynamite combination.”
