Austin—Cloudsnap, a startup that makes software to connect and integrate data from its customers’ enterprise applications, has raised $1.75 million in seed financing led by Active Capital.
Cloudsnap was founded in 2018 by Rick Barkley, a native Austinite (he moved here when he was 2 years old, so close enough) who ran e-learning startup Nuvola Networks from 2011 to 2018. Cloudsnap previously took in $500,000 in money last summer from Active, which is based in San Antonio, and Austin co-working space and incubator Capital Factory.
The roots of Cloudsnap stretch back to Nuvola, which aimed to connect users online to instructors and training materials. Customers of Nuvola would frequently ask Barkley for ways to integrate things like employee databases into his e-learning software, he said in a phone interview. Barkley looked for a way to connect his software to those custom databases, but couldn’t find the right fit, so he built his own tool. Eventually, that system started getting more attention than the e-learning software.
“That kind of became our value prop for the e-learning (business): We can integrate it really easily into your environment,” Barkley said in a phone interview with Xconomy. “We started running into customers who were like, ‘Hey, we don’t care that much about your e-learning platform, but we’re actually interested in your integration platform.’”
He decided to spin out Cloudsnap as a separate business and is no longer taking new customers for Nuvola. Cloudsnap already has about 120 customers, he said. Its fees start at $3,000 a year, he said, which is lower than the six-figure fees he said custom software can cost.
There are several businesses that work in the field of connecting disparate applications, both for consumers and enterprises. San Francisco-based Zapier helps consumers connect web applications, such as WordPress and Mailchimp. Enterprise applications are a bit more difficult to connect, Barkley said, because the applications often have custom user-defined fields and endpoints, and they often run behind users’ firewalls in on-premises data centers.
Salesforce (NYSE: [[ticker:CRM]]) acquired one of the biggest businesses in the sector, Mulesoft, for $6.5 billion last year. Dell (NYSE: [[ticker:DELL]]) acquired a startup called Boomi, which similarly integrates data and apps through application programming interfaces, in 2010. Some larger businesses dedicate staff to the work internally, while others contract custom tools, Barkley said.
The difference in Cloudsnap, Barkley said, is its architecture. His software can take any kind of raw data source—be it based in JavaScript, extensible markup language (better known as XML), or a custom data source—and convert it into a format that is proprietary to Cloudnsap. Then Cloudsnap can send those data back into the other application into whatever format the app needs, be it SAP, Oracle or anything else, Barkley said.
The things that are connecting and sucking data out of applications, we kept those really dumb,” he said. “All of the logic resides in the platform.”
Barkley has planned to apply the funding primarily toward new hires, with the goal of adding four more to his staff of 17 by the end of the month. Cloudsnap is looking for new office space in Austin, too; it’s outgrowing its space in Capital Factory.
“We’re moving from startup phase to real company phase,” Barkley said.
Lead investor Active Capital raised a $21.5 million first fund in January. Cloudsnap is one of the first deals it has made public since.
