The Rainmaker Group, a company founded in 1998, has accepted its first investment — $33.8 million from Norwest Venture Partners that the Atlanta-based company will use to extend its profit and price optimization technology to different markets.
Rainmaker started in 1998 when the founders assumed control of the intellectual property from a former employee. The company has historically served hotels such as The Wynn in Las Vegas. Recently it has started extending into the apartment market by forecasting supply and demand for apartments.
Rainmaker Co-Founder Tammy Farley said in an interview yesterday that data has always served as the foundation of its business model. Today, the company is leveraging its technology to continue building its business in the hospitality sector. It also now has a tool for tracking the movement of inventory for apartments. For example, they have learned how in San Diego the movement of troop ships carries a huge impact on both inventory and demand.
Rainmaker’s future is as a data as a service (DaaS) that would leverage what Farley calls “perishable data.” That may mean doing forecasting for self-service storage or commercial office space — markets where prices can fluctuate based upon supply and demand.
Choosing Norwest caps a two-year search for the profitable company. Norwest has a history investing in leveraging companies like Rainmaker. It has invested more than $150 million of capital into data-oriented companies, including SPSS, the predictive analytics leader that went public and was later sold to IBM; Jigsaw, a “data-as-a-service” company acquired by Salesforce.com; and InfoArmy, The EchoNest, The Retail Equation, Insights One, 1010 Data and Hadapt.
Rainmaker has 83 employees. It expects to grow to 100 employees by the end of the year and 115 by this time next year. Rainmaker competes with large predictive analytics companies like SAS, IBM, and peripherally with providers such as Tibco.
The analytics market has more startups than almost any sector of the market. They are popping up everywhere, which means Rainmaker has both the problem of competing with the young innovators of the space and the opportunity to show its experience and proven success in the hospitality market.