SkyGiraffe, a startup that helps companies quickly build and deploy apps, has raised a $3 million Series A round of capital, led by Trilogy Equity Partners. Prior investor 500 Startups participated in the capital event. Trilogy, unsurprisingly, picked a board seat as part of the round.
The market that SkyGiraffe focused on, custom apps for businesses, is a hot space at the moment. Earlier today, K2, another firm that helps companies build apps, recently raised over $100 million in a single Series C round. TrackVia, which also helps companies build mobile apps, indicated last year that it expected to grow its revenues 100 percent in 2014.
Of course, each company offers something different — SkyGiraffe focuses on what it calls “code-free custom mobile apps,” meaning that any company with data can build applications for its employees without the need for an extensive, and expensive, development staff.
The rise of cloud and mobile, coupled with employee and executive appetite for mobile applications, creates a difficult situation for IT departments better suited at running on-premises data centers that operate behind firewalls. SkyGiraffe’s business is a bet that its service, which can be molded to fit various security setups and allows for apps to be built in hours, will solve the problem.
In mid-2013, SkyGiraffe raised $1.5 million. The company was Microsoft Venture’s first investment, according to the SkyGiraffe’s CEO Boaz Hecht. (Microsoft made some investment through its Bing Fund, which was later folded into Microsoft Ventures. SkyGiraffe was the first investment the group made after it was renamed.) Microsoft declined to comment on its non-participation in the round. The company has raised a total of $4.5 million to date.
Update: Regarding Microsoft not investing in the round, it’s worth noting that Microsoft has stopped directly investing into startups. Looking at the wording I scribbled, it could be read to indicate that Microsoft merely passed on the round. That’s not the case.
That Microsoft is an investor in the startup is interesting. According to Hecht, SkyGiraffe is “seeing a synergy with the enterprise sales folks at Microsoft, because we are solving a problem for their clients.” Working with Microsoft’s sales team could provide an obvious shot in the arm for the firm. Put another way, Microsoft doesn’t offer the same service as SkyGiraffe and wants to sell more use of Azure, its cloud computing service. That makes the firms easy collaborators.
Hecht declined to detail the company’s core growth metrics. It has 15 employees at the moment, split between Menlo Park in Silicon Valley, and Israel. And its headcount, Hecht told TechCrunch, will at least double in size by the end of 2015.
I asked SkyGiraffe why it raised $3 million for its Series A, an amount that in the current capital climate is almost closer to a seed round. Hecht said, simply, that it is how much his company needs to reach its “next milestone.”
Flush with twice the cash that it had previously, SkyGiraffe now needs to prove that there is as much enterprise demand for its products as it seems to think that there is. I’ll check back in with the company in a few quarters to see if it is willing to share more on how quickly it grows.