Cloud Elements, a company that builds API integration tools aimed at developers, announced $13 million in Series B financing today.
The round was led by Harbert Partners with participation from Rally Ventures, Access Ventures and Grotech Ventures. Tom Roberts, who is a general partner at Harbert, will become a member of the Cloud Elements board when the deal closes. Today’s funding brings to the total raised to $21.2 million, according the company.
Why is Cloud Elements being given this pile of cash? It is attempting to solve one of the stickiest problems enterprises face: sharing data across disparate systems. Cloud Elements has a unique approach to this issue. Instead of trying to create an integration product, separate from the application, it has built the integrations directly into the application, says Mark Geene (pronounced “Gee-nee”), company co-founder and CEO.
“We sell to the app developer, software companies or platform companies building applications,” he told TechCrunch. They enable developers to create connector hubs to similar product sets. For example, if you need to connect to a bunch of financial systems, you create a financial hub from the application.
Cloud Elements gives developers a single administrative interface to connect to these applications. While he acknowledges there is still a fair amount of work involved making these applications understand each other, he says the Cloud Elements interface reduces the amount of work it would take otherwise.
Cloud Elements competes with companies like SnapLogic and MuleSoft, which are trying to solve a similar problem. Geene says what’s different about his company’s approach is that it’s the only one that works from inside the application. The others are external services aimed at IT. They help solve data communications issues as a problem separate from the application, Geene explained.
The idea for Cloud Elements had its genesis, like so many startups, when the founders encountered a problem they couldn’t solve. “We had built another SaaS company called Channel Insight (which was eventually sold to Model N), which collected inventory and sales data from CRM and accounting systems. We tried different methods [to connect to this data], and found none was architected and built for the application developer to integrate inside the application,” he explained.
So he decided to build a product that did just that, launching the Denver-based company in 2012. They self-funded the company until 2014 as they built and shaped the product they have today. That’s when they decided to seek their first round of funding, which eventually totaled just over $8 million.
With 55 employees today, the company is growing at a rate of 40 percent quarter over quarter, according to Geene. The company plans to use the new investment to expand the customer success team and build out sales and marketing (as you would expect in a growing company).
They also want to expand the number of systems Cloud Elements can connect to, and eventually allow third parties to build elements (the internal name for these connectors) in an open marketplace.
“There is an insatiable appetite for more things to connect to. There is no limit to the number of applications you need to connect to,” he said.