Each of the big three cloud vendors — Amazon, Microsoft and Google — has a marketplace where software vendors can sell their wares. It seems like an easy enough proposition to throw your software up there and be done with it, but it turns out that it’s not quite that simple, requiring a complex set of business and technical tasks.
Tackle, a startup that wants to help ease the process of getting a product onto one of these marketplaces, announced a $35 million Series B today. Andreessen Horowitz led the investment with help from existing investor Bessemer Venture Partners. The company reports it has now raised $48.5 million.
Company founder Dillon Woods says that at previous jobs, he found that it took several months with a couple of engineers dedicated to the task to get a product onto the AWS marketplace, and he noticed that it was a similar set of tasks each time.
“What I saw [in my previous jobs] was that we were kind of redoing the same work. And I thought everybody out there was probably reinventing the same wheel. And so when I started Tackle, my goal was to create a software platform that would take that time down to one or two days. So it’s really a no-code solution, and it makes it much more of a business decision, rather than this big technical integration project,” Woods told me.
While you may think it’s a pretty simple task to put an app on one of these marketplaces, Woods points out that the AWS user guide explaining the ins and outs is a 700-page pdf. He says that it’s not just the technical complexity of setting up the various API calls to get it connected, there is also the business side of selling in the marketplace, and that requires additional APIs.
“There’s not just the initial sale. There could be things later like upgrades, refunds, cancellations — maybe you need to do overage charges against that same contract. And so there are all of these downstream things that happen that all require API integration, and Tackle takes care of all of that for you,” Woods explained.
CEO John Jahnke says that the company usually starts with one product in one marketplace, which acts as a kind of proof of concept for the customer, then builds up from there. Once customers see what Tackle can do, they can expand usage.
It seems to be working, with the startup reporting that it tripled annual recurring revenue (ARR), although it didn’t want to share a specific number. It also doubled headcount and the number of customers and was responsible for over $200 million in transactions across the three cloud marketplaces.
Jahnke didn’t share the exact number of customers, but he said there were currently hundreds on the platform, including companies like Snowflake, GitHub, New Relic and PagerDuty.
The company currently has 67 employees spread across 25 states, with plans to almost double that by the end of 2021. He says that it’s essential to put systems in place to build a diverse company now.
“How we scale through this next 100% increase in headcount is going to define the mix of the company into the future. If we can get this right right now and continue to extend on the foundation for diversity and inclusion that we started and make it a real part of our conversation at some scale, we think we’ll be set up as we go from 100 employees to 1,000 employees over the long period of time to continue to grow and create opportunities for people wherever they are,” Jahnke said.
Martin Casado, general partner at lead investor a16z, says this type of selling has become essential for businesses and that’s why he wanted to invest in the company. “Cloud marketplaces have become a primary channel for selling software quickly and conveniently. Tackle is the leading player for enabling companies to sell software through the cloud,” he said.