The Chicago-based technology company, which builds application programming interfaces for the logistics and transportation industry, will use the funding to fuel sales and product development.
project44, a Chicago-based technology company pushing adoption of application programming interface (API) usage in the freight transportation industry, said Monday it has secured its first round of outside funding.
Two technology-focused venture capital groups, Silicon Valley-based Emergence Capital and Chicago-based Chicago Ventures, are providing project44 with $10.5 million, which the software company will use to drive product innovation and expand its salesforce.
project44 provides a software-as-a-service (SaaS) network of web service APIs, a method of system-to-system communication that is more dynamic and quicker to implement than the standard in the logistics industry, electronic data interchange (EDI).
The company, until this point, has been bootstrapped by CEO Jett McCandless, who founded project44 along with Chief Technology Officer Wally Ibrahim.
“We started this almost three years ago, and it took two years to build the platform,” McCandless said in an interview with American Shipper. “We had beta clients, and went to market in December 2015, so we knew there was need for better communication technology, but didn’t know if the market was ready for it. It became obvious people liked it and wanted more. There was enough traction and scale to do a capital raise.”
McCandless said the company was “deadset” against accepting capital from companies that weren’t interested in being part of the company’s growth, often called “dumb money” in the venture capital world. He said project44 targeted companies that would provide it connections and experience within the logistics industry and ones that had experience funding and growing SaaS-model companies.
Chicago Ventures, McCandless said, also provided an investor that would “fight for us locally” in the rapidly rising technology industry in Chicago. Emergence, which has backed Salesforce and Box, provided the SaaS-based funding partner the company was seeking.
McCandless said the private equity experience forced himself and project44 President Tommy Barnes to reinvent themselves in a sense.
“We really had to elevate our game,” he said. “We have rock star guys in development, but for Tommy and I, we had to reinvent ourselves and become technologists.”
Both McCandless and Barnes come from a logistics background, which drove project44’s early foundation-laying moves into the less-than-truckload (LTL) industry, where the company provided rate and transit time data via APIs to carriers, shippers, 3PLs and transportation management system (TMS) providers.
“We were domain experts (in transportation),” McCandless said. “We knew a lot about technology, and had always been passionate about it, but I’ve never been CEO of an enterprise SaaS company. To think like that is different.”
The capital will not be used “to take chips off the table,” he said.
“The market’s there, the timing’s perfect,” McCandless said. “A healthy dose of it will go to sales and a lot on the product side. We’ve had so many inbound leads and people just onboarding, we haven’t actively made a prospect call in two months.”
project44, as a neutral provider of APIs, has been at the forefront of a group of companies trying to build awareness of the power of that systems communication tool in an industry noted for its use of APIs.
But the company in recent months has been seeing interest in areas like e-commerce and inventory management. APIs underlie much of the modern e-commerce technology structure. As an example of how important they’ve become, the API platform Apigee was acquired last week by Google for $625 million.
Meanwhile, project44 said its customer list has grown 400 percent from a year ago, and now includes not just LTL companies, but also big box retailers, e-commerce retailers and manufacturers, including Odyssey, Blue Grace Logistics, Estes, MercuryGate and McLeod Software.
project44 secures $10.5m in funding
