In the fast-moving world of startups, it's not uncommon to hear about companies raising multiple rounds of financing within a year or less. Sometimes the gap may be a year or two until a company raises its next round, but for Boston marketing tech startup Promoboxx, it was nearly four years.
After raising its seed round in late 2012, Promoboxx announced on Thursday that it has raised a $8.2 million Series A round led by Ascent Venture Partners and Grotech Ventures, with participation from existing investors Launch Capital, Converge Venture Partners, Boston Seed Capital, StageOne Ventures and several Boston angel investors.
Promoboxx, a 2011 Techstars Boston alum, provides a software-as-a-service marketing platform that helps manufacturers provide retailers, more specifically brick and mortars, with up-to-date marketing material to drive revenue.
Ben Carcio, Promoboxx's CEO and co-founder, told BostInno the funding will be used in invest in sales and marketing efforts and the company's engineering team. The company has 35 employees and currently has 10 open positions. Carcio said he is also on the lookout for a chief financial officer to help move the company forward with its new funding.
In explaining why the company decided to raise its Series A now, Carcio said there were three reasons.
For one, Carcio said, the market is ready.
One of the original challenges for Promoboxx was selling marketing software to brick and mortar locations that typically had owners from the baby boomer generation, Carcio said. That meant it was tougher to convince these store owners to adopt a new technology platform and actually use it. But in the past half decade, Carcio said, there has been a demographic shift and more stores are being run by younger generations, making the software an easier sell.
"This allowed us as team to invest into ourselves and understand the market."
"When we talked to brands they said, 'our stores aren't ready, our stores aren't technically sophisticated," Carcio said. "Now brands are calling us and saying not only do [retailers] need it, they’re calling and asking for it."
Another reason for raising the Series A now, Carcio said, is that the team is ready.
In waiting longer, Carcio said it allowed his team and his fellow co-founders to grow and mature as the business grew so that they would be ready to hit the accelerator for the Series A and so that they could establish the right culture.
"This allowed us as team to invest into ourselves and understand the market," he said.
Lastly, Carcio said it was important that he himself felt ready for the Series A. "From my perspective I had to say, 'Am I ready yet to take this to the next level?'" he said. "That’s why about half a year ago we made the call to raise capital."
Promoboxx currently has 30 brands using its platform at more than 12,000 engaged locations, meaning these brick-and-mortar stores are actually using the platform instead of just having signed up for it, Carcio said. He added that the company has been profitable for 12 of the last 18 months and has reached north of $5 million in annual recurring revenue.
Customers include GE Appliances, Chevrolet, Nissan and New Balance, Carcio said, and contracts range from $50,000 a year to the hundreds of thousands of dollars.
