Milwaukee-born supply chain tech startup PAXAFE raises $1.5M

Supply chain technology startup PAXAFE Inc., which was born out of the gener8tor Milwaukee accelerator program and is backed by local investors including Northwestern Mutual, has raised another $1.5 million to expand its customer base, the company recently announced.

With the latest round of seed-stage funding, PAXAFE has raised $5.5 million in capital to date, PAXAFE co-founder and CEO Ilya Preston said. The company's technology is designed to enable intelligent cargo insurance with real-time data that helps predict adverse shipping events.

PAXAFE launched commercially in April 2021 and has more than 10 enterprise customers, Preston said. It's now focused on bringing on additional customers that are currently in its pipeline, Preston said.

The new round was led by early-stage logistics-focused venture capital firm Venture 53, which has a presence in Atlanta and Richmond, Virginia. It's PAXAFE's second round of seed-stage funding — last year, the startup raised a $2.25 million seed round.

PAXAFE was founded in October 2018 in Milwaukee and was based in the city out of Northwestern Mutual's Cream City Labs, but it doesn't currently have a Milwaukee presence.

When the pandemic hit, the company relocated to Indianapolis, where Preston has roots, he said. Many of its 21 employees work remotely, he said. PAXAFE is onboarding a group of new employees and will have 29 by the end of July, Preston added.

The startup previously also had a presence in Michigan, where PAXAFE co-founder and chief technology officer Ashok Seetharam — who is originally from India — moved from Milwaukee for a visa program through an organization called Global Detroit that partners with the University of Michigan.

At the time, PAXAFE wasn't aware of any Wisconsin programs that would enable immigrant founders to meet the H-1B visa requirements needed to stay in the U.S., Preston said.

"We are very grateful to the Milwaukee community ... we feel fortunate that we were a part of a great ecosystem," Preston said. "At the end of the day, it was just personal circumstance and being closer to family that made all the difference."

At the same time, Preston said Milwaukee's startup ecosystem could be strengthened by creating more access to capital for early-stage startups and helping enable seamless immigration processes for immigrant entrepreneurs and employees, he said.

"In some cases, you have early-stage groups that might have later-stage requirements to unlock that capital," Preston said.

PAXAFE raised early funding from local investors including gener8tor, Northwestern Mutual's Cream City Venture Capital and the gene8tor-affiliated angel investing group gANGELs. The initial capital was difficult to secure but subsequent rounds have been easier, Preston said.

"Everybody wants to fund when you have traction, right?" Preston said. "I think what separates the good ecosystems from the average ecosystems, particularly in the Midwest, is that risk tolerance."