PenPath, a St. Louis-based technology startup that has created a data analytics platform for e-commerce brands, plans to expand its team and enhance its technology after securing funding from a local investment firm.
St. Louis-based Gilead Group LLC said it is making a “significant” investment in PenPath to help the technology startup to pursue its growth strategy. The financial terms of Gilead’s investment were not disclosed.
Gilead is led by Chairman Howard Wood, co-founder of Charter Communications Inc., and President and CEO Kent Kalkwarf, former executive vice president and chief financial officer at Charter. It focused on investing in technology firms, with its portfolio also including Maryland Heights-based software firm Realtime Results, Chesterfield-based GPS tracking company Linxup and Creve Coeur software firm Archlogix. Gilead says on its website its investments historically have been between $500,000 to $6 million, averaging $2 million, including follow-on funding.
PenPath has developed an analytics platform designed to collect data from various sources and provide automated analysis and reporting to help brands manage their e-commerce operations.
“PenPath has demonstrated an impressive ability to deliver insights for its clients, and we believe that its innovative SaaS (software as a service) platform has the potential to revolutionize the e-commerce industry,” said Nicole Schlanger, vice president of Gilead. “We are well-positioned to partner with PenPath and provide the resources and expertise to help the company achieve its full potential.”
PenPath CEO Alex Cruz said PenPath aims to help brands make sense of all the data that comes in through the various platforms in which they sell and market their products.
“When you are in the trenches, you actually see that companies have too much data and they don’t know what to do with it,” Cruz said.
PenPath’s subscription software brings together data from different sources, such as Shopify, Google Analytics and Facebook Ads, seeking to help companies best understand and strategize their e-commerce operations. Users of PenPath’s software include St. Louis-based utility Ameren Corp. (NYSE: AEE), St. Louis Symphony Orchestra and defense contractor Northrop Grumman (NYSE: NOC), it said.
PenPath had largely bootstrapped its operations prior to seeking investment, Cruz said. He said the growth of the e-commerce market and an increase in large companies seeking out its software prompted the decision to raise funding.
“We noticed that in order to support the type of customers that really want our service, we needed more capital,” Cruz said.
Cruz said he engaged with venture capitalists on the coasts about raising capital, but that it “felt like you were just a number” with those investors.
“You were one of their many investments and if it didn’t work out, that’s too bad, so sad,” he said.
Cruz said Gilead provides a hands-on approach to its investment and also provides back-office support to its portfolio companies around functions including accounting and human resources. PenPath connected with Gilead through Chris Peckham, who became a mentor of the startup after it won a grant from St. Louis nonprofit Arch Grants in 2019.
PenPeth, which has an office at 677 Craig Road in Creve Coeur, has eight employees. Cruz said it plans to expand its headcount as it seeks to add employees in account executive, customer success and data engineering roles. While PenPath plans to add workers, Cruz said it won’t do so just for the sake of expansion. He said the company’s focus is to hire the “best of the best,” with its new funding offering the ability to seek out that type of job candidate.
“The job market right now, If you want top talent, it does cost a lot of money,” Cruz said.
As it expands, Cruz said PenPath will continue to improve its technology to meet the needs of customers as data becomes increasingly important to how they tailor e-commerce operations.
“We see an unbelievable opportunity for the simplification of understanding your business and getting that visibility,” Cruz said.
