Lower Manhattan startup focused on small business IT raises $ 90 million
The new funding round, which values the company at $ 810 million, comes eight months after Electric closed a $ 40 million Series C investment round. The company has now raised just under $ 200 million from investors. It employs around 400 people, mainly in New York, with a few teleworkers. Denehy said Electric is working to go public in two to three years.
Through a mix of automation and live support, Electric is promoting itself as a one-stop-shop IT service for small businesses. It can help manage company accounts, update software, and set permissions for employees. Monthly subscription software includes live support for lost passwords and connectivity issues, and can integrate with Slack or Microsoft Teams.
About 700 companies use the software, Electric said, including business news outlet Morning Brew and marketing agency Socialfly.
Denehy previously founded Swarm Mobile, an in-store retail marketing app that was acquired by Groupon for an undisclosed amount in 2014. When he launched Electric in 2016, he said he believed the software needs and IT for small businesses, including startups, would only get more complex.
“Five years ago, our average customer was using about eight different software applications,” he said. “Now an average customer uses 35”.
Electric’s software is not intended to replace large business IT departments. Denehy said most of his company’s customers either don’t have an IT department or only have one employee running from request to request.
“It’s going to be a lot of work for IT people for a long time,” Denehy said. “Our customers usually have non-IT people doing IT stuff, so our job is to give them that time back. “
Companies around the world will spend $ 4.1 trillion on technology this year, up about 8%, according to Gartner forecasts. This helped spur Electric and other New York City tech-focused startups for business. Big Apple’s corporate tech startups raised $ 6.7 billion in venture capital in the first half of the year, according to a report from venture capital firm Work-Bench.
The investment round for Electric was led by Silicon Valley venture capital firm GGV Capital and included funding from New York-focused Primary Venture Partners. GGV’s previous investments include Airbnb and Slack.
The round relied entirely on existing investors, which Denehy says helped close the deal in less than a month. The company will invest in hiring for sales and marketing, he said, as well as research and development.