A Beloit software business that said Tuesday it had raised $12 million of venture capital funding has potential to grow big enough to hold a public offering, an investor said.
Comply365 LLC, a maker of mobile-friendly software for airlines and other industries, says it has 13 products with 400,000 users and a client roster that includes six of the eight biggest airlines.
Playing into an explosion of mobile devices, the company has potential to transform companies' operations departments, said Chris Olsen, co-founder of Drive Capital, the Ohio firm that led the $12 million funding round. The overall market for this type of software could be as large as several billion dollars, he said.
"We wouldn't be surprised if one day this company had the potential to go public and be one of the largest software companies on Earth," Olsen said. "The opportunity for growth is astounding, and we believe Comply365 is perfectly positioned to lead the market for mobile enterprise solutions."
The deal is the biggest Drive has done since raising its $250 million fund earlier this year and represents its second investment in a Wisconsin company, Olsen said. Drive's first Wisconsin investment was in Aver Informatics, which moved to Columbus, Ohio, shortly after being funded. Comply365 plans to stay in Beloit, said Kerry Frank, chief executive officer and co-founder.
Frank and her husband, Dude Frank, who is the company's chief technology officer, started Comply365 in 2007 in the basement of their South Beloit, Ill., home. Kerry Frank had no college degree and had worked in jobs ranging from cake decorator to caterer. But she had a creative mind that she says her husband encouraged her to apply to a software business.
Comply365 started with the aviation industry and the problem of pilots having to carry around 90 pound manuals, Frank said. Industry players were skeptical, but the company now serves more than 80% of the commercial aviation market, she said.
Today, Comply365's products help pilots access needed materials in a secure environment. They also help franchisers deliver information about menu changes and provide oil and gas companies with software to track whether all employees have read new safety procedures, Frank said.
After being wooed by state and local economic development officials — the courtship included a call from Gov. Scott Walker — the Franks moved their company across the state line to Beloit two years ago.
"We're extremely optimistic about their potential," said James Otterstein, economic development manager at the Rock County Development Alliance. "Every benchmark Kerry and her staff have referenced, they've not only met, they've exceeded."
WEDC awarded Comply365 with up to $150,000 in Economic Development Tax Credits, contingent on creating 35 jobs over a three-year period that started in July 2012. So far, the company has received $17,144 in tax credits for four jobs that were created in 2012, the agency said. The tax credits for 2013 have not been verified yet.
Comply365 now has 70 employees, Frank said.
Frank said she interviewed 50 investment groups as she sought capital, but settled on Drive shortly after meeting its partners because it was "like looking in the mirror."
"I'm so excited about what our company is able to do and they were equally excited about what their company could do to help," Frank said.
The state has had only a handful of big venture capital rounds like this in 2014, said Lisa Johnson, vice president for entrepreneurship and innovation at the Wisconsin Economic Development Corp.
Olsen, who started Drive with a fellow Silicon Valley venture capitalist, said the fund aims to invest in 10 to 12 Midwestern companies a year. A number of the fund's portfolio companies will likely be here, he added.
"Wisconsin is going to be one of the largest concentrations for us," Olsen said. "It's one of the most innovative states in the Midwest and I'm excited to see what's next."
Along with announcing the venture capital funding, Comply365 also said it has launched ProChat, software to help companies streamline internal communications by allowing instant, secure chats from any web browser or mobile device. The product also integrates with Samsung's wearable technology. Allegiant Air said it is among the first companies to use ProChat, the company said.