GRAND RAPIDS — The latest investment that positions enterprise software developer Blue Medora Inc. for further growth reflects the emergence of venture capital in the Midwest over the past decade.
With $8 million from a Series B1 round that closed this month, the Grand Rapids-based tech firm has raised $22.5 million over four years from venture capital investors, all of them based in the Midwest.
To Blue Medora CEO and cofounder Nathan Owen, that shows companies like his can now raise funding from across the capital continuum, from seed and startups stages to Series C without having to go to the coasts.
Accomplishing that feat “really was impossible 10 or even five years ago,” Owen told MiBiz.
“There is capital now not just coming in from the coasts but from firms popping up all over the Midwest, helping companies kind of move all the way through that progression,” he said. “That’s a new thing and really it’s a game-changer for the Midwest in ways that unlock capabilities that just weren’t there before.”
Chicago-based venture capital firm First Analysis led the Series B1 round, which included prior Blue Medora investors Wakestream Ventures LLC in Grand Rapids, St. Louis, Mo.-based Lewis and Clark Ventures and eLab Ventures in Ann Arbor. With the investment, First Analysis received a seat on Blue Medora’s board of directors.
Founded 10 years ago, Blue Medora started out as a software engineering company. The focus shifted four years ago to developing its own brand of enterprise software that monitors systems to ensure that a client’s applications are working properly. Large enterprise customers in data-intensive industries include Safeway, Best Western and the University of Washington.
“I.T. operations teams and monitoring platform vendors are both challenged to find easy, scalable ways to collect operational I.T. data from emerging technologies as quickly as they appear, whether in the cloud or on-premise,” said Howard Smith, managing director of First Analysis. “Blue Medora has a clear vision for the future of this market and is uniquely positioned to reshape how I.T. monitoring integration is delivered and consumed.”
Blue Medora grew revenues in the most recent quarter by 130 percent from a year earlier and has recorded seven straight periods of record sales, which it did not disclose. By revenue, the company today is about 12 times larger than it was four years ago.
Owen aims to grow Blue Medora’s client roster from nearly 300 today to “in the neighborhood” of 750 within a year. The latest VC round will go to support continued expansion of sales, marketing and R&D investments.
“It’s really about continuing to make sure we have the capital we need to continue accelerating down that path of high growth,” Owen said. “For us, it’s really about achieving the next milestone.”
Owen expects the company likely will need to raise additional capital in subsequent rounds to support further rapid growth.
Some 40 percent of Blue Medora’s revenues now come from clients overseas. Owen expects overseas customers to drive 40 percent of the company’s growth.
The company presently has about 100 employees, 70 of whom work at its headquarters on North Evergreen Drive in Grand Rapids. The rest are at satellite offices in Raleigh, N.C., Minneapolis, Minn., and London, England.
Owen expects Blue Medora’s workforce to grow 20 percent to 25 percent over the next year.
While many employers today say they’ve had difficulty finding qualified workers, Blue Medora has been able to recruit the talent it needs to support growth, he said.
Grand Rapids is situated within two and a half hours of thousands of college students, providing “lots of access to talent,” Owen said. Blue Medora also has matured to the point where it’s entering its second phase, and is no longer viewed as startup and a risky move for anyone who goes to work there, he said.
“We are getting to the stature now and the evolution of our company where we are able to recruit them here to West Michigan,” he said. “When someone who is looking to move their family or move from the coasts to the Midwest, if they’re going to make that move they want to do it based on something that has real opportunity and can kind of be something big. We’re getting to that point where a lot of folks are looking at us and see a lot of potential.”