Propel PLM: A Classic Series A Success Story
Domain Experts are the Right Leaders to bring Software into the Cloud
Ray Hein, CEO & Co-Founder of Propel, is redefining Product Lifecycle Management, the world’s 4th largest software category, and doing it all in the cloud. Product Lifecycle Management (PLM) is a 30 year old market, and has primarily been focused on helping mechanical engineers, operations and manufacturing teams collaborate on the latest product designs. With Propel, Ray is broadening the traditional definition of PLM to encompass the entire process of taking a product from “Concept-to-customers”. Propel is expanding the 4th largest software category by making it possible to manage product information across e-commerce, product quality and field service. Propel’s software now helps companies around the world with PLM, Product Information Management (PIM), and Quality Management.
Prior to starting Propel, Ray was an early executive and VP of Product Strategy at Agile Software from the IPO in 1999 to the acquisition by Oracle in 2007. Agile Software was the leader in traditional on-premise PLM software for the high technology, medical device and industrial equipment industries. Ray also served as VP of Products at Apttus, the first and largest “Quote-to-Cash” software provider built on the Salesforce platform. From these experiences, Ray envisioned and framed the future for a new type of cloud PLM. Ray’s vision leverages cloud technology and enables PLM to be more customer-centric, sharing product information including sales, marketing, and services for the first time.
Large on-premise software categories that have moved to the cloud have a history of being led by visionaries like Ray. Parker Harris built best-in-class salesforce automation software at Metropolis (acquired by Clarify) before founding Salesforce.com. Another great example is Dave Duffield, the founder of both PeopleSoft and Workday. PeopleSoft, which was the leading enterprise human resource management (HRM) software when it was acquired by Oracle, gave rise to today’s leading cloud HRM company Workday. With his deep domain expertise, product leadership, and experience with modern cloud technologies, Ray is the right leader to bring PLM to a new frontier.
The Classic Series A Financing
Throughout his experience working at cloud companies like Apttus and Agile Software, Ray’s conversations with enterprise customers convinced him that PLM software could be improved from its legacy systems with modern, collaborative, cloud technology. Considering the challenge carefully, he set out to analyze the opportunity including the product definition, timing, the market dynamics, and the strategies necessary to disrupt the $17B global market. He believed he could leverage his domain expertise and take advantage of cloud technologies to improve on the old solutions and create new capabilities for customers.
Ray reached out to Matt Holleran at Cloud Apps Capital Partners to get his thoughts on the opportunity. Cloud Apps Capital Partners, with their investing and operating experience in early stage cloud business application companies, was able to help Ray validate the opportunity and led the Classic Series A financing before Propel had a single customer or a single line of code. Cloud Apps Capital Partners introduced co-investors SignalFire, Salesforce Ventures, and value-added angels with operating and investment experience from the Cloud Apps Network. The strength of a syndicate like the one backing Propel has proven to be important resource and strategic advantage for early stage entrepreneurs.
Great Product and Customer Success
The Propel team built an exceptional PLM application suite with a focus on customer success. Their domain expertise and cloud application development knowledge has enabled them to build an enterprise application in ⅙ of the time as compared to their legacy competitors. Once they built out core PLM capabilities, the Propel team then went on to build out Ray’s original vision, extending their core capabilities into adjacent business processes like PIM, E-Commerce and Quality Management. They focused on Customer Success for their first several customers and have not stopped. A great application combined with the company’s top value of 100% customer reference-ability has put them in the position to scale their business.
Early Executives, Go-To-Market Strategy and Partnerships
Having an investor syndicate with a great network of experienced executives who can join the company or act as advisors at every stage of your company’s growth is a strategic advantage. Cloud Apps Capital Partners and the syndicate partners think carefully about the challenges facing early startups, and consider the target customer, the role, the team, the culture and the stage when introducing executives, advisors, investors and board members to complement the core team. Ray and Propel have attracted first-class engineering, sales, marketing, and service executives at the right time in their company’s development.
The Cloud Apps Capital team has helped Propel frame their go-to-market strategy based on their knowledge of market trends, cloud technologies, industry verticals, and strategic partnerships. Matt Holleran of Cloud Apps Capital has also helped leverage his experience with Salesforce to provide an unfair advantage in certain markets. His team started the Salesforce AppExchange and Platform ISV ecosystem, and he helped Propel to frame and execute multi-year strategy to become one of Salesforce’s top strategic partners.
Moving MountainsPropel Takes PLM into the Cloud
Ray and his team have built an exceptional cloud application to solve mission-critical problems, making all of their customers successful, and are now focused on scaling their sales, marketing, and service organization. Cloud Apps Capital Partners understands how to lead entrepreneurs along the journey from $0 revenue to $10M in ARR and beyond. Over the years, it’s been an honor for Cloud Apps Capital Partners to help guide Ray and the Propel team.
Cloud Apps Capital Partners considers Propel well equipped for their journey to improve the life of everyone involved in product development, manufacturing and sales, who are toiling with antiquated tools. By expanding the definition of PLM in the cloud, Ray and his team are changing the workplace life, effectiveness, and happiness of an entire industry of people working on real products and problems. We know there can be better business PLM and PIM applications, and we support Propel’s vision to propel the pace of innovation and propel their customers’ top line growth.