Concord Software Designer Inks $5M Venture Deal
When a company designs a new product or prototype, typically computer aided design software (CAD, for short) is used to get an idea into the manufacturing stage.
But CAD software can require weeks of training and experience to master.
Bernie Buelow, vice president of marketing for Spaceclaim Corp. in Concord, says the Concord-based company's software makes it much easier for design engineers to create digital, three-dimensional computer models.
"Basically, we're helping companies get their products developed faster, by working in 3-D, removing the dependency on CAD," Buelow said.
Spaceclaim's assertions seem to be supported by the market. The company recently announced it received an extra $5 million in venture funding from its previous investors, bringing its total VC war chest to $33 million.
Gaining Traction
Founded in 2005 by software engineers, Spaceclaim now employs about 40 people in its Concord office, almost directly across the street from one of its competitors, Dassault Systèmes SolidWorks Corp., which makes CAD software. Spaceclaim has been selling its product since 2007.
Despite the promise, Spaceclaim is not yet profitable, but Buelow said sales have increased in the last year by triple-digit percentages.
Many of the other major players in CAD software are beginning to tap into 3-D direct modeling, which is how Spaceclaim classifies its software product. But Spaceclaim, Buelow said, is an estimated 18 months ahead of the competition.
The most recent round of venture funding, he said, will help the company increase sales directly to companies and distributors around the world.
Lou Volpe, a managing partner with Kodiak Venture Partners in Waltham, sits on the Spaceclaim board of directors and is part of the group of investors pouring money into the 5-year-old IT startup.
"There hasn't been a lot of innovation in this industry in the last 15 years, so ... We're seeing this product start to get a lot of market adoption," Volpe said.
Other investors include Borealis Ventures in New Hampshire, Needham Capital Partners of Boston and North Bridge Venture Partners in Waltham.
Spaceclaim, Buelow said, has just begun to tap into the market. He estimates there are between 3 and 5 million engineers in the world that could benefit from using the Spaceclaim software.
Buelow said he's especially happy to see reinvestment in the company given the current state of venture financing. With investments falling off in the last year and a half, Buelow said he believes many venture groups are reevaluating their investments and some are even cutting back.
"Most of the VC's that have been spending are really looking at their portfolios carefully," Buelow said.
Spaceclaim is part of the trend of companies seeing more venture investment since 2010 began. Venture deals increased 14 percent in the first quarter of 2010 compared to the same period last year, according to Dow Jones Venture Source, which tracks venture funding. Venture firms closed 597 deals totaling $4.7 billion.
The IT sector continued its dominance in the venture market, accounting for nearly a third of all deals during the quarter.
But other sectors are beginning to gain ground on the IT sector.
Renewable energy company investment, for example, was up almost 70 percent in the first quarter of 2010.
WBJ Web Partners
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