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SignalDemand, a startup that delivers software-as-a-service to help manufacturers set their prices, has raised a hefty $20 million second round of funding.
Chief executive Michael Neal says the money will go toward international expansion and to continue SignalDemand’s “march across verticals.” The company focuses on “disassembly” markets — namely, companies who take raw materials and disassemble them into products like beef and lumber. Until they’re approached by SignalDemand , most of these companies rely on Microsoft Excel, which can hurt your responsiveness when you’re involved in often-volatile commodities markets, Neal says.
“We’re arming manufacturers with the same tools Wall Street has had for some time,” he says.
The San Francisco startup delivers heavy-duty computing that would have been impossible, or at least much less efficient, before the SaaS business model, because its staff is constantly feeding new data into the system, as well as refining the calculations.
SignalDemand’s growth strategy has been focused on adding markets one-at-a-time, rather than opportunistically going after any customer who might be interested, Neal says. Next on his list — chemicals and pulp and paper.
Neal and his co-founder, Stanford Prof. Hau Lee, previously found success by starting DemandTec, which provided services similar to SignalDemand’s, but to retailers, not manufacturers. DemandTec went public last year, offering 6 million shares at $11 pear share. Neal says both companies are part of the vision he and Lee share of optimizing demand “all the way from the consumer to raw materials.”
The new funding was led by Interwest Partners. Bruce Cleveland of Interwest, whose experience includes being one of the original executives at Siebel Systems, is joining SignalDemand’s board. Previous investors Hummer Winblad Venture Partners, General Catalyst Partners and Catamount Ventures also participated.
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