Bentonville-based technology firm Movista announced Wednesday (Sept. 26) it has secured $12 million in venture capital financing. The round was led by New York-based growth equity fund Level Equity, a software-focused growth specialist with $1.65 billion in assets under management.
The investment is one of the largest ever in an Arkansas-based software company, according to Movista, which uses smart device applications for managing mobile workforces.
Company co-founder and chief executive officer Stan Zylowski, who launched the business in 2010 with April Seggebruch, said having capital to invest internally will be transformational for Movista.
“It allows us to make technical leaps, create markets and innovate faster than ever,” Zylowski said. “For eight years we were playing checkers. Now we move to chess. It is a new day, for sure.”
Seggebruch, the company’s chief operating officer, said having fresh capital changes dynamics inside the firm.
“For the first time since our inception as a bootstrapped business, we now have the freedom to push every technical limit and innovate dramatically,” she said. “We have plans in place and within 12 months will be installing solutions that were unimaginable even a few years ago.”
Zylowski said the money will be used to “double down” on the firm’s innovation efforts, create a sales and marketing division to raise brand awareness and add to the company’s leadership team.
Movista currently has about 60 employees across five offices. Its headquarters is inside a building Zylowski and Seggebruch own near downtown Bentonville, the former Ice House restaurant on Southeast Fifth Street.
“We aren’t sharing exactly which roles we plan to staff but there are a few key executive roles to be filled,” Zylowski said. “Beyond the C-suite level, we will continue to recruit and hire the best technologists we can find. And because we have practically no sales engine, there will be open roles there as well.”
As part of the funding, Ben Levin, founder and co-CEO of Level Equity, has joined Movista’s board of directors.
“Their history in the retail market, exceptional and capital efficient growth and passionate commitment to client success sets them apart,” Levin said. “We share their vision for continuing to build a world class workforce and labor management software business for retailers, manufacturers, and service providers.”
Zylowski said about 40 equity firms from around the country reached out to Movista over the past two years, and about a dozen were interviewed.
“We knew we had found the right partner in Level Equity from day one,” he said.
Zylowski said he hopes the investment in Movista will open the eyes of other funds to other successful startups in Arkansas and the region. The next important step, he added, is for Movista to be successful with the capital.
“We, as an entrepreneurial community, continue to scratch and claw our way to relevance,” he said. “This investment is one more milestone along the road.”
Aside from many individual investors, angel funds The Fund for Arkansas Future from Little Rock as well as Kansas City, Mo.-based Mid-America Angels were early investors and supporters in Movista, Zylowski said, and will retain holdings in the company following the Level Equity round.
The state of Arkansas, through the Arkansas Economic Development Commission, was also actively involved in the company’s growth and will remain part of Movista’s shareholder group.
Zylowski and Seggebruch were classmates at the University of Arkansas. Their company was the result of a business plan put into action during a graduate entrepreneurship class at the UA taught by Dr. Carol Reeves. Their idea was rooted in improving the merchandising process.
“I was working for a vendor at the time and April had come out of the manufacturing side when Dr. Reeves asked us to write a business plan about something that drove us crazy,” Zylowski recalled. “I had the idea of how we might better be able to control and understand what is going on with field operations [merchandisers]. The vendor I was working for has an internal field opt team and we also had a partnership with a third-party labor supplier for merchandising.”
With the tools available in 2007 it was difficult, if not impossible, to manage and control the merchandising field teams who worked in various retail locations. Zylowski said there was a lot of post-mortem reporting, where the field agents working merely on “scout’s honor” had several days to get the reports in to the supplier.
“By the time the data came in there was really no opportunity to use it in a meaningful way,” he said. “Suppliers could only understand what happened, but in no way control what happened or correct a problem earlier. That was the problem we sought to solve with Movista.”
Today, Movista’s cloud-based labor and workforce management software is used by more than 40 clients including retailers, manufacturers and service providers. Zylowski expects more than 200,000 retail workers to be working on a daily basis, using Movista’s technology, by 2020.
“Our goal is to have one million daily users within five years,” Zylowski said. “We will leverage the capital from this investment to expand and augment our product set, build a best-in-class business development team and share our story nationally.”
Demand for smart device software in the workplace has more than doubled for three consecutive years, Zylowski said, with Movista’s recurring revenues up more than 300% since 2015.
Editor’s Note: Kim Souza contributed to this report.