StrikeIron's data as service sees record 2007 growth
RESEARCH TRIANGLE PARK, NC – November 14, 2007 – StrikeIron struck a vein of gold with its data-as-a-service products, racking up 575 new customers to double its base and post 350 percent revenue growth in the second and third quarters of 2007.
StrikeIron, founded in 2003, evolved from an idea serial entrepreneur, founder, CEO and President Bob Brauer had while with his previous company, Dataflux. On his blog, Brauer explains that the Dataflux method of data cleansing (getting rid of duplicates such as Bob Smith and Robert Smith when they were the same person) also involved reference-based address cleansing.
That proved to be "an arduous and potentially error-prone process that had to be performed every month, required resources and contributed to IT complexity," he wrote.
Then, about five years ago, when XML-based Web services began emerging, it occurred to Brauer that the technology and the Internet could solve the resource-consuming address verification process.
"It was clear," he says, "that the data updates could be performed at a master data center and then accessed as a function call over the Web whenever "address verification" was required. No more data updates and all of the associated ongoing complexity."
Founders see opportunity
Dataflux sold to SAS in June 2000 and is still growing nicely. But the founders of Strikeiron thought that if a more effective way could be found for address verification, there was a long list of external data sources and external functionality that could use the same approach.
This could reduce all of the resources and cost required to maintain this data in-house, not to mention the accuracy degradation of internally maintained external data.
StrikeIron raised seed capital from RTP-based The Aurora Funds, which it rolled into a $2.6 million A round. It added investor NC Idea in a $2 million B round, then last March raised $5 million in a round led by Boston-based Accent.
The 30-employee company now has 1,000 customers. They include Texas Instruments, Fredericks of Hollywood, Nike, Sprint, Time Warner, BEA, and Honda Europe, not to mention a number of Southeastern start-up companies who have mentioned using their services in TechJournal South profiles.
"We have over 100 data sources available," Brauer tells TJS. "We've aggregated these data providers, making it easy to access them over the Web."
Recurring revenue model
Clients subscribe monthly or yearly for a block of usage. "It's kind of like what ITunes has done in music or Amazon in retail," Brauer says, "make it easy and consistent."
The CEO says StrikeIron's e-commerce services are among its most popular. They include address correction for companies that ship products, business data from Dun & Bradstreet and the Gale Group, currency rates, correct state sales tax rates (which can change monthly), and more.
"Ultimately, it reduces complexity for e-commerce sites," he says.
Companies integrate the StrikeIron services under their own brands and Brauer says, "The user never has to know the service is from StrikeIron. All they're hooking in is a datapipe."
The company has been adding a few new services monthly. "The longterm vision is that a company will be able to consume any external data or application a device might need from us in realtime," Brauer says.
Developer community started
Recently, the company created an online developer community that encourages developers to integrate the services into java, Adobe, or whatever they're using by paying them royalties on applications they build that drive usage. "Every time an ap gets used, they get paid anywhere from 5 to 30 percent. We already have several partners building aps and getting paid."
Brauer says that the company is looking for ways to "accelerate the business and grow." It may take additional venture capital in the future, he says. "It depends upon how aggressive we want to be. One of the things exciting about this space is that we feel we're the leader.
"No one else is doing what we're doing and there's a window of opportunity here."
Brauer says the recent stock market volatility doesn't worry him.
"It's hard to tell if the market is driven by fundamentals or emotion. You keep working on your business on a daily basis and things will take care of themselves," he says.
On the Web: www.strikeiron.com