Toronto-based Cinchy helps clients like National Bank, TD, and Colliers International reduce their dependence on costly, time-consuming integrations and establish fully autonomous data networks.
Amid a rise in demand for data fabric and data mesh solutions, Cinchy has experienced more than 500 percent growth over the past three years, amassing a roster of traditionally hard to acquire “big, hairy logos” as customers.
“The tighter it is, the more pressure there is to cut costs, which can be good for our business.”
As the macroeconomic environment worsens and other firms—including many fellow tech companies—look to cut costs, Cinchy sees an opportunity to build on this growth during the market downturn. Armed with $19.7 million CAD ($14.5 million USD) in Series B financing, Cinchy plans to do just that and help organizations access their data more efficiently.
“With the market conditions deteriorating, there’s going to be a growing demand for technology to save time and money, and so it’s a good time to accelerate,” Cinchy co-founder and CEO Dan DeMers told BetaKit in an interview. “I’ve been through many economic cycles, but the tighter it is, the more pressure there is to cut costs, which can be good for our business.”
Founded in 2017, Cinchy is a dataware vendor with a customer base that includes financial services firms, major retailers, healthcare organizations, telecom companies, and logistics firms. The startup’s platform enables clients of all sizes to securely access all of their data in one location at a lower cost.
Cinchy’s all-equity Series B round, which closed about a month ago, was led by California-based, cybersecurity-focused Forgepoint Capital. The financing saw participation from a slew of existing Cinchy investors, including Information Venture Partners, ScaleUp Ventures, and Techstars.
The round also included an additional $2 million CAD in secondary capital, separate from that $19.7 million total, that went towards Cinchy founders and early employees. The fresh financing brings Cinchy’s total funding to around $32.5 million CAD.
DeMers declined to share Cinchy’s valuation but claimed the company’s Series B funding came at a higher valuation than the startup’s $10 million, May 2020 Series A round (the valuation of which was also not disclosed).
As tech valuations have dropped amid the downturn, the CEO called this “a strong vote of confidence in both our traction to date as well as the future potential” of Cinchy’s business.
In an interview with BetaKit, Forgepoint managing director Leo Casusol cited Cinchy’s product-market fit, large total addressable market, and lack of significant competition as three of the factors that drove the Forgepoint’s decision to invest in the startup. Casusol, who is joining Cinchy’s board as part of the round, also pointed to strength of Cinchy’s team as part of what drew Forgepoint to the company.
According to DeMers, given the proliferation of siloed software solutions in corporate tech stacks, about half of the information technology budget of every company on the planet is currently invested in integration. Without a solution like Cinchy, DeMers argues that this so-called “integration tax” will continue to increase. Cinchy aims to reverse this “ever-growing cost” and do away with the need for these integrations altogether.
Amid current market conditions, Casusol believes that “market compression, pricing pressure, and other factors are going to make a solution like Cinchy very attractive” to prospective customers.
DeMers believes Cinchy is “very well-positioned” to navigate this coming period, arguing that the the startup’s offering and the simplification it brings is “versatile regardless of market conditions.”
Feature image courtesy Cinchy.