Founder and CEO Mario Ciabarra said the company plans to use the money to expand its product development, customer support and sales and marketing staffs by 100 people by year's end, including further expansion into Europe, the Middle East and Africa. Quantum Metrtic's software helps companies find their best online revenue opportunities and just a week ago announced a major deal with Englewood-based satellite television provider Dish.
Quantum Metric raised $25 million from Insight Venture Partners in 2018 and was receiving unsolicited investment offers in February that valued the company at about $1 billion, or eight times its value two years earlier, Ciabarra said. The deals would have fulfilled Ciabarra's goal of building a technology unicorn, a startup that has grown to be worth $1 billion, but but Quantum Metric wasn't trying to raise any money at that time.
"I'm excited about building a company worth many billions of dollars, which is something we don't have a lot of in Colorado," Ciabarra said. "We've had a couple of successes (of that size) but I am excited for Quantum (Metric) to join them. While the world has gone global, we have harnessed the power of (software) development in Colorado Springs and it will remain our headquarters as long as I am here."
Everything changed when the COVID-19 pandemic swept across the nation, shuttering many businesses and curbing the offers. The offers resumed in June, but valuing Quantum Metric at significantly less despite adding new customers that generated 50% in revenue growth from February to June. That prompted Ciabarra to seek a loan instead of an investment as a "stepping stone" to the company's next round of financing, which he said would be more than $100 million, and a prelude to a possible public offering late next year or early 2022.
The loan "allows us to execute on our strategic opportunities and spread the message of CPD (continuous product design) while retaining our value and growing the company amid this uncertain landscape," Ciabarra said Wednesday in a news release. "Having access to additional capital gives us the financial flexibility to continue to help our customers navigate today's greatest digital challenges, while also being a great partner to them during this time of economic uncertainty."
Insight got a minority stake and a board seat with its 2018 investment. Quantum Metric previously raised $1 million each from Ciabarra and from Bain Capital Ventures. Ciabarra, a veteran of three other local startups, founded Quantum Metric in 2011, but the company didn't really start developing its product until 2015. Quantum Metric began selling its software in 2016 and has grown so quickly it was ranked 124th in this year's Inc. 5000 with three-year growth of nearly 3,000%.
Quantum Metric moved its headquarters in June from Monument to the Interquest business park to accommodate its growing staff, but the building only has room for 80 of the company's 175 employees. The remaining employees will eventually work remotely or in offices in Denver, Los Angeles, Bethesda, Md., and London. Nearly all of Quantum Metric's employees now work remotely because of the COVID-19 pandemic, Ciabarra said.
Quantum Metric's 120 major customers include 3M, Alaska Airlines, Bass Pro Shops, FanDuel, Lenovo, Lululemon and Western Union. In one example, clothing manufacturer Carhartt uses Quantum Metric's software to identify and fix issues with its customer website, including a form for Post Office boxes that could not be clicked, frustrating customers. Another customer, Canadian Tire, used Quantum Metric's software to find that up to 20% of its customers were trying to use expired coupons, prompting the company to allow expired coupons so it could complete more online sales.