SECOND IN A SERIES
Charlottesville-based technology startup VividCortex recently announced $4.5 million in funding. New Enterprise Associates, one of the world’s largest venture capital firms, led the funding round. The firm previously invested in another Charlottesville tech startup, PsiKick.
VividCortex’s database performance monitoring product attracted the attention of NEA partner Harry Weller in 2012.
“It was premature to invest at that time,” said VividCortex founder and CEO Baron Schwartz. “Things started to come together last year when the company’s growth, frankly, was just impossible to ignore.”
After VividCortex’s product went to market in late 2014, the company experienced 750 percent revenue growth in 2015. Before that, Schwartz had spent almost three years developing efficient solutions to what he called “unsolvable problems.”
Early financial support for VividCortex came from local hedge fund manager Jaffray Woodriff. Woodriff’s own technical expertise gave him an appreciation for the company’s potential — and Schwartz’s ingenuity.
“It’s very difficult to separate the strengths of the startup from its founder,” said William Foshay, president of Woodriff’s family office. “Baron is a uniquely talented founder and CEO.”
Schwartz emphasized the crucial role local investors like Woodriff have played in his company’s success. Attracting investment can be difficult for capital-intensive startups such as VividCortex that are not based in industry hubs such as Boston or California’s Silicon Valley.
For Schwartz, those locations have major shortcomings. Cost of living is high, and attracting talent often requires ruthlessly recruiting people away from competitors.
“Staying in Charlottesville is a strategic decision to find a foothold,” Schwartz said. “Where other people are competing against each other for talent in Silicon Valley, we can build and grow and nurture a talent pipeline here instead. We have to get the roadblocks out of people’s ways to give them a reason to stay here.”
That partly means fostering relationships with local talent sources, such as the University of Virginia. It also requires there be multiple growing, interesting tech companies to provide people with a range of employment options.
Schwartz views VividCortex as one part of an inter-dependent Charlottesville tech startup community. Individual companies might not actively work with one another, but the bigger and more successful they become, the more attractive the area looks to entrepreneurs, innovators, investors and employees.
“If you’re importing talented people from outside the area, they say, ‘What’s my alternative if this doesn’t work out?” Schwartz said. “They need to look around and see sort of a critical mass, so it’s not a Hail Mary move for them.”
Arjun Aggarwal, an NEA associate and board member for VividCortex, agreed that the presence of successful companies like VividCortex and PsiKick is crucial to Charlottesville’s growth as a tech industry hub.
“There’s a great community out in Charlottesville,” Aggarwal said. “High-profile companies like [VividCortex] which are growing really quickly and are going to be game-changers in their respective markets go a long way toward increasing the attraction of Charlottesville as a kind of center of the Mid-Atlantic area.”
Aggarwal described VividCortex’s product as one-of-a-kind.
Database administrators, typically, must monitor the performance of their servers while managing ever-expanding data sets across different types of databases. Other products have not been able to simultaneously monitor multiple data clusters in different kinds of databases.
“We live in a world in which there is so much data and not enough people to help process all that data,” Aggarwal said. “VividCortex is really the only company out there that’s helping people understand, measure and improve the workload of an applications database overall.”
Looking forward, Schwartz plans to further develop his company’s product, escalate marketing efforts and continue growing the size of his team.
Schwartz sees no immediate obstacles to continued growth.
“The investment doesn’t cause things to happen, so much as it’s an acknowledgement that it is the right time for us to move to the next stage in growing and scaling the business,” he said. “I don’t see any roadblocks for us at the moment.”
Longer-term expansion in the Charlottesville area does pose some potential challenges in terms of resources such as office space, transportation and availability of local talent. Schwartz said he already has begun to consider these things, though he has no current plans to move VividCortex into a larger office.
Schwartz likes to reframe some of those challenges, such as distance from larger industry hubs, as advantages.
“People always talk about building a defensive moat around your company,” he said. “So you just have to look at where you are and say, ‘some of these things can be viewed as strengths.’ How are you going to attract talented people here or find space to grow in physical infrastructure — you could look at those as strategic decisions.”
Based on the enthusiastic support of NEA, Schwartz has good reason to be optimistic about meeting both immediate and long-term goals.
“[VividCortex] has a great list of impressive customers, and they’re blowing through their milestones and doing so on relatively little operating costs,” Aggarwal said. “We are excited about what Baron has done with the company so far, and are looking forward to continuing to work with him and see where VividCortex can go.”
ABOUT THE SERIES
As appearing this week in The Daily Progress
Sunday: Local entrepreneurial scene craving shared space, coordinated marketing
Monday: Charlottesville-based technology startup VividCortex builds on success with $4.5 million in funding
Tuesday: Contraline, a developer of male contraception founded by a UVa graduate, is getting the attention of investors
Want to see more stories
How did this series happen?
This series is the first product of our new initiative to get our readers directly involved in our reporting.
We call it #CvilleCurious.
First we asked you what innovation story you wanted us to investigate.
Then you voted on your top choice.
The question submitted by Gary Henry of the Charlottesville Technology Incubator received the most votes!
He asked if we could: Survey Charlottesville/Albemarle startups for what are their most difficult unmet needs; e.g. funding, facilities, recruits, etc.
Our reporter Aaron Richardson interviewed Gary and that started him down the path of telling this story.
Then two other innovation stories fell in our laps and we made it a three-part series!