The best part about raising $10 million in Class B funding for AppDetex isn’t being able to update the technology or add more employees, but having everyone in the same office.
“Currently, we are kind of separated into several different locations downtown,” said CEO Faisal Shah. “We love downtown and want to stay downtown.”
Altogether, the new office will boost the current square footage by about 30 to 40 percent, he said.
Right now, the new space — at 508 8th St., next door to the Trailhead coworking space, which Shah helped found — is being renovated from its former identity as the Boise Farmers Market Winter Market.
The money will also help Shah increase his number of employees from the current 70, though he wasn’t sure how many he would be adding.
Most important, it will help him update AppDetex’ technology, Shah said.
The software helps protect brand identity. Companies sell their goods through various channels such as marketplaces, social media and mobile apps.
“We protect the brands,” Shah said. “We find brands trying to copy the image or logo of a particular brand, and we help the brand enforce that intellectual property.”
AppDetex will be enhancing its technology with artificial intelligence and machine learning, Shah said.
“We’re using a lot of modern-day technology features to enhance what we have already developed, to ensure we are constantly looking forward,” he said.
A serial entrepreneur, Shah founded AppDetex in 2012. Before that, he founded and ran another brand protection company, MarkMonitor, which Thomson Reuters bought in 2012. He also founded First to File, a patent management system, which was acquired in 2013 by CPA Global.
AppDetex started with $2 million in seed funding from local and regional investors. Next came $5.5 million in 2017 from investors including EPIC Ventures, of Salt Lake City, and Origin Ventures. This Class B round is led by First Analysis, as well as further investment from EPIC and Origin.
“They’re a well-known venture capital firm out of Chicago,” Shah explained. “They have investments in the security space. They’ve been watching this particular space, digital risk protection, for some period of time, and feel there’s a synergy between security and digital risk protection.”
So far as he knows, it’s the company’s first investment in Idaho.
AppDetex has a lot of company in that market sector, though not in Idaho. According to New Tech: Digital Risk Protection, Q2 2018, from Forrester, the number of vendors in the market has more than doubled since 2013, from 10 to 21, and the venture capital investment in those companies is almost half a billion dollars.
Shah’s not too busy to continue hanging around Trailhead and other events, including Hackfort, and he credits the Boise startup community for boosting his success.
“This is a real credit to the talent pool we have here in Idaho, specifically in Boise, to be able to grow a company over the last few years to this point,” he said. “It’s also helping with the startup culture in Boise. The talent pool, being this close to schools like Northwest Nazarene University, Boise State University and the University of Idaho, having those schools so close, has also been really important for us and our growth.”
The investment also means First Analysis will be joining EPIC and Origin on AppDetex’s board of directors, Shah said.
While investors typically want to know how they’re going to get their investment back, Shah said he isn’t thinking about an exit strategy just yet.
“At this point, we’re looking to grow our business here in Boise,” he said. “We’re not really looking to exit at this point. We just got our funding. We’re trying to grow, add our employees and take advantage of everything Boise has to offer and the startup industry here. [An exit strategy] is something we’ll do down the road.”