Morning Report: Chicago Firm Raises Millions From St. Louis-Based VC

Morning Report: Forget mega rounds and Silicon Valley Intrigue. Here’s a deal from outside the Bay.

News recently broke that spinning company Peloton has raised a massive $325 million round. That enormous sum of money came from some of the biggest names in venture, like Kleiner Perkins, and super late-stage capital, like Fidelity.

On the other end of the dollar spectrum, Rentalutions just raised $2 million. Rentalutions, based in Chicago, raised the new capital from Cultivation Capital, which is based in St. Louis. The Rentalutions round, therefore, is a midwest company raising from a midwest venture shop, which is fun to see.

This is not Rentalutions first fundraising trip for its “do-it-yourself” property management software. According to Crunchbase, the firm raised two small seed rounds worth a combined $1 million in 2015. The gap between the company’s seed rounds and this venture event is 20 months, just a mote longer than the traditional 18-month fundraising cadence.

So Rentalutions is right on time. But it did the last cycle with just a flat million. It will be interesting to see what it can do with two more. This little funding event is a good reminder that spinning companies raising nine-figure rounds probably isn’t normal. But software companies raising a few million to keep growing is.

And as a bet Rentalutions may have decent odds. Appfolio, a firm that Crunchbase has described as “web-based property management software for residential property managers,” went public in 2015. According to Google Finance, Appfolio is worth just a glance under $1 billion.

Perhaps Cultivation Capital hopes that there is more than one unicorn in this particular niche.

From the Crunchbase Daily:

Peloton spins its way to $325M

• There’s only one way to spin this deal. Peloton, the provider of bikes and content that fueled the spinning craze, closed a massive $325 million series E financing round led by Wellington Management, Fidelity Investments, Kleiner Perkins, and True Ventures. The round topped a big year for five-year-old Peloton, which nearly tripled its annual revenue, grew its subscriber base over three-fold, and was named by Crain’s as New York’s fastest growing company.

Appian prices IPO

• Eighteen years after launching, Appian is finally going public. The Reston, Va.-based company, which develops tools for building enterprise apps with less coding, priced shares at $12 each, the middle of the expected range. Appian had just over $130 million in sales last year and posted a loss of about $12 million.

Demandbase supplied with $65M

• Demandbase, a software platform for marketers, has raised $65 million in a late stage funding round led by Sageview Capital and Silver Lake Waterman. The new financing brings total funding for the ten-year-old, San Francisco-based company to more than $150 million.

Bloomberg bets on future of work

• Corporate VC Bloomberg Beta has spent the past year managing a fund that invests in the future of work. So far, Crunchbase News finds, that has translated into investments in areas including cybersecurity, online education, and a bit of AI.