Mason startup ConnXus lands $5M venture capital investment

Mason-based startup ConnXus has secured $5 million from venture capitalists to help accelerate its growth.

Techstars Ventures, Serious Change LP and Impact America Fund are the investors that led the Series "A" funding round for ConnXus, which announced it obtained the money Wednesday. The three venture capital groups were already investors in ConnXus.

The new funding doubled the investments made in ConnXus since the company launched in 2010. CincyTech was among early investors in the firm.

ConnXus uses a technology platform to connect minority and women-owned suppliers with large corporations. The company's cloud-based, supplier diversity and sustainability dashboards open the door for procurement, supplier diversity, and supply chain professionals to access a range of analytics. The company's goal: Disrupt the $10 billion-a-year supply chain and procurement software market.

ConnXus CEO Rod Robinson founded the company as a result of his personal experience and frustration with the complexities associated with supply chain management. He found it difficult to identify qualified diverse suppliers, track spending, maintain diversity certifications, and report reliable results in accordance with corporate and government mandates.

"I thought it was expensive and inefficient to pay for access to separate databases to search for minority-, women- , veteran- and other classifications of diverse-owned businesses," Robinson said. The company's database has more than 1.7 million suppliers that fill a range of diversity classifications.

Bid opportunities disseminated through the ConnXus platform have led to millions of dollars spent with diverse suppliers, he said.

Daryl Hammett, an early investor in ConnXus and the firm's chief operations officer, said the investment will help expand sales and marketing efforts, bolster the company's software engineering team, pursue global strategic partnerships, and add to its management team. Prior to working at ConnXus, Hammett had been the highest-ranking black executive at global retail giant Luxottica, serving as a senior vice president and general manager.

David Cohen, the Boulder, Colorado-based co-founder and managing partner of Techstars, said the ConnXus investment aligns with its goal to serve high-performing, emerging technology companies. Techstars Ventures has $265 million under management and the investment in ConnXus is from the group's third fund, which is focused on seed and Series "A" investments.

This investment by Techstars also comes on the heels of its commitment to the White House to increase diversity in tech entrepreneurship. It launched the nonprofit Techstars Foundation to provide opportunities for underrepresented entrepreneurs to enter the tech startup arena through grants, scholarships, and sponsorships. Robinson is a member of the foundation's advisory board.

Robinson said while minority- and woman-owned businesses represent more than half of all U.S. businesses, they only account for 6 percent of the $30 trillion in total annual revenue generated. And with small businesses powering job growth in the country, he said it's important to foster an economic environment that supports the growth of these firms.