Catalyte Supercharges Growth with Acquisition and Funding Round; Accelerates U.S. Onshoring Opportunities
Revolution's Rise of the Rest Seed Fund, Palm Drive Capital, Cross Culture Ventures, Expon Capital and others invest $27M to expand AI tech offering that promotes onshoring and increases tech care...
February 14, 2018 --
BALTIMORE, Feb. 14, 2018 /PRNewswire/ -- Catalyte is now one of the largest American software engineering services companies with the acquisition of software development and consulting service company Surge and a $27M Series A funding round. These events position Catalyte at the forefront of an onshoring wave that is fundamentally changing the traditional IT services outsourcing model.
Catalyte is building a disruptive domestic software services model to promote onshoring and address the U.S. tech talent shortage. According to the U.S. Department of Labor, there will be 1.4 million computer specialist job openings by 2020. Projections show universities are not likely to produce enough qualified graduates to fill even 30 percent of these jobs. Catalyte is creating a new domestic base of knowledge workers and is bringing them into the digital economy.
Catalyte recognizes that aptitude is equally distributed, but opportunity is not. To remedy this, it applies proprietary artificial intelligence and predictive analytics to identify talented individuals who are often overlooked for technology jobs due to outdated hiring practices that rely too heavily on resumes and college degrees. These individuals come from all backgrounds and have the innate potential and cognitive ability to be great software developers. Catalyte gives them career opportunities in an in-demand and growing field while also producing high-quality software for Fortune 500 clients.
"One of the fundamental ways our economy is going to both remain competitive on the international level and expand opportunities to more Americans is by changing the way we identify talent," said Steve Case, Chairman and CEO of Revolution and co-founder of AOL. "Catalyte proved to us that not only can it bring new and underrepresented groups into the fold, it can do so while helping its own clients grow."
"Catalyte provides a real solution to tech's diversity problem," said Troy Carter, co-founder and managing partner of Cross Culture Ventures. "It has the chance to change America from within; to build a multicultural workforce not just for the sake of diversity, but to deliver better business outcomes. We fully support the company's audacious vision, bold execution and long-term commitment to becoming the largest software development company in America."
"Catalyte is able to solve four of the biggest technology challenges facing companies today," said CEO Jacob Hsu. "We shrink the talent gap by finding great developers from non-traditional backgrounds. Since our employees are selected based on their innate abilities, we remove subjective bias from the hiring process and increase the diversity of our workforce. Because we know they will produce at higher levels, we help our clients create better software and digital products. And we're able to do this locally, with a 100 percent American-based workforce. We plan to use the funding to magnify the impact and grow the company to reach even more talented individuals."
Catalyte's growth comes at a time when enterprises are looking to outsource more software development work to onshore providers, but are having difficulty finding the right talent to do so.
According to Gartner's March 2017 report "Potential H-1B Visa Changes and NAFTA Withdrawal Could Impact Your Offshore Outsourcing Deal,"1
"The U.S. Bureau of Labor Statistics projects that employment of software developers is projected to grow 17% from 2014 through 2024, much faster than the average for all occupations. The main reason for the rapid growth is a large increase in demand for computer software. An apparent lack of U.S. IT talent is impeding the success of IT service providers that are currently expanding or wishing to expand onshore talent, or newly entering the domestic, onshore market. As a result of the talent shortage, IT service providers that are not using creative methods to attract and retain IT resources will be viewed as less competitive, and their market growth will be inhibited."
As part of its growth plans, Catalyte plans to significantly expand its geographical footprint by opening development centers in new cities in 2018 and expand access to in-demand software engineering careers to more Americans.
Additional details on the acquisition and funding and how Catalyte is expanding access to software development careers can be found here.
1 Gartner, "Potential H-1B Visa Changes and NAFTA Withdrawal Could Impact Your Offshore Outsourcing Deal," Helen Huntley, 7 March 2017.
Catalyte advances human potential for the digital economy. We use AI to identify any individual with the innate potential and cognitive ability to be a great software developer. Catalyte's predictive analytics platform hires, upskills and deploys high-performing teams to deliver product engineering and enterprise applications for Fortune 500 companies. Our hiring model and intensive onboarding process rapidly create teams that have exponentially higher levels of production and quality than anyone else. Catalyte has created a diverse and US-based technology workforce to help companies scale software innovation. For more information, visit www.catalyte.io.
Surge is an onshore provider of custom web, cloud, mobile, digital, and desktop software development and consulting services to clients in every industry, from hot startups to Fortune 500 companies. Founded in 2007 and listed on the Inc. 5000 list of America's fastest growing companies for six straight years, Surge has successfully delivered hundreds of software products, apps, and solutions to its clients using a proven agile/scrum development process combined with an elite group of North American software professionals. Simply put, Surge offers America's best software engineers, on demand, at rates 30-50% less than the competition. For more information, visit www.surgeforward.com.
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