Milwaukee-based startup SteamChain Inc. has closed on a $2.7 million seed round of investor funding, according to co-founder Michael Cromheecke.
As of June, the company was aiming to raise $600,000. Cromheecke said investor interest exceeded expectations.
“I’d like to think a lot of folks took an interest in what we’re doing and see the long-term potential of this opportunity,” he said.
SteamChain, founded in 2017, is a Machine-as-a-Service company that provides a platform for usage-based machine financing. It offers a blockchain-based software to machine builders, who can use it to track their manufacturer customers’ usage to monetize the lifecycle of the equipment.
The lead investor in this round, which contributed half of the funding, was Milwaukee-based venture capital firm Capital Midwest Fund.
Other investors in this round included Northwestern Mutual Life Insurance Co.’s Cream City Venture Capital; Milwaukee- and Madison-based startup accelerator gener8tor, which made an equity investment when SteamChain completed its accelerator in fall 2017; and BrightStar Wisconsin Foundation Inc.
As a result of the NM investment, SteamChain has moved from its office in Ward4 south of downtown to NM’s Cream City Labs, an innovation hub for its portfolio companies. Startups Lumanu and Socialeads are also based in the space.
The startup plans to use the funding to hire more employees, particularly those with software development skills, and expand its sales and marketing efforts. SteamChain now has six full-time employees, with plans to add another four to six as soon as possible, Cromheecke said.
The additional capital will help SteamChain accelerate its growth.
“We were doing some things previously and now we’ll be able to do those things in a more professional manner, with a broader scope and reach,” Cromheecke said. “It’s an exceptional list of passionate investors with background in large-scale corporations that have the potential to really help supercharge our efforts and provide guidance to SteamChain.”
“Using SteamChain’s technology creates a disruptive business model which improves the OEMs’ bottom line and rewards them by monetizing their improved technology results when their equipment performs as guaranteed based on actual usage and service results,” said Stephen Einhorn, principal at Capital Midwest Fund. “Simultaneously, it verifies to users of automated equipment that they are receiving the efficiencies and output which has been promised by the OEMs.”
“All the focus that is being placed on developing Wisconsin’s manufacturing leadership makes this a great fit for Cream City Venture Capital,” said Craig Schedler, venture partner at Northwestern Mutual. “Northwestern Mutual has a vested interest in growing the technical capabilities of southeastern Wisconsin and Steamchain’s use of cutting edge software architectures including blockchain makes it a great fit for our portfolio.”
