While chief executive at Edina-based technology consulting firm Nerdery, Tom O'Neill repeatedly struggled with finding and using the appropriate information that would help him forecast consulting work for his employees.
Edina tech firm — which helps other firms predict business — closes on funding round
Parallax was formed by former leaders at the Nerdery and now has 30 employees.
July 2, 2021 at 1:37PM
"Do we need to hire people?" he recalled thinking. "Do we need to ramp up sales to keep business going?"
At Nerdery, which O'Neill helped grow to hundreds of employees over nearly 14 years, he flirted with the idea of building a platform that would predict workload in the sales pipeline to make sure a company had enough work to keep people busy.
O'Neill left Nerdery in 2017. Two years later, he officially launched Parallax, a software company that would develop the platform, with Dave Annis.
The company closed on a Series A round of funding this week, which brings the company's value to $33 million, O'Neil said. The funding round was led by Maryland's Grotech Ventures and included follow-on capital from Rally Ventures, which has offices in Minneapolis and Silicon Valley.
In the tech consulting industry, money is made by billing out time. Typically, most firms strategize their hours using spreadsheets or a mix of forecasting and revenue recognition tools, O'Neil said.
"Everyone is generally happy with this except for those in finance and leadership," O'Neill said. "These people want tighter control. They want to have very consistent data coming through."
Through the platform, Parallax integrates with a user's existing system. The subscription-based software acts as a resource planning and predictive analytics tool to fill gaps in product management and pricing functions.
Parallax, which is in Edina, has about 30 employees right now and close to 50 users of its platform in North America and Europe. Parallax primarily serves software consulting and digital agencies like Nerdery, with between 30 and 300 employees, O'Neill said. The next target group will be larger companies with 300 to 1,500 workers.
Parallax is ahead of a plan to triple its 2020 sales revenue, which was just over $1 million, the majority of that annual recurring revenue, he said.
The newest funding will be applied mostly to hiring software engineers and data scientists to faster implement key integrations to keep up with demand in the market, O'Neill said. The company will also hire for roles in sales and customer success, he said.
The total addressable market for professional services will grow to $25 billion by 2025, O'Neil said, and that includes thousands of digital and consulting agencies. There are about 64,000 digital service agencies in North America, O'Neill said, and about 40,000 fall into the bucket of companies Parallax wants to serve.
Pioneering surgeon has run afoul of Fairview Health Services, though, which suspended his hospital privileges amid an investigation of his patient care.
