Scranton Tech Startup Lands $2.4 Million In Seed Funding, Expanding To Tap Global Market

July 21, 2019 GMT

SCRANTON — ChannelApe has all the trappings of a Silicon Valley startup.

There’s a ping-pong table outside the conference room, exposed beams in lofty ceilings and desks you stand at where young programmers studiously tap away, transfixed on dual screens.

Now, the 3-year-old software company can add venture capital to its list of attributes more easily pinned on the San Francisco Bay Area than downtown Scranton.

ChannelApe recently announced it secured $2.4 million in seed funding from venture capital investors, including Afore and Upside Partnership, both of San Francisco, and New York City firm Supernode Ventures.

The money gives founders Mike Averto and Jason DePietropaolo the muscle to seek new clients, enhance their product and build their team.

ChannelApe does a very specific thing, and the number and caliber of clients who have stuck with them since its early days show that Averto, DePietropaolo and their team of 10 do it well.

Their clients are online retailers that ship products directly to their customers.

They’re retailers up against the Goliaths of e-commerce, most notably Amazon. The e-commerce giant gives retailers, in exchange for big chunks of margin, a lightning-fast network that gets merchandise to shoppers in 48 hours, sometimes less.

ChannelApe coders plan, program, implement and support the software that kicks into action when you, the consumer, click the “confirm order” button.

They govern that nebulous, virtual middle world where orders travel from customers’ fingertips to the right warehouse in the fastest, most cost-effective way.

First, their programs locate the thing you ordered. That could be a pair of wool loafers from their biggest and first client Allbirds. It could be a makeup compact from Younique. It might be a pair of headphones from Monster Audio.

ChannelApe’s software finds your product in whichever warehouse is closest to you, creates a pick slip, and decides which carrier is cheapest and fastest.

They sell their software as a service. That means ChannelApe programmers monitor orders and jump in when needed to make sure things flow smoothly. Customers pay a monthly subscription price for a customized platform. Program packages start at $1,000 a month, and as they’ve grown over the last three years, they’ve shifted their target market to online retailers who already have a healthy online retail operation, but need fine-tuned back-end processes.

“Once somebody grows big enough to need a warehouse, small business or not, that’s really where we’re helping,” Averto said.

They’ve got dozens of clients who ship millions of products.

As they shoot for the stars, they’re still committed to keeping headquarters in Scranton, DePietropaolo said, and they’re not worried about finding the high-skill workers they need.

Larger companies in the region that employ developers — DePietropaolo mentioned TMG Health, Geisinger and Benco Dental — draw software developers to the region.

ChannelApe offers an alternative workplace for programmers who want to build something from scratch and want to see their computer code turn into something that improves how people shop online, he said.

“It’s not that corporate, stuffy cubicle development work,” he said. “We offer something a little bit different: a start-up vibe, flexible work hours, open space.”

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