IU Ventures-backed company Encamp relies on IU and Indiana roots to achieve genuine growth and impact
This week’s news that Indianapolis-based software company Encamp had secured $30 million in Series C funding to help further develop its innovative environmental compliance platform came as welcome—but not at all surprising—news for IU Ventures, Indiana University’s early-stage venture and angel investment arm. IU Ventures was an early champion of the trailblazing company with deep IU roots that, from its inception, has been determined to be a leader in the environmental health and safety industry and a major contributor to the economic vitality of the Hoosier state.
IU Ventures is the first “institutional” investor in Encamp, providing more than $775,000 in financial support for the company, which offers a first-of-its-kind software product to organizations seeking to improve their environmental compliance operations and mitigate the risks of non-compliance. The company was co-founded in 2017 by Luke Jacobs and Daniel Smedema, graduates of IU Bloomington’s College of Arts and Sciences.
In 2019, IU Ventures invested $250,000 in the company through the IU Philanthropic Venture Fund, which aims to bridge gaps in venture funding by making equity investments in high-potential early-stage companies with IU affiliations. The investment closed out Encamp’s $1.1 million seed-funding round, which concluded shortly after the company graduated from the gBeta Indy accelerator program for early-stage companies preparing for initial funding rounds. IU Ventures followed this investment with an additional $151,000 in financial support in 2020 and another $373,000 last year. The latter investment was part of Encamp’s $12 million Series B funding round, one of the largest rounds raised in Indiana last year.
Encamp has used these early investments to dramatically expand its business operations and workforce and continue to improve its software platform. Nearly 200 businesses (double the number from 2019) now use Encamp in more than 8,000 regulated facilities throughout the U.S., including a growing number of businesses listed in the Fortune 1000 and Fortune 100. The company’s growth also includes a 500% increase in annual recurring revenue in 2021 and a 200% increase in its workforce of around 60 software engineers, product developers, environmental consultants, customer experience professionals, and sales and marketing staff, with the goal to more than double again by the end of this year.
Encamp will further develop its platform’s capabilities as businesses increasingly face the growing complexities of successfully collecting, managing and analyzing environmental compliance data across varying state guidelines. Not successfully handling such data can be costly and damaging; according to a company news release, the general minimum for regulatory non-compliance is $62,689 per day/per violation just for the federal EPCRA act alone. Encamp, which competed for “Tech Product of the Year” at TechPoint’s annual Mira Awards earlier this spring, will also look to develop new technologies to help companies comply with Clean Water Act, Clean Air Act and other federal toxic release regulations, while also expanding its hazardous material and waste compliance automation capabilities internationally.
As IU Ventures President and CEO Tony Armstrong noted in a recent op-ed for the Indianapolis Star, Encamp has experienced major growth during the global COVID-19 pandemic, which has caused many early-stage companies to scale back their business plans. The company’s ability to overcome the pandemic-related disruptions of the past two years, he added, suggests the key role private investment—including venture capital—is playing in catalyzing job creation across Indiana and ensuring the state’s overall economic competitiveness.
Jacobs, who serves as Encamp’s CEO, is quick to underscore the impact that IU Ventures’ investment has had as Encamp accelerates its business development, generating interest from other investors and enabling the company to pursue plans to grow the business despite the challenges of COVID-19.
“IU Ventures was our first institutional investor, our first fund,” Jacobs says. “We had a large local angel cohort, but within our first $1.1 million of funding, $250,000 of that came from IU. That investment really was the initial momentum-builder. IU Ventures committing capital, demonstrating that level of trust and giving us that major vote of confidence very early on when we were a new business—that really got the ball rolling.”
“Now we’re in a really good position,” he continues. “At a time of market compression, we’re leaning into our development, hiring great talent and working with more corporations looking to increase efficiencies while still being compliant. And we’re doing all of this in Indianapolis, which has been really gratifying.”
In addition to helping elevate Encamp’s credibility, IU Ventures also provided the company with valuable advice, mentorship and business connections, Jacobs says. Through the founder-funder relationship, Jacobs has become closely involved with The Mill, Bloomington’s downtown center for coworking and entrepreneurship, and has built relationships with fellow IU alums including Ellie Symes and Wyatt Wells, co-founders of the successful agtech startup The Bee Corp, which is also headquartered in Indianapolis. (Jacobs shares another notable connection with Symes and Wells: All were recently named to Forbes’ prestigious ’30 Under 30′ list.)
Jacobs studied ecology as a student at IU Bloomington, where he met Daniel Smedema, who was pursuing an education in cognitive science. (The pair were introduced as freshmen, when they were both selected to participate in the College of Arts and Sciences’ Integrated Freshmen Learning Experience.) After both graduated from IU in 2015, they hatched the idea for Encamp with Jacobs’ brother, Sam, who had experience in human resource software. They started their venture with $12,000 in the bank and paid one another $800 a month the first year they were in business.
If $12,000 seems a long way from $30 million, it is, but Jacobs says his liberal arts education at IU Bloomington, Midwestern roots and “boot-strapping heritage” of his company will keep him grounded even as Encamp continues to scale new heights. While at IU, he was introduced to the ideas of American business management author Patrick Lencioni, who described the ideal team player as “hungry, humble and smart.”
“We want to be really hungry, humble, smart and into our mission, but we’re not an ego-driven place,” he says. “A pretty unique part of Encamp … me and my two co-founders, none of us are traditional business people. I was planning on a doctorate in ecology. Together, we started this company because we saw a problem and wanted to help out. If we could do Encamp with 20 people and service the world, we probably would.”
For more on Jacobs and the beginnings of Encamp, check out the terrific “Software Meets Science” feature story in the fall 2021 issue of “The College” magazine.