Catalyte acquires software development company Surge and raises $27M

By Jacob Hsu

Catalyte is supercharged to provide the best software engineering services

Since I joined Catalyte, I’ve spoken often about our dual purpose: to provide the best software engineering services and to advance human potential for the digital economy.

We’ve now entered a new, supercharged phase, where Catalyte can rapidly and substantially grow our disruptive software services model to take full advantage of the benefits of onshoring, address the US tech talent shortage and help our clients scale digital innovation.

This is all possible due to our acquisition of the software development and consulting company Surge, and the closing of a $27M Series A funding round.

Combined, Catalyte and Surge will be one of the largest American software engineering services companies. We have a shared focus and belief in the power of onshore outsourcing and tight business and strategic alignment. We know what we exist to do:

  • Improved outcomes for clients
  • Accelerate creation of alternative sources of quality tech talent
  • Expand opportunities for development careers to more Americans
  • Create a more diverse and productive workforce

The big picture – Why is this happening?

This acquisition and fundraising position Catalyte to take full advantage of several IT trends, including:

  • Agile changing best practices in software development
  • The reconfiguring of outsourced development work from a distributed/offshore model to an onshore/local model
  • The need for better ways to discover talent from unconventional backgrounds
  • The rise of the gig/freelance economy

When I talk about our “farm-to-table” software development approach, it highlights the real benefits of agile; developing in close proximity with clients to deliver better outcomes with less overhead, while creating a circular, hyperlocal economy. As companies continue down the agile path, they’re figuring out to achieve these benefits, they must bring work back onshore. A distributed, offshore model is antithetical to agile development.

With a 100 percent onshore workforce, and the opening of new development centers in major metro areas in 2018, Catalyte will be closer than ever to clients, ready and able to deliver on the promise of local/agile development.

The opening of these new development centers, and further investment in our Catalyte Talent Platform, will allow us to discover and employ even larger numbers of currently undiscovered tech talent. These are individuals currently overlooked by an antiquated system that values the perception of talent over actual talent and cognitive ability. Without creating this new talent pool, we as a company, and as a nation, won’t be able to supply the number of great developers needed to remain the most innovative and productive.

While our Catalyte Talent Platform works on solving the tech talent shortage, what about the other end of the spectrum: senior developers with the skills and background to work independently? The future of work indicates that they will frequently opt for a freelance career. With Surge’s gig economy model, we can now have a full career ladder for Catalytes. We can retain their expertise while allowing them the freedom to make their own choices.

The power of Catalyte + Surge

As one of the largest American software engineering services companies, no one will have our level, depth and breadth of talent to solve complicated and innovative client challenges. With emerging digital technologies, many of the products, services and experiences our clients want to create have never been done before. They must rely on teams and networks with diverse skill sets to tackle these challenges. Our increased network size will better serve clients’ needs for quality local tech talent and top-level experts.

Catalyte and Surge enables clients to scale and accelerate digital innovation with improved outcomes. We’ve solidified our ability to deliver on any engagement model, be it managed services, project/team delivery or elite staff augmentation.

Believers in Catalyte

It was important for us to find investors who understood and valued Catalyte’s unique business model and would support our mission to find undiscovered talent and expand IT career opportunities to more Americans. We wanted people and institutions that understood that a company which does good can perform better than one that is strictly focused on the bottom line at all costs.

We were excited to find such a large number of prominent investors who got this message and wanted to help us expand opportunities to underserved individuals and communities. Some of these investors include:

So what’s next?

Practically speaking, our clients are already seeing the benefits of the acquisition and fundraising. We’re pulling resources from our combined talent pool to provide the best person or team for the project.

In the long run, the acquisition and fundraising are just the start. The funds will help us triple the number of new development centers in 2018, including new ones in Salt Lake City and Chicago. We will increase our recruiting efforts in underrepresented communities to give opportunity to anyone with the aptitude to be a great developer.

We will continue our growth in a responsible manner that honors our commitment to do right by our clients, employees and communities. Catalyte will stand out, not just as a premier software engineering services company, but as an example that a company can be great and do good at the same time. This is the only way we see for our country to remain at the forefront of tech innovation and to grow our workforce and economy to meet the digital demands of the 21st century. We welcome you along for the journey.

Jacob Hsu: Catalyte CEO

Find additional acquisition and fundraising details here: