CDS Snaps Up Gener8tor Grad Optyn to Expand its Software Services

Central Data Storage (CDS) has purchased Chicago online marketing startup Optyn, a 2013 graduate of Gener8tor’s accelerator program, for an undisclosed price, the companies announced today.

The deal provides some early validation for Gener8tor, a Wisconsin accelerator that has invested in 28 companies since its 2012 founding and recently raised $2.1 million for its second seed capital fund.

“The rest of the market is valuing the kind of companies that are coming through our program,” co-founder Joe Kirgues says. “It’s gratifying to see our entrepreneurs succeeding in the months and years following Gener8tor.”

The Optyn acquisition is the second exit for a Gener8tor portfolio company, Kirgues says. He declined to disclose the other exit, which is being kept confidential at the request of the acquirer, he says.

Considering it takes many startups around seven years to exit, Kirgues says, these deals came a “little sooner” than Gener8tor expected. “We anticipate that the lion’s share of the work to be done is still ahead of us,” he adds.

Still, Kirgues wouldn’t shed any light on the specifics of the Optyn deal, only saying that both Optyn and Gener8tor are happy with the outcome—so it’s unclear what type of returns the accelerator is getting.

The acquisition was in the works for about three months, Optyn co-founder and CEO Alen Malkoc says. Optyn initially reached out to Lincoln, NE-based CDS to see if it was interested in forming a business partnership.

Founded in 2008, CDS primarily provides online data backup and recovery services to dentists, medical practitioners, chiropractors, and other professionals and small businesses. But the company has been looking to expand the types of services it offers, Malkoc says, and it apparently liked what it saw in Optyn.

“With their aggressive plan to expand their market reach and suite of tools, it just kind of made sense,” Malkoc says. “We just jumped on the opportunity.”

Malkoc started Optyn last year with chief operating officer Lou Morales and chief technology officer Gaurav Gaglani. Gaglani previously co-founded Idyllic Software, a Ruby on Rails development company in India. Morales’s career includes stints as a senior vice president of subsidiaries of General Electric (NYSE: GE) and Barclays (NYSE: BCS). Malkoc and Morales previously co-founded Chicago-based marketing startup Dealster, which was acquired in January 2012 by Atlanta-based Half Off Depot, a company now owned by Knoxville, TN-based nCrowd.

With Optyn, the co-founders wanted to create a simple software service that would help small businesses make and send out e-mail and social media marketing campaigns within two minutes, Malkoc says.

“Small business owners really had a tough time creating e-mail marketing campaigns,” he says. “They didn’t have the time, the money, the expertise to create effective marketing campaigns. We saw a really nice opportunity for them because of the high return on investment” for e-mail marketing, he adds.

Optyn says it attracted more than 3,000 customers in 115 cities worldwide. It raised $119,000 from investors, including what it received as part of the Gener8tor program, Malkoc says. He declined to share company sales figures.

“Optyn’s software and their team will help us serve our customers better than ever,” CDS president and CEO Ed Conklin said in a press release. “Small business owners love to use the simple marketing tool for a reason.”

Optyn’s eight employees are helping with the post-acquisition transition period, but CDS has yet to determine if it will keep those people on staff and if it will keep the Optyn name attached to the marketing service, Malkoc says.

Jeff Engel is a senior editor at Xconomy. Email: jengel@xconomy.com Follow @JeffEngelXcon

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