TCI Lands $9M For Grocery Push
By ANDREW SIMONS
Irvine-based TCI Solutions Inc., a maker of software and systems for grocery chains, has landed $9 million in funding, according to Chief Executive Lance Jacobs.
The privately held company plans to use the money to develop products it hopes will appeal to larger grocery chains, Jacobs said.
“We really want to increase the breadth of our products,” he said. “They are unbelievably deep, but we want to increase the breadth.”
TCI has its sights set high. Once software upgrades are done, the company is looking to target giants such as Kroger Co. and Albertson’s Inc., Jacobs said, as well as mid-tier accounts.
For now, it could be a matter of survival. TCI, which posted $19 million in sales last year, has been locked in a war with two bigger rivals: Minneapolis-based Retek Inc. and Scottsdale, Ariz.-based JDA Software Corp.
The two companies are publicly traded and have a grip on some of the largest grocery and retail chains. JDA has $170 million in yearly sales and Retek counts $90 million.
“We want to move into the larger retail space,” Jacobs said. “We just need to land bigger opportunities.”
The $9 million infusion should at least get TCI started. Jacobs plans to use the money to add salespeople to his current 23-person force.
He said he also plans to add product development people who can bolster the company’s offerings to handle the load typically processed at big grocery chains. TCI now employs 140 people companywide.
“We’ve got the technology and its good technology,” Jacobs said. “We just need to develop the software and add more modules to it so the bigger guys can use it.”
Costa Mesa’s Innocal Venture Capital was among the investors along with Chicago-based First Analysis and Cincinnati-based Blue Chip Ventures. Each firm invested about $3 million, according to Jacobs.
The funding marks one of the few times Innocal has invested in Orange County technology companies. Innocal also invested in Newport Beach-based IPNet Solutions Inc.
But the investment isn’t likely to be enough to allow TCI to seriously take on its larger competitors.
“JDA and Retek have three to five dollars for every one dollar of ours,” Jacobs said. “While I’m telling the board we’re going to get the most out of our money as possible, we’re going to need more.”
TCI is looking at all options, including a public offering sometime in the future, Jacobs said.
