Mechanical Orchard, led by ex-Pivotal CEO, scores $50M round led by Alphabet's GV
Summary
In 2023, Harvard Business Review reported that while 89% of large companies have a digital and AI transformation underway, theyve only captured 31% of the expected revenue uplift and 25% of anticipated cost savings from the effort.Rob Mee, previously the CEO of Pivotal, says that he was inspired to tackle the challenges around digital transformation after spending years working with enterprises dealing in old infrastructure. The companys stock lost more than 40% of its value in one day after a poor earnings report, and the stock price never fully recovered; eventually VMware bought the company for an enterprise value of $2.7 billion, well down from its peak.But Mee assures TechCrunch that Mechanical Orchard is on a strong growth trajectory, with large enterprise customers in retail and logistics in the pipeline.Theres interest and opportunity across many sectors where legacy IT is a challenge, like manufacturing, transport and financial services, he said. Our approach is all about risk reduction IT leaders can see continuous proof that the migration is working, which builds confidence in the process and reassurance that there will be a positive outcome.In a vote of a confidence, Mechanical Orchard this week closed a $50 million Series B round led by GV (formerly Google Ventures), Alphabets corporate venture arm, bringing its total raised to $74 million.The raise was unsolicited, Mee said. Mechanical Orchard was not proactively raising, but GV presented a great partnership opportunity.Plenty of vendors have built tooling and entire business divisions to support digital transformation. That might matter to some customers with sensitive code wary of having that code run through a third-party service like GitHub Copilot or AWS Q Developer.To transform a companys legacy system for instance, software running on a mainframe Mechanical Orchard works to understand the systems behavior, identify its dependencies and break down its components to define their purposes and how they work.