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CloudFactory raises $3 million

October 13, 2014

CloudFactory, a human cloud platform that uses a crowd managed in person, raised $3 million in a Series A offering. The series was led by David Clouse, founder of vacation rental site VRBO.com, with other institutional and angel investors participating.

“Their model is a rather unique one that leverages an online work platform to do projects, complete them through microtasking, with a captive onsite workforce,” said Andrew Karpie, affiliate analyst at Staffing Industry Analysts.

CloudFactory breaks large tasks into smaller pieces that can be done by individual workers online, similar to crowdsourcing. Unlike a traditional crowdsourcing system, CloudFactory’s cloud isn’t open to anyone wanting to contribute.

“We don’t usually use the word ‘crowdsourcing,’” founder and CEO Mark Sears said. The firm sees itself more as a hybrid — filling a sweet spot between outsourcing and staffing.

Potential workers sign on through Facebook and take tests; they also invite social contacts to join. Once a team of eight workers has been vetted, they are called in for an in-person team interview. Five are chosen and three are put on the bench. Then members of the team of five are able to work remotely from their homes. However, each team has weekly face-to-face meetings with “cloud feeders,” who each supervise 20 teams each.

“Our belief is that when you have people altogether in one office, there’s definitely some good things that happen in terms of face to face,” Sears said.  Those things include quality and reliability. Traditional crowdsourcing sites pull workers from all corners the Web and may only require them to fill out a form.

The company’s platform also allows customers to monitor in real time the performance of the workers and the quality.

CloudFactory’s teams are presently formed in Nepal and Kenya. Sears has lived in Nepal for the last six years, but the company’s US headquarters is in Durham, N.C.