The CEO of Workato explains how watching his kids learn to code inspired his team to go from working out of his house to winning a new $70 million investment

• On Monday, the automation startup Workato announced it raised $70 million in series C funding led by Redpoint Ventures.
• Workato creates integration software that helps apps "talk" with each other, and automates repetitive tasks. It's used by customers like Slack and Salesforce.
• Workato CEO and founder Vijay Tella says that competitors like MuleSoft and Dell Boomi are often too technical for business users to use, while smaller rivals like startup Zapier are not as well-suited for enterprises.
• When starting up Workato, the founding team spent a year working from Tella's house, and found inspiration from cooking recipes, and from the children's programming language Scratch.
• Read more on the Business Insider homepage.

In summer 2012, Workato founder and CEO Vijay Tella brought a small team together to put their heads together and build a new type of software that would solve a common corporate headache. For the first year they were together, that team worked out of Tella's own home.

Workato creates integration software, which ties apps together in a secure way and automates repetitive tasks. For example, a company might use it to take in customer data and automate the financial processes around it, such as creating an invoice.

It's an idea that's only grown more important, Tella says, as data can be "chopped up and fragmented" among any of the dozens of apps that any business might be using, from vendors like Microsoft, Google, Slack, or any of the very many others.

"The scale of this problem is enormous," Tella told Business Insider. "The scale and speed that needs to be done is really high."

Against that backdrop, Workato announced Monday that it raised $70 million in series C funding led by Redpoint Ventures with participation from Norwest Venture Partners, Geodesic Capital, Battery Ventures, and Storm Ventures.

With the funding, Workato plans to invest in helping customers manage business systems, growing its customer success division, and generally entrenching itself in the market. Already, Workato has over 6,000 customers, including Slack, Pixar, Panera Bread, Levi's, and Salesforce.

Taking on MuleSoft, Dell Boomi, and Zapier

Prior to Workato, Tella was CEO of Qik, which was acquired by Skype. When he left Skype in 2011 - around the time that Microsoft bough it for $8.5 billion - he reconnected with some former colleagues, with whom he got to discussing how there was no easy way to bring data between apps.

On one hand, Tella says, there were tools like MuleSoft (now a subsidiary of Salesforce) and Dell Boomi, which the team found too technical and difficult for business users.

"These products are very capable," Tella said. "You can run your business on them but they're very technical. Only a few people can use them and it's hard. That's one set of players."

On the other hand, there were tools like those from startup Zapier, which are easier to use, but not as well suited for enterprises. Workato sees its opportunity as being in the middle.

'It left the adults kind of stumped'

For the first year, the Workato team worked out of Tella's home, trying out different ways to solve that problem and allow applications to work smoothly together.

The team took early inspiration from Scratch, a simple programming language popular for teaching children to code. Scratch relies on dragging and dropping to create simple instructions, rather than typing out lots of complex code. Tella's 8-year-old twin boys often played around with Scratch, and the team thought a drag-and-drop interface would make their product easy for literally anybody to use.

"These kids didn't get any lessons. They were playing these games," Tella said. "There was this super interesting dynamic happening with kids."

However, when the team tested the software with IT workers, it was a different story.

"What we found was this whole drag-and-drop thing that was easy for kids in Scratch, it left the adults kind of stumped," Tella said. "They don't know what to drag. We went back and said, we need to change it. Adults in many ways have linear thinking."

After that, the team redesigned the software to work more like a cooking recipe, with conversational step-by-step instructions. Users can also share these recipes for businesses processes they set up or reuse ones that others have created.

"By the end of the year, we got to a place where we saw it could be done," Tella said.

A growing business

Workato had just raised its Series B round of $25 million last summer, and the company says its business has grown 3.7 times since then. Tella says that the company still has about 70% of that funding left in the bank, but it decided to raise again because it saw a big opportunity to grow.

Satish Dharmaraj, partner at Redpoint Ventures, says that he decided to invest in Workato because he talked to many CIO's and asked what products they were using. Workato kept on coming up. He heard about various teams using it, from sales to finance to HR, and he says he hopes that Workato will continue to grow and build "a large big independent big business that can be a publicly traded company."

"In the enterprise space, Workato had the best solution for the enterprises we talked to," Dharmaraj told Business Insider. "We were talking to them about how they're using Workato and what would happen if we pull Workato away from them. We always asked them on a scale of 1 to 10, what would be the pain point when you take the solution away. A lot of customers said that would be a 10 if you took it away. That's what we like to hear whenever we decide to consider an investment."