Y Combinator alum lands $4M seed to boost open-source connections

After growing from five customers to 65, leadership at the software startup Hotglue knew it needed outside capital to keep up the pace. 

The software-as-a-service company behind an embedded integration platform raised a $4 million seed round to hire more staff and continue building out its tech. Embedded integration helps companies, often developers, connect products and applications, cofounder and chief revenue officer David Molot explained. He added that the startup, which has offices in DC’s Navy Yard, also aims for this tool to scale with companies as its needs change.

The Y Combinator alum previously raised a $1.5 million pre-seed in 2021 — a much different experience and economic climate than today’s, Molot said. 

“Definitely there was a lot more cash flying around at that point [in 2021],” Molot told Technical.ly. “We’ve also grown as a company.”

This new raise was led by 8VC, with participation from Wayfinder Ventures, Correlation Ventures, repeat investor Y Combinator and Bethesda’s TDF Ventures.

Hotglue, founded near the end of 2020, had about five customers during its pre-seed round. Now, there are 65 clients across the US, Europe, India and South America. The main sectors Hotglue focuses on are customer relationship management, accounting and e-commerce tools, per Molot.  

The fintech company Chargebee RevRec, which grew out of a 2021 merger between the unicorn status-reaching Chargebee and revenue management software company RevLock, is one of the 65. Hotglue also recently signed a public company as a client, but Molot declined to disclose details. 

Molot added that about 40% of Hotglue’s customers are AI-focused companies. Its platform is not an AI-powered tool, but rather, a support for different AI integrations. 

“We ourselves are not an AI company, but we’re a really important piece of powering a bunch of AI companies,” he said. 

Molot knew it was time to raise outside funding for a few reasons: Hotglue now has more of a product to show for, as well as more customers. The rise in clients also signaled the urgency of accelerating Hotglue’s go-to-market, Molot said. 

There are other integration services out there, he said, but Hotglue stands on its own because the integrations its developers build are all open source. Molot said he hopes customers are even empowered to experiment with creating their own integrations. 

The staff currently consists of nine people, per Molot, and the majority are engineers. Hotglue just brought on a head of marketing and is in the process of hiring a sales director to build out its leadership. 

As Molot looks at hiring, he’s open to hiring remote staff but wants to focus on people in the DMV, he said. 

“We love DC as a city, and really want to grow DC tech in general,” Molot said, “and hope to stay here for the foreseeable future.” 

This love for the region is personal. Molot grew up in Gaithersburg, and his cofounder and CEO Hassan Syyid grew up in Bethesda. The pair met at the University of Maryland, College Park, and dropped out after three semesters to start Hotglue. 

Molot and Syyid first took a gap semester, but properly left the school when they were accepted to the Y Combinator cohort in the summer of 2021. Molot noted he was nervous at first, but considering these raises and the customer base growth, “it’s worked out so far.” 

“This is a place where you can grow a company,” Molot said. “We’re so happy that so far it seems to be working out, and that we found a problem people really want solved.”