Dallas-based software company Arcade, which uses gamified micro-incentives to boost the productivity of sales teams, has closed on a $4.5 million growth seed round to grow its team and strengthen its offerings.

The funding was led by VC firm Stage 2 Capital, with participation from Revolution’s Rise of the Rest Seed Fund, Our Innovation Fund, and ATX Venture Partners. Arcade said the capital will help it expand its footprint into inside sales teams and automotive dealerships, while continuing to develop its front-line sales teams in wireless retail.

It will also enable the team to bolster product, sales, marketing, and advanced integrations with its key strategic partners.

“With this infusion of funding, we are focused on expansion, partnering with strategic companies to broaden Arcade’s reach, and furthering our mission of engaging one million salespeople across the globe,” David Cherrie, who co-founded Arcade with James McLaren, said in a news release. That goal builds on Arcade’s founding idea that “happy workers do their best work, live their best lives, and are more successful because of it.”

To Cherrie, the investment solidifies Arcade’s position as a premier provider of gamification software. The technology is specifically designed to enable businesses to motivate, incentivize, and retain employees across many industries—a critical application in today’s business climate, he says.

Arcade’s proprietary approach is based on an SaaS solution that intelligently gamifies the workplace. The intent is to improve performance with contests, not leaderboards: Arcade’s games it creates focuses employees around actions that “move the needle” for a business. That allows all employees to have a chance to win. Arcade believes engaged sales teams provide better customer service and sell more.

Even better, they increase revenue-driving activities to boost profitability.

“Arcade is at the forefront of how teams are investing in their people,” Jay Po, managing partner and co-founder of Stage 2 Capital, said. “Employers need more creative ways to drive team productivity with real-time, action-based incentives, and Arcade is the way to do that in one fully integrated platform.”

Arcade, which also has an office in Melbourne, Australia, said its seed round comes at a pivotal time for the team.

A recent study by Villanova University concluded that companies with positively engaged employees outperform competition by up to 202 percent and generate 2.5 times more revenue.

Arcade implements a fun, easy-to-use system that motivates employees to meet their goals. The platform features comprehensive reporting tools that leaders can use to track performance, streamline communication, and recognize achievements.

Arcade believes that as the young and distributed workforce continues to burgeon, companies have to be focused on investing in solutions that elevate employee productivity and engagement. That’s evermore important as the economy begins to recover from COVID-19.

In June, Arcade made a commitment to match up to $5 million in employee incentives for small businesses. To do so, the team offered $20,000 per company after the economic struggle of the market shutdown. Eligible businesses that applied received $500 per location or a maximum of $20,000 to put toward employee incentives and 90-day access to Arcade.

“Arcade doesn’t just improve sales productivity, it changes behaviors and ultimately, company culture,” Shonk, who joined the Arcade Board as part of the financing, said. “We’re excited to watch Arcade’s growth.”

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