(RealWear Photo) Vancouver, Wash.-based startup has raised another $5 million in a round led by Columbia Ventures Corporation to expand its global sales arm and invest in development of its industrial augmented reality headwear. Wearing his signature product, the HMT-1, Andy Lowery is co-founder and CEO of RealWear. (Andy Lowery Photo) Founded in 2016, RealWear sells a voice-controlled augmented reality device worn by industrial workers that provides remote video calling, document navigation, guided workflow, mobile forms and data visualization. It has two versions of the device priced at $2,000 and $5,000. The company has shipped more than 10,000 units to 800 customers globally in the past 18 months. It recently with China’s State Grid, the largest utility in the world. Other customers include Colgate-Palmolive, Volkswagen, Toyota, and others. “We essentially are the tip of the spear of a connected worker program for industry,” RealWear CEO Andy Lowery told GeekWire . “We are able to free a worker’s hands for the work by providing a wearable Android computer that is fully voice-controlled, even in extremely noisy environments. They can pull up documents, connect to other experts, and facilitate learning and problem solving in situ, meaning right there and then.” RealMax also invested in the new round, as did other strategic backers, advisors, employees, friends and family. Total funding to date in the 91-person company is $30 million. RealWear is ranked No. 98 on the , our index of Pacific Northwest startups. reported this week that funding in U.S.-based construction technology startups rose to nearly $3.1 billion last year, up from $731 million in 2017. Related:
Scorebook Live CEO Dan Beach. (Scorebook Live Photo) has reeled in another $2.5 million to help high school sports programs get access to the same level of technology that professional leagues use on a daily basis. The Spokane, Wash.-based company started with an app that lets high school football and basketball teams record stats and play-by-play information, but it has expanded to more sports and products. It now offers additional tools for scheduling, roster management, and a team website service. Scorebook Live also recently partnered with DragonFly Athletics to build software targeted at high school athletic departments and launched . (Scorebook Live Photo) , a media company that owns The Spokesman-Review in Spokane and a handful of TV stations across the Pacific Northwest, led the funding round. “Cowles leadership of Stacey Cowles, Steve Rector and Spokesman-Review Editor Rob Curley understand how important high school sports are to local communities and see that Scorebook Live’s technology and vision are solving a number of problems that have existed inside this market for many years,” said Scorebook Live CEO Dan Beach. Beach previously worked at ESPN from 2009 to 2012; he “spearheaded ESPN’s entry into the ‘high school scoring’ market,” according to his . Scorebook Live relocated from San Diego to Spokane after Beach’s son accepted an offer to play for Gonzaga’s basketball team; the CEO and his wife also grew up in the area. Other investors in Scorebook Live include ex-NBA players such as Jerry Stackhouse and former Gonzaga star Adam Morrison. Dan Dickau, another former NBA player who also starred at Gonzaga, is the company’s vice president of market development. Scorebook Live employs 11 people and makes money off a combination of licensing and sponsorship/advertising sales. Cowles Company has also in Pacific Northwest tech startups such as Zipwhip, Phytelligence, Skyward, etaliz, AnswerDash, SheerID, TurboPatent, and others.
Vikram Jandhyala. (UW Photo) After five years of leading the University of Washington’s innovation center, is stepping down. Jandhyala, executive director of , told GeekWire that he plans to depart this June. He’ll stay connected to the university and spend more time at the , the new U.S.-China joint technology innovation institute run by the UW and Tsinghua University in Beijing. Jandhyala became the university’s vice provost of innovation , taking over for Linden Rhodes after a 3-year stint leading the UW’s electrical engineering department. His title evolved into vice president of innovation strategy as Jandhyala led CoMotion, which helps startups through education and access to experts and funding sources. Originally started as the Center for Commercialization (C4C) at the UW’s main Seattle campus, CoMotion evolved a few years ago from a department that mainly helped commercialize ideas born at the university to what it now describes as a “collaborative innovation hub dedicated to expanding the economic and societal impact of the UW community.” Under the leadership of Jandhyala, the UW has ranked among the top 10 on for the past several years and cracked the top 10 of the Milken Institute national tech transfer rankings. CoMotion also helped open a makerspace on campus; created an Amazon Catalyst program; and launched the Mobility Innovation Center with Challenge Seattle. “These last five years have been amazing and I am really proud of the momentum and accomplishments made by the team at CoMotion,” said Jandhyala, who first joined the UW as an assistant professor in 2000 and founded his own startup in 2007. “They have produced a standout service for the community of UW innovators and built strong connections to the local and global innovation ecosystems.” Jandhyala is already the co-executive director at GIX, which recently , and will dedicate more time to the program after he leaves CoMotion in June. He’ll work closely with UW leadership to create a transition and succession plan for CoMotion.
LeoStella technicians work on the first of 20 satellites to be produced by the Tukwila, Wash.-based startup. (GeekWire Photo) When you hear the words “satellite factory,” ‘s operations in a nondescript office park south of Seattle probably isn’t the image that comes to mind. But that’s exactly what it is. By the middle of summer, the Tukwila, Wash.-based startup aims to pop out the first of a run of 20 small satellites. That initial production will go to in Seattle, which operates a constellation of Earth-imaging satellites and sells the insights to business clients. LeoStella CEO said the Tukwila location fulfilled three main criteria: it was close to BlackSky, affordable, and easy to get a building permit. Chris Chautard will step down as LeoStella CEO next month when Mike Hettich will take over. (GeekWire Photo) The startup, which launched less than a year ago, will manufacture small, low-cost satellites for Earth observation and telecommunications. Chautard said the satellites were designed to be simple and flexible. Chautard will step down as CEO next month, when , a vice president at Kirkland, Wash.-based aerospace firm Astronics, will take over. LeoStella’s structure is a 50-50 transatlantic joint venture between two entities: Seattle-based , which owns BlackSky. , an aerospace venture between France’s and Italy’s . Thales in Spaceflight last year as part of a $150 million fundraising round. The companies said a “big chunk” went to forming LeoStella. The basic pitch around small satellites is that they’ll let more companies get to space cheaper. With its purchase of LeoStella’s satellites, BlackSky is betting that what’s most important isn’t the size of your satellites that counts. It’s how you use them. “The economics of a high performing small satellite constellation are going to unlock a whole world of new data and information services for a much broader global market,” said BlackSky CEO . “Satellites are a great enabler. But ultimately, this is about delivering timely information so people can make relevant decisions that are going to impact their business,” he added. A satellite developed by BlackSky sits on the floor of LeoStella’s manufacturing room. (GeekWire Photo) LeoStella is actively looking for customers outside of BlackSky. The company has 34 employees and lots of empty desks, though it did not elaborate on hiring plans. LeoStella is already working on the design of its third-generation satellite. Once it is at full capacity, the startup will produce 30 small satellites per year and will add telecom satellites to its offerings. LeoStella uses parts from 20 different suppliers, including L3 GCS, Aitech Defense Systems and Seattle’s Jemco. When it comes to satellites, small is a relative term. LeoStella’s initial satellites will weigh between 50 to 150 kilograms (110 to 330 pounds). Other satellite makers are investigating tough scientific questions with . LeoStella’s Earth-imaging satellites were created to revisit heavily populated mid-latitude regions frequently, taking in 4×6 kilometer images. They have a 36-month service life. LeoStella’s first satellite should launch in late 2019. BlackSky said it will have 16 satellites in its constellation by early 2021 and hopes to eventually grow that number to 60.
Matt Rubright. (Matt Rubright Photo) Editor’s note: This guest post is written by Matt Rubright, an operator turned banker at Silicon Valley Bank. Building an effective pitch deck is a unique topic of conversation in the startup ecosystem. It’s one of the few topics where every startup has created one before, many people have written playbooks about how to create them, yet many early stage companies I speak with are still looking for guidance. What I surmise from hearing this time and again is that pitch decks are so important to the livelihood of a startup that we’re constantly in the pursuit of more perfect information. In that spirit, I turned to Silicon Valley Bank’s unique data set that has been aggregated over the years and in various markets to provide tangible, quantifiable guardrails based on the successful fundraising processes of our clients. We then pressure tested our findings from the investor perspective with Randall Lucas of Voyager Capital, a first-round VC having led or co-led over 70 Seed and Series A rounds, to ensure we’re surfacing the most valuable points in the research. Companies in the study Our data set is comprised of Series A companies from diverse geographies, industries and founder experience levels. By doing so, we’re able to surface insight that has broad application in the innovation economy. No client-specific data is presented in this post to maintain confidentiality. Investors & funding outcomes The pitch decks we evaluated came from companies that garnered highly credible investors and were able to close larger rounds than asked for in their pitch decks. What we observed Pitch deck length: Keep it short + appendix. We saw a great deal of variation in the number of slides as shown below. If you’re grappling with the length of a pitch deck, compare the slides in to the . If you have many additional slides or expound upon sections for multiple slides, it’s probably worth leveraging an appendix section. At a minimum, ask yourself if the slide is critical to the story you are telling or if it’s supportive in nature. Randall advises entrepreneurs, “Shoot for 10–12 slides knowing you’ll wind up at 14-16 — entrepreneurs love to tell their stories, but you really need to ruthlessly focus.” Problem statement: Be clear & concise Every pitch deck had a problem statement but there was a decent amount of variability to how it was presented. The two most prevalent approaches we noted were “User X has Y problem” and “market A has B inefficiency or missed value.” Just shy of half (46 percent) actually specified a specific user in their problem statement; the remainder focused on the market problem/inefficiency approach. In speaking with Randall, there isn’t a “right” approach between the two options, as long as it’s clear what the company is solving for. A tactic that doesn’t resonate is merely describing how much better the future world would be with everyone using your product. “Asking investors to ‘imagine a world where…’ is not a great start to understanding an early stage startup’s opportunity,” says Randall. “Focus on pain that customers are having today, and on articulating sustainable competitive advantage — and the ‘great and glorious future’ will be clear.” Be concise in the problem statement — 1-to-2 slides maximum here. Market Size: Billions can make sense within a context If you’ve reached the point of pitching institutional venture capitalists, you must be able to prove that the market you operate in is capable of producing venture-size returns. We could belabor what the minimum market size is or how to assess a venture sized return, but we’ll defer to those who’ve already explained these concepts well (). That said, the desired VC return profile does have important implications on the approach to estimating size. As noted in the graphic above, a top down approach is the significantly more popular. In terms of total dollar size, Randall told us he didn’t have a strong expectation that founders should present deep rigor around the estimate, however this does not negate thoughtfulness in the approach. “Many of the best market opportunities don’t have historical data available, or don’t even fully exist at the time you’re pitching,” he says. “You need to show that your addressable market is plausibly big enough and lucrative enough for your goals.” Saying your market is $3T because your industry is “retail” does nothing for a potential investor because it’s too high level to tie to your company in any manner. The worst case scenario is having an investor question your market size and lose their confidence in you before you’ve really talked about what it is you do. Retail isn’t an appropriate context for your opportunity, but perhaps retail supply chain SaaS spend is. Furthermore, pitch decks that provided massive market sizes were often contextualized within an industry mega trend or paired with an addressable opportunity breakdown to show what is actually addressable. Less prevalent in both our data set and in Randall’s experience are startups that complement their top down with a bottom up approach as well. Extending our prior example, a large retail supply chain market can further be contextualized by starting with how much on average a Fortune 100 organization spends on supply chain software today. Extrapolating from this data point can help show cost that you’ll attempt to displace at a minimum. Randall indicated he would see presenting both top-down and bottom-up calculations as an positive exception, not the rule. “The more surprising or non-obvious the market opportunity is, the more support it demands,” he says. “Don’t burn a lot of time and screen space on reinforcing readily grasped, credible market numbers.” Your solution: Demo like a founder, not customer support Your problem statement, market size, competitive landscape slides don’t deep dive into granular detail, so why should your product demo? From what we observed in the study, founders are using simple visual tools to help provide product context but aren’t providing a level of detail to onboard investors as successful users. Perhaps the greatest indicator of the 50K foot approach is the prevalence of product screenshots over any other medium. Don’t forget, a pitch deck is just a first step — you’ll likely get into a much deeper product review during the diligence process, so don’t attempt to ramp up investors on the nuance of your product at this point. As you’ll note in the above graphic, 18 percent of companies didn’t use any product visualization in their presentation deck. However, we don’t want to draw conclusions here as it’s possible founders showcased their product outside of the presentation entirely. “For an entrepreneur, your product is your baby. Of course you think it’s beautiful and exciting. To a venture investor, though, all the baby pictures kind of look the same,” says Randall. “I generally don’t like to see a product demo in the first meeting.” Exceptions would be products where user experience or visualization are truly core elements. Focus product slides *only* on key product aspects that drive your unique go-to-market edge or sustainable competitive advantage. Traction: Showcase two types of credibility A successful pitch deck will successfully weave together quantifiable metrics and customer profiles to establish credibility behind what has been accomplished to date. We’ll briefly touch on both below. Metric Showcase Knowing that our study covered a wide range of industries and business models, it would be improper to place targets on metrics to illustrate expectations for a Series A (we’ll likely address in a future post). Regardless of the industry or business, we did see three distinct categories across a majority of pitch decks that should be accounted for. Customer Showcase If metrics are the quantifiable success of the company, customers are the qualitative context that helps put it in perspective. Most pitch decks leveraged one or more of the below tactics to further ground their metrics in a customer context. From what we’ve observed both in this study and in working with early stage companies, these illustrative approaches lend to different types of credibility: Customer logos: brand credibility — we are diligenced and paid by trusted brands! Testimonials: user passion credibility — our users can’t live without us! Case studies: end-to-end solution credibility — we can repeat this again! Pipeline: forecast credibility — look at the revenue we’re going to have! As you look to build your deck, be cognizant of why you choose the above mediums and how it reflects on the state of your business. You should be able to show traction that is both quantitative and qualitative in nature. Competition: Use it to demonstrate your strengths Every founder would like to say they are completely unique and they’ve found completely white space. It is almost never true. For a vast majority of startups, there are competitors, potential competitors, or substitutes for solving your customers’ problem. Not addressing this can look like you don’t know the space well enough or are obscuring detail. It’s also a missed opportunity to tie in your competitive advantage. As indicated by the data, most startups aren’t shying away from competition, but instead using this section as an opportunity to educate potential investors on how the startup will carve out their space. To illustrate this point, the majority of pitch decks leveraged a 2×2 graph to show position relative to competitive threats. When asked about the 2×2 visualization, Randall urged founders not to neglect considering magnitude vs. specificity. “When you choose how to present the ‘market map,’ it’s important to note the scale of competitors and substitutes, but also how specific and direct the competitive threat is,” he said. In other words: who else can do what you’re doing and how well are they resourced to do it? For example, a large enterprise may have the magnitude (or scale) to compete with you, but may not choose to do so because it doesn’t make sense to pivot resources to build in your narrow space. However, if a competing startup raises a significant round, they can solve a specific problem and have the capital to move quickly. Your ability to speak to these dynamics in a pitch will help illustrate your understanding of the real threats to your business in the market. Go to market: Sales channels + pricing at a minimum Perhaps the widest variability of content was observed in go-to-market approaches. It was interesting to observe that other sections we address throughout this blog post had definitive titles and a discrete number of slides, yet GTM was rarely ever titled as such. The most notable approach observed was a combination of sales channels and pricing strategy. In speaking with Randall, we attribute this variability and lack of depth to how tried and true markets and business models are. For example, enterprise B2B SaaS is very well defined, so there is no need to belabor the mechanics of a GTM. With that in mind, Randall did emphasize that you must answer two questions: How do you get the “kindling” started for very early sales if you’re still discerning product market fit? How do you think you’ll scale up the sales model once the fire is going? Growth projections: Work within a knowable range Similar to market sizing, projections help illustrate the aspiration and opportunity ahead of the business. Projections without any rigor will show lack of knowledge and/or understanding, while getting too granular in your attempt to model growth is unrealistic, cuz ya know, early stage startup. A quick way to gut check your forecast is by asking yourself how “knowable” the industry and business model truly are. If you’re entering an industry that is fairly well understood or you employ a proven business model (think enterprise SaaS), you may have the ability to show longer time frames with higher confidence. From what we’ve heard from Randall and what’s we’ve seen from clients historically, 36 months is probably a good projection horizon. It’s long enough to show growth potential, but it doesn’t put you firmly into an “unknowable” range. In terms of the metrics you choose to project, the two most common approaches were: (a) revenue + # of customers + headcount, or (b) income statement In speaking with Randall, option A was the much preferred approach as it anchors on the most important drivers, but doesn’t attempt to forecast income statement line items that end up being based on very little knowable data. Revenue was by far the most common top prioritized metric, but as noted above there are many other top line metrics a company could optimize for. Other important notes… Being cash flow positive: This may seem important to a founder, but don’t forget your Series A investors want to see rapid top line growth and another equity round to fuel continued growth and long term exit opportunities. Being cash flow positive isn’t the priority. Assumptions: None of the pitch decks stated explicit assumptions with their projections. The numbers aren’t perfectly knowable and having a reasonable approach is enough to satisfy investors during the pitch. Team: Highlight what makes you credible All pitch decks had a team slide that was either near the onset or the close. Team slides were primarily limited to the founders, but occasionally included other key team members. The data hierarchy on these slides was typically person A name, short title or statement about person A, previous companies and/or exits for person A. Many of the team slides observed also allocated space for existing investors and key mentors. “If you’re going to include advisors — other than employees or directors — you get far more credibility if you can also say that they’re investors. It’s easy for a Ph.D. or retired CEO to lend you their name — but will they put even a modest sum at risk?” asked Randall. “I personally discount non-investor advisor names in a deck.” All things considered, you should be able to accomplish this with one slide. The Ask: A conversation starter I’d imagine this is the most anxiety inducing slide for most founders. You’ve told your story and now it’s time to land the punchline. Most investors want to see a dollar ask. After all, you’ve already told the investor what you expect to build and the expected projection for the business — shouldn’t you be able to project how much it’s all going to cost? Beyond the capital ask, we saw common elements on the ask slide across many of the decks: Expected milestones and metrics to be achieved Projected spend allocation Remaining cash, burn rate and runway Expected participation from existing investors (if any) From Randall’s perspective, No. 1, No. 3 and No. 4 are very important. He indicated No. 2, the specifics of spend, is helpful mainly when the business model doesn’t make it obvious where the funds will go. “OpEx — and head count in particular — is almost always the core spend driver. More detail in the use of funds is only helpful if it doesn’t clearly follow from a head count increase that ties to the GTM and product efforts,” he said. In summary, don’t forget this presentation is the first step in a dialogue. By presenting a transparent ask with the above context around it, you’ll be more likely to have a fruitful conversation where potential investors can understand where you’re trying to go and how they can play a part. Bonus round: wildcard slides Through inventorying every slide in a large number of pitch decks, we came across interesting slides that are not always discussed in pitch deck discussions, but worth considering for any startup. TL;DR slide: A summary slide at the beginning to highlight the key information to follow. Randall indicated this was very helpful and often found in above average pitch decks. Capital efficiency slide: Some of the pitch decks included a slide to show revenue and customer growth achieved with the previous capital. A handful of these slides also included net burn, remaining months of capital and total cash on hand. ‘Explainer’ slides: I use this as a catch all where you want to dive deeper into things like tech infrastructure, product, hiring plans, etc. These are fantastic appendix slides. Appendix: We believe founders should create an appendix section. You won’t always use it, but supporting information can be helpful in a pitch. About this post is dedicated to helping founders increase their probability of success. Be on the lookout for more data-driven posts in the near future. is a venture firm providing entrepreneurs with the resources, experience and connections to build successful technology companies. The firm prefers to invest in the software, analytics and cloud infrastructure startups. It is based in Seattle, Washington and was founded in 1997. For more writing from Randall Lucas check out his blog . NOTE: The views expressed in this article are solely those of the author and do not reflect the views of SVB Financial Group, Silicon Valley Bank, or any of its affiliates. Companies referenced throughout this document are independent third parties and are not affiliated with SVB Financial Group.
It seems like we’ve moved to the Midwest or East Coast with Seattle weather lately. And days like these make us think about how technology can help kids continue to learn when they’re outside the classroom. An upcoming weekend hack event will focus on improving education using technology. takes place Feb. 22 and Feb. 23 in Seattle. “Discover how developments like voice, AI, ML, and AR/VR will forever change the way we learn and teach information,” according to a description from the event site. Here are more highlights from the GeekWire Calendar: : A talk from fashion startup Armoire about how they’ve used machine learning in their business at Ada’s Technical Books in Seattle; 6 p.m. to 8 p.m Thursday, Feb. 21. If you’re a comic book fan, Seattle’s MoPop museum is currently showcasing The exhibit has more than 300 items on display, including props and costumes from the Marvel Cinematic Universe, as well as old, rare or out-of-print comics. The installation runs through March 2. : A presentation about Artificial Intelligence from startup veteran, computer scientist and Allen Institute for Artificial Intelligence CEO Oren Etzioni at Create 33 in Seattle; 5:30 p.m. to 7:30 p.m. Tuesday, Feb.26. : The first night in a series of hackathons where contestants work in teams to develop and program donkey cars at Code Fellows in Seattle; 6 p.m. to 9 p.m. Tuesday, Feb. 26. : An event highlighting current trends and innovations in robotics at WeWork Labs in Seattle; 6 p.m. to 8 p.m. Thursday, Feb. 28. : A competition where five startups pitch their company to the audience members at The Collective in Seattle; 6 p.m. to 9 p.m. Thursday, Feb. 28. For more upcoming events, check out the , where you can find meetups, conferences, startup events, and geeky gatherings in the Pacific Northwest and beyond. Organizing an event? .
, the Seattle-area indie game developer and publisher of titles such as Hello Neighbor and Rapture Rejects, has raised a $15 million investment to fuel growth. Founded eight years ago, tinyBuild partners with third-party studios to turn small game prototypes into full products. It started with games such as No Time to Explain, Party Hard, and Clustertruck. Its most recent title, Hello Neighbor, was tinyBuild’s first franchise that spawned multiplayer spin-offs, prequels, and a book series that just crossed 1 million in sales. The 27-person company will use the fresh cash to hire in Seattle and Amsterdam. , co-founder and CEO, told GeekWire that tinyBuild plans to grow with what he described as a “dynamic structure.” “We don’t necessarily hire for specific roles, rather build roles around people’s skills — and when the industry changes, morph those roles into whatever is relevant at the time,” he said in an email. “I strongly believe it’s dangerous to build companies in the games industry that rely on a strict structure with specific roles — the industry is dynamic, and so is tinyBuild. The flip side of this is that it can often feel like everything is on fire. Organized chaos is what I call it!” Nichiporchik declined to provide details about investors in the round. The company previously from Makers Fund. According to the Washington Interactive Network, is home to roughly 400 video game developers, representing around 23,000 jobs and over $28 billion in annual revenue. Related:
Sales automation startup Outreach was the only Seattle company to make CB Insights’ list of future unicorns. (Outreach Photo) Can algorithms predict the next billion-dollar companies better than human venture capitalists? It seems possible, at least based on a formula created by CB Insights and The New York Times. Back in 2015, the companies published a list of 50 startups that would eventually becomes “unicorns,” or those valued at $1 billion or more. It identified candidates using CB Insights’ which analyzes the health of a startup based on various data including strength of market, financial performance, and overall traction — a “FICO score for startups,” as described by the investment data firm. Fast forward to today, and 48 percent of the companies on the 2015 list are now considered unicorns. “At the risk of sounding immodest, that is pretty good,” CB Insights this month. “And if we were a venture firm, this kind of hit rate would make us legendary.” That’s why it’s worth giving a look. (CBInsights Photo) The 50 future unicorns hail from various industries and the median company has about $111 million in total funding. A majority are based in the U.S., with 22 from California, five in New York, and two in Massachusetts. Outreach CEO Manny Medina. (Outreach Photo) There is just one from Seattle: sales automation startup , which this past spring, announced it was space this summer, made its , and was the only Seattle company to crack the top 25 in list for 2018. Outreach CEO Manny Medina said the company more than doubled its revenue in 2018 and met all goals and metrics. Outreach now has more than 3,100 customer accounts and 50,000-plus users. It employs 315 people and plans to reach 450 by the end of 2019. “This upcoming year we will make more investments in scaling the business efficiently and prepare for an IPO a few years out,” Medina told GeekWire. “This includes continued investment from our product to support, measure, and automate customer facing workflows. Our job is to make all sales reps great and drive higher revenue efficiency for their companies.” The 5-year-old sales engagement platform uses machine learning to help customers such as Cloudera, Adobe, Microsoft, Docusign, and others automate and streamline communication with sales prospects. Medina, a former director at Microsoft, originally launched a recruiting software startup called GroupTalent in 2011 with his co-founders Andrew Kinzer, Gordon Hempton, and Wes Hather. But the entrepreneurs in 2014 to focus on building tools for salespeople. Chris DeVore, managing director at Techstars Seattle — Outreach was a 2011 graduate of the accelerator — said the company is a good example of why he focuses on investing in people over ideas. “Outreach is one of my favorite stories,” . “The business they set out to build wasn’t working, but because they stuck together as a founding team and kept adapting and learning, they figured out how to find a productive thing. But that wasn’t because of where they started or the early metrics. It was because as humans, they were so committed and resilient and so gritty that they figured it out. “And that’s really what you’re betting on,” DeVore continued. “It’s a 10-year journey and it’s never always up and to the right. There are always setbacks and near-death moments. It’s the human capacity for resilience and persistence every time that will turn a bad investment into a good one.” While it’s a safe bet to invest in tenacious and dogged founders, CB Insights’ track record with its Mosaic score shows how data-driven formulas can drive smart investment decisions. That strategy has worked well for firms such as Seattle-based , an online revenue-based funding vehicle that uses proprietary technology to figure out which companies to back. Lighter Capital has invested in more than 300 companies across 500 deals since 2012 and plans to invest in close to 200 startups this year, CEO B.J. Lackland . A recent found that 38 percent of venture capitalists use data to source and evaluate investment opportunities. “Our survey shows strong adoption of data to inform investment decision-making and a growing appetite to increase usage,” Steve Bendt, vice president of marketing at PitchBook, said in a statement. “While the majority of respondents believe VC investing will always involve the human element, there’s enthusiasm to explore how machine learning can automate traditional VC.”
DNA Romance co-founders Timothy Sexton and Judith Bosire. (DNA Romance Photo) It’s Valentine’s Day, so romance is in the air. But it’s not the smell of Axe Body Wash or Chanel No. 5 that will do the wooing. It’s the scent that comes from the unique combination of proteins that pepper the surface of our cells, helping our immune system tell the difference between friend or foe. At least that’s the matchmaking strategy being embraced by , a Vancouver, B.C.-based startup that launched in 2014. “We are deciphering the essential elements behind the ‘scent of love’ and the ideal personality combinations for successful relationships,” said co-founder and CEO . DNA Romance generates potential matches based on a DNA analysis of genes involved with immune system response that research has connected to human attraction. It appears that people with greater differences in their receptors — known as the — are more likely to be appealing to each other. Opposites, it seems, do attract — which has the evolutionary advantage of potentially creating kids with a wider range of immuno-weapons for fighting disease. As an added layer of screening, the service also uses the results of Myers-Briggs personality tests to match singles. People can use a kit purchased from DNA Romance to sample and create their genetic blueprint, or share their results from one of the other DNA sequencing companies. Then DNA Romance applies its proprietary algorithm to the DNA results, adds in the Myers-Briggs analysis and runs the combo against the site’s other users, which number between 8,000-12,000 (Sexton declined to give an exact number). The company promises to generate potential matches within 30 minutes of providing your data. While the idea of bringing scientific rigor to dating holds an appeal, some researchers are skeptical that these genes provide meaningful insights into love connections. A 2018 advised that “experts caution the science behind matching you with someone who has different immune system genes remains theoretical,” though Sexton countered that the story incorrectly mixed up the idea of pheromones with MHC-driven attraction. Sexton, who has a Ph.D. in population genetics and a bachelor’s in biochemistry and molecular biology, is convinced by the research, and the DNA Romance website links to more than two-dozen research papers on the topic. He touts some anecdotal evidence as well. Sexton met DNA Romance co-founder through OkCupid. On his initial dates with Bosire, they talked about the concept of DNA-based matchmaking. Sexton explained the science and Bosire, who holds master’s degrees in economics and international development, considered the business case, asking why DNA-driven dating was not already being used. It appeared that the backend was difficult to code, Sexton said, requiring input from experts in fields including genomics, dating, software engineering and business. DNA Romance provides matching scores based on genetic results and a personality test. (DNA Romance Image) “Despite the challenges, we were still curious and decided to collect a DNA sample from both of us, and then prepare our couples DNA comparison,” he said. “It was a nerve-wracking few weeks waiting for the DNA testing and the analysis to be completed.” The test confirmed that they were a match, and the couple ultimately married in May 2016. Bosire is the chief financial officer for DNA Romance and a senior associate for Deloitte. The third member of the founding team is , now a project manager at the University of British Columbia (UBC). Shortly after launching, the trio participated in UBC’s accelerator. Other contributors include , a Google engineer who helped build the software side of DNA Romance, and lead investor , a psychology researcher at James Cook University who developed the personality compatibility rating. The startup has raised $120,000 from friends and family and has customers in 93 countries. Their business model was initially subscription based, but in the fall they shifted to selling home DNA testing kits and online advertising to generate revenue. The kits — on sale for Valentine’s Day — cost $74.75. DNA Romance is available online, with plans to develop mobile apps. Competitors in the DNA-assisted dating space include Pheramor, GenePartner and Instant Chemistry. We caught up with Sexton for this . DNA Romance co-founder and CEO Timothy Sexton. (DNA Romance Photo) Explain what you do so our parents can understand it: DNA Romance is an online dating platform where predictions of romantic chemistry are made online. DNA Romance also evaluates personality compatibility using information from Myers-Briggs personality types. Like other dating apps, users also see a photograph of each match allowing them to evaluate attraction to appearance. Inspiration hit us when: We had suffered from online dating fatigue! Judith and I had both been using online dating for about four years before we meet on OkCupid, both of us had several mismatches dates — with no “chemistry” at all. As a population geneticist, I understood that while online dating provided many choices, mismatching was occurring because the online sites were failing to predict chemistry before a first date. Online dating sites were overlooking decades of scientific research validated in independent labs showing that there was a genetic basis for romantic chemistry, and the mode of action was similar in all vertebrates. VC, Angel or Bootstrap: We have bootstrapped in order to demonstrate the vision and attract investment from accredited investors. In recent weeks we have been talking to angel investors, VCs and even larger dating sites to secure our next round. Our ‘secret sauce’ is: Romantic chemistry is written in your DNA code, and DNA Romance translates this genetic information into actionable advice to help your dating life. DNA Romance has developed a technological pipeline that has been improving with every customer. At the heart of our business is the DNA Romance matchmaking algorithm, which identifies the DNA markers of interest and calculates predictions of romantic chemistry between our members. The smartest move we’ve made so far: We didn’t hire full-time employees until our growth trajectory was clear. We have hired or contracted subject matter experts who could help to make DNA Romance a reality. The biggest mistake we’ve made so far: We did not fully understand the challenge of educating people about our product. Consumer genetics is a fairly new field with precision health applications finally catching on. We also wish we had learned to code before day one. This would have made the overall development less stressful and costly. A potential match? (DNA Romance Image) Which entrepreneur or executive would you want working in your corner? In an ideal world, we would love to be advised by Markus Frind, founder of the Vancouver, B.C.-based online dating service PlentyOfFish. He built the company and sold it to The Match Group (owner of Match.com and OkCupid) for $575 million. Our favorite team-building activity is: A day hike up a local mountain has so many benefits: We share spectacular views, take a break from technology and achieve a tough goal together. The biggest thing we look for when hiring is: We look for the smartest people available with a passion for our product and the company. It’s important for us to be able to meet every new hire in person. What’s the one piece of advice you’d give to other entrepreneurs just starting out: Get out of the office and talk, people will only invest their time and money if they know you and believe in your vision, not everyone will like your idea if they don’t just move on. Starting a business is an endurance contest, strap in for the long haul and get multiple revenue streams flowing early.
ASG MarTech CEO Steve Reardon. (ASG MarTech Photo) , a Silicon Valley investment firm that acquires and then operates software-as-a-service companies, is swooping up six startups and forming a new marketing tech organization that will be based in Bellevue, Wash. The new company, called ASG MarTech, will consist of the six acquired startups and an existing Alpine SG portfolio company called Grade.Us. They will continue operating as standalone offerings as part of ASG MarTech, which will serve digital agencies and brands with a suite of marketing tools. Here are the six acquired startups, with descriptions from Alpine SG: and , managed by Mike Ciaglia, are software platforms for brands and agencies that allow firms to effectively and accurately monitor, test, measure and prove SEO strategies to their customer bases. , lead by CEO Ben Carpel, is an all-in-one online performance dashboard that helps marketers easily monitor and analyze vital enterprise data in one place. , founded by Jack Yu and Nori Yoshida, helps businesses operating multiple locations engage customers quickly and identify opportunities to improve through its monitoring and management platform. The business is a powerful complement to Grade.Us’s presence in the online reputation management market. , founded by Zach Anderson and Jeff Schwerdt, is a marketing platform that enables local business owners to easily control and expand their online reputation. , founded by Vitaly Veksler is a full-service social media management platform that offers both social media monitoring and scheduling of content. ASG MarTech will employ more than 50 people and will be led by CEO , who previously oversaw Alpine SG subsidiary Bill4Time and Grade.Us. “We are incredibly fortunate to be partnering with such quality businesses,” Reardon said in a statement. “Each business has been infused with the passion and energy of an incredibly talented founder and are well positioned to accelerate their already considerable growth.” Alpine SG is backed by Alpine Investors, a private equity firm. In September it Seattle startup Record360 and has bought 18 companies since 2016.
Polly co-founders Bilal Aijazi and Samir Diwan. (Polly Photo) With millions of employees at thousands of companies now getting work done with collaboration software such as Slack and Microsoft Teams, it’s created opportunities for startups to build tools that help enhance these new workflows. Investors — including Slack’s own VC fund — like what they see so far with , a Seattle startup that announced a $7 million funding round led by Madrona Venture Group. , Amplify Partners, Fathom Capital, and existing investors also participated. What Polly does: Polly’s software is used to quickly collect feedback from employees using Slack, Microsoft Teams, or Hangouts Chat. Use cases include anything from automated polls every time an IT ticket closes or periodic surveys for new hires going through the onboarding process. The idea is to gather and analyze data to improve operations across various parts of a company. “As work converges in Slack, we’ve seen an increase in demand from teams and organizations to connect these pieces of work together,” said Polly CEO and co-founder . “This is why you see Slack and Teams using the language ‘collaboration hub’ more often, because that’s exactly what’s happening. As teams look to measure the success of these processes, with Polly they can trigger feedback requests based off of key events.” Pivot: Polly launched more than three years ago. After graduating from Techstars Seattle in 2016, it a $1.2 million seed round. At the time, Polly was focused on using chatbots to survey employees inside of Slack. Diwan said the software shifted to be less conversational. “Conversational has a time/place, but when users and customers want something, sometimes there are significantly faster ways then to have a text-based conversation,” he said. “There is space in this world for conversational bots — Polly isn’t one of them.” But the company was certainly on the right path. Since Polly started, the use of Slack and other new tools such as Microsoft Teams has increased. Slack, , has 10 million daily users and more than 85,000 paying customers . Microsoft in September that it had 329,000 organizations using Teams. Competition: There are a few other Slack-related polling tools but Diwan said Polly’s software sees higher engagement in part because of its simple and intuitive design. “Others have tried to copy us but they haven’t been able to pull it off,” he noted. Customers: Polly has hundreds of customers, Diwan said. The company launched its enterprise product last year and tripled its user base in 2018. Founding team: Diwan and his co-founder, , are former Microsoft engineers. Employees: Polly employs 11 people and plans to double its headcount. Investor insight: Total funding to date is $10.4 million. Madrona Partner Sudip Chakrabarti will join Polly’s board as a result of the new funding. Here’s why he’s excited about the company, per a blog post from today: Our investment in Polly follows from our core thesis that, enterprise workflows, for the most part, will move away from legacy systems and email to modern online collaborations platforms like Slack, Teams and Mattermost. While these platforms started their lives as messaging tools, they now have the opportunity to become the “operating system” for modern enterprise workflows. That is already happening. Forward-looking organizations are creating Slack teams whose mandate is to adopt and/or build applications to enable enterprise workflows on Slack. As enterprise workflows move to collaboration tools, measuring the effectiveness of those workflows — so that those could be analyzed and further improved — becomes critically important. That is exactly what Polly enables. Polly enables organizations to collect and understand feedback from key constituents so that enterprises can measure and optimize their workflows and thereby, deliver a much better experience.
Tectonic Audio Labs CEO Craig Hubbell. (Tectonic Audio Labs Photo) Seattle-area startup has raised $6 million to further develop its audio technology used in smart speakers, TVs, cars, and other products. WestRiver Group and Delafield Hambrecht led the Series B round. Founded in 2011, Tectonic uses to provide more immersive sound across varying environments. The company’s product uses composite panel tech instead of pistonic vibrations from a traditional cone diaphragm design. Its customers across North America work in a wide spectrum of industries — Tectonic is used inside the ballroom at Treasure Island in Las Vegas; at the lobby and bar at the W Bellevue; and inside . Tectonic aims to ride the growth of the smart speaker market, which is to reach nearly $40 billion worldwide by 2025. CIRP last week an installed smart speaker base of 66 million units in the U.S., up from 36 million a year ago. “We believe the market will continue to shift toward audio products that provide higher voice intelligibility and full range, natural sound,” said , Tectonic’s CEO who joined in November after a 16-year career at PlayNetwork. “We expect that our products will be used in a broad range of consumer products across several industries that want to make voice interaction and audio playback more enjoyable for consumers.” Tectonic employs 25 people.
David Leeds, Tango Card CEO. (Tango Card Photo) startup journey is making a return to Seattle. Founded back in 1997, GiftCertificates.com was one of the earliest gift card resellers in the market. The company relocated its headquarters from Seattle to Omaha . But now it has a new owner: Seattle-based , which announced the acquisition of GiftCertificates.com on Tuesday. Tango Card, which helps companies provide digital rewards, will establish a third office in Omaha and add 30 employees from GiftCertificates.com, which has more than 1,000 customers. The combined company will have 130 employees and more than 3,000 customers. GiftCertificates.com was previously in 2010 by Marlin Equity Partners. Tango Card also announced an additional $10 million investment from FTV Capital, which this past May. “As we got to know the team at GiftCertificates.com, we recognized the same commercial and customer focus,” Tango Card CEO David Leeds said in a statement. “We believe that together and with the backing of FTV we’ll be able to continue creating value for our customers while also being able to grow and influence the incentive industry.” Tango Card’s platform consists of three main ways to deliver rewards. Its “” API allows companies to integrate digital rewards directly into their apps and platforms. allow users to fund a gift card account, build an email template and send out digital gift cards. lets the customer send out a link for the recipient to pick a gift card or donation of his or her choice. Tango Card, which ranks No. 71 on the index of privately held Pacific Northwest tech startups, partners with more than 200 retailers, such as Amazon and Best Buy, in addition to restaurants, movie theaters and others. Tango Card also supports donations to 30 nonprofits, such as Habitat for Humanity, American Cancer Society and Girls Who Code. Editor’s note: This post was updated to reflect that Tango Card raised an additional $10 million from FTV Capital.
David Leeds, Tango Card CEO. (Tango Card Photo) startup journey is making a return to Seattle. Founded back in 1997, GiftCertificates.com was one of the earliest gift card resellers in the market. The company relocated its headquarters from Seattle to Omaha . But now it has a new owner: Seattle-based , which announced the acquisition of GiftCertificates.com on Tuesday. Tango Card, which helps companies provide digital rewards, will establish a third office in Omaha and add 30 employees from GiftCertificates.com, which has more than 1,000 customers. The combined company will have 130 employees and more than 3,000 customers. GiftCertificates.com was previously in 2010 by Marlin Equity Partners. Tango Card also announced an additional $15 million investment from FTV Capital, which this past May. “As we got to know the team at GiftCertificates.com, we recognized the same commercial and customer focus,” Tango Card CEO David Leeds said in a statement. “We believe that together and with the backing of FTV we’ll be able to continue creating value for our customers while also being able to grow and influence the incentive industry.” Tango Card’s platform consists of three main ways to deliver rewards. Its “” API allows companies to integrate digital rewards directly into their apps and platforms. allow users to fund a gift card account, build an email template and send out digital gift cards. lets the customer send out a link for the recipient to pick a gift card or donation of his or her choice. Tango Card, which ranks No. 71 on the index of privately held Pacific Northwest tech startups, partners with more than 200 retailers, such as Amazon and Best Buy, in addition to restaurants, movie theaters and others. Tango Card also supports donations to 30 nonprofits, such as Habitat for Humanity, American Cancer Society and Girls Who Code.
Team Tenta Browser. (Tenta Browser Photo) The founders of Seattle startup want to help banish your digital doppelganger. Or least take control of it. People’s behavior online these days “is not just about sharing your cat videos and family photos. You’re having this long digital shadow,” said Tenta co-founder and CEO . “People are starting to realize this is my own digital clone, and it’s betraying me and it’s following me.” Tech companies and retailers are collecting vast amounts of information about what you view, buy and post online. They can use that data to target ads and news content and if their systems are breached, that personal data falls into criminal hands. Governments in numerous countries such as China, Russia, Turkey and many others that’s available online. So in 2016, Adams and co-founders , chief operating officer, and chief technology officer, launched Tenta, a secure browser that protects privacy and can skirt censorship controls. The company has 100,000 active users, 16 employees and recently raised seed funding (they’re not disclosing the amount). A decade ago, the trio co-founded the popular adult-content app store MiKandi, which is billed as the first and largest app store of its kind — and an enterprise in which privacy protections are paramount to most users. Tenta Browser CEO and co-founder Jesse Adams. (Tenta Browser Photo) Tenta Browser prevents internet service providers (ISPs) and others from seeing which websites a user visits, but is just as easy to use and as fast loading as other browsers, Adams said. Tenta, which is currently available as an app for Android users, encrypts everything: browsing history, downloaded and local files, bookmarks, videos, documents and other media. And for people who like to keep their browsing sessions separate, say for work, personal use and depending on where they’re currently located, Tenta has a “zone” function to organize different uses. Tenta doesn’t store users’ data, and all of the information is decentralized. Competition includes browsers that are basically “Chrome reskinned” with limited privacy blockers, Tor Browser for more “hardcore” users, and tools from Norton and McAffee, said Adams. Opera used to utilize a VPN-based tool like Tenta’s, but removed it. Over the next year, the Tenta team is working to expand to other devices and keep improving their speed. With Tenta, the core browsing function is free, and the company offers subscriptions of $1 to $5 per month for added protection of your devices. Adams said they’re aiming for subscriptions that are as cheap as possible, but people still need to pay something. That’s because Tenta doesn’t follow the more standard approach where handing over personal data is the price for using “free” services. “You are not the product,” he said. We caught up with Adams — who co-founded the MiKandi app store for adults — for this . Explain what you do so our parents can understand it: Today’s browsers need your data to survive, resulting in constant privacy violations and browser spying. Tenta is a crypto browser that takes the complete opposite approach and protects your personal data instead of exploiting it. The Tenta Broswer interface. (Tenta Browser Photo) Inspiration hit us when: Previous to Tenta, we built the world’s first and largest app store for adults. From this experience, we learned three major trends from our customers. First, internet freedom around the world declined for the past eight years, and censorship and network interference were becoming mainstream. Second, cyber security was no longer solvable for the average internet user who craves a simple and trustworthy product to protect them and their families. Finally, constant data collection and surveillance and the resulting massive data breaches revealed that privacy violations have become the norm. In response, we began building browser tools to help our customers alleviate these issues, but soon realized we were just creating more browser Band-Aids. Then the inspiration came when one of us posed the question: “Why not build a better browser instead?” We know that sounds crazy, but we’ve always been driven by big ideas, so that was the spark that got us going. VC, Angel or Bootstrap: For the first two years, we were self-funded. This past month we announced our strategic partner and investor, , for our first significant seed round. We decided to start raising money once we gained real user traction and growth. We especially wanted to work with ConsenSys, which is focused on blockchain businesses. The decentralized future is coming, so if you’re building the browser of the future, you must partner with the best in the industry. We share the same values and vision. Tenta is the secure gateway to the new internet that will help drive adoption of many blockchain services, so we’re looking forward to deep collaborations with them. Our ‘secret sauce’ is: Our team is awesome. Most of us have been working together for many years on complex, large-scale software, so that gives us an advantage. Having a great team also leads to smarter product decisions. For example, we offer built-in VPN and encrypt all your browsing data by default. That includes your bookmarks, downloaded files, open tab data, domain name system (DNS), online traffic, etc. No other browser in the world does this. Our team figured out early on that this was going to be a real differentiator and the team knew how to execute that strategy. The smartest move we’ve made so far: Deciding to build a strong cryptographic foundation to power the browser. There are many private browsers in the market today, but most are glorified incognito browsers with an ad blocker attached. These do nothing to keep you invisible or protect your data. We decided early to go all-in on building a private browser and that meant redesigning many components that our competitors ignored. It also meant that it took us longer to get off the ground, so there were times we thought “maybe we’re going too hardcore with this privacy thing and no one cares.” Now that early decision is the reason why we’re gaining momentum with amazing customer reviews, which in turn helped secure our funding. The biggest mistake we’ve made so far: Drastically changing the browser user interface (UI) when we first launched. You might be lucky to create an app design that is totally new and that people love right away, but that’s extremely rare. With software, it’s often better to iterate and improve on existing experiences. We got too excited with the idea of building a new type of browser and went overboard. We re-learned that lesson the hard way, wasting precious time simplifying the UI. Tenta co-founders Chris O’Connell, Jesse Adams, and Jen McEwen. (Tenta Browser Photo) Which entrepreneur or executive would you want working in your corner? Elon Musk. He’s actually trying to do something grand for humanity. He’s awe-inspiring. If he can land rockets and take us to Mars, then helping us build the browser of the future should be a piece of cake :) Our favorite team-building activity is: Eating together and sharing a toast. Our team is distributed around the world, so we really enjoy getting together and sharing a meal. Most of us love to cook. I think it’s one of the best ways to build bonds and spark conversation and creativity. The biggest thing we look for when hiring is: We look for people who are passionate about what they do for a living and love learning. We often prefer to just look at a candidate’s personal GitHub repository instead of a resume. If you have no personal projects to share, then I’d argue you’re only coding for the money, not because you enjoy it. That difference matters in a startup. What’s the one piece of advice you’d give to other entrepreneurs just starting out: My advice is to take this quote from Calvin Coolidge to heart: “Nothing in this world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent. The slogan ‘press on’ has solved and always will solve the problems of the human race.”
Health care provider Providence St. Joseph Health acquired Seattle startup , which uses blockchain to collect payments more efficiently. The process of billing and collecting payment, called revenue cycle management, is a common headache for hospitals that has attracted solutions from Athenahealth, Experian Health, GE Healthcare Partners and others. Lumedic CEO Lincoln Popp. (Lumedic photo) Lumedic uses blockchain, the technology behind cryptocurrencies like Bitcoin, to share information between payers and providers on a distributed ledger. Providence said it’s the first integrated health care system to use blockchain for this purpose. By moving what is often a manual process to the blockchain, the companies hope to reduce costs. “New technologies like blockchain, artificial intelligence, and machine learning give us an opportunity to view the complexities of today’s health systems through a different lens,” said Venkat Bhamidipati, Providence St. Joseph Health CFO, in a statement. Renton, Wash.-based Providence, which operates 51 hospitals, has hired the Lumedic team and intends to keep it an independent company that will pursue partnerships with providers, insurers and others. Providence did not disclose how much it paid for the acquisition or other terms of the deal. Lumedic was founded a year ago by Michael Nash, the company’s chief product officer, and is led by CEO Lincoln Popp.
Founders from the Techstars Seattle 2018 cohort after Demo Day last year. (GeekWire Photo / Taylor Soper) The Seattle tech ecosystem has changed plenty in the past decade. New startups have grown or died off; the investment scene looks much different; and hometown tech giants continue to expand their footprint. But one organization has been a mainstay since it launched in 2010, offering a launchpad for early-stage startups to help entrepreneurs turn their ideas into full-blown businesses as part of an evolving tech scene in the Emerald City. today announced its 10th class, marking a milestone for the accelerator that has graduated 100 companies to date. Alumni of the organization — companies such as Remitly, Outreach, Skilljar, Bizible, Leanplum and Zipline — have collectively raised more than $700 million in investment capital. Most have built their startups in the Pacific Northwest, helping expand the entrepreneurial clout in the region. “Staying alive is the hardest thing to do in startup land,” said Techstars Managing Director . “We’ve been around for 10 years and have been lucky to be apart of some really great founder journeys.” Techstars Seattle is part of a larger Techstars network that spans across the globe and also features a Techstars venture capital fund and a . Techstars Seattle is based at Startup Hall at the University of Washington and shares space with the , a separate program co-led by Techstars and Amazon focused around voice technologies. Here are the ten startups in the newest class (Demo Day is set for May 7 in Seattle), with descriptions from Techstars, which provides $120,000 in funding in exchange for 6 percent common stock as part of the three-month accelerator. Continue reading for a Q&A with DeVore as he reflects on the longevity of Techstars Seattle and dishes on how the Seattle tech scene has changed. (Seattle) — interactive, customized machine learning training for industry engineers. (Seattle)— testing automation for complex SaaS tech stacks, made simple. (Denver)— identity & consumer intelligence for Asia-Pacific, built on Blockchain. (Cambridge)— augmenting the human brain with always-on personal assistants. Level — transforming access to credit and savings for the underbanked. (Miami)— customer experience platform for the $1 trillion freight forwarding industry. (Seattle) — access to the decentralized future. (Bay Area)— adding real-time intelligence to online communications. (Austin)— meeting familiar strangers. (Seattle)— the YouTube of AR content. Editor’s note: Interview edited for brevity and clarity. GeekWire: Thanks for chatting with us, Chris. It’s pretty cool Techstars Seattle launched 10 years ago and is still going strong. Chris DeVore: When we started out, the idea for an accelerator was kind of a new thing. Y Combinator started in 2005 and Techstars in 2007. We were the third version of Techstars — first Boulder, then Boston, then Seattle. Now there are hundreds of accelerators around the world and the speciation around the idea has gotten pretty tense. As the noise has grown, it’s been about figuring out what you are uniquely good at. Part of what that comes down to — and a lot of this is why we’re so focused on the role we play in the community — is that Seattle is uniquely excellent at a handful of things. It hangs off our anchor tenant companies and the University of Washington. It’s cloud infrastructure; e-commerce marketplaces; enterprise software; and things powered by data and machine learning. There’s also stuff around the edges — space and aerospace, digital health. That’s sort of the learning over the past 10 years. Just being an accelerator is not good enough. Just being a Techstars accelerator is not good enough. So what can we, in Seattle and the Pacific Northwest, do better than anyone else and how do we make that a promise that if you come to Techstars in one of these vectors, we’re going to give you an unfair advantage — not just regionally but globally. That’s the wheel we’ve been trying to spin. Techstars Seattle Managing Director Chris Devore. (GeekWire File Photo) GeekWire: When you say Seattle is uniquely excellent at certain things — what does that mean, and why does that matter? How does it help entrepreneurs? DeVore: As a founder-centric investor, all you’re really betting on is people. The combination of real domain expertise and enthusiasm for solving problems is the kernel of the founder. Despite the stereotypes, research shows that the highest-performing companies aren’t founded by 20-something kids right out of college. They are founded by people who’ve been in the trenches for a while and learned something about business, about the world, about problems. The kinds of problems in our ecosystem that gets people up to speed on tends to be about how software changes the world of work for developers or business professionals or somewhere in between. Amazon and Microsoft have helped attract amazingly talented people to the region from around the world who have a passion and expertise for those problems. If you look at the mentors and investors who make it work, they also came up often through those pathways. They were founders or they spent 20 years working on enterprise software at Microsoft. Their pattern recognition around what good looks like was hardened at some of the institutions that are producing founders. It’s a group of people that understands each other and communicates clearly and has a lot of built-in trust because they share a cultural foundation and passion for those kinds of problems. GeekWire: There have been so many accelerators and incubators and similar organizations popping up in recent years. How has Techstars Seattle kept it going for so long? What is the secret sauce? DeVore: Staying alive is the hardest thing to do in startup land. We’ve been around for 10 years and have been lucky to be apart of some really great founder journeys. We’ve built a community of founders who are themselves really successful, but who are also grateful for the role Techstars played in their success. They give back. They refer companies to us; they come and speak; they mentor. So over ten years, you build this incredible network of people who feel emotionally connected to the brand and community. I keep thinking about the flywheel — the compounding effect of surviving and thriving and playing a role in great people’s success, that keeps coming back to you in positive ways. GeekWire: You’ve been in a unique spot over the past ten years, launching an early-stage venture capital firm in 2008 (Founders Co-op) and then taking over as Techstars Seattle managing director in 2014. How have you seen the Seattle tech scene change? Is Seattle a better or worse place for a founder now? DeVore: There are two narratives. The first is business related. We got super lucky that Jeff Bezos decided to build his company here in downtown Seattle and is scaling headcount faster than I’ve ever seen. The magnetic pull of a high performing company for high performing people into the urban core across a broad range of dozens of businesses has been a massive injection of talent and energy to the Seattle urban core. Then, after what felt like a lost decade in the Ballmer years, Satya has done a similar thing with Microsoft. It felt pretty moribund, the Boeing 2.0 — the Lazy M instead of the Lazy B. Microsoft has become a more exciting and more fun place to work. Those two things have been incredible. That’s the rising tide that has lifted the boat of the entire region economically from a talent standpoint and and urban standpoint. The second narrative is around the livability of Seattle. When you look at the Bay Area, they have politically failed to deal with issues around growth and transit and housing. Seattle hasn’t gotten it right every time, but at the margin, when pushed, taxpayers and civic leaders have said ‘we really do need build a light rail system,’ or, ‘we really need to reconsider how we zone for scale and allow more housing to grow.’ So as the Bay Area has choked on its own growth, Seattle has made it possible to continue to grow and not price out absolutely everybody. Do we have work to do? Of course. Homelessness is a huge issue. But it’s hard to build a great city for work if it’s not a great city also to live in. Seattle leaders have done a good job of saying, ‘we need to do stuff to make this city a great place to live for everyone and not just a great place to make money.’ I think that’s an underreported narrative about why Seattle is winning more and more as an economic center. It’s because we’re doing stuff at the margins to make it a place that works for families and works for transportation. The partnership between business and civic leaders and taxpayers is what will set up the next 20 years of growth. Sunset over the Seattle skyline. (GeekWire Photo / Kevin Lisota) GeekWire: With all that talent rushing into the ecosystem, you’d think Seattle would turn into a startup factory. But that hasn’t been the case. Why not? DeVore: We are still wrestling with what I call a company town mentality. Most people didn’t come here out of school to start a startup. They go to New York City or San Francisco. Seattle is a place where people who already have a career come to further their career. And if you work at Amazon or Microsoft, you’ve had a great run and have a bunch of stock that is worth more every year. Not only is it a great place to get a job, but it’s a great place to keep a job because the companies here are succeeding. We still struggle with Seattle as a place where entrepreneurially-minded people choose to be, as opposed to just talented people who work in tech. The only way you turn the crank on that is to get more great companies that scale and raise money and go public here. We’ve had increasing success at getting companies to be founded here by folks who moved here to work for Microsoft and scaled their own companies and made themselves and their early employees really rich. That’s the story of how you get people out of an employee seat and into the founder seat. Our velocity is slowly increasing there but we’re still much more of a company town than some of the other major tech cities. I believe founders are people who don’t fit in the corporate world. Some people realize that sooner than later. Sometimes the golden handcuffs make it harder to unwind. But most founders realize they aren’t happy working for other people. In any population, that’s going be a small percentage. With more population of talent, the higher the number of potential founders. But it’s always going to be a tiny slice. Most people are happier having a job. GeekWire: With Techstars Seattle specifically, what have you seen change over the years? DeVore: Getting money into good companies has become easier in the Pacific Northwest. It used to be hard to find $1 million for a startup coming out of Techstars because there wasn’t a lot of angel money in the ecosystem and almost no institutional capital for seed-stage companies. In the last ten years, there’s been this explosion of micro-VC firms, particularly in the Bay Area, . We’ve had increasing success at getting out of town seed investors to commit real money into this ecosystem. Getting $1 or $2 million for a great startup is a lot easier than it used to be. The thing that’s gotten harder — or that we chose to make harder — is the realization of how lopsided the demographics of venture-backed founders have been. Companies aren’t just founded by white and Asian men. There are lots of founders who are women or African-American. Somehow we as a system need to think harder about how we’re sourcing and how we support founders from different kinds of backgrounds. It’s about challenging ourselves as a community and looking at the reasons for why we’re not being attractive to founders who look different. How do we open our doors and build relationships and change the narrative so that founders from different backgrounds see themselves in our work and vice versa? We agree with the consensus view, that it’s really important as investors who are trying to make change in the world, to figure out how to make change in your industry. . It’s a challenge we set for ourselves in the last few years that is a new kind of risk we’re trying to take and new type of innovation we’re trying to pursue with the platform as we mature. Seattle entrepreneur Andy Sack (left) stepped down as managing director of Techstars Seattle in 2014, passing the torch to Chris DeVore, his longtime business partner and co-investor at Founder’s Co-op. (GeekWire File Photo) GeekWire: What’s your pitch to founders? Why should an entrepreneur go through Techstars Seattle? DeVore: In general, we’ve seen businesses that are further along and founders who are more experienced join our platform over time. We’ve been able to progressively attract more and more experienced founders. They have more options, yet they choose to work with us. It is the realization that there are lots of things about building a business besides raising money that are important and needed. Founders who can self-assess their strengths and weaknesses and say, ‘hey, if I can find a hack in 12 weeks that super saturates my network in an area of weakness, how much is that worth to me? Is it a couple points of equity to transform in a positive way or mitigate a risk in a powerful way by accessing the Techstars network in Seattle?’ Founders who come to that conclusion are the ones who opt in to the program. The ones who say ‘I got this, I don’t need any help, all I need is money,” are probably not the right fit for what we do anyways. GeekWire: What do you think about the ? DeVore: It’s a super healthy push for clarity. We say ‘no’ all the time to founders — not because we don’t like what they are working on, but we don’t think their business is a fit for venture. The venture model wants one thing and one thing only, which is dominance and hyper-growth in a new category of innovation. And 99.9 percent of all startups do not fit that description. Broadly, the media narrative around startups makes it feel like every business that’s successful is a venture-backed business. There are tons of super successful businesses and make a ton of money for their founders and principals that never take outside funding. But the only thing I find wrong [about the discussion] is the idea that venture is trying to talk people into taking their money and they shouldn’t. I don’t think that’s ever been true. Good venture capitalists are very clear about what the model is good for and what it’s not good for, which is why they say no so often. They don’t want to be part of a business that’s not going to grow super fast and generate a liquidity outcome for everyone in 10 years. So anyone who thinks venture is somehow trying to get people, in a predatory way, to take money from businesses that shouldn’t doesn’t understand the economics and incentives in venture. GeekWire: You’ve seen thousands of pitches. Any learnings with how you invest or what you’re looking for? DeVore: Every time I’ve screwed up as an investor, I’ve fallen in love with an idea and used that as an excuse to overlook shortcomings in the founding team. When I really sit back and ask myself why I lost money on a deal, it’s because I knew there were things about my preferences around what founders I like to work with that were misaligned, but I ignored that because I was so excited about the idea they were working on. I keep coming back to the same thing. If I choose amazing people that are working in some direction that I think has economic merit, scale, and disruptive potential, those founders will find a way to make it work. is one of my favorite stories. The business they set out to build wasn’t working, but because they stuck together as a founding team and kept adapting and learning, they figured out how to find a productive thing. But that wasn’t because of where they started or the early metrics. It was because as humans, they were so committed and resilient and so gritty that they figured it out. And that’s really what you’re betting on. It’s a 10-year journey and it’s never always up and to the right. There are always setbacks and near-death moments. It’s the human capacity for resilience and persistence every time that will turn a bad investment into a good one.
(Atomo Image) Andy Kleitsch was pacing, sipping and talking rapidly during a phone conversation on Thursday morning. The Seattle entrepreneur had had multiple cups of coffee already — and he’d just aimed at upending what we think we know and love about the beverage. and are the co-founders of Atomo, a startup that claims to have “hacked the coffee bean,” in so much as they’ve removed it from the process of making coffee and substituted it with a molecular concoction derived from naturally sustainable (and secret) ingredients. Kleitsch is a tech vert who once worked at Amazon among other places, and he currently leads entrepreneur workshops at the University of Washington. He started looking for his “next thing” about six months ago and reached out to friends in Seattle. Atomo co-founders Andy Kleitsch, left, and Jarret Stopforth. (LinkedIn Photos) “I got all kinds of great ideas,” Kleitsch said. “I heard ideas around firefighting robots and all kinds of things. But Jarret said, ‘I want to make coffee without the bean.’ And that was just too good. It blew my mind.” Stopforth is a Ph.D. with extensive experience around food safety and quality at companies such as Chobani and Campbell Soup. “I love coffee, but every day I was adding cream and sugar to mask coffee’s bitter flavor” Stopforth said. “By replicating the taste, aroma and mouthfeel of coffee, we’ve designed a better tasting coffee that’s also better for the environment.” The sustainability element of Atomo’s mission is driven by the belief that regions where beans are grown will be greatly impacted in the coming years. The company points to a last month that said “60 percent of the world’s coffee species were in danger of going extinct in the next 50 years due to climate change, population expansion, and disease.” Atomo promises that its ground coffee will be suitable for drip machines, French presses, refillable K-Cups, and pour-overs. The grounds will be made of a non-allergen, Kleitsch said. “It’s not going to be made out of peanut shells,” he said. “What we’re really excited to do is find a material that we can upcycle — naturally occurring ingredient that is probably a spent item, that is usually thrown away from a different food process and give it life again.” Disrupting something that is so near and dear to the tastebuds and culture of so many people, and doing it in a coffee capital like Seattle, is a big deal. Atomo could simply create a liquid product without worrying about the grounds and consumer’s brew habits. But the five-person company is made up of coffee lovers who respect all that goes into being addicted to the stuff. “People’s coffee ritual is very important to them and it’s something they do every morning,” Kleitsch said. “And so we want to fit into that ritual, we want to be a part of that, and that’s why we’re coming up with the grounds. So they can just replace [their current coffee] one for one.” A video shot on campus at UW shows Atomo going head to head in a taste test against another certain Seattle coffee company: Atomo has set a goal of $10,000 on Kickstarter, with a deadline of March 9. The crowd-sourced funds will be used to further development. The team is partnering with Mattson, a food tech company, and is bootstrapped right now, with eventual plans to seek investors. Kleitsch said no one else is trying to build coffee from the molecular level up. The closest thing might be coffee without the black color. A company called Endless West does make molecular whiskey, and Kleitsch points to the , makers of a plant-based burger that “bleeds.” When told that maybe Gates would like coffee without the bean, Kleitsch said, “I hope he does!”
(GeekWire Photo / Nat Levy) Seattle-based tax compliance company Avalara has acquired Indix, a Seattle startup that had accumulated vast amounts of data on product information. Indix CEO Sanjay Parthasarathy. (Indix Photo) Avalara, which went public this past June year, will use Indix technology to bolster its tax content database that includes everything from international product codes and classifications to taxability rules. “We believe the combination of deep product knowledge, broad product content, and artificial intelligence technology will allow us to provide our customers the information they want and need to factor compliance into their business decision-making, and for Avalara to address more compliance requirements to support their growth,” Avalara CEO Scott McFarlane said in a statement. Founded in 2013 by former longtime Microsoft executive , Indix developed an intelligence platform that helps businesses analyze and visualize product information across various industries. The company had raised more than $30 million from investors. “From day one, we built Indix to collect, organize, and structure the world’s product information using artificial intelligence,” Parthasarathy said in a statement. “With the addition of the Indix expertise, Avalara will be able to efficiently and rapidly refine its content to meet the expanding and evolving needs of its customers.” Parthasarathy is well known in Microsoft circles. He into the tech giant’s product group in the early 1990s. The Indix homepage now redirects to Avalara’s site. We’ve followed up with Avalara and Indix for more details about the acquisition and will update this post when we hear back. Last month Avalara Compli, a California-based company that helps makers of alcoholic beverages comply with government rules and regulations. Avalara has grown to more than 1,500 employees across 12 offices around the world. Avalara a net loss of $9 million on revenue of $69.5 million for the third quarter. Its stock is down about 10 percent from its IPO price. The company will report fourth quarter earnings next week.
KenSci co-founders Ankur Teredesai (left) and Samir Manjure. (KenSci Photo) has raised an additional $22 million to fuel growth of its machine learning and AI-powered technology that helps health systems predict when patients will get sick and lower healthcare costs. Polaris Partners led the Series B round, which included participation from existing investors such as Ignition Partners, Osage University Partners, and Mindset Ventures. UL Ventures also joined the round as a strategic investor. Total funding to date is $30 million. Founded in 2015 by two childhood friends — , a longtime former Microsoft exec, and UW professor — KenSci’s software aggregates patient data from a number of existing sources, including data collected from patient devices, electronic medical records, and public records. The platform then assembles the data so its machine learning systems can use it to predict clinical, operational and financial risks. KenSci’s customers include Fullerton Health, St. Luke’s Health Partners, Evergreen Health, and others. “In the last two years, we’ve singularly invested ourselves in building a platform that simplifies the way health systems look at their data and gain actionable, predictive insights to save lives and costs,” Manjure said in a statement. “With this round of funding, we’re excited to take these capabilities to a global stage with partners who complement our capabilities and are committed to helping us drive this transformation across the care continuum.” Healthcare spending in the U.S. increased 3.9 percent in 2017 to $3.5 trillion, according to . KenSci appeared on last year, pitching its business to a group of judges. The company, which employs more than 50 people and has additional offices in Singapore and Hyderabad, was also nominated for the Innovation of the Year category at the . “If you can predict, then you can potentially prevent — and not only that, but you can make better outcomes happen and reduce cost,” Manjure said in his pitch, which you can watch below.