#18: FirstClose, BIP Capital & more📍
|Christopher DeLuca||Sep 18, 2018|
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Recent Startup Funding Announcements 💰
FirstClose (Tim Smith, CRO)
FirstClose, an Austin-based provider of technology solutions for mortgage lenders nationwide, raised an undisclosed round of funding.
How long did the round take to close: 8 months.
How many firms did you speak with: 3.
What capital will be used for: Capital is being deployed to enhance technology and increase sales and marketing initiatives.
Valuation after the round: A valuation between $40m-$50m was agreed upon by the parties.
Competitive landscape: There aren’t really many companies that provide the services we provide. We are essentially a middleware application that aggregates multiple vendors in to one delivery platform. To a degree, our competitors are essentially our vendors, but also serve as value added partners.
Macro trends: Home equity lending will continue to rise. At the end of June, US home owners were sitting on $6 Trillion of collective, tappable Home Equity. Tappable equity is the amount most lenders will allow borrowers to cash out, while still keeping 20 percent equity in the home. An increase in home prices over the past few years is seen as the primary factor for this increase in home equity and it is expected to continue through 2019.
Arcade (Dave Cherrie, CEO)
Arcade, a Dallas-based workforce productivity software company, raised USD 1.5m in a seed round.
How long did the round take to close: 6 - 8 months.
How many firms did you speak with: 20 - 30.
What capital will be used for: Marketing & Sales.
Valuation after the round: Between USD 5-10m.
Total amount raised to date: USD 1.5m.
Competitive landscape: Nudge Rewards, YouEarnedIt, Game Effective, Sales Screen.
Macro trends: With the high concentration of millennials entering the workforce, business leaders are desperate for relevant solutions that keep employees engaged at work and maximize their retention. We provide business leaders with a relevant solution for their millennial workforce, using gamification to provide instant feedback, recognition and incentives to engage employees on a daily basis.
Evox Therapeutics (Dr. Per Lundin, co-founder)
Evox Therapeutics Ltd, an Oxford, UK-based exosome therapeutics company, raised £35.5m in Series B round earlier this month.
How long did the round take to close: As a growing company, we are constantly raising money. Raising this round was a relatively condensed process in view of the amount raised and the broad interest we received.
How many firms did you speak with: We spoke to a several dozen investors before closing our oversubscribed round.
What capital will be used for: We will continue to accelerate the development of our technology platform and will importantly move our exosome therapeutics into man in disease areas of very high unmet medical need.
Total amount raised to date: We have raised a total of around £46m.
Competitive landscape: The exosome therapeutics landscape is emerging, with only a handful of players. Due to the ground-breaking work by our founding team, we have consolidated a very comprehensive technology platform and an associated patent estate, giving us a unique position in terms of being able to operate and commercialize exosome therapeutics across various drug modalities and disease areas. Thus, we do not really see any of the exosome therapeutics companies as competitors, but we are of course constantly assessing the progress being made across cell and gene therapy and within the drug delivery space.
Macro trends: One thing that is evident is that the large pharma and biotech companies are growing increasingly interested in various types of advanced drug modalities, such as CAR-Ts, gene therapies, and exosomes, so we expect there to be significant deal making in the space over the coming years. Clearly, our comprehensive proprietary technology platform enables us to leverage this interest, so I think we are really well placed to capitalize on the strong interest in exosome therapeutics.
Countingup (Tim Fouracre, founder & CEO)
Countingup, a London-based provider of a mobile bookkeeping and banking app, raised a £2.3m seed round.
How long did the round take to close: Fundraising is an ongoing process. Capital builds huge business and therefore it's important that the CEO is always speaking to investors.
How many firms did you speak with: We had to kiss a lot of frogs to find our prince!
What capital will be used for: We have two clear goals: (1) To grow our customer base to more than 10k which we are well on track to do. (2) To build out the accounting features such that we can monetize our customers with a monthly subscription fee.
Comment on valuation after the round: Existing shareholders were diluted by typical VC amounts i.e. 20-30%.
Total amount raised to date: £2.9m.
Competitive landscape: Countingup is a whole new category called an accounting bank as no one currently offers a business current account that is also your accounting software.
Macro trends: A transformation of tax in the UK called Making Tax Digital is a significant driver. HMRC is requiring that businesses keep digitial records and make quarterly online tax filings. This will force businesses to look for new digital accounting systems that are easy to use.
Treez (John Yang, CEO and founder)
Treez, an Oakland-based provider of point of sale software for the legal cannabis industry, raised an $11.5m Series A round last week.
How long did the round take to close: We started our raise over two years ago. The grind is real and new entrepreneurs should multiply their target fund date by at least four.
How many firms did you speak with: 100+.
What capital will be used for: We will use the funds to expand our team, explore invest in beneficial partnerships, and bring more creative retail management solutions to this rapidly growing industry.
Total amount raised to date: $15m.
Competitive landscape: MJFreeway, Green Bits, Biotrack, Flowhub.
Macro trends: VCs are opening up, more public opportunities and in general, more competition and market entrance resulting in consolidation of best of breed companies.
Silvernest (Wendi Burkhardt, CEO)
Silvernest, a Denver-based online roommate-matching platform, raised a $3m Series A round earlier this month.
How long did the round take to close: We started talking to potential investors in early spring 2018, and continued to vet offers and engage in discussions until the end of May 2018. The entire process including diligence took approximately 120 days. We are extremely happy to have found the perfect partner for us in Incenter, a Blackstone Group portfolio company.
How many firms did you speak with: Approximately half dozen during the course of this specific investment period, although some were certainly more serious discussions than others.
What capital will be used for: First and foremost, the new funds will be used to expand our user base in all 50 states. Other priorities are acquiring new talent and continuing to build our core platform with expanded features and functionality.
Total amount raised to date: This Series A round was $3 million, and that brings our total financing to date to $4.45 million.
Competitive landscape: Current competition ranges is largely lack of awareness. However there are various services focused only on roommate matching and do-it-yourself alternatives such as Craigslist. There are several small matching services that specifically target niche audiences such as only females or specific types of matches. Silvernest’s service is marketed to a broad demographic that includes male and females, and we can pair our homeowners with roommates that best suit their needs, which may include a wide range in age or personal preferences. Silvernest offers a robust set of technology tools that make the process simple and secure to support your personal choices.
Macro trends: Stats show that 10,000 people are turning 65 every day in the United States and Americans are living longer than ever before. This population wants to age in place, but many are financially underprepared for retirement and living on fixed incomes. A large number of boomers are also contending with higher costs of living that aren’t necessarily reflected in their incomes. These factors are leading many to leverage their homes as assets by renting out unused space to long-term housemates. In doing so, they can earn an average of $10,000 a year in extra income that can be used to offset their living expenses or boost their nest eggs. We’re also seeing a number of cities – especially those with a higher cost of living – introducing home sharing programs as a means to temper their housing crises. We’re perfectly positioned to capitalize on these trends with a service that securely matches homeowners with compatible housemates, benefiting both financially. On a macro level, we’re helping communities as a whole by putting more affordable real estate on the market that wouldn’t be otherwise available.
VC firm update
BIP Capital — Atlanta (Mark Buffington, CEO)
Sector focus: Healthcare IT, Enterprise SaaS, Digital Media, Developer Tools, Marketing Technology.
Geographical focus: Southeast and Midwest US.
Capital for future investments: $100 million.
Number of new investments so far this year: 2 new investments; 6 follow on investments.
Number of investments before year end: We have a very active pipeline and expect to make 2-5 more investments before the end of the year.
New fund: We are actively fundraising for BIP Capital Venture Fund IV now.
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