#20: Ro, ZenLedger, and more📍

PD Reporter brings together a weekly selection of exclusive interviews with early-stage founders and VC firms. The newsletter attempts to uncover previously unreported data such as valuation, total amount raised, and conversations around new financing rounds.

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Recent Startup Funding Announcements 💰

US—New York/SF

ReGrained (Daniel Kurzrock, CEO)

ReGrained, a San Francisco-based ingredient platform and packaged goods company that leverages patented technology to transform food manufacturing byproduct into superfoods, closed out its $2.5M seed round last week.

  • How long did the round take to close: 

    There were a few waves to the round. Most of the capital was raised in the last 9 months. 

  • How many firms did you speak with: 

    Tough one to answer because part of our capital stack here is equity crowdfunding, which had nearly 700 investors. 

  • Total amount raised to date: 

    $2.5M.

  • Competitive landscape:

    We're the only company that is taking a true "platform" approach to building this market with technology to scale the supply chain, and a brand to stoke demand. There are a few other companies like Canvas making branded products out of brewers spent grain, and others making ingredients, like Zea10. Both of these are funding by AB-Inbev. Our ready-to-eat products will compete with any other foods that can be pulled from the shelf. 

  • Macro trends: 

    Food Waste is a massive one. 40% of all edible food is wasted. This does not include edible byproducts, like brewers spent grain. Also the trend towards natural/healthy foods that are good for you and good for the planet. 

Ro

Ro, New York City-based direct-to consumer telehealth company, raised $88M in Series A funding in September.

  • What capital will be used for: 

    The capital is being used to continue to build out Ro’s infrastructure (physician EMR, pharmacy operating system, and patient management applications). We’ll also leverage the infrastructure to launch new conditions in the coming year.

  • Total amount raised to date: 

    We’ve raised $91.1M.

  • Competitive landscape:

    If we are constantly thinking about how we can serve our members best, we can’t go wrong. The only people we’re trying to serve, the only people we’re competitive against is ourselves. The only thing that will limit what we accomplish is how hard we work and how we listen to the people we serve.

  • Macro trends: 

    We are currently in the early stages of a shift to “Consumer First” healthcare.

    When you are forced to spend your own money on healthcare (you’ve always been paying but the obfuscation of how you’re paying for your own healthcare could be a book in and of itself) you go from being a “patient” to a “customer.”

    If you’re not explicitly paying for something (i.e., employer is paying on your behalf, which comes out of your salary but again, for another time), it becomes very hard to complain and see results. The incentives are not perfectly aligned between you, your employer, your provider, and your health insurance company.

    But when you are paying for something—you start to demand the same type of experience you get from Apple, Amazon, Google, or Netflix. “Consumer First” forces transparency. Transparency leads to competition. Competition leads to cheaper options and better care. Better care leads to happier, healthier, and longer lives.

  • Other details:

    We’re working to reinvent the way people experience healthcare. When we first started, we dreamt of the experience we wanted to deliver and worked backwards. This meant rebuilding the infrastructure from scratch. We built our own physician EMR, our own pharmacy software, patient application, and even our own pharmacy fulfillment center, which now power both Roman and Zero.

    We did this because we never wanted to be the company that told a member to “please call our pharmacy partner” when they had a health question. We wanted to be the company that takes on the complexity, so our members never have to. We wanted to not only offer the best experience in the present but innovate on the future.

  • Jobs: Product Manager, General Manager, Head of Growth, Social Media, Strategist, Head of SEO

US — Iowa, Seattle

IDx (Gary Seamans, CEO)

IDx, a Coraville, Iowa-based AI diagnostic company that develops clinically-aligned autonomous algorithms to identify disease from medical images, raised $33M in funding last week.

  • How long did the round take to close: 

    8 months.

  • How many firms did you speak with: 

    Approached by 54 entities (post FDA clearance), discussions with 8.

  • Comment on valution after the round:

    Significant, reflecting the value of the first ever FDA cleared AI system for autonomous diagnosis in the front lines of medicine.

  • What capital will be used for: 

    Delivering our system to the primary and retail healthcare marketplace and accelerating the pipeline of additional AI algorithms which will reside on our deployed platform.

  • Total amount raised to date: 

    $54.7M.

  • Competitive landscape:

    At this time we are the only entity with FDA clearance for an autonomous AI system. Considerable clinical trials and evidence will be necessary for other entities to receive clearance for autonomous AI based algorithms. 

  • Macro trends: 

    The healthcare system (patients, providers, payers and specialists) wants and needs the benefits that a widely deployed autonomous AI system offers.

  • Other details:

    The first to market with a new technology is an incredible opportunity.  In the healthcare space, it is also an incredible responsibility.  We intend to leverage our position to not only directly address the problem of unnecessary blindness associated with diabetes, but also demonstrate how autonomous AI can be introduced into medical practice in a manner that is both physician and patient friendly, safe and effective, and scalable across multiple high impact disease states.

ZenLedger (Pat Larsen, Co-Founder)

ZenLedger, a Seattle-based provider of tax software for cryptocurrency investors and their accountants, raised $1.5M in funding in September.

  • How long did the round take to close: 

    4 months on and off. We started the round in May and had angels come in. In August, we closed two VC’s on the same terms. We found that our Angels had significant crypto assets and really understood the market and problem we were solving. However, with the crypto markets down, it made a lot of sense to engage with VC’s that had recently raised funding and were looking to invest in blockchain.

  • How many firms did you speak with: 

    At least 100 Angels and VC’s. Mostly through warm introductions but it’s still a high miss rate

  • Comment on valuation after the round:

    We haven’t priced the company yet. We used very vanilla convertible notes.

  • What capital will be used for: 

    We are looking to improve our product by building out or development team and ramp up the number of features and integrations going into next tax season. We will also expand our marketing team.

  • Total amount raised to date: 

    +$2M has been raised in total.

  • Competitive landscape:

    We think that the market will be expanding rapidly so we worry more about getting the product to a be a “complete solution” for as many CPAs and crypto investors as possible. There are a number of companies in the same space and that’s to be expected. There are just a lot of problems to solve in the space right now.

    We aim to win not only on product quality (speed, ease of use, accuracy, automation) but also on customer experience and customer support. We have noticed that most of the offers in blockchain typically have poor user experience so we are making sure you can always get a hold of a person to help you with your problems. Taxes are stressful, so we aim to be as helpful as possible. You don’t need more stress.

    Bitcoin.tax and Cointracking.info are our most established competitors.

  • Macro trends: 

    We definitely have a thesis that crypto will gain more traction in solving real problems and we’ll move past this point of “crypto is just about speculation”. We think that utility and security tokens will find their footing and start being used in the US and globally. We are forming partnerships and making sure our software will be able to work well in this evolving landscape.

  • Other details:

    We work with lots of CPAs and tax lawyers to make sure we are putting our customers on solid footing, even if the tax laws are still rather murky in the United States. We realize that taxes are a high stakes thing and so we are putting forth a ton of effort to make sure we are taking care of our customers and getting everything right.