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Future Funding 🔮
Q-Branch, a developer of a residential cyber-security and network control device, is “planning to raise an (series) A round of around $3-5M in Q1 of 2019 to accelerate our planned enterprise pivot in Q1,” according to Jim McCoy, founder of Q-Branch Labs. Companies with similar devices includes Cujo, Akita, or Bullguard Dojo, McCoy noted. So far, the company has been“self-funded and recently closed a small seed round to bootstrap our manufacturing pipeline prior to an IndieGoGo crowdfunding campaign that is going to kick off in early January.”
Voxpopme, a UK-based a video analytics platform, may be ready to begin talks for its Series B round very soon, following the recent close of its Series A round, according to Dave Carruthers, CEO and founder. “We believe we’ve found that in Mercia Technologies and their support so far has been incredible and were happy with the valuation after the round - so much so that we’re ready to embark on our Series B very soon.”
*Q&As with these two companies in next week’s newsletter.
Recent Startup Funding Announcements 💰
US— New York, California
Edo (Kevin Krim, president and CEO)
Edo, a Los Angeles and New York City-based tv ad measurement platform provider, closed $12m in Series A funding earlier this month.
Recommended rule to live by: Take good notes at meetings and identify the action items before the meeting ends. We all invest too much precious time in meetings to let the main outcomes slip away.
Recommended book: Creative Confidence by the Kelley brother.
How long did the round take to close: About 6 weeks of focused effort, preceded by many months of laying the groundwork. Our board did most of the work, letting us focus on the business.
How many firms did you speak with: Over time it's been many dozens of investors.
What capital will be used for: We're continuing to hire engineering and data science talent to develop new products and new data sets. And we're scaling out our sales and analytics resources to sell our current product across all national brand advertising categories.
Seems as though the process of raising money isn’t efficient. Your thoughts: In our experience, it's a pretty bad use of founder time to devote many months to VC pitches and related overhead. It can become easy to confuse what the real goals are. We were very fortunate to have a board of non-operating co-founders who are dialed in to a great network of strategic investors who are not conventional VCs. We were able to get strategic individuals as our main investors instead of generic VCs which is so much more helpful for a company like EDO that is very focused on a very lucrative but largely overlooked segment.
Total amount raised to date: Over $12 million (we did not disclose the exact amount of seed capital but it was in the low 7-figure range).
Competitive landscape: We do not have any direct competitors -- mostly because Linear TV has been overlooked in the huge rush to Digital Video -- but we have to fight for share of budget and mind with the traditional measurement and research behemoths, so it's a real battle.
Macro trends: The macro trend is automation and AI technologies that will allow Linear TV to finally offer the kind of transaction platforms that have been available to advertisers in digital for decades. That will open up Linear TV as a real option for 10x to 100x the number of advertisers than have traditionally viewed it as a viable option. We believe our approach provides the right kind of rigorous, performance-based metrics for buying and selling that future of TV.
Hiring: We're hiring! https://www.edo.com/careers
Alpaca (Yoshi Yokokawa, CEO and co-founder)
Alpaca, a San Mateo, California-based API stock brokerage for developers and bots, raised $3m in Pre-Series A funding back in October.
Recommended rule to live by: We’re always mindful of logically calculating what is cheaper when considering the time, actual dollar spent, and physical and mental conditions.
How long did the round take to close: About five months.
How many firms did you speak with: About 15 investors.
What capital will be used for: We’re going to be investing heavily in building out the team. And we’ll be testing several customer acquisition channels to find the right message and audience that will drive growth.
Comment on valuation after the round: Around $20 million USD.
Seems as though the process of raising money isn’t efficient. Your thoughts: Closing a funding round is really similar to closing any kind of business deal. A funding round is similar to a B2B enterprise deal, which usually takes some time to close when you consider the time from the initial pitch to the finalizing of an agreement. Each enterprise product is unique and each deal is unique. So I personally think that it is difficult to be much more efficient than this unless the enterprise sales process itself could be drastically improved in some way.
Total amount raised to date: $6 million.
Competitive landscape: The online brokerage space is well-established industry, so there are many players out there. In terms of targeting a new generation of users, Robinhood does a great job. We feel like we learn a lot from them. Interactive Brokers is another player who has partially offered an API solution to our targeted tech-savvy users.
Macro trends: There are more tech-oriented users who are entering the retail investment sector and no one has really prepared for that shift in the market. We’re really going to focus on building the right platform for this new tech-native generation as well as recent crypto hype.
Other details: Within 2 weeks of the product release, we executed more than $1 million in trades.
myLAB Box (Lora Ivanova, CEO)
myLAB Box, an LA-based at-home STD testing service, raised $1.56M in seed funding back in August.
How long did the round take to close: Fundraising can be a time-consuming process and distract founders from the key priority of running the business, so it was important we completed this round as fast as possible. At the same token, we wanted to make sure we are only aligning with investors who would bring value beyond funding and support the company and it’s growing needs as we scale. The raise took a few months and in that time we were fortunate to foster strong relationships with investors who believe in our mission and share our urgency around building a business with purpose and making a difference.
How many firms did you speak with: Fundraising is a process. Our goal was to find the right chemistry and vision alignment to ensure our investor community so we can enjoy a smooth working relationship for months to come. We spoke to a small handful of angel groups but also a number of individual and seed funds to narrow it down to the handful we felt would be the best fit as we enter into the next stage of growth of our company.
What capital will be used for: The funding will allow us to research, test and create new test kits to address additional STDs and infections. Additionally, we will be able to evaluate and expand into other personal health verticals. We want to be able to provide consumers with an alternative form of testing and health care to better fit their lifestyle and circumstances.
Total amount raised to date: The total investments to myLAB Box now totals $2.18M. Due to high investor interest, we oversubscribed both rounds.
Competitive landscape: myLAB Box was the first company to offer a nationwide at home alternative for STI screening and to-date remains the only fully nationwide testing-to-treatment platform as well as the most comprehensive. While we are excited to see other companies follow suit we believe the current landscape is still very much a wild frontier and as such our focus remains on innovation, not competition.
Today myLAB Box offers unmatched quality of service in all 50 states at speed and value which are unprecedented. A person can screen and get treated for a potential infection 10X faster than the conventional model involving clinics and brick and mortar lab facilities and less than ½ the cost. Our packages are expertly designed and with stringent quality control, making us the market leader in at home sexual healthcare in the marketplace.
Macro trends: The biggest trend we’re seeing is the continued increase in STD/STIs in the US, which per the latest CDC STD report, have increased for the fourth straight year while maintaining record levels. We started myLAB Box as a new approach to the problem, focusing on the stigma surrounding STD testing which is keeping people away from clinics. By bringing the test to your mailbox, users can test from the convenience and privacy of their homes.
Other details: myLAB Box’s core mission is to change and improve lives, giving users a convenient and cost-effective alternative to clinical testing. When we launched the company, few believed consumers would respond positively to an at-home screening service, but the demand has been overwhelming. As the healthcare community has also begun to embrace and pay notice, we believe the true disruption in the healthcare sector will ultimately come from the trenches of the startup world as we keep hands on the needs of consumers first and foremost to any other interest. Our success is a true testament that great ideas met with innovation, an entrepreneurial spirit and persistence can change the world.
Ushur (Simha Sadasiva, Co-Founder & CEO)
Ushur, a Santa Clara, California-based provider of a SaaS service engagement platform leveraging enterprise data, Robotic Process Automation and Language Intelligence Service Architecture (LISA), raised $12m in Series A funding back in October.
Recommended rule to live by: My mantra for efficiency is centering every aspect of the business around customers. The Ushur team optimizes all processes from a customer standpoint – with the ultimate goal of acquiring, satisfying, and retaining customers.
Recommended book: I’ve been an avid reader of books about entrepreneurship (The Hard Things About Hard Things by Ben Horowitz; The Lean Startup by Eric Ries), leadership (RISE by Patty Azzarello; Leadership by Rudolph W. Giuliani), success (Getting Things Done by David Allen; Outliers by Malcolm Gladwell; Traction: How Any Startup Can Achieve Explosive Customer Growth by Gabriel Weinberg and Justin Mares), and memoirs (Dreams From My Father by Barack Obama; The Story Of My Experiments With Truth by Mahatma Gandhi). While there is compelling insight within each book, I find them to be most valuable when synthesized together. They’re each written about specific people or organizations, so I’d recommend entrepreneurs read a variety and customize the collective advice for their own company’s DNA.
How long did the round take to close: Ushur’s co-founder Henry Peter and I built the company from ground up and spoke to virtually everyone we knew at every possible opportunity – the running club, at social events, etc. Overall, we raised seed capital as needed over 3 years until we built a base of customers and established a product-market fit. Series A funding followed this. For Series A funding alone, it was about 3 months start to finish.
How many firms did you speak with: The majority of our funding to date has been at the grass roots level, which included reaching out to more than 250 people in our network. A lot of our investors came through referrals. Our Series A investors actually approached us—and they ended up being a great fit for the company.
What capital will be used for: Any good business will ideally invest in three major areas: the product/service, sales & marketing (to amplify your key messages in the market), and business development (to identify new approaches for selling your product/service). At Ushur, we have learned to be frugal, but do plan to invest heavily in each of these three areas.
Comment on valuation after the round: VC firms have an investment thesis of owning between 20-30% of a company at the Series A stage. Our funding round of $12 million was within this range, making it worthwhile for our early investors, our founders, and our team. I believe it’s important to retain enough to be able to share all of Ushur’s ‘glory’ with various constituents: investors, employees, as well as partners.
Seems as though the process of raising money isn’t efficient. Your thoughts: Prior to founding Ushur, Henry and I were part of a team that executed an IPO and had seen what it takes for a company to expand, evolve, and eventually go public. There are plenty of ways for startups to accumulate and grow capital, but there’s friction in the way companies get funded—not to mention the dilemma investors face in deciding between so many good entrepreneurs and ideas.
We have also come to realize how much of an impact location has on an entrepreneur’s ability to find funding. Being in Silicon Valley has given us ample opportunities to increase brand visibility for Ushur among investors, but access to those investors is limited for people in other parts of the country and the world, regardless of how good their ideas may be.
Total amount raised to date: Bootstrap funding through Series A brings us to around $12 million.
Competitive landscape: Automation is being approached by different players with various distinguishing features. There are platform companies that have moved on from traditional recordkeeping CRMs to providing engagements, pure AI/ML companies that focus heavily on data analytics using Machine Learning technology, and legacy call center companies that are ambitious about automating various internal processes.
However, within the specific space of service engagement automation, there’s no one organization that has the badge of honor yet; Ushur has gotten a significant head start, but we are mindful of our competitors. That’s part of why we will continue to invest in the development of state-of-the-art solutions.
Macro trends: With the ubiquity of the smartphone and growing accessibility of information, it’s possible for consumers to experience digital consumption in new ways. As such, the expectations of the average customer have grown significantly, and will continue to grow over the next 5-10 years. Ushur has been created to fill the gap between these expectations and the digital experience a company can provide.
Hiring: We are looking for great talent in a few areas. We’re growing our sales and marketing team in the U.S. with seasoned professionals – specifically those who have experience in sales of automation and system of record products/services. We are also hiring engineers in our Santa Clara and Bengaluru offices. People can find out more on the Company page on our website: https://ushur.com/company/#open-positions.
Kinvolved (Miriam Altman, CEO)
Kinvolved, a NYC-based provider of software and services reducing chronic absenteeism and boost daily attendance, secured $1.54M in its second seed funding earlier this month.
Recommended book: In the last year or so, I have become an avid podcast enthusiast. They offer a great way to take in information while in transit, at the gym, or otherwise on-the-go. I swear by a few podcasts, including 1A by NPR, NPR Politics, New York Times’ The Daily, but most relevant to this audience is How I Built This with Guy Raz. It is an interview-style podcast that tells the story of entrepreneurs behind brands we know and love, from Reddit to Eileen Fisher to Teach For America and more.
How long did the round take to close: We raised this round in two waves, as we developed the full set of projections, use of funds, and accompanying narrative that drove this round. We raised the first third of the financing in fall 2016. At that time, we thought the total round would be $450K. Then, we met game-changing strategic investor, the Draper Richards Kaplan Foundation (DRK), which invested in fall 2017, and helped us really figure out the capital needs of the business at that point. With DRK as our lead, we then decided to reopen the round, going out then to raise the remaining 60 percent of the total round in spring and summer 2018. So, while the round was effectively open during two periods, but we were most actively fundraising from March through August 2018.
How many firms did you speak with: Since about March 2018, I would estimate that we spoke with about 50 targeted investors in total. But, we spent quite a bit of time honing the target list by gathering feedback from other entrepreneurs and advisors before we even started outreach. We included 11 investors in this round in total, including three who followed on their investments in our Seed I round.
What capital will be used for: We are largely investing in R&D and broadening implementation support and expanding our sales and marketing efforts.
Comment on valuation after the round: While we are not able to publicly report the valuation, I can say that it nearly doubled the cap in this second seed round compared with our first seed round. This increase is a reflection of the company’s successful growth in revenues and users, annual customer retention rates upwards of 90 percent, and achievement of the mission, proving to increase student attendance and family engagement across our school district partners in eight states and the District of Columbia, to date.
Seems as though the process of raising money isn’t efficient. Your thoughts: If we had a strong lead investor back in 2016, we may have raised more quickly. The reality is that we didn’t know how much we needed to raise until we had been working with DRK for a few months, and they were able to really “get under the hood” with our leadership team and dig into the financials with us. Once they were able to do that, we were able to construct a clear financing plan that would help us achieve specific milestones. In reality, it is difficult for a start up’s internal leadership to do this strategic planning work alone, all while trying to build the business day-to-day simultaneously. With DRK on our board, we had the extra support we needed to look ahead further.
Then, once we had a fundraising plan and narrative in place with DRK, Stephanie Khurana, Managing Director, and I became a great team in the process of closing the round. We collaborated to identify a target funder list and secure introductions. I would tell prospective investors the story of our past milestones and the purpose of the raise, while Stephanie would lend additional credibility to the investment as a notable name in the social impact field that had performed extensive diligence on Kinvolved. Stephanie’s insights gave investors additional confidence in their decision to join the round.
All of this is to say that entrepreneurs do not always have the luxury to identify a lead investor in a timely manner. However, the sooner they can, and the stronger the lead, the faster the fundraising process can move forward. This has been my experience, now having raised two separate seed rounds, the first of which lacked a lead.
Total amount raised to date: The company has raised just over $3M to date. This includes $1M in our Seed I round, $1.54M in our Seed II, and $500K in grants.
Macro trends: As a result of ESSA, absenteeism is an issue that is capturing much more attention today than in year’s past. This means that there is greater accountability at the school district and state level to not only capture better attendance data, but also to report on results and close absence gaps. Because we have been working on this specific issue for six years, we are well-positioned to take a broad share on the market looking for solutions to this widespread problem.
While the absenteeism problem that we aim to solve is growing in importance, the barriers to entry are increasing. The edtech investment boon of a few years ago has subsided, and the sales cycles are long. Thus, cash flow can be a real challenge for small edtech companies, and we are seeing fewer new companies crop up as a result.
At the same time, the industry is moving toward greater consolidation, which makes a lot of sense. Districts want products that offer an array of services, resulting in fewer integrations, disparate contract negotiations, and other challenges for the customer that come with a fragmented market.
As we look toward Kinvolved’s next phase, we are evaluating these market trends and positioning the company accordingly.
US— Ohio, Colorado, Pennsylvania
Checkpoint Surgical (Len Cosentino, president and CEO)
Checkpoint Surgical, Inc., a Cleveland, Ohio-based medical device company with proprietary neurostimulation technology for nerve protection and repair, completed an $8.8 preferred funding round back in September
Recommended rule to live by: Not really a rule but we do emphasize our shared mission and a set of core values. A clearly stated mission that is passionately communicated by leadership points everyone in the right direction so they stay on course and have a defined purpose for our work. Our core values emphasize excellence, urgency, collaboration and doing the right thing. Add in a culture of gratitude with high expectations for performance and character while also placing a high value on people. Good people working together with purpose results in efficiency.
Recommended book: I’ve read a few of helpful books about leadership and business but there isn’t one that particularly stands out to me, except Leading with Honor by Lee Ellis. Everyone has someone following them. In my view, lessons in leadership apply to everyone, not just those in management. The one book I would recommend universally is the Bible.
How long did the round take to close: This round was raised in two primary tranches, the first tranche was led by our existing institutional investors, First Analysis and JumpStart NEXT Fund was completed in July 2017. We did not seek any new institutional capital in this first tranche. For the second tranche we started talking with new institutional investors in April 2018. I believe our first contact with Mutual Capital Partners to solicit interest in this round was in May 2018. The investment was completed in mid-September.
How many firms did you speak with: We spoke with two venture capital firms including Mutual Capital Partners.
What capital will be used for: We have added and will add new executive level talent and support personnel in R&D and operations, increase our direct sales force 50%, increase marketing and surgeon education expenses 50%, and invest significantly in development and clinical trials for a new application of our technology.
Seems as though the process of raising money isn’t efficient. Your thoughts: In my experience when you are bringing in a new institutional investor the process typically takes six to nine months. This last time was a little shy of five months from first contact with Mutual Capital Partners and I think the time to close was positively impacted by MCP’s previous familiarity with Checkpoint and the fact that other institutional investors had already invested in the round. It certainly requires significantly north of 50% of my time during the process and a substantial time commitment from our CFO, but only limited time of others in our organization. In most cases it is inefficient and distracting from running/growing the business but it is necessary and I’m not sure I know of a better way. One thing that helps is establishing relationships in advance and keeping investor groups apprised of your progress so that when you are ready to solicit investment you can shortcut the introductory phase. I suspect it is less time consuming in markets where availability venture capital is more plentiful. Competition gives everyone a greater sense of urgency.
Total amount raised to date: Approximately $24 million since inception of the company.
Competitive landscape: We compete primarily with other modalities for locating and monitoring nerve function during surgery, particularly intra-operative nerve monitoring systems like the one marketed by Medtronic. There are no companies presently that compete directly with our approach to nerve monitoring and assessment using a handheld, surgeon-controlled nerve stimulation technology.
Macro trends: There are three trends in particular that we see developing:
We believe the standard of care will continue to migrate to require nerve protection across many types of surgery which is a trend we are helping to drive.
We also believe that surgical repair of nerves will play a significant and growing role in the treatment of nerve-related pain, such as phantom limb pain and stump pain suffered by amputees. This is already being done in a number of prominent medical centers in the U.S. and appears that it will grow rapidly and expand into other pain conditions. The use of intraoperative stimulation is a key component in these nerve repair surgeries and Checkpoint is the tool of choice.
Development of new treatments to improve the rate and degree of nerve recovery following a nerve repair procedure. Surgeons and patients are dissatisfied with the current status of nerve repair which takes many months for the repaired nerve to recover function and even in the best cases is sub-optimal. Recently the use of electrical stimulation as a therapy to accelerate and enhance nerve recovery is getting significant attention. Checkpoint is well positioned to be a leader in this arena.
Assignar (Sean McCreanor, CEO & Co-Founder)
Assignar, a Denver-based innovative construction operations management platform provider, raised $6.2m in Series A funding back in October.
Recommended rule to live by: I have two (sorry!) 1. learning to say no fast and move on (specifically, archive or delete that email so it isn't front of mind anymore). It saves me from being unnecessarily overwhelmed. and 2. For large projects/pieces of work, just get started somehow, it gets me into the flow quickly.
Recommended book: Rework by Jason Fried & David Heinemeier. I love this book because it throws a lot of the traditional business processes out the window and helps me focus on what matters in an early stage company. It was released in 2010, the authors were definitely ahead of the curve. I re-read Rework at least once each year!
How long did the round take to close: We went from initial meeting to term sheet in just over 5 weeks. Post term sheet it took about 3 months to close the round.
How many firms did you speak with: I short listed 16 investors for our Series A. After the first round of meetings/discussions we had 5 left in the process (some either dropped out or I felt like we didn't have some sort of alignment). We received a couple of term sheets so we had to make some decisions fast - that was probably the most stressful yet thought out process. Our existing investors and Board were fantastic during this process.
What capital will be used for: It'll be used for more R&D and Senior Leadership roles both in the US and Aus, as well as for helping us execute our go to market in North America.
Seems as though the process of raising money isn’t efficient. Your thoughts: Like most startups, I get inbounded by various stage VCs a couple of times a week. I always make time to engage with the ones that I think could be a good fit for us and I send a polite no to many others, even when we were not raising. I think it is important (and only fair to all parties) that you have some sort of relationship prior to raising a round. The funding round is important as a company, but the ongoing relationship you will have with your investors is even more important, so I felt like I had to know my investors beforehand, even a little bit. I think this really helped streamline the process. It was a full time process for me for those 4 months.
Total amount raised to date: $10.7m.
Competitive landscape: The construction industry is one of the slowest industries to adopt technology. That has been changing over the past few years. It is still really common for us to come across companies that are using whiteboards/magnet-boards, spreadsheets or some custom built database.
Macro trends: We see three major trends across industry: mobility in the field, adoption of cloud technology and use of data. We help our customers with all three, which helps them gain more efficiency and visibility across their business and projects, and ultimately help them drive bottom line profitability.
Group K Diagnostics (Brianna Wronko, CEO)
Group K Diagnostics, a Philadelphia-based healthcare company offering patient care via accurate, fast and affordable diagnoses, secured $2m in Series A funding earlier this month.
Recommended rule to live by: I always use the few minutes I have between meetings to address the little things that often have a large impact on the team’s productivity.
Recommended book: The Hard Thing About Hard Things by Ben Horowitz.
How long did the round take to close: GKD devoted 1.5 months to raising the Series A round.
Comment on valuation after the round: 21M.
What capital will be used for: The funding achieved to date is being used to expand GKD’s laboratory infrastructure, with new hires made for lab technicians. This round of funding will also support the work our team needs to complete to obtain 510(k) clearance from the Food and Drug Administration.
Seems as though the process of raising money isn’t efficient. Your thoughts: We were able to raise our Series A round efficiently due to two key factors. First, the majority of our Series A investors were existing investors in the Company, including our primary and secondary leads. We are very fortunate to have a loyal group of investors that we work with closely. Second, our Series A was timed strategically with company initiatives focusing on the expansion of our laboratory infrastructure. Our investors understood the pertinence of their investment to GKD’s success, as well as the significant progress we had made.
Total amount raised to date: $2.8M has been raised to date through seed, angel and Series A funding.
Competitive landscape: GKD is positioned to be a disruptor in the laboratory testing market. There are not any point-of-care or traditional testing solutions that offer accurate, inexpensive testing requiring minimal to no training.
Macro trends: There is an increasing demand for timely patient information as a result of overall technological improvements and the regulatory emphasis on quality of care. Our solution provides rapid results and ensures proper results management. GKD’s software application integrates with EHR systems and displays results on a patient portal, enabling trends around team-based care and patient engagement.
Mrs Wordsmith (Sofia Fenichell, CEO and founder)
Mrs Wordsmith, a London, UK-based provider of illustrated and animated word products for the education industry, raised $11m in Series A funding back in October.
Recommended rule to live by: Focus the entire company on serving the user. Cut everything that doesn't serve the user.
Recommended book: Creativity Inc By Ed Catmull, one of the founders of Pixar.
How long did the round take to close: It was fairly quick.
How many firms did you speak with: Only a small handful.
What capital will be used for: Investing in technology, apps and animation.
Seems as though the process of raising money isn’t efficient. Your thoughts: We have found that our rounds have unfolded efficiently. My experience is that fundraising is more efficient if your vision is clear, the metrics support it and you have a clear execution strategy. It reduces the amount of back and forth.
Total amount raised to date: $14m.
Competitive landscape: Benign. The sector is undercapitalised. There is also little in the way of thought leadership or innovation from any of the incumbent publishers. The improvements in educational content today have been evolutionary and not revolutionary.
Macro trends: I believe the Edtech sector is finally at a tipping point driven by 1) affordable devices in schools, 2) substantial investment by the largest players - Google, Apple, Amazon, and Microsoft in education and driving affordable solutions into the home and schools, 3) greater central planning of budgets by US schools districts - the CTO/CIO is the most important person in the district today and 3) the decentralisation of curriculum into more useful and exciting tools and content with lower barriers to adoption than classic curriculum.
Other details: Watch this space for an exciting digital roadmap.
VC firm/early-stage investor
K&T Capital (Roman Taranov, co-founder)
K&T Capital, a London, UK-based hybrid accelerator and venture capital firm, closed a €20M initial round of funding from private investors back in October.
Recommended rule to live by: Trusting my team’s expertise and avoiding micromanagement. We hire the best talent, knowing that our management is self-reliant and able to lead processes from end2end. This helps me not only manage day to day processes more effectively, but also for my management to maximize their creativity potential and free up time for me to keep looking for the best investment opportunities out there.
K&T Capital is a hybrid accelerator and VC firm. In terms of the model, does the firm only invest in companies that participate in its accelerator program? In general, we are looking for companies who have a desire to break into new markets and have been struggling with this task, for financial, political or legal reasons. This is precisely where the K&T value-added comes in; our team of financial, legal, business and marketing experts assist re-structure those companies, so adhere to regulations/ needs of those markets they are looking to break into.
What stages does the firm invest at? Would you look to do follow-on in later stages rounds for companies that you’ve invested in? Currently we’re mostly investing in post-seed companies, with the plan of helping them lay down the foundation for future, larger investment rounds, which we are planning to take part in, along with other VC’s, in a syndicated round.
How many companies have you invested in to date? RGK Mobile, Ecoisme, Oblivki.biz (re-branded as 7ADs) and KMA.biz
There was a really interesting blog post from Fred Wilson recently about founders becoming more interested in who their VCs count as LPs. Have you seen that kind of interest from companies that you’ve invested in? The first thing we’ve seen in companies we’ve invested in is an interest in the fund managers (partners) and their track record. Given that both of us (partners) have made the transition from developing markets (CIS) into Western Europe and overcame the same obstacles, as entrepreneurs, has been quite an important factor to these companies. As for our LP’s themselves, they are all well-established figures in the European tech and financial scenes; having built extensive networks, they are well-positioned to build strong networks on the back of their own success and are able to help our companies with introductions to both customers and partners alike.
How do you differentiate yourself in the market, both on the accelerator front and as a VC firm? The idea that we are a team of young entrepreneurs, with a track record of success, each in his own respective field means that we know he pains our portfolio companies are going through, on their way to growth and expansion. Both Evgeny and I had established successful companies back in CIS, before founding RGK Mobile together, with which we’ve managed to break into the EU market, in less than 2 years. We apply the lessons we’ve learned along the way (and avoiding our own mistakes), to help other companies, in developing markets, break that glass ceiling, penetrate and expand in the West. Understating that we need a whole team to support us on those efforts, we’ve chosen the best-of-breed for our accelerator, hiring a team of experts that live and breathe their respective fields, having supported startups in the past, grown them and lead them to exits, mergers, etc. We are truly an entrepreneurs for entrepreneurs type of model, we want to grow with our companies.
How long did it take to raise the recent fund? About a year.
How much did the firm set out to raise initially? 10M-20M euros.
How many new investments has the firm made thus far this year? How many investments do you anticipate closing before the end of the year? We’ve invested in 4 companies this year and will probably add 2-3 more companies to the portfolio by the end of the year.