Last Week in Boston Tech Deals
Playing Offense
Welcome Back!
I hope that by now, you’re finally getting used to the distributed work lifestyle. It’s not very glamorous, but it’s nice to know that pretty much everyone in your network is just a click away from a video call at any given time. It’s been a surprisingly great time for reconnecting with family and old friends. If you’d ever like to connect, feel free to schedule something with me.
Playing Offense
Last week, I tuned in to a virtual discussion hosted by Venture Lane’s Ross Palley called “Downturns Create Massive Revenue Opportunities for Startups.” It was led by Techstars Boston Managing Director, Clement Cazalot, a serial entrepreneur and an investor in over 60 startups. He spoke about how startups should be thinking about not just surviving the pandemic, but potentially thriving. He pulled stories from his past experiences and from real-time examples he’s seeing unfold in his portfolio.
It’s obvious that every company is in “wartime” mode right now, but Clement wanted to explain how founders should think about unique offensive opportunities to create generate revenue now or post-crisis. Since it wasn’t recorded, I jotted down some of his advice and an interesting example he shared of a Boston company playing offense:
Focus on Communication
Unsurprisingly, communication was a core theme of the whole discussion. Your customers most likely have far more acute needs now than they did three months ago. This doesn’t necessarily make them lost customers, but it does mean that material changes most likely must be made to a product (or entire business) in order to provide value to the same customers. Founders should be hyper-focused on listening to stakeholders and tailoring their product messaging to quickly adapt to changing needs. As Clement put it, your ability to gather feedback at lightning speed is paramount to your survival even without a crisis. It’s one of the few things that separate you from the sluggish incumbents you’re up against. You can’t know what your customer needs right now and craft a solution for it without asking them first.
Lead with Empathy
You might not make more (or any) money from customers right now, but approaching their needs with empathy could greatly improve their lifetime value post-crisis. Put the brakes on traditional business development and focus on creating a long-term reputation that will win you their business post-COVID. Maybe that means providing a product for free indefinitely, lowering pricing, or offering an extended free trial. Of course, make sure you’re able to balance being helpful with maintaining a lengthy runway to weather the storm.
Leverage Your Strengths
Take Brio, a health biomarker company operating out of GSVLabs in Boston. Before the outbreak, they would draw blood from athletes at gyms to deliver a deep analysis of vitals for training purposes. With all gyms closed, their product has ceased operations. After communicating with stakeholders, they recognized that their core strength was efficiently delivering lab results to end-users. They decided to put their fitness product on hold and re-direct their existing relationships with labs and suppliers to quickly spin up an FDA-compliant COVID—19 screening tool for employers that can deliver results to a patient’s door in 1-3 days.
Brio is just one example of companies acting swiftly to use their strengths to combat COVID—19. If you want to learn about other startups taking the offense, check out Devin Nash’s running list of companies taking bold actions to support their community.
Stuff I’ve Been Reading:
VC Financing Deals:
Perch 🐦& Thrasio 🛒
Back in early December of 2019, I wrote about a Boston-based company called Whele that had raised $2.3M. Since then, the company has re-branded to Perch and taken on an additional $5.7M in an $8M round led by Spark Capital, with participation from Tectonic Ventures. Perch is led by Chris Bell, who previously worked as a Principal at Bain & Co. and Head of Custom Supply Chain, Transportation, and Delivery at Wayfair. Perch is similar to companies like Think3 and Tiny Capital that purchase budding businesses to give founders a chance at liquidity. The difference is that Perch focuses exclusively on purchasing Amazon FBA businesses for anywhere between $750K and $2M and running them internally.
Interestingly, another Boston-area company called Thrasio that also purchases Amazon FBA businesses announced that it raised $110M at a $780M valuation just days later. They claim to be able to purchase an Amazon business in under 45 days, guaranteed. Will Perch and Thrasio’s close proximity to each other matter? How does one differentiate themself as an acquirer of online businesses? My initial thoughts are 1) Paying more than others and 2) Paying faster than others.
Verve 🦿
According to a new Form D filing, robotic exoskeleton company Verve has raised $5.3M from so far undisclosed investors. The “Verve” name appears to be new, but the technology is part of a years-old spinout from the Harvard Wyss Institute, which focuses on biologically inspired engineering. They received $2.9M in DARPA funding back in 2014, and have since been diligently testing the technology on target users like stroke victims.
Led by Harvard Biodesign Lab founder Conor Walsh, Verve has been developing the soft robotic exosuit to improve mobility, gait quality, and endurance for its users. The product could be used for rehabilitation purposes, or for factory workers that have to consistently carry heavy loads. The tech provides a very small amount of assistance by “pushing” muscles at the right place and the right time to ease the burden of walking. The entire system is integrated into a garment that is fastened to a user’s lower body. The actuators know when to be triggered because there are sensors embedded around each muscle group in the legs.
According to the SEC filing, Eric Paley is a director at the company. Could this be Founder Collective Managing Partner Eric Paley, or just a coincidence? For an in-depth overview of the technology, check out this Biodesign Lab page. There’s also an August 2019 piece by NPR here.
SilverCloud Health ☁️
SilverCloud Health, a Boston-based HealthTech platform for mental health, announced a $16M Series B led by MemorialCare Innovation Fund, with participation from LRVHealth, OSF Ventures, and UnityPoint Health Ventures. This brings their total raised to over $30M. SliverCloud offers a collection of 30 wellness and mental health programs for healthcare providers, universities, corporations, and insurers. They currently service over 300 clients, primarily in the UK. The company claims that 65% of their users show a significant reduction in symptoms across a variety of mental disorders after sustained time on the platform.
Hyundai-Aptiv 🚗
Eight months ago, Boston and Dublin-based Aptiv announced a partnership with Hyundai to work on a joint autonomous driving venture. According to the initial press release, the combined contributions for the venture totaled $4B, with each party owning a 50 percent stake. Their initial goal is to have a fully autonomous driving fleet for consumer and business use by 2022. My guess is that the timeline has shifted due to the pandemic.
Last week, the partnership’s LLC filed a Form D indicating that they had raised $9.1M. I’m not sure what the significance of a single-digit venture round is for a multi-billion-dollar partnership. The venture focuses on the development and commercialization of level 4 and 5 autonomous vehicles, as classified by the Society of Automotive Engineers. This essentially means that the vehicle performs all driving tasks with little or no human interaction needed.
Rise Robotics 🤖
Somerville-based RISE Robotics is raising $7.8M, with $3M of which was led by The Engine. Founded in 2011, RISE helps manufacturers transition from hydraulic machinery to full-electric machinery without compromising for power. Why make the switch from hydraulic? The biggest reason seems to be that traditional hydraulic systems require far more maintenance compared to fluid-less electric components. Additionally, electric machinery may make it easier for operators to control and analyze machine activity, leading to new manufacturing insights.
The company has developed “RISE Cylinder Packs” that deliver hydraulic performance using electricity and brushless motors. From last week’s press release, “RISE Robotics’ technology disrupts how linear actuators are engineered and makes the shift from diesel to electric systems possible, cost-effective, and environmentally responsible.” They’re previously backed by Greentown Labs, Techstars, Iron Yard Ventures, Right Side Capital Management, Eclipse Ventures, and a handful of individual angels.
CoUrbanize 👷
Online community engagement startup CoUrbanize has raised $700K from so far undisclosed investors. The Techstars ‘13 graduate has developed a platform for helping real estate developers engage with residents to improve development project timelines. The app enables discussion forums, community event planning, file sharing, and other neighborhood engagement methods. The idea is that a record of discussion around a development project may increase the likelihood of its approval and shorten its timeline.
Real estate developers, affordable housing teams, construction workers, and municipalities can use the CoUrbanize app to get the general sentiment on a potential project to gauge what its outcome may be. They hope that activating “silent supporters” of development projects will help put an end to NIMBYism. Previous VC backers include Building Ventures, Victress Capital, Right Side Capital Management, and Borealis Ventures. Individual angels such as Jean Hammond, Joe Caruso, Katie Rae, and Semyon Dukach have also invested in the past.
In my piece on PropTech investing in Boston from early February, I covered a startup called Cobu that also aims to enhance resident engagement. Their approach is slightly different though. They aren’t trying to streamline development projects, they’re trying to reduce residential loneliness.
Letsbutterfly 🦋
Another PropTech startup out of Marlborough called letsbutterfly raised an $80K round of angel funding, according to a recent Form D. It’s a mobile-first app that includes a variety of tools focused on helping homeowners accurately value their homes “in minutes.” It’s led by CEO Haitham Al-Beik, who has previously founded four other companies according to Linkedin. Haitham’s goal with letsbutterfly is to bring “transparency and accessibility to real estate.”
Ellevation Education 🏫
Per a Form D disclosure, it looks like Ellevation Education has raised $15.2M in new funding. Previous investors include the Chan Zuckerberg Initiative, Reach Capital, Emerson Collective, and Omidyar Network. Ellevation provides an end-to-end solution for teaching English language courses. Using the platform, teachers can enhance their EL programs with performance tracking tools, pre-built curriculums, engagement activities. The company has now raised over $55M in financing since its founding in 2011.
Thanks for reading!
That’s all from me until next week — If you’d like to connect with me, you can find me on Linkedin and Twitter or check out my website at nickstu.art.
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