Hey all,
Thanks for reading as always. Another slower week in the Boston tech scene…perhaps the calm before the storm? Check out the four companies that raised $327M+ below.
Prize-Linked Saving is Gaining Traction in the USA
While the Boston market is having a slow week, there was a New York-based deal that I found noteworthy. Fresh out of YC, Yotta Savings just raised a $3.3M seed round from Twenty Two VC, Chapter One, Slow Ventures, FoundersClub, and CapitalX.
The year-old company is building a savings account that incentivizes you to deposit funds to get a chance at winning a “No Lose Lottery.” I first came across this concept about a year ago when PoolTogether launched. It’s an app that lets you use cryptocurrency to buy tickets in a pooled savings account with hundreds of other participants.
It works like this:
You buy a Savings Ticket ticket on PoolTogether.
The value of your ticket is pooled into a high-yield savings account with hundreds of other contestants.
It gains interest over the course of a week. Even if it’s a low interest rate, the returns add up when the principal is massive.
At the end of the week, one lucky contestant wins the entire pool’s accumulated interest, then everyone gets their original ticket value sent back to them.
Enter Yotta Saving
Yotta took this concept a step further by creating an FDIC-insured bank account that operates under a similar system. Founders Adam Moelis and Ben Doyle were inspired by a 2010 Freakonomics episode about a prize-linked system as well as the concept of the lottery-like Premium Bonds in Europe (which have been around since the 1950’s). According to Yotta’s founder, 33% of bank accounts in the U.K. have a prize-linked component.
So why hasn’t it caught on in the United States? One reason may be the average American’s disturbing lack of emergency savings, but high propensity to buy lottery tickets. American’s love dreaming about the possibility of beating those 1:300,000,000 odds and becoming an overnight billionaire.
Why not build a product that tackles our poor savings skills and our addiction to gambling! Yotta could incentivize people to save $25 in hopes of winning millions instead of spending $25 and hoping to win millions. PrizePool is a similar company to watch that raised in late August.
I thought it was a pretty interesting company to back…
Stuff I’m Reading:
Founders of Crypto Derivatives Exchange Bitmex Face Charges — NYT
Facebook Put out a Statement on What “The Social Dilemma” Got Wrong
VCs split on change to the Volcker Rule — Boston Business Journal
Crypto company Coinbase defends rule against politics at work — The Hill
VC Financing Deals:
CrowdComfort 🛠️
CrowdComfort, a seven-year-old company building a SaaS-based service request platform for workplaces, has raised $5.78M out of an $8.86M Series B round. They went through MassChallenge and raise some angel funding back in 2014-2015 and later raised a $100K Series A from Portland-based IdeaShip in 2019. Their app empowers any worker to report facility-related concerns like room temperature, A/V issues, and plumbing.
I’m curious what kind of traction they’ve gotten recently that led to the raise, given very few workplaces have any people inside of them to make maintenance requests. It looks like they introduced a COVID-19 Cleaning Map to help employees and customers visualize what parts of a building are being regularly sanitized as reopening efforts continue.
Encora Therapeutics 👌
Two-year-old wearable device company Encora Therapeutics has raised $1.3M in pre-seed funding led by Innospark Ventures and joined by other investors including Good Growth Capital, per BostInno. According to Crunchbase, they’ve also received grant funding from MIT Delta v, MassChallenge, and the MIT Sandbox Innovation Fund. The Encora team is developing a wristband that uses sensors and small vibrations to reduce the hand tremors caused by neurological movement disorders like Parkinson’s Disease.
Really cool stuff. There are some other devices that almost magically eliminate Parkinson’s tremors, but require a surgically implanted device to deliver electrical signals to the brain. I imagine getting that same effect with a simple wrist band would be a game changer from both a cost and convenience perspective.
XtalPi 🧬
XtalPi, a Cambridge and China-based biotech startup specializing in AI-based drug development, just raised a $319M Series C led by SoftBank, PICC Capital, and Morningside Venture Capital. Other existing investors included Tencent, Sequoia China, China Life, and SIG. The six-year-old company is building a platform for drug research and development, “with tightly interwoven quantum physics, artificial intelligence, and high-performance cloud computing algorithms.”
Using AI to increase the efficiency and lower the cost of drug R&D is how many large pharmaceutical companies are betting they can bring drugs to market faster than competitors. Boston and Cambridge are flooded with cash-infused startups working on techniques similar to this. Some others I’ve written about in the last year include Immuneering, nFerence, Applied BioMath, Invivo AI, ConcertAI, and EQRx.
Gutsy 🧉
Newton-based Gutsy LLC, which I believe is a fizzy beverage company, raised $1.3M according to a Form D. The filing lists Nantucket Nectars co-founder Tom First as an executive officer. He’s currently the founder of three-month-old soda brand Culture Pop Soda and an operating partner at Stride Consumer Partners. Culture Pop Soda’s website describes the product as a “fizzy and gutsy pro-biotic soda,” so I assume the two are connected. Not really tech, but I’m consistently surprised at how many Boston-area beverage brands have raised funding in the last year. Others include Spindrift, Ohza, Willie’s Superbrew, Loco Coffee, Evy Tea, Drink Simple, and NOCA.
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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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