Dear Startup Investor,
Now that our portfolio has reached 21 companies plus the pre-IPO fund, we’re experimenting with new ways to update members on portfolio companies.
We have some exciting updates to share, starting with Underground Cellar.
But first, a note about limitations to our updates. Because we aren’t investors in the companies we recommend, we are not always able to access sensitive information. Certain startups are guarded with their data, and revealing certain information could harm their business by giving competitors insight. We respect that, while we strive to provide as much information as possible.
Underground Cellar | Recommended: September 2014
Portal: AngelList
Underground Cellar has seen extremely positive growth since we recommended it back in September. The startup was also accepted into the prestigious Y Combinator tech accelerator program and will raise $5 million after demo day next month. Y Combinator’s demo day is one of the most anticipated startup finance events of the year.
Already Underground Cellar is one of the most anticipated startups of YC’s Winter 2015 class. The valuation it will be raising at is roughly five times what we recommended it at five months ago. If you’re already a member of AngelList, you can see details here.
The company is still focused on selling wine and storing it safely for customers if they choose. But it is considering an expansion into other luxury goods. Read more about that in TechCrunch.
The future looks bright for Underground Cellar. Thanks to my friend Phil at Barbara Corcoran Venture Partners for giving us advance notice on this deal. It filled up fast, as we predicted in our recommendation.
Luckily we had the recommendation write-up ready to go live as soon as the deal did. We are expanding our network on AngelList to give members recommendations in the timeliest manner possible.
You can back Phil and Barbara’s syndicate on AngelList here. The minimum investment is $1,000 per deal (you can opt out of any deal you’d like to).
Note: Watch your inbox for some exciting news regarding Startup Investor and Barbara Corcoran Venture Partners. We’re working on something very special for members… You can expect more details soon.
Connect.com | Recommended: May 2014
Portal: AngelList
Connect continues to grow at a fast pace, with a total of 2.5 million users in December. That’s up from 200,000 users when we recommended it.
The company raised $10.4 million Series A funding in December from top tier investors including Marc Benioff, founder and CEO of Salesforce (NYSE: CRM), a $50 billion-plus company. Benioff is a very discerning investor, and his involvement bodes well for Connect’s future.
Also investing in the round was Fosun International, known as the “Berkshire Hathaway” of China. Watch for an expansion into Asia in the near future. Read more in a recent feature piece on TechCrunch here.
The latest round valued Connect at a healthy premium to the price we recommended it at, while adding a top-tier group of investors.
StackIQ | Recommended: April 2014
Portal: Ourcrowd.com
Big news from StackIQ. Late last year it raised a $6 million B round from top VCs, made strategic hires and closed large Fortune 100 clients. From the press release:
StackIQ, the leader in Web-scale IT automation for the enterprise, today announced it has completed a $6 million Series B round of funding. New participants in the round include Grayhawk Capital, Keshif Ventures, DLA Piper, and OurCrowd. Existing investors Anthem Venture Partners and Avalon Ventures also participated in the round. The additional capital will be used to scale the company’s sales, marketing, and overall operations as it meets increasing market demand for its flagship cluster management product.
…This financing round follows a record setting year-to-date for customer momentum, product innovation, and value enhancing partnerships. In 2014, StackIQ continued its rapid growth by adding several large Fortune 100 enterprises including one of the world’s largest communications & media companies, a major U.S. wireless carrier, major automobile manufacturer, and leading financial services companies to its customer base.
Wefunder | Recommended: April 2014
Portal: Wefunder
Wefunder remains one of the top five startup investment portals in the U.S. It recently completed its largest online raise yet for MadeSolid, a 3-D printing material startup.
It continues to attract high-quality startups. Zenefits, its greatest success story so far, has increased in value by more than 40 times since it was offered to investors in early 2014.
Note: This deal is still open. You can invest in Wefunder here.
Privy | Recommended: August 2014
Portal: Wefunder
Privy recently provided a business update and announced an important strategic hire. From the company’s blog:
2014 was a great year for us. We’re now helping over 900 retail locations drive and measure in-store transactions from their web footprint across social, search, organic website traffic, and more. We’re successfully enabling retailers such as Hard Rock Cafe, Bruegger’s and Darden Brands grow their email lists and managed just under 1 million transactions last year.
Additionally, towards the end of 2014, we announced the launch of our free website widget that makes it easy for any marketer to start collecting emails from their web visitors and linking that data back with their email service provider.
To that end, we’d like to welcome Dan Scudder as Privy’s VP of Business Development. Dan was previously a co-founder and VP Business Development at LiveRamp, the leading data onboarding platform which was acquired by Acxiom in May 2014. As a graduate of Babson College, Dan is a Boston guy through and through, which is why we’re excited to have him back from New York. Dan will be focused on enterprise strategy, sales, and partnerships in the marketing technology ecosystem.
Appvance | Recommended: January 2014
Portal: AngelList
Appvance continues to improve its app-testing solution, and recently went head to head with HP’s competing product. More from the press release:
Appvance, Inc., a leader in automated app performance testing, today released the results of an independent third-party benchmark study that shows its signature Appvance PerformanceCloud (APC) performed up to 20x faster than legacy market leader Hewlett-Packard LoadRunner.
Validated by Thought Frameworks, an independent third-party with substantial LoadRunner experience, the benchmark compared PerformanceCloud and LoadRunner. The results showed Appvance performed more than 90 percent faster in each instance, testing public, high trafficked HTML5 websites and measuring the scripting time required to a working use case.
“We knew Appvance would perform significantly better and was easier to use when designing tests than LoadRunner, but it was surprising to find just how much more productive QA teams can be by using APC,” said Appvance CEO Kevin Surace. “It’s clear that a 20-year-old tool cannot keep up with the modern technology and architecture in APC. With Appvance, QA and testing teams can run more use-cases and identify potential bottlenecks easier to improve quality and response times of websites and modern apps before release.”
Ansa | Recommended: December 2013
Portal: Onevest
Ansa, the messaging app that lets users set their messages to “self-destruct,” continues to see strong growth overseas, particularly in the Middle East. Its focus on ensuring privacy of users has made it a popular choice in areas with stifling regimes.
About half its 150K users now come from overseas.
More from Wamda.com here:
Despite what you may see on the Instagram account of a Saudi royal, the Arab world is traditionally a very private place. From the high walls of old cities throughout the region, to the fact that residents are still extremely wary of using their credit cards online, privacy and security play a lot on the minds of people here.
With that in mind, the American ephemeral messaging app Ansa is currently in the middle of raising a $1.2 million USD round in an attempt to tackle the Middle Eastern chat market, currently dominated by WhatsApp.
“This is a huge population which loves technology, but has serious security concerns,” says Anthony Mouawad, Ansa’s Lebanese business development officer, over a coffee in Beirut’s Sassine Square. “No one is targeting them.”
Ansa is now working on sending disappearing texts to non-Ansa users. That would remove a significant barrier for people who have friends who don’t use Ansa. At the same time, it gives these non-users exposure to Ansa’s special privacy features.
It’s a win-win move.
From 30,000 users when we recommended Ansa in December 2013, the company now boasts 150,000 users.
What’s next?
Ansa is in the very early stages of developing an Enterprise version of its software. More on this interesting development as we get into the year.
Social Rewards | Recommended: August 2014
Portal: AngelList
It’s good to see Social Rewards making progress.
When we recommended the company last August (click here for the original recommendation), it had 650,000 signups. It now has just under 700,000.
User growth is one measure of progress. Another? Profitability.
Co-founder Joseph Morin says that Social Rewards is now profitable. Revenue in the fourth quarter should be around $200K (compared to $116,606 in the previous quarter).
That’s quite a hike. Morin attributes it to a couple of things. One is the special project it’s doing for All Nippon Airways. The other: increased traffic it’s getting from 20th Century Fox Film and Caesars.
Speaking of Fox…
Social Rewards has been working hard on rolling out its Selfie With Me! Photo Booth as a way to sign up movie patrons for Fox and other movie theaters. Its green screen lets moviegoers insert themselves into scenes from an upcoming movie.
Signing up is free and only requires an email address or phone number. Pretty painless.
Social Rewards projected a 5% conversion rate. That is, for every 10,000 movie visitors, its booth would sign up 500 people. When it tested out one of its booths last November, it got a 7.5% conversion.
At that rate, Social Rewards could make over $1 million in less than a year in the 20-theater test project Fox says it wants to do with Social Rewards.
Social Rewards is aiming to place its booths in about a hundred theater complexes this year.
That would boost its annual revenue run rate to $5 million.
20th Century Fox is the biggest movie theater chain in the country. Social Rewards has already bagged its “Big Kahuna.” But how about the next-to-biggest? It’s Warner Bros. And now Warner Bros. has agreed to do a pilot project with Social Rewards.
Current customers include Starplex Cinemas, State Theaters, Digiplex Destinations, Theatre Exhibitors, Saison, Screen Rewards and Vegas venues such as Caesars, MGM Resorts, Luxor, Venetian, and the Palms.
Apploi | Recommended: June 2014
Portal: Ourcrowd
Big news from Apploi. This is the company that is transforming how retail and service industry workers and employers find each other. It offers a more interactive application process, if you recall.
Apploi just closed a Series A round raising over $7 million. It will use the money to bring more kiosks and employers online. Right now it’s in 36 states and has signed up tens of thousands of job seekers and over 3,500 companies. Over 80,000 job seekers use its app or kiosk every month.
Apploi accomplished a great deal in 2014. It launched new partnerships in New York State, Washington State and the city where I work, Baltimore.
It hired a new CTO from uber-successful Internet retailer Warby Parker. And it added a Finance Director from KPMG.
Apploi also won the Tabby Award for the best iPad App of 2014.
One of its most important achievements in my book? A new feature allowing companies to post jobs in seconds to the Apploi community through “Post-Your-Job.”
Based on the valuation that Apploi based its latest fundraising round on, you’ve already made a profit in little over half a year since Apploi was added to our portfolio.
In Conclusion…
2014 was a great year for Startup Investor. 2015 is shaping up to be even better. We’re hard at work on our next two fund deals, which will be exclusive to members. Watch for more details soon.
Cheers,
Adam Sharp
Co-Founder, Startup Investor
P.S. To ensure you receive every Startup Investor update, please add SUI@earlyinvesting.com to your email contact list. For instructions on how to do so, click here.
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