More than 350 entrepreneurs, creative professionals and investors gathered at the Carolina Theater in downtown Durham this morning for Triangle Startup Factory’s Pitch Day – and they heard arguments that backers should hazard more than a collective $4 million on the emerging ventures.
The event, which served as the de facto graduation for the five companies that participated in the spring 2013 Triangle Startup Factory, is also the kickoff event for this week’s Paradoxos event in downtown Durham.
Thursday’s event gave five startups – Tuee, Bring Me That, Taggs, Tabsprint, and Vacation Futures – the opportunity to showcase their company, founding team, and technology to an audience of investors and fellow entrepreneurs.
“This crowd is the right audience for these startups,” said Chris Heivly, managing director at Triangle Startup Factory. (After the pitches were made, he told the crowd that The Startup Factory is the accelerator’s name going forward. WRALTechWire’s The Skinny has the details.))The event attracted more than 350 people, said Heivly. Seventy-five were investors. Of those, close to 60 are angel investors based in the Triangle or Triad regions, said Heivly.
Featured guests included Scott Case, CEO of Startup America Partnership and founding CTO of Priceline.com, and Paul Singh, founder of 500 Startups and founder of Dashboard.io, who gave keynote addresses to the audience.
“A group of this size wouldn’t have been here five years ago,” said Singh in his address, speaking to the rise of the Bull City’s startup community.
“Startups are really critical to our economy,” said Case, in his address. “The most powerful thing we can do is build a strong entrepreneurial community.”
Of the five companies that pitched at today’s event, four are currently raising money. All are raising initial rounds of less than $1 million, and believe that the funding will come from angel investors, many who are local.
Profiles of each company that pitched follow:
Tuee is a tablet-based system that enables restaurants and their managers to gather real-time data and feedback on their customers. The company, co-founded by CEO Vikram Rao and CTO Kunal Arora, aims to provide restaurants a way to build customer relationships and increase satisfaction.
According to Rao, who gave today’s pitch, restaurants struggle with three key pieces of customer information: why customers come in to the restaurants, how their dining experience was at the restaurant, and how to get in touch with them in the future.
“We decided that there had to be a better way for restaurants to check their pulse,” said Rao, “and that’s where Tuee comes in.”
According to Rao, less than 3% of all restaurant customers complete some form of survey or feedback that restaurants offer to them. Tuee, which is in 17 restaurants in the Triangle, receives feedback from 80% of all restaurant customers and feedback plus an email contact for 40% of all restaurant customers, according to Rao.
The feedback is sent directly to restaurant owners or managers, said Rao, who can use the information to adjust menus, pricing, or address customer concerns.
Tuee is raising $600,000 in investment, $150,000 of which is already committed. Tuee plans to use the money to extend their sales team in the Triangle, invest in their product’s technology, and advance their prototype, said Rao.
Bring Me That
Have you ever wanted to order Thai food but didn’t know if a place would deliver to you? Bring Me That could help you, said Jason Liang, CEO and co-founder.
Bring Me That addresses an enormous market, said Liang, because the “online food delivery space is a huge industry right now.” According to Liang, the top 20 markets for online food delivery in the United States are worth $200 million in revenue opportunities. Yet, said Liang, the top 40 markets in the United States only represent 20% of the total number of restaurants in the United States that are capable of delivering food to local customers.
Bring Me That seeks to address the 80% of restaurants that lie outside of a top-40 market, as well as the 20% within the top-40 urban areas. “We’re going to help customers in Boston, Massachusetts, Boston, Kansas, and Boston, South Carolina,” said Liang.
It’s a simple technology. Customers input their address, and Bring Me That’s deep database of restaurants and menus delivers restaurants that are within delivery range. Customers can scan menus, order online, and within 30-45 minutes, receive their order. Customers are charged a convenience fee for the service.
The company, which according to Liang, has grown 264% in four months, uses SEO marketing techniques and is averaging $1.9 for every $1 spent in customer acquisition.
The company is raising $800,000, said Liang, in order to increase their presence in certain key states (the company is in Ohio and North Carolina right now, serving more than 3,000 restaurant customers) and build out their engineering team.
“We help brands achieve their #1 goal in using social media,” said Mark Kelley, CEO and co-founder of Taggs, “which is increasing engagement.”
Taggs provides data-analysis for photographic content, which Kelley said dominates the social web. Four of the top 5 social media sites are exploding with image content, said Kelley, yet there are few companies that analyze how images increase engagement for brands.
The numbers are staggering, said Kelley. Seventy-one percent of people are more likely to make a purchase based on a positive social media referral or recommendation, said Kelley, yet brands currently engage with less than 1% of their audience with most of their content.
The result is that “one billion dollar companies are guessing about their content and the success of their brands,” said Kelley.
“This company will help advertising companies and brands make sense of their social marketing,” said Jim Russell, head of innovation at McKinney, a global advertising agency and a mentor to the Taggs team.
Taggs is not raising money at this time, but expects to raise a small round (less than $1 million) before the end of the calendar year, said Kelley.
“Our mobile payment system solves a huge pain point for a specific segment of point-of-sale restaurants and businesses,” said John Chipouras, co-founder and CEO of TabSprint, “their nightlife.”
Think about the last time you went to a popular nighttime destination, said Chipouras, and you had to wait in line to order your drinks and then wait in line again to pay for your drinks. Or think about the long line that forms on $1 hot dog night at the Durham Bulls games in the summer.
“Maybe there’s 150 hot dogs, hot, ready to be served, and the hot dog vendor could just start passing them out,” said Chipouras, “but for each transaction, the vendor has to take payment, make change, and give the customer a hot dog.”
“What if there are 50 people in that line?” asked Chipouras, who concluded that “some will leave, frustrated.”
The same holds in any vendor relationship, claimed Chipouras, who built TabSprint in order to reduce the friction between customers and vendors, specifically reducing their time spent queuing up for food or beverages.
The company, which currently has partnerships with 12 Triangle-area restaurants, recently signed a partnership deal with Anheiser-Busch, announced Chipouras on stage during his pitch. This gives the company warm leads into bars and restaurants nationwide that may start using the mobile application to process payment.
The company is raising $500,000, said Chipouras, which will be used to leverage the increase in potential partnerships (like the ones generated through the Anheiser-Busch relationship), and to begin to scale the business to grow into markets nationwide.
Vacation Futures is the first wholesale vacation rental marketplace, said CEO and co-founder Andrew McConnell.
In a market that represents more than $85 billion in potential capital for property owners, that’s a pretty big opportunity.
Homeowners who elect to rent their property have had only two options historically, said McConnell. Either the homeowner manages the property themselves – spending on average 11.5 hours for every week the property is rented – or they hire a property manager who takes as much as 30% of the rental income and assumes no liability.
“The current models are fundamentally failing a large portion of the overall market,” said McConnell.
Vacation Futures seeks to solve problems for both parties – the homeowners and the property managers.
Within the Vacation Futures marketplace, said McConnell, homeowners will “bundle” their rental properties and allow property managers to bid on the entire bundle. After a property manager “wins” their bid, the homeowner receives a payout, and the property manager assumes 100% responsibility for booking the property and 100% of the income generated from their efforts.
The company, led by McConnell and his partner Mickey Kropf, both Harvard alumni, has hired five employees and maintain dual offices in Raleigh-Durham and in Atlanta. According to McConnell, the company plans to expand to corner the marketplace in the top 10 vacation destinations in the United States, and then expand nationally and internationally.
The company is raising $750,000 in order to achieve these goals, said McConnell, who in an interview noted that the first thing they will do once the round is closed is hire salespeople. The company already has $275,000 committed from angel investors, and expects to close the rest of the round shortly.
Their goal is to post more than 1,000 listings and have more than $5 million in transactions occur through their platform by the end of the calendar year, said McConnell in his pitch.