Tech companies make final pitches at Extreme Startups 2013 demo day

The historic Berkeley Church on Queen Street E. in Toronto felt a bit like a sacred sauna for budding capitalists as it hosted a few hundred investors, beaming mentors and prowling entrepreneurs for Extreme Startups’ third biannual demo day Thursday afternoon.

Before the new graduates took stage, keynote speaker Charles Hudson of SoftTech VC, an early stage capital venture firm with seed stage funding for Web 2.0 startups, advised investors to search beyond their geographical borders, diversifying their portfolios with entrepreneurs from West Bengal, India to Waterloo, Ont.

His PowerPoint slide name-dropped big technology players based in Kitchener-Waterloo, like Thalmic Labs, BufferBox, and Wattpad as he drove home his point that investors are increasingly looking north.

“As I told my mom, people get that Waterloo is a legit place now,� Mr. Hudson said about rich venture opportunities in the Waterloo tech cluster, eliciting chuckles from the audience.

“Two years ago, there wasn’t that awareness about the level of technology and startup talent that you have now.�

Exit Mr. Hudson, enter proud, beaming mentors introducing their startups like offspring who’ve graduated from the Ivy League.

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The accelerator’s 2013 technology-oriented cohort of companies, in the order they presented their demo pitches to potential investors:

BRIKA:  a curated online boutique for original handicrafts and lifestyle products, which has reached half of its $1-million funding goal. Mentor Andrew Black of BrandPoynt Brand Ventures compared BRIKA to a hybrid of online retailer Etsy Inc. and e-commerce powerhouse Fab.

Instaradio: seeks to be the Instagram of audio by allowing users to broadcast a live audio stream, which can be accessed from any mobile device or computer. Co-founder Kevin Kliman said the startup has raised $300,000 of their $1-million target so far.

Køge Vitamins: a personalized, vertically-integrated online vitamin retailer that offers premium products at affordable prices. The company allows consumers to build their own nutritional packages based on their responses to online questionnaires.

Polychart: an affordable SaaS data analytics tool aimed at the SMB market, allowing users to visualize and analyze data to build online dashboards and charts.

ScienceScape: using big data, the startup indexes scientific research in real-time for users. Founder Sam Molyneux, an ex-cancer genomics researcher, said the distribution model for digital journals is broken, which begged for the clear curating of millions of published academic literature. The nascent company has closed its seed-funding round of $1.1-million.

Jennifer Lee Koss, co-founder of BRIKA, and her business partner Kena Paranjape realized the potential of cultivating relationships between artisans and the consumers of their products in a handicrafts market worth $30-billion, of which only four per cent comes from online shopping.

The Pinterest-like e-boutique has snagged celebrity partnerships with Donna Karan and Lauren Bush, and boasts retail partners Hudson’s Bay Company in Canada and American-based J. Crew’s brand Madewell.

“Extreme (Startups) allowed us to put our heads down and focus on gaining traction and demonstrating that we have real potential. They gave us free space. There was a lot of good camaraderie and energy. Being around like-minded entrepreneurs at this initial stage is key,� Ms. Lee Koss said in an interview with the Financial Post, adding that the opportunity of connecting with industry leaders is a boon.

The technology-friendly Extreme Startups provides upwards of $230,000 in funding during its three-month program, culminating on this demo day, during which the five companies appeal to investors and other industry experts for larger seed or series A funding with meaningful pitches.

The accelerator bestows $50,000 upfront, with a hefty $150,000 cheque at the end of the program. The Toronto-based Extreme Startups is backed by five of the country’s leading VC funds: OMERS Ventures, BDC Venture Capital, Relay Ventures, Rho Ventures, and Extreme Venture Partners.

“Demo day gives us closure on a very interesting ride these past 12 weeks,� Ms. Koss Lee said.

Andrew Lenjosek, founder of Køge Vitamins, said Extreme Startups “lights a fire under� these startups.

“(Extreme Startups) give you lofty goals and push you towards becoming a really successful company by figuring out what’s broken with the current model. They help break you down and build you back up to be a stronger company,� said the former Wall Street banker.

“Three months ago when we started this, Alex (Hyssen, co-founder) didn’t really know much about the e-commerce space. We had 100 customers. Emerging three months after this, we have over 2,500 customers.�

The startup has generated $120,000 in revenue and signed a deal with distributor Loblaws. Having entered a $24-billion vitamin industry with 140 million customers in North American alone, Mr. Lenjosek said the potential for growth is boundless.

The Ottawa native said Køge Vitamins developed a sound go-to-market strategy over the past 90 days with help of Extreme Startups mentor Dean McCall.

Mr. McCall, CEO of Appficient Inc., a mobile app developing company based in San Antonio, Texas, said the Køge team inspired him to such an extent that he joined the startup as chief executive officer. Originally from Texas, Mr. McCall said the startup scene in Ontario’s capital is where Austin, TX was five to six years ago.

“But you guys have accelerated that pace by two or three years. Toronto will be where Austin is now in another year or two. This city is doing it in half the time. It’s really happening in Toronto.�

He attributed Canada’s cautious entrepreneurial culture – compared to the “go out with their guns blazing� trait of Americans – to this lag.

“You guys took your time and figured it out, with Montreal’s accelerator scene, GrowLab in Vancouver, and now Extreme (Startups) in Toronto,� Mr. McCall added.

Lisa Zhang of Polychart, a graduate of the University of Waterloo, agreed that her alma mater town is on the fast track to becoming Canada’s Valley or Bangalore.

“An entrepreneur I met from Halifax suggested building a high-speed train between Toronto and Waterloo. There is raw technical talent in Waterloo and established companies in Toronto,� said Ms. Zhang.

Extreme Startups also announced their new managing director Marcus Daniels, who has been a mentor with the accelerator since mid-2012.

“We’re a global company, so we’re looking for world-class entrepreneurs, regardless of their thesis or theme, to graduate them globally,� Mr. Daniels said.

“We’re trying to produce companies that go after the multibillion-dollar markets. We’re not happy if our companies get acquired for $20-million.�

Extreme Startups founder Andy Yang said the accelerator’s third batch of graduates are more varied than the previous two cohorts.

“The five (startups) are diverse in terms of the sectors they are attacking. The only similarities would be between BRIKA and Køge Vitamins who are both in the e-commerce space, but even then, they’re radically different in their approach.�

Mr. Yang said visiting foreign investors, including those from the Valley, are “pleasantly surprised in how sophisticated and tenacious� the entrepreneurs are in Canada.

A Californian who worked in Silicon Valley himself, Mr. Yang said he’s on the lookout for two traits when selecting the startups in his program: a sense of authenticity (Do they know their space? Do they have that drive and passion?) and a sense of urgency and tenacity (Do they have that burning hunger to succeed?).

Article source: http://www.canada.com/Tech+companies+make+final+pitches+Extreme+Startups+2013+demo/8527660/story.html