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In recent years, Techstars Los Angeles managing director Matt Kozlov has witnessed local investors pour more and more capital into health care startups across the region. It’s this sector—not entertainment or the creator economy—that he hopes to spotlight through the startup incubator’s next accelerator program.
Health care, after all, is a difficult market for startups to break into “if you don’t have support of the large institutional players,” said Kozlov, who helped Cedars-Sinai Medical Center launch a health-tech accelerator in partnership with Techstars several years ago.
On Monday, Techstars L.A. officially unveiled its spring 2022 accelerator class—and in line with Kozlov’s belief in the health-tech space’s massive potential, five of the 12 companies involved are developing digital health tools.
The 13-week program will bring early- to mid-stage startups from places as far-flung as London, Singapore and Mauritius to the accelerator’s new offices in Culver City. After meeting with some 250 mentors and potential investors in the Techstars community, the founders will select a core group of “board members” to help them prepare for a demo day where they’ll ideally secure investor capital.
The program offers each startup a $20,000 investment from Techstars L.A. in exchange for a 6% equity stake in their company. By the time it wraps, some founders will have already started fundraising; two companies in the spring 2022 cohort have already closed funding rounds since being accepted, Kozlov noted.
Beyond digital health, the founders selected for the spring class are building hybrid rockets, SaaS companies, proptech applications and services for e-commerce and retail enablement. Kozlov hinted that the accelerator’s next cohort, slated to start in September, will center around Southern California’s booming aerospace industry.
Here are the startups in Techstars L.A.’s Spring 2022 Class:
Aware Health partners with employers to provide muscle, nerve and joint pain care to their employees.
Bean is a marketplace and workflow management platform for accounting services.
Equatorial Space develops hybrid-engine rockets designed to make space launch more affordable.
E-commerce retailers can integrate GoFlyy’s platform to support customers making on-demand deliveries and returns.
Hormona is a digital health startup offering at-home hormone testing and a hormone management platform for women.
Max Retail (formerly SwapRetail) helps independent retailers and brands sell unsold inventory through a market network that includes B2B, B2C and liquidation channels.
Mind-Easy partners with employers to provide their workforce with culturally sensitive mental health resources.
Modal Living designs, manufactures and installs modular backyard dwellings and offices.
Next Generation Quantum is a quantum computing hardware and programming company.
Pear Suite’s cloud-based platform that assesses “social drivers of health” for older adults.
Rwazi is a data services company providing organizations with on-ground data on products, services and activities from Africa.
SQUID iQ is a SaaS company offering hospitals a health care technology management platform for medical devices.
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Techstars' 2021 class of Los Angeles startups graduates this week as the accelerator comes to a close with its Demo Day.
The 12 companies will show off their work, which ranges from a stroke-detecting wristband made by Alva Health to a social network for stock traders called Cheres and Renno, an app for home renovations. If you're about to go to small claims court and need help filing paperwork, there's an app for that, too – Techstars also backed PeopleClerk, which uses its system to help California residents file in any one of the state's 58 counties.
For the past three months, each company has been working under the guidance of Techstars mentors remotely and at their Culver City offices to develop its final product, which will be shown off to investors and interested potential customers Oct. 14 during an investor showcase at the Petersen Auto Museum.
In addition to each company receiving a $20,000 grant at the onset of the program in exchange for giving Techstars 6% equity in the company, the pitch day is potentially a very valuable opportunity to court new investors and keep the business' momentum going.
Of the dozen companies that have participated in the accelerator, Techstars L.A. Managing Director Matt Kozlov said about half have– or are in the process of closing – funding rounds outside the Techstars model.
"A couple of the companies will have actually already closed rounds by Demo Day, which is pretty exciting," Kozlov said. "Some of the companies are so hot that the deals kind of ran away with themselves before the rest of the world got a chance to meet them, which is great for our founders and we're proud of them."
One of those companies is Sanity Desk, which makes software for small businesses to help them manage marketing and customer service. Sanity Desk CEO Samuel Cook said the company raised $116,000 during the program from investors outside Techstars and $1.9 million since launching in 2019.
Cook said that working with Techstars helped Sanity Desk boost its revenue by focusing on offering its product at a free or discounted price to reel in new customers. He noted Sanity Desk's monthly revenue grew 15% in September and expects the startup to hit $1 million in annual revenue by January 2021.
"The biggest breakthrough we had from the program was learning through our mentors how we could grow our revenue to $1 million in annual recurring revenue before we raised our Seed round," Cook said. "The advice we received in raising and how to raise will greatly increase our valuation at the time we raise. Plus the network and skills we have to raise will make it much easier than it would have been."
The demo day is virtual because of the ongoing coronavirus pandemic, but Techstars LA embraced a virtual and in-person hybrid model this year. The investor showcase will be in-person, and throughout the three-month mentorship period startups met both in-person and online -- Kozlov said one mentor even moderated a class while docked on a yacht.
Kozlov said Techstars will likely continue a hybrid model of in-person and virtual experiences in its future classes regardless of the pandemic, because it allows more companies to participate.
"We came to TechStars because we were looking to raise money, but the real value we got was from the mentorship and the confidence we gained to grow our business with these mentors," Cook said. "Also, the other founders in the program are a huge source of strength and inspiration to me that I can rely on them for advice, connections, and support through our journey after the program."
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When Matt Kozlov, TechStars Los Angeles' Managing Director, evaluates startups, he looks for a few key qualities in a company's leadership: humility, passion, resilience and the ability to accept coaching well.
"We believe that an A-plus team can turn a C-minus product into a really successful venture," he said. But the inverse, he said, isn't always true.
The 12 companies chosen for TechStars LA's 2021 Accelerator includes a social network platform for traders, a startup making a wristband that detects strokes and an app to handle small claims court cases.
Kozlov, who took the helm in February, is also taking his inaugural TechStars Los Angeles class in-person after the accelerator went remote during the pandemic.
"Nothing is better than an in-person experience for the mentors and founders," he said. "We are planning this year to bring the best of both worlds."
Kolzov, who spent the last two years working from home with "little" human interaction, is looking forward to swapping ideas across a table. TechStars LA is also in for other changes. The class will be held at an office space in Culver City, where most of the mentorships and instruction will take place.
But with LA County's new mask rules and an unpredictable virus, he's braced for the prospect of returning restrictions if COVID-19 cases rise.
"We've done it before, and we have to, we'll do it again," Kozlov said.
Kozlov said making sure the startups are racial diversity was a major area of focus for the accelerator. Many of the companies are led by Latino, Black and Asian American founders, and a majority of the businesses have women in their leadership.
"In terms of diversity, we really set that as a requirement when constructing this cohort," Kozlov said. "We wanted to make sure that the community of TechStars that we're bringing into this portfolio represents the community of LA."
Chelsie Hall, the co-founder of ViralMoment, said she's looking forward to collaborating with other startups and has already benefited from TechStars' network.
"The program hasn't even started yet, and they've already connected us to people who are just absolute experts in the space," said Hall, whose company helps brands identify internet trends.
The TechStars LA Accelerator's 2021 class will receive three months of training mentoring. Each company will receive $20,000 in exchange for 6% equity in the company, as per TechStars' usual accelerator agreements.
Here's a preview of this year's class:
Born out of Yale University, Alva Health wants to help people identify strokes sooner with a wristband that helps detect "the silent killer." Strokes are among the top leading causes of death worldwide. Detecting a stroke early is often a key way to improve survival rates and reduce side-effects for stroke victims.
"It's kind of a problem that has not been solved," said Sandra Saldana, CEO and co-founder of the Houston and New Haven based startup.
Butterfly Labs wants to make at-home lab testing easier for telehealth companies.
Based out of Los Angeles, Butterfly's software provides telehealth companies access to labs, testing and results that can be shared with patients via their portal and mailing services. So far, they have partnered with 10 labs to offer blood and other tests.
Cheres is a social network for stock tracking.
The platform allows users to see what their friends and followers are investing in. The app has pre launched and already has thousands on its waitlist, according to the company.
Founder Cimeran Kapur created Communikind, an app that lets families track their behavioral health history and health data. She developed the app after finding out she had cancer while in medical school. Available on both the iOS and the Google Play Store, the app also lets users share data with physicians.
Kapur created the app to give patients more control over their medical histories.
Led by Shiloh Johnson, a former accountant, ComplYant sells software that helps businesses keep track of tax deadlines, bills and other paperwork.
Erdos Ventures buys small e-commerce businesses. Based out of Canada, Erdos generates an offer within 14 days and lets owners choose between fully selling the company or sharing profits.
Based out of India, Eunimart offers machine learning and AI-based tools to help companies manage their businesses across major ecommerce platforms, including Shopify and Amazon.
The company primarily operates in Asia and the Middle East and is aiming to expand into the U.S.
Lightbox wants to combine the online and in-person shopping experience. The company's main product is a smart, 43-inch touchscreen that connects in-store shoppers with their online accounts.
Co-founder Sumant Yerramilly is no stranger to the program; he went through Techstars Boston in 2009, where he worked on Amp Idea, a company that designed an interactive touchscreen for taxis. The company was later acquired by Verifone Transportation.
PeopleClerk is an app that lets customers prepare small claims lawsuits and file the correct paperwork online. It operates in all 58 California counties and is hoping to expand into other states.
PeopleClerk co-founder and attorney Camila Lopez said it takes 30 to 40 hours and multiple court visits just to navigate the court system, which is often exacerbated by filing the wrong paperwork or missing a step in the process.
"If you watch a small claims hearing, you will see that people are showing up with evidence everywhere," Lopez said. "It's kind of a mess, and you're leaving money on the table."
Renno is an online business that aims to streamline the home renovation process. Led by former real estate consultant and CEO Khalief Brown, the company's app lets customers design a renovation, get pricing quotes and find contractors.
SanityDesk is a software aimed at "solo-preneurs" and small businesses. The software helps businesses improve their web presence, marketing strategy and customer relations management.
ViralMoment wants to make it easier for companies to better understand what's trending on the internet so it can make its own "viral moment."
The company uses Artificial Intelligence to generate reports on what people are saying about a company online based on images, videos and memes posted online.
Correction: An earlier version of this story misspelled Complyant founder Shiloh Johnson's name. It also clarifies Cimeran Kapur is the sole founder.
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