Newsletter 3 — January, 2021
“Lets not do that again” and “2021 can’t come soon enough” were common sentiments on year-end holiday cards. But, it’s a mistake to sum up the year 2020 as a discrete event. To be sure, much of the damage as well as the progress we’ve experienced in the past year had its origins in 2020, but not all of it. In many ways, 2020 was an accelerant for tech, social and political discourse, as well as divide but there’s no going “back to normal”.
It’s safe to state that 2020 will mark the beginning of a new era in how we live and work. Thanks to the Covid-19 Pandemic, lines between work and life blurred completely. We no longer view “Tech” as its own sector as technology has become a nearly ubiquitous enabler of business. And business is now very much in our homes — bringing “Tech” into every corner of our lives.
Coronavirus, the blurring of work and home and, specifically, the technology that enabled some to stay safe as they worked from home while others risked their lives working, exposed many of the pre-existing inequities in our society. The communities hardest hit by the pandemic in the U.S. include communities of color, the elderly, the poor and working women.
Melinda Gates wrote in her December piece for the Washington Post that “Women’s covid-forced exodus from the economy is a blow to decades of progress toward gender equality — and there is little evidence that progress will recover soon.” She notes a report from the Bureau of Labor Statistics that 865,000 women, which is 4 times more than men, including 324,000 Latinas and 58,000 Black women dropped out of the workforce in the U.S. in September, alone. Unfortunately, these trends also impact women and underrepresented entrepreneurs in tech startups. According to Pitchbook, investment in women-led startups declined in Q3 2020 by 48% from Q2, and this year is on pace to be the worst since 2017.
Fortunately, this decline in funding for female founders in venture does not appear to have impacted our deal flow at Leadout. In fact, the number of talented “non-obvious” entrepreneurs with exciting start-up ideas has been substantial and growing since our first close in Q3, 2018 and we remain extremely energized about the opportunity to invest in and support these founders. As the statistics above make clear, our mission is more important and more relevant than ever.
As I reflect on Leadout’s strategy, my conclusion is that we are seeing strong preliminary validation of the thesis. We were fortunate to be included in Alyson Kapin’s article in Forbes last month highlighting investors who fund underrepresented founders. We continue to process the evidence of significant opportunity with our “founder market fit” thesis and the themes we’ve pursued. The most important evidence being the demand from exceptional founders.
Human.io is Leadout’s latest investment. Still in beta, lead by a trained executive coach and mobile product veteran, Human delivers a fresh take on personal and professional growth by democratizing access to leadership coaches. The expert content is delivered via an on-demand audio and audio-visual format. It is bite-sized, personalized and affordable. Sign up for their waitlist here
Portfolio Companies Highlights
R-Zero Systems is a biosafety company dedicated to developing the most effective hospital-grade technologies to reduce the spread of infectious disease. We participated in their latest round of $15M in new capital to fuel remarkable business momentum, just three months after first introducing its germicidal UV device. See their Forbes coverage here from earlier this quarter and their YE2020 Newsletter.
CoProcure is building a marketplace for the $1.5T local public purchasing space (7% of US GDP). CoProcure’s technology brings this outdated commercial search process into the 21st century. Over 300 government buyers run searches on CoProcure each month to find, compare, and buy from suppliers, often using existing public contracts that expedite the purchasing process from 6+ months to just a few weeks. Check out this video of holiday greetings this fantastic team created for their market participants (local government buyers and the vendors who sell to them) and their supporters.
BookSloth: A community based interest group (via mobile app and soon web!) for book lovers grew the user base over 6x this year! They participated in Apple Entrepreneur Camp’s 5th Cohort (see pic), the first company from Puerto Rico to be accepted. They also graduated from the Rising Entrepreneurs Program from the Bravo Family Foundation and were highlighted by People en Español as one of the Top Apps from Latinx Creators.
TheCut: This Northern Virginia based start-up builds a mobile platform that seamlessly connects barbers and clients while simultaneously executing on their vision for a brand around style and grooming. They’ve been on a tear of late: despite the Covid headwinds to barbershops, they’ve grown clients and barbershops to over 2M! Check out their recent press in Washington Biz Journal, Obi’s blog.
Pack.io: Pack is building a turn-key solution for managing the software development lifecycle using microservices on Kubernetes. The product is sold both as an enterprise software solution and will have a SaaS cloud offering which reimagines container management and features include Single Sign On (SSO/OAuth2), documentation, build & deployment, and management of multiple clusters. Sign up here to get early access to the tool.
Pawscout: Did you adopt a new pet over this past year? If so, you need a Pawscout, the community based interest group for pet parents. Over the past year, the team launched the new guardian feature to add more members of a pet’s family to their activity feed, and meaningfully expanded their retail footprint in stores like PetCo, Target and Walmart. Get one today on Amazon, or at national chain or local pet stores.
Arc: Arc has grown to 2.8 million daily users, 50 million monthly, who contribute to and load content from Arc’s peer-to-peer Content Delivery Network. The team recently added their fourth software engineer.
Walrus.ai: Walrus.ai is a provider of automated end-to-end application testing with a natural language user interface. The company continues to ramp hiring to support the growth of their business and 10x’d their rate of automation. The team is currently 10, with recent hires on the business side.
Near Space Labs: The team continues to defy space and time becoming the leading stratospheric vision solution and business. They 3x’d revenue this past year and grew the team across all areas of the business. They built an inhouse data processing API and continue to expand their offering via partnerships in retail, government, utilities, real estate, insurance, disaster response and other industries. Github API for lo-res thumbnail imagery
Tierra: CEO Marusia Musacchio was the keynote speaker at this year’s North American Cartographic Information Society annual meeting. For those not deep in the maps space, this is the conference in maps with all of the heads of maps organizations in tech also in attendance.
Throughout this year of significant change and sacrifice, I made a habit of asking people which habits (if any), they broke or created this year whether for better or for worse. It was a fun discussion starter and a nice way to reflect on the year. Many shared and I am grateful for it. Here are the top 5:
Best wishes for 2021,
The Leadout Team