November 16, 2012
Last week was the third Demo Day at FounderFuel in Montréal, this time for the cohort of fall 2012. FounderFuel is in the major league of tech accelerator in North America. So far, start-ups in the three cohorts have raised $6.5 million in financing. The quality of each cohort is improving. In this latest cohort, the three most promising start-ups are: Urbita, MyCustomizer and Openera.
Urbita has reached an important milestone with 3 million unique visitors last month on its web site. The website is based on recommendation of marketplaces and destinations for travelers. The website is rich in images and comments from people who are passionate about the city. The web site aims to become a platform with direct competitors such as TripAdvisor.
In a previous article I discussed about the challenges for entrepreneurs who want to build platforms on the web. With strong network effects and economies of scale, the success can be very fast, and unfortunately fierce competition can also produce fast failures. Thus, Urbita will need to differentiate itself from TripAdvisor by focusing for instance on the weaknesses of the quality of many reviews on TripAdvisor. Several travel agencies are not recommending TripAdvisor to their customers due to poor assessment of hotels, for instance.
Urbita has raised $500,000 so far and wants another $500,000 in the short-term. Building successful web platforms necessitate a lot of capital but the payoff can be huge (Facebook and Yelp are public firms and Pinterest is growing fast). The founders are from Los Angeles and Buenos Aires.
Openera aims to simplify automated filing for everyone. Openera automatically organizes email and cloud files to meet corporate compliance requirements and allow the right people to find files quickly. The start-up is in a niche market that could be huge. The CEO of Openera had over 15 years of experience at Open Text, one of the biggest IT firm in Canada, which experienced fast growth through internal projects and acquisitions. The software of Openera makes the links in cloud computing with many other applications such as Box, Salesforce and Evernote. Some of their first customers are Box and CCA (Creative Artists Agency). Openera has an iPhone application enabling the management of document filing. The start-up has raised $250,000 so far and wants $500,000 more in the short-term. The firm is from Ottawa.
MyCustomizer enables retailers to sell customized products adapted to the special requests of their customers through cloud computing with a ready-to-use SaaS platform. Mass customization was a buzzword with the growth of Web 1.0 around 1998. Now, it is a reality in the retail world through Web 2.0. For instance, MyCustomizer has a partnership with Warrior Sports, a hockey goods firm, that lets the customer pick the colors of a hockey glove, and can change the material or even put its name or number. In exchange, retailers can charge around 30% more to the customers for their special requests. MyCustomizer is charging $99.99 per month and a commission around 5% on sales. Thus, the company is already profitable and wants to expand in other vertical markets such as furniture. The potential for customized products represents a large market for the start-up, which should help to attract Venture Capital money. The founders are from Quebec City and Montreal. MyCustomizer is looking for a financing of $600,000.