Inside Startups

Hey, Insider! Want to be featured in next week's newsletter? Answer our weekly question:

Have you ever turned down a secure job offer to join or create a startup?

Share your response here.

Also, check out an excerpt from our interview with Passthrough's founder Tim Flannery below. 

Karan
p/karan-chafekar

Boeing inked a "pre-purchase option agreement" with Los Angeles, Calif.-based startup Equatic that removes carbon dioxide from the ocean. Forbes estimates that the carbon credit and green hydrogen deal is likely worth $50M. The deal has a term of five years starting mid-decade and is contingent upon Equatic's ability to scale its platform. 

More:

• Under the agreement, Equatic is tasked with removing 62,000 metric tons of CO2 and supplying Boeing with 2,100 metric tons of "carbon-negative" hydrogen to use as clean jet fuel for its fleet. 
• Equatic uses electrolysis to remove CO2 from seawater and convert it into eco-friendly material, producing hydrogen as a byproduct. 
• The startup, which has raised $30M from investors to date, has two pilot projects running in L.A. and Singapore. 
• Equatic expects to remove 100,000 metric tons of carbon annually by 2026.

Hyro, a startup that focuses on conversational AI for healthcare, raised a $20M Series B. The company automates routine messages, including scheduling, prescription refills, and searching through physician directories.

More:

• The startup claims there is an opportunity in the healthcare sector's staff shortages and out-of-date processes. 
• The Medical Group Management Association says that 88% of medical practices have had difficulties recruiting front-of-office staff in the past year. 
• The round, which brings Hyro's total capital to $35M, was led by Liberty Mutual, Macquarie Capital, and Black Opal.
• Hyro plans to expand to areas such as real estate and the public sector.

U.K.-based startup CUR8 raised a $6.5M pre-seed round led by Google Ventures to develop a platform for companies to invest in carbon removal. The methods include direct air capture by 1pointfive, enhanced rock weathering by UNDO, and durable soil carbon by Loam Bio.

More:

• CUR8 was founded in 2020 by Marta Krupinska, former U.K. head of Google for Startups, Gabrielle Walker, founder of non-profit Rethinking Removals, and Mark Stevenson, former advisor to the U.K. Ministry of Defense. 
• "...we don't believe that just being a marketplace is enough. We believe that it needs to be a much more tailored approach. So our first product is a portfolio of highly curated carbon removals from across the technological spectrum," said Krupinska.
• The startup says it has provided carbon removal solutions for events, including British Summer Time and All Points East.

Maximal Learning, a startup that uses generative AI to develop personalized learning for students, raised a $5.7M Seed round. The company is seeking to apply its AI to K12 and higher education, including a research partnership with the Stanford Graduate School of Education. 

More:

• Maximal Learning was founded by Eran Megiddo and Liviu Asnash, who sold Maximal Innovative Intelligence to Microsoft in 2001.
• The round was led by Trilogy Equity Partners, with participation from Pioneer Square Labs, GSV Ventures, Honeystone Ventures, Owl Ventures, and former superintendent of the Los Angeles Unified School District Austin Beutner, among others.
• The startup plans to use the funds to hire engineers and designers. 

As head of the go-to-market strategy for investor services at Carta, Tim Flannery recognized the inefficiencies of using paper documents to onboard LPs to a fund. To solve this problem, he created Passthrough, a fund workflow automation tool that streamlines the LP onboarding process.

In an insightful discussion with Inside.com, Tim reveals little-known insights into alternative investments, fundraising, onboarding investors, and growing a fund.

More:

• How alternative investments became a $15 trillion industry:
  In 1985, David Swenson, Yale's newly appointed endowment chief investment officer, shifted the traditional investment strategy by allocating a substantial portion of their funds to alternative investments, including private equity. This unconventional approach resulted in a 20x increase in their assets over the next two decades. The Yale model was copied by other endowments, family offices, pension plans, and long-term investors. As a result, the alternative investment space (venture capital, infrastructure, real estate, and more) has expanded from under $50B in 1999 to a $15T industry by the end of 2021.
• How Passthrough raised a successful round in 2022:
  VCs deploy less capital today than in 2021, so raising a round can be difficult for founders. Tim shared the changes Passthrough made to position themselves for success. Compared to their 2021 Seed round, he said their 2022 Series A round required:
  • More professionalism
  • Tighter business metrics
  • A better idea of gross margin and customer acquisition costs than most companies
  • Reset expectations around company valuation
  • More thought about what they really want to optimize for
• Tim's advice for fund managers who want to onboard more LPs:
  • Build a strong brand as a firm and as an individual. Be a thought leader. Use content marketing, in-person events, and other strategies a private company would use. "It doesn't matter if you're an emerging manager or Blackstone, the thing that's enduring right now is having a brand that people can trust."
  • Take a long-term approach. Make brand-building and trust-building a strategy that stretches over many years. It's never too late to start now.
  • Have a strong CRM. Surprisingly, this can be a differentiator.
  • The most basic requirement that an LP wants to see in a fund? Good returns.

Last week, we asked our community, "How long has your startup been in operation?" Here are some highlighted responses we received:

• Ayhan Ergezen (p/LivelyPencil), Founder of LivelyPencil, answered, "I've been trying to improve LivelyPencil for 4 years. Finally, in April, I met a good developer and we made significant strides. The 4-year process taught me a lot. It was a frustrating and frustrating process. I've been depressed a few times, but throwing in the towel isn't for me. Probably by the end of the year, our application will be ready for service." You can read Ayhan's full comment here.
• Will Schmahl (p/will-schmahl), COO at HousMthr, answered, "Had been living 10 years with the problem as a user and it took 9 months of planning/dev. Now July 4th to be launching the solution. Living the fund raising 24/7 search for the right investors right now, while trying to octopus out every marketing strategy for a successful splash launch."

Join the conversations at Inside.com, and we may shout out your name and business or contact you for more! ⭐️

Quick Hits:

• Demo Divvy + get a $100 Amazon gift card. Divvy, BILL’s spend and expense management solution, is one of the easiest and most efficient ways to manage your company spending.*
• Payments fintech startup Stripe acquired low-code analytics software startup Okay for an undisclosed sum. 
• German accounting startup Taxfix laid off 20% of its staff or 120 employees. 
• Sustainable aviation fuel maker CleanJoule raised $50M in fresh funding from an investor group led by Indigo Partners. Frontier Airlines, Wizz Air, and Volaris participated in the round and also agreed to purchase up to 90 million gallons of fuel in the future. 
• Internal developer portal software maker Cortex closed its IVP-led Series B funding round at $35M. Craft Ventures, Sequoia Capital, Tiger Global, and Y Combinator participated in the round.
• AI investments: Harness the power of a technology expected to add $15.7 trillion to the global economy by 2030.*

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