It’s show day season. This morning marked the launch of 500 Global’s Fall 2022 Venture Capital Demo Day, which saw more than a dozen startups pitch their best offerings to potential investors — and clients. Participants ran the gamut from fintech and sustainability to development tools and education technology, and many of them stood out from the rest of the package.
The event comes only weeks later Y Combinator held a semi-annual demo daywhich is the first since moving operations to personal mode. Previously branded under 500 startups, 500 Global has an accelerator that rivals YC. Both machines are looking to support early stage founders with money and advice in exchange for equity. YC has backed more than 3,500 founders, while 500 Global has backed more than 2,800 founders, according to each organization’s website. Unlike YC, 500 Global has geo-specific accelerators, similar to Techstars, focusing on areas such as Aichi, Japan; Cambodia; and Alberta, Canada.
However, today’s 500 Global debut is from its first and flagship program, dating back to 2010, and fittingly, including companies from around the world. All companies go through a four-month program but start at different times, thanks to the fairly new renewed acceptance strategy of 500 Global. Let’s dive into some lunar footage of the batch and finish with some notes from Clayton BryanPartner and Head of Accelerator 500 Global Fund.
For example, it is based in Taiwan Rosetta.ai, an e-commerce startup that taps into artificial intelligence to allow customers to search for products — especially clothing and cosmetics — by specific attributes. Rosetta’s AI algorithm “sees” the attributes (eg, sleeveless, ruffled, microbeads) that a shopper might want while browsing an online store and creates a “preference profile” for it, which merchants can use to cross-sell or set up promotions that trigger if The shopper was likely to abandon his cart.
It’s Rasheed’s early days. But the company, which was founded in 2016, has raised $2.4 million in capital so far and claims to have clients like Shu Uemura, in which L’Oreal has a majority stake. The trick will continue to win customers at the expense of competitors like Lily AIwhich similarly attempts to match customers with products that use attributes and artificial intelligence models.
Elsewhere on the day of the show, Lydia Walked through the health assessment service of insurance companies. Lydia is designed to do away with lengthy medical examinations and forms, in which insurance plan applicants answer some questions about their health — for example, whether they have a chronic illness, were recently hospitalized and so on — via their smartphone. The platform then creates an abstract health score supposedly free of sensitive medical details, which insurers can use to manage risk and underwriting.
Lydia is not the first to try it. Health tech startup Fedo also works to mathematically generate health outcomes, determining a person’s risk of disease and their propensity to claim. The ambiguity of Lydia’s approach also raises questions, such as whether her algorithms account for demographic differences and historical biases in health care. But if the startup stays true to its mission — securing the next billion people — it may be one to watch, especially given the capital ($13 million) already behind it.
One of the most unique startups on Demo Say presented was beta store, a supplier of popular “informal” retail outlets in Africa. Informal retailers are unlicensed, unregistered, and non-reporting retailers to tax agencies, usually operating outside of open markets and stores. BetaStore acts as a merchandise marketplace for casual retailers, providing access to essential items such as dish soap, laundry detergent and all-purpose cleaner at wholesale prices and having them delivered to retailers (within 48 hours).
BetaStore customers can order products via chat, text or WhatsApp. On the back end, the platform provides sales analytics to manufacturers, which can be leveraged on BetaStore feedback to make “data-driven” decisions for scaling shipments.
It looks like the BetaStore is off to a strong start. Founded in 2020, the Nigeria startup claims to have distributed over 140,000 items to retail clients in Nigeria, Ivory Coast and Senegal and placed over 20,000 orders. Recently, BetaStore has started offering financing to retailers and plans to launch a Buy Now, Pay Later product in the coming months.
One year after rebranding
Minutes after demo day ended, Brian spoke to TechCrunch about 500 Global and how it’s growing in an increasingly volatile (and competitive) market.
“It was kind of bleak, but we have been telling our companies time and time again that the silver lining is that 2021 was an exceptional year for venture fundraising,” he said, matching the news that says US-based investors are sitting on $290 billion in dry powder right now. The accelerator’s most important tip was to start raising money early, to prepare the company more before going to market, and to stay smart about expense management. His advice these days is that startups should prepare for at least 18 months off the runway.
It’s been almost a year since global 500 companies were renamed from 500 start-ups, a move Brian said aims to reposition the institution as less of an accelerator, and more of an investment company. More than a sign. Previous participants in the batch went back to 500 for later funding, during Series A but up to Series D.
“Historically, we had no choice, but now we are following multiple strategies and working to finance the next phase,” he said. “We have a demand from our founders’ community, we have a demand even within our partner community that they want to reach more risk-free companies.”
He added, “We are very proud of our accelerator. It is a major advantage… but it has now helped open up other opportunities for us as a company that we are exploring with great enthusiasm.”
As for whether 500 will change the rhythm of investing, check volume or focus – Similar to YC as it braced for deflation. Brian said there is more to come.
“We are not immune to changes in our ecosystem; we are aware of what other funds and other programs are doing.” Our program has been running aggressively for the past 10 years or more. But at the same time, we can’t be content with what we’ve achieved, and we have to make sure we have the terms of a convincing deal.”