The latest Friday Nooner guest was Arpio CEO Doug Neumann, who shared the latest on how the Durham-based startup helps companies keep their cloud-based data safe on Amazon Web Services (AWS) as well as the ruffian tactics of a young GrepBeat Godfather and his early, scrappy Bronto team.
Product-izing
We’ve seen many tech products—and ultimately full-fledged startups—emerge from consultancies, and Chapel Hill-based CX Pilots seems squarely on that path. CX Pilots helps professional services companies (think law, accounting, engineering, finance, etc.) become more human-centric by focusing on customer experience (CX).
But like many successful consultancies before them, CX Pilots wants to better scale its reach to more customers and offer different pricing and levels of service to different customers. So it’s developed tech-enabled tools that can either be used as a standalone product offering or alongside some hands-on consulting help.
Morrisville-based Keel Labs has announced the debut of the Kelsun T-shirt, which is made from Kelsun fiber—the startup’s flagship product made from seaweed. Kelsun fiber is significantly more sustainable than either natural fibers like cotton or synthetic fibers, many of which are petroleum-based. Consider that compared to cotton, Kelsun reduces water usage by 70x and land use by 100x. Meanwhile seaweed is one of the world’s most regenerative and renewable organisms, which very much cannot be said for petroleum, the king of the carbon-spewing fossil fuels.
Keel Labs raised a $13M Series A in 2022 and moved to the Triangle to commercialize Kelsun, which made its global runway debut last October during Paris Fashion Week as part of Stella McCartney’s 2024 Spring Summer Show. The Kelsun T-shirt had been developed in collaboration with climate activist and environmental educator Aditi Mayer and is 70% Kelsu, 30% cotton-blend. It’s not yet for sale, but that is coming soon. See all the info here.
Challenge Accepted
Chapel Hill-based ExstoBio is one of 15 startups nationwide selected as the Stage 1 winners of the National Institute on Drug Abuse’s (NIDA) “$100,000 Start An SUD Startup Challenge.” (“SUD” stands for “substance use disorders.”) We first wrote about ExstoBio and its mission to set the standard of patient care in cannabinoid therapeutics in April, 2022, as it went through the Launch Chapel Hill accelerator. ExstoBio’s contest entry centers on its ExstoMD, a B2B SaaS product that helps doctors integrate precision medical cannabis into patient care, in this case to help treat substance abuse.
These 15 finalists will compete in the challenge from February-July, with 10 startups winning at least $10K each. All of them will receive personalized mentoring, and the program ultimately serves as a fast track for SBIR/STTR funding from the federal government. See more info on the NIDA site here.
Sobering Stats
It’s no secret that startup funding was down in 2023 in the Triangle and nationwide, but as year-end numbers come available it cements the feeling into fact. Axios drilled down into both trends, citing PitchBook stats that Triangle startup funding fell by more than 70% in 2023 by dollar volume to $1.2B, while the number of different companies receiving investments also fell by 20% to 163. (Here are the Axios stories on startup funding in the Triangle and nationwide.)
One major shift is that the highest-flying startups that had been raising big rounds in recent years—think Cary’s Epic Games and Raleigh’s Pendo—were forced to retreat for various reasons, including layoffs. Bull City Venture Partners’ Jason Caplain told Axios that last year was the hardest time to raise money he’s seen since the 2008 recession.
The general hope is that 2024 will be better by the second half of the year, anyway, especially if interest rate cuts are coming. Some IPOs and acquisitions both locally and nationally could really help re-start the virtuous circle of successful exits leading to more capital being invested leading to more checks written.
AI Pitch
Given that it’s hard to raise money, maybe ChatGPT can generate the perfect pitch to make any investor open their checkbook? That was the premise that TBJ/Triangle Inno’s Lauren Ohnesorge wanted to test. The verdict: sorry, but there’s no easy shortcut. Lauren gave ChatGPT the following prompt—“Write a pitch for a tech startup seeking to raise $1 million”—and sent the result to several Triangle investors. Triangle Tweener Fund maven/Spiffy CEO Scot Wingo gave it a D, which, ouch. Though on the plus side, a few investors did think that ChatGPT got to the point quicker than many real pitches they see. Fun story.
Taking Sides
Charlotte- and Raleigh-based dev shop Dualboot is suing Texas-based Mossa Holdings, Triangle Inno reports, over what Dualboot alleges is $500K+ in unpaid work to develop an app for golfers to track their stats. Mossa also allegedly fudged its finances so that Dualboot would keep working on the project in the hopes that the promised (and already delayed) funds were on the way.
In the name of full disclosure, Dualboot is one of GrepBeat’s largest and most loyal financial backers, and indeed sponsors this very newsletter. I’ll also disclose that I totally believe them and hope they collect every dime they’re owed. We’ll see what Mossa Holdings has to say if they make a legal filing, but they declined (for now anyway) to share their side with TBJ. Hmmm.
Problem Solvers
While labor force participation among women ages 25 to 44 has rebounded from a major dip during the pandemic, that’s not because it’s gotten much easier to find quality and affordable childcare. Of course, wherever there’s a big problem, there’s a business opportunity.
Triangle Inno wrote about two Triangle entrepreneurs who are tackling the childcare issue: Margaret Macfarlane of My Girl Friday and Alison Rogers of Blush Cowork in Cary. My Girl Friday is a nanny staffing service that also guarantees backup care, while Blush Cowork—which we wrote about shortly after it opened in April, 2022—is a women-focused coworking space with built-in childcare..
Board Fellowship
RTI International and the Triangle Chapter of the National Association of Corporate Directors (NACD) have announced a fellowship award in honor of Robert A. Ingram, a General Partner at Hatteras Venture Partners who passed away last March at age 80. The fellowship is open to both NACD members and non-members in the Triangle and Eastern North Carolina who exhibit high potential for public or private board service. See all the info here.
Build Great Software
Dualboot is a software development company. We build software that drives revenue growth and transforms business. With a proven track record of creating nearly a billion dollars in equity value, we are committed to driving your business growth. Clients include tech and non-tech founders as well as Fortune 500 companies, so they can start small or scale fast depending on what you need. Learn more here, and email us here to work together.
Extra Bit
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