SUM VENTURES
 MONTHLY NEWSLETTER 
 "Helping founders is the best form of diligence."
 

SUM THOUGHTS

Hello friends

Over the past year, we've channeled our resources into groundbreaking technologies and visionary founders. To date, we've strategically deployed $4.4M across 20 promising seed-stage startups, and our book value is already up 41%. Our success is a direct result of the incredible team we've built, which is why I am delighted to share that our Principal, Peter Jun, is being recognized as the Venture Capital Ambassador to South Korea by the Mayor of Seoul. I invite you to celebrate this moment with us. Link for Event Information & Registration

Our collaboration with Siemens and Douglas Elliman has thrived. Frequent weekly interactions have further strengthened our alliance. Siemens brings unmatched benefits, including due diligence, advisory services via their Advanta division, and various financing options for our portfolio. Meanwhile, our strategic allies at Douglas Elliman consistently introduce us to promising early-stage prospects. Their unique insights, especially concerning our proptech investments, are priceless. Both Siemens and Elliman see the value in our investment approach and our unique ability to identify promising early-stage companies.

While last year marked a transformative phase for the venture scene, valuations, once inflated, have now settled around 4-6x revenue. This provides more discerning investment opportunities. It's worth noting that stalwarts like Airbnb, Microsoft, and LinkedIn flourished amidst economic downturns. Such times often separate the wheat from the chaff, leaving those truly resilient founders building companies with compelling value propositions left standing. 

While previous updates emphasized our fantastic founders and the tangible value we bring to our LPs, this time, I'd like to shed light on broader market trends and how our investments align with these trends.

SUM Perspective on Upcoming Sectors

Artificial Intelligence: 

Artificial Intelligence (AI): The AI domain has achieved significant strides. Yet, the potential remains enormous. One key challenge is deploying models that handle data securely in isolated environments. Eduworks stands out in this arena. Not only is it backed by $15M in non-dilutive funding from prestigious entities like Defense Advanced Research Projects Agency (DARPA) and Air Force Research Laboratory (AFRL), but it has also showcased remarkable growth recently. Only a few months into their fiscal year, Eduworks has achieved milestones that are nothing short of impressive: boasting over $5M in revenue and on track to exceed their ambitious $10M target for fiscal year 2023. Propelled by a $1 million funding boost for TIDES (Tools for the Instructional Design of Engineered Systems) and renewed contracts with aviation giant Boeing, Eduworks has further solidified its market position. The launch of its human performance language model, NLighten, across projects financed by the National Science Foundation (NSF) and Chamber of Commerce Foundation, and the rollout of their innovative AI chatbot, Extension Bot—endorsed by the State of California—cement the company's trajectory towards broader adoption and reliable revenue streams. With such strategic endeavors, Eduworks is not only set to revolutionize human-AI interactions but also to achieve, if not exceed, their revenue aspirations. 

FinTech: 

Even as fintech valuations have dropped significantly, the sector's potential transformation remains undeniable. The emerging emphasis on streamlined payments in burgeoning markets and a focus on financial wellness is evident among global merchants, banks, and credit unions. Paperwork is distinguishing itself in this domain with a unique approach to financial wellness, a testament being its successful collaboration with Baxter Credit Union. Additionally, we have increased our investment in Pay Amigo and are proud to be their largest institutional backer. Their commendable growth in South America's payment ecosystem, coupled with expansion plans for Africa and the Middle East, heralds a promising future. I eagerly await sharing further positive updates about Pay Amigo as the year unfolds. The leadership of Frank Mastrangelo, Co-Founder and CEO, epitomizes our ideal founder profile. His impeccable integrity and extensive industry knowledge, with roles like founder of Bancorp, COO of Greendot, and CEO of Yapstone, underscore his numerous achievements.

EdTech: 

The U.S. education system, particularly teachers, faces tremendous pressure. With declining literacy rates, there's a dire need for technology that caters effectively to students and educators. Living Popups, with its engaging AR content and robust teacher dashboard, is a testament to this potential. The global EdTech market is expected to reach $404 billion by 2025, highlighting its rapid growth. I urge you to view [this video link], showcasing the remarkable talent they’ve garnered. Celebrities like Brian Cranston and Levar Burton are among the actors supporting Living Popups’ incredible AR-enabled books.

PropTech: 

The archaic, inefficient practices plaguing the real estate sector need an overhaul. Purlin and Live Easy are building a future where property search and purchase is hyper-personalized, followed by a hassle-free transition to homeownership and maintenance. Purlin is poised to revolutionize the home-search realm. Their collaboration with Douglas Elliman and the upcoming launch event in NYC underpins their commitment to redefining how agents and buyers interact. The use of their unique artificial intelligence technology offers an unprecedented edge. 

CleanTech: 

The urgency to conserve natural resources is at an all-time high. To circumvent the tragedy of the commons, we look for startups aligning monetary benefits with sustainable practices. Plantswitch and Irrigreen exemplify this, offering solutions that promise both environmental and financial savings. Their ethos reaffirms that profitability and sustainability aren't antithetical but can coexist harmoniously. For example, PlantSwitch has experienced significant growth recently as Whole Foods approved their resin for nationwide use, Dart Container, and Yum! Brands deals are on track for a 2024 launch, and we're eyeing a potential $30M deal with the world's largest compostable coffee pod company. Additionally, a leading US cannabis packaging manufacturer is considering our resin. With these developments, they are primed to become a dominant figure in the biopolymer industry.

CleanTech/Digital Fashion: 

The realm of digital fashion is soaring, driven prominently by advancements in augmented reality (AR) and virtual reality (VR). Leading tech firms such as Meta, Microsoft, Snap, and Amazon are eagerly exploring this space. While the future landscape of dominant applications remains a mystery, the impressive scale of the gaming skins industry, boasting a total addressable market in the billions alone, is undeniable. Our involvement with DressX transcends mere speculation. Through their alliances with industry titans like Roblox, Snap, Meta, and Microsoft, they've established themselves as the central hub for fashion brands seeking to create cross-platform digital wearables. Committed to sustainability, DressX operates as a carbon-neutral entity, taking a progressive stance in an industry historically ranked as the world's second-largest polluter. In DressX, we see not just potential but a market leader in digital fashion with over 400 brand partners that will only extend its competitive advantage.

These sectors present lucrative, sustainable investment avenues, promising robust returns and paving the way for a brighter, innovative future. I remain grateful for your unwavering trust and support. If you find our vision aligning with potential investors in your network, kindly share our SUM Executive Summary here (password SUM). Now is the time for innovation as the latest fad-chasing startups die off; we are well-positioned to continue investing at attractive valuations in game-changing technology companies led by incredible founders.

Learn More

• SUM News Feed, where you can see the latest news from our portfolio companies
• SUM Youtube Channel where you can view our monthly Mtgs and Founder Testimonials
• SUM Deck here (password SUM)
• SUM Executive Summary here (password SUM)

Thanks to our growing team for sharing deal flow, supporting our founders, and helping with diligence. John Paglia, Mike Van Kempen, Peter Jun, Elizabeth Spears, Peter Mansfield, Marcus Yang, Sally Dewitt, Ian Sobieski, Ksenia Yudina, Mark Belinksky, Nachi Gupta, Ken Borkan, Martha Stein, Stender Sweeney, Adam Korman, Millicent Tracey, Tim Sabean, Frank Mastrangelo, Tammo Mueller, Jon and Jacob Walker, Andrey Kudievskiy, Dan Sachar, Jason Bennett, Kammron Taylor, Kevin Herzberg, Amy Wood, Hunter Ballard, and Aike Mueller. Another big thank you to our strategic partners who support our portfolio founders.

1. Douglas Elliman (Real estate brokerage)
2. Distillery (Software Development)
3. Quantiva (Software/Product Development)
4. UpTech (App Design and Development)
5. Grafted Growth (Lifecycle Marketing and Growth)
6. Pepperdine Most Fundable Companies Program (Deal Sourcing and Diligence)
7. Siemens Advanta

Best,

Garrett Gilbertson

SUM Portfolio Updates

Automotus  

• Industry: Transportation + Smart Cities
• Stage: Series A
• Signed a contract with the city of Aurora's Onlight Aurora for a $2.1M 3-year contract
• Signed $70M 4-year contract with Miami
• 3000+ cameras under contract, each generating $7,000 per year in revenue on average. 
• The Pittsburgh City Council formally approved a two-year contract extension, expanding the Automotus partnership to three years and scaling their deployment to 200 zones. 
• Automotus has established public-private partnerships with Fort Lee, NJ; Durham, NC; and San Antonio, TX.
• A distribution agreement with RealTerm Energy is in its final stages, providing access to a wider customer base in Canada and Northeastern US cities.
• Awarded SMART grants in Philadelphia, San Francisco, and Miami-Dade County, translating to ~$500k in revenue over the next year.
• The Boston City Attorney's Office has approved a subcontract with Conduent to deploy 100 cameras over three years, with scale-up potential.
• Jordan Justus Automotus (CEO) was featured in Parking Today
• Here is a recent report from S&P Global highlighting Automotus' business and technology.
• Terms: Closed $9M Seed Round featured in Tech Crunch here.

Pay Amigo  

• Industry: FinTech
• Stage: Seed
• Terms:  We invested in the seed at a $12m post-money valuation alongside the founders
• SUM Ventures is the only VC seed investor invited to participate
• Launched Pay Amigo in Brazil and will soon launch in Argentina
• $2M in revenue in the first six months
• Expanding to the Middle East and Africa this year
• Preparing for Series A raise Fall 2023

Plantswitch 

• Industry: CleanTech
• Stage: Series A
• Terms:  We invested $250,000 at a 10% discount to Series A in March.
• Received multiple term sheets and will soon close Series A.
• $307k new revenue, 38 new customers 
• LOI from manufacturing partner Westfall Technik
• Yum! Brands partnership discussions ongoing
• Dr. Aditya Jindal has joined the team as Senior Scientist to lead R&D efforts.
• Collaborations with ADM and Siemens promise advancements in technology and product offerings, including feedstock sourcing opportunities and supply chain monitoring.
• Q1 2023 sales finished up 139% YoY
• Repurpose is considering switching to their cutlery after they launch their new facility, an approximately $10M annual opportunity 

DressX  

• Industry: Digital Fashion 
• Stage Series A
• Series A announcement in Forbes
• Top selling digital fashion brand in Meta & Roblox outperforming brands like Prada 
• Warner Media and DressX Partnership Vogue article here
• https://www.voguebusiness.com/technology/metas-avatars-just-got-a-fashion-upgrade-with-dressx
• Link to CNN interview of CEO Daria Shapovalova here
• Mark Zuckerberg featured DressX at MetaConnect (video link here, minute 58:30). 
• Terms: SUM invested $500k alongside ten other funds/ CVCs, including Slow Ventures. Garrett currently serves as a Board Observer. 

Purlin 

• Industry: AI/ PropTech 
• Stage: Seed
• Metrics: Just signed a $4m revenue contract with Douglas Elliman
• Currently profitable with a team of over 40 (largely remote)
• Received $2M investment commitment from Rice Park Capital (strategic customer/partner)
• Securing placement on upcoming Netflix show and investment from Eklund Gomes top-performing US real estate agents 
• Terms:  We co-lead this investment with Douglas Elliman at a $16m pre-money valuation. SUM Ventures received the Board Seat, and Douglas Elliman will serve as Board Observers. Redwood Trust and Eklund Gomes also participated in the financing.

Irrigreen 

• Industry: CleanTech
• Stage: Seed
• 600K per month in revenue
• Since seed funding CAC has dropped in half 
• Tech Crunch Feature
• Making significant progress on longer-range sprinkler systems for commercial use
• Online D2C conversion rates improving, driving down CAC 
• Terms: We completed our $200k investment alongside Ulu Ventures (lead investor). SUM was the last money in the seed round.

• Industry: PropTech
• Stage: Seed (now raising Series A)
• Terms:  We invested alongside Douglas Elliman at a $15m post-money valuation 
• Move Easy has now closed 4/6 largest real estate brokerages as customers and will soon add  250k agents through two new customers
• MoveEasy recently closed their Series A financing with Travelers Insurance and Moderne Ventures co-leading the investment. They launched a fully integrated home platform that empowers agents to deliver greater value to their clients. You'll be able to read more here. 

Brius  

• Industry: Medical Device
• Stage: Seed + Series A
• Terms:  We invested in the seed at a $10m valuation and the Series A-1 at $30M valuation
• Closed recent $10M raise
• Multiple patents issued on the device (self-driving braces that sit behind the teeth)
• Significant interest was generated from the recent AAO conference
• The new CEO is the only person to sell a lingual orthodontics company
• A strong network of co-investors, including Sonder Capital, Invus, GT Healthcare, and Woori (Formerly KTB Capital)

Eduworks  

• Industry: Artificial Intelligence 
• Stage: Seed + Series A
• Terms:  We invested in the seed at a $15m valuation and the Series A-1 at $30M valuation
• Closed recent $1M raise
• $15M+ in non dilutive funding from DARA + SBIR + AFRL
• Multiple patents issued on technology
• Secured $15M in nondilutive funding from reputable entities like DARPA and AFRL.
• Remarkable growth in recent times:
• Over $5M in revenue just a few months into their fiscal year.
• Already achieved half of their $10M target for 2023.
• Gained a $1 million funding boost for TIDES.
• Renewed contracts with aviation leader Boeing.
• Launched human performance language model, NLighten:
• Projects financed by the NSF and Chamber of Commerce foundation.
• Rolled out AI chatbot, Extension Bot:
• Endorsed by the State of California.
• Positioned to revolutionize human-AI interactions.

 Paperwork 

• Industry: Financial Wellness
• Stage: Seed
• Baxter Credit Union (BCU)
• Expect to sign a partnership with a 40M+ member organization (confidential for now), making Paperwork the app solution for members and their marketplace of record--this company is also an investor in Paperwork 
• Launched a partnership with Insuritas to expand into the Credit Union channel
• Late-stage negotiations with a major credit union that aims to white-label Paperwork for members and corporate partners
• Featured at CES in conjunction with AARP 
• Paperwork team in Chicago working on a release with BCU 300k members and partners (see press release). AARP is next up (40M members)
• Terms: We recently invested in their seed terms ($12m post-money valuation); other investors at these terms are Launchpad Capital and Kickstart VC. Founders previously sold their startup Jemstep to Invesco. 

ClearClub

• Industry: Healthcare
• Stage: Seed 
• Invested alongside Rogue Venture Partners, Sonder Capital, AOA, and NuFund.
• ClearClub will exceed $2M in revenue (50% subscription revenue) this year
• ClearClub is building the Dollar Shave Club for oral wellness and has 38k customers to date with 3,800 5-star reviews! They are the current market leader in their space, and we expect Pablo (CEO) and his team to build on their leadership position while achieving profitability in the next 6 months
• Onboarding strategic advisor and brand ambassador Kammron Taylor to spearhead sports guard marketing efforts
• Terms:  $6M Post-Money SUM receives a Board Seat. You can view a video of our D.D. call with Rogue and AOA here.

Living Popups 

• Industry: EdTech
• Stage: Seed 
• Terms:  We made a $50,000 pre-seed investment alongside strategic angels and received additional warrants (totaling 1%)
• Product Demo
• Preliminary Analytics: 95% of students responded that LP popups increase reading enjoyment. LP is currently running research in Marin County, CA, to further prove the efficacy of LP in increasing literacy comprehension, engagement, and attainment.
• Attended the CUE conference, where LP received positive feedback from educators and received new orders as a result
• LP welcomed new team members, including a fractional CFO and VP of Global Strategy and Operations
• Released a new beginning reader chapter book to support children's social-emotional wellbeing
• Upcoming event: Tina will attend the ASU GSV Summit in San Diego, and LP will be at the Texas Library Association meeting in Austin.

Sweat Pals 

• Industry: Health & Wellness
• Stage: Pre-Seed
• Terms:  We invested $ 50,000 at a $6M Post Money valuation alongside Sweater VC, Antler VC, and other strategic angels, including the founder of HotelTonight, early employees at Uber, Snap, and Google, and a syndicate of top CEOs and Fortune 500 leaders in YPO association.
• SweatPals is a platform connecting fitness enthusiasts and communities, streamlining events, payments, and content for a healthier, social lifestyle. SweatPals empowers leaders to organize and manage their communities in a centralized location while offering consumers a vibrant social experience to connect with each other.
• SweatPals has grown organically through word of mouth and referrals (with a $0 user acquisition cost), amassing 200+ active communities and over 8,500 active users 
• Monthly retention among community leaders is 92%, and all users are 63%.
• SweatPals is launching in Miami next month due to demand from users there, then Denver and San Diego. SweatPals aims to launch nine additional markets by early 2024.
• Last month, SweatPals generated $15K in GMV and has had $12K in revenue so far.

Grapefruit Health 

• Industry: SAAS Healthcare
• Stage: Pre-seed
• Terms:  We invested $50,000 $6M Post Money SAFE
• Closed $1.3M oversubscribed pre-seed
• Won $250k investment from Barnburner pitch competition, waiting to sign SAFE/wire transfer
• Potentially entering diligence on another $550k+ investment with two investors
• Finalist for AWS Latinx Impact Fund, potentially receiving $125k + $100k in AWS credit
• Sales pipeline at $6M, up from $5M
• Grapefruit Health Raises $1.3M Oversubscribed Pre- seed Round To Address The Massive Staffing Shortage In Healthcare
• Contracting with the University of Chicago Medicine, Ballad Health, Optu & San Francisco VA
• Expect to be in contract with 2-3 more by end of Q2

UNest 

• Industry: FinTech
• Stage: Series B
• Terms:  We invested in the seed at an $8m post-money valuation and rolled $150,000 of equity into the fund
• Q4 2022 was their best quarter on record. 10% MoM revenue growth through 2H 2022
• Reached over 600K total users (parents and kids)
• Exceeded $17M in total AUM
• Partnership with iHeartRadio began in February
• Laura Dern brand ambassador article
• Gross margin 3X since Q4 2021 due to the ongoing focus on efficiency
• Good Morning America feature

Berri Organics

• Industry: Beverage 
• Stage: Seed
• Terms:  $18m post-money valuation 
• Scaling through Whole Foods and Target
• Jerome, the founder, is presenting to Band of Angels this month
• Near signing key brand ambassador

Rotender 

• Industry: Robotics
• Stage: Pre-seed
• Terms:  $12m post-money valuation New customer Terranea resort in Palos Verdes, renting two units at $2,500/month each and a $7,500/unit branding fee
• Onboarding brand partners who will pay to wrap the machine
• Success in this deal can set a standard for selling branded machines to other venues.

SUM Events

SUM Fund Materials

• SUM Executive Summary (password SUM)
• SUM Ventures video 
• SUM Ventures August Mtg
• SUM Deck (password SUM)
• Summary of Terms

SUM Mission

Startup Mavericks Ventures (SUM) is a seed-stage venture capital firm founded by Garrett Gilbertson and Mike Van Kempen. At SUM our goal is to be the top-performing seed fund. To be clear, we have no desire to be the largest seed fund; we aim to have the highest IRR. This goal is only achievable with the support of our 50+ LPs, advisors, and strategic partners who have given their time, capital, and guidance to support our founders. Through our collective focus on identifying promising founders early, tracking their progress, and supporting their growth, we will continue to have a deeper insight into the companies we invest in.

Our approach leads to better investment decisions and timing because we identify upcoming inflection points before our peers. Finally, our check size allows us to participate in highly competitive rounds as we continue to build upon our reputation as a significant value add for founders. Please don't take my word for it; listen to our founder updates recorded during our recent Zoom holiday party here.

This newsletter provides commentary on our portfolio founders, the broader venture ecosystem, and upcoming events. I would love to hear your thoughts. Please feel free to contact me at Garrett@sum.vc with any questions or feedback.