Toronto’s newest technology startup accelerator debuted today its first cohort with five firms seeking millions in venture capital money and some with investments already locked down.
Extreme Startups is a collaboration between Extreme Venture Partners, and several other investor institutions, including OMERS Ventures, Rho Canada, and the Business Development Bank of Canada (BDC). After guiding its first cohort of Web-based startups for three months, it presented the firms to a room packed with investors and entrepreneurs in Toronto.
The event was an opportunity to launch Extreme Startups as a program that works with big brand companies and high quality mentors, says Sunil Sharma, the chief connector for Extreme Startups. It was also an opportunity for Canadian tech startups to attract something that often eludes them – cash.
“It’s always the missing link in Canada, is to find risk capital that’s willing to invest in sufficient quantities in early stage companies,” he says.
The number of investors present in the room to watch the demos shows there’s enthusiasm, Sharma adds. “They want to be exposed to these kind of investment opportunities.”
The startups had eight minutes each to show off their product and make a pitch for investor cash. None of them were shy about it, with many sharing eye-opening audience growth and engagement numbers, then asking for hundreds of thousands of dollars in fundraising or more. Shoplocket, a Web service that allows anyone with a PayPal account to make a sale using a shareable widget, asked for $1 million in seed funding. The good news is it already has $500,000 of that covered by Rho Canada Ventures.
“Thousands of sellers are already benefitting from this model,” said Shoplocket CEO Katherine Hague on stage. After six weeks of launching an open beta, the firm has 5,600 sellers with an average transaction amount of $35.
The debut of Extreme Startups impressed Mark MacLeod, general partner with Real Ventures and a mentor at Montreal’s FounderFuel accelerator.
“It’s really important to have a strong debut, and I think they absolutely nailed it,” he says. “They’ve got some companies that have some real traction and really clear business models.”
It’s important for an accelerator to bring in one startup team that will be able to close some funding very quickly, MacLeod says. That helps create credibility for the accelerator and attract top talent. These days, there’s a lot of incubators and accelerators to choose from, so wooing the right entrepreneurs is no small feat.
The accelerator does invest $200,000 in the form of a convertible note to its startups, Sharma says. The first cohort of firms is now fundraising at twice their initial valuations , showing that they’ve caught up with their respective markets.
“When these companies started 90 days ago, they were not close to this investment interest,” he says.
Extreme Startups is currently accepting applications for its second cohort online.Aside from Shoplocket, here are the other startups that gave demos:
- Gijit – Makes scheduling meetings painless. Find out more about who you’re meeting, where you’re meeting them, what’s nearby that place, and provide talking points for the meeting. A better calendar.
- Granify – A big data play that aims to make more money for e-commerce stores. It analyzes the behaviour of online shoppers and determines the best way to influence them when needed. It’s like adding Amazon’s recommendations engine to your online store.
- Simplyus – A mobile app that helps couples organize their lives together. Provides a private digital space to share messages, calendars, lists, and more.
- Verelo – A Web site monitoring service that will alert you if your Web site crashes, has performance issues, or suffers from malware related problems.