Raising an investment round for a startup is never easy. Try doing it during a global pandemic.
But it is possible with a combination of bold leadership, committed VCs and a good idea.
Just ask Ryan Gerhardy, CEO and co-founder of Des Moines startup Pitchly. Earlier this month, the data-driven productivity platform announced it had completed a $2.5 million investment round.
“We started the fundraiser earlier in the year,” Gerhardy said. “In February, we thought it would go one way, and then in March, everything changed. But the important thing is we got it done…really, it’s a sign of strength in a really bad time.”
The startup’s business database platform has a goal of eliminating manual, repetitive data work and unlocking the value companies can have in their datasets, Gerhardy said. Pitchly has use cases across various industries, from law to accounting to real estate.
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Gerhardy previously worked in investment banking in his native Australia, where he frequently had to take information from spreadsheets and place it in Powerpoint templates. This is the type of work Pitchly hopes to eliminate.
Some example use cases shared by Gerhardy include having updated numbers flow into a template for monthly board reports, and updating real estate flyer templates in real time with the most up-to-date information from a database.
After moving to Iowa, Gerhardy worked for VC firm Next Level Ventures for several years. He launched Pitchly with co-founder and CTO Michael Brook in 2018. They currently have about 11 full-time employees and also work with a handful of contractors.
This latest round of fundraising was led by Next Level Ventures, which focuses exclusively on Iowa startups. Great North Labs, Twelve19 Ventures and Wellmark also participated, as did Nebraska-based Nelnet Ventures and Nebraska Angels.
It was difficult to keep the momentum from the beginning of the year, Gerhardy said, as many of the firms they discussed working with, including a few coastal firms, decided to focus on their existing portfolios instead. But the combination of new investors and insiders stepping up was key to completing the round, Gerardy said. It’s something he’s seen consistently with companies raising money during the pandemic.
“We’re looking at the world a little differently with COVID-19,” he said, explaining that the company’s growth assumptions have changed to fit today’s economic outlook. “Being profitable is a luxury and a benefit right now.”
The strategy seems to be paying off for Pitchly. Gerhardy said that since March 13, the company has retained more than 99% of its recurring revenue base. It’s also seen strong annual growth of existing customer accounts.
The immediate focus of Pitchly is launching a new website that includes trials of the software, as well as working with enterprise customers to release a new product next year that will allow employee-specific access to company data. That’s in addition to the company’s bet that they can change workflows and free up employee time.
“If we’re right, we could replace a lot of manual work with a lot of automation, and that could change how people use (software like) Microsoft Office or Google Slides,” Gerhardy said.
