A roughly 15-month-old local startup has raised a pre-seed round that was higher than anticipated.
SelectFI recently announced that it has closed a $4.5 million pre-seed round, at a $10 million post-money valuation, backed by a pool of investors that include institutional investors, private individuals and customers. The company was originally targeting $2.5 million and later increased that goal to $3.5 million.
The startup’s software platform is an auto dealership regulatory compliance and financing pre-qualification tool that aims to help dealerships help customers with financing quickly, more accurately and in greater compliance with Federal Trade Commission fair lending practices.
“Now we have a lot of runway,” said CFO Matthew Dorn, who was a CPA for several years and has been CFO and raised funds while developing power plants with different partners. “We think we can create a lot of value before we have to do another fundraising round at this point.”
Why it matters: Monitoring startup funding helps gauge the health and growth of the Buffalo-area technology and startup community, a burgeoning part of the local economy. The first half of the year, local startups raised more than the first half of 2023 but remained well below 2022 levels.
The round was led by investors including StartFast Ventures, Launch NY, Buffalo Innovation Seed Fund, Rochester Angel Network and Innovent Capital Group. The funding included about 50 investors total.
The startup, which launched in May 2023, secured about $1.99 million of the funding last year and raised the rest of the round in 2024.
The money will go toward fueling the company’s expansion beyond Western New York and technological advancements. The business brought on a sales team in fall 2023, started ramping up hiring developers between August and November 2023 and since January of this year has been adding to its revenue month-over-month by about 20%.
The company is on track to have “several million” of annual recurring revenue by year-end, according to Dorn.
“We’ve added a lot of new features,” said Chief Marketing Officer Chris Laczi, previously vice president of marketing at Life Storage. “I think the platform is just so much more robust than even … seven or eight months ago.”
SelectFI’s original executive team also includes founder Tom Vullo, who has been in the auto industry for over a decade, and Chief Operating Officer Drew Dorn, an engineer who had a tech-enabled smart grid energy business that he sold to a private equity fund.
The company in May moved from a 1,300-square-foot space at 360 Delaware Ave., Buffalo, to a 3,600-square-foot space at 875 Hopkins Road, Buffalo. The move means more space for the startup’s growing team.
The business added a product manager to its team, which is now at about 23 employees, at the start of the year. SelectFI has also added a chief technology officer, a machine-learning expert and sales positions in Florida, Alabama and Texas.
Those areas were partially targeted due to existing customer referrals to dealership groups in those regions.
“The idea here is we’re going to continue to grow strategically,” Dorn said. “Those are high-growth areas for us, and we’ll continue to add customer service and support staff and expand sales territories.”
SelectFI is the ninth local company to acknowledge a private, growth-oriented round of funding this year. The list includes Strideful ($100,000), Circular.eco ($100,000), Immersed Games ($100,000), Edenesque ($175,000), TeleSafety ($230,000), Top Seedz ($750,000), SelectFI ($4.5 million), MimiVax ($5.8 million) and CleanFiber ($28 million).
