Chicago startup Grapefruit Health has had its best 24-day stretch in its history to begin the new year, according to founder and CEO Eric Alvarez.
In the fourth quarter, "it was hard to get clients to respond and it felt like this natural end-of-the-year, holiday trudge, but now it's like we hit the gas pedal," he told Chicago Inno.
Grapefruit Health, a health care workplace tech platform that trains clinical students to work with patients remotely, was among 45 finalists named to the SXSW pitch competition last week, landed new customers in deals that will be announced soon and is funded through 2024. The company also submitted for a Small Business Innovation Research (SBIR) grant for $300,000 to begin the year and applied to the National Institute of Health Build Up Trust Challenge.
Taking place in Austin, Texas, in March, the SXSW Pitch competition, now in its 16th year, is open to startups from across the globe. Since 2009, finalists in the competition have gone on to receive more than $23.2 billion in funding.
SXSW initially reached out to Grapefruit Health and encouraged the startup to apply. The Chicago health-tech startup will be competing in the Future of Work category.
For Alvarez, competing in SXSW and other pitch competitions — Grapefruit Health won $250,000 at Barnburner in Boulder, Colorado, in April 2023 — is about more than just the money.
He thinks it's a great way for startups, which already face fundraising declines, to get creative and stretch every dollar.
"It's very hard to find VCs. There's all these databases, but to really get in you need warm intros," Alvarez said. "When you perform in a pitch competition, it gives you incredible exposure that you would never get on your own. I think outside of pitch competitions, you're basically playing a one-to-one game."
Grapefruit raised a $1.3 million pre-seed round and will be kicking off a $3 million seed round starting in May, according to Alvarez.
Alvarez said the seed round will help the startup accelerate growth and get in front of their spend.
"We will run out of money at some point so we're starting to fundraise a little bit early to avoid coming to a deadline," he said.
How the young startup will approach pitch competitions moving forward, after multiple successful raises, will be something Alvarez will have to consider moving forward.
Grapefruit officially launched in March 2022, and after competing in Boulder and now Austin, Alvarez will have to consider if it has aged out of these types of opportunities moving forward.
"It's the same way I think about accelerators: At what point do you stop doing that and start focusing on your clients?" he said. "I think we will participate in any opportunity prior to May, but once May starts, we will be very heads-down."
After that, it will be on a per-opportunity basis, he said.
"If the opportunity is big enough, like a SXSW, we will always participate," Alvarez said.
