A 2-year-old Cincinnati "startup to watch" has raised millions in new funding as it gains ground with a major manufacturing partner.
Soundtrace, which is developing software with AI and IoT (Internet of Things) technology to protect employees from noise-induced hearing loss, has raised an oversubscribed $2.5 million pre-seed. The round was led by New York-based Gutter Capital with participation from SpringTide, a Cambridge, Mass., venture capital firm, along with some local angel investors. Both VC groups are investing their first dollars into the region.
Wilson said the money will be used to scale. Soundtrace – a SoCap Accelerate alum, a Main Street Ventures grant recipient and a Cincy Inno 2023 “Startup to Watch” – also needs to boost its staff in order to deliver to its growing customer base.
The company counts the likes of Bob Sumerel Tire, Cleveland-based Olympic Steel and, most recently, manufacturer Caterpillar Inc., as clients.
Soundtrace recently closed a major five-year contract with Caterpillar (NYSE: CAT) for its Florida locations, and it continues to make traction with the company. Caterpillar, with 150 primary locations around the world and $59.4 billion in revenue in 2022, is the world’s largest manufacturer of construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives.
“Right now, it's trying to keep up with demand,” Wilson told me. “Our mission is to offer a better solution for protecting against noise-induced hearing loss for these frontline employees. (In terms of competitors) they offer bits and pieces, but we're the only ones with a full solution.”
Soundtrace automates Occupational Safety and Health Administration (OSHA) hearing conservation program requirements by providing real-time noise monitoring – which can alert employees when noise volume reaches potentially hazardous levels – audiometric testing and record keeping in one cloud-based platform.
Wilson said the company is seeing the biggest growth with its audiometric testing. Soundtrace has developed a “booth-less” audiometer, he said. That allows customers to test an employee’s hearing in-house, versus booking a mobile van with an outside vendor or sending employees to a nearby clinic.
The audiometer is portable and can be set up in a general manager’s office or a conference room and easily carried from facility to facility.
“It really is pretty groundbreaking,” Wilson said. “For a lot of these safety managers, if there's an audit or an incident, their job is on the line. We're making it easier for them and we get that buy-in. At the executive level, we're saving the company money as well. We have a top-down and bottom-up approach to selling.”
Currently, hearing loss ranks as the most common occupational disease in the United States. James Gettinger, co-founder and managing partner at Gutter Capital, said Soundtrace is “solving a hair-on-fire-need" for its customers.
Gutter typically leads pre-seed and seed stage rounds for software-focused businesses. Gettinger and Dan Teran, both Johns Hopkins University alum, founded the firm in 2021.
Gettinger spent last decade as a professional gambler before “retiring” and stepping into the world of VC, while Teran’s first company, Managed by Q, an automated office management startup, sold to WeWork in 2019 for $220 million.
Gutter closed a $25 million Fund I earlier this year, and according to U.S. Securities & Exchange Commission filings, is in the process of raising a $50 million Fund II. Gettinger declined to comment on latter as federal regulations restrict publicity during the fundraising process.
Soundtrace stands as its 15th overall investment. It hopes to find more companies to fund in the region.
“Cincinnati is the right place to build this kind of business,” Gettinger said.
“We're expecting a lot (from Soundtrace),” Gettinger told me. “Jeff really exemplifies the decisiveness, drive and integrity we look for in founders – especially with the problem he's solving and his ability to garner the amount of interest he's gotten at such an early stage. Soundtrace has a product that's working, and they have paying customers – customers that are using the product every day.”
Soundtrace currently uses a shared workspace in Mason but is searching for a more permanent office. Its team includes five employees with six more in contract roles. It recently moved Ryan Kast, its chief technology officer, full-time, while Matt Reinhold rounds out the leadership team as chief operating officer and chief financial officer.
The start is looking to add engineering, product manager and sales and marketing talent, Wilson said.
