Ohioan Ryan Sevey, then an IT administrator, befriended Will Gokey, a Pepsi bottler in North Dakota, nearly 20 years ago as they played in a hyper-competitive "World of Warcraft" league.
Today, Gokey's family fund has invested in three consecutive software startups Sevey founded, and the bottling plant was a customer of two. Gokey stuck with Sevey after doubling the first investment and losing the second when the company shuttered.
Gokey is vice president of Northern Bottling Co., the fourth generation in the family PepsiCo franchise in Minot, North Dakota.
"My Pepsi franchise territory is not growing," Gokey said. "We’re always looking for new opportunities to grow familial wealth. That’s what we’re looking for with Ryan.
"I’m in very much a legacy industry," he said. "There’s not a lot of room for upsetting it. You’re talking about carrying around cases of soda."
How an online friendship grew to a lasting business partnership
As life got busier, the two had drifted away from the video game for several years, until 2014. Out of the blue, Sevey decided to log back in, he told investor Rev1 Ventures for a blog. Coincidentally, Gokey did so at the same time.
As they chatted, it turned out Gokey had an inventory problem, and Sevey and a fellow engineer were exploring business applications for machine learning.
Stores that Northern Bottling served would run out of stock when the warehouse had plenty of product on the shelves, Gokey said. With rural delivery times as long as 2 hours, that was a lot of lost potential sales.
The plant became the first customer of Westerville-based Nexosis Inc., co-founded by Sevey and CTO Jason Montgomery. Gokey persuaded his father and relatives to invest.
Nexosis ingested the plant's unstructured data to better plan when to restock, and helped redesign the warehouse for more efficient picking – increasing capacity 25% without adding to the building.
"There’s a lot of data out there. Most people don’t know how to interpret it," Gokey said.
The Gokeys more than doubled their money when Boston-based DataRobot acquired Nexosis in 2018.
Sevey and Montgomery headed DataRobot's Ohio office for three years before leaving and founding Mantium Inc., which tapped into the generative AI tools of OpenAI but built guardrails that made it easier and safer for business clients without technical backgrounds to use it.
The Gokey family fund invested again. Mantium raised $12.8 million in a round led by Drive Capital and Top Harvest Capital.
Again Northern Bottling became a customer. Mantium automated invoices, purchase orders and receipts that had been handwritten.
"It frees people up to do more important things," Gokey said. "It relieves a lot of stress from their lives."
Shutdown of Mantium
Gokey was not aware of real trouble at Mantium until last fall. Like a lot of startups, Mantium kept seeing products obviated as OpenAI released similar features through its ChatGPT. Mantium was trying to raise $5 million for a pivot to cybersecurity.
Gokey set aside about $500,000 to participate, but the round never transpired.
New Albany AI startup backed by Drive Capital shuts down
Mantium received an acquisition offer in the fourth quarter, but in a dramatic twist, the lender that would have to approve the deal instead swept its deposit account.
Gokey bought the loan from the bank, but again other investors declined to re-up. So as the largest creditor, he owns substantially all Mantium's assets now. Operations wound down throughout the first quarter of this year.
AI for kids with special needs
Now, the Gokeys are investing in Sevey's latest startup, Arloa Inc., incorporated this January. Its software uses generative AI to help guide parents of children with developmental disabilities through special education, therapy services and at-home strategies.
Sevey had pitched the idea to Mantium investors in one last effort to pivot: A business model so subject-matter specific OpenAI would not be competing. But directors said to shut down and start fresh.
Meet Arloa, personal advocate for families with special needs.
Gokey said he's sticking with the entrepreneur even after the loss. For one, Arloa can help people. And he believes "external factors" affected Mantium, including the urging of VC investors to spend capital and build fast.
Sevey's own resources are the only other funding for Arloa. He's not seeking VC funding, and it's structured as a public benefit corporation.
"I appreciate that he has never looked at it as a money grab," Gokey said. "This is something that makes things better, … empowers people to do things where previously you have to hire professionals do to it.
"I respect he's been willing to put … his own personal capital both into Arloa and Mantium," he said. "It says a lot about him as a person that he's still going forward."
Now both parents, the two haven't played Warcraft lately.
"Life has just gotten busy," Gokey said.
