Digital behavior analysis startup ForMotiv has raised $6 million in a seed-plus round at a time when the company isn't wanting for capital – a strategy CEO Bill Conners said is by design.
“The best time to be raising money is when you don't need it, which we didn't need it,” Conners said. “And we ended up having a lot of great opportunities.”
The Philadelphia startup wasn’t looking to raise money this year, but demand for ForMotiv’s product exploded, he said. ForMotiv grew 300% in 2020 and it has already grown 400% in 2021, according to Conners.
ForMotiv collects and analyzes digital behavioral data from users in real time so its clients can reduce risk and improve their user experience. Its proprietary platform tracks factors like keystrokes, mouse movements, backspaces and corrections to identify red-flag behavior from users. The startup primarily works in the insurance space, but it also has clients in financial services and other industries.
Boston-based Vestigo Ventures led the $6 million round, and existing investors Dreamit Ventures and Plug and Play Ventures also participated.
ForMotiv is taking a contrarian approach to fundraising — it has no plans for a Series A yet. Conners doesn’t want to be on the “neverending fundraising treadmill,” and the company was profitable before it raised the $6 million, he said.
ForMotiv was founded in 2018, and the company processed about 100,000 transactions in 2019. This year, Conners anticipates ForMotiv will analyze more than 200 million transactions.
The startup won’t set deadlines to raise capital but will look to do so if the opportunity presents itself and if that cash can help accelerate growth, Conners said.
“We could have been at the same size we are now and been profitable, but we just wanted to go faster because there's so much demand for what we're doing,” he said.
The startup is funneling its new funding into doubling its employee count and building out its product, Conners said. ForMotiv already doubled its staff to about 20 people, and it will likely grow to 30 employees by the end of the year and to 40 by the end of 2022.
ForMotiv is hiring employees in marketing and sales, product development, technology and data science.
About half of its team is in Philadelphia, and the company is looking to primarily hire in the Philadelphia area. But given the competition for tech talent right now, ForMotiv has expanded its hiring to remote jobs up and down the East Coast as well as in the Central time zone, he said.
“I think we're now competing against some of the larger companies who previously wouldn't recruit in areas like Philadelphia because you had to go to an office," Conners said. "But now with everyone being remote, some of those large technology companies are recruiting everywhere, so it's made the environment more challenging for companies like us.”
