About 15 months ago Paul Drysch had a gut feeling that the economic winds would be shifting, and that he should prepare his startup for a new kind of fundraising reality.
That intuition was built on a career spent in startups — reaching back to 1999 — and the knowledge that those who survive and continue to generate investor interest are those with customers and revenue.
The result is his company PreAct Technologies consciously moving beyond its initial market in automotive driver assistance and into areas like health care, agriculture tech, smart cities and robotics. Basically, anywhere that customers need to map surroundings.
PreAct makes a suite of sensors and software for affordable Lidar solutions that can map a physical area quickly. It was already sampling its technology with a number of vehicle manufacturers and their major suppliers.
“We had been approached by a number of people in the past to use the Lidar for other applications (beyond automotive) but we didn’t focus on it,” he said. “Fifteen months ago we started to focus more on it with great results.”
The company has customers in these new areas, Drysch said. Two new products are slated to be rolled out this year that are applicable to many interior sensing applications, he said.
PreAct has about 30 employees with 20 people based in Portland. The company was able to raise a $14 million Series B round that it announced last week. The company met its lead investor at a TechCrunch startup event last summer.
Talks with I Squared Capital started in August, Drysch said. At the time, he could already tell the investing landscape was shifting, he recalled.
“It wasn’t bad, per se. But, by September/October very few companies got funded and if they were it was a down round and the size of rounds were going down,” he said. “We were lucky. That said, the due diligence process was triple the hardest due diligence process I have ever been through.”
The investor brought in industry experts, financial experts, intellectual property experts and interviewed all of the company’s customers.
“It was a long, hard process,” Drysch said. He added that he didn’t already know the people at I Squared and that experience of signing on a completely new investor would likely be unusual in this new environment.
In more challenging times, investors and founders gravitate to deals with people they already know, he said.
Between this round of capital and the company’s sales plans, Drysch is hopeful this is the last round of outside investment the company will need.
The company is hiring and has about 20 openings, with the majority in Portland, he said. PreAct is looking for computer vision engineers, algorithm developers and hardware engineers.
Additionally, the company announced an acquisition just days after the funding was announced. PreAct acquired Barcelona, Spain-based Gestoos. That company makes software that lets users create AI algorithms without any training or special knowledge.
“By marrying a powerful AI algorithm development platform with our best-in-class flash Lidar, we have created a unique environment for our customers to quickly solve difficult use cases,” Drysch said in a written statement. “The Gestoos AI development platform comes pre-integrated with our flash Lidar solution and a development environment making AI training tractable by our customers' own engineers with minimal hand holding.”
