Two Tampa-based companies have begun raising their next funding rounds in a perhaps unexpected way: through a crowdfunding site.
"There is still a bit of stigma, especially from the old guards of venture capital, but generally speaking this is giving access to regular investors, diverse investors that have the money but can't participate in VC fundable companies," said Jae Bang, founder and CEO of Oracle Health. "This really democratizes the funding avenue for investors, and regular investors are as savvy as anyone else. It's not an issue of intelligence or anything; it's an issue of access."
Both Bang and Tampa-based mobile advertising technology company Nickelytics have significant funding on Republic, which vets startups and allows its network of investors to participate.
Nickelytics' Shama Keskar joined the company as a co-founder after it had already opted into the Republic crowdfunding model. But she also believes in the process, saying it was also encouraged by the prestigious accelerator program Techstars.
"I think crowdfunding is getting pretty popular," Keskar said. "Nowadays, there are people investing in upcoming startups and the stock market, and we wanted to give the opportunity to invest in us."
Nickelytics closed its funding round on April 30, earning roughly $400,000. It is the first step for its $1.5 million seed round, which Keskar expects to close in June. She added the company would then be raising a Series A for an undisclosed amount, expected to close in Q1 or Q2 of 2022. The funding will be used toward building out its technology. It plans to build a cell service portal for advertisers, featuring predictive analysis. It will also offer a mobile app for its drivers using gamification for another form of revenue.
Bang's own Republic crowdfunding has garnered more than $1 million, launching in January and expecting to close by July. He is hoping to raise more than $4 million by the time it closes.
He said a major selling point of Republic was its ability to get a diverse amount of investors in the round.
"We had quite a bit of physicians and entrepreneurs want to invest [initially], but it was $10,000, $25,000, and it was time-consuming for them and me to execute the smaller checks," he said. "We've got big angel [investors] putting in, but it's the smaller angels making almost up almost 50% of the $1 million, so that turned out to be a huge success. And it gives them access to investing in companies that are initially reserved for VCs."
The company launched in 2019 and has a patent-pending cardiac monitoring system. All the funds Bang is raising will go toward research and development. Once he hits the $4 million mark, Bang plans to implant his device in animals. He aims to submit to the U.S. Food and Drug Administration by 2022 and hopes to receive approval by 2023.
