2023 roundup: A year of milestones for Launch NY and its portfolio companies

First major portfolio exit, and 1,500 mentored companies highlight Launch NY accomplishments

 

Launch NY remained the most active seed fund in New York state, made 1^st investment from its new for-profit fund and onboarded its 300^th investor in its Investor Network

 

$1.975 million invested in Upstate NY startup companies in 2023

 

Buffalo, N.Y., January 2024, – Launch NY hit significant milestones in 2023 as it continued to be a crucial source of mentorship and seed funding for startups in Upstate New York. The nonprofit venture development organization once again ranked as the most active seed fund in the state by number of transactions.

 

Launch NY debuted in 2012 with mentorship programs that have now served more than 1,500 companies, and the organization continues to prepare more than 350 companies annually to be “investment ready.” Launch NY’s InvestLocal financing programs injected $1.975 million into 36 different deals in 2023, supporting startups in western and central New York, the Southern Tier and the Finger Lakes.

 

That pace stands in contrast to a significant national slowdown in startup funding and overall activity, serving as a showcase for Launch NY’s commitment to catalyzing the innovation economies of Upstate New York. Furthermore, Launch NY reached its milestone of growing its online investor community, known as the Investor Network, to more than 300 accredited investors who are considering independent investments in startups. The Investor Network features startup deals like ShearShare, a former 43North business plan competition winner, which received funding from individuals through the Investor Network.

 

“We’re using this moment to create a new generation of high impact companies led by diverse entrepreneurs who provide jobs, wealth and opportunity,” said Marnie LaVigne, Ph.D., president and CEO of Launch NY. “We are typically the first institutional check written to these founders, and that spark combined with our world class mentorship is leading our portfolio companies to attract nearly 30 times in capital from other funders. We are incredibly gratified to have hundreds of individual and institutional investors as part of our network supporting these entrepreneurs.”

 

Launch NY is the first and only Venture Development Organization and venture-funding Community Development Financial Institution (CDFI) to provide pro bono mentoring and seed capital access to early-stage startups in the 27 westernmost counties of New York State.

 

A total of $11.985 million has been invested through Launch NY’s InvestLocal financing programs since the organization was founded eleven years ago. In 2023, that included $575,000 from its for-profit Limited Partner (LP) Fund I, $165,000 from its for-profit LP Fund II and $260,000 from its Investor Network.

 

Some of the milestones this year include:

 

Debut of new seed fund

 

Launch NY debuted its first for-profit LP fund in 2019. That fund ultimately raised $5.425 million from 73 accredited investors and has backed 55 companies over the course of 4 years.

 

Launch NY was pleased in 2023 to debut a new non-profit LP fund, LaunchNY Seed Fund II, LP (LP Fund II) making its first investments in Q3 last year. The new fund means Launch NY can continue serving the demand for seed capital to build their businesses in the region for years to come without having to consider leaving town or letting their good ideas die on the vine.

 

• The fund includes a $1 million impact investment by MetLife Foundation. MetLife reported that the fund is targeting a total of $15 to $20 million, and its investment is expected to accelerate commitments from other interested investors.

 

• Launch NY received approved for its LP Fund II for up to $5 million from Empire State Development Corp.’s State Small Business Credit Fund Initiative via NY Ventures. The state funds are contingent on Launch NY’s commitment to a 1-to-1 match from non-government sources into the fund.

 

• Launch NY’s first investment out of Seed Fund II was a $65,000 pre-seed check to Buffalo-based fintech startup Diadem Capital, a deal which included $50,000 from the nonprofit LaunchNY Seed Fund LLC.  Launch NY was the lead investor in Diadem’s $600,000 pre-seed raise. Diadem connects private companies to venture capital, venture debt and non-dilutive funding sources.

 

300^th investor onboarded to Investor Network and new 43North partnership

 

In order to aggregate a virtual community of accredited investors motivated to support regional startups, Launch NY has been growing the first and only digital platform exclusively featuring local investment opportunities since 2020. This Investor Network achieved a key milestone of onboarding its 300^th accredited investor in 2023.

 

The Investor Network also launched a new partnership with 43North, the world’s largest business plan competition, featuring 43North winners and finalists on the Investor Network as they continue to raise capital and grow in Western New York. In 2023, Launch NY closed on a combined $140,000 for 2021 winner ShearShare and 2021 finalist Ognomy and plans to continue growing this exciting partnership. Former 43North winner Verivend is currently featured on the Investor Network.

 

 

Portfolio company exit

 

Launch NY saw the first significant exit out of its portfolio in 2023 when Buffalo-based Patient Pattern was acquired by PointClickCare, a larger company headquartered in Canada, in a deal that was announced in March.

 

Launch NY invested in Patient Pattern several times, including rounds that closed in 2021 and 2022. The company was founded in 2013 by Dr. Steven Buslovich, a geriatrician, and Margaret Sayer, a geriatric care nurse, to improve medical care in skilled nursing facilities. The company employed 23 people at the time of the acquisition.

 

Terms of the deal were not disclosed.

 

“Patient Pattern is one of many companies that made significant progress since we started investing in 2016,” LaVigne said. “We expect many more exciting liquidity events for our own investors, proving our model of writing early checks can create financial returns while also enabling job and wealth creation throughout Upstate New York.”

 

Uprounds and major events

 

Launch NY’s portfolio companies celebrated these exciting accomplishments in 2023:

 

• Ithaca-based Dimensional Energy closed a $20 million Series A funding round to continue developing its cutting-edge carbon utilization technology. Launch NY participated in the round.

 

• Buffalo-based AireXpert raised a $3 million to scale its business providing tech-based maintenance solutions for commercial airlines. Launch NY is a repeat investor in AireXpert.

 

• Buffalo-based HELIXintel closed on an $11 million Series A funding round to grow its building management software suite. Launch NY was a previous investor in HelixIntel.

 

• Ithaca-based Exostellar secured a $15 million Series A funding round to grow its cloud management software solution. Launch NY was a previous investor in the company.

Companies that received seed capital from Launch NY from Launch NY’s funds in 2023 included:

 

 

Finger Lakes

 

CYRISMA – A SaaS platform for cyber risk management.

 

Iryss, Inc. – A personal finance platform that can help families affected by a chronic medical condition reduce financial stress.

 

Re-Nuble – Converting food waste into hydroponic nutrients.

 

Layer Metrics Inc. – a revolutionary way to integrate in-line quality assurance so customers can react to defects, flaws and deficiencies in real time rather than scrap their finished product.

 

TheirStory – A remote interviewing platform that helps communities collect, preserve, and engage with the audiovisual stories of their members.

 

Southern Tier

 

Dimensional Energy – Cutting-edge technology that transforms carbon dioxide emissions into sustainable aviation fuel (SAF), renewable diesel.

 

Ecolectro – A climate-science company using today’s talent and technology to tackle our biggest climate problem.

 

EMPEQ – Onsite building data capture that reduces the time spent on this initial energy assessment process by up to 80%.

 

Western New York

 

AireXpert – Software tools to help commercial aircraft companies track and perform maintenance.

 

Arbol – Ed-tech software platform that reduces college dropouts.

 

BetterMynd – Teletherapy platform delivered through colleges and universities.

 

CAHill TECH – Software solutions that connect construction industry employers with new workforce pipelines.

 

Diadem Capital – A platform that connects high-quality startup companies to a network of early-stage investors.

 

Dimien Inc. – Developing electric vehicle batteries with longer range and shorter charge times.

 

Feedback Solutions –  Data-driven hardware-enabled software solution to optimize HVAC systems.

 

HELIXintel – A platform that simplifies building maintenance for commercial facility owners.

 

Ognomy – A digital solution for the treatment of sleep apnea.

 

Safety Badger – A safety application for the construction and manufacturing that offers an immediate connection to OSHA safety experts.

 

SelectFI, Inc. – Predictive analytics for auto dealership financing.

 

Verivend – Online platform that allows investment groups to painlessly, paperlessly and effortlessly raise and deploy capital.

 

2023 Launch NY Financial Highlights:

 

$11.985 million is the total invested in Upstate New York startups through Launch NY’s #InvestLocal financing programs since the organization was founded eleven years ago.

 

$1.975 million is the total invested by Launch NY in 2023. This compares to $2.320 million in 2022, $2.712 million in 2021, $2.230 million in 2020, and $1.160 million in 2019.

 

$975,000 is the amount invested in 2023 by Launch NY’s nonprofit Seed Fund through 20 transactions (5 new and 15 follow-on) in 18 companies. This compares to $1.325 million in 2022, $955,000 in 2021, $872,500 in 2020, and $855,000 in 2019. Launch NY’s nonprofit Seed Fund is the most active in New York State and has invested $6.570 million since its inception.

 

$575,000 is the amount invested in 2023 by Launch NY’s Limited Partner (LP) Fund I, comprising 73 LPs, through 10 transactions (10 follow-on) in 9 companies. This compares to $715,000 in 2022, $997,273 in 2021, $922,500 in 2020, and $305,000 in 2019. The LP Fund, Launch NY’s first for-profit fund that debuted in 2019 and invests alongside the Seed Fund, has thus far invested over $3.514 million.

 

$260,000 is the amount invested in 2023 by Launch NY’s Investor Network, the first and only online community featuring exclusively Upstate NY startup investments, in four transactions and funding four companies. This compares to $280,000 in 2022, $1,035,000 in 2021 and $105,000 in 2020, its first year of operation. Thus far, the Investor Network has raised and invested $1.735 million. The Investor Network membership reached over 300 accredited investor members at the end of 2023.

 

91 is the number of startup companies funded by Launch NY’s #InvestLocal financing programs to date with 55 of these receiving capital from Launch NY’s LP Fund 1 and 2 of these receiving capital from Launch NY’s LP Fund II. This is an increase from 86 companies at the end of 2022. These companies have supported 550 jobs, attracted $286.2 million in follow-on funding, and generated more than $60 million in annual revenues. Over 50% of Launch NY’s portfolio companies are women and/or minority-led ventures, and over 71% are located in low-income neighborhoods.

 

$165,000 Amount invested out of new for-profit LP Fund II into two deals.

 

Other notable Launch NY accomplishments in 2023

 

Launch NY secured over $2 million in new grant funding, including $500,000 from the U.S. Department of Treasury’s Community Development Financial Institution (CDFI) Equitable Recovery Program, $250,000 from the New York Power Authority, $150,000 from New York Electric & Gas and Rochester Gas & Electric, and a CDFI consortium award from JPMorgan Chase.

 

U.S. Rep. Brian Higgins, D-Buffalo, announced a $1 million federal grant for Launch NY to support a program expanding entrepreneurial services to local small business startups with high-growth potential.

 

A report titled “Lessons Learned and Voices from an Entrepreneurship Program for Underrepresented Founders,” was distributed and presented in numerous forums by Launch NY. The report identified barriers faced by underrepresented founders who want to build a scalable business, and is both a case study and a guide for investors, philanthropic funders, CDFIs, venture development organizations and other entrepreneurial support organizations that are committed to inspiring and empowering underserved founders.

 

Last but certainly not least, Launch NY continued to add talented members of its team this year. Hires included:

• Buffalo native Wendy Wojick was recruited from Colorado back to her hometown to manage federal and state grants, including programming, to support Launch NY’s pro bono mentorship and #InvestLocal seed funding programs.
• Katie Hestor was hired to manage Launch NY’s Investor Network, the first and only online angel investor community exclusively featuring Upstate New York startups.

 

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About Launch NY: Launch NY is the only nonprofit venture development organization and U.S. Treasury-designated Community Development Financial Institution (CDFI) that serves and directly funds startups in the 27 westernmost counties of New York state. The core mission of Launch NY is to identify, support and invest in high‐growth, high‐impact companies and to catalyze the entrepreneurial culture of Upstate New York through regional collaboration with ecosystem partners. Since its inception in 2012, Launch NY has served more than 1,500 companies which have gone on to raise more than $1.6 billion, generate over $240 million in annual revenues and support more than 5,000 jobs. Launch NY delivers its mission via mentorship and capital access programs, starting with pro bono mentoring through its Entrepreneur-in-Residence program, Founders Go Big program for underrepresented and underserved founders, and Emerging Cleantech Opportunity (ECO) Incubator. These programs prepare entrepreneurs for investment capital from multiple sources, including Launch NY’s InvestLocal Financing Programs comprised of non-profit and for-profit investment funds, and Investor Network deals marketplace that features hundreds of accredited investors. Through these vehicles, Launch NY is the most active seed investor in New York state and has been ranked among the top 5 nonprofit seed funds in the country.

 

For more information about Launch NY, its programs, and other entrepreneurial opportunities, visit www.launchny.org, and follow Launch NY on Facebook , Twitter and LinkedIn.

Tag: Launch NY, seed fund, Upstate New York, mentorship, investment, startup, portfolio exit, Venture Development Organization, Investor Network, funding