Hello and welcome to a brand-new weekly series on MorganLinton.com – Funding Friday! As the co-founder of a venture-funded startup following startup funding news on a daily basis has become a part of my normal routine. Thanks to resources like Crunchbase, Mattermark and AngelList it has become easier than ever before to dive in and study funding events on a daily basis.
The problem is, there’s so much data out there it’s hard to stay focused and keep up with it all. Rather than trying to pack in as much information as possible, I’m going to keep it simple and feature one company that was funded in the past week and do a deep dive into who funded them, why they funded them, and where that funding is likely to get them.
My goal is to go beyond reporting news by providing analysis and insights that you won’t find anywhere else. Sounds like a bold goal? It is, but since all of this is already in my head I thought it was about time I share it with all of you. Ready to rock? Let’s get started!
This startup has a great a great story behind it which is why I thought it would be a fun one to feature this week. uMake is an Israeli startup that was selected by UpWest Labs to go through their accelerator program. Started in 2012, UpWest Labs focuses on bringing Israeli startups to the US connecting them with investors and partners in Silicon Valley.
UpWest keeps their class sizes small (typically under 10 startups per class) and puts their time into finding the most promising startups in Israel’s active startup scene. uMake graduated in 2012 and did a $700k Seed round to get them off the ground.
So what does uMake do? They built an app that makes it easy for designers to put concepts together in 3D on a tablet or mobile device. With uMake.com taken they opted for uMake.xyz, a new domain name extension that just became available last year. This week uMake announced a $5.2M Series A round led by BlueRun Ventures.
uMake’s founders started lean with a focus on customer development, talking to product designers and game developers a very valuable question – “What’s the one thing they need that would make their lives easier?” Armed with data around a real need, Evi and Erik built uMake.
So now let’s get into the details that I think are going to make Funding Friday interesting. Why BlueRun Ventures, and why $4.5M? Let’s start with BlueRun.
BlueRun Ventures is based in Menlo Park, was started in 1998, and has $750M under management to-date. They are an early-stage venture fund which means a lot of their focus is on the early growth rounds for startups (i.e. A and B rounds) and they invest in mobile, FinTech, Commerce, and Big Data.
On their Crunchbase page BlueRun says they are focused on early stage mobile opportunities which is why uMake is a logical investment for them. They have three funds, one focused on the US, one on Korea, and another on China so it’s clear BlueRun is also very comfortable investing in startups outside of the US.
Looking at the A-Rounds that BlueRun has been involved in this also seems to be right in their sweet spots with their typical A-rounds landing between $4M – $6M on average.
Since Series A rounds are typically used for growing an already proven product it makes sense that uMake would look to a firm like BlueRun that has a solid track record helping mobile app companies scale. One example, Banjo (www.ban.jo), a mobile discovery app was funded by BlueRun in their A, B, and C rounds – a scenario that a company like uMake would likely want to follow.
This is a great example of a startup that found an investor that can go far beyond simply providing funding since BlueRun can share critical expertise helping other mobile app startups grow and scale. 80% of startups that take on Series A financing also take on Series B so having an investor that is comfortable in these stages and beyond can also make a major impact as to how effective the startup can be at using the money in the current round to get them the metrics they need to raise the next.
So what are they using the funding for? CEO Evi Meyer shared their plans with VentureBeat:
“We’re using the funding, first of all, to hire great talent. When people look at uMake, they tend to see a mobile app. But we see it as something more. We see it as a tool that can last for many, many years. And to make that happen, we need the best people out there,” (Source – VentureBeat)
While it’s easy to think of growth rounds as a time when companies increase spend on sales and marketing efforts it can be easy to miss the value it can bring to building a team that can support the scale. An investor like BlueRun should be an incredibly valuable resource in this hiring process as they are likely closely plugged-into the talent market in-and-around the mobile space.
This is a great example of a startup that worked hard to understand their customer, validate the problem they have, build a real solution, and then find an investor with a proven track record helping mobile startups scale.
Hats off to Evi and Erik, I can’t wait to follow the uMake journey!
