The biggest shots from the moon in the last 500 Global Demo Days

It’s demo day season. This morning marked the start of Venture Capital 500 Global’s Fall 2022 Demo Day, where more than a dozen startups made their best pitches to potential investors – and customers. Participants ranged from fintech and sustainability to edtech and developer tools, with a few standing out from the rest of the pack.

The event comes just weeks after Y Combinator held its biannual Demo Day, the first since operations returned to face-to-face. 500 Global, the former 500 Startups brand, has an accelerator that competes with YC. Both companies aim to support early-stage founders with money and advice in exchange for equity. YC has backed more than 3,500 founders, while 500 Global has backed more than 2,800 founders, according to each institution’s website. Unlike YC, 500 Global has geo-specific accelerator programs similar to Techstars, focusing on areas such as Aichi, Japan, Cambodia and Alberta, Canada.

However, today’s Global 500 debut is from its first and flagship program, which dates back to 2010 and, fittingly, includes companies from around the world. All companies go through a four-month program, but start at different times, thanks to 500 Global’s new rolling admissions strategy. Let’s dive into some of the issues in the series and finish with a few notes from Clayton Bryan, Partner and Head of 500 Global’s Accelerator Fund.

moon shots

For example, there’s Taiwan-based Rosetta.ai, an e-commerce startup that uses artificial intelligence to allow shoppers to search for products — particularly clothing and cosmetics — through specific attributes. Rosetta’s AI algorithm “sees” what attributes (e.g., sleeveless, pleats, microbeads) a customer might want while browsing an online store and creates a “preference profile” for them that retailers can use to upsell or set up promotions that are triggered if it seems that the customer will abandon his shopping cart.

Image authors: rosetta.ai

It’s early for Rosetta. But the company, which was founded in 2016, has raised $2.4 million in capital to date and claims to have clients such as Shu Uemura, in which L’Oréal has a majority stake. The trick will continue to win customers over rivals like Lily AI, which also tries to match customers with products using AI attributes and models.

Elsewhere at Demo Day, Lydia.ai walked through its health assessment service for insurance carriers. Designed to eliminate time-consuming medical exams and forms, Lydia makes insurance plan applicants answer a few questions about their health—for example, do they have a chronic disease, have they been hospitalized recently, and so on—through their smartphones. The platform then generates an abstract health score purportedly stripped of sensitive medical details, which insurers can use for risk management and underwriting.

Image authors: Lidija.ai

Lydia is not the first to try this. Health tech startup Fedo also algorithmically generates health scores, quantifying a person’s risk of disease and their tendency to complain. The opacity of Lydia’s approach also raises questions, such as whether its algorithms account for demographic differences and historical biases in healthcare. But if the startup stays true to its mission – securing the next billion people – it could be one to watch, especially given the capital (~$13 million) already behind it.

One of Demo Say’s most unique startups was BetaStore, a supplier of “informal” outlets common in Africa. Informal retailers are unlicensed and unregistered retailers who do not report to tax agencies and usually operate in open markets and shops. BetaStore serves as a commodity marketplace for informal retailers, providing access to essentials such as soap dish, laundry detergent and multi-purpose cleaner at wholesale prices and delivered to retailers (within 48 hours).

BetaStore

Image authors: BetaStore

BetaStore users can order products via chat, SMS or WhatsApp. On the back end, the platform provides manufacturers with sales analytics, which BetaStore notes can be leveraged to make “data-driven” decisions to increase shipments.

BetaStore seems to be off to a good start. Founded in 2020, the Nigeria-based startup claims to have distributed more than 140,000 products to retail customers in Nigeria, Ivory Coast and Senegal and received more than 20,000 orders. BetaStore recently began offering financing to retailers and plans to launch a buy-now, pay-later product in the coming months.

One year after rebranding

Minutes after Demo Day ended, Bryan spoke with TechCrunch about 500 Global and how it’s growing in an increasingly volatile (and competitive) market.

“It’s been a bit dark, but we’ve told our companies several times that the bright side is that 2021 has been a phenomenal year for venture fund fundraising,” he said, fitting in with the news that US investors are sitting on. Now $290 billion in dry powder. The accelerator’s main advice was to start raising funds earlier, prepare the company better before going public and manage costs wisely. His advice these days is that startups should prepare for at least 18 months of runway.

It’s been nearly a year since 500 Global rebranded from 500 Startups, a move Bryan said was aimed at repositioning the institution less as an accelerator and more as a venture. It’s more than semantics; Former members of the group returned to 500 for further funding, during Series A, but through Series D.

“Historically, we didn’t have any options, but now we are adopting different strategies and working on later stage funds,” he said. “We have a demand from our founding community, we have a demand even within our partner community that they want access to companies with less risk.”

He added: “We are very proud of our accelerator. This is an important advantage, but it has now helped to unlock other opportunities for us as a company that we are very enthusiastically exploring.”

As for whether the 500 will change its investment cadence, check size or focus — similar to YC in that it braced for a downturn — Bryan said there’s more to come.

“We are not immune to the changes happening in our ecosystem, we are aware of what other funds and other programs are doing,” he said. “Our program has been working strongly for the past 10 years. But at the same time, we cannot rest on our laurels and we must ensure that we have convincing agreements.”

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