Tumml Accelerator Evolving Formula For Urban Venture Financing
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her company’s development. “It was kind of like a crash course in business,” she says. “We’re aiming to get three contracts by the end of summer. We already have one.” Boyle says that customer is a large Bay area agency, but says she can’t yet announce the name.
Boyle agrees with Brenner that community-focused enterprises are harder to scale up than many consumer-oriented tech company platforms that easily cross geographical boundaries.
“They’re much more time-consuming to scale than Facebook,” Boyle says.
Tumml looks for startups with a basic business model that can be duplicated from city to city. But Brenner says urban ventures that begin in San Francisco still must coordinate closely with the leaders in each new community.
“Just going across the bridge to Oakland is like starting again, because it’s a whole new set of decisionmakers and sometimes a whole new set of rules,” Brenner says.
Investors looking for fast growth may be concerned by the more arduous scale-up path, Brenner says. Tech investors have been tracking the rapid, borderless expansions of Web companies such as Facebook, Twitter, and Pinterest. So what strategy did Tumml evolve to help its startups find seed money?
When Brenner and Lein started the Tumml program, they assumed that investment groups dedicated to supporting startups that aim to deliver societal benefits would be the first to back their fledgling urban ventures.
“But they’re not seed investors,” Brenner says. “They said, ‘Come back when you’re ready for a Series A.’ ”
Tumml learned to encourage its startups to focus their attention on traditional angel investors. That strategy worked out for KidAdmit and for another Tumml alum, HandUp, a mobile platform that allows donors to contribute money to support a needy person of their choice. HandUp raised an $850,000 seed round from San Francisco, CA-based SV Angel and other investors.
Tumml, itself still a startup, attracted its first investment from the Blackstone Charitable Foundation, which was followed by a roster of backers that includes the Omidyar Network and American Express. Tumml raised $500,000 in its first fiscal year ending March 2014, and anticipates raising double that amount for the year ending March 2015, Brenner says.
In addition to the support of investors, the value of Tumml’s program is reflected in the engagement of city residents in its startups’ projects, Brenner says. She points to Chariot, which has sold 9,000 tickets for its first two commuter bus routes. The company is using its Web data to plan more routes that would take city residents to their workplaces more quickly than existing public transit lines.