These Two Seed-Stage Tech Startups Are Staying In The Northwest

Last week, we took an up close look at two early-stage companies based in the Northwest U.S. who have fundraised from outside of the typical bay area hubs. Vacation rental company, Stay Alfred, and digital mapping company, onX, respectively raised $15 million and $20.3 million. However, half of the 46 early-stage companies from outside of Portland and Seattle that were funded since the beginning of last year were seed-stage startups that raised less than $2 million.

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With that in mind, Crunchbase News decided to take a look at two seed-stage tech companies, based in Idaho and Oregon, who have raised money in the past year. As their founders explained to Crunchbase News, the teams at Boise-based Refer and Eugene-based Connected Signals are aware of the limitations of being headquartered in the Northwest. However, both startups are confident that the cost of living combined with increasingly digital connections are working in their favor.

Boise, Idaho: Refer

Digital referral company Refer was founded in 2014 by its current CEO Tom Gay. Its goal is to provide small business owners with an online platform to receive, send, and organize referrals.

As an experienced entrepreneur who founded two other tech firms, Gay said starting Refer was natural for him.

“I understand relationship marketing and referrals,” he told Crunchbase News in an email. “[I] used these practices world-wide and, with the advent of SaaS, it just seemed that we could help a large potential market with a sizable, recurring problem.”

The company raised $800,000 in a seed round with two outside investors according to the CEO. Previous early seed rounds in 2016 and 2017 were primarily led by Tom Gay. The company’s total known funds raised amounts to $3.5 million.

According to Gay, the company’s external fundraising has largely been aimed at local angel investors looking to build a network.

“It’s been a challenge getting Silicon Valley investors to look over the mountains to a place like Idaho,” Gay explained.

However, he believes there are advantages to keeping headquarters in Idaho.

“There is a small but very talented tech base here with great developers and many more inbound from highly impacted CA markets,” Gay explained. “So if you’re looking at the typical 25-50 year old developer or entrepreneur, it’s hard to compare the lifestyle and costs.”

In January, the company announced that it acquired a Boston-based SaaS company, Referral Key, to expand its small business reach across the U.S. Though based in Boise, according to Gay, the company now reaches almost five million users with about half outside of the USA.

“In this digital world, there are no geographic boundaries… and today [we] serve clients in over 200 countries and have virtual staff across the nation.”

Eugene, Oregon: Connected Signals

Another seed-stage tech company making moves in the Northwest is Eugene, Oregon-based predictive traffic signal startup Connected Signals. The company was founded in 2013 by David Etherington and Matt Ginsberg with the goal to improve overall traffic and driving experience by connecting drivers and vehicles to traffic signal data.

In July 2017, the company raised $1.5 million in a Seed -stage round led by Palo Alto-based Benhamou Global Ventures, bringing its total known funds raised to $2.8 million.

CEO Matt Ginsberg explained the pros and cons of fundraising from Eugene.

“Many investors want the option of driving across town and dropping in, and we obviously can’t provide that,” Ginsberg told Crunchbase News in an email.

But he said that the advantages of living outside of a big city area are clear.

“We are more efficient with money than organizations in the usual hubs, with total cost per staff member being perhaps 60 percent of what our investors typically expect,” Ginsberg further explained.

And being outside of a venture hub hasn’t stopped the company from aiming to reach far and wide with its product.

“We currently get data from about 15,000 lights on three continents, and just opened an office in Geneva,” Ginsberg wrote. “We expect to have about 25 to 30 percent coverage in the U.S. by the end of the year.”

With shared goals of safety, fuel efficiency, and convenience, the company also plans on partnering with players in the autonomous vehicle market.

“As the world becomes smaller, I think that the real question is going to be whether any particular company can hire enough talented technical staff,” Ginsberg wrote. Regardless, he and his partner have managed to build a staff of highly educated, experienced professionals.

“Hiring is very different outside of a hub; we have to capitalize on the fact that Eugene is a university town with phenomenal quality of life,” he expressed. “There aren’t a whole lot of towns that fit that description.”