For people who didn’t grow up in the U.S., navigating the American startup scene can be intimidating. Dat Venture, a Boston-based accelerator for international entrepreneurs, wants to change this.
Dat, which is kicking off its second cohort today, has refashioned the traditional accelerator model into a program designed to lower the barriers for international entrepreneurs looking to bring their businesses to the U.S.
The new batch of 16 startups includes a Spanish augmented reality company, a French biochemistry company, and Clean Tech companies out of Spain and Colombia.
Instead of providing seed funding in exchange for equity, Dat Venture asks companies to pay their own way. In exchange, they arrange housing at shared living space Krash and office space at WeWork, and help founders build relationships and expand their American customer base.
“These are not idea-stage companies — they’re much later-stage than the typical MassChallenge or Techstars company,” says Matt Hurley, co-founder of Dat Venture, who was previously at Techstars in Boston.
“They’re just entering the growth stage of their company — 70% are revenue-generating, and 75% have already raised one round of funding,” Hurley says.
Hurley’s co-founder Tomas Ratia moved to Boston from Spain seven years ago, so he’s familiar with the difficulties of breaking into the startup scene as a foreigner. Neither Hurley or Ratia have substantial experience in venture investing, but they seem to be well-connected in Boston’s tech scene.
The pilot program, which wrapped up in April, accepted 14 Spanish startups, eight of which are now generating a combined $10 million in revenue. Hurley says about half entered the program to raise funding from U.S.-based VCs, and the other half wanted to validate their product in the U.S. market before returning to fundraise in Europe.
UptoDown, one of the pilot companies, is the second largest Android app catalogue in the world (behind Google Play) with a large user base in Latin America and Europe. They increased their U.S. customer base from 20% to 50% of their total users, saw their Alexa ranking jump to 375, and they’re nearing 100 million visits per month. Since advertisers pay exponentially more for American pageviews, UptoDown was able to grow its revenue substantially as a result.
“Often times it’s simple — many international companies don’t know how to get past the logistical obstacles that prevent them from coming here, and we’re able to lower that barrier a little bit,” says Matt Hurley, founder of Dat Venture.
Vortex Bladeless, a startup that builds bladeless wind turbines, had 7 patents in Spain before participating in the pilot program but wanted to raise a large venture round and scale in the U.S. Dat helped the founders establish a legal entity in Massachusetts and form an advisory board with Ideo, Harvard, and Sun Edison. Vortex’s crowdfunding campaign launched on Indiegogo three days ago and they’ve already surpassed their goal of $50k (from over 900 contributors) within a week.
Hurley says he’s in the process of raising a $20 million fund for follow-on investing, which he hopes to close in the next eight months.