Weave, a startup out of Utah that has developed a unique VoIP-based unified communications service for small and medium businesses that it is selling first targeting dentists (more on that below), is today announcing that it has raised a Series A of $5 million.
The round of funding is notable in that it’s the first investment to come out of A Capital, a new VC firm started by Ronny Conway (son of Ron) and Mark Valdez, both formerly of Andreessen Horowitz. In addition to A Capital leading the investment, other participants included Homebrew, Fuel Capital, Ron Conway, Sr’s investment firm SV Angel, Initialized Capital and Y Combinator (where Weave is an alum).
The funding will be used to build out the product with more features, expand its marketing and to start preparing to target other verticals adjacent to dentistry.
Weave’s co-founder and CEO Brandon Rodman tells me that the company has been on a very healthy growth trajectory of late, expanding its customer base by some 30% on average every month. Even before the startup had entered Y Combinator, it had been in business for two years — “not your typical YC company,” he says. Indeed, YC itself has been evolving a lot from its original model and this is one sign of that.
Before Weave had even entered the incubator, it had 160 customers. Now that number stands at over 600, all paying on average $300 per month for a service that includes hardware in the form of Polycom IP phones, and software that integrates with the customer’s existing CRM and EMR products. “And they are all dentists,” he adds.
So what is it about dentists that caught Weave’s attention? A couple of things, it turns out.
“There was a point in my life when I wanted to be a dentist, my mom is a dental hygienist I’ve got a number of friends who are dentists,” Rodman says. “I’ve always liked the dental industry. But I like business and software, and I didn’t like the clinical side.” He laughs sympathetically at my interjection that I can’t stand the sound of drills on teeth. “You can’t be a dentist without the clinical side, unfortunately,” he says drily.
Rodman’s interest in the field, and his own natural business inclination, led him and his co-founders, which include a brother of his, to try a previous startup working with dentists to schedule appointments, which is what pivoted to become Weave.
Throughout that work and his initial look at the industry, he says he was surprised in fact at how much of the emphasis in becoming a dentist was on the clinical side, but how little was dedicated to how to operate a business.
“You have to have clinical knowledge, of course, but once you hit that threshold the rest is business acumen. How do you increase loyalty, get people to come back, run the business?” he says.
It’s this gap that Weave tries to tackle by way of a solution that makes customer service a lot easier for dental clinics, by using the business’ existing databases of customers and linking it up with the phone system so that phone calls can be more informative for both sides, and more potentially proactive on the part of the clinic.
It’s tapping into the fact that these clinics are buying a phone service anyway, so it may as well be one that is more useful. “Our solution takes telephone service that every business needs and makes it more robust. It’s a tool they have to pay for. We pump it full of steroids.”
You can see how dentistry, in a sense, could be taken as a template for a variety of other kinds of industries that Weave could target with its products going forward — although even before it goes there, Weave has a lot of potential to tap into in the world of teeth.
“Dentistry is one of the highest concentrated business sectors out there,” Rodman notes, with 150,000 dentists and 160,000 dental practices registered in the U.S. and 130,000 dentists and 30,000 dental practices in Canada before it even considers dentists outside of North America.
Dentistry turns out to be a good training ground for tackling other overlooked industries. Rodman notes that a lot of the software that clinics use is totally devoid of APIs, so Weave had to create workarounds to integrate its services with it.
Like many of the best SMB solutions that I’ve come across, the idea behind Weave is to take services that have become completely commonplace for large enterprises, and right-sizes them (and right-prices them) for the smaller business.
Conway’s reasoning for backing Weave is based on a few different factors that play both on the founders’ entrepreneurial drive and also the fact that the company appears to have solved a longstanding problem.
“I decided to back Weave because the founding team has incredible entrepreneurial tenacity. They pivoted from their original vision when it didn’t scale instead of abandoning it and I admire that in an entrepreneur,” he says. “Furthermore, Weave is offering a product that simply does not exist anywhere else in the market and has already amassed an impressive customer list based solely on this innovation.”
He believes that Dentist offices “are the tip of the iceberg” among SMBs “as large phone carriers haven’t built a system that responds to their unique needs.”
Right now, Weave sells directly to businesses itself, although Rodman says the company has already been approached by carriers and others to partner in sales. There are other areas where the company also wants to expand, specifically in the area of mobile — right now you can use the Weave platform to send texts to patients’ mobile phones, but the plan, he says, will be to port its software to smartphones in the near future so that calls, appointments and other data can be routed to doctor’s and other’s handsets wherever they are.