In February, Dave McClure and Paul Singh, founders of 500 Startups, brought their Demo Day East to NY for the second time this year for an invite-only showing at General Assembly. This event was primarily for accredited investors and 500 Startups mentors and advisors. While their seed fund and startup accelerator is based in Silicon Valley, several of the startups they funded and mentored are located in Silicon Alley. These NY-based companies are wildly diverse, ranging from coffee — CraftCoffee, a subscription service of artisan roasters samples to fitness competitions — Fitocracy, a game to improve fitness.
Other interesting Alley companies include FanBridge, a fan relationship management and marketing platform; Medialets, rich media ad platform for mobile; Relevant, a full service experiential marketing agency on W. 24th St. and 72Lux, an online luxury retailer that based its name on its location — 72nd Street St. on the upper East side.
We talked to McClure to see what type of tech themes he is focusing on in 2012:
- We care about the kids-family-parents area, what we call family-tech. We’re seeing a lot more services being created for kids and moms and parents – actually I think that is a really big growth category, particularly with tablets growing leaps and bounds. We’ve been investing in a lot of companies that are doing services for moms and families.
- Education-related themes are in their too – you’re seeing the consumerization of education as iPhones and tablets make it into school systems and a lot of decisions are being driven by parents now, more than they have been in the past.
- I think we definitely have the consumer commerce as a continuing theme, particularly in the subscription box commerce area that seems to be catching a lot of attention recently. So we’ve done investments in a number of companies that are doing services, such as Craft Coffee, LoveWithFood — which is in our current accelerator program — and Manpacks, they do subscription socks, underwear and condoms for guys.
- Definitely doing a lot in business services, marketing automation, a lot of SMB products (small medium business). Seeing a lot of products and services being developed for that. With LinkedIn going public now there are starting to be additional platforms for going after small businesses. Also with other internet companies like Groupon, Living Social and Yelp you’ll see other aggregations for small and local businesses that will also drive platforms for small business and innovation tools.
- We have been spending a lot of time doing international themes – we’ve been expanding our business outside the U.S. and that’s about 10% to 20% of our investment — in East Asia, South Asia, South America and Europe, and particularly in Brazil and India where there is a tremendous amount of growth in mobile.
- Another thing that we found ourselves investing in is a lot of food related services and technology. Anything and everything around restaurants and food delivery.
These are the areas McClure said his fund was spending more time on. He did mention mobile, but not as an investment area because as he said, “That’s sort of like saying that we’re investing in air. I think everything under the sun is mobile and tablets these days. But certainly from a platform perspective it’s been hugely visible in our investment strategy in the last year or two.