The company is Lua and they’re changing the way modern workforces collaborate – and of course that means mobile. Companies can reach individuals, entire department or custom groups in seconds. Which means real-time communications (including sending and sharing files and more), which is what you need for fast decision-making, and we all know that things always need to get done yesterday. Which ain’t gonna happen if you’re using yesterday’s methods and technologies. It’s also cloud-based, secure – and an entire company can be onboarded in mere minutes.
Abundance Partners led the Series A round, with participation from Strauss Zelnick (ZelnickMedia, Take-Two Interactive Software), Aaron Stone (Apollo Global Management), and John Maloney. Co-founder and CEO Michael DeFranco, Co-founder and Chief Executive Officer tells us more about the funding process and their plans going forward.
What was the funding process like?
The funding process was a great time to look internally and ensure that our messaging and vision was well-aligned with a viable business model. It was of course not without stress but was a great exercise in self-expression. Building for too long in a vacuum can be dangerous. Our end goal is to hit cash-flow positive as quickly as possible, so this is hopefully not an exercise that we’ll go through too many times.
How did being part of Techstars help your company?
Techstars helps us make connections to industry leaders that wouldn’t have otherwise been possible – or would have taken years longer! Their network is incredible and even years after graduating, it’s an awesome group to be a part of.
What are the biggest challenges that you faced while raising capital?
Effectively communicating our unique value proposition and the scale of our target market was critical in the fundraising process. Market saturation is a real thing and “industry” blindness – when investors hear one word and bucket you into a certain competitive set – happens every day. Word choice and being concise is never to be underestimated. We ultimately decided to partner with a VC fund, Abundance Partners, that was confident in us and efficient in their own process. We respect those qualities in them and it made them the best fit for our team. They’ve invested in other industry leaders, from Livestream to Kickstarter, and we couldn’t value the relationship more.
What factors about your business led your investors to write the check?
There are several key differentiators at Lua that we feel are inspiring to our investors. First of all, we believe in a thesis that speed of action is going to make or break many businesses in the months and years ahead. Our investors similarly believe in that thesis and that our team is creating the best single solution that drives speed of action across the teams of all our clients.
We also believe that coordination trumps collaboration for our target verticals like client services and events management. Coordination is a what workers are really looking to achieve when they’re sending emails, texts, hosting conference calls and sharing files. We bring all of those critical capabilities: messaging, in-conversation file and image sharing, a corporate directory, conference calling, file center, etc. under one single roof so that coordination can happen with speed and ease.
Additionally, we practice what we preach as a team, and what we preach is accountability. Within Lua, every message indicates who has read it in real-time. Administrators receive read reports on every user. This level of accountability, we’ve found, inspires more team coordination within Lua, with an average of 94-99% read rate across all our users.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
My biggest piece of advice is to know your competitors inside and out, as well as set both realistic and aspirational goals for your own business. We waited two years to do our Series A round after graduating from Techstars, and that was as traditional enterprise communications and business communications startups were launching and pivoting at a breakneck speed. In that time we were singularly focused on making sure that our product met the unique needs of our target verticals and worked hand in hand with many early customers to determine our solution’s core feature set. Yet we kept a close eye on our competitors so that we continued to understand and evolve our messaging to effectively communicate our value proposition when we were ready to talk more about ourselves to venture funds and the public.
Where do you see the company going now over the near term?
Our latest round of financing, $7.5M, will help us scale to meet the demand for our product – those roles will fall across sales, marketing, client support and more. We’re seeing quick adoption amongst our target verticals: client services, mobile sales, events management, so it’s critical that our ability to serve this growing customer base only gets better as we scale.
Iced coffee or cold brewed?
We actually like it hot in the office! Coffee is a hot topic in our office. Just mention it to my co-founder, Jason, and he’ll make you a mean double espresso every morning to get you going. But if I really had to pick: cold brewed.