This NYC Startup Raised $1.5M to Listen and Learn in the Enterprise



Pathgather is a new approach to enterprise learning that puts employees in control, and who knows what skills are needed to get the job done better than fellow employees? They actually motivate individuals to learn and connect around professional development, so companies end up with a smarter, more effective workforce.

Social is the key element, and as for this funding round, having been part of the TechstarsNY program was key.

CEO and cofounder Eric Duffy goes into details with tips on funding in general, and what Pathgather does differently that moved Bloomberg Beta, Contour Venture Partners, Techstars, The Vedas Group, Tigerlabs Ventures, Palm Drive Ventures, Jerry Wang, Thomas Wisniewski, and Michael Derikrava to all sign up.

Tell us about your product.

Pathgather is a social learning platform for companies that connects employees around learning and development. Employees discover and share learning resources that are most valuable to them, connect with experts in their company, and get recognized for improving their skills.

How is it different?

Almost everyone recognizes how important continuous learning is to workforce competitiveness, but the tools most companies currently use, called Learning Management Systems ( LMS), have really fallen short. The trouble is that most LMSs are primarily designed to make sure you take your compliance training, but that’s about it, and because of this typically have very low levels of engagement.

We designed Pathgather to create a collaborative learning community within organizations. Employees review and recommend the best courses to each other, get recognized for improving their skills, and create their own learning paths that others can discover and follow. The effect is that employees are empowered to guide themselves and each other, instead of being told what to learn by someone else.

How did participating in Techstars’ NY accelerator help your company?

Techstars was an awesome experience during the program, and continues to be really helpful now that we’ve graduated. It really runs the gamut, we had great speakers, intros to great mentors who genuinely want to be helpful to your company, and warm connections to potential customers. And while fundraising is never an easy process, Techstars made it a whole lot more manageable than it otherwise would have been.

What market you are targeting and how big is it?

We target progressive, Fortune 1000 organizations who have expressed a desire to make learning and development a competitive advantage.

Eric Duffy

Eric Duffy

What are the most popular courses or programs that employees want to learn?

This one is really dependent on the organization. Our customers span a wide range of industries, from telecommunications to retail to entertainment to hospitality, and the employees at each of these organizations have different areas of interest and expertise. However, I can say with certainty that the least popular learning content at all of our customers is compliance training!

What’s your business model?

We price Pathgather on a per user per year basis, and have enterprise pricing available for our larger customers.

What was the funding process like?

When we began fundraising, we had some well-known customers and traction that we could point to, which was definitely helpful. Beyond that, many of the investors we talked to had worked at large companies in the past, and therefore had personally experienced just how unappealing and difficult-to-use Learning Management Systems are, so our product resonated with them. In general, it took a couple of months to close up the round and we ended up raising 50% more than we were initially seeking. I was told to expect that the closer you get to closing up the round, the faster the money begins to come in, and it pretty much happened just like that for us.

What are the biggest challenges that you faced while raising capital?

For us the biggest challenge was fine-tuning our pitch as we went. You kind of have to try out different talking points to see how they work on the first number of investors, and iterate as you go. It’s also the case that while some investors had personally used LMSs in a previous job and remembered disliking the experience, there were also plenty who did not, so we had to work harder to communicate the need in those cases.

What factors about your business led your investors to write the check?

Ultimately I believe it came down to the references that some of our customers like Qualcomm gave for us, which no well-crafted pitch, splashy product demo, or impressive amount of traction can substitute for. When your early adopters are really happy and enthusiastically referring you to their peers, it sends a great signal.

What are the milestones you plan to achieve in the next six months?

Over the next six months, we’ll be growing our team by 2 or 3 and begin marketing Pathgather in earnest so we can start getting in front of more organizations. Ultimately, though, we fully understand that our success is dependent upon delighting our customers with new features and ensuring that the rollout to new customers is as successful as possible, so we’ll be hyper focused on that.

What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?

We bootstrapped Pathgather for about a year and a half before raising, so my advice is would be to try to find some people who have such a strong, unmet pain point that they’re eager to pay you for it! Easier said than done, I know. If you haven’t found that yet, keep working to get your product or idea in front of as many people as you can and listen, you might be a few tweaks away from solving their need.

Where do you see the company going now over the near term?

Product development is really our strongest focus in the near term – we have a backlog of new features that will make it even easier to discover and share learning resources with your peers, and we’re really eager to get those in front of our customers so we can get their reactions and keep making Pathgather more valuable. We believe strongly that a great product will lead to great referrals, and have benefited from this dynamic already, so that’s where our focus will continue to lie.

What’s your favorite part about NY during the holidays – the tree at Rockefeller Center or the store windows?

I just love walking around the city and feeling the excitement in the air during the holidays, NYC has a buzz of energy you don’t get anywhere else!


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