SupportPay 3-minute Pitch at Launch Accelerator Virtual Demo Day (23 July 2020)

The top-tier tech accelerators include YC (of course), then TechStars, 500 Startups, and a relative newcomer Launch founded by NYC-turned-Silicon Valley star, Jason Calacanis. I am a big fan of the company, podcast, and even recently began participating in the investment syndicate.*

Launch believes in small cohorts, usually 7 startups, and requires some traction, even if it's just a few thousand dollars monthly. That can be a tough bar for newly minted fintech companies which often have a multi-year, multi-million dollar investments before the first dollar is booked.

But I was delighted to see a fintech company in 7 most recent graduations. The company, SupportPay, is solving the problem of divorced/separated parents coordinating childcare expenses. The company is using a freemium model with free and paid levels. Parent's subscribe as individuals for $7.99/mo or $79 annually (plus transaction fees).

Traction
The company was founded in 2011 by Sheri Atwood as Ittavi and raised nearly $7M in 2014 through 2016. However, in 2018 its investors liquidated the company. And Atwood was able to buy back the assets and recapitalize. Now, the company is on a tear with 27,000 total users (+70% YOY), 1,600 of which are paid (+120% YOY) for an annual run rate of almost $300k from subscriptions (ARR).

Upside
In addition to the 55 million parents in the United States living apart, there is the international opportunity (the company already has users in 15 countries) as well as adjacent markets (e.g. parents of college students, roommates, employees) that need shared-expense management.

Exits
Basically, it's a payment business with a dashboard UI. So any of the big payments companies (PayPal, Square, Amazon) would be potential acquirers as would many fintech companies in the banking/PFM space. And finally, SupportPay would be a great fit for legaltech (is that a thing?) companies.

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*Note: I have no financial interest in SupportPay as of this writing, but if it is syndicated by Launch, I may take a small (4-figure) position.