At the end of May, HIGHLINE portfolio company Koho announced it had closed a $1 million seed round. Far exceeding their original fundraising goal of $550,000, the company is backed by a range of Canadian investors including HIGHLINE, Stanley Park Ventures, Ferst Capital, Hedgewood, and Joe Canavan.
The Vancouver/Toronto-based fintech startup is focused on changing the way millennials bank through the use of innovative technology, modern design, and a vision to make Gen Y more financially literate. With plans to launch their alpha version in fall 2015, they’ve already generated quite a bit of media attention, investor respect (advisors include Gil Penchina, an early investor in LinkedIn, AngelList, and Indiegogo), and customer interest. They were also named one of the 20 hottest startups in Canada, and received the Nasdaq NY Techday award for fintech innovation.
We recently connected with Koho’s Co-Founder & CEO Daniel Eberhard to chat details of the raise — and what’s next for Koho.
Q&A With Daniel Eberhard
When did you know the round would be oversubscribed?
About six weeks in we started to expect it. We still hadn’t hit a few major cities, and were already nearing our goal.
How are you going to allocate the funds?
Product first. It’s important that we’re known for our technology, otherwise we’re just a service company.
You spoke with a lot of investors while raising this round — how did your approach/pitch change over time?
Two things shifted. I started asking more questions in the investor meetings. I always lead with questions about how they found us, what their investment thesis is, what they think is interesting about the industry or Koho, etc. We also got very quantitative. We developed relatively sophisticated experiments that let us point to objective acquisition costs, customer behaviours, etc.
On the relationship-building front, you were also able to get some pretty influential people on your board. What advice do you have for building valuable connections?
Align yourself to a purpose first. In most cases, very successful people have a lot of money so that isn’t their primary motivator. They want to align themselves with projects they can get behind, either because they believe in the vision, the value, or the team.
What were the biggest challenges you encountered raising this round?
Raising a round is challenging by nature. There are a lot of highs and lows that can impact momentum. The biggest challenge is just to keep pushing, and staying aligned to the vision you want to create.
Read more about Koho and Daniel’s vision for the company in this interview.