Gener8tor Strikes Up the UW Band to Send Off Latest Startup Class

A year ago, Wisconsin startup accelerator Gener8tor kicked off the closing pitch event for its winter session in Madison with a laser light show and smoke machines. This year, attendees were treated to a mini-pep rally by members of the University of Wisconsin-Madison band.

A small group of trumpet players, trombone players, percussionists, and a tuba player got the party started at the Barrymore Theatre last night with rousing renditions of college marching/pep band mainstays, including the university’s fight song, “Hey Baby,” the “Chicken Dance,” and “Rock and Roll Part 2” (or “The Hey Song”). They even played “Beer Barrel Polka.”

“We’re the first accelerator ever to open a premiere night with polka,” Gener8tor co-founder Troy Vosseller joked after the band exited to cheers from the crowd of about 450.

Gener8tor and the five startups that just graduated its latest session gave the audience plenty to cheer about throughout the night. (Disclosure: Gener8tor is a supporter of Xconomy in Wisconsin, but our coverage is determined independently by our editors.)

Here are some of the highlights:

—Gener8tor revealed the previously secret identity of one of its acquired portfolio companies: Driblet Labs. The water tech startup was founded in Mexico, went through Gener8tor’s Madison program last year, and later moved to Cambridge, MA. Co-founders Rodolfo Ruiz and Carlos Mosqueda flew to Madison to be recognized on stage last night with the other Gener8tor grad that got acquired, Chicago-based Optyn.

Driblet is still being secretive, though—Ruiz declined after the event to name its acquirer, telling Xconomy it will be disclosed when Driblet’s water consumption-tracking device hits the market.

Carson Life CEO Sonia Guzman, whose company just completed Gener8tor’s program, announced she has closed a $750,000 funding round led by Milwaukee-based CSA Partners. She was introduced on stage by Chris Abele, CSA’s backer and Milwaukee’s county executive.

GrocerKey, the Madison-based provider of white-label software that lets grocers sell online, has signed up the Woodman’s grocery chain as a customer, a deal that by itself will generate an estimated $6.5 million in annual revenue for GrocerKey, founder Jeremy Neren said. Woodman’s is also investing in GrocerKey, he said.

—Keynote speaker Jack Salzwedel, CEO of Madison-based American Family Insurance, said he thinks the area’s startup ecosystem has gotten stronger over the past few years, with more dollars invested and a growing reputation. But he challenged other big Wisconsin corporations to follow American Family’s lead and invest in startups. American Family has a $50 million venture capital arm and has partnered with Microsoft on a home automation startup accelerator in Seattle, for example. “There’s still a lot of money sitting in large companies that needs to be deployed,” Salzwedel said.

Small companies probably could do a better job selling the benefits of their products to bigger companies, who are potential customers and investors. But Salzwedel thinks large companies “haven’t done a good job looking at entrepreneurs.” “Large companies are worried, perhaps a little bit paranoid, about changes in their business models,” he said.

And without further ado, here’s a recap of the presentations by Gener8tor’s latest program graduates:

AltusCampus: CEO Daniel Guerra, Jr., thinks his Madison-based company can be the Netflix for continuing medical education. Educational companies can upload their content to the AltusCampus website, where healthcare professionals can access the course materials anywhere, anytime, he said. The market is big: Guerra estimates that $20 billion will be spent this year to provide continuing education for 16 million healthcare professionals required to participate.

AltusCampus makes money by charging healthcare organizations an annual licensing fee for each employee that takes online education courses. It pays the content producers based on how much their content gets used by healthcare professionals, Guerra said. AltusCampus customers include GE Healthcare.

Bright Cellars: The business model of sending monthly shipments of goods curated for each customer has become popular with products like shoes, food, clothing, and beauty products. The team at Bright Cellars believes wine is next, CEO Richard Yau said. The company’s members take an online quiz to determine their tastes, and then they subscribe to receive a box of four wine bottles per month. They provide feedback about which wines they liked, and a Bright Cellars algorithm works to suggest better matches over time, Yau said.

The company, founded by MIT graduates, has more than 2,000 members. Its plans for attracting more customers include becoming an exclusive seller of wines produced by a partner vineyard in California, Yau said.

Carson Life: Guzman, a Puerto Rico native, founded the Miami-based company because she struggled to find quality health and beauty products targeting the Hispanic population. So, she started such a business herself. Carson Life snagged Julian Gil—an Argentina-born actor, model, and entertainer popular throughout Latin America—as a company spokesman, and the company has quickly pushed its natural products into 120 Walgreens stores and 18 Walmart stores in Puerto Rico, Guzman said. Carson Life also sells its 33 products directly to consumers via its website.

The company has generated $400,000 in revenue, and the plan is to move into Florida retail outlets next, Guzman said.

GrocerKey: Neren started the company to help grocery stores keep up with the rapidly changing purchasing habits of shoppers, who are spending less money in stores and starting to turn to new options like Instacart, an app-based grocery delivery service. Neren estimates that 20,000 grocers don’t have an option for online ordering, and those that do are often using outdated and expensive systems, he said.

GrocerKey’s solution is to create a branded website for grocers, which allows customers to shop online for items at in-store prices, and then have the groceries delivered or made available for pick-up, Neren said. GrocerKey makes money by charging stores a fee on every transaction, which stores can recoup by charging consumers a fee on their orders.

The benefits for grocers include the chance to remain at the heart of online transactions and access to data analytics that provide valuable insight into shopping habits.

GrocerKey has already launched some grocery store websites, and its website for Woodman’s, shopwoodmans.com, goes live in June, Neren said.

Passage: Detroit-based Passage provides online systems that handle ticketing and payments for specialty events. It started by targeting businesses operating haunted attractions, and has since expanded to beer festivals, paintball events, and semi-pro soccer games. There are all kinds of possible markets it could cater to, CEO Alex Linebrink said, ranging from comedy clubs to wine tastings.

Passage makes money by charging service fees to the ticket purchasers. The company has generated $130,000 in revenue over the last nine months, and it’s on pace for $625,000 in sales this year—which would be a five-fold increase over last year, Linebrink said.

Jeff Bauter Engel is Deputy Editor, Tech at Xconomy. Email: jengel@xconomy.com Follow @JeffEngelXcon

Trending on Xconomy