One of the challenges of the Portland startup community has always been momentum. We sometimes have great—at times even fantastic—startup news, like an exit or a major announcement. But more often than not, that happens as a solitary instance. And then it’s some time before the next major announcement. So it’s rare to have a day like today where both Torch 3D and Vacasa have major news.
I’m going to focus on each of these announcements separately. But it made sense to talk about them together.
Torch 3D raises $3.5 million seed round
Let’s start with Torch 3D who announced that they had raised a $3.5 million seed round, today. The company has been largely in stealth, so today serves as both an announcement of their seed funding and a reveal of their presence here in Portland.
Torch 3D was founded here in Portland by two Magic Leap veterans and serial Portland entrepreneur Antony Falco, cofounder of Basho Technologies and Orchestrate.
What do they do?
At Torch, we are building a design platform to empower designers to quickly iterate and collaborate on spatial 3D concepts in augmented and virtual reality (AR/VR). It’s my pleasure to share that we have closed a seed round investment of $3.5 million to get there even faster.
Why is that important from my perspective? Well, there are a few reasons.
For one thing, they’re arguably the first Portland startup wholly focused on the virtual reality and augmented reality world that has received significant funding.
For another, they’re doing it in a very Portlandy way. Instead of building a consumer facing product, they’re building tools for people who build VR/AR. And that “developers building tools for developers” tends to be a very successful model here in town.
Still another, this marks a new type of startup in Portland: folks moving to town to start a company. You see, in the past, we’ve generally had two types of companies. We’ve had homegrown companies like Elemental, Jama, and Urban Airship and then we’ve companies that were founded elsewhere and then moved to Portland, like Jive, Puppet, and Simple. With companies like Torch, we may be seeing a different model emerging: Portland as a destination to launch companies.
And finally, this isn’t a bunch of first time founders. It’s a group of serial entrepreneurs getting together to form a company that directly responds to a problem they’ve experienced in the marketplace. That’s a little bit different for Portland, as well. And the sign that our startup community is maturing.
Long story short, I like where Torch is going. Mostly because it strikes me like an Adobe or Macromedia play for VR/AR. And as the platforms and applications of VR/AR become more prevalent, you’re going to need more and more folks creating content and experiences. And not all of them will be able to code in Unity. Nor should they have to. That’s the opportunity for Torch.
For more on this announcement, read Torch’s blog post or coverage from Geekwire, The Oregonian, and Portland Business Journal.
Vacasa secures $103.5 million private equity round
Yes, you read that right. Portland startup Vacasa, which to-date had only raised one round of venture capital, today announced that they had secured $103.5 million in private equity financing.
If you’re not familiar with Vacasa, it’s because they’ve kept a fairly low profile—even though they’ve been regularly recognized as one of the fastest growing companies around. They’re in the highly competitive vacation rental space, but they have a unique model that differentiates them from some of the other more well known players.
Why is this a big deal? Well, Vacasa has some insight on that:
This is a landmark funding round in our industry. It’s the biggest Series B in the history of Oregon, one of the largest-ever in the Pacific Northwest, and one of the top 10 rounds nationally in 2017.
So, yeah. Like Torch’s reveal, this is very much an announcement that will put Vacasa on the map for a lot of folks. And that’s not necessarily a bad thing. Vacasa and its peers have had the luxury of quietly building successful companies. Which is great for them. But not always great for the perception of Portland and its startup community. With this kind of news, it’s very much a “rising water floats all boats” about the types of companies we have the potential to build here.
It’s also interesting that it’s a fairly early private equity round. Without getting too much in the weeds about the differences between venture capital and private equity, I’m interested in the fact that private equity rounds—more often than not—are the rounds that enable founders of the company to recoup some wealth for all of their years of grinding out their business concepts on a wing and prayer.
So what am I saying? What I’m saying is that, at a time when many founders are struggling to find investors who understand newer business models and how companies are built in Portland, minting a few new angels can’t hurt.
It’s also nice to see that a good chunk of this investment came from Riverwood Capital, which also financed local headphone company Sol Republic. Hopefully, as Vacasa continues their successful journey, this isn’t the last we’ve heard of Riverwood.
Finally and most importantly, this was—until very recently—a bootstrapped company. And the fact that a bootstrapped company can secure that type of capital and (hopefully) create some wealth for the founders is a very very good thing for Portland. And for the types of companies we tend to build here. Build it, then take funding when the timing is right for the business is a model I’d like to see more of.
For more information, read the Vacasa blog post or coverage from Malia Spencer—”Vacasa lands $103.5M from investors, will vastly expand its national reach” and “Why Vacasa raised its monster round“—in the Portland Business Journal, The Oregonian, Forbes, and Geekwire.
[Full disclosure: Orchestrate is a PIE alum. I am the cofounder and general manager of PIE. Also, if you’re of a certain age, my headline probably had some unintended consequences by causing you to start humming that song you’re currently humming. For that, I apologize.]