Companies to Watch: Black Founders Shaping the Next Generation of New York Tech

It comes as no surprise, but venture dollars to Black founders remains at dismal levels. According to Crunchbase data, funding to Black founders in the US has been on a decline for the third year in a row – just 0.48% of all VC in 2023. Last year’s market cooling had a disproportionate impact on Black entrepreneurs – not to mention the ripple effects of slashed DEI budgets and other recent anti-DEI sentiment.

But New York is stepping up to the challenge: Tech:NYC is partnering on a citywide Venture Access Alliance to standardize diversity goal-setting metrics across 90+ VC firms, as well as our own initiatives to funnel dedicated resources to underrepresented New York-based founders building in emerging technology fields (more details on those programs coming soon!).

The first key solution: Fund Black founders. The path to getting there: Amplify the founders who are kickstarting the next big ideas in New York tech.

As we close out Black History Month, we asked leading New York VCs in our network to nominate the Black-led startups they’re most excited to support in 2024. Here’s what they reported back: For this special edition of our Companies to Watch series, meet Hopscotch, Guaranteed, Singuli, and Spry.

HOPSCOTCH

Reed's level of ambition and pace of learning have enabled him to deliver an amazing product to help small businesses. He has triumphed over adversity and is regularly making time to mentor the next generation: traits we love to see in a CEO who wants to both build an enduring large enterprise business and also amplify the community of future founders here in NYC.

– Peter Boyce II, Founder & Managing Partner, Stellation Capital

What does your company do?
Hopscotch Founder & CEO Reed Switzer: Hopscotch is the all-in-one invoicing, cash flow, and bill pay solution for small businesses. Today, thousands of small businesses use Hopscotch to manage their everyday invoicing and bill payments in one place. We also leverage our payments data to power a product called Hopscotch Flow. Businesses can use Flow to advance funds from unpaid invoices in just two clicks. This allows them to get paid on-demand and easily cover gaps in cash flow, which is a critical muscle for small businesses to have.

A question we love to ask every founder: why New York?
RS: I’m born and raised in New York City, and I don’t think there is a better place in the world to build a company. As a founder, you face two critical challenges in getting your business off the ground: raising capital and finding talent. Not only does the city’s investor density nearly match that of the Valley, but New York’s diversity, energy, and ambition is unmatched – and the talent pool reflects that.

You’re technically not a first-time founder – you already had an apparel company when you were in high school. Have any early lessons from that time carried over to how you’re building Hopscotch?
RS: Although the apparel company was on a much smaller scale than Hopscotch, it taught me a lot. I think the most valuable takeaway from that experience was learning that action is usually better than inaction. Founders have to make so many decisions every day and sometimes it feels like your choices can make or break your company. Lots of first-time leaders might avoid making a decision in hopes of the circumstances changing.

In reality, building an early-stage startup requires making tough decisions, and it’s going to be uncomfortable sometimes. But if you don’t take a swing, the ball is definitely going to sail past you. If you take a swing, even if you don’t knock it out of the park, you give your team a better chance at scoring a couple points and maintaining that forward motion. Control what you can and always choose action over hoping the circumstances will change.

After launching the core product, you added a credit product in 2022 called Hopscotch Flow. Can you tell us about how that’s going? What features are you looking to build next?
RS: Since starting the company, Hopscotch Flow has been our most requested feature. We launched an early version of Flow to a small subset of our users last year to test product-market fit and overall demand. With the results we’ve seen so far, we couldn’t be more excited about the future. Not only have we been at full capacity nearly every month since the product went live, but we’ve also been encouraged by the revenue opportunity: AOVs are high three figures, and LTVs are mid-four figures.

Given the strong demand for Flow, the team has worked tirelessly over the past few months to onboard new partners so we can support more customers. Today, I’m excited to share that Flow will reach general availability in early March 2024 with 100x our current capacity.

Outside of Flow, this year is focused on expanding Hopscotch’s capabilities to support larger teams better. From communication tools to automated controls that ensure invoices are being sent and payments are being made correctly, we’ll be spending a lot of time optimizing Hopscotch for its next phase of growth.

What part of the finance stack is still too analog for most small businesses?
RS: The Hopscotch product is built around three pillars, all of which are still quite analog for most small businesses: invoicing, bill pay, and cash flow management. Although there’s been innovation in invoicing and bill pay in recent years, cash flow management still lags behind.

Today, poor cash flow is the #1 reason most small businesses fail. Many of our users have tried to solve this problem with lines of credit or traditional factoring, but this often requires weeks of back and forth, financial statements, and tons of paperwork. Due to those requirements, many small businesses are left without access to capital while others are in limbo for weeks until getting approved.

With Hopscotch Flow, you can advance funds from unpaid invoices in just two clicks within seconds of sending an invoice. Flow offers all the cash flow convenience of lines of credit and invoice financing with fewer downsides for small businesses. There’s no credit checks for you or your customers, Flow is completely private, and you can get paid immediately instead of next month.

Okay, some rapid-fire questions. First: where do you get your favorite pizza slice?
RS: Prince Street Pizza, of course!

What’s the best place in New York for a coffee or lunch meeting?
RS: I’m a big fan of Maman for coffee and Tacombi for lunch.

What’s one piece of advice you can share on building a startup from the ground up in NYC?
RS: Go to networking events! For the longest time I declined invitations to events because I thought they were a distraction from building the business. What I didn’t realize is how powerful these events could be in building a community of supporters. It wasn’t until a founder-friend of mine started sharing how much he was getting out of these events that I started actively attending them myself. Living and building a company in New York is a privilege and it’s so important to take advantage of the one-of-a-kind community here by going out and making connections.

Besides your own, what’s another early-stage startup in New York you think more people should know about?
RS: GrailPay is fantastic. I’ve had a front row seat to the founder William Messina’s fintech masterclass over the past couple of years and couldn’t be more impressed with the company he’s building.

GUARANTEED

Jessica is taking on one of the most universal, yet underserved, experiences: end-of-life healthcare. Jessica founded Guaranteed based on her own lived experience as a caregiver for her father while he was in hospice, and it’s bringing much needed innovation to patients and their families with tech-enabled hospice services and death education.

– Amanda Eilian, Co-founder & Partner, Able Partners

What does your company do?
Guaranteed founder and CEO Jessica McGlory: Guaranteed is a tech-enabled hospice service provider making the end-of-life care experience dignified and seamless for patients and their loved ones.

A question we love to ask every founder: why New York?
JM: The New York health tech ecosystem is truly incredible. The innovation that is happening paired with a community that helps each other is the combination that made me want to build in NYC.

What is Guaranteed trying to fix or improve upon that traditional hospice care providers are lacking?
JM: Guaranteed is focused on building out what hospice care would look like if it were created for the first time today. This is changing the way hospice is perceived with greater education for the general population and clinicians alike. This is also changing the understanding of what hospice is – we believe that hospice is far more upstream in terms of when it should begin and far more downstream for family members in terms of when it “ends.” From serious diagnosis through bereavement, we are excited that we are building a company that addresses end-of-life healthcare in a seamless experience built for patients and families today.

We’ve heard you describe Guaranteed as a “hybrid healthcare company.” What do you mean by that? How has the explosion in digital health informed how you deliver “at-home care”?
JM: When thinking about hybrid healthcare, I think of it as how technology helps aid the real world experience. Whether it is using video visits, using data to personalize the experience, or messaging platforms, I’m of the belief that it is key to test digital interventions in care and then integrate what makes for the best experience especially when striving for at-home care.

What area of healthtech is still most ripe for disruption? Where do you hope to see the sector at the end of the decade?
JM: I’m likely biased, but I definitely think there could be far more disruption in aging and end-of-life healthcare. There are some great companies coming up, but when we look at funding, the space is still lagging behind other categories despite the rapid expansion of the aging population. By the end of the decade, I hope to see more dollars headed towards the companies focusing on the aging space and even more innovators deciding to build in the space.

Okay, some rapid-fire questions. First: where do you get your favorite pizza slice?
JM: Scarr’s Pizza, for sure.

What’s the best place in New York for a coffee or lunch meeting?
JM: Daily Provisions, and then do a walking meeting around Gramercy.

What’s one piece of advice you can share on building a startup from the ground up in NYC?
JM: Talk to people in every borough – your prospective believers are not all going to be in Manhattan. So go out and explore, find the people who will shout your name across NYC.

Besides your own, what’s another early-stage startup in New York you think more people should know about?
JM: There are truly so many incredible startups in NYC, so this is tricky. I’ll say Sika Health and ReKlame Health should definitely be checked out!

SINGULI

Ben is the quintessential founder – he’s innovative, dynamic, resilient, and an incredible leader. He’s a true expert in the supply chain and commerce space and that shines through all parts of the business. What's truly remarkable is how he's not just scaled the business, but also built a culture that attracts top-tier talent. Ben's ability to keep things grounded while pushing boundaries is what makes Singuli a standout in the industry.

– Gabby Cazeau, Partner, Harlem Capital

What does your company do?
Singuli co-founder & CEO Benjamin Kelly: Singuli is building an inventory optimization platform that helps its customers decrease stockouts, prevent excess inventory, and run operations more efficiently.

A question we love to ask every founder: why New York?
BK: New York City is home for me, I’ve been here for twelve years. I find the bustle, diversity, and culture energizing, and whenever I need motivation I can just look at the skyline and think about the incredible history of the city and what those who came before have achieved here.

Supply chain fluctuations were obviously a consequence of market reactions during the pandemic. You were building the company through that — are things still complicated? What trends is Singuli noticing right now?
BK: We still do a lot of work with omni-channel DTC “retail” businesses and there’s no doubt it’s a tough market out there – discerning consumers, plethora of choices, increased cost-to-acquire (new customers). The businesses that are doing well, besides the table stakes of having a great product, have a tight control on inventory and associated costs. Channel diversity seems to be another key – some combination of Amazon, wholesale, or retail in addition to the direct offering. However, each of those channels comes with its own set of challenges – but all ones that Singuli can help with.

Overall, for retail businesses the old adage of ‘right product, right place, right time’ still rings true. But it’s definitely very complicated to achieve that.

Is inventory management going to become more automated? How are you integrating AI tools – and communicating with customers about the benefits of using AI-powered features?
BK: We certainly believe there’s a huge opportunity for automation (and optimization) in inventory planning and forecasting workflows. At its foundation, Singuli is a set of models built to tackle the problems that recur for our customers – problems related to demand forecasting, inventory ordering and allocation, etc. Each of the problems maps to a plethora of deep academic research and we’ve tried to build the product foundation that permits us to construct the right solution for the customer. In the end, that doesn’t necessarily mean a fully automated solution, but perhaps 50-80% of your SKUs can be put on autopilot.

In terms of AI: It’s clear generative AI has a lot of interest at the moment, and some of the key concepts there have applications to time-series modeling (e.g. GANs, attention, etc). However, unlike some generative AI problems, there is some objective ground truth with forecasting (i.e. what was actually sold) and so the bar is higher in a certain sense. But generative AI certainly has applications in retail, for example in creative generation and optimization, and even merchandising and ideation.

Ultimately, everything we do at Singuli involves some form of machine learning and AI. The customers we work with currently are those who are already bought in on the idea that machines can help. Our job is to show customers how having better forecasts can impact their bottom line.

What area of retail is still most ripe for disruption?
BK: As an aside, I think most of the changes in retail over the past 50 years have been incremental, versus true disruption. In a certain sense, the Sears catalog was a precursor to e-commerce, simply operating with the mediums and payment mechanisms of the time.

Clearly there’s a huge amount of “stuff” being produced and consumed, much of it low price and low quality. Finding ways to make more durable items affordable and having true just-in-time production seems to be the panacea, not just in retail but in supply chains overall.

Okay, some rapid-fire questions. First: where do you get your favorite pizza slice?
BK: Speedy Romeo (a pie, not a slice).

What’s the best place in New York for a coffee or lunch meeting?
BK: Any of the Maman locations.

What’s one piece of advice you can share on building a startup from the ground up in NYC?
BK: Hire the best people you can.

Besides your own, what’s another early-stage startup in New York you think more people should know about?
BK: I admire what Alex Levin and Rebecca Greene have built at Regal.io. Watching from afar, it’s incredible to see the velocity of product releases and overall momentum.

SPRY

Spry is revolutionizing the back end management for non-professional sports teams, including colleges, high schools, and leagues. Serving hundreds of institutions and providing a broad platform for team management, Spry is among the fastest-growing seed-stage companies in the market today, fusing sports, fintech, and edtech into one SaaS platform.

– Oliver Libby, Co-founder & Managing Partner, H/L Ventures

What does your company do?
Spry founder & CEO Lyle Adams: Spry is an Athletics Management (Saas) platform built for administrators, coaches, and athletes. The same problem plagues many athletic organizations: multiple platforms for different use cases which ultimately lead to inefficiencies and communication gaps. Spry is administrative task management software built to manage department operations, reduce costs, and increase collaboration.

A question we love to ask every founder: why New York?
LA: I moved to New York to attend graduate school in 2019, and since New York City is the center of the sports world, all the major leagues, agencies, and brands are based in NYC. I felt it was the perfect place to blend my passion for sports and technology.

You were an early employee at startups like LivingSocial and Uber. What made you want to make the jump into a founder role? What most surprised you about getting your own company off the ground?
LA: My background as an athlete fueled my desire to merge my passion for software and my love for sports. I was extremely fortunate that my first two tech jobs were at two unicorns. However, breaking into this "sports tech" industry was challenging despite my best efforts.

My ‘aha moment’ came in the fall of 2019. The new legislation impacting college athletes inspired me to design a prototype and seek feedback from industry professionals – coaches, administrators, and student-athletes. After more than 50 conversations, it became clear that my concept had potential: these conversations were the catalyst for launching Spry.

Reflecting on my journey (so far), the most significant lesson has been the importance of remaining positive. Celebrating small wins is crucial, but not getting bogged down by setbacks is equally important. Starting a company is fraught with challenges, but overcoming these setbacks is essential for success.

Athletic departments are having to monitor a lot — their own training schedules, student academic performance, financial performance. Where are you seeing Spry being used the most by customers? What’s getting automated?
LA: COVID was challenging for athletic organizations since many of their processes were always in-person or top-down processes. COVID forced athletic organizations to adopt various horizontal solutions that provided short-term benefits. However, these solutions led to long-term inefficiencies as data and information were scattered across multiple platforms.

In the last 12 months, Spry has experienced exponential growth within the collegiate athletics sector, especially among schools that don’t receive large annual TV contract payments. Unfortunately, many of these institutions cannot afford to hire additional staff. This is where Spry's product comes in handy. With Spry, administrators and coaches can manage multiple athletes, coaches can communicate with prospective students, and athletes can focus on their performance without any distractions.

What area of sports and athletics is still ripe for disruption?
LA: Outside of software innovation, I think there are great opportunities to improve the fan experience (in-venue and at home), fan engagement, and data usage/consumption within sports and athletics. I’m excited to track the growth in VR/AR products and experiences, especially as the cost of virtual reality headsets and devices becomes increasingly accessible to a wider population. The democratization of AR/VR products promises to revolutionize how fans interact with and enjoy sports, offering new ways for fans and teams to connect locally and globally.

Okay, some rapid-fire questions. First: where do you get your favorite pizza slice?
LA: L'industrie in Williamsburg. If I’m in SF, I go to Golden Boy Pizza in North Beach.

What’s the best place in New York for a coffee or lunch meeting?
LA: My preferred spot varies depending on my location in Manhattan. In Midtown, URBANSPACE on W. 52nd Street is my top choice, particularly Pita Yerro. If I find myself near Spry's office in SoHo, I tend to go for either Jack's Wife Freda or Brewlita.

What’s one piece of advice you can share on building a startup from the ground up in NYC?
LA: View rejections and ‘nos’ as valuable educational experiences. As an entrepreneur, encountering challenges and obstacles is an inevitable part of your journey. However, if you can conclude each week in an advanced position (one step forward) from where you began – be it through gaining new insights, securing a new customer or advocate, or forging fresh connections – then it was a positive week. The more positive weeks you can stack together, the more success you will find. Embrace a continuous learning mindset!

Besides your own, what’s another early-stage startup in New York you think more people should know about?
LA: It's hard to name just one; I'm particularly interested in seeing what new software companies emerge over the next 18 months.