Deal Spotlight: Venture Capital and Startup Investing — Aperio Systems

In this Deal Spotlight series, Propel(x) had the pleasure of speaking with Jonas Hellgren, the CEO of Aperio. Jonas spoke about Aperio’s mission to reinvent data integrity and quality for the manufacturing industry, his experience raising capital with Propel(x), and what that meant for Aperio’s investors.

Who is Aperio?

Founded in 2017 and headquartered in Boston MA, Aperio is a software company which makes software for the industrial world and works with industrial companies to ensure reliability of data.

The Problem: Growth in data collection and usage is exponential, which brings challenges in the management and application of that data. Reliable real-time operational data can drive profitability and sustainability, which in turn can increase competitive advantage and mitigate operational risk.

Solution: Aperio addresses data integrity issues and aims to address big data industry challenges by implementing solutions across a range of sectors including Oil & Gas, Chemicals, Power, Renewables, Food & Beverage, Mining, Infrastructure, Water, and more.

Data quality, validation, integrity, security, and accessibility are specialties of Aperio, whose systems can handle data from more than 2m sensors simultaneously.

In Aperio’s own words, they have created the market for sensor data quality, artificial intelligence, and analytics, and have a customer database across the world. Their vision is to help industrial customers get access to clean, reliable data to optimize their operations. This can have a positive impact on the environment by helping industrial companies monitor, manage, and report on their greenhouse gas emissions thus playing a role in decarbonization.

You can find out more about the company on Aperio’s website.

Startup funding

Aperio raised capital through Propel(x) in a Seed Round in 2019 and then again with a Series A round in 2020 (learn more about Seed Rounds and Series A funding).

In the video interview, Aperio shared that it is leading a new category and thus this innovative, deep tech startup was an ideal fit for the Propel(x) platform. Since Aperio was breaking new ground, investors had to not only put their money but also their faith into Aperio in what was a high-risk undertaking.

During the Seed Round, Aperio was seeking to raise $2m. They had around $1.5m committed from large investors including major industrial partners and venture firms, so were looking to fill a funding gap of around $500k. Jonas shares that Propel(x) was a perfect partner* to close the funding gap and even though they were not leading the round, they did make a big contribution by plugging the remaining 25% gap. The Seed Round was a convertible note, which worked well for the company.

In the Series A round, Aperio raised $8.4m and Propel(x) participated again. For this round, Jonas shared that Aperio did not really need Propel(x) to close a funding gap, but he had committed to Propel(x) being involved in the Series A round, so offered the follow-on opportunity to investors on the Propel(x) platform.

Funding Structure

In Jonas’s words, the Seed Round was managed very professionally by Propel(x)* and that our due diligence was the deepest and most thorough of any of their investors. There was minimal management overhead, and there was flexibility on terms and adaptability in the offering. All the investors were organized inside a single Limited Partnership via a Special Purpose Vehicle. This way, Aperio only saw the syndicate as a single investor, so did not have multiple small investors showing up on the cap table, which is not always desirable for a startup seeking funding in later rounds. Jonas says this made it a very clean, low maintenance exercise that now only requires two updates per year for the investors.

How the startup investment was used

Like many Seed Rounds, Aperio used their initial capital to build their product and go to market. The early funds were used to pay engineers for software development and hire a team of eight people.

Jonas shared that Propel(x)* was instrumental in helping carry the company to the Series A round, and by the time of that investment, the company was in good shape, and Aperio returned the favor by allowing Propel(x) investors to participate in their Series A round even though the company was not required to.

After the capital raise

Since raising the Series A round, Aperio has been focused on its growth and continues to expand their customer base, sign new deals and book more revenue. They recognize that a company’s success is a partnership between the company, the investors, and the board, so good communication is important to keep all the stakeholders updated.

Words of wisdom from a serial entrepreneur

From someone involved in startups for many years, Jonas shared these words of wisdom:

• Do not run out of money.
• Do not run out of time, which is basically the same thing as do not run out of money.
• Things feel easier after you raise funds and all of a sudden you have money in the bank. But before you know it, you will be running out of time and money again, so do not move too slow, because the clock is always ticking, and time is always running out.
• Respect money: do not waste it, have a sense of urgency from day one because it is always running out.
• The day after the Series A round, you have to wake up thinking you are running out of money, so always keep your pedal to the metal.
• Building startups means a life of uncertainty. Get used to it.

Summary

As a potential high growth startup, Aperio is one example of an innovative, deep-tech company previously listed for fundraising on the Propel(x) platform.

If you are interested in diversifying your portfolio with startup investments, you can find more information on how to get started in venture capital and start investing on the Propel(x) platform.

*This testimonial may not be representative of other customers and is no guarantee of future performance or success.

Private placements are a high-risk investment. An investment in such an offering is speculative and an investor could experience an entire loss of principal. Private investments are highly illiquid and risky and are not suitable for all investors. Investments in early-stage private companies should only be a part of your overall investment portfolio.

Originally published at https://www.propelx.com on June 8, 2022.