White Star Continuing to Back Drop and our First EIR Derrick Fung
I was first introduced to Derrick Fung by my colleague Eric in November 2014 at the Web Summit in Dublin. Derrick was a Forbes 30-under-30 entrepreneur who was approaching the end of his earn out period of the startup he had sold, and he was deciding what to do next.
We continued getting to know each other over the coming months. Impressed by Derrick’s strategic approach to analyzing startup opportunities, White Star invited Derrick in April 2015 to join us as our first — and only so-far — Entrepreneur-In-Residence (EIR). As EIR, Derrick helped us source investment opportunities in Toronto — because White Star ❤ Canada — while exploring his startup ideas and bouncing them off of us. In June 2015, Derrick approached us with the concept of Drop.
While White Star normally invests in startups that have some early traction, we proactively knew we would make an exception for our EIR: this was precisely the goal of our EIR program! The Drop concept fit nicely into our theses of the Age of Context, the Digitalization of Finance, and the Disruption of Commerce, and so we invested in Drop back when it was just an idea, a deck and a small team passionate about conquering the world of loyalty.
Drop helps consumers easily receive and cash in on loyalty points for doing what they do every day: subscribing to Netflix, picking up a latte at Starbucks, ordering an Uber or enjoying their favorite sushi from Seamless. All that consumers have to do is enter their debit and credit cards and Drop seamlessly takes care of the rest, partnering with leading brands and building loyal connections with over a million millennials through their beautiful app.
An interesting aspect of Drop is that it is a company of “boomerangs” moving back to their home regions. Derrick moved from New York back to his home country of Canada. Similarly, Drop’s co-founder Darren Fung and new VP of Engineering Ian Logan are among the Canadians at Drop who moved from Silicon Valley back to Toronto. We see this trend a lot at White Star: 37.5% of Silicon Valley’s talent is foreign born and there are many reasons why techies are leaving Silicon Valley. Many of these techies are now seeing that their home regions, be it New York, Canada, Europe, or Asia, now have all the ingredients for a great startup career.
With this international team — as well as their loyal office dog Jamie who coincidentally was born the same day that Drop was incorporated — Drop first launched in Canada, iterated on the product, and reached #2 in the Canadian app store (behind only Tinder!). Equipped with product-market fit and a product that was delighting millenials and its brand partners, Drop then launched in the US, raised a round of $5.5m, and quickly moved up to #3 in the US app store.
With this new $21m round, White Star has backed Drop in all three of its rounds of financing. We are proud to partner with NEA, Sierra Ventures, ff Venture Capital, Portag3 Ventures and Silicon Valley Bank in supporting Derrick and the impressive team at Drop for the next step of the journey!