TampaBay.Ventures Makes First Investment in St. Pete Tech Startup • St Pete Catalyst

Venture capital firm TampaBay.Ventures made their first investment and it’s with a new startup in St. Pete.

TampaBay.Ventures, founded this year with a first $ 20 million seed fund committed to investing in Tampa Bay-tech companies, announced this week that it is leading a funding round for Procoto.

Procoto is a startup that focuses on purchasing automation processes that can be easily accessible for small businesses.

“The product itself is very compelling, but to be honest, when you invest in this step, the team matters more than the idea. The founding team is the focal point that collects the data, analyzes it, and then turns it into a product, ”said Andreas Calabrese, general partner of TampaBay.Ventures. St. Pete Catalyst. “This is the team you really bet on as an early stage investor. ”

The amount of the round table was not disclosed; however, this is a six-figure chord.

TampaBay.Ventures plans to lead investments for 15-20 companies over the next five years with companies similar to Procoto.

“Tech companies are the best vehicle for us. Tech companies can grow and become IPO candidates [Initial Public Offerings] in eight or nine years. What works for us are companies that have a digital component, or that are in advanced materials or research spin-off companies, ”Calabrese said.

The venture capital group typically searches for startups through word of mouth from its founders, research, and attending events.

The investment follows Procoto’s graduation from Silicon Valley’s Y Combinator Program, a leading seed money startup accelerator launched in 2005. It has been used to help launch more than 2,000 companies, including Airbnb, DoorDash, Instacart, Dropbox, Twitch, and Reddit.

Procoto is the first Y Combinator graduate located in the Tampa Bay area.

“Andreas was watching us before the Y Combinator announcement. Rumors tend to circulate that a company is involved in Y Combinator before there is an official publication about it. We were on their radar at the start of the year and the official announcement was the trigger, ”said Procoto co-founder Michael Otis.

Co-founder of Procoto Michael Otis. Photo: Procoto

Calabrese connected with Otis weeks after launching the company in St. Pete.

“We did additional research into the software procurement space, which was fragmented and did not serve small and medium businesses,” Calabrese said, explaining that Procoto provided a solution to a growing need.

The six-figure funding round is expected to end by the end of the month, Otis said.

“He [TampaBay.Ventures] perfectly matched his background, experiences and own successes in the past. We want to be a local business and if we partnered with investor XYZ in San Fransisco it wouldn’t have been the same experience, ”said Otis.

Otis co-founded the startup with Ryan Muckel, a childhood friend he grew up with in Philadelphia. The friends parted ways in different directions as Muckel worked in England and Otis worked in Atlanta.

“I was really frustrated that there were only solutions designed for large companies,” Otis said of working in the space and the motivation to start his own business.

“The original game plan was for Ryan to move to Atlanta, where I started building a community of startups,” Otis said, explaining that the plan had changed.

“We entered the Y Combinator last year and now have connections across the country. At the same time, the Covid-19 pandemic was taking place and we were conducting operations remotely, ”said Otis. “We’re both beach people and we knew we didn’t want to be five hours from the nearest beach, but we didn’t want to move to Miami.”

The duo chose to move to St. Pete last year because of the surrounding beaches, the relaxed city vibe, and the potential there was for more start-up activities.

“We knew there was a growing tech community here and it was invaluable. Tampa Bay is growing like what Atlanta has experienced over the past decade, ”said Otis.

Procoto does not yet have physical office space, but the founders are interested in coworking spaces in St. Pete.

“We see the value of having time in the face, especially since we are a start-up and would like to find the right local talent,” said Otis. “We want to be a St. Pete’s business, not just two guys working in their apartments.”

The company, which is currently run by the two co-founders, is in the process of hiring two senior engineers and plans to hire for several other positions.

One shot in the dark

A major pivot for Procoto was becoming accepted in the Y Combinator.

“It wasn’t even on the radar, it was beyond aspirations,” Otis said, providing an analogy of how it seemed so far out of reach.

“I grew up playing baseball and always dreamed of being a professional baseball player, and by the time I got out of high school I knew I was good but not good enough. My future was not to be paid to play a sport, and that’s how I viewed Y Combinator. It’s that far-reaching thing that only the best of the best can do. It was something else that others were able to experience, ”he said.

As Procoto gained ground, Otis decided to compete for the opportunity and got an interview.

“The reaction was ‘oh we actually have a chance,’ Otis said.

“It was a hit in the dark. Such a small percentage of companies are accepted, ”he said, recalling his disbelief when he received a call about procoto’s acceptance into the program.

“One of the great benefits of being at YC is that you have exposure to a lot of western investors, seed funds, venture capitalists and angel investors. For many investors, it’s a numbers game. A certain percentage of YC companies will someday become unicorns, ”he said.

Now, with the support of TampaBay.Ventures, Procoto is moving cautiously.

“Over the next two years, we will be mindful of our spending. While it’s encouraging to have investor support, it doesn’t make sense to spend the money. We will let our progress dictate how we move forward, ”said Otis.

Procoto and TampaBay.Ventures will be speaking at Embarc Collective today from 4 p.m. to 5 p.m.

Otis said he would like to help others in the local startup community.

“There is a close relationship with the Y and that is incredible value. I would love to be a part of that community here and help other companies apply, ”said Otis. He wants to give tips, advice and carry out interview simulations to better equip local startups.

Those interested in connecting with Otis can reach him by email at [email protected]

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