How 2 high school teens raised a $500K seed round for their API startup (yes, it’s AI)

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Nicholas-Van-Landschoo (left) Christopher Fitzgerald (right), cofounders of APIGen

Image Credits: APIGen

Just a few weeks ago, 18-year-old best friends Christopher Fitzgerald and Nicholas Van Landschoot graduated from high school. 

While most teens their age would be living it up in their last summer before college or the adult jobs that await them, Fitzgerald and Van Landschoot are hunkered down in a VC office in Denver, Colorado.

They’re spending the summer working on their startup APIGen after they raised a $500,000 pre-seed investment from Varana Capital. Fitzgerald will head off to Duke in the fall and Van Landschoot will move near the university but is putting his college plans on hold to be a full-time startup founder.

The money was raised while they were still in high school after a prototype for their idea garnered a lot of interest among the large Boulder community of AI enthusiasts. 

APIGen is working on a platform that will build custom APIs from natural language prompts. It will be able to, for instance, allow an e-commerce business to simply ask for an API that connects its web front end to its database, and the platform will deliver it. 

By API, the founders don’t just mean a standard “application programming interface” that allows applications to exchange data or perform some other simple workflow function. They want APIGen to create complex custom APIs that can do multiple or serial tasks.

“We’re actually generating the code for the APIs so that you can have business logic, actual custom functionalities within those APIs as well,” Van Landschoot told TechCrunch.

In addition to web apps and databases, Fitzgerald says IoT devices are one of his startup’s target areas. He offers the example of a customer asking for an API that instructs a drone to fly around the perimeter of an area, capture images and allow another application to interface with the result. Another example is an API that uses face recognition for building security. Once a database of photos of verified employee faces is created, the user could ask APIGen for an API that lets a smartlock’s door camera check the face of everyone who arrives against that database before unlocking the door.

“APIs at the end of the day, can be as simple or as complex as you make them to be,” Fitzgerald said. “They can range from just new connectors that take one entry of data, one row of data from a table of a database, to entire back ends. And that’s really what we’re trying to target there, for entire web apps for entire IoT applications.”

The teens met on their school’s debate team and bonded over their love of coding. Their first project together was a chatbot that would allow people to chat with data. They soon realized that it wasn’t an original idea. Still, while building that app, they learned that their tech relied on APIs and that “making APIs was kind of a pain,” Fitzgerald said. “They were hard to design.” 

So they focused on that. Once they crafted an alpha version of their idea, a demo-level tool, they began to show it around to the programmers in their circle to get feedback. They knew people in their local tech industry. Van Landschoot’s dad works in cybersecurity IT, and Fitzgerald landed a summer internship at SoftBank through a connection with a friend’s dad.

And then they started sending cold messages to VCs on LinkedIn and to anyone else they thought might respond.

“We asked people to destroy this pitch deck,” Fitzgerald said.

Phil Broenniman, Ankur Ahuja, Varana Capital
Phil Broenniman (left), Ankur Ahuja (right), Varana Capital
Image Credits: Varana Capital

A VC is so impressed, he offers to invest

One of the people who got the message — and had heard about the founders through other connections in Denver/Boulder’s tight-knit startup community — was Philip Broenniman, founder of Denver’s Varana Capital. Varana began as a family office for Broenniman and a partner 13 years ago, and has since expanded into a firm with institutional LP money and $400 million in AUM, he told TechCrunch

Broenniman and Varana COO Ankur Ahuja agreed to meet with the teens. “We went into the meeting thinking we were going to provide some fatherly, avuncular advice; provide some words of wisdom,” Broenniman told TechCrunch. “We walked out after two hours of their presentation thinking that this was the best presentation we had heard in the last five years. We were blown away by the cogent insights these two 18-year-olds gave.”

With Fitzgerald dressed in his best sweater and Van Landschoot in a debate-team-style collared shirt, they leaned into their debate training and pitched their company, their vision, the potential market and themselves. 

Rather than feedback on the pitch, “At the end of the meeting, they mentioned that they were actually interested,” Fitzgerald said of the Varana partners. Broenniman asked the teens how much money they were looking for.

Varana did its diligence looking into the potential of the API market, which has created multibillion dollars’ worth of successes (MuleSoft bought by Salesforce, Apigee bought by Google, to name just two). And it looked at the founders’ backgrounds: Fitzgerald graduated as valedictorian of a top-ranked high school in Boulder, which has a highly ranked public education system; Van Landschoot was such a gifted programmer that he had been tutoring college computer science students since he was 14.

The Varana partners scheduled a second meeting for the founders to demo their tech to make sure the teens weren’t just “good at talking but not delivering and doing stuff,” as Van Landschoot described.

The teens were nervous, they confessed, but the demo went well and the VC offered a term sheet: $250,000 of pre-seed money with another $250,000 in a SAFE, which is a note that converts to equity if the startup raises later. The VC also provided office space.

While they were pitching to the VCs, Fitzgerald learned about Boulder’s active AI Meetup that has 1,400 members, organized by a dad of one of Fitzgerald’s tennis team teammates. Boulder has a famously close and cozy startup community and, along with nearby Denver, hosts office outposts for Amazon, IBM, Google, Microsoft and many others.

The teens joined the group and demoed their product, and the local AI enthusiasts rallied behind them and their idea.

APIGen is obviously very early. And it isn’t the only one working on automating APIs. Giant tech companies like Salesforce’s MuleSoft and established startups like RapidAPI are already working on this market, as are most of the cloud giants.

APIGen also doesn’t yet have its minimum viable product built, though it’s getting closer with a beta version that will be released this month. “We’ve already had some interest from businesses, but obviously we’re still pre-MVP at this stage, and just cranking, trying to get it out as soon as possible,” Fitzgerald said.

Still, Broenniman, who takes board seats with investments, is in for the ride. He points to how the young founders have already built a community of eager supporters. 

“APIGen may be the vehicle into which we’re making an investment, but we’re creating partnership with Christopher and Nicholas,” he said. “This is a $7 billion-plus market. They are entering with some elements of competition there but are carving out their own space. The opportunity for return from our standpoint is insane.”

Quantum Rise grabs $15M seed for its AI-driven ‘Consulting 2.0’ startup

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Alex Kelleher, Quantum Rise

Image Credits: Alex Kelleher, Quantum Rise

Quantum Rise, a Chicago-based startup that does AI-driven automation for companies like dunnhumby (a retail analytics platform for the grocery industry), has raised a $15 million seed round from Erie Street Growth Partners. Its approach is somewhat akin to UiPath’s, a company famous for bringing robotic process automation to the enterprise, but with a broader lens on the AI hurdles companies face, and a touch more “hand-holding.” 

Quantum Rise deploys AI into companies under a so-called “Consulting 2.0” model to automate workflows, provide roadmaps and tailored AI solutions, and generally accelerate businesses. The startup is the second act from Alex Kelleher, the former founder of adtech platform Cognitive Match, which was acquired by Magnetic back in 2014.

For some context on the potential market opportunity for AI-driven automation, consulting giant BCG expects to generate a fifth of its revenues in 2024 from helping corporations integrate AI, and 40% by 2026. Meanwhile, IBM has secured more than $1 billion in sales commitments related to generative AI. This suggests a space is opening up for swift-moving startups to enter the arena, and that’s what Kelleher is betting on with Quantum Rise. 

He thinks merging human and machine intelligence is where the opportunity is at right now.

“The entire consulting industry is about to come crashing to the ground because it’s built on people’s time and lack of automation,” Kelleher told TechCrunch. “We will bring heavy engineering to the space. The number of CEOs of these $300 million companies who don’t know where to start is enormous. They can’t afford the Deloittes of this world. That’s where we come in. They want somebody to come in and just automate the company and make it happen.”

In a statement, Terry Graunke, chairman and CEO of Erie Street Growth Partners, added: “The Quantum Rise team uniquely understands how to apply data, automation and AI to augment human intelligence and drive growth.”

India's EtherealX puts $5M seed toward fully reusable launch vehicles

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EtherealX founders

Image Credits: EtherealX

EtherealX, an Indian space startup, has raised $5 million in a seed funding round as it plans to develop fully reusable medium-lift launch vehicles, making satellite launches cost-effective and time-efficient.

Space launches have multiplied in recent years. However, despite the number of players, launches still involve substantial transportation costs and considerable waiting periods. For instance, SpaceX launches are booked until 2026, even while on a ride-sharing model.

EtherealX aims to solve this problem with a new fully reusable medium-lift vehicle, offering absolute reusability to help reduce transportation costs and cut launch timeframes. Unlike SpaceX’s Falcon 9, which provides partial reusability by bringing its booster back to Earth after successful launches, EtherealX is designing its vehicles to get both the upper stage and booster back.

Founded in 2022 by Manu J. Nair (CEO), along with former Indian Space Research Organisation (ISRO) scientist Shubhayu Sardar (COO) and aerospace engineer Prashant Sharma (CTO), the Bengaluru-headquartered startup intends to take on SpaceX with its medium-lift vehicle named Razor Crest Mk-1. In a fully reusable configuration, the design is intended to put 8 tons into the lower Earth orbit. The vehicle could also put over 24.8 tons into the lower Earth orbit in an expendable and 22.8 tons in a partially reusable configuration. They claim it can also deliver payloads in geostationary transfer and trans-lunar injection orbits.

Image Credits: EtherealX

“When bringing back the upper stages, the reentry heat is so much that the refurbishment cost is almost always more than the fresh vehicle itself. So, we built from scratch a completely new rocket engine cycle, which, coupled with the deployment system, allows us to operate our engines efficiently in both vacuum and atmosphere,” said Nair in an interview.

The startup claims that it can operate between $350 and $2,000 per kilogram, a fraction of what launch vehicles, including Falcon 9, currently offer and 1/35th of the global average launch price.

“At the price point at which we will enter the market, we’ll comfortably capture 30-40% of it,” Nair told TechCrunch.

The two-year-old startup has acquired 16 acres of land in Tamil Nadu, where it is developing what it says is India’s largest privately developed rocket engine facility.

What’s the approach for complete reusability?

Unlike conventional methodologies for fending off the reentry heat, such as heat tiles and other thermal protection systems, Nair explained to TechCrunch that EtherealX’s proprietary rocket engine cycle works along with a deployment system to redirect the reentry heat throughout the reentry phase. This helps the system to operate efficiently in both vacuum and atmosphere and allows the startup to achieve pinpoint landing as opposed to the traditional ballistic reentry, which requires a much larger range of target landing zones.

“The closest model to our approach could be SpaceX’s Starship. They’re attempting to bring the upper stage back, but they’re doing it with the usage of heat shields or tiles,” the executive said. “We’re not fighting the reentry heat.”

The startup declined to provide too many details on the record so it can test in secrecy.

Image Credits: EtherealX

Currently, EtherealX does not produce the rocket engine in-house to avoid manufacturing-related capital expenditures and has partnered with a few companies to outsource its production. However, it does have plans to manufacture the rocket over time.

“During the rocket’s development, we need to observe the most effective way of manufacturing these components so that we can establish a proper manufacturing facility, which will be tested in-house,” said Nair.

EtherealX aims to test its development through a technology demonstrator vehicle (TDV), which it plans to launch in 2026. The company told TechCrunch that the startup plans for a full orbital launch to around 400 kilometers with its initial vehicle, using the same engine type as the full-scale vehicle but in a smaller count: four engines on the upper stage and one in the booster stage.

The TDV will be 35 meters tall and 2.5 meters wide with a 1.2-ton capacity.

The co-founder told TechCrunch that it is going with the TDV launch first to verify the telemetry and flight software for its commercial launch later.

Meanwhile, the startup has already identified 35 potential customers for its 2026 launch, though it plans to go ahead with 10–15 customers initially.

India’s space ecosystem has grown significantly. The South Asian nation is home to 229 space tech startups, per the Indian government data, and the ecosystem already has players building small satellite launch vehicles and solutions to offer space situational awareness and hyperspectral imagery.

The Indian government projects that the country will raise its share in the global space ecosystem fourfold by 2030. In the last few months, New Delhi introduced its space policy and updated rules to attract foreign investors and companies. The country also gained global attention for events, including its successful moon landing and partnership with NASA for joining Artemis Accords.

In 2023, space tech investments in India hit $126 million, up 7% from the $118 million raised in 2022 and a 235% increase from the $37.6 million in 2021, per Tracxn. The funding landscape has so far been driven by early-stage investments as the ecosystem is yet to be matured for commercial activities.

EtherealX’s seed funding round, led by Indian deep tech fund YourNest, also included BIG Capital, BlueHill Capital, Campus Fund, SGgrow and Golden Sparrow Ventures.

The startup plans to use its fresh funds to kick off engine test firing in the next six months and set the pitch for its TDV launch in a couple of years. It also aims to finish building its engine test facility and manufacturing the 40-kilonewton and 925-kilonewton engines.

Air Force plane takes off from Larnaca Airport in Cyprus.

Defcon AI closes $44M seed round to solve a problem of 'maximum complexity': Military logistics

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Air Force plane takes off from Larnaca Airport in Cyprus.

Image Credits: Christoph Reichwein/picture alliance / Getty Images

The U.S. Department of Defense is a mammoth organization. It not only employs millions of service members and hundreds of thousands of civilian employees, but also has the world’s largest military budget that’s used to buy and maintain more equipment than can likely fit into a single paragraph. 

It’s a lot to coordinate. Operators within the various agencies of the DOD must make decisions about how to plan their operations, coordinate resources and stay within budget for events that are likely contested — whether that’s from a hurricane or an adversary.

Two years after it was incubated, Virginia-based startup Defcon AI has raised a $44 million seed round led by Bessemer Venture Partners, with participation from Fifth Growth Fund and Red Cell Partners, among others, to solve this seemingly intractable problem.

Consider the Air Mobility Command, a command of the U.S. Air Force. When operators plan airlifts, they have to consider a whole slew of variables: available aircraft, the number of crews required, places for crews to rest, where to refuel, relevant airfields, cargo handling locations. Defcon AI says it has developed a set of software that allows the operator on the front end set these parameters “and then turn the software loose,” Defcon’s co-founder, chief strategy officer and retired U.S. Air Force General Paul Selva told TechCrunch. The software essentially operates against those parameters or inputs to generate the best plan — including the cost tables, resource requirements and schedule. 

This type of planning is difficult enough in the best of circumstances, but during a crisis, defense operators don’t even have the luxury of a day to allocate their resources. That’s where Defcon AI comes in.

“I’ve had all the jobs that we’re actually impacting,” Selva said. During his long military career, Selva held many titles, including the commander of the Air Mobility Command, which oversees nearly all of the Air Force’s fleet of air lift aircraft. He later became the commander of the U.S. Transportation Command, which coordinates transportation missions around the world, including those delivered by ships, trucks, trains and other forms of transportation. Before he retired in 2019, he was nominated by President Barack Obama to be the vice chairman of the Joint Chiefs of Staff. 

He co-founded Defcon in 2022 with Yisroel Brumer and Grant Verstandig, both founding partners of Red Cell Partners (Verstandig is also CEO). Red Cell has an interesting model: The firm makes internal investments but it also incubates companies (including Defcon), often identifying promising entrepreneurs that could lead them. Sometimes, entrepreneurs approach Red Cell before they found a company, and the firm handles things like board building, legal, HR and finance while the company grows. 

In the case of Defcon, Selva says that the company got started “because Air Mobility Command articulated a mission need that wasn’t being filled by industry.” The trio “had a conversation about whether or not we thought this was a tractable problem, and … our intuition was it is a mathematically and software tractable problem, but we have to do it a different way.” 

Brumer and Verstandig have their own impressive pedigrees. Before joining Red Cell, Brumer worked at the Pentagon as acting director of OSD/CAPE (Office of the Secretary of Defense, Cost Assessment and Program Evaluation), an enormous role that essentially functions as the “chief analytics officer” for the DOD, he said, and the overseer for the budget submission process. Verstandig is an entrepreneur who has incubated or grown businesses including Rally Health and defense startup Epirus. 

Defcon AI is targeting a problem of “maximal complexity,” Brumer said. The startup’s system combines different algorithms, including machine learning and mathematical optimization algorithms, to simulate a given scenario and generate the best logistical outcome to meet it. In the initial stages of product development, Defcon used reinforcement learning algorithms that don’t require data, but the company says it is now ingesting more and more data provided by the DOD to power the software. Operators can also choose whether to have the system simulate how an adversary might disrupt the operations, and can tell it to optimize for different variables, like speed versus cost effectiveness.

The company has earned around $15 million in government contracts and delivered a production version that was deployed for a real-world operation with Air Mobility Command less than two years after founding. The company is in the process right now of certifying the software to handle classified, secret information, both to expand its uses in the DOD and to enable it to ingest even more data. It’s also expanding to include trucks, trains and ships to its planning and simulation software.

Defcon is not planning on slowing down. The company sees even more applications across the DOD where its software can make an operational difference, and Brumer said they’re seeing “a very strong demand signal” from the private sector for the product too. Overall, the company says working closely with the end users will result in a better product and a genuine competitive edge in adversarial situations.

“Operational planners are actually trying to assess risk for their commanders,” Selva said. “They’re probably the most skeptical audience for decision support tools, so the extent to which you can partner with them you achieve a better outcome.” 

India's EtherealX puts $5M seed toward fully reusable launch vehicles

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EtherealX founders

Image Credits: EtherealX

EtherealX, an Indian space startup, has raised $5 million in a seed funding round as it plans to develop fully reusable medium-lift launch vehicles, making satellite launches cost-effective and time-efficient.

Space launches have multiplied in recent years. However, despite the number of players, launches still involve substantial transportation costs and considerable waiting periods. For instance, SpaceX launches are booked until 2026, even while on a ride-sharing model.

EtherealX aims to solve this problem with a new fully reusable medium-lift vehicle, offering absolute reusability to help reduce transportation costs and cut launch timeframes. Unlike SpaceX’s Falcon 9, which provides partial reusability by bringing its booster back to Earth after successful launches, EtherealX is designing its vehicles to get both the upper stage and booster back.

Founded in 2022 by Manu J. Nair (CEO) along with former Indian Space Research Organisation (ISRO) scientist Shubhayu Sardar (COO) and aerospace engineer Prashant Sharma (CTO), the Bengaluru-headquartered startup intends to take on SpaceX with its medium-lift vehicle named Razor Crest Mk-1. In a fully reusable configuration, the design is intended to put 8 tons into the lower Earth orbit. The vehicle could also put over 24.8 tons into the lower Earth orbit in an expendable and 22.8 tons in a partially reusable configuration. They claim it can also deliver payloads in geostationary transfer and trans-lunar injection orbits.

Image Credits: EtherealX

“When bringing back the upper stages, the reentry heat is so much that the refurbishment cost is almost always more than the fresh vehicle itself. So, we built from scratch a completely new rocket engine cycle, which, coupled with the deployment system, allows us to operate our engines efficiently in both vacuum and atmosphere,” said Nair in an interview.

The startup claims that it can operate between $350–$2,000 per kilogram, a fraction of what launch vehicles including Falcon 9 currently offer and 1/35th of the global average launch price.

“At the price point at which we will enter the market, we’ll comfortably capture 30-40% of it,” Nair told TechCrunch.

The two-year-old startup has acquired 16 acres of land in Tamil Nadu, where it is developing what it says is India’s largest privately developed rocket engine facility.

What’s the approach for complete reusability?

Unlike conventional methodologies for fending off the reentry heat, such as heat tiles and other thermal protection systems, Nair explained to TechCrunch that EtherealX’s proprietary rocket engine cycle works along with a deployment system to redirect the reentry heat throughout the reentry phase. This helps the system to operate efficiently in both vacuum and atmosphere and allows the startup to achieve pin-point landing as opposed to the traditional ballistic reentry, which requires a much larger range of target landing zones.

“The closest model to our approach could be SpaceX’s Starship. They’re attempting to bring the upper stage back, but they’re doing it with the usage of heat shields or tiles,” the executive said. “We’re not fighting the reentry heat.”

The startup declined to provide too many details on the record so it can test in secrecy.

Image Credits: EtherealX

Currently, EtherealX does not produce the rocket engine in-house to avoid manufacturing-related capital expenditures and has partnered with a few companies to outsource its production. However, it does have plans to manufacture the rocket over time.

“During the rocket’s development, we need to observe the most effective way of manufacturing these components so that we can establish a proper manufacturing facility, which will be tested in-house,” said Nair.

EtherealX aims to test its development through a technology demonstrator vehicle (TDV), which it plans to launch in 2026. The company told TechCrunch that the startup plans for a full orbital launch to around 400 kilometers with its initial vehicle, using the same engine type as the full-scale vehicle but in a smaller count: four engines on the upper stage and one in the booster stage.

The TDV will be 35 meters tall and 2.5 meters wide with a 1.2-ton capacity.

The co-founder told TechCrunch that it is going with the TDV launch first to verify the telemetry and flight software for its commercial launch later.

Meanwhile, the startup has already identified 35 potential customers for its 2026 launch, though it plans to go ahead with 10–15 customers initially.

India’s space ecosystem has grown significantly. The South Asian nation is home to 229 space-tech startups, per the Indian government data, and the ecosystem already has players building small satellite launch vehicles and solutions to offer space situational awareness and hyperspectral imagery.

The Indian government projects that the country will raise its share in the global space ecosystem fourfold by 2030. In the last few months, New Delhi introduced its space policy and updated rules to attract foreign investors and companies. The country also gained global attention for events, including its successful moon landing and partnership with NASA for joining Artemis Accords.

In 2023, space-tech investments in India hit $126 million, up 7% from the $118 million raised in 2022 and a 235% increase from the $37.6 million in 2021, per Tracxn. The funding landscape has so far been driven by early-stage investments as the ecosystem is yet to be matured for commercial activities.

EtherealX’s seed funding round, led by Indian deep tech fund YourNest, also included BIG Capital, BlueHill Capital, Campus Fund, SGgrow and Golden Sparrow Ventures.

The startup plans to use its fresh funds to kick off engine test firing in the next six months and set the pitch for its TDV launch in a couple of years. It also aims to finish building its engine test facility and manufacturing the 40-kilonewton and 925-kilonewton engines.

How 2 high school teens raised a $500K seed round for their API startup (yes, it’s AI)

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Nicholas-Van-Landschoo (left) Christopher Fitzgerald (right), cofounders of APIGen

Image Credits: APIGen

Just a few weeks ago, 18-year-old best friends Christopher Fitzgerald and Nicholas Van Landschoot graduated from high school. 

While most teens their age would be living it up in their last summer before college or the adult jobs that await them, Fitzgerald and Van Landschoot are hunkered down in a VC office in Denver, Colorado.

They’re spending the summer working on their startup APIGen after they raised a $500,000 pre-seed investment from Varana Capital. Fitzgerald will head off to Duke in the fall and Van Landschoot will move near the university but is putting his college plans on hold to be a full-time startup founder.

The money was raised while they were still in high school after a prototype for their idea garnered a lot of interest among the large Boulder community of AI enthusiasts. 

APIGen is working on a platform that will build custom APIs from natural language prompts. It will be able to, for instance, allow an e-commerce business to simply ask for an API that connects its web front end to its database, and the platform will deliver it. 

By API, the founders don’t just mean a standard “application programming interface” that allows applications to exchange data or perform some other simple workflow function. They want APIGen to create complex custom APIs that can do multiple or serial tasks.

“We’re actually generating the code for the APIs so that you can have business logic, actual custom functionalities within those APIs as well,” Van Landschoot told TechCrunch.

In addition to web apps and databases, Fitzgerald says IoT devices are one of his startup’s target areas. He offers the example of a customer asking for an API that instructs a drone to fly around the perimeter of an area, capture images and allow another application to interface with the result. Another example is an API that uses face recognition for building security. Once a database of photos of verified employee faces is created, the user could ask APIGen for an API that lets a smartlock’s door camera check the face of everyone who arrives against that database before unlocking the door.

“APIs at the end of the day, can be as simple or as complex as you make them to be,” Fitzgerald said. “They can range from just new connectors that take one entry of data, one row of data from a table of a database, to entire back ends. And that’s really what we’re trying to target there, for entire web apps for entire IoT applications.”

The teens met on their school’s debate team and bonded over their love of coding. Their first project together was a chatbot that would allow people to chat with data. They soon realized that it wasn’t an original idea. Still, while building that app, they learned that their tech relied on APIs and that “making APIs was kind of a pain,” Fitzgerald said. “They were hard to design.” 

So they focused on that. Once they crafted an alpha version of their idea, a demo-level tool, they began to show it around to the programmers in their circle to get feedback. They knew people in their local tech industry. Van Landschoot’s dad works in cybersecurity IT, and Fitzgerald landed a summer internship at SoftBank through a connection with a friend’s dad.

And then they started sending cold messages to VCs on LinkedIn and to anyone else they thought might respond.

“We asked people to destroy this pitch deck,” Fitzgerald said.

Phil Broenniman, Ankur Ahuja, Varana Capital
Phil Broenniman (left), Ankur Ahuja (right), Varana Capital
Image Credits: Varana Capital

A VC is so impressed, he offers to invest

One of the people who got the message — and had heard about the founders through other connections in Denver/Boulder’s tight-knit startup community — was Philip Broenniman, founder of Denver’s Varana Capital. Varana began as a family office for Broenniman and a partner 13 years ago, and has since expanded into a firm with institutional LP money and $400 million in AUM, he told TechCrunch

Broenniman and Varana COO Ankur Ahuja agreed to meet with the teens. “We went into the meeting thinking we were going to provide some fatherly, avuncular advice; provide some words of wisdom,” Broenniman told TechCrunch. “We walked out after two hours of their presentation thinking that this was the best presentation we had heard in the last five years. We were blown away by the cogent insights these two 18-year-olds gave.”

With Fitzgerald dressed in his best sweater and Van Landschoot in a debate-team-style collared shirt, they leaned into their debate training and pitched their company, their vision, the potential market and themselves. 

Rather than feedback on the pitch, “At the end of the meeting, they mentioned that they were actually interested,” Fitzgerald said of the Varana partners. Broenniman asked the teens how much money they were looking for.

Varana did its diligence looking into the potential of the API market, which has created multibillion dollars’ worth of successes (MuleSoft bought by Salesforce, Apigee bought by Google, to name just two). And it looked at the founders’ backgrounds: Fitzgerald graduated as valedictorian of a top-ranked high school in Boulder, which has a highly ranked public education system; Van Landschoot was such a gifted programmer that he had been tutoring college computer science students since he was 14.

The Varana partners scheduled a second meeting for the founders to demo their tech to make sure the teens weren’t just “good at talking but not delivering and doing stuff,” as Van Landschoot described.

The teens were nervous, they confessed, but the demo went well and the VC offered a term sheet: $250,000 of pre-seed money with another $250,000 in a SAFE, which is a note that converts to equity if the startup raises later. The VC also provided office space.

While they were pitching to the VCs, Fitzgerald learned about Boulder’s active AI Meetup that has 1,400 members, organized by a dad of one of Fitzgerald’s tennis team teammates. Boulder has a famously close and cozy startup community and, along with nearby Denver, hosts office outposts for Amazon, IBM, Google, Microsoft and many others.

The teens joined the group and demoed their product, and the local AI enthusiasts rallied behind them and their idea.

APIGen is obviously very early. And it isn’t the only one working on automating APIs. Giant tech companies like Salesforce’s MuleSoft and established startups like RapidAPI are already working on this market, as are most of the cloud giants.

APIGen also doesn’t yet have its minimum viable product built, though it’s getting closer with a beta version that will be released this month. “We’ve already had some interest from businesses, but obviously we’re still pre-MVP at this stage, and just cranking, trying to get it out as soon as possible,” Fitzgerald said.

Still, Broenniman, who takes board seats with investments, is in for the ride. He points to how the young founders have already built a community of eager supporters. 

“APIGen may be the vehicle into which we’re making an investment, but we’re creating partnership with Christopher and Nicholas,” he said. “This is a $7 billion-plus market. They are entering with some elements of competition there but are carving out their own space. The opportunity for return from our standpoint is insane.”

Quantum Rise grabs $15M seed for its AI-driven ‘Consulting 2.0’ startup

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Alex Kelleher, Quantum Rise

Image Credits: Alex Kelleher, Quantum Rise

Quantum Rise, a Chicago-based startup that does AI-driven automation for companies like dunnhumby (a retail analytics platform for the grocery industry), has raised a $15 million seed round from Erie Street Growth Partners. Its approach is somewhat akin to UiPath’s, a company famous for bringing robotic process automation to the enterprise, but with a broader lens on the AI hurdles companies face, and a touch more “hand-holding.” 

Quantum Rise deploys AI into companies under a so-called “Consulting 2.0” model to automate workflows, provide roadmaps and tailored AI solutions, and generally accelerate businesses. The startup is the second act from Alex Kelleher, the former founder of adtech platform Cognitive Match, which was acquired by Magnetic back in 2014.

For some context on the potential market opportunity for AI-driven automation, consulting giant BCG expects to generate a fifth of its revenues in 2024 from helping corporations integrate AI, and 40% by 2026. Meanwhile, IBM has secured more than $1 billion in sales commitments related to generative AI. This suggests a space is opening up for swift-moving startups to enter the arena, and that’s what Kelleher is betting on with Quantum Rise. 

He thinks merging human and machine intelligence is where the opportunity is at right now.

“The entire consulting industry is about to come crashing to the ground because it’s built on people’s time and lack of automation,” Kelleher told TechCrunch. “We will bring heavy engineering to the space. The number of CEOs of these $300 million companies who don’t know where to start is enormous. They can’t afford the Deloittes of this world. That’s where we come in. They want somebody to come in and just automate the company and make it happen.”

In a statement, Terry Graunke, chairman and CEO of Erie Street Growth Partners, added: “The Quantum Rise team uniquely understands how to apply data, automation and AI to augment human intelligence and drive growth.”

Quantum Rise grabs $15M seed for its AI-driven ‘Consulting 2.0’ startup

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Alex Kelleher, Quantum Rise

Image Credits: Alex Kelleher, Quantum Rise

Quantum Rise, a Chicago-based startup which does AI-driven automation for companies like dunnhumby (a retail analytics platform for the grocery industry), has raised a $15 million seed round from Erie Street Growth Partners. Its approach is somewhat akin to UIPath’s, a company famous for bringing robotic process automation to the enterprise, but with a broader lens on the AI hurdles companies face, and touch more ‘hand-holding’. 

Quantum Rise deploys AI into companies under a so-called “Consulting 2.0” model to automate workflows, roadmaps, tailored AI solutions, and generally accelerate businesses. The startup is the second act from Alex Kelleher, the former founder of adtech platform Cognitive Match which was acquired by Magnetic back in 2014.

For some context on the potential market opportunity for AI-driven automation, consulting giant BCG expects to generate a fifth of its revenues in 2024 from helping corporations integrate AI, and 40% by 2026. Meanwhile, IBM has secured more than $1 billion in sales commitments related to generative AI. This suggests a space is opening up for swift-moving startups to enter the arena, and that’s what Kelleher is betting on with Quantum Rise. 

He thinks merging human and machine intelligence is where the opportunity is at right now.

“The entire consulting industry is about to come crashing to the ground because it’s built on people’s time and lack of automation,” Kelleher told TechCrunch. “We will bring heavy engineering to the space. The number of CEOs of these $300M companies who don’t know where to start is enormous. They can’t afford the Deloittes of this world. That’s where we come in. They want somebody to come in and just automate the company and make it happen.”

In a statement, Terry Graunke, chairman and CEO of Erie Street Growth Partners, added: “The Quantum Rise team uniquely understands how to apply data, automation and AI to augment human intelligence and drive growth.”

How 2 high school teens raised a $500K seed round for their API startup (yes, it’s AI)

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Nicholas-Van-Landschoo (left) Christopher Fitzgerald (right), cofounders of APIGen

Image Credits: APIGen

Just a few weeks ago, 18-year-old best friends Christopher Fitzgerald and Nicholas Van Landschoot graduated from high school. 

While most teens their age would be living it up in their last summer before college or the adult jobs that await them, Fitzgerald and Van Landschoot are hunkered down in a VC office in Boulder, Colorado.

They’re spending the summer working on their startup APIGen after they raised a $500,000 pre-seed investment from Varana Capital. Fitzgerald will head off to Penn State in the fall and Van Landschoot will move near the university but is putting his college plans on hold to be a full-time startup founder.

The money was raised while they were still in high school after a prototype for their idea garnered a lot of interest among the large Boulder community of AI enthusiasts. 

APIGen is working on a platform that will build custom APIs from natural language prompts. It will be able to, for instance, allow an e-commerce business to simply ask for an API that connects its web front end to its database, and the platform will deliver it. 

By API, the founders don’t just mean a standard “application programming interface” that allows applications to exchange data or perform some other simple workflow function. They want APIGen to create complex custom APIs that can do multiple or serial tasks.

“We’re actually generating the code for the APIs so that you can have business logic, actual custom functionalities within those APIs as well,” Van Landschoot told TechCrunch.

In addition to web apps and databases, Fitzgerald says IoT devices are one of his startup’s target areas. He offers the example of a customer asking for an API that instructs a drone to fly around the perimeter of an area, capture images and allow another application to interface with the result. Another example is an API that uses face recognition for building security. Once a database of photos of verified employee faces is created, the user could ask APIGen for an API that lets a smartlock’s door camera check the face of everyone who arrives against that database before unlocking the door.

“APIs at the end of the day, can be as simple or as complex as you make them to be,” Fitzgerald said. “They can range from just new connectors that take one entry of data, one row of data from a table of a database, to entire back ends. And that’s really what we’re trying to target there, for entire web apps for entire IoT applications.”

The teens met on their school’s debate team and bonded over their love of coding. Their first project together was a chatbot that would allow people to chat with data. They soon realized that it wasn’t an original idea. Still, while building that app, they learned that their tech relied on APIs and that “making APIs was kind of a pain,” Fitzgerald said. “They were hard to design.” 

So they focused on that. Once they crafted an alpha version of their idea, a demo-level tool, they began to show it around to the programmers in their circle to get feedback. They knew people in their local tech industry. Van Landschoot’s dad works in cybersecurity IT, and Fitzgerald landed a summer internship as a programmer at SoftBank through a connection with a friend’s dad.

And then they started sending cold messages to VCs on LinkedIn and to anyone else they thought might respond.

“We asked people to destroy this pitch deck,” Fitzgerald said.

Phil Broenniman, Ankur Ahuja, Varana Capital
Phil Broenniman (left), Ankur Ahuja (right), Varana Capital
Image Credits: Varana Capital

A VC is so impressed, he offers to invest

One of the people who got the message — and had heard about the founders through other connections in Denver/Boulder’s tight-knit startup community — was Philip Broenniman, founder of Denver’s Varana Capital. Varana began as a family office for Broenniman and an “ultra wealthy” friend, and in its 13 years since, it has expanded into a firm with institutional LP money and $400 million in AUM, he told TechCrunch

Broenniman and Varana COO Ankur Ahuja agreed to meet with the teens. “We went into the meeting thinking we were going to provide some fatherly, avuncular advice; provide some words of wisdom,” Broenniman told TechCrunch. “We walked out after two hours of their presentation thinking that this was the best presentation we had heard in the last five years. We were blown away by the cogent insights these two 18-year-olds gave.”

With Fitzgerald dressed in his best sweater and Van Landschoot in a debate-team-style collared shirt, they leaned into their debate training and pitched their company, their vision, the potential market and themselves. 

Rather than feedback on the pitch, “At the end of the meeting, they mentioned that they were actually interested,” Fitzgerald said of the Varana partners. Broenniman asked the teens how much money they were looking for.

Varana did its diligence looking into the potential of the API market, which has created multibillion dollars’ worth of successes (MuleSoft bought by Salesforce, Apigee bought by Google, to name just two). And it looked at the founders’ backgrounds: Fitzgerald graduated as valedictorian of a top-ranked high school in Boulder, which has a highly ranked public education system; Van Landschoot was such a gifted programmer that he had been tutoring college computer science students since he was 14.

The Varana partners scheduled a second meeting for the founders to demo their tech to make sure the teens weren’t just “good at talking but not delivering and doing stuff,” as Van Landschoot described.

The teens were nervous, they confessed, but the demo went well and the VC offered a term sheet: $250,000 of pre-seed money with another $250,000 in a SAFE, which is a note that converts to equity if the startup raises later. The VC also provided office space.

While they were pitching to the VCs, Fitzgerald learned about Boulder’s active AI Meetup that has 1,400 members, organized by a dad of one of Fitzgerald’s tennis team teammates. Boulder has a famously close and cozy startup community and, along with nearby Denver, hosts office outposts for Amazon, IBM, Google, Microsoft and many others.

The teens joined the group and demoed their product, and the local AI enthusiasts rallied behind them and their idea.

APIGen is obviously very early. And it isn’t the only one working on automating APIs. Giant tech companies like Salesforce’s MuleSoft and established startups like RapidAPI are already working on this market, as are most of the cloud giants.

APIGen also doesn’t yet have its minimum viable product built, though it’s getting closer with a beta version that will be released this month. “We’ve already had some interest from businesses, but obviously we’re still pre-MVP at this stage, and just cranking, trying to get it out as soon as possible,” Fitzgerald said.

Still, Broenniman, who takes board seats with investments, is in for the ride. He points to how the young founders have already built a community of eager supporters. 

“APIGen may be the vehicle into which we’re making an investment, but we’re creating partnership with Christopher and Nicholas,” he said. “This is a $7 billion-plus market. They are entering with some elements of competition there but are carving out their own space. The opportunity for return from our standpoint is insane.”

Nile raises $11.6M in seed funding to build a Postgres-powered data layer for SaaS applications

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Image Credits: Nile

SaaS needs a new data system. That’s the driving idea behind Nile, a startup that aims to create this data system with serverless Postgres at its core. Co-founded by Sriram Subramanian, the former head of cloud engineering at Confluent, and Gwen Shapira, the former engineering lead for the Kafka team at Confluent, Nile is building this new data solution with built-in support for multi-tenancy as its core primitives.

The company today announced that it has raised an $11.6 million seed funding round led by Benchmark’s Eric Vishria, who was also the original lead investor of Confluent.

“While my team built the multi-tenant product for Confluent, it didn’t dawn on me that this is something that every SaaS in the world is multi-tenant, everyone needs to handle multi-tenant data — and we have to keep building these things from scratch because there is no existing system that does it,” Shapira told me.

Subramanian noted that virtually every database on the market today was built as a general-purpose tool. “When you do that, you end up having to build something that is the least common denominator across all the different use cases,” he explained. “Based on our experience making Confluent a SaaS company for six years, we found a lot of challenges in actually leveraging the database the way we wanted to — and not just the database itself but also solving all the data problems around it that were all essentially dealing with integrating with the database. This could be authentication, billing, and so on.”

Unsurprisingly, that’s exactly the problem Nile tries to solve. The idea here is that every SaaS company has a data layer at its core and since we are talking about SaaS companies, they all have to solve for multi-tenancy in some form or another, no matter whether they are in the B2B or B2C space.

Typically, that involved either overprovisioning servers to be able to react to spikes — and accepting the additional cost of doing that — or moving specific customers to their own databases and clusters to ensure isolation (for both security and performance reasons).

“We have a lot of stories of incidents from well-known companies that we talked to that had this one tenant impacting another incident, or they upgraded — or didn’t upgrade — and that adversely affected some of the other customers. They needed to roll back, but only for some of the customers, and it ended up being a weeks-long incident as they manually tried to do surgical changes for the right customers. It’s a problem that felt endemic,” Shapira said.

Image Credits: Nile

Traditionally, the team argued, solving problems around data and database management was always an application problem rather than a database problem. Nile is turning this on its head by making multi-tenancy a core feature of its Postgres solution and by separating the data layer from the compute layer. That means users can connect a virtual tenant database either to a shared compute service or attach a dedicated compute node to it, for example. Developers just need to define which database the application needs to speak to and Nile then provides the isolation at the session and — coming soon — the connection level.

Why Postgres? According to Subramanian, that’s where the market is going. Virtually every company the team talked to was betting on Postgres. “It’s pretty obvious that it’s going to become the Linux of databases,” he said. The fact that it’s open source and easily extensible also enables Nile to do what it does.

“We talked to hundreds of SaaS companies and when you ask them, How do you do queues? How do you manage jobs? How do you do analytics? How do you do unstructured data? How do you do big data? How do you do this? How do you do that? And every time it’s, Oh, we do it in Postgres. Can Postgres do that? Oh, yeah, absolutely,”  Shapira explained. “Does that do it as well as alternatives? Sometimes yes. Sometimes no. But for SaaS companies, 90% of the time, they seem to be extremely happy doing absolutely everything with Postgres.”

On top of speeding up development, since the developers won’t have to build their own systems for managing multiple tenants and the authentication layer needed for that, the Nile team also argues that its service can reduce cost by centralizing databases in a single location (even as tenants may be in different places) and by making it easier to scale through horizontal sharding.

On top of all this, Nile also offers features for user management, customer dashboards, vector embeddings for AI use cases (based on pgvector) and more. The company offers a limited free plan (currently behind a waitlist), with paid plans still in the works.