Andy Nurumov

Author: Andy Nurumov

In the first quarter of 2024, Y Combinator invested in around 50 businesses outside their traditional Incubator/Accelerator program. Almost 50% were in the B2B space. Let’s dive into the top 5 of these investments that could have the potential to become something significant.

There are 2 solutions for Sales departments: Artisan AI (Seed round) and Tennr (Series A), one for Legal – DraftWise (Series A), one for Finance – Campfire (Seed round), and one for the Construction industry – PermitFlow (Series A).

Replace the CEO. Focus on bootstrapping. And do it for Canada. In this article, we will talk about these ones and other ideas. 1 idea and 1 open question for each of the 5 businesses. 

Each of them solves a concrete business problem, and if companies can demonstrate a business case for clients, it’s amazing, as the TAM for each opportunity allows to generate billions of dollars in revenue. Based on public information, investors can go deeper to make due diligence in the next round. Series A and Series B are usually the latest rounds when it is possible to outperform classical PE or Public Tech returns.

Below are these top 5 opportunities:

1. Campfire (Seed round) – https://meetcampfire.com/

The company tries to automate cash collection from clients in the payment workflow from an initial contract till a customer invoice and reconciliation. Foundation Capital is also among investors.

Open Question 1: Defects are not good in this field, therefore questions arise: (a) how to eliminate these mistakes and (b) how the company can minimize manual work for checking?

IDEA 1: AI with outsourcing Revenue management firm. Campfire could provide classical outsourcing services in the field to generate cash and focus more on bootstrapping growth.

2. Artisan AI (Seed round) – https://artisan.co

The startup provides a platform to automate outbound sales process. Too broad, but it’s OK for the Seed round to test different business hypotheses at this round.

Open Question 2: With the current solution, it would be hard to demonstrate a business case for clients, and as a result, to sell the solution.

IDEA 2: Fortune 500 outbound SaaS sales. The company could go deeper into the outbound process for some niche to provide a real outcome for their clients. An example can be standardization to work with Fortune 500 companies to sell scalable and secure SaaS solutions. At the same time, the company should have rigorous due diligence of potential companies with whom it works.

3. Tennr (Series A) – https://www.tennr.com

The New York-based company uses client data to improve engagement and retention in healthcare sector. Focus on different types of Healthcare clients: Practices, Facilities, Home Care, HMEs, Infusion centres, and ASCs. Andreessen Horowitz and Foundation Capital are among investors.

Open Question 3: There is only one user case on the website. Ideally, if the company would spend part of its Series A round on getting user cases in other types of their clients, that they target.

IDEA 3: Tennr for service-based companies. I like the idea that the company starts with the concrete sector. However, it is likely that their solution will have applicability outside of Healthcare as well, and the company could scale to other client segments later on.

4. DraftWise (Series A) – https://www.draftwise.com

The startup focuses on draft contracts for transactional lawyers. The product uses specific databases and firm-wide data to generate relevant legal deliverables. Index Ventures is among investors.

Open Question 4: It is great that there is a lawyer among founders. When I read about the company’s target audience, I think that if the CEO is a lawyer it will be much better for sales and for PR. Personal brand matters. An example of good positioning is an ex-pilot CEO, Brandon Robinson, for a Canadian airplane construction company, Horizon Aircraft, a venture which is already on NASDAQ.

IDEA 4: DraftWise for non-lawyers. There is a large potential customer base outside of lawyers and legal departments for whom the service could be even more relevant.

5. PermitFlow (Series A) – https://www.permitflow.com

The company simplifies and accelerates the approving process of permits in the construction industry. The product includes Permit research, Permit preparation & submittals, and Permit management and monitoring. Kleiner Perkins is among investors.

Open Question 5: There is no open question for PermitFlow. I sourced Construction Tech startups and could say that the company solves concrete pain points, addresses them in the right way for clients, and has a large TAM to grow. The questions could be started after looking at the company’s finances and its performance traction.

IDEA 5: PermitFlow for country X. PermitFlow is focusing now “nationally” with the US, but the issues are relevant for many countries. You could start, for example, with Canada.

Remark: there were also 4 specialization startups from Y Combinator investments in Q1 2024 that can be interested by investors in B2B. I did not mention them, as for investments in these businesses, the need for specific knowledge about technology or potential exits via M&A is required. I stick to the idea do not invest in businesses, unless (I) business model, (II) size of TAM, and (III) technology of which are understandable by an investor. Could go deeper with them if you have this expertise within your organization or can “hire” it. Businesses are Nanonets, Easol, Armilla AI, and Infield.

Thank you for reading! Hope you enjoyed. Stay tuned to read the following articles later on.

Copyright: Citation and paraphrasing usage are welcome with a hyperlink to the original article.

About the author: Andy Nurumov specializes in Enterprise Tech, AI, and Marketplaces. He is a Founder and ex-CEO of an 8-figure B2B E-Commerce marketplace for Enterprise clients, which he scaled to a team of 20+ people and positive cash flow.