First City-Sponsored Small Business Incubator to Graduate 22 Companies
By NYC.gov - MAR. 27, 2012
Mayor Bloomberg, New York City Economic Development Corporation President Seth W. Pinsky, and Polytechnic Institute of New York University President Jerry M. Hultin today announced that 22 companies have graduated or will soon graduate from the Varick Street Incubator, the first in the growing network of City-sponsored business incubators.
This diverse roster of innovative companies includes 12 businesses that have already graduated from the Varick Street Incubator in recent months, and 10 more that are set to graduate between April and July. Collectively, these 22 companies have already created more than 300 jobs. Launched in 2009 as a partnership between the New York City Economic Development Corporation, the Polytechnic Institute of New York University and Trinity Real Estate, the Varick Street Incubator provides low-cost office space and valuable training to emerging innovative technology companies. The Mayor was also joined at the announcement at the incubator’s new space at 137 Varick Street by Small Business Services Commissioner Robert W. Walsh, President of Trinity Real Estate Jason D. Pizer, President and CEO of the Hudson Square Connection Ellen Baer, and several representatives from incubator companies.
“Over the past three years, we’ve launched a total of 10 small business incubators, and today we are seeing the fruits of our labor: successful companies and good jobs,” said Mayor Bloomberg. “What started on Varick Street three years ago has now spread throughout the city. At all of our incubators, big ideas are being hatched and innovative companies are being born.”
“New York City is a magnet for the top entrepreneurial talent in the world, and Mayor Bloomberg is committed to accelerating the development of our start-up sector by encouraging promising new companies at the City’s network of incubators,” Deputy Mayor for Economic Development Robert K. Steel said. “We’re not only confident in the future of today’s graduating companies but also in the long-term trajectory of New York City’s innovation-driven economy.”
“NYU-Poly is proud to have blazed the trail for City-sponsored incubators, and we are proud of the entrepreneurs who have built strong companies with us,” said NYU-Poly President Hultin. “Equally important, the NYU-Poly Varick Street Incubator has amplified our school’s culture of invention, innovation and entrepreneurship – what we call i-squared-e. The startup companies have inspired our students to expand their own entrepreneurial ambitions, and they have turned more than a dozen of our students into full-time employees, opening a new path for talented young engineers and technical graduates to remain in the city of their dreams. We commend the City and our business partners for the vision and energy they brought to this initiative.”
“Today’s announcement is evidence that the Varick Street Incubator is helping people realize their entrepreneurial dreams and putting New Yorkers back to work,” said City Council Speaker Christine C. Quinn. “I’m thrilled that our first City-sponsored incubator is yielding such success stories, and I am optimistic our other nine, and all future City-sponsored business incubators, will do the same. I want to thank Mayor Bloomberg, Seth Pinsky, and NYU-Poly for their continued dedication to small business growth and job creation in our City.”
“Three years ago, we made a relatively modest investment in the Varick Street incubator with the goal of fostering entrepreneurship across the five boroughs,” said NYCEDC President Pinsky. “With the first wave of incubator companies now expanding all across the City, today’s announcement is more proof that New York is quickly emerging as one of the most dynamic locations in which to start a new business, and we are well on our way to becoming a global hub for innovation in the 21st century and beyond.”
“The Varick Street incubator helps small businesses start and grow by providing affordable office space in New York City, as well as a place for smart and talented people to come together and work on ideas,” said Rob Walsh, Commissioner of the NYC Department of Small Business Services. “Incubators help create a stronger economy and more jobs for New Yorkers by supporting small businesses, and through our NYC Business Solutions Centers, we are ready to continue supporting these businesses with all their future needs.”
Over the past three years, the Varick Street incubator has demonstrated remarkable success in allowing its companies to thrive. Collectively, they have raised $38 million in investor funding, and created more than 400 jobs. The companies at the incubator have also mentored student interns, providing them with opportunities to explore entrepreneurial career paths. The City’s incubators, which now total 10, are part of suite of initiatives launched by the Bloomberg Administration in order to spur innovation and entrepreneurship across a variety of sectors.
In 2009, as part of the Bloomberg Administration’s efforts to ensure that New York City becomes a global hub for innovation for the 21st century, NYCEDC agreed to provide a $100,000 capital grant to establish the Varick Street Incubator, and helped negotiate a three-year lease between the landlord, Trinity Real Estate, which contributed the space, and NYU-Poly, the facility operator. The incubator was originally located at 160 Varick Street and offered start-ups high-quality, ready-to-use office space equipped with basic business services and administrative support. Over the past three years, NYU-Poly also provided a variety of mentoring services, business seminars and networking opportunities for the entrepreneurs, who could sublease space at below-market rates for six months with an option to renew. In January 2012, the incubator relocated to a new space at 137 Varick Street, which will enable to better support the next generation of innovation-fueled companies. To help meet the growing demand from high-tech startups, the City and NYU-Poly, along with Two Trees Management, opened another incubator in January 2012 in DUMBO.
The City’s network of incubators is part of the Administration’s efforts to encourage entrepreneurship within a variety of economic sectors. Through the incubators, the Administration is providing low-cost office space – more than 120,000 square feet to date - as well as training and networking opportunities to hundreds of start-ups and small businesses. Approximately 550 startup businesses are currently located at City-sponsored incubators, and companies have raised more than $78 million in investor funding. The number of employees currently working at the incubators is more than 900. Some of these tenants have already graduated into market-rate space and continue to expand. The City’s network of incubators include, among others, Hive at 55, a co-working facility for freelancers in Manhattan; and General Assembly, a technology and design campus in Flatiron. Last fall the City announced a Request for Proposals for a small business incubator to be located along 125th Street in Harlem, and in January the Mayor opened the first small business incubator in the Bronx. And in 2010 the City launched the New York City Entrepreneurial Fund, the first City-sponsored seed and early-stage investment fund located outside of Silicon Valley. The fund makes up to $22 million available to New York City-based technology startups.
Recently Graduated Varick Street Incubator Companies:
- CreativeWorx: Designed to fundamentally change how advertising and creative services are transacted, produced and delivered. The CreativeWorx online ecosystem provides productivity tools and a marketplace to help both buyers and sellers of these services. By streamlining production, simplifying collaboration and automating workflows, CreativeWorx enables companies of any size to complete creative projects faster, better and cheaper. CreativeWorx “graduated” from the Varick Street Incubator upon securing $500,000 in angel funds. It has grown to 12 employees and secured the third-largest advertising agency as its first paying client.
- Ecological: One of the first companies at the Varick Street Incubator, Ecological develops and implements sustainability action plans for ecologically sound real estate development. In 2011, the company announced a strategic alliance with Cushman & Wakefield, and it has grown from its original six employees to 20 and raised nearly $3 million in private funding.
- EcoLogic Solutions: EcoLogic Solutions uses, manufactures and distributes environmentally preferable institutional cleaning products and is headquartered at the Brooklyn Navy Yard. EcoLogic’s product formulations — all of which are non-toxic, non-polluting and utilize plant-based or microbial technologies — have attracted some of New York’s top restaurants and major corporations including the Statue of Liberty and Ellis Island, French Culinary Institute, The Durst Organization, Batali & Bastianich restaurants, NBCUniversal, Whole Foods stores in the Northeast and all New York-area Chipotle locations.
- Effective Coverage: Provides insurance coverage for both renters of apartments and owners of apartment buildings, presently covering over 50,000 apartments. Effective Coverage has partnered with Travelers, Selective Insurance Group and Bankers Insurance Group to provide nationwide coverage.
- Fig Food Co.: Joel Henry started Fig Food™ to improve the health of people and planet through delicious, organic, plant-based foods by creating recipes with his wife in their kitchen. The company’s first ready-to-eat and condensed soups debuted in fall 2010 in an eco-friendly, BPA-free cartons. Whole Foods Market selected all seven Fig Food™ soups for national distribution. After 18 years in corporate food and beverage, Joel incorporated Fig Food and joined the incubator in July 2009 and raised $900,000 from angel investors.
- Hotlist: One of the first geo-social aggregators providing real-time information on where friends are and what they are doing. Users receive a custom “hotlist” showing places and events where they can connect with friends. The company has grown to 500,000 users and raised $800,000 in seed money.
- ITB Holdings Inc.: Founders launched ITBconnect, a real-time trading platform for fixed income investors, specializing in the global bond market and providing the technology for both retail and institutional investors. The company raised funding of over $3million in two years.
- Pixable: Envisioned as “your photo inbox,” Pixable has helped over 2 million users manage their online photos. Its applications offer personalized browsing by aggregating photos from different social networks and sorting them into feeds for the user. Starting with three founders and only one employee, the company graduated and relocated to permanent space across the street from the original incubator, and has raised $7 million in funding and created 20 jobs in New York City.
- Social Amp: Allows online retailers to instantly socialize their sites with simple social tools (plug-ins) powered by open social clouds like Facebook’s Open Graph. Since its founding in 2008, Social Amp has attracted clients including Levi Strauss, 1800Flowers, Este Lauder and Discover Card. During its time at the NYU-Poly Varick Street Incubator, Social Amp grew to 8 employees and became the first incubator company to be acquired by a major company. Merkle, a leading customer relationship marketing (CRM) firm, acquired Social Amp in February 2012, and all employees moved to its New York City offices.
- ThinkEco Inc.: The company’s “modlet”, or modern outlet, is a low-cost method to reduce energy costs on electrical appliances, and it has three projects under three grants totaling $1 million from the New York State Energy Research and Development Authority. It has also worked with Con Edison on a project to reduce energy costs for window air conditioners and saw reductions of 25 percent. The modlet is now available to consumer at BestBuy.com. ThinkEco created 15 New York City-based jobs and competed two rounds of capital fundraising.
- Wind Analytics: Provides estimated wind speed and turbine energy production data to the global wind energy industry. The company was founded in 2008, has been awarded $1.5 million in research grants and has raised $1.5 million in venture capital. With its highly accurate data and affordable pricing, Wind Analytics is becoming the standard for small to medium sized (2kW - 10MW) wind energy projects. The company currently has 7 employees and is planning on hiring several more in 2012.
- Yelli, Inc.: Creates digital customer loyalty programs for small business and can link several businesses for a customer. Customers use phone number or email address rather than plastic cards.
Upcoming Varick Street Incubator Graduates:
- Base One International Corp.: Develops software, software developer tools and provides consulting services for building web-enabled database applications. Base One's customers have included the U.S. Government and Fortune 500 companies in finance, insurance, media and communications. Its latest product is a collection of reusable software components for building enterprise-level applications more easily with Microsoft's latest .NET platform and Visual Studio programming tools. Simultaneously, Base One launched a collection of software developer tools including full source code.
- BestVendor: Allows startups and small businesses to make faster, smarter purchasing decisions through social recommendations. The company’s initial product is a give-to-get community in which you share and rate a few products you use in your business, and then see what products and providers others use and recommend, including companies within an industry.
- CB Insights: A technology and information services company that provides reliable information on high-value private companies through a proprietary sourcing method that closely tracks high-value private companies, offering private equity, venture capital, investment banking, wealth managers and corporate and angel investors access to fast, comprehensive private company intelligence. Founded in 2008, CB Insights joined the Varick Street incubator in July 2009. Since that time, it has grown from three employees to nine and was awarded a $650,000 National Science Foundation grant.
- Clifton Charles: Uses algorithmic technology to fit men with perfect, custom-made dress shirts. Clifton Charles has added 12 jobs since becoming one of the first incubator companies, has raised $400,000 from private investors and grown its client base to more than 3,000.
- Relate: Provides relevant, related content to online publishers. nRelate’s algorithm mines content on individual sites and across the Internet to integrate and aggregate related stories and news items to enhance the user experience and maximize page views. Depending on the specific needs of the web publisher, nRelate software can integrate content from the web publisher's archive, its partners or the entire blogosphere to give better context to online content. Founded in July 2009, nRelate has since jumped from two employees to 10 and raised $200,000 in funding.
- White Stratus: White Stratus is the leading partner of companies seeking to drive value by moving a part – or all – of their business into the cloud. It focuses on four key areas where costs can be taken out of the business or new revenue streams can be generated: Cloud Migration; Cloud Integration; Cloud Management and Cloud Development. White Stratus-embedded experts with unmatched experience are not just guns for hire. White Stratus can embed people in an organization on permanent or contract positions, to stay for an entire transformation journey, or as long as needed.
- Anellotech: A newly formed company developing a one-step thermochemical technology to produce high-value, high-volume, high-commodity petrochemicals from renewable resources at low cost. The company's catalytic fast pyrolysis process, or "CPF," will convert cellulosic biomass into benzene, toluene and xylenes, or "BTX," at lower cost than petroleum-derived BTX. Compared to competitors' complicated multi-step biological, thermo chemical or combination processes to make biofuels, Anellotech's one-step process is far simpler and yields higher-value products that are compatible with current distribution systems. Anellotech plans to build the first plants with strategic partners, then license the technology and supply proprietary catalysts to licensees. Anellotech's first small-scale production plant is expected to be online in 2014.
- LifeEnsured: Unravels the on-line lives of those who pass away. The firm partners with websites, estate planners, funeral homes, insurance companies and government organizations to ensure an individual’s internet accounts, digital assets and content are transferred or removed according to their wishes or those of surviving family members.
- Rentricity Inc.: A renewable energy company that uses unique energy recovery configurations to transform the untapped energy in various man-made processes into electricity. Rentricity Flow-to-Wiresm systems have no environmental impact and represent a new class of clean, renewable hydrokinetic energy. Rentricity was one of the Varick Street Incubator’s first companies and has offices in New Jersey, Connecticut and Pennsylvania. The Global Cleantech Cluster Association recently named it among its Later Stage Global Top 10 greentech companies.
- Sollega: makes it faster and simpler to switch to solar power by reducing the non-module costs for solar arrays. Founded in 2009, the company’s first product is the InstaRack™, a solar module mounting system that cuts installation costs by up to 50 percent. This solution provides the solar industry with the ideal racking solution for commercial flat roof applications. InstaRack™ is made in the USA from recycled materials and is recyclable. Since joining the incubator with only a prototype in December 2009, Sollega has added 22 staffers, grossing $1.1 million in sales and supporting solar projects in 22 states. It recently signed two projects with GE.
“This incubator illustrates how real jobs are created when public-private partnerships are designed to serve entrepreneurs,” said NYU-Poly Director of Incubator Initiatives Micah Kotch. “From day one, we've been focused on results.
Three years in, I am proud that one-third of all our companies are poised to take the next steps: expanding to accommodate their growing teams. Our high success rate is due in large part to the community we've curated and the quality of the ventures who contribute to the space – and that is a testament to the vibrancy of the tech ecosystem in New York City.”
“After graduation from MIT, we relocated Pixable from Boston to NY,” said Andres Blank, Founder and COO of Pixable, the Varick Street Incubator’s first graduate. “Being part of the incubator helped us tap into the entrepreneurial and tech community in New York very quickly. The network is super important (both professionally and personally) -- especially sharing ‘war stories’ with fellow entrepreneurs. Or getting advice about what is a good accounting firm, payroll firm, health insurance provider, and the like. Working from an incubator, instead of a single office or from our apartment, helped us stay more focused and work harder because of the peer pressure from startups next to us who were working hard and making progress. The fact that it was affordable helped us stay in Manhattan, vs. moving the company to New Jersey or staying in Boston. Finally, it helped build credibility when recruiting or meeting investors. We wouldn't be where we are today if it wasn't for this initiative of Mayor Bloomberg.”
“We found ourselves in the midst of the Great Recession while bootstrapping Hotlist,” said Chris Mirabile, Co-Founder & CEO, Hotlist “It was the incubator’s affordability and resources that enabled us to put together the plan, product, and team that was needed to raise the necessary capital for growing Hotlist into a business.”
“We’ve just announced both a new software product and a new streaming and download service for premium digital content,” said Steven Asherman, President and Chief Technology Officer of Base One International: “The NYU-Poly incubator has enabled us to weather the recession and attract new clients, as well as bootstrap our e-commerce startup. It is a credit to the university staff as well as Mayor Bloomberg’s Five Borough Economic Opportunity Plan that the incubator has grown the way it has through the years.”
“The incubator has been a large part of our success,” said Clifton C. Berry, Founder of Clifton Charles. “From the many resources and networking opportunities provided, to the personal and professional friendships developed, our involvement with the incubator has been invaluable. Specifically, we have contracted with six of our incubator colleagues for services, including web development, design and marketing. The incubator has provided us with a solid foundation upon which we will continue to grow.”
“As the City’s home of the innovation economy, Hudson Square is the perfect place to grow new ideas” said Ellen Baer, President of the Hudson Square Connection. “Our buildings and byways breathe creative energy, providing the soil where ideas can grow and flourish into thriving businesses. We applaud the partnership of the City, NYU-Poly and Trinity and look forward to celebrating the graduation of even more innovative, job-generating companies in the future.”
“I applaud Mayor Bloomberg, the New York City Economic Development Corporation, and the Polytechnic Institute of New York University for developing this innovative and monumental business incubator,” said Council Member Diana Reyna. “The Varick Street Incubator is an example of how well-focused policy can stimulate growth in these hard economic times. Today’s graduates will create jobs for New Yorkers and advance our City’s growing technical industry.”
“We are delighted to help support this incubator where ideas take root and flourish. Congratulations to today’s graduates, destined to become tomorrow’s success stories – much like Pixable, one of the first graduates and now a full tenant on the this building’s sixth floor,” said Jason Pizer, President of Trinity Real Estate.