This Venture Firm Expands Its Focus to Mom & Pop Shops


When we introduced you to LaunchByte last year, it was only configured as a “reverse angel fund" and incubator. But over the past six months, the Boston-based firm has become so much more.

For one thing, it's added two new arms- LaunchByte Capital and Appio - to its firm and they're both focused on fueling small businesses. For another, it's positioning itself in places throughout the world.

I caught up with Tan Kabra, LaunchByte’s founder, Babson alumnus and serial entrepreneur. He filled me in on how they've broadened the aim and impact of their business in a brief period of time.

As a refresher, LauncheByte started with just LaunchByte.IO, which uses a $7.5 million microfund to invest in tech startups by extending them lines of credit for services. Portfolio companies can use their credit to pay for LaunchByte's resources, helping them with platform development, UI/UX design, data analytics, financial modeling, marketing, public relations and legal affairs. Ventures also have access to LaunchByte’s Board of Advisors, former entrepreneurs with a net worth of $3 billion.

"LaunchByte doesn't only cater towards empowering tech startups with complicated apps, but also aims to help the small businesses launch into the mobile era," he explained in an email.

So what are these new arms all about? With both Appio and LaunchByte Capital, the firm plans to cater to traditional brick and mortar businesses.

Appio offers mobile services to the original startup community: your mom and pop shops. Small businesses like spas, salons, body shops and cleaners don't always have the capital to invest in the mobile technology that modern customers expect from companies these days. These financial restrictions, in essence, prevent their ability to compete with bigger businesses in their industries.

That's why Appio is meant to help them have swanky websites and apps to connect with customers just like the best of them - and for a fraction of the price they'd pay if they hired a dev shop to do the work for them.

"A year ago, we were so focused on the tech startups," Kabra told me. "As we were talking to more and more business owners, we found the divide between big and small businesses was growing. Small businesses were willing to spend $10K on having someone make them a regular website. What is a website anymore? There's no customer stickiness, no retention. But that's all they can afford because they can't drop $100K on mobile, which is what they really need."We found the divide between big and small businesses was growing.[/pullquote]

Appio has pinpointed eight core functions that small, brick and mortar businesses need in a website and app: scheduling, payment, e-commerce, loyalty, flash deals, chat, profile and feed. Small businesses choose the five features they need most, and Appio packages it up for them so it's all nice and pretty.

These companies pay for the app, as well as $150 per month for maintenance. The mobile tech is then owned by the businesses, as is all of the data that they collect from it.

LaunchByte Capital targets the same type of businesses as Appio, but instead of providing them with mobile app services, it helps invests in small businesses that are generating revenue. It provides these companies with non-diluting working capital ranging from $5,000 to $500,000 they can use to grow their operations.

"In the past few months of testing this new direction, our revenues have increased by over 15x, and we've gained a significant amount of traction," Kabra wrote in an email to me.
The revenue generated from LaunchByte's three arms allows the firm to inject capital into the local startup scene through LaunchByte Fund I LLC starting this month.
Currently, LaunchByte is building out its Appio team within small business hubs throughout the country, such as New York, Miami and Austin. Meanwhile, LaunchByte.IO has 12 tech companies in its portfolio to date. LaunchByte.IO also has a presence in Russia and India, on top of its Boston locale.

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