Sramana Mitra: What about sector? You said you only do enterprise software. Could you elaborate on what you like to invest? What trends are you following and are excited about?
Miriam Rivera: A lot of our companies are traditional SaaS companies, but many of them were also invested in Internet of Things and AI. Smart data is one of the big focus areas of our investing. Fintech and education technology are some other focus areas. What differentiate us is that we are selling into an enterprise customer. We do have some companies that are selling it to small enterprise, but that’s more unusual. We also consider enterprise to be a little different than the traditional Fortune or Global 2000 type of companies.
Sramana Mitra: Let’s double-click down on your portfolio. Let’s talk about some of the highlights of your portfolio. As you are explaining, give us some insight into your thought process on when these companies came to you, what did they have? What did you see that convinced you that this is going to be one of your few portfolio companies?
Miriam Rivera: I’ll start with one of our recent investments, which is very relatable. It’s a company called Zum in the transportation space. One way that people might describe them is that they’re Uber for kids and is typically related to the school transportation. When they initially started, they were going down a testing path.
It’s actually a founding family. There’s a sister and two brothers who who came to the US from India. Two of them were in a Stanford Master’s in Management program. One of the brothers is in technology in the eastern part of the United States. The other had been working for the Indian military managing logistics. The sister had been working in tech here in Silicon Valley.
They came with this idea of a company just based in part on life experience and the difficulty that two-parent working households have in managing transportation to and from school, sports after school, pick ups from sports, and the interesting thing was that there was another company that had already been in the market that raised substantial capital. They had raised over $10 million in capital at that time. With only $200,000 in capital, they were able to generate a third of the rides of the company that had raised $10 million.
We thought they’re onto something. They didn’t quite know it yet. What they were trying to do was also selling to schools as opposed to just selling directly to parents, which was how the other company in the space had been going to market. The other company had radio ads, for example, which are very expensive.
This company was going directly to schools and saying, “We can help transport your kids from the train station to the school and from the school to the sports. You can make us available to the parents if they want to have their kids picked up from the sports and brought home.” Those conversations were working. Schools were very interested in what they had to say. It turned out that this was a very cost-effective way of reaching more consumers more quickly. Each school is essentially a viral network.
The focus wasn’t on price competition. The other company that had been in the space was using Uber and Lyft drivers to come and pick up students. Sometimes, with surge pricing, the money that a driver could make doing a different pick up would be more than for picking up a child. They were literally leaving children behind, which as any mother would know is completely unacceptable.