Houston blockchain startup closes oversubscribed seed round of funding with local investors
Topl the world
Kim Raath is pretty proud of her company right about now. Not only is she proud that her startup, Topl, a blockchain network with applications across industries, closed a 20 percent oversubscribed $700,000 seed round, but because she did it in a way that was directly in line with her company's values.
"Every investor that is invested now has focused on both the purpose and the profit, and I'm big on that," Raath, president and co-founder of Topl, says.
Houston-based Topl was created by a few Rice University graduates and doctoral students — Raath, Chief Technology Officer James Aman, and CEO Chris Georgen. The founders wanted to create a way to track impact in various industries, such as carbon footprints in oil and gas or fair wages for farmers in agriculture.
The team has built six blockchain platforms that operate on the Topl network — two are live now, and four will go live later this year. The platforms are focused on four different areas: agriculture (tracking food products from the farm to the shelves), mining (diamonds, for instance), sustainability and impact (tracking a program to see how it succeeds), and carbon credits and renewables within the energy industry.
"It's a validation time for us," Raath tells InnovationMap. "With two platforms already live and collecting transaction fees, we are now at a point where there are actual blockchain transactions happening on our network."
The fact that Topl's technology is already up and running is rare. For this reason, Raath says she has to focus a lot on educating investors, clients, and the rest of the community — something that's really important to her.
"In the blockchain space, there are not a lot of real applications live anywhere," Raath says. "A lot of people are selling ideas that can be built on blockchains, but have not executed yet."
Topl partnered with European NGO Fairfood to create an agricultural blockchain platform that currently is live. Shoppers in the Netherlands can buy a pack of nutmeg and track the product's progress from the farmer who grew and sold the spice. The other already launched platform is focused on sustainability. Topl worked with the Texas Coastal Exchange to create a carbon credit marketplace that can sell carbon offsets generated through the natural carbon sequestration activities of land the organization holds along the Texas coast.
"For us this round is taking these four spaces and validating ourselves, proving out volume, the blockchain's ability, and then, the big thing is, to build out our next version of our blockchain," Raath says.
Raath says the fundraising round was different from what she expected, but she's excited about her investors. Seventy percent of the round was raised by Houstonians, and 40 percent of the investors were women, she says. Topl also had investor interest across industries and backgrounds — from Rice University professors to former banking execs.
The round doesn't technically have a lead investor, but Samantha Lewis, director at the GOOSE Society of Texas, led a syndicate of investors that made up more than 40 percent of Topl's round. Lewis says the round was too early stage for something GOOSE investors would typically contribute to, but she believes in the company so much that she worked nights and weekends to accomplish some of the things a lead investor would do during a raise.
"Since this was their first big round that they raised, I stepped in to help advise them — thinking about the terms, strategic investors, how to pitch to different people, if they needed to oversubscribe, and little details like that," Lewis says. "Through working with them in this way, I was doing diligence with them, and I got really excited about it."
Lewis, who volunteers a lot within the Rice network, met Raath through Georgen and the two hit it off. Lewis was then able to bring in investors from her network to contribute under her syndicate.
This passionate group of value-add investors who are personally committed to the company is what makes this seed round different for Raath. Their commitment is encouraging to her.
"I 100 percent believe that the investors in this round will not allow Topl to fail," Raath says.
With the money, Topl will be able to grow its platforms, provide better product features, and increase marketing efforts. Topl's customers are drawn to the technology because of the business efficiency the blockchain adds to their supply chain, but they are also excited about how having this technology differentiates them from their competition. Raath says she's interested in growing Topl's ability to do joint marketing campaigns with their customers.
This type of promotion leads to a growing clientbase, and Raath says she sees an overwhelming interest from potential clients. Not only is Topl creating a series of platforms in various industries, but the company itself is connecting other companies through their clients.
"Topl is not just a technology," Raath says, "it's an ecosystem."