A couple of months ago my partner, Ohad Gliksman, came to me with the sentence I’ve learned to know and love “I’ve found our next investment”. This happens twice a week and of course, we don’t invest in all of them, but this one…. This one had a different vibe to it.
I poured through the deck and immediately was intrigued, not just by the idea and the technology I was looking at, but the numbers…. Millions in sales in the second year with 70% margin?! Hold up. This team is doing something right and I need to understand exactly what that is.
Immediate Relief - No Drugs Attached
A couple of months ago my partner, Ohad Gliksman, came to me with the sentence I’ve learned to know and love “I’ve found our next investment”. This happens twice a week and of course, we don’t invest in all of them, but this one…. This one had a different vibe to it.
I poured through the deck and immediately was intrigued, not just by the idea and the technology I was looking at, but the numbers…. Millions in sales in the second year with 70% margin?! Hold up. This team is doing something right and I need to understand exactly what that is.
First of all - What does Dendro do? They created a device and technology called Calmigo, that helps people with panic attacks, PTSD, ADHD, and other mental conditions find immediate relief, without drugs(!). This is the first in a line of products.
We know that a lot of funds have a thesis; either invest in software or hardware. One of the best things about being in 5Eyes is we’re not beholden to any thesis. We are to venture funding what the Sex Pistols were to music. So we invest in exceptional teams wherever we find them and make our own “music”.
So Why Do We Love This Opportunity
Let me count the ways
Millions in revenue in just the second year. This is where you (extremely smart founders who actually read these memos to understand how investors think) need to pay attention. Investors always say they’re about the team, the team, the team. But that’s just a slogan. This is what it really means; what we have here is a team that can deliver 8 figures in sales over less than 2 years. That means manufacturing, making sure you have the supply, making sure it’s a great product delivering the finalized product into your clients' hands in large quantities, and all this while adhering to rules and regulations, like the fact they can only assemble the product in the US because they work with the VA. Al this is extremely hard to execute, especially as a startup. This is what we mean by “the team”. It really means “the team that can execute like rockstars”.
The company raised $7.6M to date - which is not a significant amount in comparison to the result yielded. They’re already driving more revenue than the investment amount. Pretty impressive.
HUGE TAM - $92 billion and growing
Increasing probability of 100X return due to size of exits in the space.
Recently signed partnerships with 800 CVS stores nationwide, the VA, Mayo Clinic, the FSA store, and one of the biggest health insurance giants in the US, and is expected to double in revenue within a year.
Will release its next-generation AI-powered platform in 2022.
The company and founders own powerful patents that protect the business
With the deal terms we got… we think this is a high potential deal especially as the company predicts the current funding round can take it to profitability. We’re not above saying that market conditions are working favorably for us, and a solid valuation on a company that has already done 8 figures in sales and predicts double the income within a year, would never have happened in 2021. The valuation would have been 4X what we paid for it. This is a fantastic opportunity.
All the secret stuff - which is the stuff we can’t tell you yet. But if you see in the coming weeks that Dendrotech signed a HUGE deal with a HUGE company.
The founder, Adi Wallach, is one of the smartest people you’ll meet. But more than that, she’s intensely passionate about this problem, deeply thoughtful about how to solve it, and relentless in seeking out the right advice, partners, and team members to make the vision a reality.
Take all the above into consideration - and we have an investment that we’re more than proud to be part of.
Not to mention that I heard that investing in products that actually do good, is great Karma.
And one more thing
One of our founders, Guy Poreh (that’s me), is a war veteran with PTSD. He completely gets how Calmigo helps make lives better, and why it’s so popular. And although understanding the marketplace is key, we also realize there is huge karmic value in investing in a company that actually helps people improve their lives in the most complicated of times.
And this is just the beginning.