Hartford Business Journal

8 Hartford Business Journal • October 29, 2018 • www.HartfordBusiness.com Reporter's Notebook Matt Pilon | mpilon@HartfordBusiness.com Health Care/Bioscience, Startups & Entrepreneurs, Government/Law and Energy STARTUPS & ENTREPRENEURS Persistence, timing lead to $1.5M investment for Israeli entrepreneurs T hirty minutes after winning Connecticut Innovations' third annual VentureClash competition, Voiceitt CEO Danny Weiss- berg sat in an emptying Yale auditorium with fellow co-founder Sara Smolley and reflected on how the moment nearly didn't happen. Earlier this year, the 16-employee Israeli-based tech startup — which is developing speech recognition software to help those suffering from cerebral palsy, stroke or other conditions bet- ter communicate — was rejected in a semi-final qualifier. "They told us 'sorry guys, you were not selected,' " Weissberg said. Rejection is ultimately a reality for many en- trepreneurs competing at the $5 million Ventu- reClash pitch competition, which whittles down 300 applicants from around the globe to about 10 finalists, but Smolley decided to call CI CEO Matt McCooe for feedback. She pitched Voiceitt once more and told McCooe that the company had recently secured a $1 million prize from a Microsoft-sponsored investment contest. McCooe said he sensed momentum. "This is an example where we missed it," Mc- Cooe said. "They had a lot going for them." Voiceitt has competed successfully in a number of pitch competitions, including Mass Challenge and another in New York called 43North. Weiss- berg and Smolley said VentureClash's vetting process was serious and well-run. As a result of winning, the company has gained access to a $1.5 million capital-invest- ment from CI, but deal terms still need to be worked out. If the investment is finalized, Voi- ceitt will have to set up some kind of presence in Connecticut. For now, the company is looking at Hartford and New Haven. Besides its Israel home base, it previously had a Boston office and still has a small presence in Buffalo — locations tied to winning investment competitions. Voiceitt has also garnered an investment from Amazon. The company is hoping CI's funding will close an investment round totaling about $6 million. Voiceitt's work stems from a personal experi- ence for Weissberg. His grandmother suffered a stroke and lost her ability to clearly communicate. "I saw what it means to lose your voice and a lot of your motor capabilities," he said. "How frustrating and painful it is to not be able to convey even basic needs such as 'I'm thirsty' or 'I'm cold.' " Voiceitt's technology includes mobile apps, machine-learning software and wearable devices that translate difficult-to-understand speech into clearer audio and text. The company hopes health insurers will pay for patients to use the technology. McCooe said he's feeling good about the state of VentureClash, which will head into its fourth year in 2019 under a new governor. The $1.5 million top prize is a major draw; it's still the biggest award of any similar competi- tion, he said. McCooe said deep involvement by companies like Travelers and Stanley Black & Decker, each of which posted their own $25,000 prize this year, is also encouraging. "We want to keep expanding on that," he said. "I think it's a good blueprint for Connecticut." FINANCE & INVESTMENTS CT 3Q venture investment dips Smaller deals in the third quarter led to less venture capital flowing to Connecti- cut companies, despite higher deal volume, according to the latest MoneyTree report from PwC and CB Insights. There were 14 VC deals in Connecticut during the three months ended Sept. 30, totaling $42.6 million. That's down from $84.6 million in deals during the same quar- ter last year, spread across 11 transactions. Ridgefield artificial intel- ligence tech company r4 Technologies recorded the biggest deal in the third quarter, raising $20 million. Darien asset-manage- ment firm Alaia Capital ranked second raising $5.5 million. The third-largest deal was Glastonbury-based fintech Payrailz's $3.8 mil- lion fundraise, according to the MoneyTree report. Payrailz, which launched last year, has an artificial intelligence platform for making digital payments. CEO Fran Duggan told the Hartford Business Journal earlier this year that the technology, offered through banks and credit unions, sends a push notification to end users when bills are coming due, allowing users to text a response that au- thorizes bill payment. No other Hartford County companies raised venture funds during the recent quarter, the report said. Venture funding in the state was much higher in the second quarter, when Con- necticut companies raised a combined $119 million. That was the biggest second quar- ter since 2007, MoneyTree report data show. JOHN DEMPSEY HOSPITAL 2016 2017 2018 Admissions 9,068 9,245 10,082 Patient days 37,357 38,339 42,303 UCONN MEDICAL GROUP 2016 2017 2018 Unique visits 675,595 673,334 684,219 Revenue per unique visit $154.80 $156.70 $166.20 Source: UConn Health/Cain Brothers HEALTH CARE UConn Health's upward trend For the second time in a decade, UConn Health is officially on the hunt for a financial partner that can strengthen its long-term fiscal position. The system has a burden- some cost structure, includ- ing its state (unionized) workforce and rising pension contributions, as well as a rel- atively small John Dempsey Hospital that anchors it. But UConn Health has lots going for it too, according to CEO Dr. Andrew Agwunobi. From its leafy, suburban campus to its academic status, Agwunobi said the right partner will find plenty to like. Recent positives for Dempsey and the UConn Medical Group — the sys- tem's doctor practice — in- clude rising patient volume and revenue. Voiceitt CEO Danny Weissberg (middle, black shirt) next to company co-founder Sara Smolley after winning the $1.5 million first prize at Connecticut Innovations' VentureClash this month. HBJ PHOTO | MATT PILON

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