Two black-owned tech firms are among the latest group of startups to each receive a $50,000 grant from Arch Grants, a nonprofit that is working to lure new businesses, jobs and the next generation of inclusive leaders to St. Louis.
Ilerasoft, based in Texas, is hoping to gain access to St. Louis’ hub of healthcare providers. The firm is developing software to help hospitals track and share medical equipment across large healthcare systems. When fully implemented, the platform will also alert clinicians of safety recalls issued on medical devices and equipment.
Co-founder Kwaku Owusu developed the idea after working as a consultant for large hospitals. “You have a hospital in a system renting the equipment at a premium,” he said, “but the same piece is going unused at a sister hospital.” Owusu said the platform will give hospital administrators better information about their inventory to make relevant purchasing decisions.
Milwaukee-based Exit 7C is developing a mobile app to allow consumers to securely pay for gas using their phone or another mobile device, reducing the chances that private data can be stolen from a credit card reader. “It’s like Apple Pay for gas,” said Blessing Egbon, founder. Businesses with a fleet of vehicles can use the app to search for the cheapest fuel and control their drivers’ fuel spending.
Ilerasoft and Exit 7C beat out hundreds of applicants in Arch Grants’ Global Startup Competition in October; 10 businesses received the grant, donated office space and pro bono services.
The $50,000 grant is paid in five disbursements over a year and is non-dilutive, which means Arch Grants doesn’t own a stake in the firms.
“We’re interested in the character of people and the ability to add value to St. Louis, whether their business is successful or not,” said Ginger Imster, Arch Grants’ executive director.
“This is a program for St. Louis and about St. Louis, and we only want to give money to people as passionate about St. Louis as we are.”
Funding future leadership
Behind the incentives to attract young entrepreneurs is a push to find the next generation of diverse business and community leaders, said Joe Schlafly, a St. Louis philanthropist and founding board member of Arch Grants.
“The economics and success of firms can be traced to having diversity,” Schlafly said. “It’s the right thing to do, and it ends up helping out the bottom line too.”
Statistics confirm this belief. A 2015 study by research firm McKinsey & Co. found that ethnically diverse companies were 35 percent more likely to financially perform above their industry median. Among U.S. companies, there is a linear relationship between racial and ethnic diversity and better financial performance, the study found.
In Arch Grants’ portfolio, 100 percent of startups founded by a woman, a minority or an immigrant are still active and generate proportionally 15 percent more revenue than other firms.
“When we don’t treat people equitably, we miss out on tremendous talent,” Imster said. “It’s in our best interest to nurture, curate and cultivate the best talent, regardless of income, class and race.”
The life of a start-up can be tenuous, though. Tuloko, a social networking website and directory for black-owned businesses, received an Arch Grant in 2014, but the firm couldn’t find traction or raise more capital in St. Louis. Cofounder Sean Armstrong splits his time now between the firm’s home base in Minneapolis and the Southeast, where civic organizations like the Atlanta Black Chamber of Commerce and the NAACP have opened doors for the firm.
Fresh off a business incubator program in Chicago, Darryl Palmer, a 2016 grant recipient, is finding success in St. Louis. He’s cofounder and chief technology officer of Janus Choice, which develops an interactive platform for hospitals that matches patients with post-acute care providers.
“We didn’t have experience in B-to-B sales with hospitals, but connections with Arch Grants helped us refine our pitch and presentation,” Palmer said. Janus Choice hopes to hire personnel in outbound sales and add marketing and customer service interns in the next year.
In February, Arch Grants will send staff to BlackTech Weekend in Miami, one of the largest national events for black coders and developers. The goal: to inform young entrepreneurs about the Global Startup Competition and invite them to apply.
“You have to meet people where they are and get in front of networks that don’t necessarily hear about you,” said Dalychia Saah, Arch Grants’ competition manager.
“Inclusion does not happen by accident, you have to be intentional about it.”
For more information about how to apply for startup grants, go to www.archgrants.org.
