The idea that has always guided us in the Reactor was to help startup founders from all over Poland. The coronavirus, which grounded most home entrepreneurs, was one of the impulses for us to implement the program completely online – eliminating many restrictions for participants!
Yay! We’ve just made our first deal as SMOK! We invested $520k in SmartHotel, a smart new way for guests to interact with hotels or Airbnb hosts through Messenger chatbot and SmartTV app.
Here is why.
1. The People
I could actually start and end here. This investment is first and foremost about the team. And the team is amazing!
- Maciej Prostak (CEO) is a serial entrepreneur who successfully built and sold his two previous companies. After MoneyZoom got acquired by PMPG, he built HotelOnline, one of the fastest-growing tech startups in Africa, which he fully exited this year following a merge with Savanna Sunrise. Maciej knows both Africa and the hotel market as well as anyone and he’s probably the best person on Earth to build SmartHotel.
- While Maciej is selling his vision, his co-founder and CTO, Damian Dąbrowski is busy building the product. They worked together in their previous business and Damian was responsible for all the fancy features of HotelOnline app.
- And then we have Paula Pul, an entrepreneur, founder of Lawmore, a boutique law firm, recently named Poland’s 30 Under 30 by Forbes. She does all the little things that make the machine run smoothly, from operations, through business development to the legal stuff as well, whatever is required.
Startup team is not just about the big names (check) and the past achievements (check). It’s even more about the right motivations (check), the hustle (check check) and the chemistry (check check check). When I met the whole team for the first time I immediately saw the chemistry. Everyone knows their role, they trust each other and let the others do what they do best, a co-foundership made in heaven!
2. The Product
Sometimes the best products are those which you don’t even know you’re using. When hotel guests interact with SmartHotel they might not even notice. This is because there is no app! Once you check in at reception, you receive a message, easily connect to hotel WiFi and then interact with the reception via Facebook Messenger! It’s that simple. Have a look at the video below to feel the SmartHotel experience!
3. The Traction
As Maciej invested heavily in the company over this past year, he was able to validate the initial hypothesis, build the minimal viable product, show it to 50+hotels, and gather feedback. Meanwhile Damian connected SmartHotel to 50+ hotel management systems (PMS) for easy integration and adjusted the product based on what the customers said. Now they are ready to take SmartHotel to the initial African markets. This is exactly what we’re looking for from a 6-month old startup to make an early bet.
4. The Market
The next phase of growth will be fueled by the fact that well-established businesses including hotel chains, airlines and rail operators that previously relied on old and costly software systems, are now upgrading thanks to existing or new technology companies.
When he writes the above I’m thinking “SmartHotel”!
5. The Business Model
It’s Software As a Service (SaaS) with only minimal initial setup required. We like SaaS, because SaaS is scalable. All SmartHotel’s competitors are enterprise software solutions. Bad for them. Good for us 🙂
6. The Cap Table and The Valuation
Polish startups officially have a cap table issue. Only a handful of startups we looked at had a cap table as clean as SmartHotel with the founders owning 100% of equity. We like such cap table. What we don’t like is angel investors taking over large equity stakes (think bigger than 20%) early in the life cycle of the startup.
We also liked the valuation which is very reasonable for a startup in such an early stage but with a somewhat verified business model and a built product.
Nothing fancy here but a clean cap table and reasonable valuation are rare nowadays and seldom come in pairs.
Do you have a startup relevant to SMOK?
If you read the above, liked what you saw, can relate to how we think, communicate and act as a fund and you know of a startup we should be talking to, just send me an email at firstname.lastname@example.org!