Five years in, Hartford’s startup scene grows but is still in early stages
The Hartford Business Journal weighs in on the region’s startups:
November 16: Back in 2018, Anurag Shah was only vaguely aware of Hartford’s existence.
Four years prior he founded Aureus Analytics in Mumbai, India, and was looking to expand the company, which uses artificial intelligence technology to monitor insurance policies, to the United States. That’s why he was at an event in Silicon Valley when he met a couple of representatives from Travelers Cos., a potential client. They told him he should consider Hartford for a U.S. base of operations.
“Quite frankly, we had never been to Hartford,” Shah said. “We were really close to setting up our office in California. The reason we [came to Hartford] was that potential customer.”
About a year and a half later, and after going through the Hartford Insurtech Accelerator operated by Startupbootcamp, Shah, along with three other employees, is running Aureus Analytics from space at Upward Hartford’s downtown coworking space in the Stilts Building, 20 Church St.
A single potential customer brought Shah to Hartford, but what’s kept him here is a developing ecosystem of startup companies, large corporates looking to patronize innovative tech companies, state-level support, and accelerator programs intent on facilitating deal-making between the various players. The end goal for all involved is to transform Hartford’s startup scene into one up-and-coming entrepreneurs with proven products see as an ideal place to base operations, hire employees, and grow.
“I remember the first time when we were bringing startups [to the city] how difficult it was to sell Hartford to startups,” said Upward Hartford CEO Shana Schlossberg.
A few years ago she was focused on getting the word out about Hartford to almost any startup willing to come here. Not anymore.
“In the last two years, we’ve built credibility. Now let’s bring superstars,” Schlossberg said, noting that she’s developing a more discriminating eye for companies she recruits.
Hartford in recent years has seen a number of accelerators blossom, working to recruit tech companies from around the globe involved in insurance, health care, and advanced manufacturing.
To date, dozens of startups have visited the city for months-long accelerators that provide business development mentors and resources, as well as connections to investors or larger companies interested in new technologies. But just as startups seek to mature and grow, so too does the city’s nascent tech scene. The goal is no longer to just bring startups to Hartford, but keep them here.
That’s a tall order for a city few around the country consider a tech haven. Some Hartford boosters like Schlossberg are trying to change that. And there have been a few success stories — like Aureus Analytics — of companies establishing a permanent presence here.
“Hartford is a city that’s big enough that it has a lot of opportunities, but small enough that [entrepreneurs] can do things quickly,” said Martin Guay, vice president of business development at New Britain-based manufacturing giant Stanley Black & Decker, which operates a tech center downtown and sponsors an advanced-manufacturing accelerator. “When you start helping entrepreneurs and making it easier for them, they’re more likely to stay.”
Kick in the pants
Pretty much every city worldwide that doesn’t already have a healthy startup infrastructure is trying to create one, Guay said.
But Connecticut’s intensity really started growing five years ago, when General Electric relocated to Boston, according to Michael Cantor, board chair of the state’s venture capital investment arm Connecticut Innovations (CI).
“GE leaving was really a kick in the pants,” said Cantor, who is also co-managing partner of Hartford intellectual property law firm Cantor Colburn. “It was a real awakening.”
Cantor believes GE’s move to Boston was at least partly an effort to more easily attract a younger, tech-savvy workforce, which Connecticut — without a magnet city — has traditionally lacked.
It’s no secret that younger people over the years have left the state at a high rate, although the COVID-19 pandemic does offer Hartford an opportunity as more people flee densely populated cities like New York for a more suburban lifestyle.
Establishing a vibrant startup scene in and around Hartford could bring in younger people with disposable incomes, which creates demand for things like new restaurants and other revenue-generating amenities, Cantor said. It also would provide major corporations here with a pool of innovative small companies with whom they can partner or acquire amid an ongoing technological revolution in most industries, particularly insurance, health care, and advanced manufacturing.
Many vibrant U.S. cities have been on the innovation bandwagon for a while, but Hartford is in the very early stages.
“Three years ago in Hartford, it was a desert,” Schlossberg said.
However, the growing prevalence of startup accelerators is helping to change that.
The Upward Labs accelerator last year started recruiting to Hartford companies focused on age-tech and smart buildings. Meanwhile, toolmaker Stanley Black & Decker partnered with London-based global startup accelerator Startupbootcamp to establish the Stanley+Techstars accelerator, which focuses on advanced manufacturing startups. There’s also Hartford InsurTech Hub — run by Startupbootcamp — and Digital HealthCT, sponsored by Hartford HealthCare and focused on medical-technology startups.
Each accelerator has different focus areas and goals. Stanley+Techstars is looking for companies conducive to Stanley’s business, while InsurTech Hub brings startups that could work with major Hartford insurance companies. There’s also the nonprofit accelerator reSET, which works with local socially-conscious startups in its Parkville offices.
In the last three years, 40 startups from outside the state have set up operations in Hartford, said Michelle Cote, director of Launch[H]artford, a nonprofit that works as a go-between for startups, government officials, and corporations in the city. Many of those startups either came to Hartford to participate in an accelerator or after hearing positive reviews from entrepreneurs who had.
Sanjay Poojary, CEO of Los Angeles-based Saya Life, is opening an office in Hartford after participating in the Upward Labs accelerator. Saya Life makes a hardware platform for buildings that detects water behavior (i.e. flow and leaks from pipes) and constantly posts updates to a cloud server, enabling building managers to avoid things like pipe bursts before they happen. A city that’s home to property and casualty insurers like The Hartford and Hartford Steam Boiler is rich with prospective customers, Poojary said.
“It’s a unique opportunity for us to be working with all the major players,” said Poojary, who is in regular contact with companies like Travelers and Nassau Re.
Saya Life, which now employs three interns from the University of Hartford, is currently working on a project with multinational financial services firm UBS, Poojary said. It will probably end 2020 with $400,000 in revenue, but it had been on track to earn $1 million before the COVID-19 pandemic put a few ongoing projects on ice.
Hartford HealthCare (HHC) this year began partnering with med-tech startups on pilot programs. HHC Chief of Geriatric Medicine Dr. Sowmya Kurtakoti is overseeing an ongoing pilot using
Texas-based startup BrainCheck’s mobile app that tests users for cognitive decline.
So far, Kurtakoti says BrainCheck appears to be producing more accurate results than traditional tests performed in-person. With the pilot, HHC is using a cutting-edge product it otherwise wouldn’t have known about, Kurtakoti said.
“I think it’s a changing world, and we need to stay with the times,” Kurtakoti said. “We need to make these innovations more available to our patients.”
Keeping them here
While Hartford is putting more focus on recruiting startups, keeping them here remains a significant challenge.
And one key element where the region lags is access to venture capital, Cote said.
In 2019’s first quarter, California recorded the largest number of venture capital deals with 1,473. Second and third place went to New York and Massachusetts, which had 525 and 265, respectively, according to the National Venture Capital Association. Connecticut had 19, and even that number is a bit inflated, Cote said, because some were transactions by Connecticut VCs that only seed New York companies.
“It’s not something we needed in the past,” Cote said, noting the burgeoning innovation economy didn’t have much to offer venture capitalists until recently.
However, Cote thinks an increasing number of companies succeeding in Hartford is likely to increase interest from investors.
Meantime, Schlossberg and others say they are more keenly focused on recruiting more established companies that will be able to attract investor interest.
Shah, of Aureus Analytics, said the key to boosting Hartford’s startup scene is for more large companies to work with smaller firms, perhaps with the government providing incentives to do so.
“If there’s enough business and companies to work with locally, they’ll come and stay,” Shah said.