Rezzi Closes Major Funding Round
Q - What was the purpose of this past funding round? How did the funding support your big-picture goals as a company?
“These are two young entrepreneurs, with the right stuff. They have a potential to disrupt an industry. They're open minded, they want to be advised. And that's why the checks that were written are so large.”
-Sandy Wollman, Co-Founder and Managing Director of the Westchester Angels
In 2022, we pivoted from being a robotic trash valet product to a data collection service. This switch required a substantial amount of change while we worked out how to support the new goals of a freshly designed, repurposed device. So, most of our goals have shifted, and they did so pretty recently. However, since that time we’ve been able to validate the market need for SmartCan’s data collection capabilities, and have also begun to discover the engineering challenges associated with the device.
The new funding we’ve received will help us to achieve two primary goals. The first is the launch of our beta pilot. This will allow us to deploy SmartCan in a wide variety of scenarios - with haulers, institutions, and municipalities across the Northeastern U.S. Throughout the pilot, we’ll have the opportunity to refine our product further by testing different iterations of the device over a wide range of scenarios. Once the beta trials are complete, we’ll have a final design that we can put into production.
The second goal is the development of more partnerships in the waste collection industry. With the ability to expend a greater amount of resources, we’ll be able to discover more haulers and communities who have interest in the product, as well as further research how these customers are using this data. This will help us to gain insight into the customer experience, providing valuable information for the further development of Rezzi’s data platform. We’re very excited to start working with customers, as this will give us an idea of how our device functions in real-work scenarios.
Q - How many different investors participated in this past funding round? Were there any particular investors who stood out as significant?
“Andrew and Nick being who they are, have the potential to scale and disrupt a very large industry…So the bottom line is, we invested [our largest amount to date], because we liked the team, there’s a huge potential to scale in an [underserved] industry.”
-Sandy Wollman
This round of funding was led by the Westchester Angels, an angel investment group which supports startups in the Northeastern United States. We are the group’s largest investment to date, and the work we’ve done with them is significant for us both. During our work with the WCA, we’ve had the opportunity to collaborate with numerous investors, all of whom brought specific expertise and investment prowess to the table. We are fortunate to have caught the attention of the Angels, and we hope to continue working with them for many years to come.
Another significant investor throughout this round of funding is Filco Carting Corporation. For the uninitiated, Filco is a major United States waste hauler which services the five boroughs of New York City. The company boasts over one hundred years in waste management, and the knowledge which they’ve shared with us about the industry has played a key role in our development. Working with Filco has taught us more about how waste haulers operate, and has given us a better idea of how we can tailor SmartCan to meet the needs of this customer base.
We were also fortunate to have Night Capital and NextFab ventures follow-on this round, which brought us to a total of $1M in funding. Although this is certainly a significant sum of money, the value that our investors bring to the table goes far beyond just that of the money alone. The skills and expertise which these companies possess has played a key role in developing Rezzi into the company we are today. We’re extremely lucky to have assembled such a talented group of investors, and without them, we simply would not be the company that we are today.
Q - How will the funds raised in this round be utilized? Are there any specific projects which can now begin as a result of closing this round?
“Additionally, their valuation was very reasonable. Sometimes we see great teams with potential to scale and their valuation is sky high out of the ballpark. Andrew, Nick priced this round to get it done quickly. And they did exactly what they said [they] set out to do.”
-Sandy Wollman
The main goal of this round of funding is the launch of our beta pilot. We’re looking forward to the launch as it will be our largest deployment to date! Over the course of the beta, we’ll roll our hundreds of units over the course of about six months. The test will include notable customers including the City of Boston, Tufts University, Agri-Cycle, and Filco Carting Corporation.
During the beta pilot, one of our priorities will be developing SmartCan, which is the hardware component to the Rezzi customer experience. Our development goals for SmartCan are to reduce the cost of the unit, improve the accuracy of the data we collect, and enhance the unit’s durability. We’ll also be putting SmartCan to the test in real-world scenarios, where they’ll be impacted by variables like inclement weather and temperature. By the end of the beta test, we’ll have developed a reliable, accurate, affordable unit which can stand up to the kind of conditions they’ll be faced with in their operation.
Another priority during our beta test will be the further development of our software platform - the other component of the Rezzi experience. To achieve this we’ll be working closely with customers to learn how we can best collect and present their data to them. The Rezzi platform aims to provide an intuitive and useful customer experience, so much of our attention during the beta will go towards development of this product. Over the course of the beta, we’ll be collecting feedback from our customers on what works best for them, which will help guide us to learn how to present data in the most useful manner possible.
Q - What are some of the key factors that attracted investors to Rezzi?
“Andrew and Nick are open minded. They surrounded themselves with quality advisors that have experience in the field - even before we started working with them.”
-Sandy Wollman
One of the factors that investors have frequently commented on is our exhaustive due diligence process. In fact, Rezzi’s whole purpose is built on due diligence - we know our place in the waste collection industry very well, because we’ve done the research into the legislation and policies which make the waste collection industry operate the way it does. Rezzi has a very specific purpose, and we know precisely how outside variables impact the market, leaving an opening for our company to step in and fill a need.
Although we’ve put in a lot of time into research ourselves, the contributions from our partners in the waste industry, and from our investors, have been significant. We work with companies which have over a hundred years of experience in waste collection. In this opaque, tough-to-penetrate market, that kind of wisdom is gold. Additionally, the inventors we work with have offered tremendously useful expertise in our business development, marketing, and in helping to establish new partnerships and relationships for the Rezzi Company. We are lucky to have had the opportunity to work with many incredibly talented people, and that collaboration has been instrumental in our success with investors.
Q - Were there any major roadblocks you encountered during this round of funding? How did you overcome these obstacles?
“We go through hundreds and hundreds of applications a year. At the top of the funnel, there’s hundreds who apply. We touch maybe 100 startups when we screen. After that, there’s only 18 to 20 startups that pitch every year. So there’s a lot of competition for pitching slots.”
-Sandy Wollman
One of the major roadblocks we have faced is trying to raise funds in a difficult market. Creating a startup is a difficult task in the best of markets, and it’s been made harder by the fact that funding for startups has generally diminished since its peak in the early 2020’s1. This means that there is a fair amount of competition in the VC landscape. After all, there’s only so much funding available.
Another challenge we’ve faced is our pivot, which occurred fairly close to this round of funding. When we altered SmartCan’s function to be a data collection device, we had a limited amount of time to execute the due diligence needed for initial development of the product. During this time we were incredibly busy working on SmartCan’s design, our customer use cases, and initial development of our data platform. Through many hours of hard work, and with the help of our industry and investor friends, Rezzi came together in time to close a successful round of funding!
Q - Finally, what does this round of funding mean for Rezzi’s existing users? How will it improve their experience, and what changes might they expect in the final product now that this round of funding has been closed?
“Business is about people. And we primarily invest in good people. What made Rezzi so attractive is both Andrew and Nick are open to suggestion, and take advice.”
-Sandy Wollman
Rezzi’s existing users will find that with this new funding, we are able to provide them with more reliable and consistent data. Many of our current customers are participating in our beta pilot, where they’ll be able to see the impact of the funding firsthand. We’ll continue to improve SmartCan over the course of the beta pilot, reducing its cost, improving the quality of its data collection, and improving its durability and weather resistance. We expect this funding to bring us much closer to a final design for the device.
Additionally, this round of funding will allow us to continue to scale SmartCan to greater deployment numbers. Currently, SmartCan has been released in only a very limited capacity. During the beta pilot, we’ll be expanding the number of units deployed for our existing customers, which we expect to provide a greater amount of useful data. By the end of the pilot, we’ll have smartCan deployed at a much higher capacity for our existing customers, benefitting both them and their waste collection efforts.
Finally, funding will allow us to continue developing our data platform, by adding more features and functionality to our web portal. With this portal, we aim to find ways to provide actionable data in useful reports, so we’ll be continuing to improve and iterate on the design to deliver the best customer experience possible. We are confident that our data platform will be a useful tool in its own right for consolidating and sharing useful data - whether you use SmartCan or not.
The close of this round of funding represents a great leap forward in Rezzi’s growth as a company. The investment our partners have put into our startup goes far beyond just money. The expertise and wisdom which has been shared with us has been instrumental in our growth, and without it, we would not be the company who we are today. The near future for Rezzi will be a busy and exciting time, while we capitalize on the investment which has been placed in our company. We hope you’ll follow us along for the ride!
References:
1 Blum, Sam. “The VC Market Has Never Been Worse. That Doesn't Mean You Can't Get Startup Funding.” Inc. Magazine, 26 June 2023, https://www.inc.com/sam-blum/the-vc-market-has-never-been-worse-that-doesnt-mean-you-cant-get-startup-funding.html. Accessed 9 August 2023.