Very few of the participants of Start-Up Chile have impressed investors but Gympact, producing software to motivate people to go to the gym, leveraged their gift from the Chilean government to get into Techstars, a prestigious accelerator with good connections to investors, and from that experience they improved their business processes and raised a seed round of venture capital.
The team applied to TechStars and made good use of their time while they waited to hear back. They took a detour south of the Equator for a grant from Startup Chile that included office space and ‘la oportunidad de practicar el idioma español.’ When they learned that they were being seriously considered for on of the coveted thirteen TechStars spots, they cut a mountain trek in Southern Chile short to hunt down a reliable internet connection (no small feat in a remote locale) for a Skype appointment to discuss their candidacy. Although brief, the call went well and they returned stateside having scaled a literal mountain as well as figurative one by securing a spot in Boston’s Spring 2012 cohort….
It was the first of many twists for Zhang and her team. Pre-TechStars, the company’s bootstrapping mentality paid-off with a monetized cash-positive model. The trick was breaking through to the next level. During mentor and investor pitch sessions, they came nose-to-nose with a perception problem that brought them to a pivotal realization.
“We had a meeting with Katie and Reed where we said – this sounds crazy but the name GymPact is affecting the level of interest in our company. They immediately think that it’s a very niche idea in a very niche industry – just gyms, just fitness tracking – when our idea was always about behavior change and incentives. The steady stream of feedback provided the confidence to embrace their idea’s full potential to change lives. With three weeks until Demo Day, they changed their name to ‘Pact’ and transitioned from a single product to a platform for behavior change. GymPact became the flagship offering, demonstrating their model of building adaptable products that integrate with the APIs of widely adopted activity tracking systems. This allowed them to forge partnerships with major players in the health and wellness space (like Harvard Pilgrim and Puma)….
Having just closed a seed round of venture capital funding only a month after the program, I can officially say Pact is on the fast track.
It doesn’t appear that Chile will benefit from the $40K of investment; the economic impact benefits the USA. I hope the Chilean government changes their policy, requiring equity in return, though most governments are loath to admit mistakes.