Toloka.vc to invest $1M in Ukrainian NewHomesMate. It shares details of this and other deals
On October 17, a Ukrainian venture capital syndicate, Toloka.vc, finally closed a nearly $1 million investment in Forta Health. This American medical service helps treat autism by researching and deploying AI-powered clinical programs. Now, the investors are working on a new deal. This time, they will invest in NewHomesMate, a Ukrainian startup that analyzes real estate in the US market and plans to raise $15 million in a new round. The founders of Toloka have already received commitments for at least $1 million, although the amount may be higher.
AIN.Capital provides more insights of the deal.
Details of the potential deal with NewHomesMate
NewHomesMate (formerly Propertymate) is an American startup with Ukrainian co-founders and a team in Ukraine. It was founded in 2018 by Bohdan (Dan) Hnatkovskyy and Sofia Vyshnevska from Lviv. Before NewHomesMate, they worked together on Bohdan’s real estate sales automation project, Brainify. As of June 2023, the team consisted of more than 90 people, some in Kyiv and Lviv, but most new hires are from the United States.
NewHomesMate is a platform that allows buyers of primary residential real estate to find all the information about new buildings. It is an AI-based startup that helps analyze data on buyers and real estate. It predicts which properties customers will be most interested in.
The startup received its first million in 2021 from Pragmatech Ventures. In June 2023, NewHomesMate raised another $5.5 million from Ukrainian Geek Ventures, Flyer One Ventures, and SID Venture Partners. At the time, the startup’s co-founder, Bohdan Hnatkovskyy, claimed that the project had grown by 1086% in revenue as of January 2023 compared to January 2022. In total, the startup has $6.5 million in investments.
NewHomesMate serves 14 local markets in the United States, including Austin, Houston, and Miami. Also, the company has recently launched in Atlanta and Denver. According to Forbes, the startup expects revenue to reach $8.5 million in 2023 and plans to expand to Colorado Springs and Phoenix.
“The company has reached a multi-million ARR very quickly, is growing and opening its business in new cities,” comments Taras Kirichenko, co-founder of Toloka.vc.
Now, NewHomesMate is raising a third round, which is expected to be $15 million. It is unknown who will be the lead investor and, accordingly, with what valuation the round will be closed. But Toloka.vc has already received commitments from 90 of its LPs for a total check of $1 million.
“I think the total investment will be bigger. Overall, 200 out of 500 Toloka.vc partners were interested in the deal with NewHomesMate. Most of them are from Ukraine, although we have many people in the community from other countries: Georgia, Singapore, Kazakhstan, Turkey, and the Baltic states,” adds Promodo CEO and one of the co-founders of the venture syndicate, Oleksandr Kolb.
A $1.4M deal for YCombimator’s startups that never happened
At the time of the fundraising for Forta, the Toloka.vc syndicate had 300 LPs (Limited Partners). Now, according to Kirichenko, there are 500 of them.
“We want to do one deal per month. Of course, sometimes it can be a little more or bit less, but we aim to conclude about 10-12 deals a year, from at least $0.5 to $2.5 million,” he said.
His business partner Kolb added that they could invest with smaller tickets but have a limited allocation.
“So, $200-300k deals are possible. Not because we don’t have funds but because startups simply don’t allocate more shares for syndicates. We haven’t said yes to anyone yet, but we are considering such deals as well,” he clarified.
In particular, Toloka planned to invest in startups that are residents of the current YCombimator batch and even raised $1.4 million in commitments but changed their minds at the last minute.
“We understood startups were too risky. Our strategy is to invest in numbers and growing businesses. And the startups in YC were too young. It doesn’t mean they were bad, but they didn’t fit our strategy,” said Igor Shoifot, another Co-Founder of Toloka.vc and Partner at TMT Investments.
Details of the deal with Fortа Health
It was the debut deal of the syndicate, founded in May 2023. The investment was $1 million. The round attended 89 investors from Toloka.vc, with an average check of $10,000 and a minimum of $5,000. The parties finally signed documents on October 17. The same day, an official release came out.
Forta Health is a telehealth platform to help treat children’s autism. It serves as a bridge between classic healthcare providers and innovative technology providers. With the help of its platform, the company itself creates qualified specialists more affordable for parents of children with autism, simplifies the workflow, and connects them with insurance companies. At the same time, Forta Health actively uses artificial intelligence in all routines to secure a competitive advantage in using data.
The startup grew from $0 to $8 million in ARR in the eight months, compared to May 2023, with an average projected monthly revenue growth of about $1.5 million.
“We expect Forta Health to deliver x10-20 return on the invested capital. Although Toloka’s overall strategy is to give investors 2-3 times growth in 3-5 years, which is approximately 25% per annum, with every new deal, we hope for significantly higher growth,” commented Taras Kirichenko.
“First of all, guys are earning millions of dollars after starting monetization less than a year ago. This is absolutely phenomenal for a startup. Secondly, they do millions with just a few hundred customers, even though the customers are parents of children with autism-related disorders. According to various estimates, there are several million potential clients in the US alone. There are tens of millions worldwide. They started with autism, but in the future, they also plan to work with eight other severe problems, such as diabetes, Down syndrome, etc.” added Igor Shoifot.
“Parents don’t pay anything but—and this is a paradox—even make money. Insurance companies are happy to pay them for training their own children because otherwise, their checks would be several times higher in the case specialists are involved. On the other side, many players in the industry are harmed by this. In America, there is an influential group with its lobby that makes a lot of money in this market, the so-called nurse mafia. That’s why they are trying to fight against companies like Forta Health.”
Forta Health recently raised $20 million from Insight Venture Partners, the world’s largest venture capital fund. According to Forbes Ukraine, in July 2022, the startup was valued at $68.5 million within a $24.4 million Series A round. The investor was the same Insight Partners with the participation of the British Digital Horizon and the American What-If Ventures, MVP Ventures, and FJ Labs. Among the first investors is TMT Investments, one of whose partners is Shoifot.
At the end of 2023, Forta Health planned to raise another $30m at the $120m valuation. Instead, Insight Partners offered to add during the current Series A round another $15m in valuation and committed to lead it. The Ukrainian syndicate joined this round.
Scandal surrounding the deal
According to Forbes, Shoifot’s Garage syndicate also entered the deal with a $500k+ check. It couldn’t happen without a “Russian trace,” too. Screenshots of investor correspondence show many people from Russia and Russian venture capital among the Garage members.
As early as February 25, 2022, the syndicate’s co-founder, Russian-born Sergey Mosunov (currently living in London), offered to make venture capital investments in stablecoins, USDC, in a general chat for investors, arguing that “they are not subject to the restrictions as traditional international settlements.” He urged to open crypto wallets on well-known crypto exchanges and keep at least part of the assets in USDC.
The Garage syndicate members were also offered to enter the deal with Forta using cryptocurrency. It was structured on the Allocations investment platform, a portfolio startup of The Garage syndicate (the option to transfer funds in cryptocurrencies is not mentioned on the Allocations website).
“There is indeed a ‘Russian trace’ there,” says Shoifot. “There are several hundred investors in the syndicate, and most of them have Russian roots, so communications are mainly in Russian. But Garage cannot, even if it wanted to, accept investments from residents of Russia and Belarus because it is prohibited by law, and all investments are made through Allocations.com, which has to do KYC, AML, and full compliance confirming that these people do not live in Russia.
When the war started, we issued two strong statements: each of the Garage founders donated $5,000 to support Ukraine, and then, of course, we continued our support. Therefore, even if there were some vatniks (Russophiles) [among investors], they have already left, and people from Russia can’t get to us because of Allocations’ checking. Could there be some Russian citizens living in London or Dubai? Yes, but I can’t do anything about it. Any fund can have people with a Russian passport.”
Is this considered a risk factor, or do American investors not care? Shoifot says it’s not that simple.
“I would really like it if the position [regarding Russian citizens in the syndicate] was so solid, but it is not. Some take a very sharp, tough position, but only a few. Others say: “Look, we legally cannot deal with any money that has anything to do with the Russian Federation. And some don’t care at all; it’s not even a topic of discussion for them.
There is a lot of support for Ukraine here in the United States. In different cities, big and small, Ukrainian flags are everywhere, and it’s definitely made not just by the Ukrainians. But unfortunately, as the vatniks say, “it’s not that simple.”