Networking, Risk-taking, and Capitalizing on Resources:
SkyDeck Startup SuperAnnotate Reflects on Journey to $14.5M Series A Round
Last week I caught up with the co-founders of SuperAnnotate, Tigran and Vahan Petrosyan. In the spring of 2019, SuperAnnotate joined SkyDeck’s accelerator cohort program. I had just joined SkyDeck as Head of Program and vividly remember being excited about their company and vision, early in their startup’s journey. I was impressed by their pitch and the clear passion in their story. It’s every bit as fulfilling sitting on the accelerator side seeing the SuperAnnotate team go through the startup journey and exit. As seen in this July Forbes article, SuperAnnotate raised a $14.5 million Series A round, on their mission to help automate the computer vision pipeline. After talking to so many of our seed stage portfolio companies who are always curious to learn more about the journey to Series A, I thought I’d sit down with Tigran and Vahan to hear more about what had transpired since I last caught up with them two years ago.
Sibyl: So great to see you two on Zoom! I wish we could be chatting in person. SuperAnnotate has come a long way and evolved, how would you describe your evolution?
Tigran: It’s interesting to look back at how much has evolved and changed since we originally joined SkyDeck. Putting that into perspective we, in the beginning, had a segmentation tech which came from Vahan’s Ph.D research at the University of Stockholm. Based on that, we were building a platform to accelerate the annotation process for a specific type of funnel, patent semantic segmentation.
Since then, it has grown to be an end-to-end application development platform for computer vision products. Meaning that if you have any camera you want to put somewhere to detect any object and you don’t have any computer vision expertise, but you want to accelerate your pipeline model creation process, we’re the right place to go.
Sibyl: I think one of the challenges for so many early stage startup founders is trying to nail that perfect product market fit. What was that process like for you, in terms of pivoting or refining your product feature set?
Tigran: We started by providing services with our platform which gave us a competitive edge early on. We saw greater value in conducting those services due to the lack of proper infrastructure-expanding resources in companies wanting to build computer vision. Those resource costs are generally quite expensive and easily sustained only by larger companies.
We realized that we could build a platform for the training data of these companies to get a sense of that data, building models, etc. This means building all the key pieces to mold and strengthen computer vision pipelines. There are many teams all over the world conducting labeling which is what we were initially doing before realizing the difficulty in scaling, the finite resources, and limited skills. In this process, we discovered that we really want to work with diverse people in this realm with the right skills to help our clients. From there, emerged the idea to build a marketplace of integrated service teams, in addition to the platform, which is where we currently are.
Sibyl: Congrats on the latest news was the announcement of you raising $14.5 million in funding Series A round. How’d you meet your lead investor?
Tigran: Yes, it has been an incredible journey! Our lead investor is Base 10 Partners. They are a relatively new, but a rather fast growing venture firm. We met their partner quite some time ago in Armenia, when we were just starting out before joining SkyDeck. We ended up reconnecting again as they saw vast changes and expansions implemented overtime, which triggered the Series A conversation. Ultimately, we ended up partnering together and it has been really great.
Sibyl: Since you very recently closed the latest round of funding, I’m curious to know what you observed about the current fundraising climate?
Tigran: This could just be us, but we feel like the closing cycles are getting shorter and shorter quicker. It helped us greatly to solidify our story and mission before diving deep into the fundraising process. I made checklists with myself and polished over everything hundreds of times, from outlining clear processes with different stages and investor lists to having the answers to all of my critical questions. This was extremely helpful and allowed us to get the term sheet in just ten days, from starting to end.
Sibyl: Nice work on the quick close! I know that getting the story right is one of the hardest parts about fundraising. Who did you lean on for expert advice on fundraising? What are the characteristics of people that early stage startup founders should be looking for?
Tigran: Great question, we were lucky that our seed investor was really experienced in building startups from seed to series A and he was actively working with them. He was from Point Nine Capital and he was very much involved in helping us in this process because he had vast experience and knew our industry very well. That experience of knowing what it takes to get from seed to series A is very important and is what originally led us to take his advice.
Also, talking to other folks who are industry experts in terms of whether research or general computer vision understanding about the future, for example. Some advisors, like professors from UC Berkeley and prominent figures in the computer vision space, we actually met through SkyDeck. They all have helped us gain a better understanding about the future and helped us refine our story
Vahan: Yes, also going back to our experience with SkyDeck, we were working with Lance Matthews as our advisor and he was very helpful in picking our seed investors that Tigran previously mentioned. We were genuinely guided on every small step of the process which has made all the difference.
Sibyl: That’s fantastic! When startups come to SkyDeck they often cite the access to talent including undergrad, postdoc and MBA interns from UC Berkeley as one of the reasons they come. What was SuperAnnotate’s experience with SkyDeck when it came to leveraging that talent bridge at UC Berkeley?
Tigran: Yes, the immense talent pool was one of the most exciting aspects. Of course, Berkeley has one of the best computer vision faculties and that allowed us to network with people we had never dreamed of meeting. Meeting people who trusted our technology and shared our vision ended up joining our advisory board, for example, Professor Trevor Darrell and Pieter Abbeel.
I remember we had some postdocs that joined us for a short internship period and it was interesting to see the genuine excitement in the people who were talented researchers and really wanted to understand the startup realm and journey.
Towards the end, we were looking for our first business hire and we got really lucky with Jason Liang, who we met through SkyDeck advisor meetings. SkyDeck offers such a huge network; whenever we needed any kind of position or advice, there was always someone experienced who could help.
Sibyl: Looking back on your experience, what advice do you wish you had heard early on? What advice would you now give to other early stage founders?
Tigran: I think capitalizing on your resources is vital in the early stages. One thing we really love about SkyDeck is the very personal approach that every team is given and it’s something everyone should take advantage of. Anytime you need to set up a meeting, advisors and mentors would quickly be available to learn what’s going on, take you through possible options, and really try their best to solve the problem. This is quite unique for an accelerator and there are so many talented advisors that use their vast experiences to help you grow and understand. Coming into SkyDeck, of course, product market fit and customer development are the main focus at that stage, but this is still a deeply important factor. Leveraging the whole network of SkyDeck provides immense value and the sooner you understand how to do that, the better your experience will be.
Whether you’re looking for clients, advisors, or interns, it’s important to leverage everything that SkyDeck provides due to how limited your time is. One last thing is to definitely make full use of the workshops. As recently graduated Ph.D students, there was much we had yet to understand about business. These workshops were critical for us because they taught us how to build a proper business and they helped us become better businessmen.
Vahan: Adding to that, I think it is crucial for founders to build their story and truly believe in it. I remember certain stages during which we didn’t completely believe in our story and it visibly altered our performance. Your story is easily one of the most integral parts of the startup and living that story is equally as important to move forward.
Sibyl: I completely agree that getting the story right can be hard for startups. You actually reminded me of the first time we met during the welcome drinks for your cohort. Going home that night, I remember thinking about our conversation and the excitement for you two because I could feel your passion and I knew you really had something and were going to go places.
Vahan: Right, I remember that yes!
Sibyl: Your team is unique with you being co-founders that are also brothers. What is the best part about working with family?
Tigran: The best part is the amount of trust and understanding we have between each other. Despite any disagreements we have this assurance that we will find a solution. As brothers, we feel as though nothing can stop us from pushing forward our vision for the company. It’s so critical to have that reassurance of knowing that your cofounder is someone that really has your back.
Sibyl: One last question, thinking back on everything that has happened in the past 3 years since you started your company, what has been the greatest highlight or lowlight?
Vahan: Thinking back, a lowlight was definitely the few moments during which the threat of bankruptcy was very real. We had many sleepless nights and there were times where we couldn’t really pay team salaries for a couple months. One of our team members even put all of his savings to pay the salaries. In terms of highlights, there are too many to count in my mind.
Tigran: Just to mention one highlight, which was definitely a bit crazy when we were just starting; it happened immediately after SkyDeck. Looking back it was definitely stupid, but I think paid off quite sweetly now. We had very little money in our bank, but really needed to sponsor this big conference and show ourselves as one of the leaders in this industry. So, we spent half of all our money to sponsor that conference with booths and a showcase. In a sense, it is a pretty big highlight because of the excitement afterwards and it set ourselves quite into this stage in this space, but it was definitely a big risk. In the end, it was worth it. Sometimes you have to make bold moves.
Sibyl: It’s so great to catch up with you two. SuperAnnotate was part of the first cohort I worked with when I joined SkyDeck full time so it’s incredibly gratifying to see you grow and achieve success. Just want to say again, congrats on your recent raise! Your hard work is paying off.
Sibyl Chen is the Senior Director of Program at Berkeley SkyDeck, UC Berkeley’s premier tech accelerator.
