Meet Meritful, a year-old startup that moved from Ann Arbor to Austin last month after winning a Capital Factory contest with $100,000 worth of prizes.
CEO Azarias Reda had never been to Texas when he heard about the competition, which pitted five startups against each other at a South by Southwest Interactive event called “Move Your Startup to Austin for Free.”
Among the prizes donated by Austin companies: free moving services, a temporary place to live from HomeAway, office space at Capital Factory, server hosting from Rackspace and free storage space and organic groceries. Plus a $35,000 investment from the Central Texas Angel Network.
Reda, who holds a doctorate in computer science from the University of Michigan, applied and won a spot, and in March rented a car and drove 20 hours with one of his co-founders, Lander Coronado-Garcia, to take part.
“We were really just looking for a way to get free passes to South by Southwest, which we couldn’t afford,” Reda said. “Then we won, and the next thing we knew, we were packing our bags to move to Austin. It was almost an accident that we ended up here, and all of a sudden we’re submerged into this big welcoming community of people.”
Now Reda is building Meritful, which connects college students with potential employers, from a desk overlooking the state Capitol. He and Coronado-Garcia arrived at the incubator the week President Barack Obama visited. It has been non-stop ever since.
“We have met so many successful entrepreneurs and angel investors and executives at companies like HomeAway,” he said. “A lot of people you meet have done this before and they understand what we’re doing and give us guidance.”
Reda was born in Ethiopia who grew up in Northern Virginia. While pursuing his doctorate, he worked as a data analyst and researcher for LinkedIn, where he saw a need for a service that links students with companies doing college recruiting.
“I saw how hard it was for medium-sized businesses to compete for talent on campuses again big companies with lots of resources,” Reda said. “Recruiting the students takes a number of years. You can’t just show up on campus senior year and expect to hire the best students.”
Meritful is an online platform that companies use to build a relationship with students they meet at career fairs, online and through other programs.
Students upload their information and companies invite promising candidates to be part of their network. Students can share their projects, work on challenges from companies and learn about the company culture, while companies get to know their strengths and build a relationship with them.
A business with up to 100 employees pays around $5,000 a year to participate. Meritful currently has an undisclosed set of early customers and is targeting Austin’s growing base of mid-sized tech companies.
Capital Factory co-founder Joshua Baer said the idea behind the contest was to convince the high-tech brainpower that visits Austin during SXSW to make the city a permanent home.
“Every year thousands of super smart people come here for South by Southwest and then they leave,” Baer said. “This is the exact kind of talent we need in Austin, so the contest was a way to get draw attention to that. And hopefully convince more startups to move here.”
For Meritful, which has four employees and received some initial seed money in Ann Arbor, the next step is raising a new round of capital. Reda said it’s likely the investors will be found in Austin.
In the next two weeks, he is meeting one-on-one with 20 mentors to discuss issues including fundraising and strategic partnerships. In addition, the Central Texas Angel Network has made introductions to prospective financial backers.
“We are very grateful for the community embracing us, and helping us become part of what is happening in Austin,” Reda said. “If I could say anything, it would just be thank you very much.”
The company landed the following by winning Capital Factory’s startup competition:
$35,000 investment from the Central Texas Angel Network
$15,000 for rent from HomeAway
Six months of co-working at Capital Factory
$24,000 worth of server hosting from Rackspace
Moving services from uShip
Six months of storage unit space from Sparefoot
Six months of organic groceries from Greenling
One year of postal mail scanning from Outbox