Farmington Hills startup selected to receive COVID-19 relief funding

MEDC, ID Ventures partner to provide startup relief funding across state

By: Jonathan Shead | Farmington Press | Published July 7, 2020

 Itai Bengal is the CEO and co-founder of Nerdy Bunny I.

Itai Bengal is the CEO and co-founder of Nerdy Bunny I.

Photo provided by Itai Bengal

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FARMINGTON HILLS — There’s no ignoring the economic impacts COVID-19 has had on businesses across Michigan, but as county, state and national relief funds begin to disperse funding to small and big businesses, one industry — startup ventures — is particularly being left out.

The Michigan Economic Development Corporation and Invest Detroit Ventures have partnered to fill that gap. Together, the two entities have awarded a total of $3 million to 58 startup companies from across Michigan, including one — Nerdy Bunny I — in Farmington Hills.

Itai Bengal, the CEO and co-founder of Nerdy Bunny I, said it’s “very humbling” to be one of the chosen companies.

“When we started this business, obviously, startups are always risky, and then with everything with COVID-19, it’s a scary time for any entrepreneur or business in general. We know there were a lot of applicants, and there are never enough resources to go around and make everyone happy, so we were really excited that, even though we’re in a very early stage, we were still selected.”

Bengal said his company, which he began with his co-founder only six months ago, works to power interactive experiences in retail stores. This is Bengal and his co-founder’s second company together. They began their first in 2009 and sold it in 2016.

Working primarily with retailers, Bengal said his company is expected to be behind by about three months, due to retailers being shut down for that amount of time, from where his company could have been without the pandemic. The pandemic has provided a silver lining, too, though.

“A lot of people, rightly so, are hesitant right now to touch a touchscreen in retail no matter how many times they would wipe it down. That was one of the challenges, and we came up with a solution that we filed for a patent allowing you to interact with the store experience using your own mobile phone.

“Does it make up for all the craziness? Certainly not, but I think this is one of the exciting things about young, small companies, is being able to be nimble and react to problems to create new solutions.”

Nerdy Bunny I was awarded $25,000 of the relief funding, which Bengal said will go primarily to salaries, as software companies don’t have many other expenses starting out. The relief funding, along with measures to cut costs amid the pandemic, give Bengal’s company about a year of runway to continue operating, he said.

Managing Director for ID Ventures Martin Dober said extending startup companies’ runways was exactly the goal of the relief fund.

“We’ve got a lot of really good tech startups here in Michigan, and just because of timing and the lack of funding, (they) were in jeopardy of not being able to survive the pandemic, not knowing how long things were going to go on, not knowing when capital markets would open up again to support them, and with the pullbacks we saw early on … we knew something needed to be done to support these companies and help extend their runways so they had enough cash to continue to operate their businesses and, hopefully, get to the other side,” he said.

MEDC Vice President of Entrepreneurship and Innovation Fred Molnar added his goal from his position with the MEDC was to maintain the diversity of Michigan’s economy and its talented workforce.

“There’s been a lot of time, investment, sweat and equity into these companies, and the whole thing could have come crashing down, and then you’re almost starting over again,” he said. “It was really almost a no-brainer to keep these companies afloat and continue on their path of success.

“There is a lot of talent in the state, and certainly we don’t want to lose that to competitive states. I think that’s very important,” he added.

Dober said several factors were considered when choosing the final 58 technology companies, including residing in Michigan, working to commercialize technology rather than just be a service business, cutting spending and/or shift operations to help provide services related to COVID-19, what their funding situation looked like and whether providing relief funding would make a difference in the company’s ultimate outcome.

“We didn’t just select the best companies. That wasn’t really a part of it. We wanted to make sure whatever funding we provided, it could make a material difference,” he said. “If a company had enough money only to last another month, and they were burning $100,000 a month, then there wasn’t really much we could do there unless they found other investors.”

The Tech Startup Stabilization Fund builds upon other statewide MEDC comprehensive entrepreneurial supports, including the Michigan Entrepreneur Resilience Fund, the Business Accelerator Fund and the Pre-Seed III Fund.

While the MEDC doesn’t have any other specific funding plans currently, Molnar said internal discussions for other possible programs are occurring.

“Time is going to tell where this is going, and once we get a good grip on that, it may be obvious there’s problems in specific areas that have to be dealt with.”

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