Philly start-ups pivot and scramble, trying to survive and thrive amid pandemic

There are flickers of hope in entrepreneur-land — even amid a pandemic and an economic maelstrom not seen in decades.

Take entrepreneur Mark Surkin, who cofounded Dineable, a catering platform for virtual events. Dineable’s business took off — after the pandemic started.

It wasn’t supposed to happen that way. Dineable last year won a spot in the 2020 class of the Global Start-up Accelerator, sponsored by the University City Science Center, among others.

Before COVID-19, Dineable had built an early business model and software to help event managers and meeting planners. “We spent 2018 building it, and planned to expand in January 2020,” Surkin said. “We were working through the accelerator program, and they helped us pivot” to virtual catering.

Through start-up space at the Science Center at 3401 Market St., he met Eamon Gallagher, who sits on the Global Start-up Accelerator advisory board.

The accelerator “kept helping us, powered through, and that set an example for our business,” Surkin said.

Now going on eight months, the COVID-19 pandemic has changed how entrepreneurs meet-and-greet investors, raise money, and conduct business securely and safely, said Cynthia Sutera, spokeswoman for the Keiretsu Forum MidAtlantic, which introduces founders and funders.

“We just wrapped up our latest investor expo, and the consensus among angel investors, venture capital and private equity folks is a newfound sense of stability,” Sutera said, even as growth has fallen.

“We’ve figured out how to connect with entrepreneurs, how to have meaningful due diligence, on a secure platform. Entrepreneurs are raising money and getting advisers to join their boards. There’s cautious optimism. We are at a slower rate of growth than we would have been, but there’s still some hope.”

Nearly 50 angel groups, investors from corporations, banks, and about 1,500 accredited investors attended the most recent round this month. Thirty-six companies presented, on a platform called Attendease that kept proprietary information secure, she said. Another founder-funder event is scheduled for Dec. 17.

One company, Philadelphia-based Virion Therapeutics, is developing novel T-cell-based treatments that harness the body’s immune system to fight cancers and infectious diseases.

Another, Jenkintown-based SFA Therapeutics, pivoted to focus on treatments for coronavirus. Its SFA005 drug was designed to treat Cytokine Release Syndrome, which causes a potentially fatal inflammatory response. Based on COVID-19 patients’ data, SFA “believes a cytokine storm mechanism causes the progression of symptoms. In the short term, they pivot to focus solely on the use of SAF005 to prevent the damage inflicted on patients by COVID-19,” Sutera said.

Overall, 850 start-up companies raised $2 billion from angel investors and follow-on rounds in 2019, slightly higher than in 2018, according to the latest data from the Angel Capital Association’s Angel Funders Report.

Dineable had a strong network of people in the events industry, including planners, caterers, and technology companies. They urged Surkin, cofounder Nick Farrell, and five part-time contractors to build a hospitality-virtual dining network through delivery companies and restaurants — taking food to participants’ doors so they can share a meal.

“It was clear events would still happen, but they’d go virtual. In the future, everybody knows virtual-hybrid events are here to stay,” Surkin said. This past March, Dineable worked an event for FARE, the nation’s leading food allergy nonprofit (www.foodallergy.org).

With this autumn’s lockdown, catered meals, snacks and treats are more popular than ever, he said.

“Yeah, events are virtual now, but so what? The world is different, and it’s going to stay different,” he said. “We all know that as a society we’re horribly divided. Sharing a meal is one of the best and most effective ways to build empathy for someone and gain perspective. I learned that from my grandma, from [celebrity chefs] Padma Lakshmi and Anthony Bourdain and Andrew Zimmern, and from my cofounder, chef Nick Farrell. We can’t let anything get in the way of that mission of connecting people over food.”

Dineable is releasing menus and gift packages at dineable.com for Thanksgiving and other holidays.

“The holidays are obviously prime time for people to eat together, and our service can make that possible regardless of physical distance,” he said.

Dineable packages start at $45 a person (including food, delivery, taxes and fees) for a happy hour kit, lunch, or afternoon meal.

Since launching this service over the summer, “we’ve sent out almost 1,000 meals to people in more than 30 states.” He declined to share sales numbers, but said average sale per guest so far this year is roughly $55.

Sid Kandan and Sandy Gomberg, former CEO of Temple University Hospital, founded Stel Life (www.stel.life) an in-home device to track patients’ vital signs remotely. The company this year built and shipped a few thousand devices out of their Science Center start-up space.

Stel Life has been growing steadily, and even more so in the middle of the pandemic. Stel’s Vitals Hub charges $150 per device and $10 a month for services. Last year, Stel Life reported sales of close to 1,000 of its Vitals Hubs.

“We expect to pass 10,000 Vitals Hubs before the end of this year,” Kandan said.

With just under 10 employees, “we kept our physical offices open upon the request of customers relying on us for remote patient monitoring equipment,” said Kandan.

At the beginning of the pandemic, Stel Life also got lucky: Health system leaders wrote letters requesting landlords and the city classify Stel as an essential service provider to prevent device supply chain disruptions.

All employees follow the city’s new restrictions, limiting travel for only essential trips and restricting contact to those at home. Only a limited number of essential employees are permitted at the office. All others work from home.

Amid the Black Lives Matter and MeToo movements, Michael O’Bryan had positioned himself and his start-up, HumaNature, to educate corporate and other clients on diversity, equity and inclusion in the workplace.

Now, even in the midst of the city’s shutdown and economic woes, his business is thriving. He works with cofounder Robert Peagler, and is hiring two part-time employees. Past clients include the Mural Arts Philadelphia, Temple University Hospital and the Curtis Institute of Music.

O’Bryan said the firm offers training and classes on stress management, social cognitive bias, and race, equity and inclusion.

“Folks are dealing with trauma and chronic stress” during the pandemic, he said. “COVID just surfaced problems that were already there, and employers want to know how to address that. They don’t want to be mean employers.”

Racism, classism, and other flawed policies at work are forms of “dehumanization,” O’Bryan said. “There’s no way to do diversity-equity-and-inclusion without recentering the humanity of those excluded by policy and practice, whether it’s through legislation, handbooks, informal practices and unequal pay.”

Based in Philadelphia, HumaNature clients come mostly through word of mouth referrals and public speaking, or as he calls it, “DEI cleanup.” We do paid DEI training around trauma” in the workforce. By close of 2020, he projects $250,000 in sales.

Many other entrepreneurs had to come up with new ideas. Jessie Garcia, founder of Tozuda (www.tozuda.com), a head impact sensor for concussions, survived a succession of hard knocks. Some studies involving team sports that Garcia was working on have been curtailed or shut down entirely at high schools and colleges.

Garcia was forced to adapt: She started chasing new industries such as construction.

“We want sports to come back, but we always knew there was a market for sensors on hard hats,” she said. “What we know from sports is 90% of concussions do not result in loss of consciousness. There are many being missed on the job sites, and it’s the most expensive injury in the workplace.”

Tozuda will participate in the virtual Women in Tech Soiree X Launch Lane Showcase on Dec. 10 from 3 to 8 p.m. This year’s session will focus on rebuilding health, workforce and employment, the growth of start-ups during this pandemic, and the race and gender-based inequities facing Black, Latinx, and Asian communities and start-ups headed by women and minorities.

“If anyone is interested in connecting with our company to learn more, it’s free,” she said, as Tozuda is actively seeking new partnerships and investment. The Tozuda sensor currently costs $49.99 at retail.