Nixle helps police send text-message alerts to local residents. Can it raise $7.5 million?
Check Your Phone Mobile alerts from Craig Mitnick's company helped police find a fugitive in Texas and an Alzheimer's patient in Florida.
The Pitch: "Nixle offers a secure text-messaging platform that sends mobile alerts to subscribers in a specific radius. Our free service, Municipal Wire, allows government agencies to send alerts about recent crimes, emergencies, and public services to residents who sign up for updates. It has helped police departments find suspects and missing persons. Agencies also use the service to share real-time information with other municipalities. We are introducing a service, WireWords, that will charge businesses a subscription fee to send offers to their customers via text message. We are seeking funding for marketing and further development of WireWords."
CEO: Craig Mitnick
LOCATION: San Francisco
2009 REVENUE: None
2010 PROJECTED REVENUE: $6 million
NUMBER OF GOVERNMENT AGENCIES USING THE SERVICE: Nearly 4,000, including the Los Angeles and Chicago police departments.
FUNDING SOUGHT: $7.5 million
IN THE NEWS: Security officials used Nixle's service to share information at the Academy Awards and the G-20 summit.
The Experts Weigh In
Tough Market These sorts of applications have received a lot of attention in the past year, and Nixle seems to have been well received by municipalities. It remains to be seen whether Nixle can acquire business customers in a cost-efficient manner. Local merchants will likely bring in only small amounts of revenue, and it will be difficult to market to them. When pitching investors, Mitnick needs to explain how Nixle will acquire customers and what the lifetime value of those customers will be.
Dan Rosen principal, Highland Capital Partners Lexington, Massachusetts
Demonstrate Value Nixle will attract some business customers just because it has a unique, sexy technology. But to have longevity, it needs to prove a quantifiable return on investment for its business customers. How effective is this distribution mechanism? As an investor, I would want to know more about the service's engagement rates: How many people subscribe to the alerts, and what actions do they take when they receive texts? Will an alert lead to a sale? Nixle needs to have measurable data to prove the value of this service.
Josh Cohen managing partner, City Light Capital New York City
Charge for Both Services A system like this would be valuable in a disaster. It would have been very useful during the Virginia Tech shootings a few years ago. Nixle should consider offering additional services to municipalities at a fee. The small-business market, however, is very different. In fact, it's really not a market; it's many tiny, fragmented markets, and no one except the yellow pages has cracked it. Nixle should start with one area and figure out a distribution model before attempting to duplicate it elsewhere.