Technology breakthrough sets stage for growth at Stratos
Launching a cool, new technology isn't all celebration and revenues. When that happens it's usually the culmination of years of product development, a process
Stratos is quite familiar with.
The downtown Ann Arbor-based startup launched an all-in-one payment card earlier this spring. The Stratos Bluetooth Connected Card consolidates an unlimited number of plastic cards into one and can work anywhere traditional credit cards are accepted. It can load credit, debit, loyalty, membership and gift cards into a familiar, universally accepted card that can instantly change into the card needed on demand. The Stratos Card comes equipped with Bluetooth technology that consolidates your cards and helps make sure the right one is ready to go when the user is ready to check out. Check out a video describing it
here.
"We're really excited to be out there and launching the product," says Thiago Olson, CEO of Stratos. "The reception has been extremely positive."
Getting the Stratos Card to that point took a long time. Think years. Three years to be exact. First, there was the reality that mobile payments have been a hard sell to the public. Google, Apple, and countless other tech companies have tried to make it happen on a broad scale and met limited success, at best.
And then there is the challenge of getting technology for an all-in-one payment card right. The concept seems easy but the execution of creating such a card is much harder.
"It (Stratos' original product idea) started off with a clunky, iPod-like prototype," Olson says. "Then we realized we can fit all of that technology into a card."
Stratos spent a couple of years getting the formula for its card just right. It needed to figure out how to overcome a high failure rate for the stripe on the back of the card. It needed to work closely with manufacturers to make sure all of the thin-film electronics meshed correctly into a durable, flexible, and scratch-proof card.
"Getting these cards to be reliable and work everywhere has been a huge obstacle," Olson says. "It took us a long time to overcome it."
All of this took both a lot of time and money. Stratos raised $5.8 million in a Series A round last year, and another $1.2 million in a seed round prior to that. Silicon Valley-based
Toba Capital Partners led the Series A with Ann Arbor-based
Reasonant Venture Partners participating, along with two other venture capital firms. Stratos also has leveraged a number of local entrepreneurial resources, such as
Ann Arbor SPARK,
TechTown, and counts
Duo Security CEO Dug Song among the members of its board of directors.
"We spent a whole lot of time in Silicon Valley and New York fundraising," Olson says. He adds, "going after this the first time, investors and mentors are essential."
That got the company across the finish line for product develop. It also helped the company scale up its staff and execute a national marketing strategy. It currently employs more than 50 people and is consistently hiring. That team is currently working to get users to sign up for a $95 annual subscription to the card, and looking at getting it used on a broader basis.
"We're not only launching this brand to consumers but we're talking to banks about using the Stratos branded card," Olson says.
Welcome to the Year of the Gazelle, an exploration of the fastest-growing startups in southeast Michigan by the Startup team and the New Economy Initiative for Southeast Michigan (NEI). Not only will we identify the local gazelle companies that are perfecting innovative new products, creating jobs, and generating lots of revenue, we will give you a full accounting of each one. The stories behind the entrepreneurs that build these businesses. The investors that back them. The resources they leverage. How they have all worked together to build Metro Detroit's new economy, and how they plan to do it in the future. In return we will only ask you to do one thing: keep up.
- Written by Jon Zemke