Austin had a strong second quarter this year, with startup funding increasing 182 percent from the first quarter of the year. That was $330M in capital raised across 43 deals, according to PricewaterhouseCoopers and CB Insights' latest report.
But deal flow doesn't care about months, quarters or seasons. It cares about good deals -- and the broader economy. There weren't any monster deals in July, which isn't to say the deal flow was bad. Several startups landed early-stage and Series A type deals ranging from $500K to $10M.
Meanwhile, a couple Austin companies found exits. One of them seemed a bit sour, considering the company's prior value. But it was Austin's win when Sizmek acquired California-based Rocket Fuel for about $145M in cash, considering the company's prior valuation of about $2B.
We write about all the Austin tech and startup funding deals in the Beat newsletter, where we also report all of the day’s top Austin tech and startup news and share links to other interesting stories.
Now, here’s a look at the top deals we’ve seen through SEC filings and company announcements in July.
Angel Investments, Venture Capital and Private Equity Funding (June 2017)
- Upswing International, Inc., an Austin-based edtech startup, raised $3.7M in equity funding, an SEC filing shows. The company, founded in 2013 by Melvin Hines, provides online tutoring and analytics to help college students succeed and colleges fight attrition. It's not immediately clear who led the round. But existing investors listed on Upswing's AngelList page include: Tech Wildcatters, Silicon Valley Growth Syndicate, GrowthX VC fund founding partner Will Bunker, and several others.
- SourceDay, an Austin order management automation software startup, raised a $3.5M round of equity funding from Draper Associates, Silverton Partners and ATX Seed Ventures. The new money will help the company hire product development and salespeople to keep up with demand. SourceDay was founded by Tom Kieley and Clint McRee in 2013.
- Continuum Analytics, the Austin-based developer of Anaconda, reported raising $10M in new equity funding. It's unclear whether this is a new funding commitment or part of the $24M round the company announced in 2015. That round was led by BuildGroup and General Catalyst Partners. Prior to that, the startup got a $3M research grant from the Defense Advanced Research Projects Agency - or DARPA. Continuum Analytics, founded in 2011, is known to most as the company behind Anaconda, the open-source distribution for Python programming language. Continuum Analytics declined to provide details on the funding. But CEO Scott Collison said through a spokesperson that the funds will go toward sales and marketing and our enterprise product and offerings.
- Self Lender, Inc., an Austin-based fintech startup, reported raising $3.4M in equity funding from 14 unnamed investors. Prior investors include Austin's Silverton Partners, Techstars and Galvanize Ventures. Self Lender helps users build credit and provides personalized credit score tracking, credit monitoring and access to simple financial tools. It builds credit by having users get a loan from a banking partner and holding that in an insured CD for a year. You make 12 equal payments to repay it, and the payment history goes to credit bureaus. Then, you get a bit of interest from that and have helped build some credit.
- Embark, the Austin startup analyzing dog DNA, relocated its headquarters to Boston. Why? The founders told BostInno they moved to be closer to Boston’s large cluster of biotechnology companies, some of which the founders have been talking to for potential partnerships. Also, Matt Barton, Embark’s CTO, has roots in Boston, making the move easier for him. Meanwhile, the company announced a $4.5M infusion of new money, led by Cambridge-based Founder Collective, Freestyle and ThirdKind. That brings total funding to $6.5M. The round also includes investment from 23andmeCEO and co-founder Anne Wojcicki and Section 32, the new firm from Google Ventures founder Bill Maris.
- Telestax, an Austin-based company that makes real-time messaging, voice and video apps, has raised a $4.7M funding round that comes on the heels of the launch of the company's latest communications tool. In late May, the company, which was founded in Palo Alto, Calif. in 2011, launched theRestcommOne Marketplace, which operates on on Telestax's cornerstone platform. It lets Telestax's existing service provider customers sell real-time apps that fit into the RestComOne platform they're already using with their customers. That means you could move a text message conversation to a call and beyond all within the system. Telestax plans to use the new funding announced on Monday to expand operational support and market reach. The $4.7M round was led by Austin's LiveOak Venture Partners. And it adds to an $809,911 seed-stage round led by Pinnacle Ventures in 2015.
- Kahoot!, an Oslo-based game-based learning startup that has offices in Austin at Capital Factory, landed a $10M Series A round. It was led by new private investors from Norway, along with Microsoft Ventures, Creandum and Northzone.
- Snap Kitchen, the Austin-based prepared meals company, added $1M in new equity funding, an SEC filing shows. That adds to the $117M of funding the company has already raised as it continues to expand into new markets.
- Cycorp, Inc., an Austin AI software company, raised $10M in equity funding, a federal filing shows. No word on who the investors are. In face, Cycorp kept an incredibly low profile for years as AI expert Dr. Douglas Lenat launched his quest for AI with The Cyc project in 1984. Cycorp formed out of that in 1994. This appears to be the company's first funding that had to be filed with the SEC. Lenat is one of AI's earliest pioneers. Last year, WIRED reported Lenat and fellow Austin-based AI experts launched a company called Lucid.ai to commercialize Lenat's programming. That company's site appears to still be under development.
- Waterloo Sparkling Water, an Austin-based brand with naturally-flavored sparkling waters similar to LaCroix, raised $3.1M in equity funding, a new SEC filing shows. The company's founders and executives include Sean Cusack, an investment advisor at UBS and co-founder of Mighty Swell; Clayton Christopher, who co-founded Sweet Leaf Tea and Deep Eddy Vodka before co-founding CAVU Venture Partners; Brandon Cason, who is CMO at Waterloo and former VP of marketing at Deep Eddy; and Bader Alam, a senior VP at CAVU and former VP at Bespoke Capital Partners.
- Austin-based Smart Flour Foods, which makes gluten-free pizza crusts, hamburger buns and other products, raised $2.1M in debt funding, a new SEC filing shows. The company, led by CEO Charlie Pace, raised $3.8M in equity funding in 2015 and $2.8M in equity in 2014.
- Authors, Inc., an Austin-based AI software maker for the publishing industry, received an equity investment (amount unknown) and a definitive reseller agreement from Chicago-based LSC Communications, Inc. Authors Inc., founded by MonicaLanders, provides AI editorial analysis, keyword enhancement and other insights, and LSC plans to offer those services to publishers.
- Cerberus Interactive, Inc., an Austin-based mobile game maker, reported adding $130K to the $70K it had previously raised.
- EMC2 Financial, an Austin-based app maker for financial markets, reported raising $400K from three unnamed investors. The company was founded in 2016.
Other Activity
- Clearhead, an Austin-based digital marketing optimization company with offices in Cincinnati and London, is being acquired by New York-based Accenture (NYSE: ACN). No financial terms were disclosed. Clearhead was founded in 2012 by Matty Wishnow, Ryan Garner and Sam Decker.
- Jana Partners LLC sold off its shares of Whole Foods and made roughly $300M. As you may recall, Jana Partners earlier this year disclosed an 8 percent stake in the Austin-based grocer and pressured the company to make big changes and consider a sale. The day after Whole Foods announced it would be acquired by Amazon, Jana Partners started selling shares. Federal filings show Jana Partners sold share in a series of moves for a combined $1.09B. The hedge fund is reported to have paid about $794.5M for its 8% stake in the Austin-based organic grocer.
- March Capital Partners, a Santa Monica, Calif-based venture capital firm, opened an office in Austin, 512Tech reports. The office will be home to a rotating cast of partners visiting Austin to scout for deals. March Capital typically invests about $10M per deal in companies already making revenue, and last year it raised a $250M fund. The firm sees itself as an ideal partner to lead follow-on rounds after early-stage firms, such as Silverton Parnters and LiveOak Venture Partners, have led initial funding rounds.
- LiveOak Venture Partners, one of Austin’s most active venture capital firms, is planning to raise a $110M investment fund. A representative with LiveOak declined to comment on the filing, which is somewhat common when the filing only indicates the firm is planning to raise money and sets a target amount. LiveOak’s last fund, which was lock in three years ago, was $109M. By comparison, Austin-based Silverton Partners recently filed similar paperwork showing an intent to raise $100M.
- Upland Software, Inc. (Nasdaq: UPLD), an Austin-based work management software company, acquired Waterfall International Inc., a San Francisco-based mobile messaging company, for $24.4M. Waterfall International, founded in 2005, uses text messaging and other mobile messaging to provide cross-channel marketing software for companies including 7-Eleven, Cabela's and Jack in the Box. The acquisition comes about a half year after Upland acquired Massachusetts-based Omtool Ltd., which sells secure document storage and sharing software, for $19.2M. That was fueled, in part, by the $90M line of financing Upland secured in 2016 from Wells Fargo Capital Finance and CIT Bank. Upland has now made a total of at least 12 acquisitions since its founding in 2013.
- Sizmek, an Austin-based adtech company owned by Vector Capital, is acquiring California-based Rocket Fuel (Nasdaq: FUEL), which makes a predictive marketing platform. Sizmek will pay about $145M in cash (or $2.60 a share). For Sizmek, the acquisition is a bit of a bargain. The Wall Street Journalreports Rocket Fuel has seen its stock fall from as high as $66 per share in 2013 and a market value of about $2B.
- Smart Host, smart pricing startup for vacation rentals and a 2014 alumna of Techstars Austin, was acquired by San Francisco-based Beyond Pricing. Smart Host moved to New York sometime after completing the Techstars program in Austin.
Departures
- Dev Bootcamp, a coding school operating in Austin and several other cities, is shutting down. In a message to students the bootcamp said it will provide career support for the school’s last cohort for at least six months after they graduate in December. Dev Bootcamp has six locations, including in Austin at 1705 Guadalupe St. An employee told the ABJ Friday that the last Austin cohort will start classes on Monday.
- The Iron Yard announced on its web pages that it is shutting down after its current round of students graduate and get post-grad career assistance. In March, the coding school announced it would shut down in San Antonio, Columbia, South Carolina; Cincinnati; and Minneapolis-St. Paul.
