Austin's Phunware plans to go public after a merger. Favor, a local on-demand delivery startup, was acquired by San Antonio-based H-E-B. And SparkCognition added new money to bring its Series B total to $56.5 million.
Those are just a few of the highlights from last month. Below, we've made a list of the all local tech startup funding announcements, mergers, acquisitions and venture capital fund activity from February 2018.
We cover these types of startup news items and much more in our daily newsletter, The Beat. You can sign up to get that here. If we missed something in this roundup, please e-mail bwistrom@americaninno.com.
Now, let’s look at all the activity from February 2018.
Austin Startup Funding
Juniper Square, a real estate investment software startup headquartered in Austin and San Francisco, closed a $6 million Series A. The round was led by Felicis Ventures, and it brings the company’s funding total to $8 million. Juniper Square, founded in 2014, came out of beta last year. The startup is led by Co-Founder and CEO Alex Robinson.
New Knowledge, a startup combating fake news that also goes by the name Popily Inc., has raised about $2.2 million, according to a new SEC filing. The startup, led by founder and CEO Jonathon Morgan, uses machine learning to help flag disinformation on social media to help brands and countries reduce the impact of misleading information. The company, already profitable, has used its findings to support articles in The Washington Post and The Atlantic. The round was led by Moonshots Capital. Haystack, GGV Capital, Geekdom Fund Capital Factory and Spitfire Ventures also contributed.
Restream, a service that lets gamers stream their gaming sessions to multiple video sites at once, raised a $2.5 million round, per this SEC filing. Founded by Alexander Khuda and Andrew Surzhynskyi in 2014, the startup has delivered 21 million-plus broadcasts.
RigUp, an Austin-based marketplace for oil field equipment, closed a $15.8 million Series B and secured a $30 million credit facility with Silicon Valley Bank, the ABJ reported. This follows RigUp’s $15 million Series A in 2016.
Unomi Inc., an Austin-based health and wellness company that makes at-home test kits and supplements, raised $3.7 million, according to a new Form D filing. The equity funding came from 24 investors. The company was founded in 2006 under the name Blue Spot Health.
Multiscreen platform and mobile ad startup Phunware reported raising an additional $26.8 million in equity funding and other securities. The move foreshadowed Phunware's merger with Stellar later in the month (more on that below). This funding followed a $22 million infusion in 2016 that was led by Khazanah Nasional Berhad, the strategic investment fund of the Government of Malaysia. Other investors from past rounds have included Fraser McCombs Capital, Maxima Ventures, WWE, Central Texas Angel Network and Baylor Angel Network.
Oil and gas investment management software startup MineralSoft has closed a $4 million Series A round led by Houston-based Cottonwood Venture Partners. The Austin startup, founded in 2015, recently partnered with fellow Austin oil and gas startup DrillingInfo. MineralSoft recently moved its headquarters to a larger facility. It plans to expand again later this year as it expands its marketing and sales teams.
Employee Wow, which helps employers gauge employee performance and engagement through an anonymous feedback platform, has raised a $1 million round of seed funding. The new money comes from Sean Tomlinson, a Hong Kong-based investor. As part of the deal, Tomlinson is joining the company’s board. The funding will help Employee Wow, which was founded in 2016 by CEO Jessica Ciabarra and CTO Chris Ciabarra, expand its enterprise sales team.
EXTEN Technologies, a software and storage company previously called Mangstor that appears to be in the midst of a rebrand, reported adding $400,000 in debt funding. When they were called Mangstor, the company reported a $7 million equity round in 2017, a $5 million round in 2016, an $8 million round in 2015 and a $4 million round in 2013, SEC filings show. The EXTEN website says it is “launching soon.”
CBANC Network, an Austin-based professional network for the banking industry, raised $500,000 in equity funding, according to a Form D filing. The company last raised a $4 million Series B in 2015.
ZenBusiness, an Austin startup that helps other companies manage business incorporation filings and other government records, has raised a $4.5 million seed round. The funding round was led by Lere Hippeau, an early-stage venture capital fund in New York City. Other investors include New York-based Greycroft, San Francisco-based Slow Ventures, Revolution’s Rise of the Rest in Washington D.C. and San Francisco-based Founders Fund. ZenBusiness, which has been operating quietly since its founding in 2015, helps other businesses, including LLCs, C-Corps and S-Corps, file with the state to become a business entity, manage a variety of state and federal regulatory filings and stay up-to-date with tax filing.
Smarter Sorting, which files paperwork as Waste Repurposing International, has raised $5 million in new equity funding, an SEC filing shows. The startup, founded by Chris Ripley and Charlie Vallely in 2014, turns incinerator-bound consumer chemical waste into reusable products. It’s customers include the cities of Austin, Portland, Salt Lake, Boulder and Tempe.
Compl.ai, an Austin-based startup that helps business travelers know what options fit their company travel policy, has raised $1.2 million in equity and debt funding, according to a new SEC filing. The startup, founded by Daniel Senyard, was part of the Capital Factory accelerator last year.
SparkCognition, an Austin-based AI cybersecurity and analytics startup, has closed its Series B round with $56.5 million. The first tranche came last June from Verizon Ventures and Boeing’s HorizonX fund. The latest $24 million came from CME Ventures, Brevan Howard Investment Holdings Limited, Invenergy Future Fund, as well as two Cisco veterans — former CEO and chairman, John Chambers, and former EVP and chief development officer, Pankaj Patel. This builds on SparkCognition’s existing momentum, which includes partnerships with IBM, Google and National Instruments, as well as its recent award from the Department of Defense’s DIUx. The new funding brings SparkCognition’s total to $73.5 million.
RVshare, a marketplace for renting RVs that is based in Austin and Akron, Ohio, announced it raised $50 million from Austin-based investment firm Tritium Partners. RVshare’s CEO is Jon Gray, an early employee at HomeAway. And Tritium Partners led early investments in HomeAway. RVshare plans to initially use $20 million of the funding to improve its user experience and hire top-notch talent.
Nulo Inc., maker of Nulo Pet Food, has raised $5.5 million in equity and other securities, a new SEC filing shows. The company, founded in 2009 by Michael Landa and Brett Montana, makes cat and dog food, including grain-free kibble recipes that are sold at PetSmart. The funding filing lists CAVU Venture Partners co-founders Clayton Christopher and Brett Thomas as board members, and CAVU lists Nulo as one of its brand partners, along with several other high-profile consumer packaged goods startups. Nulo previously raised about $6.4 million in equity rounds between 2010 and 2015.
Vyopta, an Austin-based communications monitoring startup, reported raising $3 million of a $7.5 million offering. The company’s software provides insights about call reliability and quality from company video, voice and messaging platforms made by big players like Microsoft, Cisco, Zoom and Skype.
Guidefitter, an Austin-based online marketplace for hunting and fishing guides, has raised $1.5 million in equity funding from a single investor, a new Form D shows. The startup, founded by CEO Bryan Koontz (who is also CEO at CBANC Network) in 2011, previously reported raising a $1.5 million round in 2014 from private investors. Last fall, Guidefitter inked a partnership with Ariat to provide a discount on boots and apparel.
ClosedLoop.ai, an Austin-based AI startup for healthcare providers, reported raising $3 million in equity funding from 27 unnamed investors. The startup was founded last year by CEO Andrew Eye, former founder and CEO of Boxer, Inc. (acquired by VMWare) and CTO Dave DeCaprio, a former VP of engineering at GNS Healthcare and CEO of Cizr.
Acquisitions, Mergers and IPOs
PeopleAdmin, an Austin edtech company, agreed to acquire Performance Matters, an edtech company based in Utah that is operated by Weld North Holdings LLC. The combined company will operate as TalentEd by PeopleAdmin. As you may recall, Reuters reported late last month that PeopleAdmin owner Vista Equity Partners was said to be considering a deal to merge PeopleAdmin with PowerSchool or send one or both companies for an IPO.
Back in November, Bazaarvoice announced it would be taken private in a buyout by Marlin Equity Partners. A lot of math and a few lawsuits later, the company this morning announced the deal has closed in a SEC filing. Stockholders got $5.50 a share in cash, which helped make the whole deal worth $521 million.
Grocery giant H-E-B is buying Favor, an Austin-based on-demand delivery startup. Terms of the deal weren’t disclosed. But the mashup gives H-E-B a new set of data and logistics technologies. The deal allows Favor to continue operating independently and keep its brand. H-E-B also said it will keep all of Favor’s employees and its 50,000 or so runners, who operate as contract delivery drivers, as well as its CEO, Jag Bath. Favor's investors have included S3 Ventures, Draper Associates, Silverton Partners and Corsa Ventures.
Austin sports and entertainment fan analytics startup Umbel is merging with Dallas-based MVPindex, a social media analytics company founded in 2013 by Shawn Spieth, father of golf star Jordan Spieth. As a combined company, they’ll have 140 brands, teams and venues as customers. The combined company will be overseen by a mix of both companies’ board members. MVPindex CEO Stan Woodward will be CEO and MVPindex Co-Founder Shawn Spieth will be president and chairman, with Co-Founder Kyle Nelson as CMO. Umbel CFO Iser Cukierman will be the company’s CFO and GM of the Umbel business unit. The news release didn’t indicate what role Umbel CEO Lisa Pearson will play, if any. No financial details were provided.
Dell Technologies has agreed to sell Mozy to Boston-based data protection company Carbonite for $145.8 million in cash. The deal is expected to close during the first quarter of 2018.
Bazaarvoice announced its first acquisition since being taken private by Marlin Equity Partners in November. It has acquired Chicago-based AddStructure, which makes tools to let customers shop for things online using voice commands. No financial details were provided. AddStructure was founded in 2014, has raised $2.4 million and was one of the ten startups picked for the Target+Techstars retail accelerator in Minneapolis.
Austin web design and marketing firm Springbox has acquired nFusion, another Austin marketing company that provides targeted consumer analytics and content. No financial details were released. nFusion CEO John Ellett will become Springbox’s chief marketing officer as part of the deal. The two companies operate in similar spaces and already share at least one client – Q2 Software.
Tiff’s Treats, a warm cookie delivery business, is acquiring Nashville-based Jake’s Bakes, the ABJ reported. The move comes as Tiff’s Treats is expanding in Nashville with a store opening in late March. It’s the first acquisition for Tiff’s Treats.
Phunware announced it will become a publicly traded company following a planned merger with Stellar Acquisition III, Inc., which is based in Athens, Greece. It’s expected to trade on the Nasdaq exchange as “PHUN.” The deal is expected to close in Q2. Stellar describes itself as a “blank check” company that helps companies go public and raise money — and by going public through acquisition. Phunware will likely save a lot of money it might have spent on an IPO, the ABJ noted. Two other news items emerged in the announcement: 1.) The deal values Phunware at $301 million. 2.) Phunware is getting into crypto and plans to issue PhunCoins later this year. They described it as “a blockchain-powered utility token and ecosystem that enables consumers, brands and application developers to transact directly and create a value-based and voluntary data exchange.”
Venture Capital and Private Equity Funds
Serial Austin entrepreneur Andy Tryba announced the launch of a new, $1 billion private equity fund. It’s called Think3, and it’s focused on acquiring SaaS startups. Think3 acquires software startups that have traction but aren’t necessarily wildly successful — its news release labeled them as “modestly-growing” companies. It then takes over management and transitions the startup’s founders and team over to a new SaaS startup. Meanwhile, Think3 provides $500,000 in a zero equity angel round to the founders to start their new company. The new fund is part of Austin’s ESW Capital, which is also focused on software companies and includes Trilogy and Ignite Technologies in its portfolio.
Local women-led firm True Wealth Ventures has announced that it had raised $19.1 million to invest in women-led startups, the Dallas Morning News reports. Over 80% of those funds came from women, the report adds. Read more about True Wealth Ventures here.
Elsewhere Partners, which has already made several investments, has filed paperwork with the SEC that indicates it plans to raise a $100 million fund. Somewhat similar to the Rise of the Rest fund that you’ll read about below, Elsewhere Partners is focused on backing startups outside of New York, Boston and San Francisco. That said, Elsewhere Partners, which launched last year, is largely targeting software startups. It has already backed Vancouver-based Tasktop, Atlanta’s Itential and Nashville-based Relatient. It has also invested in Austin’s Vyopta.
