After Scott Harmon parted ways with his latest startup, Noesis, following a merger, he got together with venture capitalist and entrepreneur Mike Maples, who is a long-time friend, to talk about what might come next.
This was back in 2016. Harmon and Maples had founded and sold Motive years before, and both were intrigued by the explosion of real estate startups disrupting the market -- primarily residential innovations, such as Airbnb.
"Both of us thought the commercial space, which is even bigger, had really yet to evolve," Harmon told me. "We had a couple beers over it and he said 'Hey, how'd you like to incubate a company?'"
It proved fruitful.
After five months of research, Harmon and Maples took a closer look at the idea of providing a software-driven, plug-and-play service that gives companies, typically with 10-75 employees, flexibility in lease terms and customizable office design. They gave it a green light and raised initial funding to hire an experienced founding team, including two Spiceworks co-founders and two Icontrol founders who had recently sold their startup.
On Tuesday, the company formally announced its emergence in the market and a $4.75 million round of funding. The new investment was led by San Francisco-based First Round Capital. Fuel Capital, Correlation Ventures, Great Oaks Venture Capital, Hack VC, Capital Factory and Abstract Ventures also joined the round alongside prior investors, including Maples' firm, Floodgate, and Austin's Next Coast Ventures.
Swivel's co-founders -- Greg Kattawar, David Proft, Tabrez Syed and Wade Cohn -- share a lot of common background.
Harmon, Maples, Kattawar and Proft all worked previously at Tivoli Software, which is among the most pivotal software startups to come out of Austin during its formative tech startup days. And those three, along with Cohn and Syed, worked at Motive, a software developer that was founded by Maples and Harmon and was acquired by Alcatel-Lucent in 2008. Also worth noting, Maples went on to found Floodgate, a well-known Silicon Valley investment firm, and Kattawar and Syed went on to become a co-founder at Spiceworks.
Harmon said Cohn and Proft were available, having recently sold their startup, Icontrol. But he had to lure Kattawar and Syed away from Spiceworks.
"I was just persistent," Harmon said with a laugh. "I pestered them."
But that was a key moment for a startup taking on an office space market packed with big money traditional commercial real estate firms and the ever-expanding coworking industry. Harmon said he needed founders who have scar tissue from past mistakes -- and resolutions.
“Startups are really tough, and it’s hard to do it without and experienced team," he said.
Back in its stealthy days, the company had a code name: Poquito. But after reporting about $1.8M in funding to the Securities and Exchange Commission, people started taking notice, including CNBC.
Hamon said Swivel fills a void between coworking and traditional office leases by providing simple and flexible lease terms -- as well as providing 3D visualization tools to quickly create a custom office layouts and select design elements. It basically saves growing startups from going through the traditional design process of choosing colors, materials and furniture to fit a given layout.
Swivel has about 50 properties on its Austin menu. With the new funding, Swivel plans to continue growing partnerships and providing leases in Austin. It plans to launch in two more markets this year. They haven't picked the cities yet, but have been looking at Nashville, Seattle, San Francisco and Dallas, among others.
“We want to use Austin as our showcase and get our groundswell here," Harmon said.
